Newark – On Monday March 13, 2017, City Manager Carol Houck sent a confidential memo to the mayor and city council regarding an early retirement incentive package.
The memo, blocked from public view until Wednesday night’s city council meeting, lays out what Houck would receive if she were to retire or resign.
As council emerged from executive session on Wednesday, Mayor Polly Sierer called on Councilman Stu Markham, who made a motion to amend the city manager’s agreement.
Markham read from a prepared statement stating “Should the city manager resign upon a sixty days’ notice effective between May 15, 2017 and June 15, 2017 the city agrees that she shall be entitled to separation pay as set forth in section III B of her employee agreement.”
Sierer called for a council vote and the amended language passed unanimously.
Prompted by the Mayor, Councilwoman Jennifer Wallace made a second motion regarding the early retirement incentive option for the city manager.
“I make a motion that council open up the memo dated March 13, 2017 from the city manager to mayor and council regarding the city manager’s limited early retirement incentive options.”
This motion passed unanimously as well, opening the memo up to public view.
If Houck retires or resigns between March 15 and April 15 the Limited Enhanced Retirement Options indicated in the memo would be activated, according to Newark’s Communications Manager Kelly Bachman.
If Houck elects not to retire and chooses to remain with the City the options would no longer be available and the original agreement would remain in effect, Bachman added.
Bachman explained that the Early Retirement Incentive Option is similar to those offered to other employee groups. They too had a finite period of time to review the package details and decide if they wish to retire or remain employed.
This is a similar option for the City Manager, but needed to be approved by Council separately, given she has an employment agreement, unlike all other employees, said Bachman.
Bachman continued by saying that the compensation included in the early retirement incentive option mirrors what is included in Houck’s current agreement as a severance package. In other words, if Council were to terminate the City Manager, her current employment agreement would provide her with 6-months of wages and benefits. With this ERIP, those same 6-month’s wages would be afforded to her as a retiree.
The value for any Early Retirement Incentive Option is in the realization of long-term cost-savings to the City. As outlined in the memo, the cost savings that would be realized, should the City Manager elect to retire, amount to approximately $347,902 over a 10-year period, which is her anticipated term to continue working, according to Bachman.
An Early Retirement Incentive Option was offered in late 2016 to thirty-five eligible merit and union employees with the City. Information on that was shared with and unanimously approved by Council in November 2016 (https://de-newark3.civicplus.com/ArchiveCenter/ViewFile/Item/4939#page=22&zoom=auto,-112,311 and https://de-newark3.civicplus.com/DocumentCenter/View/7840).
Bachman. said that Houck’s memo was sent to Council on Monday, in advance of the executive session on Wednesday, to allow time for Council to review the information contained within prior to meeting and be prepared to engage in a full, informed discussion.
It’s not clear if Houck has any real plans to take advantage of the Early Retirement Incentive Option. When asked if Houck was planning to give notice by April 15th Bachman said “This is a period for her to review her options and make a decision, which will be shared with Council once a decision is made.”