News

July 9, 2008

County may offer 368 early retirement

Incentive would raise pension payments by increasing years of service by 30 percent.

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
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Luzerne County commissioners plan to vote Wednesday to offer an early retirement incentive to 368 employees.

The incentive would increase pension payments by adding service years by 30 percent, said county Human Resources Director Doug Richards. For example, an employee with 20 years of service would receive an additional six years of service.

Richards said he can’t estimate the dollar amount of this benefit because each situation is different and calculations must be done on each employee.

“There’s not a simple formula,” Richards said.

The county sent information about all 368 employees to the company that manages retirement benefits. Eligible employees will receive specific information on the dollar amount of their benefits before the eligibility period, which runs from Aug. 1 through Sept. 30.

If all employees accepted, the incentive would cost $6.7 million to $17.4 million, depending on the degree of benefits offered to eligible employees, the pension fund actuary recently told county officials.

County officials plan to pay that back over five years, according to a resolution released during Monday’s work session.

The county would save about $5.5 million in payroll and health care costs if all 368 retired and were replaced by new workers at entry-level wages, Richards has estimated. He came up with that number by totaling the gross salaries of the 368 employees -- which came to $14.8 million -- and subtracting replacement employee costs, leaving a net savings of $4.2 million.

Richards pegged the health-care savings at $1.3 million. He said veteran employees tend to cost the county more in health insurance. The county is self-insured.

If 60 percent of the employees take advantage of the incentive, the county would save $2.5 million in payroll and $700,000 in health care, Richards estimated.

The incentive would be offered to employees who are 55 with 10 years of county employment or who have 30 years of service, regardless of age.

County commissioners had borrowed $11 million to fund an early-retirement incentive in 2004.

The county also offered an incentive in 2000, though it was deemed a failure because the work force eventually went back to its original size.

In other business, commissioners said they won’t be prepared to vote Wednesday on two matters: the juvenile detention center lease termination and a contract for psychological tests on juvenile offenders.

Commissioner Chairwoman Maryanne Petrilla said the county is still negotiating a contract termination with Gregory Zappala, who is now sole owner of the Pittston Township juvenile center leased by the county.

The county is trying to get out of its $58 million, 20-year lease of the Pittston Township center because the state Department of Public Welfare has reduced reimbursement for the facility, effective June 1.

The state believes PA Child Care is receiving too much profit. With the lease in effect, the county will lose more than $1.6 million annually until the lease expires in 2024.

Petrilla said commissioners will hold a special meeting before July 1 to vote on a plan.

A contract for psychological testing of juvenile offenders must be approved before July 1 because a Welfare Department official has warned the state won’t continue funding expensive and lengthy evaluations of juvenile offenders who do not qualify for Medical Assistance.

Frank Vita, the brother-in-law of county senior Judge Mike Conahan, has been paid more than $1.1 million since 2001 to perform the psychological evaluations for county court.

In addition to Vita, three other psychologists have applied, said county Children and Youth director Frank Castano.

County probation officials proposed during the work session to hire Vita for $450 per assessment and $80 an hour, for up to five hours, for additional assessment.

However, county officials questioned the need for probation to hire someone because the Children and Youth department is in the process of selecting a psychologist.

Commissioners questioned the additional $80 hourly fee, saying state officials had cited an acceptable figure of $65.

Probation officials said the $80 mirrors the rate that had been approved for Medical Assistance clients.

If you go

In other business

The on-the-road county commissioner meeting is at 5 p.m. Wednesday in Hazleton City Hall.

Commissioners plan to vote Wednesday to:

• Pay $191,565 to Valley Testing for emergency repairs at the county prison. A Times Leader reporter had recently discovered the company double-billed the county $82,365. County officials said the overpayment was deducted before the latest payment.

• Formalize the county’s commitment to sponsor Luzerne County Community College. Sponsorship is supposed to be renewed every 20 years, but officials from the county and college can’t find proof of the last approval recorded in 1995. The college can’t continue to operate without a formal agreement. Commissioner Chairwoman Maryanne Petrilla asked a college representative to see if commissioners can mandate the college follow the county’s purchasing policies as a condition of sponsorship.

• Approve a statewide program that would require the county to notify victims or other interested parties when a county prison inmate is transferred, escapes or is released for any reason. More than 30 counties have already signed up. The program will cost the county $2,920 next year and increase to $11,680 in 2012.

• Forgive an $854,008 loan to Nanticoke for the Kanjorski Building. The county community college is purchasing the building and requested loan forgiveness. County officials are receptive because the project will help revitalize the downtown.

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