Fremont leaders gave a big budget presentation this evening.
City expenditures are forecast to jump by about $5 million next fiscal year. The biggest culprit ($3.5 million) is rising pension costs.
The state pension system has told the city that pension contributions for police and firefighters next year will jump from 30 percent to 36.5 percent to make up for prior investment losses and incorrect assumptions.
That means next year for every police officer and firefighter making $100,000, the city will have to pay an additional $36,500 to fully fund their pensions. For non sworn employees, who don’t have as generous pension benefits, it will jump from 18.4 percent to 22.9 percent.
The city expects to pay $15.7 million to fund its pension obligation this fiscal year. Next year it’ll be $19.2 million. In 2000, when the market was great,the city paid just about zilch. The more Fremont pays for pensions the less it has for restoring jobs and services.
In better news, sales tax revenue was up a bit, property revenue only went down a drop, and the city spent less money than expected, mostly by keeping positions vacant and being frugal.
But city leaders said that to stay on reasonably solid financial footing, Fremont will have to either reduce more positions, raise taxes or get more employee givebacks.
More on that below