BY DAVID RESS

Times-Dispatch Staff Writer

For nearly 4,000 people depending on Richmond for retirement and disability benefits, no cost-of-living adjustment is in sight as the budget dispute between Mayor L. Douglas Wilder and City Council continues.

Wilder has said the retirement system has the power to pay a 1.5 percent cost-of-living allowance without funds from the city. In an opinion written this week City Attorney Norman B. Sales said the mayor's assertion is wrong.

That means the retirement system cannot dig into its own funds to pay the allowance while Wilder and the council fight about whose budget should be in force.

Wilder has said the council budget -- which includes a cost-of-living adjustment for retirees -- is invalid. Wilder's budget -- with no adjustment -- has been loaded into the city's computers.

Sales said the retirement system would not be living up to its responsibilities as trustee of city employees' and retirees' funds if it authorized an adjustment without the council's promise to pay for it.

According to Linwood Norman, Wilder's press secretary, the mayor still disagrees. "There is no limitation ... that prevents the retirement board from funding the COLA increase, as it has done so in the past," Norman said in a statement released today.

Wilder's administration has refused to disburse funds for the cost-of-living increase for 3,857 beneficiaries -- retirees, spouses of deceased city employees and disabled former city employees.

Contact David Ress at dress@timesdispatch.com