The city’s workforce is voluntarily shrinking.
Mayor John Whitmire
More than 700 city of Houston employees are set to retire May 1 after accepting voluntary buyouts, city officials said Thursday.
Many of the positions will have to be backfilled, but Whitmire administration officials said they anticipate saving more than $26 million annually in general fund dollars – and $48 million total – from the reduced staff.
Those savings could balloon up to $189 million if all 3,000 civilian employees eligible for retirement accept the buyouts, according to a presentation from the mayor’s deputy chief of staff and finance director.
That would not be enough to cover the projected $330 million budget shortfall in the fiscal year that begins July 1, but it will help directors restructure their departments ahead of budget hearings, said Steven David, the mayor’s deputy chief of staff.
The city normally sees about 400 retirements a year, David said.
“The expectation is we are going to have to do drastic changes in the way we run the city,” David told City Council members at a Thursday committee meeting.
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Of the eligible employees, 15 percent are supervisors. David said a main concern of department directors has been a disruption of city services, but the extended time for the buyout will allow them to plan accordingly.
See here for some more on the buyout plan, which has a deadline of April 28. I feel confident saying that not all of the eligible employees will accept the package. And it’s just as well, because the city will have to backfill most if not all of those roles, with new employees who will have lower salaries. (The average savings, based on 700 retirees and a net $26 million in cost reduction, is about $37K per employee.) We’ll see what effect this has on city services.
Note that even if all eligible employees did take the golden handshake, the city still has a deficit of well over $100 million. This is again why I say that we cannot get out of this without raising revenue – there just isn’t enough to cut, not with police and fire not only off the table but a source of increased expenses. And this early retirement package is itself a one-time solution – you’re not going to get anything like this reduction again if it’s offered, and sooner or later you run out of people who could take it. All roads eventually lead to raising or removing the revenue cap.