FY11 Guiding Budget Principles Survey Results Hampton City Council March 10, 2010

Slide 2 FY11 Guiding Budget Principles Briefed Council on several possible budgeting principles that could be utilized to balance the FY11 budget Distributed survey to Council to receive feedback Following is a review of the underlying themes based on survey results

Slide 3 Survey Results Employee Compensation/Benefit Retirement Incentive Program was well received as an option to pursue Council will be briefed on results later in presentation Council was in agreement with instituting some level of salary reduction as a balancing strategy, if necessary Council varied on preferred approach to these options

Slide 4 Survey Results Other Budgeting Principles Council overwhelmingly favored consolidating services, both within the City and with outside entities In addition Council strongly favored increasing service related fees Freezing vacant positions, as well as eliminating/ reducing non-core services was supported Use of fund balance for one-time expenditures was acceptable by the majority However, reducing hours of operation of certain city facilities such as libraries and community centers was not overwhelmingly favored.

Slide 5 Survey Results In addition to the survey questions posed suggestions were also solicited and are included in the packet.

Workforce Feedback Compensation and Benefit Options Hampton City Council March 10, 2010

Slide 7 Background Three employee meetings scheduled thus far One on March 9 th and two on March 11 th 100 employee capacity for each Additional meetings will be scheduled, if necessary Online survey also available Employees asked to use the honor system to express their opinion (either take online survey or come in person, but not both) Employees are reminded that this is not a referendum or a binding vote Our expressed goal is to minimize as much impact as possible to employees

Slide 8 Areas Covered & Explained The following areas may impact employees differently depending on their specific situation: Furloughs Salary Reductions Three thresholds - $75,000, $50,000 and all employees Employees share in VRS contributions Health insurance premiums Health insurance co-pays

Slide 9 Employee Polling Employees are asked several demographic questions as a warm-up As each option is explained, employees are asked what their tolerance level is for each area (i.e., furloughs, salary reductions) Choices include acceptable, somewhat acceptable, somewhat unacceptable, unacceptable and no opinion

Slide 10 Role of Reductions Employees will also be asked about their preference concerning these options: CHANGES ONLY TO PROTECT ALL JOBS: I think we should only do pay or benefit reductions if it protects all jobs. CHANGES TO PROTECT WHAT WE CAN: I think some pay or benefit reductions are appropriate even if we still have to eliminate some jobs.

Slide 11 Other Questions Salary Reductions Employees will be asked their tolerance level for salary reductions (0%, 1%, 2%, 3%, 4%, 5%) What is their preference? Employees are asked, of all the options, which do they prefer?

Retirement Incentive Survey Results Hampton City Council March 10, 2010

Slide 13 Retirement Incentive Results Receive briefing on survey results Approve Retirement Incentive Program Appropriate Funding

Slide 14 Retirement Incentive Results Staff presented a retirement incentive proposal which included the following: A one-time 20% salary incentive to employees who opt to retire between March 1 and August 1, 2010 Includes employees who are eligible for full retirement benefits Includes employees who are eligible for reduced retirement benefits Includes employees who are eligible for unreduced retirement benefits Employee paperwork should be returned to Finance by April 19th

Slide 15 Retirement Incentive Results A total of 288 employees were surveyed 125 employees eligible for full retirement benefits 134 employees with 20 – 29 years of service (eligible for reduced retirement benefits) 29 employees age 65 with at least five years of service (eligible for full unreduced benefits) Of total surveyed, 48 were not eligible due to age requirement Net total respondents eligible to receive incentive = 240

Slide 16 Retirement Incentive Results Of the 240 surveyed, a total of 59 employees responded that they would take advantage of the early retirement incentive 23 employees eligible for full retirement benefits 22 employees eligible for reduced benefits 14 employees eligible for unreduced benefits

Slide 17 Retirement Incentive Results SavingsCost – one-time funds Full-Retirement Eligible408,126273,407 Reduced Benefits321,202207,767 Unreduced Benefits223,042191,481 Total (including FICA)1,025,226724,113

Slide 18 Retirement Incentive Results These are estimated costs and savings numbers Exact numbers will not be realized until we have a confirmed list of retirees Some of the 181 employees who said no or were undecided may change their minds Some needed more information prior to making decision

Slide 19 Retirement Incentive Results Action required by Council Approve resolution to offer retirement incentive package and appropriate funds from designated fund balance – end of year savings