For the second time in two years, Chandler will offer severance packages aimed at prompting dozens of city employees to take voluntary early retirement to help balance a massive budget deficit.
Last Thursday, the City Council voted unanimously to reinstate the Retirement Incentive Program - known by the acronym RIP - which would give eligible city employees the choice to accept a severance package equal to 12 weeks of base play, plus one week of additional pay for each year of service, up to a total of 20 weeks, according to a report from Debbie Stapleton, human resources director.
The estimated payout for a worker with 17 years of service who accepts early retirement is $92,500, according to Stapleton.
The council also approved a similar voluntary severance package for employees not eligible for early retirement. An employee with five years of service who accepts voluntary separation would receive an estimated $31,685 payout, Stapleton wrote.
Each employee who accepts early retirement or voluntary separation would remain eligible to receive health insurance at city rates for a year but would have to be out of the job by Oct. 1.
Last month, City Manager Mark Pentz recommended slashing up to 38 occupied jobs to help balance a projected $17.5 million budget deficit next fiscal year, 2010-11, which begins in June. The cuts are expected to save the city more than $6.2 million a year, Pentz has said.
The Chandler Police Department would be the hardest hit by the latest round of cuts, facing the loss of 17 support positions. The cuts would eliminate the DARE anti-drug program and the park ranger program, among others, but no sworn officers, Pentz said.
If officials don't receive enough applications for early retirement or voluntary separation, it could prompt layoffs, according to Stapleton. The "involuntary" severance packages would give laid-off employees a 30-day notice that their jobs are being cut; two weeks of base pay plus one additional week for each year of service, not to exceed 16 weeks; and six months of eligibility to receive health insurance at city rates.
The estimated payout for a laid-off employee with five years of service would amount to $13,735, Stapleton said.
The latest severance packages are less lucrative than those offered last spring, when 62 employees accepted early retirement and another three opted for voluntary separation. Those employees received a lump sum payment equivalent to 20 weeks of base pay.
The cuts helped the city close a $20 million deficit last fiscal year, 2008-09, largely attributed to the ongoing economic recession, officials have said.