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HomeMy WebLinkAboutCOW 2010-08-23 Item 3C - Resolution - Voluntary Separation ProgramCAS NUMBER: 10-094 CA'T'EGORY Discussion Motion Mtg Date 8/23/10 Mtg Date SPONSOR'S SUMMARY MTG. DATE I 8/23/10 COUNCIL AGENDA SYNOPSIS Inztzals Meetzn,g Date I Prepared by 1 Mayar vzesv 1 Dung! revzezv 1 8/23/10 1 SB 1 QAY/ J 1 8/23/10 1 SB I 1 ITEM INFORMATION 10 -094 I ORIGINAL AGENDA DATE: AUGUST 23, 2010 AGENDA ITEM TITLE Resolution to adopt a Voluntary Separation Program Resolution Ordinance Bid Award Mtg Date 8/23/10 Mtg Date Mtg Date RECORD OF .COUNCIL ACTION MTG. DATE ATTACHMENTS 8/23/10 Informational Memorandum dated August 10, 2010 Resolution in Draft Form Exhibit "A" Voluntary Separation Program Document Agreement of Voluntary Separation Minutes from the Finance and Safety Committee Meeting of August 17, 2010 ITEM NO. 3,G E Public Heanng Otherr Mtg Date Mtg Date SPONSOR Council Mayor Human Res.. DCD Finance Fire Legal n P&R Police n PW The Council is being asked to approve a resolution that adopts a Voluntary Separation Program as an option for employees in lieu of a reduction in force to help address the budget shortfall. RWIEWED BY COW Mtg. CA &P Cmte F &S Cmte Transportation Cmte Utihties Cmte Arts Comm. El Parks Comm. Planting Comm. DATE: 08/17/10 RECOMMENDATIONS: SPONSOR /ADMIN. Human Resources Department COMMII1EE Forward to the Committee of the Whole /Special Meeting for approval. COST IMP ACT /.FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: 2010 BUDGET Comments: 23 24 ISSUE BACKGROUND DISCUSSION City of Tukwila INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance Safety Committee FROM: Stephanie Brown, Human Resources Director DATE: August 10, 2010 SUBJECT: Voluntary Separation Program (revised per discussion at FS Meeting) Jim Haggerton, Mayor The City of Tukwila is currently undergoing an unprecedented budget crises caused by a recession and declining sales tax revenue. As a result, a long term budget shortfall of $9 million per year has been identified. A reduction in City staffing levels will likely be required to address this shortfall. A potential measure to help address the impacts of staff reductions is to implement a Voluntary Separation Program starting September 1, 2010. Voluntary separation programs have been successfully utilized in the cities of Bremerton, Issaquah, and Tumwater to help reduce the impacts to employees of staffing reductions. Research has been done on the various city programs and the Human Resources Department has drafted a proposed program for Tukwila. Participation in the Voluntary Separation Program is entirely voluntary. To be eligible for this program, the employee must be a regular full -time or part -time non probationary employee. Participation is subject to the review of the employee's department director and the approval of the City Administrator and the HR Director. The Voluntary Separation Program is a management tool, not an employee right. The intent of the program would be to gain the long- term savings associated with a reduction in force, while minimizing the need for non voluntary layoffs. Therefore, only positions that the City has determined it is unlikely to re -hire in the foreseeable future would be approved for participation. Employees requesting voluntary separation will sign a form indicating that their decision to participate is entirely voluntary and that they understand the limitations and costs associated with re- employment and other restrictions. As an incentive to participate, an employee who volunteers and is approved for voluntary separation from the City effective December 31, 2010 would have a choice of receiving one of the following benefit options: 25 26 INFORMATIONAL MEMO Page 2 1 Option 1 Passed probation, up 3 months salary to 10 years service 10 to 15 years service 4 months salary 15 to 20 years service 5 months salary Greater than 20 years 6 months salary service Salary would be calculated on the base pay of the employee. Longevity, specialty pay, and other pay programs would not be included in the salary amount. The overall near -term cost associated with this program would vary depending upon approved participation. For an employee with up to ten years of service, the cost to the City would range from approximately $14,000 to $22,000. For an employee with greater than 20 years of service, the cost would range from approximately $25,000 to $44,000. As a hypothetical example, if 10 employees of varying lengths -of- service were to apply and be approved for voluntary separation, the near -term cost to the City might be roughly $300,000. The long -term cost savings of a 10 position reduction in force might be approximately $900,000 a year, whether accomplished through lay -offs or through voluntary separation agreements. RECOMMENDATION Voluntary Separation Options 1 Option 2 2 months salary plus 50% cost share for COBRA premiums for 9 months 3 months salary plus 50% cost share for COBRA premiums for 9 months 4 months salary plus 50% cost share for COBRA premiums for 9 months 5 months salary plus 50% cost share for COBRA premiums for 9 months 1 Option 3 2 months salary plus 75% cost share for COBRA premiums for 6 months 3 months salary plus 75% cost share for COBRA premiums for 6 months 4 months salary plus 75% cost share for COBRA premiums for 6 months 5 months salary plus 75% cost share for COBRA premiums for 6 months Due to the timelines associated with implementing this program, it is being requested that this item be forwarded to the August 23, 2010 Committee of the Whole meeting and the Special Meeting to follow that same evening. ATTACHMENTS Resolution in Draft form, with Exhibit Voluntary Separation Agreement ATTEST/AUTHENTICATED Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney W \Word Processing Resolutions VSP 2010.doc SB:mrh 8/11/2010 RAFT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, APPROVING AND ADOPTING A VOLUNTARY SEPARATION PROGRAM. WHEREAS, the City of Tukwila is currently undergoing an unprecedented budget crisis caused by a recession and unfavorable state taxation policies and, as a result, a long -term budget shortfall of $9 million per year has been identified; and WHEREAS, City Councilmembers met in February, 2010 for a budget retreat to study the current budget situation and its affect on the long -term ability of the City to continue to provide essential services to the City During this retreat, Councilmembers expressed the importance of taking a balanced approach in closing the current budget gap and as such will be focusing on ways to increase revenues, program reductions, and reviewing overall the cost of staff compensation, and WHEREAS, a Voluntary Separation Program has been proposed as a potential cost savings mechanism by both the union bargaining groups and City Administration; and WHEREAS, the proposed incentives will expire on September 30, 2010; and WHEREAS, a Voluntary Separation Program would reduce the overall cost of employee compensation; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Voluntary Separation Program Adopted. The Voluntary Separation Program, a copy of which is attached hereto as Exhibit A, and by this reference fully incorporated herein, is hereby approved and adopted, effective the date set forth below City staff is hereby authorized and directed to implement the program in accordance with its terms. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2010 Attachment: Exhibit A, Voluntary Separation Program Dennis Robertson, Council President Filed with the City Clerk: Passed by the City Council: Resolution Number: Page 1 of 1 27 28 City of Tukwila VOLUNTARY SEPARATION PROGRAM Parameters of the Voluntary Separation Program are: Participation in the program is entirely voluntary. To be eligible for this program, the employee must be a regular full -time or part-time non probationary employee Participation is subject to the review of the employee's department director and the approval of the City Administrator and the HR Director. The Voluntary Separation Program is a management tool, not an employee right and is a time limited program. Voluntary separation shall not be targeted on the basis of individual or personal factors. Employees requesting voluntary separation will sign a form indicating that their decision to participate is entirely voluntary and that they understand the limitations and costs associated with re- employment and other restrictions. This voluntary program is available from September 1, 2010 to September 30, 2010. Written requests for participation in this program must be sent to your Department Director and received by close of business on September 30, 2010. Criteria for Approval: City approval is subject to review pursuant to the following criteria. Exhibit A A. Retention of adequate levels of skilled and talented workers in needed positions and locations. B. Retention of positions and skills that are necessary to achieving the Department's mission and priorities. C. Potential disruption due to loss of experienced workers D. Overall cost of the program. 1 29 30 Incentive for Voluntary Separation: Participants are able to choose one of the following three options for their incentive: I Option 1 Passed probation, up 3 months salary to 10 years service 10 to 15 years service 4 months salary 15 to 20 years service 5 months salary Greater than 20 years 6 months salary service 1 Option 2 2 months salary plus 50% cost share for COBRA premiums for 9 months 3 months salary plus 50% cost share for COBRA premiums for 9 months 4 months salary plus 50% cost share for COBRA premi ums for 9 months 5 months salary plus 50% cost share for COBRA premiums for 9 months Option 3 2 months salary plus 75% cost share for COBRA premiums for 6 months 3 months salary plus 75% cost share for COBRA premiums for 6 months 4 months salary plus 75% cost share for COBRA premiums for 6 months 5 months salary plus 75% cost share for COBRA premiums for 6 months *Federal law requires that group insurance health plans give their employees and their covered dependents the opportunity to continue health insurance on a self-pay basis when there is an event that would result in the loss of that coverage. Participants choosing an incentive option with a COBRA cost -share would only be responsible for paying a portion of the monthly premium. If you do not choose an incentive option with COBRA coverage all other COBRA provisions would apply, and participants would still be eligible for the opportunity to continue their coverage for a total of 18 months. For more information about COBRA, please contact the HR staff. The salary amount is calculated on the base pay of the participant. Longevity, specialty pay, and other pay programs are not included in the salary amount. The Washington State Employment Security Department will not consider this separation a qualifying event for purposes of filing for unemployment benefits. The Washington State Department of Retirement Systems will not consider the lump sum incentive payment participants will receive under this program as compensation for the purposes of service credit or earnings for pension calculations. If an employee returns to the City of Tukwila as a City employee within 3 years, he /she will be required to repay the incentive payment. The lump sum incentive payment issued will have all applicable withholdings (FICA and Federal Income Tax) taken from the payment. 2 Employees will have a maximum of 45 days to make their decision to participate in the Voluntary Separation Program and seven days from their written decision to revoke it. An agreement must sijined by or before November 22. 2010. Once this decision is made by signing the Voluntary Separation Agreement an employee will have 7 calendar days to revoke their decision. The City will cash out any leave accruals per applicable City policy. There will be no leave accrued on the lump sum incentive payment. All recommendations for acceptance of a request for voluntary separation will be reviewed and must be approved by the City Administrator and the HR Director. Their decision regarding acceptance is final. Final approval for any employee utilizing this program is conditioned upon execution of a written agreement between the city and the employee acknowledging the terms and conditions of the program including a hold harmless agreement. Positions vacated by this program will not be eliminated; however, the position will be vacant for a minimum of 3 years, unless otherwise approved by the City Council. 3 31 32 CITY OF TUKWILA AGREEMENT OF VOLUNTARY SEPARATION This Voluntary Separation Agreement "Agreement is entered into between "Employee and the City of Tukwila "City who agree as follows: 1. Voluntary Separation Date. The parties agree that the Employee resigns and Employee's employment with the City is voluntarily terminated effective December 31, 2010. 2. Payment. The City agrees to pay Employee the applicable payment under the City of Tukwila Voluntary Separation Program "Program provided that the Employee is eligible for the benefits under the Program and executes this Agreement: A lump sum payment of the equivalent of months of Employee's base salary. Base salary does not include any City paid benefits, specialty pay, or longevity pay. COBRA: If applicable, the City agrees to pay of the monthly COBRA premium for a total consecutive months. 3. Separation Not a Oualifvina Event. The Washington State Employment Security Department will not consider this separation a qualifying event for purposes of filing for unemployment benefits. 4. Lump Sum Payment. The Washington State Department of Retirement Systems will not consider the lump sum incentive payment Employee will receive under this Program as compensation for the purposes of service credit or earnings for pension calculations. 5. Return to City Service. If Employee returns to City service within three years, Employee would be required to repay the incentive payment. Limited exceptions to this may be approved by the City Administrator. Such exceptions may require partial repayment of the incentive payment. 6. Lump Sum Payment Issued in Final Paycheck. Employee's lump sum incentive payment will be issued as part of his or her final paycheck from the City on the next available normal pay date following her separation from employment. All applicable withholdings will be taken from the paycheck as required of payroll. 7. Participation in Program is Voluntary. Employee acknowledges that he or she has read and understands the provisions and restrictions of this Program and that he or she is participating in this Program on an entirely voluntary basis. 8. General Waiver and Release. Employee waives and releases any and all claims, known or unknown, arising on or before the date Employee signs this Agreement, that Employee C: \temp\XPGrpWise \Tukwila Voluntary Separation Aa eement.doc /co /08 /18 /10 33 34 has or might have against the City, its Council, officers, employees, representatives and agents (collectively, "Released Parties These waived and released claims include but are not limited to: (i) claims that in any way relate to Employee's employment, separation from employment and other dealings of any kind with any Released Party or Parties; (ii) claims of unlawful discrimination, harassment, retaliation or other alleged violations arising under federal, state, local or other laws and regulations, including but not limited to claims arising under the federal Age Discrimination in Employment Act (ADEA); Older Workers Benefit Protection Act (OWBPA); Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1866; the Americans with Disabilities Act (ADA); the Fair Labor Standards Act (FLSA); THE Worker Adjustment and Retraining Notification Act (WARN); and the Family and Medical Leave Act (FMLA); (iii) claims of wrongful discharge, tort, defamation, misrepresentation, fraud, detrimental reliance, breach of alleged contractual obligations, negligence, and violation of public policy; and (iv) claims for monetary damages, other personal recovery or relief, costs, expenses and attorneys' fees of any kind. 9. Employee Advised to Consult with an Attorney. Employee acknowledges that he or she has been advised to consult with an attorney regarding the terms of this agreement, and that this agreement serves as written notification to Employee that he or she has been so advised. 10. Effective Date. Employee acknowledges that the effective date of this agreement is Month, Dav, Year and that he or she had 45 days to consider this agreement and its terms. Employee further understands and acknowledges that he or she may revoke this agreement within seven (7) days of his or her execution and that if he or she chooses to revoke this agreement, he or she will be returned to her previous position with the City and will refund all payments received under the terms of this agreement. Employee acknowledges that this agreement shall not become enforceable or effective until after this revocation period has expired. 11. Employee's Decision to Revoke Nullifies Agreement. Employee acknowledges that if he or she chooses to revoke this Agreement, the Agreement is considered null and void, she will not have the opportunity to participate at a later time, and that he or she will not receive the incentive pay that the City has offered Employee. Further, Employee understands that his /her decision to revoke is irrevocable. 12. Notification in Writing. Employee acknowledges that he or she has been notified in writing that the Voluntary Separation Program is available to all full -time and part-time regular status non probationary employees regardless of individual or personal factors including age. 13. Severability. In the event that any portion of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the invalid or unenforceable portion shall be construed or modified in a manner that gives force and effect, to the fullest extent possible, to all other portions of this Agreement. If any invalid or unenforceable portion of any provision in this Agreement cannot be construed or modified to render it valid and enforceable, that portion shall be construed as narrowly as possible and shall be severed from the remainder of this Agreement, and the remainder of this Agreement (including the remainder of the section, -2- paragraph, subparagraph, sentence or provision containing any invalid or unenforceable words) shall remain in effect to the fullest extent possible. 14. Periods to Consider this Agreement and Revoke. Employee has been given a period of 45 calendar days in which to consider this Agreement and decide whether he or she wishes to sign it. After Employee signs this Agreement, Employee has seven (7) calendar days in which Employee can change his or her mind and revoke this Agreement. The City and Employee agree that, to revoke this Agreement, Employee must notify in writing, by hand delivery or mailed via US Postal Service in writing within the 7 -day period to: Stephanie Brown Director of Human Resources City of Tukwila 6200 Southcenter Blvd. Tukwila, WA 98188 JVacation and Other Benefits,. Accrued and unused vacation and compensable sick leave payments due to an employee at the time of separation shall be paid in accordance with those established policies, plans and procedures. Any other pay and benefits (health, dental, etc.) will terminate or cease upon separation in accordance with the terms of those established laws, policies, plans and procedures. 16. Governing Law. The laws of the State of Washington shall govern the validity, performance, enforcement, interpretation and any other aspect of this Agreement, notwithstanding any state's choice of law provisions to the contrary. 17. Complete Agreement. This Agreement constitutes the parties' entire agreement and cancels, supersedes and replaces any and all prior proposals, understandings and agreements (written, oral or implied) regarding all matters addresses herein, except Employee shall continue to be bound by all obligations set forth in any prior agreements, undertakings, waivers and assignments involving confidential information, inventions, non competition, non solicitation, non inducement, patents, copyrights, trademarks and other intellectual property, and compliance with laws and policies. The terms of this Agreement may not be altered or modified except by written agreement between Employee and the City. In connection with this Agreement's acceptance and execution, neither Employee nor the City is relying on any representation or promise that is not expressly stated in the Agreement. -3- 35 36 18. Separation Date. Employee's last day of employment with the City of Tukwila will be December 3L 2010. Employee has read this Agreement, including the waiver and release contained herein, and understands all of its terms. Employee executes it voluntarily and with full knowledge of its significance. Agreed to and signed by: Employee Stephanie Brown, HR Director -4- Steve Lancaster, City Administrator EMPLOYEE DATE By NOTICE OF REVOCATION 1) On 2010, I returned a signed Voluntary Separation Agreement (the "Agreement to Stephanie Brown, HR Director of the City of Tukwila. 2) I am aware of my right to revoke the Agreement anytime within 7 calendar days of the date set forth above by returning this signed Notice of Revocation to Stephanie Brown, HR Director of the City of Tukwila. 3) By returning this signed Notice of Revocation I am electing to revoke the Agreement. 4) I understand that the Agreement, if revoked, will not become effective or enforceable, and that I will not receive the severance benefits that was offered me by the City of Tukwila. 5) I understand that by signing below that my decision to revoke is irrevocable. By Steve Lancaster, City Administrator DATE Stephanie Brown, HR Director DATE -5- 37 38 Finance Safety Committee Minutes August 17, 2010 Page 2 B. Voluntary Separation Program Staff is seeking Council approval of a draft resolution that approves and adopts a Voluntary Separation Program for the City including the draft program description, agreement for voluntary separation, and notice of revocation. The Voluntary Separation program is not a savings strategy, but is intended as an option for employee consideration in lieu of potential layoffs due to the City's current budget crisis. Staff explained briefly that employees will have a 30 -day window to review and apply for the program, and an additional 45 -day period for the employee to review and revoke their decision, as determined by the employee. Decisions regarding positions eligible for participation in the voluntary separation program will be determined by the City, and will be based on the likeliness that the position will not be filled in the foreseeable future. Staff noted that the separation incentives increase as employee longevity increases. Potential savings would be based on participants. The City Attorney has reviewed the proposed program. Due to time constraints involved with the employee review timeline as outlined above, staff is requesting this item go forward to the August 23 COW and the Special Meeting immediately following. UNANIMOUS APPROVAL. FORWARD TO AUGUST 23 COW FOR DISCUSSION. C. Potential Surplus City Properties Based on the request of the Council made at the April 26 Committee of the Whole meeting, staff has been researching potential opportunities for revenue generation based on the sale of surplus property currently owned by the City. Staff has completed evaluation of the property that currently houses the former Tukwila Library/City Hall building. Since this building is located on a single parcel that also houses Fire Station No. 52 and Hazelnut Park, consideration to surplus the land would require a short-plat, re- zoning, and Council review and approval. Additionally, the building is listed with National Historic Register which limits its use potential. High -level appraisal and evaluation, has led staff to recommend the City retain ownership of above mentioned property, and seek out the best possible use for this section of property and building for the community. The Committee was informed that the Tukwila Historical Society has an interest in utilizing the former Tukwila Library/City Hall building and would like to come forward to the City Council requesting permission for use. Based on tonight's Committee discussion and recommendation, and in consideration of the continuity and pattern of decision making, Committee Chair Quinn stated that it would be most appropriate for the Tukwila Historical Society request to be heard by the Finance Safety Committee. UNANIMOUS APPROVAL. FORWARD TO AUGUST 23 COW FOR DISCUSSION. D. Microsoft Enterprise Licensing and VoIP Telephone System Staff is seeking Council approval to utilize funds associated with the recent issuance of limited tax general obligation bonds for the purchase of emergency response capital equipment (see Council minutes dated July 19, 2010), specifically for the procurement of a Voice over Internet Protocol (VoIP) Telephone System and a City -wide Microsoft Enterprise license. Mary Miotke began her presentation by providing new and clarifying information to the Committee which was made available after submission of the original memo: Clarification was made of the funding source as noted above; staff is not requesting additional funding for these purchases. e Specific and accurate pricing is now available for the hardware requirements to implement these systems, and it reflects any savings, as appropriate. An item was added to the hardware category reflected as legal compliance for e -mail archiving. 39 40