As an alternative to laying off 33 city employees, the city of Mountain View is hoping to encourage some to retire early. A set of incentives for early retirement were approved by the City Council without comment during Tuesday's meeting.
Under the $200,000 program, eligible retirees could receive $750 for every year worked for the city and would qualify early for retirement health benefits and a higher percentage of cash payout for unused sick leave. With city services already cut significantly last year, administrators hope to eliminate 33 positions in order to balance an ongoing deficit.
"We're trying to find ways to save dollars for the general operating fund," explained assistant city manager Nadine Levin. "If we could de-fund or eliminate a position for retirement that we are not going to refill, then that's a savings."
Retirements and layoffs will help fix a projected $5 million general fund deficit this June, city staffers say. The program would cost the city $200,000 in one-time funds, but would save the city much more in the long run, said Levin in a staff report.
A package of four incentives is being offered to city employees at least 50 years old who just need a little encouragement to retire this year. The proposed incentives are:
■ $750 for every year worked for the city, up to $15,000
■ Employees within two years of qualifying for the city's "defined benefit" retirement health benefits (it usually takes 15 years) at the end of July will qualify upon retirement
■ Employees within two years of qualifying for the next level of retirement health benefits at the end of July will qualify for that higher level upon retirement
■ Employees within two years of receiving a higher cash-out of sick leave will receive that higher cash-out upon retirement.
It is ultimately up to city officials whether to let an employee take the offer.
"Someone may find this a very attractive offer," Levin said. "But if their position needs to be refilled out of necessity, then that person going out is not going to save the general fund money."
Levin is filling in as interim employment services director after the retirement of Kathy Farrar last year — an example of the department consolidation the city proposes to achieve.
Employees who choose to take the deal cannot return to work with the city for a year. Levin reports that the city could not afford more lucrative "golden handshakes" for retiring employees as other cities have offered.
The $200,000 would come from a "budget contingency fund" which has a balance of $5.8 million.
While the program may increase certain employee benefit costs for the city in the next few years, Levin said that wasn't a concern.
"The individual would be entitled to the benefits ultimately anyway," she said. "We're just putting them in it two years earlier."