A Retelling of DeKalb’s Reduction in Force Story


This ties together a half-dozen posts delivered over four months. It also better separates the facts from the adventures in obtaining them.

How the RIF Played Out Publicly

In February 2010, staff reported during a special meeting that DeKalb was facing budgetary shortfalls totaling more than $5 million by the end of FY2011. They attributed the shortfalls mainly to a combination of declining revenues and rapidly rising health insurance, pension and other personnel costs.

Although the city’s workforce already had been cut by 19 workers, another Reduction in Force (RIF) plan was proposed in case efforts to negotiate 12% across-the-board cuts in compensation failed — and indeed they did fail.

Phase I of the RIF was a Voluntary Separation Program (VSP) for AFSCME union employees with a minimum 20 years’ continuous service with the city, which, if approved, would then be offered also to management employees who had a minimum 10 years’ service. Phase II involved layoffs and terminations, the number of which was dependent upon how many workers took the voluntary separation.

To balance the budget, staff said 25-30 workers had to leave city employment one way or the other.

The VSP incentive was $1,000 per year of service with a limit of $20,000 per employee. It was described as a “bridge” incentive for veteran employees not quite eligible for retirement. The total incentive payout was estimated at $200,000.

Council voted in favor of the RIF and VSP April 5. A month after the vote, during a special budget meeting, the RIF $1.2 million total price tag and the necessity for borrowing the amount were first discussed.

A total of 14 signed up for the VSP by the May 25 deadline. Phase two arrived on or about June 9, when 20 employees were let go, 19 of them layoffs of AFSCME members who nevertheless would remain on the payroll until December 31 due to a guarantee made previously by the city.

The city restructured its debt in the fall to free up $1.1 million to pay for the RIF.

Obtaining Additional Information

The city reimbursed the Illinois Department of Employment Security (IDES) for unemployment compensation paid in the 3rd and 4th quarters of 2010.

IDES’ ruling in favor of claims for unemployment compensation was definitely a surprise for DeKalb. An August 20 letter from the city’s human resources director to the laid-off AFSCME workers stated, “…you are able to apply for unemployment at any time; you do NOT have to wait until January 1, 2011 as we had previously advised you.”

This meant up to 19 laid-off AFSCME workers were eligible for unemployment compensation paid concurrently with regular compensation. Ironically, they were eligible because they were not reporting for work.

Assuming none of the affected employees would have found new jobs between July 1, 2010 and January 1, 2011, it made not one whit of difference to the budget whether the laid-off employees received unemployment benefits during the latter half of 2010 or the first half of 2011. However, it was an actual mistake.

In March 2011, DeKalb denied access to two documents: the cost-benefit analysis used in creating the RIF, and the VSP contract. The Attorney General’s Public Access Counselor (PAC) upheld the city’s claim of a Freedom of Information Act (FOIA) exemption of the analysis because it was used in labor negotiations. The PAC did, however, work it out with the city to provide the VSP contract, which is how I discovered that Chapter 3/management workers as young as 36 qualified for the incentive, a “bridge” to retirement of probable record-breaking length.

Potential “retirees” in their 30s notwithstanding, the VSP contract actually reveals the havoc wrought upon the younger members of the workforce by DeKalb’s hiring freeze and previous layoffs. Of 99 IMRF positions listed at the time the RIF was enacted, 62 of them were filled by persons age 45 and above. Only 22 were in their 20s or 30s, and the RIF layoffs probably eliminated mostly these younger people since they’d tend to have lower seniority.

Now Let’s Do the Math

I’ve been told a breakdown of RIF payout categories does not exist. However, the Finance Division shared that $97,000 was paid out in unemployment compensation and $1.72 million went to separation incentives and payroll-related costs such as regular compensation, vacation time and comp time. I’ll use these numbers to estimate the breakdown.

First, the total compared to the borrowed amount of $1.1 million indicates $717,000 for the RIF was already in the budget. The city knew it would have to pay regular compensation for half a year to the laid-off AFSCME workers, and unemployment compensation was budgeted as well. Dividing the $717,000 means at least $37,737 was paid out in regular and unemployment compensation to each of the 19 AFSCME people. It’s also possible some of the borrowed money made up for compensation that was under-budgeted.

The maximum amount for VSP incentives is $20,000 times 14 people or $280,000. Subtracting that from the borrowed $1.1 million leaves $820,000 in payouts for vacation time, comp time and whatever other payroll expenses applied. Spread out among 34 people it comes to more than $24,000 each.

For the sake of comparison, consider the city’s expenditures for health self-insurance, which come to roughly $20,000 annually per employee. For FY2012, the DeKalb’s total health insurance outlay is projected at $3,320,725.

If these breakdown estimates are pretty good guesses, unpaid comp and vacation time constitute a significant liability for the City of DeKalb.

A Tale of Zero Accountability

DeKalb laid off four more human beings than planned, spent $600,000 more so far than they said they would, inexplicably delayed a public announcement of the need to borrow, and inadvertently set things up so they’d pay 19 people twice for not working.

Even without a chance to compare outcomes with the cost-benefit analysis, the facts indicate less-than-stellar performance.

Can we afford it? We face many challenges, including the one revealed here that much of the city’s IMRF workforce is within 10 years’ striking distance of retirement, which involves big payouts that cannot be delayed or put on installment plans.

These situations must be met with good planning and deft handling.

The RIF story does not inspire confidence.


— 2010 council meeting minutes
— Nov 2010 and Jan 2011 city check registers, found with meeting agendas
— Documents and e-mail shared in previous posts; use search term “VSP”