Amid budget challenges, Auburn to offer retirement incentive to city workers

With the city of Auburn facing a $5 million budget deficit, a proposed retirement incentive for eligible employees could help close that gap.

The Auburn City Council will consider the proposal at its meeting on Thursday. If it's approved, the city would pay an additional 15% of the annual health insurance premiums for retirees. The payments will last for five years or until the employee reaches Medicare eligibility age, whichever comes first.

Employees would be eligible for the incentive if they have not taken the existing retirement incentive available in the current collective bargaining agreements. That incentive is a $10,000 cash payout or a $12,500 contribution toward the retiree's health insurance premiums.

Eligible employees cannot combine incentives, according to a background memo.

Applications for the new incentive would be due by May 15. Employees who receive the incentive would need to retire on or before June 30.

In 2025, the city offered a retirement incentive with two options for eligible workers. The first option was for a $12,500 cash payout or $17,500 toward health insurance premiums. The deadline to apply was May 17, 2025.

The second option was for a $10,000 payout or $12,500 toward health insurance premiums. Employees had until mid-July to apply.

When the city proposed the incentives, they hoped it would generate savings and help close the budget deficit. Based on the number of eligible employees, Auburn City Comptroller Mary Beth Leeson projected the city could save $300,000. But she acknowledged it would depend on how many employees actually took the incentive.

Auburn City Manager Jenny Haines told The Citizen on Wednesday that three employees received the retirement incentives in 2025.

As the City Council works to finalize the 2026-27 budget, the new proposal could get more attention. The city has outlined budget scenarios that would involve eliminating more than 50 positions. One alternative would allow the city to retain its workforce, but the property tax levy would increase by 28%.

Multiple department heads have presented budget proposals that include significant staffing cuts. The Auburn Fire Department would eliminate 12 firefighters in its worst-case scenario, while the Auburn Police Department would cut eight police officer positions.

More budget presentations are scheduled at the meeting on Thursday. The last round of presentations will be next week.

Haines will present a revised balanced budget in May, which will begin the formal process of gathering feedback from city councilors. The council is also expected to vote next month on overriding the city's 4.72% property tax cap.

A public hearing on the budget will be held May 28. A final vote on the budget is scheduled for June 4.

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