Buyout plan numbers still being crunched
By GRAY ROHRER, “mailto:firstname.lastname@example.org”>email@example.com
Full cost savings from a buyout proposal offered to the city of Cape Coral employees probably won’t be seen for three years while the full impact of the plan is still being tallied.
The buyout was offered as a way of reducing expenditures by cutting staff and replacing some positions with lower salaries. Even though the deadline to sign up for the buyout passed Aug. 31 with 198 workers taking advantage of it, the total benefit won’t be realized for some time.
Under the buyout, police and fire employees could add four years to their years of service or their age to access their pension plan. General employees could add three years to their years of service or their age as an incentive to take the buyout.
Beyond pension incentives, employees who opted for the buyout also will receive any vacation time due as well accrued sick leave, with the percentage paid dependent upon hire date.
Most of the workers taking the buyout also will be able to take their medical insurance benefits with them when they retire.
“They get medical insurance until they qualify for Medicare when they turn 65, then we pick up what Medicare doesn’t cover,” said Councilmember Tim Day.
According to Budget Administration Sheena Milliken, 171 of the 198 employees who took the buyout are eligible for the insurance.
Because the buyout incentives and their costs are dependent on a variety of factors, such as how long they have worked for the city, estimating the eventual benefits cost to the city is difficult.
Day is also proposing an addition to the buyout that would allow workers in the DROP program that have their retirement money put into a separate account, a total of about 20 workers, to opt for the buyout.
“The reason I want to do this is because I want to lower the salaries for those positions,” Day said.
The 2009 budget passed Wednesday by the City Council shows 16 of the 198 positions are not budgeted at all, and eight of those positions are budgeted for one-quarter of the year. Even though most of the positions are fully budgeted for next year, not all will be refilled.
“Some of those budgeted we won’t have to rehire,” Milliken said.