OAKLAND (KCBS)- Oakland city leaders are trying to figure out how to make a $46 million dollar pension payment due this summer.

This comes as the city also has to close a $40 million budget shortfall.

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In 1997, the city gave itself a 15-year break from paying into an old police and fire pension. The holiday is up and now the city owes $46 million to a fund that pays benefits to 1,125 retirees and beneficiaries.

Some staffers have suggested issuing another bond that would buy the city another five years, but city leaders including the chair of the Finance Committee, Ignacio de la Fuente, and City Attorney John Russo said the city needs to pony up and pay at least $20 million this year.

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The only way to come up with the money according to them is to make drastic cuts to city government, but Oakland Mayor Jean Quan doesn’t see where.

“Oakland has cut probably 400 people and cut 20-22 percent of its budget over the last four years. There’s not a lot more to cut that won’t be painful,” said Quan.

She prefers to see the city pay $5 million a year for the next five years, paying more after other debts are fulfilled. But critics have said the city can’t keep putting off its obligations.

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