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Harford council gets rundown on proposed early retirement program

Harford County government officials plan to spend $6.75 million during the current fiscal year to finance an early retirement incentive for 100 county employees, an incentive that includes several one-time payouts and health insurance subsidies for those who take early retirement.

Members of the Harford County Council appeared to be generally supportive of the plan during a public hearing held Tuesday evening on Bill 14-034, which would give County Executive Barry Glassman the authority to move the funds into the fiscal 2015 budget, if the council approves the bill. The money would be transferred from the general fund balance, the highways fund balance and the water & sewer fund, according to the bill.

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Glassman has promoted the early retirements as a way to save money and fund incentives for the employees who stay, such as pay raises.

Human Resources Director Jim Richardson, County Attorney Melissa Lambert and Director of Administration Billy Boniface – the former council president – presented the details of the retirement plan to the council.

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"What the bill that you have before you does is, it transfers the money to allow us to have the funds and the proper resources for us to pay out, hopefully, the employees that will take advantage of the retirement incentive," Lambert explained to the council.

A fiscal note on the bill prepared by the county auditor's office states that the appropriation would support up to 120 early retirees, but the county administration's goal is 100.

"We have put a little bit of a cushion into the legislation," Boniface said.

Richardson listed the benefits that come with taking early retirement.

"You will be paid 100 percent of the balance of your sick leave, which is a one-time benefit," he said.

Richardson said retirees will also be paid for up to 59 days of annual leave, plus any balances of personal leave and comp time. Finally, retirees get a $5,000 cash bonus, and the county will support a $20,000 life insurance policy.

Richardson said human resources staff have been giving employees who might take advantage of the early retirement options for retiree health insurance beyond what the county typically provides.

According to a fiscal impact note prepared from the Office of the County Auditor, 221 employees are eligible for the retirement incentive from a total pool of 992 full-time employees. The latter figure does not include grant-funded employees or employees from the Sheriff's Office, none of whom are eligible.

He said three information sessions have been held with employees recently, which more 100 employees attended. Richardson noted 21 employees have requested more information.

Employees have learned about franchising opportunities available for members of the Baby Boom generation and retirees from a representative of the FranNet franchise consulting firm, as well as opportunities for temporary employment.

Richardson said long-serving county government employees would be attractive to private-sector employers because of their proven dependability, their ability to pass drug and alcohol screenings "and that you have a lot of knowledge, skills and ability that are very transferable to the private sector."

He said anyone who wants to participate in the early retirement must sign an "irrevocable letter of intent agreement."

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"In order to participate in this program, the county will require you to retire no later than May 1 of 2015," Richardson told council members.

He said human resources staff will also provide financial planning seminars for those employees, along with an additional session with FranNet.

"We always advise people [retiring] to talk to an accountant, talk to a financial planner, before you're in a position to take that jump," Richardson said.

Lambert said the financial figures in the bill "reflect what we're hoping to be approximately 100 employees that will take advantage of the program."

She said Glassman is scheduled to report to the council by March 30 regarding how many employees have taken early retirement. Any unused money will go back into fund balances.

"This is Phase 1 of our initiative to reorganize government, create more efficiencies and to get the work force to a size that we can do a better job of incentivizing them on a more regular basis and investing some of the savings into those efforts," Boniface told the council.

Council members appeared to be supportive of the program, but they questioned some of the details.

Councilman Patrick Vincenti noted that "we have no idea who's going to participate at this point in time."

Boniface said about half a dozen people have signed up so far.

"Several of the employees have shown interest or are awaiting action from the council," he said.

Councilman Curtis Beulah asked if administration officials have any solid numbers on how much money will be saved through the early retirements.

County Treasurer Robert Sandlass said the initial savings of about $1.5 million would come during the final two months of FY2015, which ends June 30, after the employees retire May 1.

"Going forward, what this is about is [the administration] not filling those positions and then having the savings generated from that," he said.

On Wednesday, Glassman's spokesperson, Cindy Mumby, said the administration estimates approximately $8.6 million in the 2015-16 budget that will be adopted this spring.

Mumby cautioned, however, that the estimate is "conservative" and based on the assumption "roughly 100" employees will take the buyout package.

Councilman Jim McMahan asked if county officials "have assurances that these vacancies are not going to be back filled."

Boniface said officials must first wait to see who applies by Feb. 13, and then they would consider "positions that are critical for replacement" or what "responsibilities can be placed elsewhere."

"If there is someone somewhere else in county government who no longer has a position after we've looked at these efficiencies, then we're looking a providing them with training and the opportunity to fill the critical roles that are opened up through the retirement program," he continued.

"The intent is not to backfill," Mumby explained Wednesday, echoing Boniface's comments that they hope to fill any critical positions with existing employees and provide them with any necessary training.

"Of course," she continued, "these are estimates, best guesses. We are looking for savings. That is the intent."

No members of the public or county employees spoke during Tuesday's hearing.

Council President Richard Slutzky said the bill will be placed on the Jan. 13 agenda for consideration by the council.

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