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City Manager's 2004 Budget Recommendations C, TKy Voluntary Reductions First. When we talked about the budget this April, the Finance Director and recommended some alternatives. bather than layoffs, we recommended some early- retirernent and other incentive programs to reduce our staff. According to Paul Kirkwold, Ramsey County Manager, Ramsey County has had great success with its early - retirement program as a way of deal - ing with their budget crisis brought on by the state's funding cuts. To summarize those April recommendations from the Finance Director and myself, for thirty to sixty days alloy City employees to consider early retirement and voluntary resignation programs in lieu of layoffs. Yes, those voluntary programs cost some money to implement. It is also true that those binds of incentive programs may produce a disproportionate loss of experienced staff whose departure may temporarily hurt produc- tivity. Additionally, staff departures under those kinds of voluntary re- duction programs may not be as strategic as layoffs. Voluntary programs depend on staff stepping for ward to take advantage of those programs; thus, the gaps in our staffing under a voluntary program would be based on an employee's personal circumstances and choice rattier than on our evaluation of the tax cost or public participation or public impact of par - ticular City programs. That said, such voluntary incentive programs do spare good employees from being laid off and they build substantial operating savings over the long run as vacated City positions are not filled. Attached for your review is our April 7th bequest for Council Action de- scribing these voluntary incentives. Hence, you could choose to follow, first, those earlier recommendations and see what bind of savings we can achieve on a voluntary basis. Then you would still have time later this year to re- evaluate the budget situa- tion and make other budget cuts, if necessary. Vj _ a I In light of the assumptions and principles and reasons and alternatives set forth above, I recommend cutting the City's operating budget by ap- proximately $350,000 for 2004. Some members of the Community will undoubtedly and justifiably oppose some of the specific recommenda- tions in this Report. Former City Councils would not have authorized all of these programs and services *.n the first place if these elected represen- tatives of the people didn't thinly current programs and services respond 15