St. Charles considers buyouts

Unemployment lines are still long, but the impact of the sluggish economy on St. Charles inspired the unveiling of a buyout program Monday that targets the city’s highest paid employees.

City Administrator Brian Townsend presented the buyout as part of a beefy list of potential budget cuts for the 2011-12 fiscal year. All told, the list could net savings of more than $2.5 million while avoiding layoffs.

Part of that means encouraging employees to leave voluntarily by waiving the incentives of ongoing health care and a cash payout. The plan will be offered to all 250 full-time and 27 part-time employees on the city’s payroll. Townsend said the payroll must be a main target to make a real dent in the city’s budget.

“Employee compensation and benefits is clearly the biggest expenditure we have as an organization,” Townsend said.

All versions of the buyout offer a base $10,000 payout to the employee. Then there is an option of selecting one or two years of health care coverage through the city.

Workers taking the buyout would continue to pay the same portion of the health insurance cost they had while still under the city’s employ.

Employees who choose the one-year health insurance option also will get a payout of one week of salary for each one year of service to the city up to a maximum of an additional $10,000.

Employees who choose not to continue receiving health insurance through the city can receive a maximum of $20,000 in the years-of-service pay. City staff said the maximum value any employee could receive in any version of the buyout is about $42,000.

The city will gauge employee interest in the buyouts and actual long-term cost savings before implementing the plan.

Staff said no employee taking the buyout can ever be rehired by the city. The idea is to avoid, at least directly, any pension double-dipping.

Other proposed budget cuts include the elimination of one front-line company in the city’s fire department.

That cut comes as the result of losing the service contract with the former St. Charles Countryside Fire Protection District, as the district recently voted to start its own fire department.

Fire Chief Patrick Mullen confirmed in an interview that the elimination of the company will not result in the closing of any firehouse or the elimination of any firefighting positions. Mullen said he does expect a reduction in firefighter overtime.

It also is likely that the city will not open up testing for new hires in the police or fire departments. The city currently tests to create a hiring list every two years. City officials now expect to extend that to three or four years.

The city also has plans to eliminate the employee tuition reimbursement program and reduce the base salary structure of city employees.