ACTION REQUESTED:
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Communication from the City Manager and Finance Director with a Request to APPROVE a RESOLUTION Adopting an EARLY RETIREMENT INCENTIVE to Eligible Members of the Illinois Municipal Retirement Fund.
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BACKGROUND: The COVID-19 pandemic has caused significant revenue loss for the City of Peoria. Based on preliminary revenue projections, the City is anticipating a budget deficit of approximately $46.5 million for FY2020. Though this is an improvement over the initial projection of $51.5 million, it is still a sizeable gap that must be addressed.
The City Council has taken steps to close the revenue shortfall:
1. Capital expenses in the amount of $27.5 million have been reduced for 2020.
2. The City will restructure 2020 debt service payments to reduce $10.25 million of payments by the end of the year.
3. 28 vacant positions, 17 filled positions, and temporary positions would be eliminated beginning August 1. Elimination of these 45 non-sworn and temporary positions, coupled with operating reductions from departments reduce expenses in 2021 by $5.6 million.
4. Restructure the organization and re-engineer processes so that the remaining, smaller workforce can effectively deliver a reduced set of services.
Offering an incentive to employees at the upper end of the pay scale to retire would create flexibility in the restructuring plan and minimize the need for workforce reduction. One vehicle to implement this action would be to offer an Early Retirement Incentive (ERI) to eligible employees who are members of the Illinois Municipal Retirement Fund (IMRF). This tool was specifically developed by IMRF in order for municipalities to address significant budget issues. Through an ERI, both the City and its eligible employees purchase up to five years of service. Eligibility is defined as any employee who is at least 50 years old and has 20 years of service with an IMRF or reciprocal employer. Through the ERI, an eligible employee ca...
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