Support for Town Retirement Plan

(Aug. 26, 2010) Before the East Hampton Town Board moves ahead with impending employee layoffs, some of which are expected to be unavoidable as part of a response to an approximately $31 million budget deficit, town employees will have an opportunity to join a state retirement incentive program, which was approved by the board at a meeting last Thursday.

Under the state program, which provides additional service credit toward pension payments for eligible employees, the town will be billed by the state, over five years, for a percentage of the cost of the incentives for each retiring employee. The bill will have to be paid from the town’s annual budget.

Heath Liebman, head of East Hampton’s Civil Service Employees Association, spoke in favor of the plan at a hearing last Thursday. Town Supervisor Bill Wilkinson thanked Mr. Liebman for supporting the retirement incentive plan. “This speaks to a time when union and management can get together and work on issues as we strive to get this town back in shape,” he said. “If we don’t get enough people to sign up, then we will lay off, with no incentive,” he said.

Before voting to adopt the state program, East Hampton officials had planned to try to reduce the workforce by offering a voluntary separation incentive to employees, funded with a $2 million bond, for which state approval was needed. Legislation that would have allowed the town to issue that bond, sponsored by New York State Assemblyman Fred W. Thiele Jr. and State Senator Kenneth P. LaValle, passed in the Assembly but failed to gain the required votes in the State Senate, however.

But Zachary Cohen, a former member of the town’s budget and finance advisory committee, suggested at last week’s meeting that the town nonetheless offer its own voluntary separation program. By customizing the terms by which employees leave, he said, the cost to the town can be minimized, and the benefits to employees maximized. Since the town must shoulder costs stemming from the state program, he pointed out, it could just as well pay for the costs of a customized program.

Mr. Cohen, a mathematician, provided a detailed scenario to board members and to Len Bernard, the town budget officer, showing how just such a program could work, and included examples of the costs to the town and benefits to employees in specific cases.

“It’s really good stuff,” Town Councilwoman Julia Prince said yesterday. She said that, instead of borrowing the $2 million, through issuing a bond, to pay for incentives encouraging employees to leave, she has long endorsed developing a program through which the incentives can be paid directly through the budgetary savings on salaries once an employee leaves.

“I think it’s something that’s valid, and should be looked at, but there’s a time line,” she said. “This is something that from the beginning I wanted to see happen. All you have to do is start using peoples’ salaries as an incentive, and give them a time they have to leave.”

Ms. Prince said she hoped that she, Mr. Bernard, Mr. Wilkinson, Mr. Cohen, and other board members can discuss the idea in depth.

Before any layoffs occur, “I think our employees deserve . . . for everybody to put their heads together,” to evaluate such a program, she said.

Mr. Wilkinson said yesterday that he had not yet reviewed the materials Mr. Cohen provided. But, he said, while the state program relies on providing pension advantages, “the application of applying our own annuity program is very difficult. There are complications associated with that.”

“I tried desperately to get our program through,” he said of the failed attempt to gain state approval to issue the $2 million bond.