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City approves employee buyout program
The City Council has approved a “voluntary separation” program that would entice an unspecified number of city workers to leave the city for a buyout that could be as much as $25,000 – depending on seniority.
Interim City Manager Brenda Bauer said employees can participate in the program through the end of this year, with additional incentives paid for buyouts executed by Sept. 30 and by Oct. 31.
All employees are eligible for the program after the city’s two unions – the Police Guild and the International Association of Machinists and Aerospace Workers, AFL-CIO (IAM), agreed this week to allow their members to participate.
“Our employees have accepted significant layoffs and concessions in the past few years, but the city continues to face severe financial challenges,” Bauer said in a statement released after the council unanimously approved the program Wednesday. “This will allow for strategic, yet voluntary staff reductions that can help reduce costs while maintaining skills and knowledge critical to our workforce.”
She said $250,000 has been allocated for the program, which will be sufficient funding to buy out at least 10 employees.
Councilor Bill Knobloch said the average salary and benefits cost to the city for each city employee currently totals $103,000.
“This is the first step in readjusting our financial structure going into 2011,” Knobloch said. “We’ll see what the results are on Sept. 30 and decide if more layoffs are necessary. That’s when the city manager will present her budget, and we’ll have a better idea as to what kind of adjustments we’ll need to make. Prior to that, it’s all speculation as to how much we’ll need to cut. But this is a start.”
Under the program, employees with more than 10 years of experience will receive $20,000 plus additional incentives up to a total of $25,000; five through 10 years will get a lump sum of $15,000 plus total incentives of up to $19,000; and less than five years, $10,000 plus total incentives up to $12,000.
Bauer said the program will help the city downsize in a more organized way, rather than laying off employees with lesser experience. She it will also help reduce short- and long-term compensation costs.
The voluntary program’s requirements include: approval by Bauer and each employee’s bargaining unit; requests submitted no later than Sept. 17; and each termination must have a labor cost savings or deletion of a position. Employees also must agree to waive unemployment compensation and to repay any compensation received if they are rehired by the city within five years.
“As far as I know,” Bauer said, “this is a one-time opportunity. We’re testing this to see if it will help us financially for 2011. It’s hard to say where we will end up as far as how much this will help us. In the future, if it’s necessary, we may need to return to layoffs.”
Paul Miller, chief steward for the city’s IAM members, said he is supportive of the program but is unsure how many employees will be allowed to participate without hurting the staff’s effectiveness in providing city services. The city currently has 117.2 FTE (full-time equivalent) employees, down from 152 when layoffs began in 2008.
“I think it’s great, and we signed off on it on the spot,” he said. “We should have done this from the start, though. We have several employees close to retirement and this will be a good way for them to go out.”