The Hamilton County Board of Education unanimously approved an employee buyout plan Thursday, giving one-time bonuses to retirees and health insurance to those who are laid off.
After two question-and-answer sessions with eligible would-be retirees and district officials earlier this week, there was little discussion among board members at Thursday's special meeting.
"In tough economic times, this is a very humane way to treat all our employees," said Superintendent Jim Scales after the vote. "This is just one of many options we'll have to pursue to get to a balanced budget."
The school system faces a projected $20.2 million deficit for next year's budget and hopes to save about $3 million annually through the buyout plan.
Information about the buyout and health care plans will be mailed to eligible employees in the next few days, and they will have 30 days to inform the district whether they plan to accept the buyout, school system Chief Financial Officer Tommy Kranz said.
There are four categories of employees eligible for a one-time bonus payment if they choose to retire at the end of the school year, Mr. Kranz said.
Employees with 30 or more years of service will receive 25 percent of their total annual salary, while those with 25 to 29 years will receive 20 percent. Certified employees who are at least 55 and have 20 to 24 years will receive a 15 percent payment, and classified employees with 15 to 24 years of service will receive 15 percent.
There also is a 10 percent "early retirement" bonus for employees 55 years or older who have at least five years of service in Tennessee.
The bonuses are higher than Mr. Kranz's first proposal, mostly to encourage more employees to take the buyout, he said.
"Increasing it from 20 percent to 25 percent makes a difference to individuals," he said. "It appears to have made a material difference in the number of employees who are willing to take this."
Mr. Kranz estimated the plan will cost the district about $2 million in initial payouts, which will come from the system's $18 million undesignated fund balance.
The approved health care plan will offer employee health care rates for one year to laid-off employees with fewer than five years of service; those with five to 15 years could participate for two years, and employees with 15 or more years of service could continue on the health care plan at the employee rate for up to three years, Mr. Kranz said.
If the employee were to find another job with health benefits during that time, the district would have to rely on "the honor system" for the employee to notify the school system, he said.
"I don't know how else to police it," he told the board.
Mr. Kranz said he hoped to have a good idea of how many employees were interested in taking the buyouts in a week and planned to have final numbers by mid-February.