A Voluntary Separation Incentive Program is hoped to help the city of Coeur d’Alene save money. 

“I think this is a move in the right direction to do something to bring our budget under control in the coming years,” City Councilor Christie Wood said. 

The program approved unanimously by the City Council targets qualifying employees who hold full time, benefitted positions, “desiring an early separation or retirement” from the city. 

The goal "is to reduce overall personnel costs,” said Melissa Tosi, human resources director. 

“By offering an incentive, our hope would be that departments would have an opportunity to review the need for a position after an employee leaves,” she told the City Council at its Nov. 4 meeting.

That could result in restructuring, a delay in hiring or bringing in someone at a lower entry wage. 

“The incentive will allow an opportunity for departments to strategically plan their future resources while realizing overall financial savings for the City,” a staff report said. 

There must be total savings of at least $25,000 in the first full year of separation. The city has about 30 employees who may be eligible for the program. 

The last time an incentive was offered to employees was in 2016. Tosi said it produced savings, mostly by leaving positions vacant. 

“Our departments now are running pretty lean," she said. “So, I’m not sure how much opportunity we have for that.” 

The city has been looking for ways to reduce spending. 

The Coeur d’Alene City Council in September approved a 2025-26 budget of $151.9 million that included the allowable 3% property tax increase to generate $835,383 and 1% of forgone taxes that will bring in $290,146.  

The budget also called for using $1.8 million from the general fund balance.

“Clearly, we’re dealing with a deficit," Wood said at the time. 

The city has about 420 employees. Wages and benefits are projected at about $48 million in the 2025-26 budget, a $2.1 million increase over the previous year.

Employees have until Dec. 5 to provide a letter of interest to be considered for the program and for those approved, they will most likely go to the council for approval at the Dec. 16 meeting, Tosi said. Employees must voluntarily separate from the city by Dec. 31.

Through the program, an eligible employee would receive a 1% service payout based on the employee’s base annual wage in the preceding 12 months from their separation date multiplied by their total years of completed city service.  

For example, if an employee makes $100,000 in base annual wages multiplied by 1% at 20 years of service it would come out to $20,000 paid as taxable wages on a final check.  

The plan also calls for compensation for sick leave, vacation and comp time. The employee must agree to opt out of medical insurance coverage with the city. 

“While it is unknown how much employee interest the program will generate, it will provide an option for employees who may be interested in separating, but who have determined they have a need for additional resources to help make the transition," a staff report said. 

Tosi said incentive savings will be tracked for an overall analysis at the conclusion of the program. 

Wood supported the program. She said it would give valuable, longtime employees the opportunity “to ride off into the sunset” and give the city a chance to bring on more affordable staff. 

She said the city “can’t just constantly be trying to grab more revenue” and can’t keep taking forgone and property taxes. 

“That's just not a concept that's sustainable,” she said. “We really need a mechanism to look at our spending.” 

City Administrator Troy Tymesen said savings would be achieved long term. 

“Day one, it doesn’t save us any money,” he said. 

But over time, as positions are held open, or a department is restructured, personnel costs would be reduced.

“We have in the past been successful,” Tymesen said.