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Cape council discusses employee benefits shortfall

By Staff | May 3, 2010

With the number of city employees due to receive lifetime post employment insurance expected to double in the coming years, the Cape Coral City Council said it has to find a way to fund the $13 million shortfall in OPEB (other post employment benefits) before that number gets worse.
Council discussed the issue at its workshop Monday, though no decisions were made.
City staff said the shortfall could damage the city financially in the long run but for now the city is not in trouble.
“Currently we are not in a state of emergency,” said Interim Finance Director Linda Senne.
City staff identified four options to fund the shortfall.
The city can continue a “pay as you go” method, which would lead to larger unfunded liability; start a fund with annual contributions to defray the cost; slow the growth of the liability by reducing benefits for new employees who have not retired; or reduce the benefit for all current and future retirees.
Senne mentioned Fort Myers and Fort Lauderdale as examples of cities that have not funded their OPEB.
Councilmember Bill Deile — who called attention to the matter to council in an April 23 memo — said he wants to “re-examine the liability” of the shortfall before making any decisions.

Summer hiatus
City council will likely carry on with six-week summer break after Councilmember Chris Chulakes-Leetz couldn’t find any support for his suggested hiatus furlough, which would have kept council working between June 14 – July 19.
Chulakles-Leetz said he felt the city is facing far too many challenges to afford the luxury of time off.
“We have a lot of issue we’ll be dealing with the remainder of this year,” he said.
The majority of the council members said they would not support the idea.
Deile said that when council takes the summer break, staff traditionally takes its vacation at the same time.
“I think everyone needs a break,” Deile said.

Labor negotiator interviews
The council will likely hold a special meeting to interview labor negotiators.
The date and time of the meeting are not yet known, but it will likely be held before council takes its summer break June 14.
Mayor John Sullivan said he would like all potential firms or candidates to be available on the same day for interviews, though each candidate will be interviewed separately.