Officials in Downey, Calif., a city of 110,000 just southeast of downtown Los Angeles, hope that an early retirement plan will help shore up budget shortfalls they say were created by the state’s dissolution of redevelopment agencies and federal cutbacks.
The City Council on Tuesday unanimously approved the early retirement program for city employees over age 55 who have a minimum of five years service.
The city would put 60% of the employee’s salary into an account over a five-year period that would then be paid over time to employees who participate in the program, according to report to the council by finance director John Michicoff.
They hope 17 employees will take advantage of the buyout plan, saving the city about $4.3 million over five years, according to a report by Keenan & Associates, the retirement consulting firm that helped the city draft the plan.
Downey officials, who anticipate a $2 million budget shortfall, have announced they will lay off about 12 employees as of July 1.
City officials attributed the shortfall to the state’s dissolution of redevelopment agencies and federal cuts to Federal HOME funds and Community Development Block Grant funds.