The Lackawanna City Council on Monday approved an early retirement incentive program for employees with 20 years or more of continuous employment with the city.

Mayor Norman L. Polanski Jr. requested the measure, which allows the city to offer $15,000 buyouts to long-term personnel who are willing to retire between July 31 and Oct. 15.

Police and fire personnel would not be eligible for early retirement under the city’s program, although they already have an early retirement option under an incentive bill signed into law June 2 by Gov. David A. Paterson.

Under the city’s early retirement incentive, eligible city employees must apply between Sunday and July 1, and agree to retire by Oct. 15. Ostensibly, the $15,000 incentive is aimed at reducing the city’s personnel expenses, but residents at Monday’s City Council meeting expressed skepticism about the plan.

“To not be a gift of public funds, where is the savings for the City of Lackawanna?” asked Joseph DiCenzo of Madison Avenue.

Council President Charles Jaworski insisted that there would be savings if the city can replace seasoned personnel with new hires at lower salaries and with less expensive benefits.

“The savings is a lower rate coming in. It’s a lower rate of health insurance,” Jaworski said. “All of our new employees have to pay 15 percent [of the cost of their health insurance premiums], where the older [employees] don’t have to. So there is quite a bit of savings.”

Andrea Haxton, a former city lawmaker, said the incentive was tantamount to a handout. She questioned why the city would budget $15,000 incentive payouts while trimming $75,000 from the 2010-11 operating budget to pay for school crossing guards.

“I think this here handout of the $15,000 is a slap in the face, because the people are going to retire, regardless, and they make a fair wage and [receive] good benefits,” Haxton said. “Then to turn around and take crossing guards out of the budget that is putting children . . . in harm’s way is an abomination.”

Second Ward Councilman Geoffrey M. Szymanski said that it was Polanski who removed the budget line to pay for school crossing guards and that the Council could not reinstate the line item without cutting elsewhere in the budget, since lawmakers were prohibited from increasing the mayor’s $22.98 million spending plan.

“It was a bad budget to work with. I mean, we could reinstate them, but we weren’t asked if we wanted to remove them,” Szymanski said. “So we were pretty much stuck between a rock and hard place on that budget. It was not nice.”