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To: Joe S Pack who wrote (3010)	10/1/2003 1:15:08 PM
From: Bucky Katt	Respond to of 8051

City may try early retirements October 1, 2003 BY FRAN SPIELMAN City Hall Reporter The Daley administration is mapping plans for Chicago's first early retirement incentive program in five years in hopes of enticing enough city employees to voluntarily leave the payroll to avert the need for up to 800 layoffs. Union leaders, pension funds officials and the champion of pension legislation in Springfield all confirmed that negotiations are under way to hammer out an incentive program attractive enough to lure thousands of civilian city employees into retirement. Under early retirement, employees are allowed to buy additional years of service to qualify for a higher pension. "If you give them that extra five years or let them buy that extra five years, you would have anywhere from 2,000 to 3,000 people taking early retirement who would not normally retire," said state Rep. Bob Molaro (D-Chicago), the House Revenue Committee chairman and former ranking Democrat on the Pension Laws Commission. "If you're getting rid of 2,500 employees and you have the discipline not to hire replacements -- or at least 50 percent of their replacements -- you could eliminate more than 1,000 jobs. That would certainly eliminate the need for layoffs." The General Assembly must approve the program, and Molaro said he would gladly introduce the legislation on the city's behalf. But he just might insist on an amendment. "In this climate, any early retirement should have -- and I would sort of insist -- on not filling those jobs for at least a 2- to 5-year period. Then the city gets the full savings. That would force them to show the discipline. And even if I didn't insist on it, some of my Downstate brethren would insist," Molaro said. Lisa Schrader, a spokeswoman for the city's Office of Budget and Management, refused to discuss early retirement. She would only say that "everything is on the table" to erase a $116 million shortfall in the 2004 budget that Mayor Daley will present to the City Council on Oct. 15. "We have to reduce the cost of the work force. We are trying to minimize the impact of those reductions on our employees," Schrader said. Currently, city employees are eligible to retire at 80 percent of their highest salary if they are at least 50 years old with 33.3 years of service. Employees 60 years old can retire with a pension if they have 10 years of service, and so can those age 55 with 25 years of service and those 50 years old with 30 years at City Hall. But they only get 2.4 percent of their salaries for every year on the payroll. In 1998, the city offered an early retirement incentive program to members of the Laborers and Municipal Employees pension funds that allowed employees to buy up to five years of service to get up to the 80 percent maximum. An estimated 1,470 employees took advantage of the city's offer. That has helped to reduce the payroll from 39,500 in 2000 to 37,500 today. Henry Bayer, executive director of AFSCME Council 31, acknowledged there has been "general talk" about early retirement, but he said City Hall has yet to put a concrete proposal on the table. "Early retirement is something you implement when you want to shrink the work force. That has to be weighed against the loss of services," Bayer said. "If you have fewer civilian employees in the Police Department, you have more police officers behind desks and fewer on the street. If you have less people working in the library when kids come in after school to do their homework, you have less librarians to assist them. If you shrink the work force in city health clinics, it's gonna take longer for people without health insurance to get service. We think that shrinking the work force is gonna be harmful to the citizens of Chicago." In late July, the Daley administration released a preliminary 2004 budget with a $116 million hole. The bad news followed a series of a year-end audits that showed Daley closed the books on 2002 with a record-low $13 million in the bank and added $576 million to the mountain of debt piled on Chicago taxpayers. The news prompted Standard & Poor, a Wall Street rating agency, to affirm Chicago's A-plus bond rating with a caveat: If Chicago expects to maintain its high bond rating, it must build its cash reserves back up to a more comfortable level -- even if it means raising taxes.