COEUR d'ALENE - The five Coeur d'Alene department heads who accepted separation incentive agreements with the city of Coeur d'Alene will receive three years of medical coverage after they leave, according to terms of the deal obtained this week by The Press.

In addition, they'll receive between $22,000 and $26,000 contributed into each of their Health Reimbursement Accounts - a retirement medical expense account for public sector employees regulated by the Internal Revenue Service.

The department heads combine for 138 years of experience and are all in the top 16 wage earners for the city.

Terms of the agreement allow each of them to cash out 25 percent of their accrued vacation leave, so they'll also earn between $3,600 and $5,000 from those unused hours on their last paychecks.

The bulk of the separation agreements involves medical benefits, according to the agreements provided to The Press. Other than a portion of their vacation leave, the department heads won't receive lump sum payments for leaving.

"Nobody is getting any walking away money," said Pam MacDonald, Human Resources director and one of the five employees who agreed to the separation agreement, announced Nov. 20. "The whole idea is for (the city) to pay over time, so that we don't have this huge impact."

Separation agreements are different than retirement benefits, which employees can only receive after reaching state-defined thresholds. All five department heads also meet retirement qualifications. But separation agreements can be reached with any benefited employee so long as the agreement would net the city a savings of $6,000 a year for the length of the agreement.

As it did in 2010, the city offered all its benefited employees a separation proposal in April due to budgetary constraints.

For most involved, the incentive provides $18,000 toward medical insurance outlays until the employee becomes eligible for Medicare. Earlier this year, according to a city press release issued last week, 11 non-department head employees accepted separation incentive packages.

But the recent agreement with the department heads will contribute 75 percent of their applicable vacation leave payout and 100 percent of their applicable sick leave payout to their HRA/VEBA plans, which are tax-exempt medical accounts.

The remaining 25 percent of the vacation leave goes on their last paychecks.

Wayne Longo, hired in 2007 as police chief after more than 30 years working for the Idaho State Police, declined to comment on why he agreed to step away effective Oct. 1, 2013.

Police Sgt. Christie Wood said Longo - recently named Distinguished Citizen of the Year for 2012 by the Coeur d'Alene Chamber of Commerce - will speak about stepping away when the date approaches.

"When he gets closer to the date I am sure he will be happy to have that conversation but right now he is still very focused on his duties of police chief," Wood emailed The Press. "He's not a lame duck yet."

MacDonald, hired in 1989, said she agreed to the separation because the timing worked for medical coverage until she was eligible for Medicare. Dave Yadon, planning director hired in 1974, said he also agreed for medical options, as well as overall timing since he is turning 65 next year.

Steve Anthony, recreation director, hired in 1974, said it was a decision he had thought about for a couple of years, and the timing seemed right to step away in 2014.

"It gives me some time to settle," said Anthony, 60. He added that his proudest achievement in the department has been partnering with the Coeur d'Alene School District to enhance and build gyms for expanded recreation opportunities.

Doug Eastwood, parks director hired in 1978, said he considered taking the agreement in 2010, but wanted to see the McEuen Field project through before leaving. Plans behind the multi-million project were just getting under way then, while the project should wrap up in November, a month after the parks director will step away.

"I wanted to see this one through," said Eastwood, 62, of the park project. But "at some point in time you have go - 35 years is a long time."

Part of his agreement allows the city to contract him as a parks consultant up to $6,000.

The city said in its press release that money saved from the packages is realized by filling vacated positions at the minimum of the pay range. Each of the five department heads is at the top of his or her pay scale.

Longo earns about $112,000, the fourth-highest salary among the city's roughly 350 employees budgeted for fiscal year 2013. McDonald, Eastwood, Yadon and Anthony each earn $100,012, which is the sixth-highest salary totals budgeted.

"There may be additional savings, as there may be reorganization or domino effects related to these separations," Deputy City Administrator Jon Ingalls stated in the press release. "Those savings are difficult to calculate exactly, but they could be significant."

The separation packages will save the city at least $145,000 over the next two fiscal years, according to the city, but it will also phase out more than a century of experience.

"These are members of our executive team and we will be sad to see them go," said Wendy Gabriel, city administrator, in the press release. "But by accepting these incentive packages, they are allowing us to plan ahead for their succession."

Wayne Longo

- Separation Date: Oct. 1, 2013

- Accrued sick and vacation time: 616 hours/$53.85 per hour

- Total HRA/VEBA contribution, $25,471

- Estimated left over vacation, $5,061 of taxable wages on final paycheck.

- City will pay for single medical and dental premium beginning October 2013 until the city premium expense totals $18,000

Pam MacDonald

- Separation date, Nov. 1, 2014.

- Accrued sick and vacation time: 646 hours/ $48.08 per hour

- Total HRA/VEBA contribution, $26,203

- Left over vacation, $4,856 of taxable wages on final paycheck

- City will pay $500 a month toward 2 Party (retiree plus child) medical and dental premium beginning November 2014 for 3 years or $18,000.

Dave Yadon

- Separation Date: Oct. 1, 2013

- Accrued sick and vacation time: 550 hours/ $48.08 per hour

- Total HRA/VEBA contribution, $22,741

- Left over vacation leave, $3,702 of taxable wages on final paycheck

- Yadon will provide consulting services to the city after Oct. 1, 2013, on an as-needed basis at $38 per hour and not to exceed a total of $18,000.

Steve Anthony

- Separation date, Nov. 1, 2014

- Accrued sick and vacation time: 545 hours/$48.08 per hour

- Total HRA/VEBA contribution, $22,549

- Left over vacation leave, 3,654 of taxable wages on final paycheck

- City will pay for family medical and dental premium beginning October 2014 until the city premium expense totals $18,000.

Doug Eastwood

- Separation date, Aug. 30, 2013

- Accrued sick and vacation time: 596 hours/$48.08 per hour

- Total HRA/VEBA contribution: $24,376

- Left over vacation leave, $4,279 of taxable wages on final paycheck

- City will pay for single and spouse medical (includes vision) and dental premium for 27 months, beginning September 2013 through November 2015 until the premium expense totals $18,000 or City will pay single medical for 27 months or $18,000.

- Eastwood will provide consulting services to the city after Sept. 1, 2013, on an as-needed basis at $38 per hour and not to exceed $6,000