The council asked staff to get cracking on the list at the tail end of an action-packed, seven-hour meeting Tuesday night, the council’s last schedule meeting until September. The request came in lieu of a proposal by Councilman Frank Matarrese that would have focused the city on exploring the formation of a nonprofit corporation to handle base development and on job creation instead of housing.

“I think it would be a mistake to start giving specific direction on little component parts of this. We’ve got to offer an overall vision, and we can only do that when we know what our options are,” Mayor Beverly Johnson said, adding that she thought Matarrese’s ideas were good ones but that a broader range of development options should be considered.

Councilwoman Marie Gilmore said she wanted the public to have an opportunity to offer their ideas on what should happen next at the Point, while Councilwoman Lena Tam said she wants a funding source identified first for any plan that might be considered.

SunCal’s Pat Keliher asked city leaders how long the plans Matarrese proposed just one day after SunCal was effectively fired as Point developer were on the drawing board. And he accused the city of working on other plans while they were supposed to be negotiating toward a deal with SunCal.

“While we were paying city staff in good faith, it appears the city was working on a secret Plan B,” Keliher said, referring to a talk Interim City Manager Ann Marie Gallant gave at a 2009 Chamber of Commerce breakfast where she reportedly said the city had a Plan B for developing Alameda Point. Keliher said the developer paid more than $17 million in it quest to seal a development deal for the Point.

Gallant didn’t respond to Keliher’s claim, though Councilman Doug deHaan disputed it.

“I’m just appalled that someone says we’re doing secret plans in the back room. I don’t think that’s the case,” deHaan said.

Matarrese said he was always gathering information and considering alternatives for Alameda Point.

“My mind doesn’t shut off when the signatures were gathered or when the measure was on the ballot or when the measure went down,” Matarrese said.

The council also voted, 5-0, to hold off on putting city charter changes on the November ballot that would eliminate binding arbitration for the city’s firefighters and require any initiatives, including the firefighters’ upcoming minimum staffing measure, to have a funding source before they could be put in place.

Tam asked her dais-mates to reconvene a council subcommittee to vet the proposed changes and to consider them for the November 2011 election instead, the date the firefighters’ initiative will be decided.

Gilmore said she thought the council shouldn’t rush to put the amendments, some of which had been in the works for over a year. She said the public should have more time to talk about the proposed changes before they go on the ballot.

“I don’t think this is something that should be taken lightly. The public should have the opportunity to ask questions and have input on this,” said Gilmore, who said she thought city staff should have brought the proposed charter changes to the council sooner.

Gallant said several of the proposed charter changes – which included adding another member to the Public Utilities Commission and removing the city manager as a voting member of that body, allowing the city clerk to reject legal bids and allowing the city to change its business hours – weren’t new ideas, and Highsmith said the changes were being proposed for the November ballot because it’s the next available general election.

Domenick Weaver, president of the Alameda firefighters union, asked the council not to put a measure on the ballot that would eliminate the union’s right to binding arbitration, which he said had been used just once in the 30 years it’s been in place.

He said the council can’t put the binding arbitration matter on the ballot, citing a state Supreme Court case that would require the city to meet and confer on it. But Highsmith said the city disagrees.

Ann Spanier of the League of Women Voters of Alameda asked the council to wait on putting the charter amendments on the ballot so the public could have more time to learn about and comment on the proposed changes, which haven’t had a prior public hearing.

The City Council also unanimously approved a $71.1 million general fund budget for 2010-2011 early this morning, an increase over the $68.7 million budget it okayed for 2009. The budget covers public safety, recreation and other services.

“The budget is tight this year. What we think we are bringing in in revenues, we think we will expend,” Gallant said, adding that the city hasn’t spent more than it has taken in over the last 18 months. She said 2009 layoffs and other departmental cuts helped bring the city’s budget in line.

The budget shows an anticipated $12.1 million cash balance at the beginning and end of the year, and Gallant said she expects the city can build toward a recommended balance of $13 million, or 20 percent.

Gallant said the city has resolved much of the $7.6 million deficit that had built up in the city’s internal service funds as city departments failed to repay their worker’s compensation and other fixed costs. She said the deficit is now $200,000, and she expects that deficit to disappear by the end of 2011.

But she said the library is running a deficit because of the way bond debt the city incurred to build its new library is structured, which she said she will work to fix midyear. The city’s budget figures show a projected negative balance of $866,984 for the library fund at the end of this fiscal year.

The city’s overall budget of $297.9 million includes money for the Housing Authority, Alameda Municipal Project, debt funds, redevelopment, money for capital projects and additional funds.

Separately, city staff offered information on a $24.3 million capital improvement program to maintain and fix the city’s sewers, roads, parks and other infrastructure.

The council will also consider changes to the way the city handles the council’s access to legal opinions at a future date. Gilmore said she wanted the discussion after she said she was required to view a legal opinion in Highsmith’s office. She said that when she questioned the restriction, Highsmith offered “vague comments leaks coming out of closed session,” a reference to allegations of leaks from Tam.

Annual pension benefits for Alameda’s youngest public safety retirees are now into the six figures, lifted by longer life expectancies, wages that have more than doubled since 1994 and a pension benefit that earns them three percent of their top wage for every year served.

“We can’t duck this any longer,” City Councilman Frank Matarrese said in an interview Friday. “We have a lot of catching up to do.”

The council is set to begin working out a plan to cover its unfunded pension costs during a budget workshop set for Thursday. They have the daunting task of figuring out how to pay skyrocketing pension costs that, in the absence of a gravity-defying market turnaround, threaten to swallow Alameda’s budget whole.

Alameda is far from alone in facing a crisis over pensions. Vallejo famously declared bankruptcy in 2008 in an effort to get out from under its high personnel costs and unfunded retiree health care obligations of $135 million. And a grand jury in San Diego recommended that city consider doing the same, to lift unfunded pension costs of $2.2 billion and retiree health care costs of $1.3 billion.

Others are considering different solutions. The city managers associations of Alameda and Contra Costa counties released a white paper in February that recommended cities consider reduced benefits for new employees and increased benefit payments from those in the existing system.

Like many cities, Alameda sweetened its pension offerings when economic times were good in an effort to attract top talent, increasing the pension benefit for public safety workers to retire at age 50 with 3 percent of their top wage for each year served. Public safety employees also get retiree health benefits that cover any health care plan they choose for themselves and their spouses. Alameda’s unfunded retiree health care costs would add another $75.4 million to the pension amount if the city had to write a check for them today, the same amount of money the city budgeted to cover all of its general fund programs this year.

The city’s other employees can retire at age 55 with 2 percent of their top wage for each year. Their pensions are much smaller because they typically serve in more than one city, spreading those costs out, while public safety workers typically stay in a single city, the city’s actuarial, John Bartel, said Tuesday.

Bartel told the council that they should start paying more into CalPERS than the retirement system requires, and that they should put a two-tiered system in place that would offer a smaller pension benefit to new employees.

But council members wondered where that money would come from in these tight budget times. “To be perfectly honest, I don’t know where we’re going to get the money from,” Councilwoman Marie Gilmore said during an interview Friday.

And they noted that even under the most liberal scenario, the savings generated by a two-tiered system would be a drop in the bucket. Bartel’s analysis showed that setting up a two-tiered pension system would save the city less than $1.2 million a year by 2020.

“It’s a savings. But it’s not your saving grace,” Vice Mayor Doug deHaan said Friday.

Domenick Weaver, president of Alameda’s firefighters union, said he thinks the city should adequately pre-fund its pension obligations.

“Had the City initiated its own policy of pre-funding in the good years, it may have minimized the negative impacts of the fluctuations on the bad years,” Weaver said. “The CalPERS system is one of the most fiscally sound models in the world, and the city needs to work with its employees to protect their shared investment in that system.”

The Alameda Fire Department is a finalist for a federal grant that could pay the full salaries and benefits of six fire department personnel for the next two years.

The Staffing for Adequate Fire and Emergency Response (SAFER) grant would be $1.763 million for two years, money that would allow the department to hire fire personnel to fill positions left dark by layoffs and attrition over the past two years. If the city accepts the grant, they will be required to maintain fire staffing at 24 firefighters per shift over the next two years.

“Even in tough times, government’s first responsibility is the safety of its citizens. We believe that by restoring these firefighter positions, the safety of the community and the safety of the firefighters will be improved from what the current staffing levels provide,” Domenick Weaver, president of the Alameda Firefighters IAFF Local 689 said in a press release.

The City Council will decide Tuesday whether to give Interim City Manager Ann Marie Gallant permission to accept the grant. Once the city submits a final questionnaire to the feds, approval could come in a week, Weaver said.

The grants are in place to help maintain fire department staffing and, in turn, homeland security preparedness and fire response. The federal Department of Homeland Security has $210 million to award this year, and it expects to hand out around 200 grants this year.

The grants were put in place to help cash-strapped professional and volunteer fire departments maintain response levels and emergency response times.

The Alameda Fire Department’s response times dropped in 2009 after the department implemented engine company brownouts and then shuttered its Station 5 at Alameda Point in order to conserve cash. The city cut 11 filled and vacant fire department positions, including two firefighting positions and three fire apparatus operator positions, when city leaders made a round of layoffs in May 2009.

Weaver said the department will seek to fill the positions – two firefighters, three apparatus operators and a fire captain – from a statewide list of laid-off firefighters. He said the new staff should help response times, particularly in the West End, and lower the department’s oft-criticized overtime costs.

“Basically, all the city has to (pay) is what it costs them to process them for hiring and buying them a set of protective equipment,” Weaver said. He said the money the city would save in overtime would cover those costs inside of two months.

In other news, the department has released some nifty new public service announcements (we’ve got one above).

Gallant said the plan would cost $140,000, and she’d like the council to put the money in next year’s budget. The plan could guide efforts to do long-neglected maintenance in Alameda’s parks and help the city apply for grants for parks and charge appropriate fees for parks and recreation facilities to developers who build new homes here.

“There’s a laundry list of things that are thought to be needed, but they’re not driven by a master plan,” Gallant said, adding that parks are clearly a priority to Alameda residents.

She said the city needs a plan to apply for grants to bolster its parks. And a plan would help city staff decide how much money or what facilities new housing developers should be expected to pay for.

It could also help the council prioritize park funding so money to properly maintain Alameda’s parks is included in the budget each year.

Recreation and Park Department Director Dale Lillard laid out the state of the Island’s existing parks Tuesday night, and it was sorry due to years of deferred maintenance. Light fixtures and fences are rusting in place; pools, basketball and tennis courts are in need of resurfacing; even the trees are beginning to fall down.

Irrigation systems are guided by mechanical clocks that have been in place since the 1970s, Lillard said.

“We put money aside to do periodic maintenance,” Vice Mayor Doug deHaan said. “But in the last 10 years – it looks like we haven’t been able to get to some of the hardcore problems.”

“No, we haven’t,” Lillard replied, saying most of that money is used for day-to-day maintenance. Lillard said the city handles big fixes with one-time money like the Measure WW bonds that are often only available every five to 10 years.

Gallant also laid out a list of potential new park sites, most of which were familiar to council members: The estuary, the northern waterfront, the city’s just-purchased Belt Line property and Alameda Point.

Council members said they like the idea of the plan and they’d be willing to consider okaying the money to pay for it. DeHaan said some of the potential upgrades – like new irrigation systems – could help pay for themselves by saving the city money.

Gallant said staff has prepared a request for proposals for the plan. She said she’d offer more details on what information would be in the plan as budget discussions continue.

Union City’s City Manager Larry Cheeves, who was part of the group that wrote the paper, said city managers across the East Bay will be asking their elected leaders to sign off on the plan and move forward to negotiate new pension deals with their workers. Alameda’s City Council is set to hear about the paper’s recommendations on April 20.

Implementation of the proposal, which the paper’s authors said was put forth in the face of escalating pension costs and inaction by state leaders and the state’s preeminent public employee retirement system, would require the consent of local public employee unions.

City officials are in the midst of negotiating new contracts with Alameda’s public safety unions, though they have taken steps to try to scale back retiree benefits, with much of the focus on reducing health benefits. Deputy City Manager Lisa Goldman said she couldn’t comment on ongoing contract negotiations.

Interim City Manager Ann Marie Gallant told the City Council last August that the dramatic losses suffered by the state’s primary pension program, CalPERS, in recent years could translate into the city paying as much as $5.5 million in additional benefit contributions as soon as 2011 in order to cover the cost of retirees’ pension benefits that CalPERS can’t.

For future savings, the white paper calls for new public safety workers to get 2 percent of their salary for each year worked if they retire at age 50, down from the current standard of 3 percent, and other new public employees to get 2 percent for each year they work if they retire at 60. Workers in each group would be entitled to more money if they retire later. The benefit would be calculated based on an average of the employee’s highest three years of salary, instead of their highest year, as it’s done now.

To help deal with the coming spike in retirement payouts, existing employees would be asked to contribute more of their own money to help cover the cost of their pensions.

One thing that wouldn’t change under the white paper’s recommendations is the type of plan public employees have. The paper’s authors said cities should keep the “defined benefit” plan most now use – instead of switching to the “defined contribution” plan (think 401k) that most private employers offer – because the former plan offers better returns, in the short term at least, will be cheaper for taxpayers.

The proposal was put forth on the heels of a similar effort in San Diego and other counties to rein in pension costs that spiked in the late 1990s and beyond, as CalPERS earned big returns and cities grew their public employee benefits in order to compete with their neighbors for workers. Under the 3 percent at 50 plan, for example, many public safety workers are able to retire with their full salaries money cities are increasingly unable to pay.

“These increased benefits have proven to be unsustainable and need to be rolled back to more appropriate pre-1999 levels,” the white paper says.

The paper’s authors said they are also hoping to head off ballot initiatives which, they said, could lead to a poorly-designed reform effort.

Cheeves said San Leandro has put a two-tier pension system in place and that his own council in Union City has authorized city staff there to try to negotiate a similar plan with their employee bargaining units.

If you’re interested, the white paper is below.

When all was said and done – the “said” being projections that showed the city would be $4 million in the hole by the end of the fiscal year, the “done” being spending cuts, a hiring freeze and ultimately, layoffs – the city actually spent about $3.4 million less than it raked into its general fund budget, which covers public safety, parks and other city services. City leaders put just shy of $1.5 million into the city’s savings, which were just shy of $10 million at the end of the year as a result.

Had the cuts not been made, the city would have had about $2.6 million less than it budgeted to cover services paid for by its general fund.

The City Council approved a $75.9 million budget for its 2008-2009 fiscal year. But city leaders later said Alameda would face a $4 million shortfall and made cuts. Ultimately, the city took in about $73.8 million and spent $70.4 million, newly released figures show.

Five city funds went into the red this past year – the city’s parking garage, technology service, risk management, unemployment insurance and workers compensation. The funds that cover the city’s bonds and pension obligations also declined 7 percent, though none of those went into the red.

The city took in $689,540 more in property taxes than it anticipated, but about $1 million less in property transfer tax – the tax you pay when you sell your house – than city officials anticipated. Alameda also brought in slightly less sales tax revenue than planned, but took in about a half million dollars more in fees for service.

Separately, council members will be getting presentations on the city’s redevelopment budgets (more on that after I’ve heard the presentation). Interim City Manager Ann Marie Gallant will also talk about the Chuck Corica Golf Complex’s finances. (Long story short: Revenues have declined almost every year since 2000, though they rose last year when a private company took over management of the course. And play has dropped off over the decade, most precipitously at the Mif Albright short course the city just tried to close, which saw rounds decline by nearly half between 2002-03 and 2007-08. The golf folks say those figures still show the complex turning a profit before the city takes its cut, and they are working to get a non-profit to run the Mif.)

The fun begins at 7 p.m. (if the council actually starts on time) in the council chambers at City Hall, 2263 Santa Clara Avenue. And if you’re interested in the nitty gritty numbers, they’re (almost) all right here.

If the resolution is approved, medical and dental benefits for retirees who are hired after November 1 would be subject to a new agreement to be hammered out with the city’s police and firefighter unions. Current employees would be covered by an existing agreement that gives them and their existing spouses full medical and dental coverage until they are eligible for Medicare, and then supplemental lifetime coverage for both the retired employee and his or her spouse after that.

City officials estimate that the benefits cost $2.1 million a year and that their cost is growing. An actuarial study released in December 2007 estimated their cost over 30 years at $75.4 million, more than the city’s entire general fund budget this year.

City leaders put the public safety benefit system, otherwise known as other post employment benefits or OPEB, in place in 1990.

The city’s police and firefighter unions agreed to talk about alternative benefit arrangements as part of their most recent contracts.

The resolution is on the council’s consent agenda, meaning it is not scheduled for a public hearing or debate. But the council could pull the item for discussion, so stay tuned for more info if they do.

Separately, the council is set to approve a contract for four new, marked Crown Victoria police vehicles to replace four others that the department says are in critical condition. The money for the contract, which is not to exceed $100,000, is already in the Police Department’s budget.

The purchase will mark a return to the trusty Crown Vic Police Interceptor, the department’s vehicle of choice for nearly two decades. The department had purchased three Dodge Chargers in an effort to reduce fuel consumption and lower emissions, but they’ve had a host of problems with the vehicles that include a higher repair rate, problems with emergency equipment installation and functionality, visibility and ergonomic problems. So they’re going back to the Crown Vics.

The department will purchase the new vehicles from a vendor in Southern California that has them in stock, and the vehicles they’re replacing will be sold at auction. Oh, and another tidbit from the staff report on this one: The city is in the process of hiring a consultant to secure grants to convert the city’s vehicle fleet to alternative fuel vehicles. They’re saying the process will take a year to implement.

Oh, and one last thing: City staff is recommending the council approve the Boys and Girls Club of Alameda’s request for $2 million of the city’s Measure WW regional park bond money for its planned West End facility, with a twist: Half the money would have to be repaid to the city for park projects within five years. More Tuesday.

Late last week, the state Board of Equalization – which handles everyone’s sales tax money – sent letters to 337 local finance directors informing them they’d see a drop in their sales tax advances for the month as a result of state sales tax revenues obliterated by the recession. The board sent an additional 15 letters to cities that won’t see any advance at all.

Fortunately, Alameda wasn’t one of the cities or counties that got a letter. (Our redevelopment projects weren’t hit either.)

A Board of Equalization press release says that payments for the second quarter of this year were 14.4 percent less money than they had been getting for the month; the state’s overall sales decline was 18.74 percent (not including a temporary 1 percent increase). Cities and counties where taxable sales dropped off by more than 21.4 percent lost an additional 4 percent of their sales tax payment.

The board had sent out a similar round of 473 letters in May and still others in February, the first time such letters were sent out on a broad scale. That’s more than half of the 768 jurisdictions the board collects sales taxes for. The payments are based on prior taxable sales patterns “that do not apply in the current economic climate,” their release says.

They’re expecting additional reductions for the rest of the year, the release says.

Sales tax accounted for about 7 percent of the city’s general fund revenue for 2008, or about $5 million. This past year, the amount stayed steady despite the loss of our last few auto dealerships. (That said, we collect about half the county average.)

The City Council may have passed a balanced budget this year, but we’re apparently not out of the woods yet, fiscally speaking. “Now what?” you may ask. How’s about multi-million-dollar increases in the city’s pension costs?

Apparently, the investment portfolio of the state-run Public Employee Retirement System, which Alameda uses as its pension fund, has seen losses over the last few years that some fear could be as high as 20 percent. And guess who’s responsible for covering those losses? A tip o’ the hat to those of you who answered with a hearty “We are!”

Many of us have 401(k) or similar retirement plans, and we are personally responsible for dealing with whatever losses they take. But the state’s system promises the same benefits no matter what happens in the markets. If they don’t earn enough to cover the benefits, the cities, counties and school districts that invest in the system must make up the difference.

CalPERS’ actual losses will become public in October, and city staff should get a letter detailing the Island’s pension rate increases in April 2010. Interim City Manager Ann Marie Gallant said that rates could rise by $3.5 million to $5.5 million starting in 2011. (Last year, the city contributed $11.1 million to PERS for its employees.)

Mayor Beverly Johnson asked Gallant if the city could drop PERS and join another benefit plan. Gallant said that some Southern California cities are doing just that.

“It’s a long process to drop PERS, but it’s something cities are thinking about,” Gallant said.

Meanwhile, city leaders still need to deal with that other retiree benefit problem, its growing retiree health care obligation (which, at $75 million and counting, is more than the city’s entire general fund budget this year). The council has okayed contracts with both police and firefighters that say they’ll talk about the problem but don’t offer any immediate changes to public safety benefits, which make up much of that amount.

Gallant said those costs, which the city is paying as it goes, will rise by $600,000 a year in 2011.

The budget, which was $7.2 million less than last year’s, included more money for police and fire and a handful of additional staff (including replacement of an assistant city attorney laid off in June and a half-time library staffer to bring more public school students into the library). It also included raises for some city administrators (who are taking on additional duties) and the creation of new management positions in the fire department.

It also showed major reductions in the amount of money city departments owed for workers compensation and other “internal service” costs that for years had not been repaid to the general fund.

The new budget also heralded a reorganization of several city functions. The city’s Planning & Building and Development Services departments are being combined in the face of sharply curtailed development activities and reduced revenues; information technology takes on new importance (and gets more money for telephone and computer upgrades) in a move to the City Manager’s office.

Major funding sources including property taxes, which funds a third of the city’s general fund budget, were stable this year, despite declines in the housing market and the loss of the city’s remaining auto dealers.

The budget, which was over a month late due to economic factors and the layoffs and restructuring that followed, was supposed to cover two years. But Interim City Manager Ann Marie Gallant said that with uncertainties like the state’s continuing financial problems, it’s too soon to firm up a budget for next year.

It did not address a provision in the state’s recently adopted budget plan that would take $5.3 million in redevelopment money over the next two years; the council will have to consider the budget impacts of that in September. But it did address the state’s plan to borrow more than $2 million of Alameda’s property tax money.

Gallant also said this year’s budget is no cause to celebrate, due both to the state’s continuing deficit and losses suffered by the state’s public employee retirement system that could lead to multi-million-dollar increases in the amount of money the city must pay for pensions. (More on those in a bit.)

The three-hour discussion about the budget included questions about the adequacy of the city’s fire staffing, which is set at 24 firefighters per shift but could fall to 21 per shift if the department runs out of overtime cash to keep the shifts filled.

Fire chief David Kapler said he used about $100,000 of the approximately $550,000 the city has budgeted for fire department overtime this year in July alone.

Councilwoman Lena Tam asked if other funds the city has set aside to study a new fire station should instead be used to bolster fire staffing. Other council members said they want to set benchmarks for what constitutes a safe level of staffing.

Gallant said she’d work with the city’s police and fire chiefs and return to the council with some ideas in September.

The general fund pays for services including public safety and parks. The city’s overall budget of $199.5 million includes the city’s Housing Authority, Alameda Municipal Power, Development Services and other, separate departments.