News Release
July 27, 2009
Concord's early retirement program helps solve budget shortfall
The City of Concord will say good-bye to 64 employees in August as a result of an early retirement program designed to help the City manage its budget shortfall and minimize lay-offs. The City has 479 full time employees; the retirements represent over 13% of the City's workforce.
Those who accepted the offer will receive 7% of their base salary annually in addition to their California Public Employees Retirement System (CalPERS) retirement benefit.
As is the case in most California cities, a sharp reduction in sales and property tax revenue has created a budget shortfall. Concord's $80 million general fund is faced with a $13.5 million structural deficit. The state is expected to take another $2.5 million of the City's money in property tax revenues to balance its own budget, magnifying the shortfall.
In June, the City Council passed the fiscal year 2009-2010 City budget and 10-Year Financial Plan, which went into effect July 1. The early retirement program, along with employee compensation and benefits reductions, operational changes, use of reserves, and the elimination of 42 positions through layoffs, were assumed in the budget projections.
The early retirements are projected to save the City $1 million this fiscal year (2009-10) in salaries and benefits, and $2.9 million annually in fiscal years 2010-11 through 2013-14. In 2014-15, when the funding for the program has been paid off, the savings will be $3.9 million a year. These projections assume no more than 50% of the retiree positions are re-filled.
"We are about to become a much leaner organization," said City Manager Dan Keen. "The City is losing 1,316 years of experience and expertise as these dedicated employees walk out the door. We are sad to see them go. But in this extreme budget situation, we are pleased to have found a way to reduce the City's work force that minimizes impacts to employees and our community.
Keen is reviewing staffing needs with all departments in light of the retirements. Those positions being vacated that need to be re-filled in order to provide essential services may allow employees on the layoff list to transfer to a vacant position, reducing the number of layoffs.
The City Council has voluntarily reduced its monthly stipend by 10% while the City Manager and Executive Team voluntarily took a 9% pay and benefit reduction.
In addition, all managers have accepted an almost 7% pay and benefit reduction and all confidential employees have accepted a 5% reduction in pay.
These reductions in pay and benefits equate to approximately $640,000 in savings to the General Fund. One element of achieving this savings requires employees to take 13 unpaid furlough days spread over the next twelve months. The first furlough day will be on August 14.
The City is currently negotiating with all represented bargaining units and is hoping to obtain additional salary savings from each of these groups. Local One, which represents 190 City employees, has entered a tentative agreement with the City. Their members will be voting on it prior to Monday's Council meeting, where the Council Members will be asked to act on the proposal.
For more information about the City's budget, visit www.cityofconcord.org, and select "Budget Update" from the News and Events box or call Ron Buck, the City's Budget Officer at (925) 671-3155. For more information on the early retirement program, call the Assistant City Manager, Valerie Barone, at (925) 671-3461.