11-25-2013 Council Work Session Packet

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0 — MEMORANDUM TO: ORONO CITY COLTNCIL FROM: JF.SSICA LOFTUS, CITY ADMINIST�TOK SUBJECT: RETIREMENT PROPOSAL DATE: NOVEMBER 25, 2013 r1t the July budget work session, the City Council decided to align the Golf Course Superintendent position to the match the golf season and reduced the position to .75 FTE to achieve a $16,000 savings in the 2014 general fund budget. In�ugust I advised Ron S. of this decision and he requested I report back to you that he would like to consider retiring if the city paid his health coverage unti12018. There was no support for this proposal from the Council in r�ugust and the direcrion was to provide him with the "Phased Retirement" brochure (attached) from PERr� and to also report on his severance payout amount ($15,000 into a medical expense account). In summary, below are the requirements for the "Phased Retirement" plan with PERA: • Must be age 62 —Ron S. meets this requiYement on January 19`" • Hours reduced by at least 25% and will not exceed 1,044 hours per year. • One year agreement that can bc renewed (no obligarion) up to 5 years. Ron S. now requests the Council consider agreeing to the Phased Retirement program. He would work March 1-November 15 for 29 hours per week. This would result in an additional savings to the City of$31,000 in salary, PERr� and benefits. There would be a gap in the current hours of supervising, general hours of labor and there is arguably a need for more programming assistance than is currently provided. However,with this phased retirement scenario providing a saving of $31,000,we could hire a programming supervisor for�25/hour and they could work 29 hours per week for 7 months which would cost$17,600. r'�dding an additiona120 hours per week of seasonal part time labor at$10/hour for 7 months would cost a total of�6,100. Overall, this option might provide comparable levels of service (albeit dependent on part-time employees) and save an additional �7,000 from the original plan to reduce the posiuon to .75 FTE. Ron has also requested two things that are not permitted in our current personnel policy and would require Council approval: 1. Would the City pay for the premium of his medical cost ($500/month = $6,000/year)? 2. Could he put vacation and sick days into his Health Savings r�ccount? The City Council may want to discuss which option, the original .75 FTE or the newly requested phased retirement, is best for the golf course in 2014.