City OKs $2 million for retirement incentive
To save money in the long run, Pasadena is offering eligible city employees a bonus to retire in two months.
Pasadena City Council recently gave final approval to appropriating $2 million for the retirement incentive.
Employees who are approved for the bonus will receive a week's pay at their base hourly rate for each year they worked full time.
The bonus will be paid in January.
Budget Director Andy Helms said more than 200 employees are eligible for the bonus through either age or years of service.
The application deadline is July 30 for the retirement that takes effect Sept. 30.
The city has the right to refuse someone's application, Helms said.
We structured it so that ultimately the city will determine who's able to take advantage of the offer so we can protect ourselves from either losing critical personnel or too many in one group or another, or too many over all," he said.
This is the first time Pasadena has tried a voluntary retirement-incentive program, Helms said.
It was triggered, he said, by projected revenue decreases for the 2011 fiscal year that begins Oct. 1: Property taxes are projected to be down about $1.2 million or $1.3 million, industrial district revenues about $300,000 and sales tax revenue about $4 million, he said.
All in all, we're looking at about a $6 million deficit, assuming we continue to spend at the current rate," Helms said. That's what prompted our evaluation of our expenditures where we can make some adjustments in expenditures and in revenues."
Pasadena's budget for the current fiscal year, as adopted Sept. 22, included estimated revenue of $141.3 million.
Thus, a $6 million drop to $135.3 million would represent about a 4-percent decrease.
During the council's July 13 pre-council conference, Councilman Don Harrison asked Human Resources Director Randy Perry why the city had not announced the program sooner so that those who retired recently could have taken advantage of it.
Perry said the city made the announcement as soon as the details were final.
According to the ordinance appropriating the $2 million incentive package, the city has experienced budgetary challenges" this year beyond its control.
City officials expect the challenges to continue next year, the ordinance says.
Thomas Webb, the senior staff representative for the American Federation of State, County and Municipal Employees, said it's difficult to know how to advise the city employees represented by the union's Local 1550.
If you find you're in a position to take retirement and be OK with sustaining your lifestyle, your obligations and your family responsibilities, then by all means, free the work field up for those who are in need of jobs," Webb said.
We would recommend that, not just in the city of Pasadena but throughout ... Texas as well as the nation."
On the other hand, Webb said he understands employees' desire to keep working.
We cannot encourage someone to not do the very thing that keeps substance in what we do work," he said.
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