Henderson to offer buyouts to city employees; layoffs possible

Tuesday, Dec. 2, 2008 | 11:21 p.m.

Henderson to trim expenses to cover $28.2 million shortfall (10-8-2008)

Henderson will offer employees a buyout as part of its strategy to cover a projected $28.4 million revenue shortfall, and city leaders have not ruled out layoffs to make ends meet.

The voluntary severance package was added to budget cuts and a hiring freeze, measures the city had already put into place to help the city stay afloat during the next four years.

The City Council adopted the plan to deal with the budget shortfall on Tuesday.

"We're not taking any option off the table," Mayor James B. Gibson said. "We can't tie our hands. We're obligated by law to balance our budget, and we're going to do that any way we can."

City Manager Mary Kay Peck, who presented the plan, said it does not include cuts to any resident services, such as parks.

"We are going to continue to be a full-service organization," she said. "We are going to work hard as an organization to get through this recession."

Peck said the voluntary severance package will be offered to any full-time employee whose age and years of service with the city, when added together, equal 65 years or more.

She said about 350 employees meet the qualifications and that the city will present the plans to local unions, which represent about 70 percent of city employees, then offer the package for a 45-day window, beginning in about two weeks.

The package would pay employees two weeks for every year of service and provide up to three months of health-care coverage. Of the 350 Henderson employees who meet the requirements, Peck said, she estimates about 50 would accept the offer, which would cost the city an estimated $3.2 million.

The city would recoup that money within the first year, and the severance packages could save the city up to $16 million over a five-year period, she said.

The city will honor its current union contracts, Peck said, but it will not offer annual cost-of-living increases when the contracts are renegotiated in 2011.

Beyond the projected $28.4 million shortfall in the fiscal 2009 budget, which ends June 30, projections for the fiscal 2010 budget show continuing revenue declines, with the 2011 budget year being the earliest that the city would see some relief, Peck said.

The plan calls for an additional $22 million in additional revenue sources over the five-year period by using $10 million from the city's rainy day fund, reducing the amount of money left in the ending fund balance by $2 million each year and taking $2 million from the city's vehicle shop.

Another major piece of the plan is the reorganization of the Developmental Services Center, the self-funded entity that oversees development issues such as plan reviews and inspections.

The decline in development has left the center unable to fund 65 of its positions, which prompted the city to shuffle those positions to other departments or use money from outside sources to fund them.

Peck said the city solicited money-saving ideas from its employees, and received about 1,000 responses. Those responses were grouped into eight categories and the city has formed eight employee review committees to look at the recommendations in each area.

The suggestions ran the gamut from practical, such as reducing fuel expenditures by properly inflating tires on city vehicles, to creative, such as selling calendars featuring police officers and firefighters.

She said the five-year plan is only a projection and that it will be altered as needed.

"We fully anticipate that we will be looking at this model on a regular basis, checking the numbers that come into us monthly and quarterly, and making changes as needed," she said.

Gibson requested that the council receive monthly updates during the duration of the plan, then made an appeal to the community to get involved.

"We encourage members of this community to come forward and lend their experience and their expertise," he said. "This is a call to all hands."

Jeremy Twitchell can be reached at 990-8928 or jeremy.twitchell@hbcpub.com.

Discussion: 4 comments so far…

By azsk8fan

12/4/08 at 6:45 a.m.

Suggest removal

Most people don't get the luxury option of being 'bought out'.... they just get laid off flat out - so perhaps these people better take the money and run...at least they're getting something slightly more substantial than a pink slip.
By stevem

12/4/08 at 12:15 p.m.

Suggest removal

when a company offers you a buy out that means "please, don't make us fire you" so you should take it and run.

it's a way for them to "thin the herd" without the negative p.r. of layoffs.

the review-journal was doing buy outs and not very many employees took advantage of them and they will regret it in a few months when the r-j starts the layoffs.
By azsk8fan

12/5/08 at 7:43 a.m.

Suggest removal

I totally agree - like I said at least a person getting a 'buy-out' gets to leave with something a little more substantial than the proverbial pink slip. Take the money and run folks. Think about moving to someplace like Pakistan - maybe you can get one of the american telephone jobs that they keep outsourcing to foreigners.
By amorgan

12/7/08 at 9:58 p.m.

Suggest removal

As a former employee of the City of Henderson, it is with disappointment that I read this article and learn of the city's difficult fiscal times. I feel very bad for my valued former collegues who may be at risk of losing their jobs. From 1994-2002, I served as an HR recruiter for what was considered the finest and best managed city in the State of Nevada. I honestly think that the fiscal difficulties were initiated by a very faulty compensation study that was contracted out back in 2002. I say this because the salary study provided large increases only to those employees who were in favorable standing by upper management. Expert HR professionals know that you classify and compensate jobs in the public sector, not personalities, but unfortunately this was not the case in Henderson. If any one takes the time to compare turnover rates from 1993 to 2000, and 2000 - 2007, believe me, you will see a large increase in turnover in the more recent years. When turnover occurs, expert knowledge is lost, therefore placing undue pressure of new employees to learn their profession and organizational culture. City of Henderson problems started in October 2000 when one of its finest and talented managers with many accomplishments and expert knowledge suddently "disappeared" or was placed on "special assignment." Translation: truly good leaders and executives value the opinion and views of their employees, but it seems that in 2000, this characteristic was lacking, and may still be lacking today. I am thankful that I work for a public sector employer in the southern California area that is considered an employer of choice, with active hiring, high morale, good managers who care about their employers, a strong HR Department, and fiscally sound. Thanks for reading, hope everyone has a nice holiday season, and by the way, Janice Weise is still the best HR Director I ever worked for.

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