Early retirement incentive in Vernon Hills

Having figuratively turned over every rock to cut costs this year, Vernon Hills officials are offering early retirement incentives to pare even more in 2010-11.

Trustees on Wednesday also approved nearly $1.2 million in cuts to close the current deficit, and opted to save money by ending the long-standing practice of paying residents' recycling bills.

"Obviously, we're not doing this to be punitive," Mayor Roger Byrne said.

Vernon Hills is one of few communities without a municipal property tax. Despite tough budget choices, imposing one has not been considered, Byrne said.

"There are other options," he said.

The actions were the result of prolonged discussion over recent months to plug holes and stave off future shortfalls as revenues from several sources are well below expectations.

The early retirement package gives eligible employees six months of their salary on the last day of employment, and 24 months of health coverage.

Twenty of the village's 107 employees are eligible for the incentive, which must be taken by Jan. 4.

Details were shared with employees Thursday.

The village now pays 85 percent of employee health care coverage. Full coverage was added as a sweetener.

"That's what this is all about - to avoid layoffs," Trustee Jim Schultz said.

Vernon Hills' work force has dropped in the last several years by about 20 full time positions. Spots have not been filled as employees left or retired.

Unlike other municipalities such as Antioch, Wauconda, Mundelein and Waukegan, Vernon Hills has avoided layoffs despite a historic drop in sales tax revenues, the main source of income for day to day operations.

How much will be saved depends on several factors, including which and how many employees take the buyout.

The last effective date of the program will be May 1, the beginning of the 2010-11 budget year.

In a separate measure, the board cut nearly $1.2 million from the 2009-10 general fund budget.

The cuts, which span six single-spaced pages and range from postage to overtime to insect control and vehicle replacement, were needed because revenues from sales, income, telecommunications, electric and hotel/motel taxes have fallen short of even revised estimates.

For example, sales taxes for July received in October were down 21 percent from the prior year, and those received in November were down 15 percent from the same month last year.

"Our big problem is not just the overall economy, but we have less stores than we had one year ago," Finance Director Larry Nakrin said.

One ray of hope is though the most recent month of sales tax revenue was down, it slightly exceeded the revised estimate, Nakrin said.

Trustees on Dec. 1 also are expected to end the village subsidy for residents' recycling, a practice that began in the early 1990s.

Charges range from $3.80 to $3.90 per month depending on the size of the recycling container. Eliminating that expense as of Feb. 1 would save the village about $86,000 through April and about $348,000 over a year.

"We're unique among villages in that we subsidize our residents' recycling cost," Nakrin said. "We're going to do basically what other municipalities do."