HomeMy WebLinkAboutCM Severance PackagesCITU On. 1F
Agenda Item No: 5
Meeting Date: February 17, 2009
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: MANAGEMENT SERVICES
Prepared by:
Jim Schutz, Assistant City Manager,\
City Manager Approval:
SUBJECT: RESOLUTION AUTHORIZING THE CITY MANAGER TO PROVIDE A
SEVERANCE PACKAGE TO EMPLOYEES SUBJECT TO LAYOFF
RECOMMENDATION: Adopt Resolution.
BACKGROUND:
On November 17, 2003, the City Council adopted a resolution providing a severance
package to employees subject to layoff due to fiscal year budget adjustments. At that
time, the Council was considering the City's future financial situation due to a
depressed economy and the potential impacts to the City from the State of California
budgetary problems. The severance package was put in effect for fiscal years 2003/04
and 2004/05.
Several years later, the City is facing an even greater level of uncertainty. Many of our
local jurisdictions are facing layoffs, furloughs, hiring freezes, and the like. The State
has instituted a hiring freeze, started a furlough program, and is looking at benefit
reductions such as reduced holidays. Our statewide sales tax growth has dropped to
the lowest it has been in over 20 years which includes major downturns such as the
tech bubble and the aerospace layoffs. At the national level, we are in a severe
recession and are seeing enormous stimulus packages, bailouts, and the worst job
losses since 1945.
ANALYSIS:
The City Manager has predicted a "30 -month valley" and a budget deficit which could
reach $3 million by the end of the current fiscal year. All City departments, which have
already cut budgets and reduced service levels, continue to look for new ways to
increase revenue and cut costs.
One cost saving measure, which also meets other city goals, is the planned
consolidation of the dispatch function of the San Rafael Fire Department. Moving the
function to the Marin County Communication Center has a number of benefits but it
would also require the layoff of two filled fire dispatcher positions.
FOR CITY CLERK ONLY
File No.:
Council Meeting:
Disposition:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
In response to the layoff, staff is recommending that the Council put in place a layoff
severance package modeled after the 2003 package. The severance package could
be used for the immediate need in the dispatch area, but could also be available should
the City require further layoffs due to budget constraints and/or organizational changes.
Current requirements (as established in the City's Personnel Rules and Regulations
and the various employee bargaining unit MOUs) include a lay off notice requirement
(in most cases 30 days prior to the layoff date). The MOUs generally also cover the
procedures pertaining to bumping rights, seniority, re-employment, and transfers.
The 2003 staff report stated that it was important to "balance the need to be as humane
as possible and give as much notice as possible to those who unfortunately would be
laid off, with the recognition that to extend these benefits would impact the savings the
City was trying to realize from the elimination of the affected positions, and not wanting
it to cause any more layoffs than absolutely necessary." In other words, the package
attempts to balance cost saving needs with a responsible level of assistance to the
outgoing employee.
The program would be offered to employees in regular, budgeted positions who are laid
off (separated from the City) as a result of the City's budgetary adjustments.
Employees who transfer to another vacant, regular position would not be eligible. The
severance package would contain:
Severance pay (paid in a lump sum no later than 30 days after termination date)
equivalent to 60 calendar days of base pay.
2. Continuation of enrollment in the City's group health and dental insurance
programs (based on the employee's enrollment at the time of separation)
through COBRA, with the City continuing to pay the City's portion (based on
bargaining group) for the first two months of COBRA continuation health and
dental insurance premiums. There would be no cash value payment option
available to affected employees not electing COBRA continuation coverage; and
continuation in the group plans through COBRA beyond the first two months
would require full payment of the group premiums by the former employee.
3. Outplacement services throughan agent contracted with by the City, up to a
maximum of $2,000 for each employee separated due to lay off (no cash value
payment option available to affected employees).
The City Council is being asked to approve the program, but the amount of individual
severance packages (per the rules established in the program) would be determined by
staff with final approval by the City Manager. For example, different base pay amounts
or different insurance coverages would result in different final packages. Individual
packages will follow the established program and will not separately be brought back for
Council approval.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
Rather than stating a sunset date as was done in the 2003 memo, staff recommends
that the Council offer this layoff severance package as the City's official package until
such date that the Council chooses to modify or eliminate it.
FISCAL IMPACT:
Cost of the program would be borne by appropriations in place in the City's Employee
Benefits Fund. Therefore, there would be no "new" budgeted dollars required to
implement this program. The cost of the severance package would not reduce the
savings the City would obtain through the position elimination.
OPTIONS:
• Adopt the Resolution, or
• Seek additional clarification from staff before consideration of this Resolution, or
• Reject the proposed severance package program.
ATTACHMENTS:
Resolution
RESOLUTION
A RESOLUTION AUTHORIZING THE CITY MANAGER TO PROVIDE A SEVERANCE
PACKAGE TO EMPLOYEES SUBJECT TO LAYOFF
WHEREAS, it is determined that, due to national, state, and local economic conditions, the
City of San Rafael ("City") is faced with decisions regarding employee layoffs; and
WHEREAS, the City is interested in assisting regular, budgeted, employees laid off due to
these budget decisions; and
WHEREAS, the City has had a layoff severance package with a sunset date of June 30,
2005; and
WHEREAS, the City now wishes to establish a new layoff severance package, which shall
continue until the resolution is rescinded or superseded.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES RESOLVE,
DETERMINE AND ORDER AS FOLLOWS:
The City Manager will have the authority to make available a layoff severance package to
employees laid off from regular, budgeted positions that will include:
1. Severance pay (paid in a lump sum no later than 30 days after termination date)
equivalent to 60 calendar days of base pay; and
2. Continuation of enrollment in the City's group health and dental insurance programs
(based on the employee's enrollment at the time of separation) through COBRA, with the
City continuing to pay the City's portion (based on bargaining group) for the first two
months of COBRA continuation health and dental insurance premiums. There would be
no cash value payment option available to affected employees not electing COBRA
continuation coverage; and continuation in the group plans through COBRA beyond the
first two months would require full payment of the group premiums by the former
employee; and
3. For a period of up to six months following separation, outplacement services through an
agent contracted with by the City, up to a maximum of $2,000 for each employee
separated due to lay off (no cash value payment option available to affected employees).
This package would be offered to employees in regular, budgeted positions who are laid
off (separated from the City) as a result of the City's budgetary adjustments. Employees
who transfer to another vacant, regular position would not be eligible.
I, Esther C. Beirne, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution
was duly and regularly introduced and adopted at a regular meeting of the City Council of the City
of San Rafael, held on Tuesday, the 17th of February, 2009, by the following vote, to wit:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
Esther C. Beirne, City Clerk