Last year, the budget was $2 million shy of revenue. This fiscal year, the budget is short by $1.8 million. Reserve funds are being used for routine expenditures and covering the difference. Projections for FY2027 and beyond call for a maximum increase in levy rates and may fall short again. In an attempt to correct the city’s budget woes, the city council asked the finance director, Katie Ebner, to evaluate an incentivized buy-out of city employees who are within five years of retirement. Ebner modeled the financial impact to the city and ultimately recommended that retirements occur naturally. A few of her slides presented during the early October workshop are here:
Some highlights of her presentation include the following statements: “Treating all [savings] as new savings would double count savings.”
“Natural and staggered turnover of retirees is preferred in the current state of city’s staffing and recruiting abilities.”
“[No positions are available to be eliminated. The financial impact for the current fiscal year is poor.]”
Key employees planned or announced retirement before the city decided to offer an early retirement incentive. For example, police chief Lee White announced his retirement October 17th, weeks before council voted unanimously to incentivize the early retirement of employees. Ultimately, seven fire personnel, including the fire chief, are retiring. The Chief of Police and 60% (⅗) of Lieutenants are leaving. The city administrator is leaving. Financial modeling calls for the city administrator AND police chief positions to remain open for 0.5 months for associated savings to pencil out. The decision is precarious.
Costs are certain. Savings are assumed. Ebner highlighted “the current state of city’s … recruiting abilities” as a reason to rely on natural and staggered turnover rather than incentivizing early retirement. But, that was not the decision of the city council. Now, the city will need to pay out over $600,000 in incentives in addition to accrued sick pay of over $400,000. During the fiscal year, $1.8M in the hole, city council members Dan Gookin, Dan English, Christie Wood, Amy Evans, Kenny Gabriel, and Kiki Miller have guaranteed additional expenses of over $1,000,000. This is a costly attempt at savings. And, our analysis does not even account for the cost of turnover, staff time to interview, onboard, orient, and train replacements for outgoing staff. Council will finalize the decision at the council meeting, Tuesday, December 16, 2025.
If savings occur as projected, the city budget will only take a several-hundred-thousand-dollar hit this year and eventually pencil in years to come. We hope.
Workshop slides: https://www.cdaid.org/files/Council/Packets/Packet%20101325%20Workshop%20WEB.pdf
Incentive Data: https://www.cdaid.org/files/Council/Packet121625WEB.pdf