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<br />City of Ramsey <br />Memo <br />To: Mayor and City Council <br />From: Kurt Ulrich, City Administrator <br />Date: February 9, 2012 <br />Re: Consideration of a Voluntary Early Separation Program <br />Due to budget concerns, the city of Ramsey may wish to establish a voluntary early separation <br />programin order to reduce salary expensesandto meet business needs in tough economic times. <br />Staff analyzed several program design options and hasdetermined the following program to be the <br />most cost-effective. Ifapproved, the program would be strictly voluntary andopen only to those <br />City employees who meet the requirements listed below: <br />Must be a regularemployeeof the City with a minimum of 10 years of regular service <br />AND: <br />Who is at least age 55 years and eligible for a full or reduced PERA Coordinated Plan <br />o <br />annuity; or <br />Who is at least age 50 years and eligible for a full or reduced PERA Police and Fire <br />o <br />Plan annuity; or <br />Meet the above age requirement for your PERA plan and are receiving PERA <br />o <br />disability benefits. <br />If a voluntary early separation program were to be established, based on the City’s 2012personnel <br />budget, the following table demonstrates possible estimated savings by participation levels: <br />2012 Annual Budget <br />Costs $1,264,832 <br />**Annual **Annual <br />for 15 eligible employees <br />SavingsSavings <br />Annual <br />BudgetPay-out1st year.Sub. Years <br />100% Participation$1,264,832 $306,254 $958,578 $1,264,832 <br />75% Participation$948,624 $229,691 $718,933 $948,624 <br />50% Participation$632,416 $153,127 $479,289 $632,416 <br />25% Participation$316,208 $76,564 $239,644 $316,208 <br />10% Participation$126,483 $30,625 $95,858 $126,483 <br />Scenario is based on a minimum of 10 years of service and PERA eligibility at the full or reduced rateand <br />subject to union agreements. <br /> <br />