Tuesday, Dec. 2, 2008 | 11:21 p.m.
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 [email protected].