01-11-2016 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Joel Hanson, City Administrator DATE: January 8, 2016 RE: Parks & Recreation Director Phased Retirement Agreement The Parks & Recreation Director has proposed a solution to achieve the $30,000 budget reduction in his department’s administrative costs (a copy of his e-mail is attached). His proposal is as follows: • He will work on a full-time basis for the months of January & February in 2016. • He will reduce his hours to ½ time status effective 3/1/16. • He will be fully retired before the end of 2016 (12/31/16). The timing of this decision will be based largely on the Department’s transition planning to assure continued quality service levels and at the Park & Recreation Director’s discretion; subject to budgetary compliance associated with a potential new hire and other benefit payouts. • He would like to enter into a Phase Retirement Option (PRO) through Public Employees Retirement Association that will enable him to collect full retirement benefits upon reduction to ½ time status. This agreement will not extend beyond 2016. (A copy of PRO document and related information is attached to this memo.) Staff is also recommending we continue his health insurance benefits on the same basis as if he were on fulltime status for three additional months (through 5/31) in recognition of his cooperation in helping us to resolve this matter. This recommendation has been vetted with the City Attorney who confirmed it is an allowable option even though our Personnel Policy does not allow an employee to garner health insurance benefits unless they are fulltime status. The difference in this case is that we directed the reduction in the department’s budget and staffing that resulted in the reduction from fulltime status. Based on the above scenario, the costs for this option are $57,560 versus the $106,845 originally budgeted (prior to the $30,000 reduction). That difference generates a savings of $49,285. Part of that will be further reduced by the payout of the unused sick leave to the Retirement Health Savings Plan that will amount to about $13,250 leaving us at $36,035. (Note: This payment will be reflected as an expense in the 2016 budget pursuant to Governmental Accounting Standards Board requirements.) The additional savings above $30,000 can help offset payouts of accrued PTO or provide for some staffing overlap for a replacement when hired.