BLOOMINGTON -- The City Council will consider more debt refinancing in an effort to generate some cash for its general fund.

The idea is to extend payments to 10 years, from six years, on the $8.5 million owed for its early retirement program. The council meets at 7:30 p.m. Monday at City Hall, 109 E. Olive St.

The city has a tight $77 million operating fund this current fiscal year and a $4 million deficit in its reserves. That leaves the city scrambling to find extra cash in case of emergencies.

By extending the payments, Finance Director Tim Ervin said the city will be able to keep $483,000 for the first year. The city would hold onto another $432,000 in the second year.

The payments begin Jan. 1 to the Illinois Municipal Retirement Fund. The extended financing would bring the total cost for principal and interest to $12.8 million. For the six-year plan, the total cost would be $10.9 million.

Ervin said the refinancing can be repaid sooner without penalty if sales tax revenue rebounds and the city has extra money.

Two weeks ago, the council refinanced two bonds. That move lets the city keep $2.78 million instead of making bond payments next month.

Ward 3 Alderman Kevin Huette is still reviewing Monday's proposal, but he's concerned. "When you start extending those payments, the overall costs can really add up," Huette said.

In May 2008, the city offered early retirement to employees age 50 or older who had worked for the city for 20 or more years.

The city saved $4 million from salaries this year by eliminating 71 jobs, including 57 left unfilled from early retirement. The other 14 workers were laid off.

In February, staff discovered the payout of accrued benefits had not been included in the early retirement program costs. That added $2.3 million in expenses for the year.

GO!

What: Bloomington City Council will consider refinancing $8.5 million early retirement payment.

When: 7:30 p.m. Monday

Where: City Hall, 109 E. Olive St.