The South Pasadena City Council on Wednesday authorized its staff to prepare a program of retirement incentives known as “Golden Handshakes” under which ten city employees, including City Manager Stephanie DeWolfe and Community Services Director Sheila Pautsch, will be offered two years of service credit if they agree to retire by the end of 2020.
The offer is styled as part of a plan of “personnel actions necessary to close” a portion of the city’s $3.5 million 2020-2021 general fund budget deficit. The program also includes imposition of a permanent hiring freeze on certain vacant positions and a reduction in overtime for the police and fire departments.
The city provided a list of those who would be offered the “Golden Handshake,” but included only their titles. The list includes two administrative secretaries, a management analyst, a support services assistant, the city’s film liaison, and three library employees including the public and support services managers and a technical assistant. The city’s film liaison is Joan Aguado and the library’s public services manager is Maida Wong.
According to a staff report prepared by Finance Director Karen Aceves and Human Resources Manager Michael Casalou, the personnel actions are aimed at saving a total of $1.55 million, about a third of which will require further negotiations with the city’s unions to modify cost of living adjustments in existing agreements.
“The early retirement benefit is intended to generate short-term and long-term savings through voluntary attrition of personnel,” the report states. Employees in the Public Works, Police and Fire Departments will not be eligible for the program. “Those three departments have been excluded due to the critical nature of service and the higher risk of absenteeism currently due to the pandemic.”
Participation is further limited to those who are over 50, have five or more years of service credit with CalPERS, and who agree to retire by year’s end. That means only about 10 employees will qualify. “It is unknown how many will accept the offer, and therefore cost savings are undefined. However PERS data indicate that typically half of the employees offered an incentive will pursue it, resulting in five employees leaving the organization,” the report said. The actual saving will also depend on which employee accept. But the city estimated the net savings will be at least about a half million dollars.
“Cost savings will be achieved through positions being held vacant for a specified time, being filled at a lower classification or part time status, or being filled” with members of a less costly state retirement program.
The action was the first taken after the swearing in of new District 2 Council Member Stephen Rossi, who’d been appointed only moments earlier. He was the only one who asked a question about it, wanting to know how the switch to unfilled positions or replacement with less senior employees would affect the level of institutional knowledge needed to keep the city running efficiently.
Casalou said that while the city’s staffing level does not contain “a lot of fat,” staff had discussed the program with department heads and concluded “we can manage given the significant of the shortfall” in the budget. “We can manage in the shorter term” and in the longer term “without suffering too much.”
No other questions were raised. Councilmember Diana Mahmud said the lack of additional questions reflected the fact that the other council members had already discussed the personnel actions during a closed session.
In an email sent Thursday morning to Councilmembers and the city manager, citizen Chris Bray said that no recent closed meeting announcements of the City Council referred to the topic of the Golden Handshake. He wanted to know if the city had therefore committed a Brown Act violation. Bray said he’d receive no response by the close of business Thursday.
The staff report also warned that “while layoffs are a last resort, they are likely necessary to balance the budget, particularly where workload has dropped due to the pandemic and less staff are needed.”
The personnel actions will be prepared for final approval by the Council at its Sept. 16 meeting.