Cutting costs: Retirement incentive shuffles county budget, staff

BREAKING IT DOWN: This chart shows the distribution by department of those Buncombe County employees taking an early retirement incentive. Buncombe Human Resources Director Rob Thornberry says the reason behind the plan comes down to five words: "Reduce positions, reduce personnel costs."

In July, Buncombe County administrative staff began implementing a retirement incentive plan aimed at generating savings of $1 million annually. The incentive has two parts: a year’s worth of salary (paid over three years) and covering health insurance premiums for one year. Eligible employees had until Aug. 22 to accept the incentive; those doing so must leave their jobs by Sept. 30.

Retirement incentive plans are nothing new. Buncombe County did one in 2006, and the city of Asheville used the same strategy last year. The idea is to trim the fat, creating recurring cost savings by consolidating positions and bringing in younger (and therefore cheaper) replacements for higher-salaried older workers.

A list requested by Mountain Xpress shows 125 employees taking the incentive — six fewer than the 131 that have been widely reported. The discrepancy, says Human Resources Director Rob Thornberry, is due to six employees whose positions may be eliminated: If they are, those workers would be eligible for the incentive despite having missed the deadline.

State, county and municipal workers, including those in public education, pay into the statewide retirement system during their working years; when they retire, those who qualify receive either a full or reduced lifetime pension. The rules are complicated, and pension amounts vary depending on the employee’s age, years of service and how much they were paid in their top earning years. Police, meanwhile, have their own, somewhat different retirement rules.

To be eligible for the county’s incentive plan, employees first had to qualify for one of the pension options.

All told, the 125 employees on the list are paid about $6.1 million annually, bringing the county’s total price tag to just over $2 million a year for three years, plus a year’s worth of insurance premiums. The lowest salary on the list is just under $26,000, while the highest is a little over $139,000. The average salary of those taking the incentive is roughly $49,000.

“We won’t know until the end of next fiscal year [June 30, 2015] what the final number is,” says Thornberry. “The reason for the incentive was five words: reduce positions, reduce personnel costs. We didn’t go into this planning to cut specific positions; we’re going to consolidate based on who’s left — and our needs.”

The knowledge drain

The high response to the plan has surprised County Manager Wanda Greene, who noted at the Sept. 2 Board of Commissioners meeting that the county is losing “a lot of institutional memory.”

The hardest-hit department by far is Health and Human Services, which will lose 49 staffers as of Sept. 30 (about 9 percent of its workforce). In the Sheriff’s Office, 23 employees have taken the incentive, including five patrol deputies. Most departments will lose no more than five people.

The 49 departing Health and Human Services staffers include senior psychologists, human services planners, public health nurses, social workers and income maintenance caseworkers. The latter group (12 caseworkers and three supervisors) are what Communications Director Lisa Eby terms “front-line employees.” They process applications for income-based aid such as the Supplemental Nutrition Assistance Program and Medicaid. As such, these staffers constitute the starting point for people seeking those kinds of help.

Despite the substantial losses, however, Eby foresees no real impact on services. “Ever since we heard of the incentive, we’ve been very proactive,” she reports. “We started advertising [for the vacated positions]; a lot of the retirements were staggered as well, giving us more lead time.”

Still, there will be a price to pay, Eby concedes. “The biggest thing we’re losing is knowledge. I won’t say that there won’t be a bubble where we might experience some slowdown while we’re bringing people in, but I really think we’ll be able to manage because of the heads up [i.e., the two-month lead time on the incentive plan].”

Almost all of the front-line positions will eventually be filled, she explains. “We’re required by law to have a certain amount of workers in those positions for the caseload. Where we’re going to experience efficiencies,” she continues, “is in the administrative portion. Our philosophy is to take resources and put them on the front lines, so if we have two secretaries that left, we might eliminate both and create another front-line position.”

In the coming months, a results team will review all departments’ needs with an eye toward determining which positions can be consolidated or eliminated and which need to be filled by younger workers.

“There will always be challenges,” notes Thornberry. “But our goal here is to achieve ongoing reduced personnel costs.”

 

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