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City to introduce $14 million emergency appropriation to cover police and fire severance liabilities
Summary
City staff introduced an ordinance seeking a $14,000,000 special emergency appropriation to fund contractually required severance liabilities tied to retirements of public safety employees; the repayment would be spread over five years.
City finance staff presented an ordinance to create a $14 million special emergency appropriation to pay contractually required severance liabilities resulting from retirements, primarily for police and fire personnel.
Staff said the appropriation would be paid in equal installments over five years beginning in 2026 at roughly $2,800,000 per year plus about 2.5% interest. The ordinance was described as a borrowing mechanism to avoid recognizing a large one-year obligation that would otherwise affect the 2026 budget and property-tax calculations.
Officials said timing makes the measure urgent because the city must close its books on Dec. 24, 2025. Staff warned that without the appropriation the city could face a cash deficit exceeding $40 million that would need to be addressed in the 2026 budget and could materially increase the tax rate. Staff referenced a modeling example that showed including the full liability in the current year could have produced a 4.72% tax increase instead of the 0.97% increase the council adopted this year.
Council members asked how the ordinance would affect hiring and overtime; staff said the appropriation covers only retirement severance obligations and would not change hiring or overtime budgets. Finance staff indicated the city has used similar mechanisms in prior years to smooth the budgetary impact of unpredictable lump-sum severance payments.
The ordinance (agenda item 3.1, Ordinance 25-111) was introduced at caucus and will return for subsequent readings per the normal ordinance schedule.
