Lewisville City Council approves retiree incentive program as strategy in midst of financial strain caused by coronavirus

Lewisville City Council unanimously approved a new retiree incentive program at a May 4 meeting in an attempt to reduce expenditures while avoiding layoffs and furloughs in the midst of financial strain caused by COVID-19. (Anna Herod/Community Impact Newspaper)
Lewisville City Council unanimously approved a new retiree incentive program at a May 4 meeting in an attempt to reduce expenditures while avoiding layoffs and furloughs in the midst of financial strain caused by COVID-19. (Anna Herod/Community Impact Newspaper)

Lewisville City Council unanimously approved a new retiree incentive program at a May 4 meeting in an attempt to reduce expenditures while avoiding layoffs and furloughs in the midst of financial strain caused by COVID-19. (Anna Herod/Community Impact Newspaper)

Lewisville City Council unanimously approved a new retiree incentive program at a May 4 meeting in an attempt to reduce expenditures while avoiding layoffs and furloughs in the midst of financial strain caused by COVID-19.

For those who participate in the program, the city will waive the cost of the employee’s retiree insurance for two years so long as they use the city’s insurance plan. The program would pay for two years worth of AARP premiums for retirees older than 65. It will only be available to civilian employees.

According to city officials, 77 city employees would be eligible for this program.

The eligible employees have until July 15 to accept or reject participation in the program. If they accept, they must retire by Sept. 30. Those who do not accept will not be protected from any potential furloughs or layoffs that might occur during the upcoming budgeting process for fiscal year 2020-21, according to officials.

“It is reasonable to assume that if the city offered these employees an incentive that would reduce the cost of their retiree insurance, 10-20% might retire prior to September 30, 2020,” a city memo stated. “The vacant positions created by the retirements would be evaluated to determine if they could be eliminated or reallocated to areas where there is a greater need.”


The program will not add any extra expenses to the upcoming budget but instead would result in a loss of revenue to the city’s health fund, according to the memo.

City Council also approved a midyear budget analysis. The analysis projected the city will experience a $10.2 million decrease in total revenue by the end of the fiscal year.

The lion's share of the revenue loss is due to reduced sales tax collections as a result of stay-at-home orders that were first enacted in March to help slow the spread of the coronavirus.

To help mitigate the revenue loss, the city has implemented a hiring freeze for all civilian positions. In addition, the city plans to reduce funding for capital improvement projects, one-time purchases and more.

Through mitigation efforts, the city expects to be able to save $8.2 million, according to the budget analysis. Despite the $10.2 million in projected revenue loss, the city expects to have $2 million left in the general fund by the end of the fiscal year.

Money from this fund will be used to pay off the projected $638,074 shortfall expected to occur under the original city budget due to loss of revenue, according to the analysis.

“Please keep in mind that the pandemic is an unprecedented, continually unfolding, and fluid event,” the analysis stated. “This makes it difficult to project future impacts. Our analysis is continually updated as information becomes available.”