Fountain Valley Offers 'Golden Handshake' to Employees

The Fountain Valley City Council unanimously approved a proposal Tuesday night that could offer early retirement to a handful of city employees, a move that could save the city about $452,000.

The proposal would help the city bridge an estimated budget gap of about $300,000 stemming from the elimination of redevelopment money for cities, City Manager Ray Kromer said. In a worst-case scenario, that shortfall could reach $1.4 million, he said.

The early retirement would be offered in conjunction with a California Public Employee Retirement System program that gives workers over age 50 with at least five years on the job the option to retire early and get credit for two additional service years added to their pensions.

About 35 city employees meet the requirements for the plan, but only seven to 10 would consider retirement, personnel manager Jean Harai said. An informal survey of employees found that five would likely be ready to accept early retirement immediately, she said. Based on that estimate, the program would cost the city about $205,000 on the front end over the next two years, but would save more than twice that in total retirement benefits.

The council will decide whether to finalize the early retirement offering at its next meeting in two weeks. If the program is approved, qualified employees would be notified by the end of April, would be enrolled in the program by July 5 and work their last days Aug. 5.