McLean County government must cut up to 25 people from its workforce, County Administrator Bill Wasson said Monday during a Board Finance Committee meeting.
Committee members are recommending several methods to deal with the projected $1.5 million budget gap next year.
Those include an early retirement incentive package. There is a proposed hiring freeze with oversight, similar to one in place from 2010-2015. All new hires would require County Board committee review, not just the standard approval from the county administrator. Non-union county employees would get no pay raise next year. Committee members also recommended asking unionized workers to agree to a similar one-year pay freeze. Administrators also expect normal attrition to account for some shrinkage in the workforce.
If use of all those methods do not add up to needed savings, staff are asking board approval to cut workers to meet the goal. The Finance Committee has forwarded a recommendation to the full board that, where possible, workers losing jobs be offered lower-level positions. First Assistant State’s Attorney Don Knapp said they would retain their original salary if that is part of the salary range of the new job.
“This would still produce a savings for the county over time because those workers at the top of their new scale would be less likely to get significant raises,” said Knapp.
Wasson said there have been discussions with every department about potential reductions in force of 20-25 positions, depending on employee cost.
“Most have identified positions they judge will be least impactful to public service,” said Wasson.
The potential reductions are distributed through all departments approximately in proportion to the size of each department, according to Wasson.
“Make no mistake, this is going to have an impact on public service. We will do our best to minimize this. But there will be longer lines, fewer people answering phones, and more recorded messages,” said Wasson.
McLean County Government Employees
Staff said there are several reasons for the expected budget shortfall year, mainly attributed to an $800,000-$900,000 projected revenue decrease. They include:
- A loss of $500,000 in Personal Property Replacement Tax money from the state that is part of the state budget deal
- A 2 percent administrative collection fee on county sales tax revenue the state is imposing
- Relatively flat projected growth of 1 percent in county property values, and
- Shrinking income tax sharing from the state as the workforce declines because of local business hiring patterns and the retirement of the baby boom generation.
Wasson said the revenue dollars are not likely to come back soon. For example, a 1 percent increase in property value in the county amounts to only a $70,000 increase in revenue at existing tax rates. Wasson also said taxes rates for some funds will or have hit a ceiling.
“These (cuts) are less about solving the immediate problem than solving it for the next several years,” said Wasson.
He said any effort to bridge the gap through temporary cost cutting that does not involve personnel would be for a single year and then would have to be replicated every year going forward, an impossible task.
Early Retirement Offers
The number of job cuts the County Board will consider approving as part of the package later this month is imprecise because it is unclear how many of 61 eligible workers over the age of 55 who have at least 18 years of service with the county would take an early retirement offer. The theory behind the package is that some of those employees could be replaced at far lower salaries with entry level wages.
“What incentive is the right one to get someone to leave?” said Finance Committee Chair Dave Selzer.
The committee is recommending a menu of options to the full board that could be offered to eligible workers.
- Two years of paid health insurance and no cash incentive
- One year of paid insurance and a $250 cash incentive for each year of service
- No insurance and a $500 cash incentive for each year of service
There was discussion among committee members to cap the cash incentive at 25 years of service. The committee decided against the cap after considering how to balance incentives among all categories of worker.
“If you run the numbers, you keep the dollars relatively similar within a $1,000 range with no cap,” said Assistant County Administrator Eric Schmidt.
If all those eligible accept the buyout, Wasson said the cost to the county would be about $750,000, though it would be a one to two year expense that could be covered by existing unencumbered fund balances. No finance committee member or staffer expects complete acceptance.
The history of previous early retirement packages is not a good guide to an estimate of how many McLean County employees would take advantage of the offer.
This proposal is far less generous than the last one in 2009, said Wasson.
“We’re still paying for the last one and will be paying for another year,” said Wasson.
That’s because the previous package allowed retiring workers to purchase up to five extra years of service credit, he said. This boosted the Illinois Municipal Retirement Fund (IMRF) required contribution rates for the county.
There is no service credit purchase option in this proposal, said Wasson. And the cash incentive would be paid 60 days after employee separation from the county, which means it is not subject to IMRF calculations of final salary, avoiding a potential pension spike issue, he said.
“Those eligible are at all levels of county government. They range from the County Administrator (Wasson himself) to Office Support Specialist One, our entry level staff position,” said Wasson.
If the full board approves the proposal next week, workers would be given 60 days to accept the retirement offer.
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