How buyouts of employees would work, now and later

By Joe Schoenmann

Sunday, March 15, 2009 | 2 a.m.

As a last defense against layoffs, Clark County appears ready to join Henderson and Las Vegas in offering buyout packages to employees as a way to reduce salary and benefit costs in the long run.

The difference between Clark County’s package and those of the two municipalities is the county’s is much less generous. A county analysis shows that although county employees who voluntarily give up their jobs will receive buyouts worth an average of $25,586, Henderson’s package averaged $62,977 and Las Vegas’ average was $30,656.

Is there a reason the county is being comparatively frugal?

The relative severity has a little to do with demonstrating to state lawmakers — who might be looking to trim tax dollars from the county’s allotment — how serious the county is about saving money.

“We’re in a real bind, is what it shows,” said Rory Reid, commission chairman. “We’ve already taken many, many steps to cut our budget and this is just another one that we need to take to avoid layoffs.”

How would the program, known as the voluntary separation program, work?

Permanent employees of the county and its hospital, University Medical Center, with five or more years of experience with the county would be eligible to resign. Firefighters are excluded.

Employees would be given one week of salary and benefits for every two years of work, with a maximum of 15 weeks of compensation.

The county would pay the employees’ COBRA health insurance premiums for up to 12 months.

Employees who choose this early-out will not be eligible to work for the county or UMC for three years, unless the employees pay the benefits back to the county.

So are these positions taken “off the books,” so in the future the positions would have to be re-created?

They are not off the books. However, before the county can hire anyone back, part of its resolution requires that the amount of money it paid out to retire a position must be paid back, or recovered, before a new hire is made. So, if the separation cost was $20,000 plus $5,000 in accrued sick days and vacation days, the position would have to stay dark as long as it takes the county to recover $25,000.

“The idea is to keep the positions vacant for a significant period of time,” said Ed Finger, county comptroller.

Is there any worry that doing this program will result in a sort of “brain drain” from the county, in which highly knowledgeable people will leave?

Don Burnette, director of Administrative Services, said that although everyone can apply, some won’t be allowed to take the deal.

“We’re going to be very conscious of not allowing employees to leave who are in critical positions,” he said.

But will the county be cutting jobs now that will cost it a lot more money down the road to refill?

Burnette said the county’s “immediate goal is to reduce our expenditures.” Commissioner Chris Giunchigliani said the county must keep an eye on the need for those future hires, when the economy turns around.

“Training a new employee costs you about three years’ worth of salary,” she said. “So you always have to understand that if you retrain somebody, it is going to cost you. We’re not just saying, ‘Too bad, so sad, see you later.’ We ought to have a plan for staffing up, when it turns around, as well.”

How much money does the county need to save?

Burnette said the county has to fill a $70 million budget hole in the next fiscal year. That amount, he added, could grow depending upon the actions of the Legislature.

The county has taken several steps to cut costs — not filling about 400 vacant positions, cutting back on overtime and instituting a furlough program that allows employees to take a limited amount of time off without pay.

Which employees might be more willing to take this kind of buyout?

Perhaps employees whose positions are funded by fees collected by the county, which are called enterprise funds. Many of these positions are in areas that a few years ago were booming, such as civil engineering, permitting and other components of development. Economic development here has tanked, however, and with it the need for many of those employees. Burnette estimated that approximately 2,000 county employees are tied to such enterprise funds.

This all sounds pretty bad.

As Burnette put it, “We have a problem.”