Fairfield officials divided over retirement incentive program

Newly elected Fairfield First Selectwoman Brenda Kupchick smiles as she delivers her address during the Oath of Office Ceremony at Warde High School in Fairfield, Conn. on Monday, November 25, 2019.

Newly elected Fairfield First Selectwoman Brenda Kupchick smiles as she delivers her address during the Oath of Office Ceremony at Warde High School in Fairfield, Conn. on Monday, November 25, 2019.

Brian A. Pounds / Hearst Connecticut Media

FAIRFIELD — First Selectwoman Brenda Kupchick said the town can expect significant savings after the recent approval of a voluntary early retirement incentive program.

But other elected officials are not so sure.

In a finance board meeting Tuesday night, members said they wanted to review the numbers generated by this program every quarter in the coming years, as the impact may not be clear for decades. Members were also concerned with both the lack of a restructuring plan, as well as unknown costs that could be associated with its implementation.

Kupchick has said these plans are frequently used in towns and cities where employees are governed by union contracts in order to to incentivize tenured employees to leave government service. This enables the administration flexibility to restructure positions and reorganize government.

“Our town cannot move into the future if we continue to do things the way we always have,” Kupchick said in a release. “After working in town hall for the past year as first selectwoman, I have gained valuable insight on what is needed. VERIP enables us to reorganize departments to create efficiencies and eliminate waste; increase productivity and modernize town government.”

Town officials said they decided to offer the program after noticing a lot of inefficiencies in the town’s operations.

Kupchick said her priority is to make government smaller, more efficient and smarter through technological advancements and managerial improvements. She also said she wants to change the culture within town government; with the ultimate goal to improve services to residents.

“While there are costs associated with reorganization, I have pledged that I will keep this program budget neutral,” she said. “I am confident that the short and long-term benefits to our community and savings resulting from reorganizing far outweigh the associated costs.”

The administration said it will cover the liability for employees’ pensions and other post-employment benefits, which would cost about $4.6 million, according to a finance board presentation.

Town officials said restructuring is an ongoing process now that they know who is leaving. They said additional position eliminations will be determined during the reorganization, adding it was too soon to tell.

According to a document summarizing the revised plan, and based off the original estimate of 23 employees opting to leave, the administration projected the net budget savings would start at $163,000 in the 2021 fiscal year and be at $405,000 in the 2030 fiscal year.

The savings will largely come from hiring people at lower rates and not filling some positions, town officials said. New employees will also not be eligible for a pension since the town adopted a 401a plan.

Kupchick said 17 employees opted to participate in the program and, from the feedback from employees, the revised package caused many to reverse course.

Town officials said there were 55 employees eligible for the program, and 31 expressed interest in it. Some of the people who opted to take the plan will be re-hired as part-time employees.

“We had anticipated 23 employees would take the package, which would have provided more flexibility in the town’s reorganization efforts,” Kupchick said. “Nonetheless, I am excited to get to work on reorganization and the opportunity to deliver top-level services to our residents.”

She still anticipates years of significant savings in its operating budget, albeit less than initially estimated.

Officials said the program was renegotiated with employee unions and largely scaled back in response to elected officials’ concerns over the initial proposal.

The Representative Town Meeting passed the program last month largely along a party-line vote with 21 in favor and 19 opposed.

Jill Vergara, the RTM’s majority leader and a Democrat, said members who voted against the program had concerns about the costs associated with it and adding those costs to the pension.

“We just didn’t think there was an established return on investment to justify that expenditure,” she said. “The same week we were spending money on the Barberry purchase in Southport. It’s a lot in the context of the budget we were facing last season, what we’re going to be facing this year and that was our main concern. We were trying to be fiscally responsible.”

Vergara said the program will likely mean the town needs to trim other parts of the budget.

joshua.labella@hearstmediact.com