Facing — “up to 20 layoffs” of municipal employees — in order to balance the budget for fiscal year 2009-10 — “and provide various levels of General Fund Reserves” — as outlined in a related staff report, Woodland’s City Council proceeded at its May 19 meeting to establish an early-retirement incentive program (referred to as a Golden Handshake) made available under the California Public Employees Retirement Law (Gov. Code, 20903).

Eligible city employees receive two extra years of service credit toward their retirement formula if they retire within a designated period, in this case from June through August, 2009.

Several other eligibility criteria must be met. The city council must find that “because an impending curtailment of, or change in the manner of performing service, the best interests of the City would be served,” by using such a program.

Also, employees must work in relevant departments / classifications, be at least 50 years of age with 5 years or more of service credit in the Public Employees Retirement System (PERS), and a permanently unfilled vacancy must occur in the relevant department / classification, resulting in a minimum of 1% “reduction in the overall workforce.”

Areas of program relevance were: “Community Development Dept., Parks & Recreation Dept., Library, Administrative Clerk II & III, Youth Services Counselor and Crime Prevention Specialist.”

Outreach to city employees was conducted in several ways and a dozen municipal employees are participating, from all of these areas of program relevance — except for the library.

Once eligibility and participation is determined, the law (Gov. Code, 7505) requires that the city council be presented with a report of the total cost of implementing this program — two weeks in advance of adopting a resolution to formally activate it.

Total cost of Woodland’s Golden Handshake early-retirement program in this circumstance is $469,770 — amortized over twenty years.

Described as “very manageable” by the city manager, this cost amounts to an increase in the “employer contribution rate [under PERS], beginning in September 2011 — from 14.718% to 15.04%.

The staff report accompanying this council agenda item explains that this cost would have represented only $43,431 of expense to the current (‘08-’09) budget, $20,122 of which would be from the General Fund.

“Annual structural savings,” on the other hand, totaling $1,155,537 ($1,035, 295 – General Fund) would be accomplished through this program.

However, because of varying retirement dates and other matters, fiscal year 2009-10 savings will be $848,355 ($752,271 – General Fund).

This three-quarter of a million dollars represents significant progress on reaching the General Fund budget-deficit goal of $6.3 million.