The city concluded that would need to set aside $846,000 per year to fund that insurance. At tonight's city council meeting, it announced that a series of small incremental solutions would be needed to resolve the issue.

City officials said there is no way it could afford the current rate.

"The real issue is the rapidly escalating cost of the services going up double digits each year and when you look at a 20 or 30 year period and extrapolate the results of that; it does become an incredibly expensive benefit," said City Manager Dan Boroff.

This is the first year that new federal accounting principles require cities to forecast the future expense of retirement programs.