Cd'A OKs voluntary separations

COEUR d'ALENE — Although he said his 30 years working for the city of Coeur d'Alene have been the best years of his life, Sid Fredrickson will retire in December from his position as wastewater superintendent.

"This must be habit forming, I've been in wastewater for 43 years total," Fredrickson told The Press. "I have enjoyed everybody that I've worked with at the city. It's been good and it's been very challenging — you do not die of boredom."

Fredrickson added that he will be 71 when he leaves the position and that health issues, combined with the city council approving allowing officials to offer a voluntary separation initiative to employees this year, made it clear that it was time to retire. On Tuesday, the Coeur d'Alene City Council approved the voluntary separations of Fredrickson and six other employees, and could approve a total of 22 separations this year.

"We are able to save taxpayers money through this because a long-time employee will have accrued a high wage and other benefits," said Melissa Tosi, human resources director. "Hiring a newer employee will provide the city with cost savings.

Tosi added that, after factoring in the incentive payments that will be made to the employees, the city is estimating it will save $188,000 over a two year period. Employees, she added, also see benefits from participating in the program.

"They receive an incentive payout," Tosi said. "And beyond that, there may be some personal opinions of employees to benefit, for instance they may enjoy being able to have a longer period of retirement than they thought they otherwise might have."

Under the program, employees who wish to participate must be employed with the city in a position that includes benefits, and their retirement must save the city a minimum of $20,000 over the course of the first two years. In return, the employees get a sum of money equivalent to 1 percent of their salary for every year of service.

In addition, Tosi said 75 percent of the employees’ eligible "total leave payout" — a number that includes vacation, sick and comp-time payments — will be contributed to his or her HRA/VEBA plan, which is a tax-free health reimbursement arrangement for public employees to help offset medical expenses.

Fredrickson, for example, will receive a $31,842 incentive payment from the 1 percent calculation, and an additional $26,399.35 will be contributed to his HRA/VEBA plan.

According to Tosi, the employment vacancies left by employees who choose to participate in the program fund the incentive payments they receive.

"The vacancy created by the separation would provide the city the opportunity to review the need for the position, possibly restructure or fill the position at a lower entry wage," Tosi said. "The incentive will allow an opportunity for departments to strategically plan their future resources while realizing financial savings."

Employees who take the voluntary separation, Tosi added, are still eligible to receive other retirement benefits such as PERSI — a retirement system governed by the state Legislature with its own eligibility requirements.

The last time the voluntary separation incentives were offered, according to Tosi, was in 2012. At that time, the city council approved 16 separations, and Tosi said the city saved approximately $481,115 in total wages because of it.

The group of seven employees approved for the program Tuesday by the council is the second group of three total that have expressed interest. Tosi said the first group, which included two employees and was approved in July, had to be approved quickly because their separation dates were in July.

"(The second group) had previously done their homework, already had information regarding PERSI retirement, and were comfortable with their chosen separation date," Tosi said. "(The third group of employees) are working through personal finances to determine if the incentive is a good fit for them and contacting PERSI to get retirement payouts based on different possible dates, and/or are still considering if separating by the end of December 2017 works for them."