Tuesday, Feb. 7, 2012 | 8:59 p.m.
In an effort to ease a continuing budget deficit, the Henderson City Council unanimously voted to implement its voluntary employee severance program and further budget cuts Tuesday night, and Mayor Andy Hafen said this is the last time.
The city is currently looking at a $13 million hole in this year’s budget, and come summer, another $14 million for the next fiscal year.
The severance program, first used in January 2009, will allow the city to pay $5 million to employees who volunteer to retire or quit.
In this fifth round of buyouts, outgoing employees will receive two weeks pay for each year they worked for the city, three months COBRA or retiree medical coverage, a 12-week minimum severance if they’ve worked for the city for less than six years and will have a 10-year service requirement waived for sick leave payment.
Since its inception, 244 employees have taken the buyout and 73 percent of the vacancies created by those lost positions have remained unfilled or taken away all together, according to city officials.
In 2009 the city employed 1,280 nonpublic safety workers, and through several rounds of buyouts the number is down to 1,060.
Human Resources Director Fred Horvath said that although the city has spent $11 million on the severance program the total savings to date are close to $31 million. He expects about 100 employees to take the buyout this year.
Savings will be seen in 10 to 12 months after employees accept the package, which should add up to more than $500,000 in savings every payroll, said Horvath.
The development services center, which focuses on development projects, was hit the hardest, with an almost 80 percent reduction in staff, he said. However, the latest severance program will cut no city services.
Councilman Sam Bateman said the city’s staff level has been cut nearly “down to the bone,” and fears any further reductions would mean a cut in services.
“We maintain a level of service to the people and do it with far less employees,” said Bateman.
Mayor Hafen said this must be the final round of buyouts.
“I’ve always expressed concern about, are we getting a return on our investment?” said Hafen. “I think it’s been a good move for this council … this does make sense to do this the last time.”
The city also voted to eliminate 22 vacant positions and implement further cuts in city departments in the city to save about $5 million. Those positions range in many city departments, from the city clerk’s office to parks and recreation to community development.
Still, Finance Director Richard Derrick said the city has to dip into its reserves to close the $13 million budget gap by June.
“It’s a work in progress,” said Derrick, who estimates about $7 million to $8 million would be needed to close the gap. “We have strong reserves and they are part of the solution. We built them in good times and that’s what they are there for.”
Derrick said the city relied on $3.5 million of reserve funds to close the budget last fiscal year.