Sunday, December 16, 2012

Common Council Passes Retirement Incentive Program in Effort to Cut Costs

The Common Council voted to pass a resolution approving the city’s Retirement Incentive Program Thursday night at a special meeting following the regularly scheduled Community Public Meeting. The program, which was arranged with members of Teamsters Local 671, passed by a vote of 8-2. Its passing is meant to help Middletown save money and prepare for planned department consolidations.

The early retirement incentive will be offered to members of Middletown’s manager union as well as other nonunion managers who have completed 25 or more years of service to the city or are 50 or older as of December 31st. Under the agreement, members of Teamsters Local 671 will be able to obtain up to two years of credit towards their pensions restricted at the number of years it would take them to reach retirement eligibility, or a $40,000 payout over two years. The first $20,000 of this payout will be given one month after the employee stopped working for the city or when the funds became available, while the second $20,000 will be made within one year after the first payment.

Mayor Daniel Drew stated that sixteen managers have expressed interest in accepting the retirement incentive, but did not state their names or what branches they served in. The Hartford Courant reported earlier that the group includes four managers in the school central office, one from the sanitation department, one from the fire department, and 11 in city hall. It is possible that some of them could leave before the end of the fiscal year.

Drew announced that the Retirement Incentive Program would produce estimated total savings of $584,512 over the next two fiscal years, and then estimated net annual savings of $133,874 beginning in 2014. It was estimated that the incentive would cost the city roughly $1600,000 in the current fiscal year.

These estimations were produced by the bipartisan Mayor’s Task Force for Efficiency in Government, led by Councilman Gerald Daley (D). “This program is about making the city work better and smarter,” Drew stated shortly before the resolution was passed. “It will positively impact the city for decades to come.”

At the same time, Drew and his task force are proposing a merger of Middletown’s legal and personal departments, which would lead to labor relations duties going to one of the deputy city attorneys. Earlier this year, the task force recommended that several departments be merged and that the city not fill open positions whenever possible.

Carl Erlacher, the city’s Director of Finance & Revenue, made a presentation at the meeting and answered questions from council members about the estimated cost and savings of the Retirement Incentive Program. Earlacher spoke about why he believed the program is fiscally responsible.

“This program will provide significant savings if the council and mayor follow the pan and stay diligent and leave a number of positions open,” Erlacher said. “I am confident that it will be financially sound and legally sound. This program is on sound ground.”

A number of council members spoke about why they supported the program before the final vote. “The cost-benefit of this program has been shown to be at a reasonable level,” Ronald Klattenberg (D) said. “It provides a great possibility for streamlining in government. We should all focus on the savings it will provide.”

“I applaud the effort of the mayor’s task force,” Todd Berch (D) said. “This streamlining will provide better sources and services for the city.” “These incentives are not golden handshakes,” Thomas J. Serra (D) said. “They can provide a positive impact, but the onus is on us to make sure reorganization works. We need to make sure that the city can still successfully provide services.”

Linda Salafia and Deborah Kleckowski, both Republicans, were the two no votes and were powerful voices against the resolution. Both spoke before the final vote. “I don’t think this is a good deal for the city,” Salifia stated. “We are still going to have to replace these people eventually. Who is going to pick up the slack of the supervisors who leave? I just don’t see where the savings are going to come from.”

“I am worried that these departments will be dysfunctional,” said Kleckowski. “I am very concerned about the intellectual talent that is leaving the government. I want to see a cost analysis of the managers leaving from the mayor,” she said, echoing the statements of several other council members. Drew said that such information would be forthcoming.

After the meeting, Salafia further clarified her concerns. “We haven’t seen a list from the task force of those who are leaving or a cost analysis of leaving these positions. The city is doing this process backward.”

“I have a problem with how they did the math. The city will have to fill these positions eventually. We are not going to save money. My constituents will be outraged by this program. Many of them already have a negative view of the pensions our city employees have.”


Jim M said...

Why do the taxpayers have to provide incentives? Re-organize the departments and layoff the unnecessary managers. Paying 40k or adding to pension service without elimination of positions is likely to result in more cost to the taxpayers. It would be better to see the details of the estimates of the costs and savings.

Anonymous said...

Technically, it's a payout of 40K plus added pension benefit in some cases or added years of service which is added pension benefit. Just saying.