In Westminster, 37 full-time city employees will be laid off in the next month with 12 more expected to choose early retirement.
“It just kills me that we have to lay off staff,” Mayor Margie Rice said. “We wish we could keep our people.”
The layoffs will save the city $3 million per year according to a staff report. But the city will spend over $500,000 on severance pay.
The City Council approved the severance packages March 28. Laid-off employees will receive between two weeks and 12 weeks of pay depending on employment time. Previously-insured employees will still receive full health benefits for six months.
The 12 early retirees will receive about three months of salary in a lump sum payment. They will no longer receive full health coverage. Instead, they will receive retiree-level health benefits.
Employees must be at least 50 years old and have five years of service time to qualify for early retirement. They must then retire by June 30.
“This is the best we could work out in trying to protect our employees and help them in finding a new job or starting a new life,” Rice said.
Rice, council members and city manager Mitch Waller all cited the loss of the city’s Redevelopment Agency as the cause of the layoffs. In June, Gov. Jerry Brown signed a law dissolving all state redevelopment agencies. The law was held up by the California Supreme Court in December.
As a result, Westminster will likely face a $10 million deficit next year. Rice in particular didn’t hide her anger with state officials.
“It was your money, the people’s money, and they took it,” she said.
The layoffs are another step in the city’s efforts to rein in spending, even before the loss of redevelopment money.
“We’ve set the city on course for long term financial stability,” Waller said. “We have implemented programs reducing overall costs to the community.”
The city changed its employee benefit structure to a tiered system in July, so new employees will contribute a larger share toward retirement. The state requires cities to pay up to 9 percent of an employee’s salary into a retirement fund. Cities can then deduct all or part of that payment from employee paychecks.
Employees hired before the change contribute up to six percent of salary. New employees hired after July 28 pay up to the full nine percent. In exchange, the city contributes an extra $100 per month for employees with a qualifying family health plan.