Buyouts to save city $2M in 2013

By David Skolnick


With 52 of its employees taking an early-retirement incentive, the city will spend about $3 million for those buyouts and severance packages.

Even with those expenses, the city will save about $2 million in 2013 — with bigger savings in future years, possibly as much as $3.66 million, according to data provided by the city’s finance department.

Nearly all of those who’ve retired or will do so by the end of year won’t be replaced, Mayor Charles Sammarone said.

The combined annual salary for the 52 is $2,616,221. Also, include about 40 percent, about $1.05 million a year, for benefits, Finance Director David Bozanich said.

That’s a reduc- tion of about $3.66 million in employee salary and benefit costs annually when fully implemented.

To date, 24 of the 52 have retired with the last work dates of the remaining employees ranging from this Friday to Dec. 28.

The city is paying about $2 million in early-retirement buyouts — $923,822 this year, with the rest being paid next year.

The city is buying two years of state Public Employes Retire- ment System time for those taking the deal.

The buyout amounts — which range from $14,971.42 to $78,199.80 — are calculated based on salary and years of service.

Also, the city is paying close to $1 million to its retirees in severance packages for unused sick and vacation time, longevity pay and education bonuses.

About $460,000 has been or will be paid this year.

Early next year, the city will pay about $530,000 in severance-package costs for those retiring between this Friday and Dec. 28.

The early-retirement pay and severance packages eat into the $3.66 million annual savings.

But there still will be a savings of about $2 million next year.

“We’re not going to hire anybody to replace those retiring unless those positions are definitely needed,” Sammarone said. “If management positions are needed, we’ll start the salaries at 20 percent less” than those jobs’ most-recent annual salaries.

Bozanich is the only employee who will retire and be rehired at this point, Sammarone said.

Bozanich will retire Dec. 28 and be brought back at his $83,949 annual salary, Sammarone said, while collecting his pension.

That’s being done, the mayor said, because V&M Star, which is investing about $1 billion in an expansion at its steel-piping plant, wanted Bozanich to remain through at least the first quarter of 2013.

Bozanich has worked closely for a couple of years with V&M officials on the project.

Also, Sammarone said that with a new mayoral administration taking over in 2014, he was going to have trouble finding a replacement for Bozanich, particularly because finance director isn’t a civil-service-protected job.

“Who am I going to bring in who’ll work for such a short time?” Sammarone said. “If [Bozanich] left after three months [in 2013], who are you going to find to finish the V&M project and then work for nine months without job security?”

Also, Bozanich may work two to three days a week during portions of the last nine months of next year, saving the city money, Sammarone said.

By retiring and then being rehired, Bozanich is forfeiting his first two months of retirement pay as per state law.

“The mayor asked me to serve out his term, and city council also asked me to stay,” he said. “It would be difficult to find someone for this job for that short period of time.”

No decision has been made, but there could be other retire-rehires on a temporary full-time or part-time basis for a few months, Bozanich said.

“The continuity of service is still needed,” he said. “Also, some positions require specific training, licensing and state certifications.”

The city offered the early-retirement buyout as a way to reduce expenses.

There could be as many as five more of the about 745 employees working for the city taking the buyout, Bozanich said. But the decision needs to be made very soon, he said.

Those eligible for the incentive were city employees age 60 and older with at least five years’ experience working in the public sector, those at least 55 years old with 25 years of service, or anyone with at least 30 years working for the city. Police officers and firefighters weren’t eligible to retire early under this program.

Also, the state changed government pension laws so anyone retiring in 2013 or later would have increased contribution rates and likely receive slightly smaller pension payouts, more in line with the cost of living.

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