By Karina Ioffee kioffee@bayareanewsgroup.com
Posted:   07/02/2015 11:07:09 AM PDT3 Comments
Updated:   07/02/2015 04:20:30 PM PDT

RICHMOND -- With just one day to go before the start of the new fiscal year, the city approved a $144 million general fund budget Tuesday, but not without some squabbling over priorities and whether the city was doing all that it could to rein in costs, especially growing pension and retiree health care obligations.

After weeks of discussion -- though still fewer than some would have liked -- the City Council voted 5-2 to approve the budget, with Mayor Tom Butt and Councilman Vinay Pimplé opposing. Both have expressed frustration at their colleagues' priorities, including spending more than three hours discussing rent control at a prior meeting and then quibbling over additional funding for festivals and Richmond's sister cities program.

"We have an unfunded OPEB (retiree health care) obligation of $120 million, and we don't even have a plan to address it," said Pimplé, an attorney. "This is something that goes to the heart of the key issue about to what degree we're financially solvent in the middle and long term."

Councilwoman Gayle McLaughlin had pressed the city to include additional funding for festivals and giving a local nonprofit free rent for an annual event, while Councilman Eduardo Martinez wanted more funding for a library book mobile driver, a position that is now vacant.

Meanwhile, Councilwoman Jovanka Beckles asked that any one-time funding the city receives, such as from the sale of Terminal 1 at the Port Richmond, for which there are currently negotiations, go toward hiring more public works staff to pave streets, a position favored by the Richmond Progressive Alliance, of which Beckles is a member.
That prompted Mayor Tom Butt to reply that the "city was not a works program" and "was not in the business of providing jobs."

"I'm flabbergasted at our obsession with the road crew when we're looking at millions of dollars in unpaid pension obligations," Butt said.

Richmond is facing a $320 million debt for pensions and a $126 million shortfall for retiree health benefits, and has no plan about how to repay the latter. Rising pension obligations were one reason the city, the third-largest in Contra Costa County, recently had its bond rating downgraded to "medium risk," a classification that could make borrowing more expensive in the future.

Another concern is using Measure U, a quarter-cent sales tax approved by voters last fall, to balance the budget. The measure, marketed as a way to pay for road repairs and other essential services, is expected to bring in $8 million to the city this fiscal year, though many worry how much of the money, if any, will ever be used for pavement work.
The city does have $6.8 million in its capital improvement budget, which it plans to use for road repairs, about $4 million more than the previous year.