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Lodi City Council approves $42 million budget

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Posted: Thursday, June 6, 2013 12:00 am

Lodi has a new budget in place well ahead of the new fiscal year, but it passed with an unexpected addition.

City staff did not have to tap into any of Lodi’s $7.7 million in reserves to create a balanced budget, Deputy City Attorney Jordan Ayers said. But Councilwoman JoAnne Mounce asked if that reserve total included the amount the council considered setting aside at the May 15 meeting.

Mounce said she would not consider a budget that did not include a decision on how to spend nearly $700,000 in unallocated funds waiting to be used. The money comes from refunds from San Joaquin County on overpaid property tax administrative fees.

Mounce thinks it should be set aside to pay for the future cost of some health care benefits.

According to a recent report, the city is about $3 million behind on saving up for increasing costs of health care benefits for a certain pool of current and future retirees. At the peak of liability in 30 years time, the city will owe $17 million.

Council members considered a resolution at the May 15 council meeting to earmark that $700,000 to use next time the bill comes due for those benefits.

With the addition of some funds from city departments, the total would reach nearly $1 million, or a third of what is currently owed.

But the council had a tied vote that night because Councilman Bob Johnson was absent. Since then, Mounce has expressed an interest in holding another vote on the same resolution.

On Wednesday, the council was tied up in discussions on the budget as a whole when Mounce reminded them that money was still sitting around.

“We need to be sure we are keeping our house in order for the citizens of our community. Without the opportunity to reconsider this, it makes me feel differently (about) the budget as a whole,” she said.

Another possibility was to bring the resolution on the $700,000 to the table at another meeting.

“In order to fund reserves, we created a deferred maintenance list. I’d rather see this money used to whittle down this list instead of setting aside for something we can already pay for,” said Councilman Phil Katzakian.

But City Attorney Steve Schwabauer said it’s legal to add in the $700,000 allotment in the budget vote, because it’s a budget question.

The council voted 3-2 in favor of setting the $700,000 aside against the future cost of the health care benefits. Katzakian and Mayor Alan Nakanishi voted against.

Mounce said she was pleased to see the issue handled.

“It’s that important to me to be prudent on this. We could end up like Stockton if we keep kicking this can down the road,” she said.

Contact reporter Sara Jane Pohlman at sarap@lodinews.com.

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