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Winston-Salem offers lure to leave
Eligible workers can get $20,000 incentive to retire by Aug. 31
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Published: February 27, 2009
Updated: 02/27/2009 01:50 am
Winston-Salem officials, in an effort to save money on salaries and benefits, have offered certain city employees a $20,000 cash incentive to retire by Aug. 31.
The one-time payment is available only to employees who are eligible for full retirement benefits. At least 100 of the city's employees are eligible, said Martha Wheelock, the assistant city manager.
"We don't want to consider layoffs," she said. "If we don't have to, we don't want to consider pay cuts … so our best opportunity to control our personnel costs is for positions that are vacant or will become vacant."
Wheelock said that the retirement incentive is designed to "sweeten the pot" for employees who might be considering retiring this year. Officials distributed packets of information about the incentive to all employees last week. Eligible employees have until April 17 to apply.
Three categories of employees are eligible, Wheelock said:
□ Those who have worked for the city at least 30 years.
□ Those who are at least 65 years old and who have worked for the city at least five years.
□ Those who are at least 60 years old and who have worked for the city at least 25 years.
Employees who have worked for other cities around North Carolina could also be eligible, she said.
The city has struggled for months to keep its budget balanced in the face of declining sales-tax and property-tax revenues. And Winston-Salem is not alone: Local governments from California to Connecticut have made financial cuts. Officials in Guilford County announced yesterday that they will eliminate 25 positions, resulting in 10 layoffs.
Karl Knapp, the director of research and policy analysis at the N.C. League of Municipalities, said he did not have numbers to show how many local governments around the state have offered similar programs.
City Manager Lee Garrity said that budget cuts have helped stabilize Winston-Salem's budget and said he did not think that layoffs are likely.
"At this point, based on what we know about the revenues, it's probably unlikely that we'd have to do layoffs," Garrity said.
"But I can't say ‘never,' because if the economy got much worse, we've got to balance our budget no matter what. But I think it's very unlikely that we'd do layoffs."
The retirement-incentive package is the city's second attempt to rein in spending on personnel. In October, officials froze hiring for all non-emergency positions and allowed hiring only on a case-by-case basis. Most often, Wheelock said, if a position opened that officials deemed necessary to be filled, they hired from within.
She said that the city is offering the retirement incentive "to vacate those positions voluntarily."
"Our primary commitment has to be to try to avoid having people lose their jobs," she said.
Wheelock said that almost 50 percent of the city's budget goes toward employees' salaries and benefits.
She said that officials do not have in mind a number of people that they hope will take the incentive. If all 100 accept, the city would owe $2 million in incentive payments. That money would most likely come from the city's general-fund balance, Wheelock said.
"But as soon as those positions are vacant, we start getting the salary savings from that vacant position," she said. "So the savings from not having somebody in that position will make it up.
"And there's a lot of factors as to how much it'll cost us: How many take it, what their salary level is. You make it up by the savings in salary and benefits."
Garrity said that the city doesn't expect the economy to improve anytime soon.
"But Winston's been through some tough times in the past," he said.
"I'm confident Winston will bounce back."
■ Laura Graff can be reached at 727-7279 or at lgraff@wsjournal.com.
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