City of Houston working to buyout retirement eligible employees to battle budget woes

HOUSTON, Texas (KTRK) -- The City of Houston is making a push to close its mammoth $330 million projected budget shortfall.

In mid-March, the city began offering to buyout retirement eligible city employees. The news came amid a hiring freeze and ongoing effort to restructure city government.

Officials tell ABC13 the efforts are an attempt to balance the city's budget while avoiding things such as higher taxes, new fees, service disruptions, and additional staffing reductions.

"This is not the only thing that we are doing to close the budget gap and more importantly, this is not the first thing," the Mayor's Deputy Chief of Staff Steven David said at a joint City Council Budget and Fiscal Affairs Committee and Labor Committee meeting on Wednesday.

David and Dubowski provided the council with an update on the effort.

About 3,000 City of Houston employees - about 20% of the city's workforce, are eligible to retire, according to David.

Dubowski said as of Tuesday nearly a quarter of eligible employees had accepted or indicated they planned to accept the offer. Only a fraction of those employees are paid out of the City's general fund, which is where the projected $330 million budget gap exists. Dubowski said if 100% of retirement-eligible general fund compensated employees accept the retirement incentive deal, the city will save more than $100 million annually, significantly slashing the deficit.

Employees have until April 28 to accept the retirement incentive package and will be retired on May 1.

The potential mass exodus prompted several council members to ask questions regarding department structure come May. ABC13 has reported that several departments were short-staffed prior to the hiring freeze and buyout effort.

The effort is also happening as State Senator Paul Bettencourt is attempting to wrestle control of HCTRA funding. He introduced a new bill, with support of the city, that if successful would divert 30% of excess toll revenue to the city. Currently, all excess toll revenue is allocated to Harris County.

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