COVID-19 budget cuts force Myrtle Beach to offer early retirement to certain city employees

COVID-19 budget cuts force Myrtle Beach to offer early retirement to certain city employees

MYRTLE BEACH, S.C. (WMBF) – For the first time, WMBF News is learning the true impact that the coronavirus pandemic is having on the city of Myrtle Beach’s government.

Myrtle Beach city spokesperson Mark Kruea confirmed that the city implemented a voluntary separation program in order to save money.

The city of Myrtle Beach was able to get through the spring and summer without any cuts or furloughs to its full-time staff. But the city did put a halt on most part-time staff positions and also initiated a hiring freeze, except for critical need positions.

But once the new budget came around, more cost-cutting measures had to be implemented.

“Obviously, the new budget year began July 1 with a much tighter (and smaller) budget than for the last fiscal year. Just as businesses were affected by the COVID-19 economy, so were governments,” Kruea said.

Kruea said the city’s current fiscal year budget is $193.7 million, which is much lower compared to the previous year’s fiscal budget.

“That budget is much smaller and tighter,” Kruea said. “It’s $7.8 million less already and yet we still found the need to cut additional monies out of this current spending year. We have more than 900 city staff members. That’s our biggest expense and that’s also the most likely place where we can find some savings. So we looked at what the private sector does. A voluntary retirement program, so that we could help people achieve their retirement goals while helping the city save some money.”

The city put a voluntary separation program, or early retirement incentive, into place for those who were close to retirement or already working beyond retirement. Kruea explained that the reason the city focused on those nearest to retirement or who had already retired but were rehired is because they would benefit the most from the separation agreement. He said that staff members who are not near retirement would not have benefited to the same degree. He added the positions resulted in greater savings to the city during this fiscal year, even with the separation package.

“This was a generous package which included a payment equal to one fourth of a year’s salary as a contribution toward the necessary retirement system contribution and an extension of medical coverage through December,” Kruea explained.

Kruea said the voluntary separation program aims to save the city at least $1 million.

He said about 35 staff members voluntarily took advantage of the early retirement, but the savings did not achieve the target.

The city ended up offering early retirement to 10 more employees, but the separation was not voluntary. City Manager John Pedersen said that of those 10 employees, three are in the fire service. He added that they were all in the “retire/rehire” group.

Kruea says the cuts are citywide and include the Myrtle Beach Police Department, Public Works Department and the Myrtle Beach Convention Center.

In all, 45 employees were given the early departure package.

“We regret the necessity for both of these programs, as we have outstanding staff members who provide a high level of service to the public, but the economic realities could not be ignored,” Kruea said.

Retirement for those who took the separation package will go into effect on Wednesday. Kruea said the city plans to keep those positions vacant until June 30, 2021.

“The budget remains extremely tight, and further cost-cutting measures may be needed, although none is planned at the moment,” Kruea said. “We hope that such measures as furloughs or further personnel reductions are not required.”

Kruea says the cuts didn’t target a specific department.

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