HomeMy WebLinkAboutCM Preliminary Impact of COVID-19 Pandemic on CIty's Finances & Initial Programs to Aid in Recovery____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting: May 4, 2020
Disposition: Accepted report, Resolutions 14793 & 14794 and approved implementation
Agenda Item No: 6.b
Meeting Date: May 4, 2020
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: City Manager’s Office
Prepared by: Cristine Alilovich,
Assistant City Manager
City Manager Approval: ______________
TOPIC: PRELIMINARY IMPACT OF COVID-19 PANDEMIC ON CITY’S FINANCES & INITIAL
PROGRAMS TO AID IN RECOVERY
SUBJECT: INITIAL COVID-19 FINANCIAL RECOVERY EFFORTS AND PROGRAMS,
INCLUDING:
1.ACCEPT INFORMATIONAL REPORT ON COST REDUCTION ACTIONS TO DATE
SUCH AS REDUCING STAFF ALLOCATION THROUGH NOT FILLING VACANT
POSITIONS;
2.RESOLUTION APPROVING A VOLUNTARY RETIREMENT SEPARATION
PROGRAM;
3.RESOLUTION APPROVING A VOLUNTARY WORK HOURS REDUCTION
PROGRAM; AND
4.APPROVE THE IMPLEMENTATION OF THE MANDATORY FURLOUGH
PROGRAM AS OUTLINED IN THE CITY’S LABOR AGREEMENTS AND DIRECT
STAFF TO MEET AND CONSULT WITH ALL BARGAINING UNITS.
RECOMMENDATIONS:
Accept COVID-19 Informational Report on City’s Finances, adopt the resolutions approving the Voluntary
Retirement Separation Program and the Voluntary Work Hours Reduction Program and approve the
implementation of the furlough program.
EXECUTIVE SUMMARY:
COVID-19 is an emergency on so many levels – physically, emotionally, and financially just to name a
few. This report provides a brief summary of COVID-19’s impact on San Rafael as context to a larger
financial response discussion. While there are many financial unknowns (e.g. will the revenue losses be
as high as projected, will they last as long as projected, will there be State or Federal assistance), staff
needs to prepare for massive revenue losses. San Rafael’s largest source of income are sales and use
taxes, so businesses being shut down or operating below capacity has a significant impact on revenues,
and thus our ability to provide the services that our community depends on. This report provides
preliminary estimates and requests specific actions to begin now as we lead into our budget adoption
process for Fiscal Year 2020/21. It also calls for a COVID-19 Economic Recovery Plan (CERP).
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
BACKGROUND:
COVID-19 General Background and Context in San Rafael
On March 16, 2020, the Marin County Health Officer in coordination with six other Bay Area counties
issued a public health order to prevent the spread of novel Coronavirus, COVID-19. This order requires
all persons to shelter at their place of residence until the order is lifted. All non-essential businesses were
required to cease non-exempt operations at physical locations, with some exemptions for delivery and
curbside pick-up services. Residents are allowed to leave their residences only to provide or receive
essential services, such as:
•Performing tasks or activities essential to personal or family health and safety;
•Obtaining necessary services and supplies, including perishable goods food and medical
supplies;
•Engaging in outdoor activity such as going on a walk, or exercise (as long as exercise is not
conducted with a group and at least six feet of distance between you and other people is
maintained); and
•Performing work providing essential products and services.
On March 17, 2020, the City Council ratified the proclamation of a local state of emergency signed by the
City Manager on March 10, 2020. The City’s COVID-19 website can be found here.
In the Bay Area, the Shelter-in-Place order has been extended and is currently in effect until May 3rd,
2020 but it will be modified and extended again through the end of May. During this time, Marin County
has experienced the below COVID-19 activity:
COVID-19 Activity (as of April 28th, 2020)
Marin County California
Confirmed Cases 226 45,031
Deaths 12 1,809
Persons Tested 3,394 577,608
Confirmed
Hospitalizations 43 3,455
In addition to the health impacts of COVID-19, the restrictions put into place through the public health
order have taken an unprecedented toll on our federal, state, and local economy. According to the U.S.
Department of Labor, since March 16th, over 2.6 million California’s have filled for unemployment,
representing an unemployment rate of 8.25%. For context, for the week before the issuance of the
Shelter-in-Place order, California’s unemployment rate was estimated at 2.44%.
These economic impacts have disproportionately impacted low-income workers. As of April 24th, 2020,
the Urban Institute estimates that Marin County has lost over 11,000 low-income jobs due to COVID-19
related economic impacts. Among the hardest hit sectors include:
•Accommodations and Food Service- 3,712 low-income jobs lost,
•Retail- 1,898 low-income jobs lost, and
•Health Care & Social Assistance- 900 low-income jobs lost.
The City of San Rafael has been operating our Emergency Operations Center (EOC) since the
declaration of a local state of emergency on March 10th. There have been hundreds of programs, projects,
and actions run through the EOC since that time in response to the pandemic. Some of the best known
might be the emergency childcare program, the Neighbor to Neighbor (N2N) program, or our virtual
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
community centers and library. The following is a bit more detail about another example, which is small
business support.
Support for Local Businesses
The small business community has always been the backbone of the Marin economy and a strong
contributor to the high quality of life that we share in the County and its individual cities. So, when COVID-
19 swept through the State, many of these important small businesses took the economic brunt when
the shelter in place mandate was initiated. Businesses and their employees have been impacted in
unprecedented ways and quick action was needed.
A San Rafael Small Business COVID-19 Disaster Relief Fund (the “Relief Fund”) was created to help
small businesses struggling to maintain cash flow and financial solvency during these unprecedented
times. The fund creation was the result of collaboration between the City of San Rafael, County of Marin,
San Rafael Chamber of Commerce, and Business Improvement District. Mayor Phillips took a leadership
role and brought partners together with the common goal to help small businesses sustain their
operations due to the pandemic and shelter-in-place mandate. One goal was to bridge to gap to when
larger funding grants and loans could be established through the various State and Federal stimulus
packages.
The Relief Fund allowed qualified small businesses to apply for one-time grants in amounts up to $5,000
to help pay for immediate operational costs, including but not limited to rent, payroll, utilities and loan
payments. This will allow for business owners to keep operations moving forward in an effort to infuse
the local economy with much needed dollars now. To date, over $200,000 has been raised for the Relief
Fund which is being administered by The San Rafael Chamber Educational Foundation, Inc. and more
funds are needed due to the overwhelming demand. There was an enormous amount of interest in the
program and a total of 280 grant applications were ultimately submitted.
Other than this fund, staff has been working directly with our local businesses to help them navigate and
better understand the myriad of financial relief programs available to support the business community
such as the Federal CARES Act and Payroll Protection Program (PPP). Additionally, staff have been
serving as a liaison with the County and City EOC staff to explain the Public Health Officer orders and
guidance around such topics as how and when to use Personal Protective Equipment (PPE) in different
industries. Detailed information for small business assistance can be found on this web page.
Support for Vulnerable Communities
The City’s EOC has also been coordinating with the County’s EOC on topics ranging from COVID-19
testing sites to alternate care sites to food distribution and a huge list of other topics in response to the
pandemic. One particular focus has been on support for vulnerable communities. The following are a
couple examples.
Lease and Eviction Protections
As the dynamic COVID-19 emergency continues to evolve, measures are being taken to bring housing
and commercial security to residents and businesses who have been economically impacted by the crisis.
On Tuesday, March 24, 2020 the Board of Supervisors unanimously voted to adopt an emergency
resolution issuing a temporary moratorium on residential and commercial evictions for non-payment of
rent due to direct impacts of the COVID-19 crisis. City staff worked with the County and other Marin
jurisdictions for this to apply countywide.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
The eviction resolution prevents residents and business owners from being evicted because of a sudden
loss of income tied to the COVID-19 pandemic. The moratorium will be in effect until May 31, 2020. You
are protected if you are suffering from a substantial loss of income due to:
• Business closure
• Loss of work or wages
• Layoffs
• Missed work or childcare expenditures due to school closure
• Medical Expenses related to being ill with COVID-19 or caring for a member of the household ill
with COVID-19
• Other similarly caused reasons resulting in a loss of income due to COVID-19
The resolution requires renters and lease holders to notify their landlord within 30 days after the rent is
due that they are unable to pay because of financial impacts related to COVID-19. It does not relieve the
residential or commercial tenant of the liability for the unpaid rent, and the landlord may seek payment
after the expiration of the local emergency.
On April 28, 2020, the Board amended the eviction moratorium to expand on the protections such as
adding a provision providing up to 90 days after the expiration of the Resolution to repay back rent and
anti-tenant harassment protections.
Emergency Subsistence Payments
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security
Act (the “CARES Act”), which appropriates nearly $2 trillion nationwide for COVID-19 pandemic relief
funding. $5 billion of these CARES Act funds were appropriated to the Community Development Block
Grant Program (CDBG) to assist state and local governments in their COVID-19 response, referred to in
this plan as CDBG-CV funds.
The County was awarded $938,065 in CDBG-CV funds, and San Rafael’s allocation is $369,785. This
total is calculated using the standard allocation for the distribution of annual CDBG funding.
These funds are the subject of another item on tonight’s City Council agenda. In brief, should the City
Council approve the other item, it would direct San Rafael’s $369,785 in CDBG-CV funding to the
Emergency Rental Assistance Program – joining the County of Marin, City of Novato, and Marin
Community Foundation in providing this much needed support.
Background on State and Federal Support for Cities
The City of San Rafael has been actively seeking State and/or Federal financial assistance through our
elected legislators at every opportunity which has included phone calls, emails, and letters demonstrating
our financial condition and need. The California League of Cities is also advocating on behalf of all
California cities struggling financially due to COVID-19.
The League’s analysis shows that cities will experience nearly $7 billion in lost revenue. The California
Assembly Budget Subcommittee No. 6 on Budget Process, Oversight, and Program evaluation met on
April 27th to discuss the economic impact of COVID-19 and what an economic recovery could look like.
Thus far, it appears that the current federal CARES I Act only includes relief to cities with populations
greater than 500,000. However, there are indications that additional relief for local governments may be
addressed in the next federal stimulus bill.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 5
The State has not yet put out guidance as to whether or when cities will receive any funding from the
above. This week, Congressmember Huffman indicated that he would be following up with the State on
the matter. The State’s May budget revision which is set to be released on May 14th will include more
specific information about the State’s response to the economic downturn and may include when/if cities
will receive direct CARES I Act funding or not.
At the federal level, U.S. Representative Brad Schneider of Illinois introduced a bill this week that will
make governmental employers eligible for the tax credits for paid sick and paid family leave under the
Families First Coronavirus Response Act (FFCRA), which would be incredibly helpful to reimbursing the
City for costs related to the 80 hours of emergency sick leave we recently implemented in accordance
with the law.
Staff is also diligently working with other Bay Area cities and towns and our local government professional
associations (i.e. ICMA) to gather and share ideas and best practices. The Marin Managers’ Association
(MMA), which includes all of the City & Town Managers of Marin and the County Administrator, are
virtually meeting multiple times per week to discuss how we can work together on shared services and
other cost saving measures that can be implemented regionally to help in the recovery effort. The Marin
County Council of Mayors and Councilmembers (MCCMC) recently created an Economic Recovery
Committee of elected officials that will also be working on regional financial recovery
actions. Appointments to this new committee is the subject of another item on tonight’s City Council
agenda.
ANALYSIS:
As illustrated in the Background section, the current public health state of emergency due to COVID-19
has created severe financial burdens for the City’s residents and businesses, as it has all across the
country and globe. Inevitably, this economic downturn is resulting in a dramatic reduction of the City’s
sales tax and other revenues. As a result of the cumulative effect of a near shut down of our economies,
many City revenue sources are projected to be significantly reduced for the last quarter of Fiscal Year
2019-20 and Fiscal Year 2020-21. Although revenues are forecasted to recover in future years, it is
projected this event is pushing us into a recessionary period and there will be a 24-36-month lag until
revenue targets are back to what was experienced prior to COVID-19.
Economists are predicting cities such as San Rafael who are heavily reliant on sales tax, transaction and
use tax (TUT), and transient occupancy tax (TOT) will endure the hardest financial hit.
In March, staff began analyzing the City’s financial situation based on the Shelter-in-Place Order. The
swift reaction by consumers and businesses to the outbreak of COVID-19 has caused a massive
decrease in spending on goods and services. Staff has been working with our financial consultant (HDL)
to better understand what to expect for sales and use tax revenue losses and assumptions on when we
can expect to see these revenues return to normal. HDL has advised the City that both sales and Measure
E tax projections will experience a recessionary impact from the Coronavirus pandemic. HDL’s
Consensus Forecast modeled sales tax impacts based on our analysis of previous recessions plus a
review of industry, economist, and news reports. HDL modified percentages to reflect the tax retailer
business base specifically for the City of San Rafael. Business-level sales tax data from the State
reflecting the first weeks of this crisis arrives at the end of May; however, data reflecting the April-June
impacts will not be available until August.
Revenue loss estimates will continue to be adjusted based on the changing environment; staff will
continuously be revising these figures based on new information as it becomes available.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 6
The fiscal year end 2019-2020 sales tax estimate is now $18.5M. This is $4.1M below the prior year
end actuals. FY 2020-21 is projected at approximately $19.6M. Measure E reflects current year totals
revised to $10.6M, a drop of $2.3m from FY 2018-19. For FY 2020-21, this tax is projected at
approximately $11M.
As of April 30, it is preliminary projected that over the next 16 months, the City will experience reductions
in revenue in the range of approximately $11,790,000, which is fourteen percent of the City’s General
Fund budget. Seventy one percent of the revenue reductions are due to sales and TUT, ten percent is
attributed to TOT, six percent is attributed to business licenses and the remaining thirteen percent is an
accumulation of several smaller revenue generating sources.
Revenue Item F 19/20 FY 20/21 Total Loss
Sales/Transaction & Use tax $ 4,930,000 $ 3,440,000 $ 8,370,000
Transient occupancy tax 860,000 290,000 1,150,000
Business licenses 240,000 500,000 740,000
Permitting/Franchise/investment earnings 1,120,000 410,000 1,530,000
Projected Revenue Losses as of 4/30/2020 $ 7,150,000 $ 4,640,000 $ 11,790,000
The City’s current projected reduction in sales and transaction and use tax combined for FY19/20 is
approximately 14% less than actuals for FY18/19 and 10% less than actuals for FY18/19 for FY20/21.
In addition to the revenue losses, expenditures for emergency response and related activities have also
increased in the past few weeks. The majority of these expenditures are expected to be reimbursed by
FEMA or through state grants, however, there will be both onetime and ongoing fiscal impacts related to
this work.
Financial Model
In late 2019, the City collaborated with an outside firm to create a 20-year financial forecasting model.
This long-range modeling tool helps decision makers better understand the impact of the projected
revenue losses and how specific cost cutting measures improve the City’s financial condition. As we face
this economic downturn, staff will use the model to present scenarios to show how various assumptions
effect the long term forecast for the City, such as higher than expected pension costs in FY 21-22,
property tax growth rates declining to levels similar to the Great Recession, and most other revenue
sources not returning to their current levels over the next 24-36 months.
The financial model shows we have several similarities with other cities such as wage pressures,
continuing revenue gaps, deferred maintenance needs, and pension cost increases. However, a city-to-
city or city-to-county comparison is less valid during this time, as the City of San Rafael’s highest revenue
stream is sales tax/use tax which has taken the biggest hit as a result of the Shelter-in-Place mandate.
San Rafael will be harder hit than cities and towns that have a smaller commercial base that results in
sales and use taxes.
Reducing Expenses - Cost Cutting Measures Taken to Date
In order to immediately respond to the current economic downtown, the City implemented cost cutting
measures to reduce expenses. The following actions have been taken thus far:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 7
No New Employee Compensation Increases for FY 20-21
•The City has communicated to its executive and mid-management unrepresented groups that
there will be no compensation increases for management positions for fiscal year 2020-21.
Further, should the City Council authorize the furlough program, it would have the effect of a 5%
pay reduction for most all non-safety employees, including all management staff.
•The City is currently negotiating with the bargaining units (WCE & Local 1) that have MOUs
expiring on June 30 and the current proposal for a contract extension does not include any
compensation increase. The City is continuing to bargain in good faith and is offering to continue
discussing elements of the contract that are not compensatory.
•The City will also continue the discussion with bargaining units who have existing MOUs that go
through next fiscal year to ask if they would be willing to either decrease and/or defer their salary
increases. Such units have requested detailed financial information which will be presented to
them during the week of May 4th.
Halted all Non-Essential Spending
•The City Manager has directed all City departments to put a hold on all non-essential purchases
and to pause all non-essential projects. In addition, overtime should not occur expect in unique
exceptions related to emergency response or needs to meet public safety staffing minimums.
Leave Vacancies Unfilled and Hiring Freeze
•The City Manager has directed all City departments to hold off on hiring any non-public safety
vacant positions. Currently, there are 14 frozen vacant positions across the City resulting in
approximately $1,400,000 in savings through the end of FY 2020-21. As non-essential positions
become vacant due to attrition, these positions will also be held vacant.
The impact of this hiring freeze on City services varies by department. For example, in the Community
Development Department the number of hours staff can provide public services for processing permits,
etc. will need to be reduced. The processing of current planning development applications will be slowed
as there will be fewer staff taking on a greater number of assignments. The three library branches may
need to reduce their operational hours due to the hiring freeze as well. In the Police Department’s cadet
program will be on hold which is a key strategy for identifying up and coming talent and training and
retaining new public safety officers. In addition, there are numerous vacant administrative positions
across the City. These positions play important role in working to identify and implement operational
efficiencies and improvements. Holding these positions vacant over the longer -term result in a reduced
ability for staff to focus on strategic objectives, designing and implementing service enhancements,
modernizing City services through technology.
Increasing Revenues
Not only does the City need to be reducing expenses, but staff are also analyzing all possible sources of
revenue that could be increased in order to help balance the budget. The City has been working on a
project to evaluate and update the Master Fee Schedule and recommendations are currently under
development to increase certain fees to insure cost recovery and be in line with comparable jurisdictions.
In addition, the Paramedic Tax is currently $95 per parcel, however the Municipal Code Section 3.28
defines the ceiling of for this tax at $108 per parcel. Staff is analyzing the Paramedic Tax Fund and will
also be bringing forward a recommendation regarding this tax along with the Fiscal Year 2020-21 budget
in June. In addition, staff are working diligently to continue our proactive economic developments with a
particular focus on business retention. Obviously, the COVID-19 pandemic is creating a huge obstacle
in the way of increasing the economic vitality of the City, however we will remain vigilant in our efforts to
support the business community so that when we do recover, we will come back even stronger.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 8
Reducing Expenses - Future Cost Cutting Measures
Staff will continue to analyze all possible cost reduction strategies to offset the projected revenue losses.
During the Great Recession, the City implemented several programs to offset costs, including a hiring
freeze, a voluntary retirement incentive program, a voluntary program of work hour reductions, a
mandatory furlough program, and ultimately, some employee layoffs with severance benefits. The
current economic downturn will require some, if not all the same programs. The recommended approach
is to use as many voluntary cost cutting measures as possible to bridge the revenue loss gap, however
these may not be enough.
In addition to the aforementioned cost cutting measures the City has taken thus far, all departments have
been asked to present budget cut scenarios for a series of reduction targets (between 2.5% and 10%)
for fiscal year 2020-21. Staff would not recommend a particular across-the-board reduction, as we have
very diverse services and funding sources and the approach needs to be more strategic. All departments
recommended cuts within their professional services budget, and several including Police and Fire have
proposed expense reductions related to training, conferences and travel. The reductions in professional
services will result in delayed implementation of priority initiatives and daily business operations.
To reduce service impacts, particularly to public safety, the City will likely need to draw from its General
Reserve fund, currently at $7,900,000, which is currently meeting the 10% reserve policy. These short-
term expense impacts are met with long-term effects as recovery of the General Reserve will take years
to rebuild and the increased contribution expense for health and pension rates will substantially increase
for a number of years starting in Fiscal Year 2021-22 as a result of not meeting its investment rate
assumptions.
In order for departments to reach their reduction targets, staff must consider reducing costs for both non-
personnel and personnel expenses to meet the revenue shortfall described above. Potential expense
reduction programs being considered include:
•Voluntary programs: a) Voluntary Retirement Separation Program (VRSP) and b) Voluntary Work
Hours Reduction Program;
•Involuntary programs: Furlough/Mandatory Time Off (MTO), Reduction in Force
At this time, staff is seeking City Council approval of the two voluntary programs and direction to pursue
the furlough program. The following is a brief description of each. The specifics of the programs would
be largely as below but could be modified as needed at the discretion of the City Manager and City
Attorney.
Voluntary Retirement Separation Program
A voluntary early retirement incentive would encourage some employees to retire earlier than they would
otherwise. The early retirement would create a vacant position which the City could freeze and/or
restructure to create cost savings. Staff recommends that the City Council adopt a “Voluntary Retirement
Separation Program” substantially similar to that which was implemented during the Great Recession.
If approved by the City Council, the program would go into effect immediately, and would be open to all
employees with a minimum of the equivalent of ten (10) years of full-time service and who have satisfied
all of the criteria to retire under the Marin County Employees’ Retirement Association’s (MCERA)
retirement plan. However, actual participation in the program is subject to approval by the City Manager
based on the needs and objectives of the City to create position savings. Employees accepted into the
program would receive a cash contribution amount calculated by multiplying the employee’s number of
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 9
completed years of City of San Rafael service, as of the employee’s retirement effective date, by one
week’s base pay, up to a maximum of $30,000.
If approved, the City Manager would send out to all employees a memorandum announcing the program
(Attachment 3) describing the program requirements. Interested employees would be required to notify
the Human Resources Department, in writing, on or after May 5, and no later than 4:30 p.m. on May 22,
2020 of their intent to retire using the “Letter of Retirement” attached to the memorandum (Attachment
3.a.). The City Manager will review all the requests during the week of May 25-29 to determine whether
each employee’s retirement under the program will result in budget savings.
Once notified of acceptance into the early retirement program, each participating employee must sign a
“Separation Agreement and Release of All Claims” (Attachment 3.b.). The employee will be provided 45
calendar days to review the agreement and will be advised that they may consult with their attorney. At
any time within this 45-day period, the employee may sign and return the agreement to the City and will
then have seven (7) calendar days to revoke their election to voluntarily retire.
Employees retiring under this program will not be entitled to seek unemployment compensation through
the California Employment Development Department as the employee is retiring from the City.
Voluntary Work Hours Reduction Program
Staff also recommends approval of a program allowing employees to voluntarily reduce their work hours
during the 2020-21 fiscal year. Employees wishing to participate will have options including a reduction
in hours or days per week for a specified period of time, or an extended unpaid leave from work, not to
exceed three months. The employee’s benefits, leave accruals, and years of service for retirement
purposes would be unaffected by the temporary work hour reduction. Interested employees will be asked
to submit a “Voluntary Reduced Work Hours Request Form” (Attachment 4). Participation in the program
is subject to approval by the employee’s Department Director and the City Manager based on the needs
and objectives of the City to create budget savings. Any resulting savings from a voluntary work hours
reduction will have a corresponding impact on the time/savings needed through a furlough program.
Furloughs/Mandatory Time Off Work (MTO) for Non-Public Safety Employees
Based on the extent of the revenue losses expected, City staff are recommending furloughing non-public
safety employees. Terms exist in the current Memorandums of Understanding (MOUs) of Local 1,
Western Council of Engineers, SEIU, as well as the Resolutions for Mid-Managers and Executive
Management that allow for up to a 5% pay reduction and would require all non-public safety employees
to take up to 13 unpaid days off during the year. The program would be structured similarly to the one
implemented in the Great Recession and City services would be closed to the public for 13 calendar days
during fiscal year 2020-21. To the extent some labor agreements require management to ask first
(Voluntary time off — VTO), we will do so. If we cannot create enough savings in the VTO effort, staff
recommends implementing the Mandatory Time Off (MTO) furlough program. Both efforts will require
extensive time to meet and consult with union representatives and define the implementation details.
Staff recommends that the Council declare the need to take this action now, so we have time to address
employee concerns, calculate savings, and determine City facilities closure days. Some of the MOU
language requires the City to meet and consult no less than 60 days prior to implementing a furlough
program. The City must also consider the potential need to implement Reductions in Force as a last
resort to addressing this financial crisis. Staff recommend implementing the two voluntary programs and
the mandatory furlough program first to determine the extent of savings which can be achieved via these
measures.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 10
Next Steps and “COVID-19 Economic Recovery Plan (CERP)”
Staff is currently working on drafting a COVID-19 Economic Recovery Plan (CERP) to communicate to
San Rafael’s residents, businesses, elected officials, and the City workforce how the City plans to
economically recover from this public health crisis. This plan will describe all of the cost cutting measures
the City has taken thus far and will forecast additional strategies to reduce expenses, increase revenues
and enhance the economic vitality of our City. Staff will bring a draft of this plan to the City Council on
May 18th for consideration and feedback. Staff suggests then seeking community feedback as well before
considering a final version with the new fiscal year budget. Once finalized, the plan will serve as
communication tool, will help to keep track of our progress, and hold us accountable to doing everything
we possibly can to recover financially.
Over the next several weeks, staff will be finalizing the Fiscal Year 20/21 budget which will be brought to
the City Council in June along with the City’s revised goals and objectives, which have been revised
taking into consideration the halt in non-essential projects and a reduced CIP plan. As the COVID-19
landscape continues to change, staff will be keeping the Council apprised on material financial changes
and will bring forth multiple mid-year adjustments as new information and impacts become available.
F ISCAL IMPACT:
The hiring freeze results in approximately $1,400,000 in savings annually. The Voluntary Retirement
Separation Program will result in on-going salary and benefit savings to the City by not filling the vacated
positions or restructuring around the vacancies. For example, if the total salary and benefits of a
participating employee equals $150,000 and the City pays out $30,000, there is $120,000 in annual cost
savings as the position remains unfilled. The timeline of this program will allow staff to build estimated
position savings into the Fiscal Year 2020-21 budget for Council consideration at the end of our current
fiscal year. This program is estimated to potentially yield approximately $600,000, but it is completely
dependent upon applications and selections.
The savings from the Voluntary Work Hours Reduction Program will depend upon the number and
position of the employees participating but would lower that employee’s base annual pay during Fiscal
Year 2020-21. The furlough program for non-public safety employees is expected to save approximately
$700,000 annually. Budget reductions currently being analyzed for the FY 2020-21 budget are estimated
to save approximately $4,200,000.
All of the above will significantly help to address the projected General Fund deficit, however additional
measures including using the one-time funds available from June 30, 2019 and dipping into the City’s
emergency reserves and/or reductions in force may need to be considered at a later date.
Cost Cutting Measures for FY 19/20 & FY 20/21 Amount
Hiring Freeze for non-public safety employees $ 1,420,000
Voluntary retirement separation program 600,000
Furloughs for non-public safety employees 700,000
Additional budget reductions 4,200,000
One-time funds available from prior year 1,104,000
Emergency Reserve up to 2.5%/year for 2 years 3,766,000
Estimates Sources to Fund Projected Deficit $ 11,790,000
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 11
OPTIONS:
The City Council has the following options to consider on this matter:
1.Adopt the resolutions approving the recommended voluntary programs.
2.Adopt resolutions with modifications.
3.Direct staff to return with more information.
4.Take no action.
RECOMMENDED ACTION:
1.Accept the report
2.Adopt the resolution approving the Voluntary Retirement Separation Program.
3.Adopt the resolution approving the Voluntary Work Hours Reduction Program.
4.Approve the implementation of the Mandatory Furlough program as outlined in the City’s labor
agreements and direct staff to meet and consult with all bargaining units.
ATTACHMENTS:
1.Resolution approving the Voluntary Retirement Separation Program.
2. Resolution approving the Voluntary Work Hours Reduction Program.
3.Exhibit A to Voluntary Retirement Separation Program Resolution: City Manager Memorandum
to Employees re Voluntary Retirement Separation Program, with attached:
a.Form Letter of Retirement.
b. Form Separation Agreement and Release of All Claims.
4.Voluntary Reduced Work Hours Request Form.
RESOLUTION NO. 14793
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL APPROVING A V OLUNTARY RETIREMENT
SEPARATION PROGRAM FOR ELIGIBLE CITY EMPLOYEES
WHEREAS, the City has a projected budget shortfall for the remainder of fiscal
year 2019-20 and for fiscal year 2020-21 as a result of the severe economic downturn
related to the COVID-19 public health state of emergency; and
WHEREAS, in order to create cost savings to assist the budget shortfall, the City
will offer a Voluntary Retirement Separation Program (“Retirement Program”) including a
cash contribution (not to exceed $30,000 per participant) to all eligible employees; and
WHEREAS, the proposed details of the Retirement Program are contained in the
notification memo, attached hereto as Exhibit A, and its respective attachments; and
WHEREAS, the Retirement Program may encourage some employees to retire
earlier than they otherwise would, allowing the City to restructure around the vacated
positions, resulting in an on-going salary and benefit savings to the City; and
WHEREAS, interested employees will be required to notify the Human Resources
Department of their intent to retire, in writing, on or before May 22, 2020, or such other
date as determined by the City Manager, using a form to be provided by the City
substantially similar to the draft “Letter of Retirement” included with Exhibit A; and
WHEREAS, participation in the program is subject to approval by the City Manager
based on the needs and objectives of the City to create position savings and the City
Manager’s decision is final and not appealable;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San
Rafael that the City Manager is authorized to implement the Voluntary Retirement
Separation Program, substantially as described in Exhibit A attached and incorporated
herein by this reference. The City Manager and City Attorney are additionally authorized
to make minor modifications to the program as practically needed to implement.
I, Lindsay Lara, 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 Monday, the 4th of May, 2020, by the following
vote, to wit:
AYES: Councilmembers: Bushey, Colin, Gamblin, McCullough & Mayor Phillips
NOES: Councilmembers: None
ABSENT: Councilmembers: None
Lindsay Lara, City Clerk
RESOLUTION NO. 14794
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL APPROVING A V OLUNTARY WORK HOURS
REDUCTION PROGRAM FOR CITY EMPLOYEES
WHEREAS, the City has a projected budget shortfall for the remainder of fiscal
year 2019-20 and for fiscal year 2020-21 as a result of the severe economic downturn
related to the COVID-19 public health state of emergency; and
WHEREAS, in order to create cost savings to assist the budget shortfall, the City
will offer a Voluntary Work Hours Reduction Program with options including a reduction in
hours or days per week for a specified period of time, or an extended unpaid leave from
work; and
WHEREAS, the Voluntary W ork Hours Reduction Program will result in one-time
salary savings to the City; and
WHEREAS, interested employees will be required to submit to the Human
Resources Department, in writing, on or before May 22, 2020, or such other date as
determined by the City Manager, a Voluntary Reduced Hours Schedule letter in a form to
be provided by the City substantially similar to the draft form attached as Exhibit A; and
WHEREAS, participation in the program is subject to approval by the City Manager
based on the needs and objectives of the City to create budget savings and the City
Manager’s decision is final and not appealable;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San
Rafael that the City Manager is authorized to implement a Voluntary Work Hours
Reduction Program for City employees substantially consistent with the Program
described in Exhibit A attached and incorporated herein by this reference. The City
Manager and City Attorney are additionally authorized to make minor modifications to the
program as practically needed to implement.
I, Lindsay Lara, 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 Monday, the 4th of May, 2020, by the following
vote, to wit:
AYES: Councilmembers: Bushey, Colin, Gamblin, McCullough & Mayor Phillips
NOES: Councilmembers: None
ABSENT: Councilmembers: None
Lindsay Lara, City Clerk
To: Retirement Eligible City Employees
From: Jim Schutz, City Manager
Re: Voluntary Retirement Separation Program for Retirement Eligible City Employees
Date: May 5, 2020
The City of San Rafael announces a program that will provide selected retirement
eligible employees with a cash contribution to retire from City service. This
memorandum provides important information regarding eligibility for participation. It is
important that all interested employees review the information provided below as soon
as possible.
By 4:30 p.m. on May 22, 2020, interested employees, after having reviewed this
information, and if eligible, must notify the City's Human Resources Department by
completing the attached letter of retirement. Participation in the program is subject to
approval by the City Manager based on the needs and objectives of the City to create
position savings. The City Manager’s decision is final and is not appealable. Once the
City Manager has made this determination, participating employees will be notified and
will be required to sign a Separation Agreement and Release of All Claims provided by
the City.
Eligibility: Employees are eligible for this program if they have completed at least ten
(10) full years of service in a regular position, are eligible for retirement as of the date of
retirement but no later than August 31, 2020, and have satisfied all of the criteria to
retire under the Marin County Employees’ Retirement Association’s retirement plan.
Cash Contribution for Early Retirement: Any eligible employee who has been
approved by the City Manager to voluntarily retire from the City between May 25, 2020
and August 31, 2020 shall receive a cash contribution calculated by multiplying the
employee’s number of completed years of City of San Rafael service, as of the
employee’s retirement effective date, by one week’s base pay, up to a maximum of
$30,000.
Implementation Timeline 2020:
May 4 City Council consideration. If approved:
May 5 Window Period opens for employees to receive and review of
materials including preview copy of Separation Agreement and
Release of All Claims
DRAFT CITY
MANAGER'S
OFFICE
May 22 Window Period closes by 4:30 p.m. for eligible employees to submit
Letter of Retirement
May 25-29 City Manager reviews Letters of Retirement and determines
approval
May 29-July 13 Approved employees attend meeting with Human Resources and
review and sign and submit Agreement and Release
July 20 Last day for approved employees to revoke election to participate in
Retirement Program
May 25 – August 31 Retirements effective no later than August 31, 2020
If you have questions, contact Shibani Nag, Human Resources via email at
Shibani.Nag@cityofsanrafael.org.
Attachments:
• Letter of Intent to participate in Voluntary Retirement Separation Program
• (PREVIEW COPY) Separation Agreement and Release of All Claims
CITY OF SAN RAFAEL
LETTER OF RETIREMENT
I, _________________________, intend to separate from the City of San Rafael
effective on ____________________, 2020.
(last day of employment)
I certify that I meet the retirement eligibility requirements and will meet the participation
requirements established by the City for participation in the Voluntary Retirement
Separation Program (hereinafter “Retirement Program”).
I understand that: (1) my participation is subject to the City Manager's approval based
on the needs of the City, (2) the City Manager’s decision is final and not appealable, (3)
the City will notify me of its acceptance of my participation in the Retirement Program,
and (4) if the City rejects my election to participate in the Retirement Program, this
request will automatically be rescinded.
I understand that if the City accepts my Retirement, I must sign the City’s Separation
Agreement and Release of All Claims. (A preview document is attached for review
purposes, only). I further understand that if I decline to sign the Separation Agreement
and Release of All Claims this request will automatically be rescinded. The City
Manager will only consider employees who submit this letter by the May 22, 2020
deadline.
_________________________ _______________________________
Signature Date
_________________________
Print Name
_________________________ _______________________________
Department Classification
______________________________________________________________________
Address
______________________________________________________________________
City State Zip Code
________________________
Phone Number
THIS LETTER OF RETIREMENT MUST BE RECEIVED
BY SHIBANI NAG IN THE HUMAN RESOURCES OFFICE
NO LATER THAN 4:30 P.M. ON MAY 22, 2020
CITY OF SAN RAFAEL
Voluntary Retirement Separation Program
SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS
This Separation Agreement and Release of All Claims (hereinafter referred to as the
“Agreement”) is made and entered into by and between the undersigned “Employee,”
his/her heirs, representatives, attorneys, successors and assigns, and anyone claiming
through Employee and the City of San Rafael, a municipal corporation, and its City
Council members, officers, agents, employees, administrators, representatives,
executors, successors, assigns, and/or other individuals or entities related thereto
(hereinafter referred to collectively as “the City”).
RECITALS
WHEREAS,
1. The City has a projected budget shortfall for the remainder of fiscal year 2019-
2020 and for fiscal year 2020-2021 as a result of the economic downturn.
2. In order to address the budget shortfall, the City is offering all employees who
have been employed by the City for at least ten (10) full years of service in a
regular position the option of electing to participate in the Voluntary Retirement
Separation Program (hereinafter “Retirement Program”) described herein.
3. Employee is eligible for retirement as of May 22, 2020 and has satisfied all of the
criteria to retire under the Marin County Employee Retirement Association’s
retirement plan.
4. Employee has timely notified the City, in writing, by submitting a Letter of Intent
to Retire, attached hereto as Exhibit A, advising the City of his/her desire to
participate in the City’s Retirement Program and has been accepted for
participation by the City Manager.
5. By opting to participate in the Retirement Program, Employee agrees to all the
terms set forth in this Agreement.
DRAFT
2
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
below and for other valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:
1. Effective Date. This Agreement shall become effective and irrevocable by either
party upon the expiration of seven (7) calendar days after this document is signed by
both parties, in accordance with the revocation period set forth in paragraph 6(e)
below (“Effective Date”).
2. Terms of Retirement Program.
a. In consideration for voluntarily retiring from the City between May 25, 2020
and August 31, 2020 (last day on payroll to be no later than August 31, 2020),
Employee shall receive a cash contribution based on years of service with the
City as of the Employee's retirement effective date. The retirement cash
contribution amount shall be calculated by multiplying the employee’s number
of completed years of City of San Rafael service, as of the employee's
retirement effective date, by one week’s base pay, up to a maximum of
$30,000. Based on this calculation, the Employee shall receive
$___________. This one-time lump sum cash contribution is not considered
compensable earnings for the purposes of calculating retirement.
b. The City Manager is authorized to extend Employee’s retirement date, after
consulting with the Employee, under the Retirement Program to meet the
needs and objectives of the City. No appeal of the City Manager’s decision
shall be permitted.
c. Employee further acknowledges that, in exchange for the consideration
provided herein, Employee is voluntarily retiring from City employment and,
therefore, ineligible for unemployment compensation through the California
Employment Development Department.
d. Employee shall receive all benefits to which the Employee is normally entitled
upon retirement from employment with the City.
3. Employee Representations Regarding Claims. Employee represents there are no
actions at law or administrative proceedings currently pending which concern
allegations based on Employee’s hiring, retention, or compensation by the City, or
the termination of Employee’s employment, or based on any act or failure to act by
the City affecting, involving, or relating to Employee and his/her employment with the
City.
4. No Admission of Liability. This Agreement and compliance with this Agreement
shall not be construed as an admission of any liability by either Employee or the City
of any unlawful or wrongful acts by either party, individually or collectively. The
parties disclaim liability as to or for any and all wrongful acts against each other.
3
5. Waiver and Release. In exchange for the valuable consideration and compromises
set forth in this Agreement, Employee, on behalf of himself/herself and his/her
representatives, family members, heirs, administrators, executives, successors,
assigns and anyone claiming through Employee, hereby releases and forever
discharges the City, its City Council members, officers, directors, agents, and
employees (whether former or current), volunteers, successors, assigns, insurers,
attorneys, consultants, affiliates, and/or related organizations or entities (all hereafter
referred to singularly and collectively as “the parties hereby released”), from any and
all actions, claims, judgments, obligations, damages, and liabilities of any kind and
character which Employee may now have or has ever had arising in any way from or
during Employee’s employment with the City, including but not limited to:
a. Any and all claims for wages, salary, paid leave, and/or benefits;
b. Any grievance or other administrative remedy deriving from City policy;
c. Any and all claims for wrongful or constructive discharge and/or
reinstatement;
d. Any and all claims relating to any contracts, express or implied, or breach of
the covenant of good faith and fair dealing;
e. Any and all tort claims of any nature, including but not limited to, fraud, deceit,
misrepresentation, negligent misrepresentation, defamation, invasion of
privacy, negligent or intentional infliction of emotional distress;
f. Any and all claims of discrimination, harassment, retaliation or failure to
accommodate under federal, state or municipal statute or ordinance, including
but not limited to, race, national origin, age, gender, mental or physical
disability, medical condition, sexual orientation, marital status, religion, or
otherwise, and including any claims under the United States Constitution,
California Constitution, California Fair Employment and Housing Act, Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. section 1981, 42
U.S.C. section 1983, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the Older Workers’ Benefit Protection Act,
the Equal Pay Act, the Family Medical Leave Act, the California Family Rights
Act, the Fair Labor Standards Act, the California Labor Code, and any other
laws and regulations relating to employment; and
g. Any and all claims for attorney’s fees or costs.
Employee hereby further agrees that this Agreement shall operate as a complete bar
against any and all litigation, charges, grievances now pending or contemplated by
Employee or which might at any time be filed including, but without limiting the
foregoing, any and all matters arising out of or in any manner whatsoever connected
4
with Employee’s employment with and separation of employment from the City up to the
date of Employee’s separation from the City.
Employee’s Initials: __________
6. Older Workers Benefit Protection Act. For an Employee 40 years or older and in
accordance with the Older Workers Benefit Protection Act, covered Employee
acknowledges having been advised by this writing of the following:
a. Employee acknowledges having been advised to consult an attorney of
his/her choosing before executing this Agreement.
b. Employee acknowledges that the compensation provided in this Agreement
constitutes independent consideration for the waiver herein and is in addition
to any other payment to which Employee is entitled.
c. Employee acknowledges that this Agreement is written in a manner designed
to be understood by Employee and that Employee has read the Agreement
carefully and understands its terms.
d. Employee acknowledges that he/she has up to forty-five (45) calendar days
from the date of receipt of this Agreement to consider whether to accept it,
although Employee may accept it at any time within those 45 calendar days. If
Employee accepts and signs the Agreement before the end of the 45-day
period, Employee acknowledges doing so voluntarily and waives any further
period for consideration.
e. Employee has the right to revoke this Agreement within seven (7) calendar
days after signing this Agreement. This Agreement shall not become effective
or enforceable until the seven (7) day revocation period has expired. In the
event that Employee revokes pursuant to this section, the entire Agreement
shall be void and ineffective.
Employee’s Initials (40 years or older): __________
7. Specific Waiver of Section 1542 of the California Civil Code. Employee
acknowledges that he/she has read, and hereby waives the application of Section
1542 of the Civil Code, which provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
DEBTOR.”
5
Employee understands and acknowledges that the significance and consequence of
this waiver of Section 1542 of the Civil Code is that, even if he/she should eventually
suffer or discover damages arising out of Employee’s employment with the City,
Employee will not be permitted to make any claim for those damages. Furthermore,
Employee acknowledges that he/she intends these consequences even as to claims
that may exist as of the date of this release but which Employee does not know exist,
and which, if known, would materially affect Employee’s decision to execute this
release, regardless of whether Employee’s lack of knowledge is the result of ignorance,
oversight, error, negligence, or any other cause.
Employee’s Initials: _________
8. Protected Rights. Employee and City agree that nothing in this Agreement is
intended to or shall be construed to affect, limit or otherwise interfere with any non-
waivable right of Employee under any Federal, state or local law, including but not
limited to, the right to enforce this Agreement and recover for any breach of it, rights
under California Labor Code Sections 2802 and 2804, the right to file a charge or
participate in an investigation or proceeding conducted by the Equal Employment
Opportunity Commission (“EEOC”) or to exercise any other right that cannot be
waived under applicable law. Employee is releasing, however, his/her right to any
monetary recovery or other relief should the EEOC or any other agencies pursue
claims on his/her behalf. Further, should the EEOC or any other agency obtain
monetary recovery or other relief on Employee’s behalf, Employee assigns to City all
rights to such monetary recovery or other relief.
Employee’s Initials: _______
9. Return of Property. Unless otherwise authorized by the City, on the last day of
employment with the City, Employee shall return all City property in Employee’s
possession or control, including without limitation any laptop computers, keys, credit
cards, cellular telephones, files and documents (and all copies thereof.)
10. Construction of the Agreement. Each party agrees that in any construction to be
made of this Agreement, the same shall not be construed against any party on the
basis that the party was the drafter.
11. No Precedent. The parties specifically acknowledge and agree that this Agreement
is a compromise which shall not operate, nor be considered, as evidence of a
practice or past practice of the City or a precedent in the future.
12. Acknowledgement of Voluntary Execution. Employee has carefully read this
Agreement and understands the contents. Employee has been afforded the
opportunity to consult with his/her own attorney regarding this Agreement.
Employee freely, knowingly, and voluntarily enters into this Agreement without any
duress or undue influence on the part of any person released by this Agreement, or
by any third party. Employee warrants and represents that he/she has the mental
6
and emotional capacity to understand the provisions of this Agreement and its
effects upon his/her legal rights.
Employee’s Initials: ___________
13. Partial Invalidity. In the event that any of the covenants, duties or restrictions of
this Agreement are found to be illegal, invalid or unenforceable, such provision, if
possible, shall be construed so as to render the provision legal, valid and
enforceable. In the event such provision cannot be amended or construed to be
legal, valid and enforceable, such provision shall be deemed deleted and the
remainder of this Agreement shall remain in full force and effect.
14. Entire Agreement. This Agreement sets forth the entire agreement between the
parties and supersedes any and all prior agreements or understandings, written or
oral, between the parties pertaining to the subject matter hereof. No other promises
or agreements shall be binding upon the parties with respect to the subject matter of
this Agreement unless contained herein or separately agreed to in writing by the
parties. This Agreement may not be modified except by a writing signed by
Employee and the City Manager.
15. Applicable Law. This Agreement shall be governed by the laws of the State of
California, and shall in all respects, be interpreted and enforced under the laws of
the State of California. Litigation arising out of or connected with this Agreement
shall be instituted and maintained in the courts of Marin County in the State of
California, and the parties consent to jurisdiction over their person and over the
subject matter of any such litigation in such court, and consent to service of process
issued by such court.
16. No Assignment. Employee warrants that he/she has not assigned, transferred, nor
purported to assign or transfer, any claim(s) Employee may have against the City,
and he/she will not assign or transfer, nor purport to assign or transfer, any claim(s)
he/she may have against the City. The City warrants that it has not assigned,
transferred nor purported to assign or transfer any claim(s) it may have against
Employee and that it will not assign nor purport to assign or transfer hereafter any
claim(s) it may have against Employee.
17. Waiver. Waiver by either party of any default, breach or condition precedent shall
not be construed as a waiver of any other default, breach or condition precedent or
any other right hereunder.
18. Section Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
7
19. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall, for all purposes, be deemed an original and all such counterparts,
taken together, shall constitute one and the same instrument.
20. Attorney’s Fees and Costs. Each party shall bear all attorney’s fees and costs
arising from and/or in any way related to the actions of its own counsel with regard to
the negotiation and creation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year written below in the City of San Rafael, California.
By: ________________________ By: __________________________
Employee Jim Schutz
City Manager
Date: _______________________ Date: ___________________
APPROVED AS TO FORM: ATTEST:
By: ___________________________ By: ____________________________
Robert F. Epstein, City Attorney Lindsay Lara, City Clerk
1
Voluntary Reduced Work Hours Request Form
Date: ______________
To: _______________________ __________________________
(Department Director) (Department Name)
From: ________________________ __________________________
(Employee) (Job Title)
In requesting a voluntary reduced work hour schedule, I acknowledge the following:
1) I am requesting that I be allowed to work ___ hours per workweek/pay period.
2) I agree to this schedule for an initial three month period starting with the payroll period
of ________________ and agree that this reduction will result in at least a 5% salary
savings but no more than a 25% savings during the time I am working the reduced
schedule.
3) I am requesting that I be allowed to take off _______ months of work without pay (not to
exceed three months).
4) My health and welfare insurance plan contribution amounts, if any (medical, dental and
vision) will not be affected by this reduced work schedule.
5) My vacation, sick leave and holiday accruals will not be affected by this reduced work
schedule.
6) If I am on a flex schedule, this reduction of work may impact the days I am currently off
due to my flex schedule.
7) My years of service with the City of San Rafael for purposes of vacation accrual rates,
seniority, and retiree health benefits will not be affected by this reduced work schedule.
8) If my holidays are compensated at the rate of 7.5 hours per holiday and the holiday falls
on a work day that I am regularly scheduled to work for more than 7.5 hours, I will use
vacation or floating holiday hours as available if I want to receive my full pay for that
holiday. If a holiday falls on a work day that I am regularly scheduled to work for less
than 7.5 hours, I will receive holiday pay for the hours I was regularly scheduled to work
and will take the additional hour(s) off on another day, as mutually determined by my
supervisor and me, during the same pay period. If a holiday falls on a day that I am
regularly scheduled to be off, I will observe that holiday on another day, as mutually
DRAFT
2
determined by my supervisor and me, during the same pay period (if I work an 8 hour
per day schedule then my holidays are compensated at 8 hours a day).
9) Overtime will be administered in the same manner as it is if working regular schedule.
Overtime is not issued unless I work more than a full week (37.5 hours for most
employees).
10) My final average compensation for retirement purposes will administered in accordance
with MCERA regulations.
11) My MCERA years of service credit will also be administered in accordance with
MCERA regulations.
12) A modification and/or termination of this reduced work schedule may not be grieved. In
all matters related to this reduced work schedule, the City Manager or his/her designee
shall have the final decision.
13) If a major life event occurs, as defined in the Family Medical Leave Act Policy, during
my voluntary reduced hour period, I may go back to my regular schedule.
14) If the City imposes a mandatory furlough, the hours I have voluntarily agreed to reduce,
will count toward the mandatory program.
My requested work schedule is as follows (start times, end times and length of meal periods
are included):
Week 1 Start Time End Time Lunch Break # of hours worked
Per Week
Monday
Tuesday
Wednesday
Thursday
Friday
Week 2 Start Time End Time Lunch Break # of hours worked
Per Week
Monday
Tuesday
3
Wednesday
Thursday
Friday
Date of implementation (must be the beginning of a pay period): _________________
Reduced Work Hours Schedule Acknowledgement
I have read, understand and agree to the provisions of the Reduced Work Hours Schedule
Request Form. Further, I am aware that, if this request is granted, continuance of this
schedule is subject to the needs of my Department and the City. I am aware that a reduced
work schedule is not a property right, benefit or entitlement. I am aware that management has
the right to change an employee’s work schedule as needed, in accordance with any
applicable MOU. I am aware that all work schedules must meet FLSA requirements.
____________________________ ________________
Employee signature Date
Recommended:
Yes No
___________________________ ________________
Supervisor signature Date
Approved
Modified
Denied
___________________________ ________________
Department Director signature Date
Approved
Modified
Denied
__________________________ ________________
City Manager Date