To date, around seven to eight employees have signed up for the incentive and city officials say the program will save the city $60,000 to $70,000 this year.
City Manager John Campbell, who himself is retiring at the end of June, brought the incentive plan before the Board of Mayor and Aldermen last month, but questions from Alderman Tom Segelhorst — who was unable to attend the meeting when the plan was first presented — delayed the measure by a couple of weeks.
The BMA unanimously approved the plan earlier this month.
According to Campbell, the incentive plan will help with the financial challenges the city is facing for the next fiscal year, and while some of the savings will take place during the current fiscal year, the major savings will take place in 2015.
“We’ve used early retirement incentives as a very effective tool to control expenses twice before in the last seven years,” Campbell said. “We feel like this will be very productive as a way to manage the budget and keep expenses as low as possible.”
The incentive plan is entirely voluntary and is being offered to employees who are eligible either by years of service or age.
To be eligible for early retirement, an employee must be 55 years old and have at least 10 years of service with the city or 25 years of service and be any age. The incentive is a lump sum payment of $10,000. This does not include public safety employees who are eligible for the bridge benefits.
To be eligible for service retirement, an employee must be 60 years old and have at least five years of service with the city or 30 years of service and be any age. In addition, public safety employees eligible for the bridge benefits who have 25 years of service and are age 55 are also eligible. The lump sum incentive is $7,000.
Campbell said around seven or eight employees have signed up for the incentive plan with a few more who are talking about signing up. Early projections from finance staff estimate a savings of $60,000 to $70,000 this fiscal year and $150,000 to $200,000 in savings next fiscal year, depending on how many employees ultimately sign up for early retirement.
“Most of the time the positions are refilled, but at a much lower cost employee because the other person has topped out,” Campbell said of the savings. “Any time you have a vacant position you always urge department heads to look at a chance to combine something, do you need that position still or is it something we might be able to refill with a (part-time) employee.”