Posted by Web Staff -
PLUSQUELLIC EXTENDS DEADLINE FOR 'BUYOUT'
MORE THAN 100 ALREADY AGREE TO VOLUNTARY SEPARATION
The City of Akron's offer to pay employees to voluntarily retire attracted 106 takers by 4:00pm today, the scheduled deadline for the program. But earlier today, Mayor Don Plusquellic in an e-mail letter to all employees extended the deadline for applications 10 more days to August 24.
"I have had some feedback from some employees that they needed more time," said the Mayor, "because of family vacations, the inability of some to connect with their retirement boards, and those who just need time to meet with a financial advisor to discuss this difficult choice."
Plusquellic stated that as "agonizing" as it is for him to consider, "there will be layoffs in September of permanent, full-time city workers on multiple levels."
The City previously announced that it faces a projected budget deficit of approximately $12 million before year's end.
"I would hate to see someone miss this opportunity for a one-time cash payout," Plusquellic said, "and then suffer the loss of their job when this alternative is being made available to all."
The Mayor told employees that some may have mistakenly thought that if they are not in entry level positions, they would be immune from layoffs. The city has previously said that layoffs will occur in many job classifications and in all departments and divisions.
Not since 1982 has the city been required to take such drastic steps. The City of Akron's operating budget has been hard hit due to decreasing revenue from income taxes, property taxes, investments, and state tax-sharing formulas that are impacting every Ohio city.
"By and large, employees with a pension 'safety net,'" as the Mayor called it, "accepted the buy-out to save the jobs of those who have no net at all. Every full time employee as of January 4, 2009 is eligible for the VSP benefit, and all five bargaining units of the city agreed to make the incentive available to their members."
The 106 departures represent an annual payroll expense of approximately $6 million, according to Akron Finance Director Diane Miller-Dawson. In addition to the savings in salaries, the city will also reduce other benefit costs for each employee, including health care costs, pension benefits paid by the city, and other expenses. The Voluntary Separation Plan is effective for all who accept it on October 1. If an employee is eligible to retire, in addition to benefits he or she may receive as pensions through the Ohio Public Retirement System or the Ohio Police and Fire Retirement Plan, the employee will receive a one-time cash payment calculated as follows:
A lump sum payment equal to 30% of the first $50,000 of base salary plus an additional 5% of that portion of the employee's base salary that exceeds $50,000.
For example, an employee making $70,000 per year would receive $15,000 + $1,000, or a $16,000 lump sum payable at separation, in addition to other benefits to which retiring employees are entitled.