Committee considers investing $1.4M to shore up cemetery, sick‑leave and retiree liabilities

City finance staff told the committee they have roughly $1.4 million in surplus revenue available and outlined options for allocating it to long‑term liabilities.

Comptroller/Treasurer Corey said the city is “pretty limited by state statute to very, very safe investment options” for most funds but noted a statutory exception for cemetery perpetual care and post‑employment benefit funds that allows a broader, prudent‑investor approach. He presented fixed‑income ladders and the option of a small stock allocation to provide dividends that can grow with inflation.

Corey laid out estimated liabilities and funding gaps: Forest Cemetery’s perpetual care fund is worth about $127,000 and generates roughly $3,200 annually against a cemetery operating budget of about $32,000 (he estimated a $613,000 add would be required to fully remove the cemetery from the tax levy). The sick‑leave trust has a year‑end balance of about $1.7 million against a discounted liability of approximately $2.5 million (a shortfall near $790,000). Other post‑employment benefits carry an actuarial liability around $2.5 million with an annual ongoing cost estimated at $100,000.

Staff noted that funding a portion of OPEB could help the city’s presentation to bond raters by reducing net liabilities disclosed in official statements. Corey recommended a cautious, staged approach rather than investing the full sum in equities at once: purchase some bonds, then ladder maturities and gradually increase diversified holdings. He also suggested that if surpluses recur the city consider transferring about $250,000 per year to address the remaining unfunded liabilities over time.

Committee members debated the tradeoffs — protecting fund‑balance strength for rating agencies versus using reserves to close gaps — and asked staff to return with more detailed allocation scenarios.