The city might not have enough money to pay its entire state retirement bill for police and firefighters this year, Finance Commissioner Deborah DeGenova said.
She told the Schenectady City Council at its Tuesday budget session that the city may have to accept a payment plan from the state.
The bill, which the city received in August, was $400,000 more than the original state projections, she said. Unless there’s a large surplus in the 2014 budget, the city won’t have the funds to pay the whole bill, DeGenova said.
The proposed 2015 budget assumes the city will have to also take a payment plan next year, she said.
The city had budgeted to spend $5.2 million this year. For next year, the budget calls for paying $6 million, while also amortizing about $820,000 more.
The city will pay its entire retirement bill for all other employees, which is about $2 million next year, DeGenova said.
The city pays the state every year. The money goes into the pension fund, where funds are dispersed after employees retire.
The city is also setting aside $70,000 for outside counsel to negotiate the next police and fire labor contracts.
Councilman John Mootooveren objected to the expense, suggesting the city hire a full-time attorney who could negotiate contracts.
“I think we have a vacancy to fill, and I think we should fill it with someone with labor-law expertise,” he said.
But Corporation Counsel Carl Falotico said the city’s $50,000 to $60,000 salary for an assistant corporation counsel wouldn’t be enough for a labor attorney.
It’s enough to attract attorneys “a little out of law school,” he said, adding that he hopes to hire someone with several years’ experience in civil suits.
“We get a substantial amount of that,” he said, adding that he wants to do more of that sort of litigation in-house.
Mootooveren said the city should use part of the $70,000 outside-counsel cost, as well as the budgeted salary, to get a labor attorney.
“Then you see a savings,” he said.
Falotico argued against that, saying it would be cheaper to hire an excellent labor attorney for a short time. He noted the attorney would negotiate the contentious and expensive police and fire contracts.
“That’s like the major leagues,” he said. “You want the best representing you. The decisions that get made are final and can have a lasting impact.”
Other council members supported Falotico, and Mootooveren dropped his complaint.