Waukegan: City offers early retir. to offset revenue slump

[fedupinwaukegan]

Check the link later. I think the comments are going to be interesting. Already one is.

Keep an eye on all this.

City offers early retirement to offset revenue slump
Shortfalls up to $6M forecast

June 2, 2009
By DAN MORAN <!-- e --><a href="mailto:dmoran@scn1.com">dmoran@scn1.com</a><!-- e -->

WAUKEGAN -- Responding to a staff analysis that forecasts a "massive gap in our city budget" due in part to "gloomy" revenue estimates, the City Council on Monday approved a pair of early-retirement incentives for municipal employees.

Seventh Ward Ald. Patrick Needham, who chairs the Finance Committee, said the incentives -- offering employees as young as 50 a chance to start collecting pensions, along with a year of insurance benefits -- are being offered to avoid layoffs.

"Our projected revenues are way down, and in order to meet our obligations, (we're) going to have to be very creative," said Needham, listing such payments as payroll, bills and public projects.

"I know it's not what everyone wants to hear," added Needham, "but our goal is to balance this budget without having to let anybody go."

According to figures aired in committee Monday, the city has 298 employees who contribute to the Illinois Municipal Retirement Fund. The total annual payroll for those employees is $15.5 million.

Under the measures approved by unanimous vote Monday, two groups of those employees would be eligible: 37 employees with eight years on the job who are 55 years old, and 18 employees with 20 years who are 50.

Assuming that at least 25 individuals take advantage of the plan and the positions do not need to be refilled, Needham said, the city would save $1 million during the first year and $1.4 million in the second.

Early retirement is also being offered to 11 firefighters and nine police officers. Cost savings in those cases were estimated between $61,000 and $100,000 per employee over the first two years.

While Needham said overall budget talks are in the early stages, he added that shortfalls of $3 million to $6 million have been forecast.

According to Director of Governmental Services Ray Vukovich, one measure of revenue shortfall has been in sales taxes, which he said "started to go south" last November and December.

In March 2008, Vukovich said, the city collected $980,000 in sales taxes, and that figure dropped to $637,000 in March 2009 -- a dip of 35 percent.

First Ward Ald. Sam Cunningham voiced concern that service levels might be affected by employee reductions. He asked the council if it is "willing to entertain an increase in our tax levy" if residents protest service cuts.

The retirement incentives will be open from July 1 through June 30 of next year. Asked how many individuals might take advantage of the offer, Mayor Robert Sabonjian said it is "very, very early in the process, and it's going to take a while to hear a response from our employees."

Needham said other options that could be explored to reduce salary costs include wage freezes and unpaid furloughs. He added that talks will be held with employee unions about wage freezes as well.

"Pretty much every community is going through some trying times, including Waukegan," Needham said.

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[marshmellow]

Are there provisions to keep retired city employees from getting other government jobs, or act as 'consultants'?

If a 50 year old city employee can take the package, then turn around and work for the school district, then what is the point of letting them 'retire'?

I smell bailing out of politically-connected employees here.

[peregrin]

marshmellow Wrote:Are there provisions to keep retired city employees from getting other government jobs, or act as 'consultants'?

If a 50 year old city employee can take the package, then turn around and work for the school district, then what is the point of letting them 'retire'?

I smell bailing out of politically-connected employees here.

I the point is to get the off the City payroll. I am assuming that those offered early retirement paid into the retirement system and have earned their retirement. Since those offered the package only get one year of benefits and health insurance is outrageously expensive, I would assume most will need to find other jobs. Why should they not have the same freedom to seek employment anywhere? Have they forfeited their rights because they worked for a government entity and paid into that retirement system?

I suppose there is always the possibility of politically connected folks landing politically connected jobs, but I don't see the early retirement offer as a bail-out of politically connected employees.

edited for typo