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Will City Retirement Plan Save Money?

Early Departures: Hartford retirement offer taking some of the best and brightest

The Hartford Courant

December 02, 2010

Buyouts and early retirement incentive programs are a questionable and sometimes risky means for governments to achieve permanent savings. The retirement program currently under way in Hartford is illustrative — it could end up being a disaster for the city.

The city council voted earlier this year to offer a voluntary early retirement program to some non-union employees. The offer, which includes four extra years of pension credit for most, payments for unused sick and vacation time and, for some, lifetime health insurance, closed this week after 30 city workers had applied. The list includes many of the most able, essential and experienced people in city hall.

City Treasurer Kathleen Palm Devine, a stellar public servant, and several top assistants have opted for the package. Assessor Lawrence LaBarbera and an assistant are on the list, in a revaluation year. The list also includes such key employees as management and budget director Rick Galarza, human resources/labor relations director Santiago Malave and his deputy, city engineer John McGrane, along with emergency management director Katherine McCormack and others.

The list also includes city councilwoman Veronica Airey-Wilson, which rankles on several levels. She is a part-time elected official. She must be replaced, and by someone making exactly the same salary. When there is no gain to the city, why is she even eligible? She also happens to be on special probation after being charged with a felony in the scandals surrounding former Mayor Eddie Perez. That she would get a pension with lifetime health benefits boggles the mind.

In any event, when the full-time retirees walk out the door, which will be at the end of the year unless the mayor extends their time, centuries of experience go with them. Looking down the list, it is hard to imagine how city hall will get its work done. Some of the "retirees" are in mid-career, meaning that Hartford is paying them to work somewhere else.

This might be worth the trouble if the city could count on substantial savings, but that is far from clear. Initially, there will be a reduction in payroll, but there will be a concurrent increase in pension liability. The city might still have a net gain, except that many of the vacated positions, including virtually all the high-paid ones, must be refilled — some are required by the city charter. Yes, some jobs perhaps can be filled by younger and lower-paid workers, but they have less experience and are thus, in many instances, less efficient.

In the end it is hard to imagine there'll be any significant savings. It is hard not to conclude that the council took this action because it had neither the courage nor the imagination to make serious structural changes in how the city does business.

What might some of those changes be?

How about comparing the size of the police and fire departments to those of comparable cities, and, if Hartford's forces are larger, reducing them? Of 1,387 non-education city workers, 834 — more than 60 percent — are police officers or firefighters, according to city records. Not to take away from the importance or difficulty of the jobs, but can the city afford such large departments?

How about instituting a "sunset" procedure on each city program or service, which means setting a date to evaluate whether the expenditure is worth continuing? How about evaluating every allocation to an outside agency, to determine if it makes sense?

These are among three dozen recommendations made by city department heads to balance the budget a decade ago. They appear on a Jan. 26, 2000, memo titled "Doing Things Differently." Some steps were implemented but many were not. Council members might want to dig it out. It is time they started doing things differently.