Title
Chief Administrative Office recommending Board approve the Early Retirement Incentive Program (ERI) and Plan for Fiscal Year 2010-11. (Est. Time: 15 Min.)
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BUDGET SUMMARY:
Total Estimated Cost $ 0
Funding
Budgeted $ 0
New Funding $ 0
Savings $ 0
Other $ 0
Total Funding Available $ 0
Change To Net County Cost $ 0
Fiscal Impact/Change to Net County Cost: None from this action however Plan could possibly result in $5 M in annual savings depending upon number of retirements and number of years of service. The cost of the ERI would come from the Retiree Health Fund which had $16 M in cash on 7/13/10. This is the source of funding for 2009/10's ERI offering. The average (RHS) contribution to retiring employees in FY 2009/10 was $35K.
Background: The County is facing a projected $15 M fiscal deficit in FY 2011/12 plus a $1.5 M deficit in the current year (FY 2010/11) due to an additional -2% decline in property tax assessment. The ability to make these levels of reductions will be exceedingly challenging given that the organization has been in continuous downsizing since 2008 and there are primarily only staff costs left to make up that difference. It is critical to begin laying the ground work for dealing with the current year and the future projected deficit now. The Chief Administrative Office believes that by incentivizing at least 70 employees to leave and then restructuring or eliminating their positions that $5 M can be achieved in annualized savings. There are 500 employees over the age of 50 with at least 5 years of service in the County. There are 325 employees over 55 with at least 5 years of service.
Reason for Recommendation:
In September 2009 the Board approved an Administrative Service Agreement with International City Management Association Retirement Corporation (ICMA-RC) to provide for a Retirement Health Savings (RHS) account as a vehicle to offer an Early R...
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