Clearwater Plans Another Retirement Incentive
By Carl Wagenfohr
CLEARWATER - Faced with a potential 2010/11 budget shortfall of more than $7-million, the City of Clearwater is again preparing to encourage eligible employees to retire with a one-time cash incentive.
Human Resources Director Joe Roseto presented the City Council with the plan during Monday's worksession.
The 182 city employees eligible to retire during the current fiscal year would be offered a one-time payment of $15,000. Those wanting to take advantage of the offer must apply between May 17 and June 18. Retirement-eligible employees must retire during the month they apply, while those who would become eligible between July and September must retire during the month they become eligible.
Roseto explained that the incentive would create vacant Full-Time Equivalent (FTE) positions that could be considered for elimination. If needed, the vacated positions could be filled with employee transfers, avoiding layoffs, or they could be filled with new hires "at a significantly lower salary."
If all eligible employees took advantage of the offer, the incentive payments would total $2,730,000. Additional cash payouts totaling $4,448,882 would be made to retiring employees for their earned vacation and sick leave; that amount is currently carried on the city's books as a liability.
Roseto estimated that if all eligible employees took advantage of the offer, the city would save $2,666,781 if the vacated positions remain unfilled through the current fiscal year. While future savings are less certain, Roseto estimated 2010/11 savings at $10,671,124 if those 182 positions remain vacant throughout the fiscal year, or $3,089,180 if each of the positions were filled at their minimum salary.
56 city employees took advantage of last year's retirement incentive, resulting in $2-million in "permanent savings" according to Roseto. He hopes to retire a similar number of employees with this year's program.
The City Council will vote to approve the retirement incentive package at their meeting tonight.
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