As salaries and benefits continue to dampen Glendale’s fiscal health, the City Council gave final approval for a voluntary buyout program aimed to trim down staff at City Hall.
Employees eligible for retirement along with younger workers can apply for the incentive, which would give them six months of salary in exchange for leaving their jobs.
The program would be cost-neutral as the city would leave the positions vacant for six months or longer, said City Manager Scott Ochoa at a council meeting on Tuesday night. The money for the incentives would come out of the already-approved citywide salaries and benefits budget of nearly $226 million for fiscal year 2014-15, which begins July 1. The total budget for the upcoming year is roughly $833 million.
“It’s a cost-cutting measure and something that will save money and that’s the bottom line,” said Councilwoman Laura Friedman by phone Wednesday.
The council unanimously approved the incentive with Mayor Zareh Sinanyan and Councilman Frank Quintero absent for the vote, although the two had expressed support for the program during earlier budget study sessions.
Staffing costs are the biggest line item within Glendale’s General Fund budget, which pays for parks, libraries, police and other general services and are expected to continue to drive expenses in the long term, according to a city report.
The first time the city offered a separation incentive in fiscal year 2012-13, 150 employees left City Hall, dropping the city workforce to 1,583, compared to 2,000 in fiscal year 2005-06. About three-quarters of those vacated positions were eliminated, said Human Resources Director Matt Doyle.
Those of retirement age who leave early must deposit their incentive into a tax-deferred retirement health savings plan, which can be used for future retirement medical expenses. Those who are not eligible for retirement will receive their buyout as a lump sum in their final paycheck.
Rank-and-file police and fire employees are exempt from the incentive. Employees can apply for the incentive between June 16 and July 18. Some could leave their jobs as early as Aug. 15 with a final separation date set at Sept. 30.
While officials don’t have a target savings amount, they plan to review the applicants and decide whether to move forward with the program after analyzing how many of the proposed vacated positions could be eliminated. The goal is to hire as few replacements as possible. If some positions do need to be refilled, the new employees would receive reduced retirement benefits due to a state law that took effect last year.
“It’s kind of a fluid process where we’ll have to see who leaves, how many leave and how we can adjust the staff duties accordingly,” said Councilman Ara Najarian. “At the same time we are going to be asking more from the existing employees and they are going to have to oftentimes broaden their work duties and take on extra duties to make up for the loss of employees who do except the [separation and] retirement incentive.”