City In Transition
5:15 pm
Wed January 22, 2014

Peduto's Severance Incentive Plan for City Employees Moves Toward Final Council Vote

Mayor Bill Peduto’s plan to incentivize some city employees to voluntarily leave their positions is at last moving forward in City Council.

“This has been a really great collaborative effort between council and the administration,” said Council Budget Director Bill Urbanic. “We were allowed to work very closely together to come up with the proper changes and clarify exact what the intent was.”

Urbanic presented some amendments to the bill, the most significant of which is an option for employees to receive a lump sum payout equal to 80 percent of their 2013 annual salary. The option to receive 100 percent of their 2013 salary paid over two years is still available. The date by which eligible employees must decide whether or not to take the severance package has also been extended from Jan. 31 to Feb. 28 of this year.

Though Peduto’s program is closer to becoming a reality than it has been at any other time since it was introduced in November, it was not without its detractors at Wednesday’s committee meeting.

Councilwoman Darlene Harris reiterated her concerns about losing the knowledge and experience of people who have worked for the city for decades. She also said she was uncomfortable making a commitment to pay out a certain amount of money without knowing exactly how much money that might be, and where the funds would come from.

Peduto’s Chief of Staff Kevin Acklin attempted to assuage those concerns by saying that this week he plans to informally survey all eligible employees to get a better idea of who might be interested in taking the deal.

“That would give us … at least six weeks to understand who’s leaving,” Acklin said. “(It would also give us a) better idea of what the actual cost would be, which is helpful not only for the preparation of our budget amendments but also to do some work within the employment side to make sure that that intellectual capital that these people have is properly relayed and transferred to other people who are staying.”

City Controller Michael Lamb was present at the meeting. He said he is not in favor of the proposal, but that if it is implemented, he wanted to see some changes.

“I still think it’s a problem to call this a retirement incentive program,” Lamb said. “The ICA and the (Act 47) Oversight Board have continuously had a problem with that language, and I think language matters.”

Councilman Ricky Burgess echoed those concerns, and Council subsequently voted to change the name to a “Severance Incentive Program.”

Other amendments were primarily technical. Changes include a specification of who would receive severance benefits upon the employees’ death and a requirement that Peduto’s team provide to Council a report of the total cost or savings of the program by April 15, 2014.

Council did ask for a few more amendments including a clause that specifies what would happen if an employee who takes the severance package wants to come back and work for the city in a different position.

Burgess again brought up the issue of budgetary priorities during the committee meeting, saying that he would vote for the plan, but that he was not fully confident in Kevin Acklin’s claims that it could save the city more than $3 million over five years.

“We are going to enlarge our budget, and spend more money,” said Burgess. “That’s the truth of what we are going to do. There will be no savings this year, next year, and probably the year after. Maybe the fourth year we’ll have savings, but the first three years, we’re going to spend more money.”

Burgess said that if the city is able to find money for this severance incentive plan, they should be able to at least double the financial commitment to the Summer Youth Employment Program.

The legislation will come up for a final council vote on Tuesday.