HomeMy WebLinkAboutS18 - Early Retirement Incentive ProgramCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. Sib
December 8, 2009
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 - 644 -3000, dkiff @newportbeachca.gov
SUBJECT: Resolution 2009 - : Early Retirement Incentive Program
Authorization and Organizational Restructuring
ISSUE:
Should the City Council approve the Early Retirement Incentive Program and the
associated budget amendments and authorize the City Manager to rehire certain
limited -term positions pursuant to Council Policy F -20?
RECOMMENDATIONS:
Adopt Resolution No. 2009 - approving the Early Retirement Incentive
Program; and
Authorize the City Manager to rehire certain employees pursuant to Council
Policy F -20 and in accordance with PERS requirements subject to ratification of
the contracts by Council in January 2010.
Executive Summary:
At its October 13, 2009 regular meeting, the City Council approved Resolution 2009 -73
authorizing an Early Retirement Incentive Program (ERIP) under the condition the
program would meet the immediate and future fiscal, managerial and operational goals
of the City. The ERIP is Phase I of a multi - pronged approach to help close the current
$5.8- million deficit in the City's FY 09 -10 General Fund and institute long -term structural
changes to balance the budget and ensure that the City remains financially sound.
The result of the ERIP is that General Fund personnel - related costs will be reduced by
4.7 %. The General Fund will save approximately $2.9 million on an annual basis
through eliminating positions and restructuring operations. Savings in non - General Fund
budgets (Enterprise Funds) are expected to be about $153,000 annually. These figures
include the full cost of the ERIP benefit to be paid to retiring employees, and several
ERIP and Organizational Restructuring
December 8, 2009
Page 2
other costs as described in this report. Approximately half of those annual savings will
be realized in the current fiscal year. A total of 51 people will be participating in the
ERIP. The General Fund full -time equivalent positions (FTEs) will be reduced by 32.4
and Enterprise Fund FTEs will decrease by 4.53, for a total of 36.93 FTEs eliminated.
Staff recommends that the City Council approve the Early Retirement Incentive
Program. Because retirements are occurring between mid - December and the end of
January, the City Manager is recommending several time - limited appointments and /or
professional services agreements for some of the retiring employees to complete
projects, provide critical services while restructuring, implementing outsourcing, and
effecting other personnel changes. Staff has identified a list of positions for immediate
authorization and will determine if other positions must be filled to ensure uninterrupted
City services. The City Attorney will assist in reviewing and preparing contracts. Staff
will bring the full list and the actual agreements to the Council for ratification in
January. The list of positions is included in the staff report below in the section on
Implementation Transition.
DISCUSSION:
This staff report is presented to you in four main sections.
1. Background: The first section provides the background on the ERIP and
process followed since the October 13, 2009 City Council meeting, at which time
the Council authorized the City Manager to offer the program to eligible
employees.
2. Results: The second section of this report outlines the financial, organizational,
and service- related results of these changes.
3. Implementation: The third section of the report describes the implementation
transition.
4. Future Restructuring: The fourth section describes "Phase II" of this effort - the
future analysis and restructuring that we anticipate.
Additionally, this report has four attachments:
• Attachment A: Highlights of impacts to the City's departments as a result of
eliminating positions and making structural changes.
• Attachment B: List of ERIP positions being eliminated or otherwise changed.
• Attachment C: A cost and position summary
• Attachment D: The proposed resolution adopting the ERIP
ERIP and Organizational Restructuring
December 8, 2009
Page 3
Section 1: Background
The Early Retirement Incentive Program is Phase I of a longer term organizational
restructuring effort. It has been a number of years since a citywide, comprehensive
review of City programs, organizational structure, and staffing has been conducted. The
ERIP is an opportunity to introduce structural changes to the organization to increase
efficiency as well as reduce costs, both in the short and long term.
On October 13, 2009, the City Council authorized the City Manager to offer the Early
Retirement Incentive Program to eligible employees (The October 13 staff report and
meeting minutes are available on the City's website at www.newportbeachca.gov, under
Agendas and Minutes). In the week following the Council's authorization, information
and enrollment packets were sent to the 166 employees who met the following eligibility
requirements:
• Are a full -time, miscellaneous (non- safety) employee
• Are 50 years of age or older
• Are eligible to retire from PERS with at least five years of service
• Have at least three years of service with the City of Newport Beach
• Will actually retire from the PERS system
• Are not the City Manager, City Clerk, or City Attorney.
Human Resources held orientation meetings and workshops during the week of
October 26 to further explain the program to eligible employees. The department also
organized a series of workshops with CalPERS, Public Agency Retirement Programs
(PARS), and Social Security and Medicare to help the employees make well- informed
decisions about their potential retirement.
Simultaneously, every department with employees eligible to retire under the ERIP was
tasked with assessing its departmental organization, reviewing duties and
responsibilities, and determining how the work would be accomplished should some or
all of the eligible staff members choose to retire. As noted in the October 13 staff report,
eligibility does not guarantee participation in the program as it is essential that the City
realize long -term budget savings by eliminating or reclassifying the potentially vacated
positions. Therefore, the department directors were asked to not only demonstrate cost
savings, but to also explain what services would be impacted by a smaller staff size and
how they would manage those impacts.
Eligible employees interested in participating in the program were asked to notify
Human Resources by November 2. More than 60 employees responded. Based upon
that initial expression of interest, a small team of staff from the City Manager's Office,
Administrative Services and Human Resources met with each affected department
ERIP and Organizational Restructuring
December 8, 2009
Page 4
director to review the impact of the ERIP upon staffing levels, service delivery and
budgets.
Eligible employees were then asked to submit their formal notice of retirement to the
Human Resources Department no later than Friday, November 20. Fifty -one employees
plan to retire between December 15, 2009 and January 30, 2010. With this final count,
staff adjusted their initial estimates and thoroughly evaluated the short and long -term
fiscal and service delivery impacts for every position listed, evaluated various
organizational re- structuring scenarios, and determined that moving forward with the
ERIP would indeed meet the goals initially approved by the City Council.
Section 2: Results
This section of the report summarizes the financial results of ERIP, the positions
affected, and the organizational and service impacts of restructuring.
Financial Results:
The net General Fund annual savings of the ERIP and related organizational
restructuring is $2.9 million, and the non - General Fund annual savings is estimated at
$153,000 for a total citywide savings of nearly $3.1 million. Please see Attachment C —
Cost & Position Summary for more detailed information.
Organizational and Service Impacts:
With the elimination of 36.93 full -time equivalent positions on an organization -wide
basis, there will be impacts on services and business processes. As part of their
proposals to the City Manager, each department head was tasked with identifying the
anticipated impacts of the early retirement(s), elimination of positions and exchange of
some positions for others, as well as assessing restructuring opportunities. All of the
impacts will not be known until implementation, but Attachment A of this report contains
a brief statement of the anticipated impacts as we see them now for each department.
In preparing restructuring plans that resulted from employees participating in early
retirement, departments did the following:
• Focused attention on maintaining delivery of core services;
• Made improvements in business practices to streamline our operations and to
accommodate reductions in staffing and attendant loss of capacity;
• Consulted with supervisors and staff to identify ways of improving processes;
• Identified changes that could be sustained over a number of years, rather than
focusing only on short-term reductions;
ERIP and Organizational Restructuring
December 8, 2009
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• Corrected business practices pertaining to use of part-time employees and
properly allocated work to appropriate positions;
• Identified succession planning needs and opportunities to grow future staff
capabilities and expertise.
As a result of reducing capacity in the organization, it will be important to make changes
to our business practices and processes. Among the changes we will be making are:
• Institute scheduling of response to services where in the past, with more
staff, we were able to respond "instantly." Emergencies, of course, will be
handled on an immediate basis, but we must become more structured and
business -like in our response to service requests so that we can be most efficient
with the use of our more limited staff. For instance, requests for vehicle
maintenance, pothole filling, special studies, and special projects will now all be
scheduled, taking into consideration the core services being delivered and
workload.
• Carefully scope, prioritize and schedule new requests for studies and
analysis, committees, new projects and tasks. Since the Early Retirement
Incentive Program necessarily means that experienced people will be leaving, in
addition to capacity being reduced, the remaining staff will not be as experienced
in many areas. Therefore, it will be important for us to more thoughtfully plan for
meeting requests for new work, whether those requests are from one department
to another, from the public, one of our commissions or committees, or from the
Council. We will be developing our staff's skills in developing work plans and
schedules, as well, so that when requests come in, we can respond in a
business -like manner, indicating the tasks, costs, and timelines involved in
responding.
• Provide training to staff who will be assuming new assignments and
responsibilities. The ERIP is an opportunity for us to grow our staff and
increase their expertise and capabilities. We have a strong stake in ensuring we
have an environment that supports professional development and encourages
staff to remain with our organization. Therefore, we will need to provide training,
guidance and mentoring, and time for learning by our staff. This requires time
allocated by our managers and supervisors, of whom there will also be fewer.
Thus, we need to be thoughtful and realistic about commitments we make
regarding timelines.
Please see Attachment A for a summary of the impacts in each City department.
ERIP and Organizational Restructuring
December 8, 2009
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Section 3: Implementation Transition
Implementing the numerous changes resulting from early retirements will be a phased -
in effort to ensure an orderly transition to new structures and methods of service
delivery. During the transition, regardless of our best efforts to make the transition
seamless, we will undoubtedly encounter unexpected issues that must be resolved and
possibly delays or interruptions in service. Staff from the City Manager's Office, Human
Resources, and Administrative Services will be coordinating the implementation efforts,
and providing analytical and other support required to ensure that all issues are properly
addressed. Therefore, we can expect the workload of those organizational units to
increase during this time.
Additionally, the implementation of each department's restructuring plan, including new
assignments to staff, training people in new skills, shifting reporting relationships,
building new teams, preparing requests for proposals, conducting various studies, and
other work will require dedication of time and attention by our management team. Thus,
during this implementation period it will be important that new projects or priorities not
be requested of staff. Our organization is undergoing major changes as a result of the
ERIP restructuring. Because we will in effect be "re- building the bicycle while we're
riding it," we need to ensure that we use our best efforts to implement in an orderly
manner.
Implementation will involve the three main types of activities, as described below:
• Personnel - related issues
• Change management
• Contracting processes.
Personnel - Related Issues:
Among the implementation issues that will require resolution (or a plan to address) in
the first quarter of calendar 2010 are the following:
• Classification studies of individual positions involved in departmental
restructurings;
• Recruitment for positions that are being replaced (whether at the same level or at
a different classification);
• Compliance with meet and confer requirements;
• Retention of certain retiring employees with special expertise (on a time - limited
basis) during the transition in order to ensure continuity of certain services and
completion of critical projects.
Each of these issues will require attention from Human Resources Department staff,
along with the City Manager and others. Since the Human Resources Department will
also be restructuring for efficiency, there is a possibility that temporary outside
assistance may be needed to help implement the departmental restructurings.
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December 8, 2009
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Change Management:
Restructuring how the work is carried out and who does it will require changing
business practices and processes, making re- assignments to remaining staff, providing
employee training, and creating new work groups and teams. Since the people leaving
under the ERIP are the most senior members of the staff, it means that in many cases
new and less experienced employees will be taking on new assignments. That is a real
benefit for succession planning and staff development, but it will require resources for
training and skills development. Most of the training will be provided in- house, but there
may be some business needs for outside training to help employees learn their new
assignments. Additionally, new teams are being created and it will be important for them
to have clarity about roles, skills needed and team expectations. It is possible that some
of this will take a number of months, or longer, to implement.
Contracting Processes:
Some of the restructuring involves engaging the private sector in providing certain
services. The services we have identified to date to be provided by private vendors
include:
• Water meter reading;
• Street sweeping;
• Harbor debris removal;
• Marina management; and
• On -call electrical tasks.
Additionally, as we continue to examine ways to work with fewer staff, we may find it
advantageous to use outside contractors for services other than those listed above.
Making these changes in service delivery methods will require analysis, preparation of
request for proposals, selection of vendors, and phasing in of contract services.
Limited -Term Contracts with Retiring Employees:
During the phase -in period of restructuring, transitioning to outside contracts, and
completing projects, a few of the retiring employees will be asked to remain on for a
specific period of time to ensure that the business needs of the City are met while
changes are implemented.
Council Policy F -20 (Contracts with Former City Employees) says that when not more
than 5 years has passed since a person who is a former City employee has left service
with the City:
• All professional services contracts with former city employees or temporary
employment contracts with retiring or former city employees shall require
approval of the City Council; and
• Council approval shall also be required for professional services contracts with a
corporation or other business entity owned or operated by a former City
employee or that employs a former City employee.
ERIP and Organizational Restructuring
December 8, 2009
Page 8
Pursuant to Council Policy F -20, the City Manager is seeking Council approval to
authorize certain limited duration appointments.
The following individuals plan to retire by December 31, 2009 and are proposed by the
City Manager to work on a temporary basis for a period not to exceed 90 days, for up
to 20 hours per week (unless otherwise noted). No benefits will be provided to these
individuals and compensation will be paid on an hourly basis. This list may be
expanded with regard to individuals who plan to retire by January 31, 2010 — if so, this
list will be proposed to the Council at a public meeting in January.
The City Manager requests authorization to enter into limited -term contracts with the
following six (6) employees retiring in December 2009:
Administrative Services:
• Dan Auger, Telecommunications Network Coordinator, to train his replacement
and complete several significant projects (up to 90 days, up to 20 hours /week);
• Glen Everroad, Revenue Manager, for transitioning and training to ensure
uninterrupted revenue collection (up to 90 days, up to 20 hours /week);
General Services:
• Gary Mansfield, Equipment Maintenance Supervisor, while a replacement is
recruited and to oversee implementation of the CNG Alternative Fuel Project.
With both the division Superintendent and Supervisor retiring, it will be critical to
have on -going supervision of this operation during the recruitment period (up to
180 days, up to 40 hours /week);
Utilities:
• Eugene Logan, Utilities Supervisor, to provide interim supervisory duties during
the process of outsourcing water meter reading (up to 90 days, up to 20
hours /week);
• John Manwaring, Utilities Crew Chief, to work on interim water meter reading
tasks during the process of outsourcing water meter reading (up to 90 days, up to
20 hours/week); and
• Robert Russell, Water Production Supervisor, to train his replacement and assist
with complex water purchase calculations (up to 90 days, up to 20 hours /week).
Additionally, given the very short time frame for the restructuring decisions, the City
Manager may deem it necessary to authorize a limited number of other temporary, full -
time or temporary part-time contracts following the December 8, 2009 Council meeting.
If that occurs, such additional contracts for people retiring in December will be brought
to the City Council in January 12 for ratification. Additionally, at the January 26, 2010
Council meeting, limited -term contracts for employees retiring in January will be brought
to the Council for approval.
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December 8, 2009
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Section 4: Future Restructuring — Phase II
The restructuring accomplished as a result of the ERIP is simply Phase I in an ongoing
process of reshaping our organization and business practices to increase efficiency and
reduce costs. All departments, whether or not they currently have employees retiring as
a result of ERIP, are actively assessing opportunities for change and improvement so
that we can continue to reduce costs. The following activities will be carried out during
Phase II of restructuring.
Fleet Management Study:
In the coming months, a comprehensive fleet management study will be conducted with
the use of an expert consultant. Fleet maintenance services are primarily located in the
General Services Department, but there is an auxiliary fleet maintenance operation in
the Police Department. Additionally, there may be expertise outside of the City
structure that may have value to us — such as the City of Costa Mesa's fleet
management program. Given the expense of maintaining the City's fleet, it is good
business practice to objectively review costs, operational practices and alternatives,
replacement schedules and other aspects of the City's fleet program to ensure costs are
minimized, the number and types of vehicles are no greater than needed to meet the
business needs of the City, and that operation is efficient. In addition, with reduced
staffing, we should be able to reduce the size of our fleet. The study will help us right -
size the fleet, using industry standards and best practices in making such
determinations. The estimated cost of the study is $75,000. The cost of the study will
be more than paid for by savings made as a result of the study.
Organization -Wide Classification and Compensation Study:
In order to properly organize our operations, and to ensure that people are paid at the
appropriate levels, the City needs to conduct a comprehensive classification and
compensation study. Such a study has not been conducted in the last 30 years (and
possibly never). The existing set of classifications has evolved over many years and
serves as a barrier to succession planning, cost avoidance, and proper organizational
alignment. A study will be conducted in 2010 to ascertain changes in classification and
compensation needed to establish an effective classification structure to meet the
business needs of the City. Consulting services will be engaged for this project,
managed by Human Resources staff. The cost of the study is estimated at $75,000.
Further Efficiency Improvements
This restructuring phase initiated as a result of ERIP will be followed by further
assessments including increased collaborations, service sharing, additional re-
organizations, and further automation. All City departments are being asked to look
inter - departmentally at new ways of collaborating, sharing services, re- organizing for
efficiency improvements, and otherwise continue to create new avenues of reducing our
ongoing costs. This will be an ongoing and active process.
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December 8, 2009
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Assessments that either are underway now or will be in the first quarter of 2010 include,
but are not limited to:
• Potential consolidation of parking meters and municipal lots into one operation;
• Ways to improve efficiencies within the City's administrative management
positions (used here generally) that would remain after Phase I;
• Ways to replace retirements in public safety (positions not eligible for ERIP) with
personnel or contracts that do not cost as much as full -time safety employees;
• Consideration of contracting out parking meter collection;
• Staffing and structure of the City Manager's Office, including placement of Harbor
Resources and Code/Water Quality Enforcement;
• Organization of our development - related functions; and
• Examination of NBTV, the government cable television channel.
Efficiency Improvements Related to New Civic Center
As we continue to refine our plans for a new civic center, we will also be assessing and
finding opportunities for staff sharing and cross - functional efficiencies. For instance, we
will be looking for ways to share reception duties, make more flexible use of staff on
appropriate assignments, and automate functions where such changes can provide the
needed services at lower cost or greater effectiveness.
Environmental Review:
The City Council's approval of this item does not require environmental review
Public Notice:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
Submitted by:
Dave iff
City Manager
Attachments:
Attachment A — Highlights of Impacts in City Departments
Attachment B - ERI Positions with Changes
Attachment C — Cost & Position Summary
Attachment D — Resolution 2009 -_ relating to the ERIP
ERIP and Organizational Restructuring
December 8, 2009
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Attachment A
Highlights of Impacts in City Departments
Administrative Services:
With 10 of 58 department employees retiring under ERIP, substantial change in how
work is carried out will be required. Because the finance function is essential, we will be
contracting back with one or more retiring employees in January for a limited period of
time so that there is no interruption in mission - critical work, particularly in light of cash
and transactions management, investments, and the many budgetary changes that
must be made due to restructuring. At the same time, the position of Director is under
recruitment and the expertise and organizational preferences of that person will be
critical to the ultimate determinations of staffing and assignments. Functions of the
department will be consolidated into two divisions (now in four divisions). Of the 10
individuals approved for ERI, 7 are in highly technical, skilled and management
positions. With the loss of highly experienced individuals, we will need to carefully
assess requests for special reports and analysis, as our capacity will be reduced,
especially in the near term.
New programs for Administrative Services that will require attention from the new
Director and staff include debt issuance, performance based budgeting, performance
measurement and benchmarking, and cost allocation. Each of these will require
expertise and substantial staff focus which will need to be established once the new
Director begins work. In order to enable the department to focus on the most critical
functions, some responsibilities will be assumed by other departments. Due to
elimination of positions in IT, it will be necessary for departments to plan further in
advance for requests for GIS projects. In telecommunications, we will pursue private
vendor assistance.
Additionally, we will be creating a project plan and recommendation to the Council to
pursue automation of the City's parking lots, consistent with the Council's direction on
market -based pricing. This project will proceed on an aggressive schedule so that the
conversion can be accomplished in a matter of months rather than years as is currently
anticipated. We believe that automation will yield revenues and reduce our costs, thus
benefitting the City in the short and long term. As we complete our analysis of this
project, we will also be assessing the costs and benefits of consolidating the entire
parking function (meters and lots) into one operation for efficiency improvements.
Building:
Three employees (two inspectors and one plans examiner) will be retiring as a result of
ERIP in Building. The department has calculated the workload per inspector that can be
maintained for good customer service. It currently meets all inspection requests within
24 hours and will be maintaining that standard. The department's calculation of the
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December 8, 2009
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desired number of stops per residential inspector per day ranges from 8 — 14 depending
on the complexity of the stop and between 5 — 8 stops per day for the more complex
commercial inspections. The department has determined that in addition to one already
unfilled vacant position, the two inspector positions can, for the present, remain unfilled
(one in residential inspections and the other in commercial inspections). This could
increase the number of stops from 10 — 20 per inspector per day for residential
inspections and 8 — 12 per inspector per day for commercial inspections since there are
only two commercial inspectors in the inspection division. This higher level, when it
occurs, cannot be sustained for long and still provide the expected level of customer
service. The third position provides complex electrical, mechanical and plumbing plan
reviews which must be performed, but could, for the present, be contracted out with the
simpler plan reviews handled by the inspection division. When workload increases,
revenue will also increase, and the City will need to restore some or all of these
positions to maintain an acceptable level of customer service.
City Manager's Office:
The staffing and structure of the City Manager's Office are currently being assessed,
with the current vacant Assistant City Manager position and the retirement of the other
Assistant City Manager as a result of ERIP. Additionally, with three other employees will
retire as part of the ERIP (one in Public Information and two in Harbor Resources), the
City Manager's Office will undergo significant change. When the analysis of the City
Manager's Office is completed, a determination will be made about the Assistant City
Manager positions in the office.
The duties of the retiring Assistant City Manager will be reassigned to others, except for
several significant projects which will be handled on a contract basis by that individual
for a limited period of time. The Public Information work program, particularly pertaining
to the government channel, will be evaluated and revised to reflect staffing changes.
The City's government channel will be examined during the first quarter of 2010,
including a cost analysis and customer survey to inform our future plans. The two
positions in Harbor Resources will be eliminated, with duties either contracted out (e.g.
debris removal and Balboa Yacht Basin management) or reassigned to other staff
(within the division or elsewhere).
Human Resources and Risk Management:
The Human Resources and Risk Management Department is restructuring positions
and significantly reorganizing the department to accomplish several important business
objectives of the City. One employee is participating in the ERIP, and that position is
envisioned to be reclassed to a lower level for the reasons stated below. The end result
of departmental restructuring is no net change.
The objectives established over the past year have resulted in new workload which is
anticipated to remain high and increase over the next year. Business objectives for HR
include increased attention to risk management and cost reduction citywide;
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December 8, 2009
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coordination and problem solving with the City Attorney on lawsuits, investigations and
other legal issues pertaining to personnel; avoiding costs that the City has experienced
in the past several years related to personnel practices through utilizing best practices
in human resources; building in -house capacity and expertise for labor relations and
negotiations work and, over time, decreasing dependence on outside consultants;
carrying out recruitments for the Police Department which previously had been handled
within that department; and using flexible staffing to carry out Human Resources and
Risk Management responsibilities through having cross - trained individuals who can
carry out a variety of tasks. The restructuring moves the department forward in
achieving these objectives.
Additionally, a classification and compensation study is proposed as an important step
in improving our use of best practices. Consulting services will be engaged for this
project, managed by Human Resources staff. The existing set of classifications has
evolved over many years and serves as a barrier to succession planning, cost
avoidance, and proper organizational alignment.
As noted in the section on Implementation Transition in this staff report, the Human
Resources Department will have a significant workload for the first two quarters of 2010
in implementing the restructurings of other City departments. Classification studies,
recruitments, and other personnel - related reviews and actions will be undertaken to
accomplish the objectives of the restructurings approved by the City Manager.
Existing staffing levels within HR will be required, and can expected to be augmented
during the implementation transition period while line departments are assisted with
professional human resources expertise in their restructurings.
General Services:
Thirteen (13) employees will retire as a result of ERIP. The department created its
restructuring plan by carefully reviewing its operations program level, and determining
how the services could most efficiently be provided. Substantial restructuring is being
accomplished, which represents an acceleration of changes that otherwise would take
several years. This set of changes builds on other process improvements instituted
over the past couple of years, and the newly authorized street sweeping request for
proposals process. The key changes being made through this restructuring are the
following:
• Consolidation: Consolidate several work groups into one that would be
comprised of beaches, facilities, storm drains and street sweeping. Scheduled
and routine maintenance will remain unchanged.
• Work Planning: Non - scheduled requests and items that are not budgeted will be
placed into a schedule and /or handled by a private contractor, depending on
budget and work priorities. The reduction in staff makes this change essential,
which will require advance planning and scheduling of items that are currently
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December 8, 2009
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completed on a same day basis. Examples of this include missed container call
outs for refuse collection, street repair /clean -up issues, concrete repairs, tree
inspections, beach maintenance call outs, and turn - around time on vehicle
maintenance and repairs.
• Street Sweeping: Proceed with the request for proposals process for street
sweeping and evaluate the results.
• Refuse Collection: Revise maps for refuse collection routes to make more
efficient use of remaining staff.
• Flexible Assignments: Increase flexibility of moving staff between services to
enhance efficiency, as well as build employees' skills and capabilities.
• Fleet Maintenance: Restructure fleet maintenance operations to accommodate
the retirement of two people. As noted in the section on Future Restructuring in
the body of the report, the City is in need of a comprehensive fleet management
study. Given the significant investment and ongoing costs to the City of
purchasing, replacing and maintaining a fleet of 435 vehicles, it is time for an
analysis of our fleet replacement, operations and systems to ensure a high level
of efficiency.
Library:
Two people will retire from the Library due to ERIP. Last year, the department
established a goal of having staff cross - trained so that any staff within a particular job
classification could perform their duties in any one of the four libraries. In order to
continue to provide a high level of service, the Library will increase its use of remote
services such as online databases, customer remote account access for renewal of
materials, e- commerce, online pre- registrations for events, and self -paced learning
modules. A variety of online customer empowerment features will be increased, such
as those enabling customers to search library collections, place or suspend holds on
materials, change or update their contact information, or pay fines.
Planning:
One support employee will retire in the department as a result of ERIP restructuring.
Duties will be reassigned to the remaining support staff. The department anticipates
some delays in website and database maintenance, the process of transitioning to
paperless files, and similar records management tasks. All other Planning Department
services and projects should proceed on schedule.
Police:
As the result of the ERIP, four employees will retire from the Police Department; three of
these positions will be eliminated. The functions of the proposed eliminated positions
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December 8, 2009
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are Animal Control Officers (ACO) and Community Services Officers (CSO). With
respect to animal control functions, one Senior ACO and one ACO from the Animal
Control Unit are expected to retire. The department anticipates filling the Senior ACO
position, leaving the Animal Control Officer position vacant. In this case, the department
will reduce the availability of animal control services as well as public outreach
programs. The reduced staffing will result in police officers assuming some of the calls
for service and additional responses after hours.
In the CSO classification, one CSO position will be eliminated in the Records Section.
Services that will be impacted include data entry, filing, scanning, front desk support,
phone inquiries, records and DMV checks. Schedules will be adjusted to minimize the
impacts of the vacancy. The second CSO position serves as the Detective Division
Secretary. While this function is necessary, the department intends to blend this role
with the duties of a CSO currently assigned to this Division who handles a variety of
tasks related to massage permits. This will result in detectives assuming some massage
permit duties such as testing, inspection and licensing.
Public Works:
One employee will retire as a result of the ERIP and this position will be eliminated. The
capital projects managed by the individual leaving will be distributed to others in the
department and/or contracted to outside project managers. The timing of capital
projects will be reviewed in light of this staff reduction to determine whether adjustments
will need to be made. As with other positions being vacated through early retirement in
the City, significant senior level experience will be gone, requiring even more growth
and development of our newer employees to meet the business needs of the City now
and in the future.
Utilities:
While the ERIP was proposed to the City Council in order to help with the General Fund
deficit, there are employees in our enterprise department, Utilities, who fit the eligibility
requirements for ERIP. The City extended the ERIP to them and has assessed
opportunities for restructuring the Utilities Department. As a result of the assessment,
staff believes that it will meet the business needs of the City to accept the employees'
early retirements. The main focus of restructuring in Utilities is to accelerate the
changes already planned in the department to improve customer service, implement
technology to improve efficiency of meter reading, and restructure how some important
pieces of work are carried out.
A total of 12 employees are participating in ERIP. Two of these vacated positions will be
eliminated from the budget. Additionally, 8.93 full -time equivalent positions (FTEs) are
being eliminated. These 8.93 FTEs are currently being filled by 10 people, working
between 30 -40 hours a week, receiving pro -rated benefits, PERS and leave accruals.
The 8.93 FTEs (again, 10 people working less than full time) will be replaced by four (4)
ERIP and Organizational Restructuring
December 8, 2009
Page 16
regular full time employees. Through this restructuring plan, Utilities reduces its total
number of employees and corrects inequities by doing so.
In short:
Current
Number of FT Employees 53
Number of Part time FTE employees 8.93
Total 61.93
Proposed
Number of FT Employees 55
Number of Part time FTE employees 0.5
Total 55.5
When the current director was appointed nearly a year ago, he began an assessment of
the department and made some initial changes in assignments. The City then engaged
the consulting firm of OMTS to conduct a review of the organization structure, and
staffing. That review resulted in a new organization structure, with changed reporting
relationships. It also identified operational changes that should be made to increase
efficiency and customer service. The restructuring that is now possible through the
ERIP enables the City to implement several key improvements in the first quarter of
2010. The improvements include:
• Establishing a new Customer Service Unit: This will enable the Utilities Department
to respond to customer questions in a more organized and timely manner. Water
pressure, flow and water quality calls will be answered by this new unit, as well as
centralizing other customer service calls. Private utilities (such as the Irvine Ranch
Water District) typically have this function provided through private vendors, and it is
considered a best practice for modern utilities operations. The meter reading
function will be part of this Customer Service Unit since it is part of providing utilities
services to our many customers.
• Outside contract services: Opportunities for contracting out for improved efficiency
and flexibility are being created through this restructuring. Specifically, we plan to
contract out meter reading services, which will enable the City to move to a monthly
billing cycle. Monthly billing will reduce the number of late notices and enhance our
customers' ability to monitor their water usage, and set the stage for implementation
of a tiered rate structure identified as one of the Council priorities. Additionally, with
the elimination of an electrician position, outside services will be engaged by City
departments as needed to handle miscellaneous items that are needed from time to
time on an on -call basis. There will be a transition period for the water meter
reading, while we issue a request for proposals, select a vendor, and then ensure a
ERIP and Organizational Restructuring
December 8, 2009
Page 17
seamless transfer so that customer service is uninterrupted.
• Establish a meter replacement program: Meter replacement in a systematic and
scheduled manner is important to assist in meeting water conservation and
efficiency goals of the City. Most of our current meters are 20 -30 years old, while
the industry standard is 10 -15 years prior to replacement. Technology has changed
significantly and the meter replacement program will take advantage of such
advances. For instance, with new technology, the City will obtain reports on an
automated basis, rather than manually as is now the practice. This program will be
established once contract meter reading is in place.
• Improve efficiencies: A variety of changes are being made to increase efficiencies,
including consolidation of facility maintenance, enhancement of Automated Meter
Reading (AMR) for large customers to help in water conservation and customer
service, dedicated regulatory and safety division to meet the variety of regulations
required of the City, and increased Big Canyon Reservoir floating cover
maintenance.
Attachment B ERI POSITIONS WITH CHANGES
inh r:n «nrie a,.n.e nom o,.�n :,.. c..,.••�
F
8q � P'y,'` r a•
:Sa`
Admin Services Telecom /Network Coordinator 12/29/2009 Eliminated
1
-
1
Admin Services Accountant, Senior 12/2912009 Replace lower step
-
1
1
Admin Services IT Fiscal Technician 01/2812010 Eliminated
1
-
1
Admin Services Revenue Manager 12130/2009 Retained with other position changes
1
1
-
-
Admin Services Fiscal Specialist 12/29/2009 Replace lower step
1
1
-
Admin Services Deputy Admin Svcs Director 01/30/2010 Replace lower step
-
1
1
-
Admin Services Administrative Assistant 01/29/2009 Replace lower step
1
1
-
Admin Services IT Manager 12/28/2009 Eliminated
1
-
1
Admin Services GISSupervisor 01/29/2009 Eliminated
1
-
1
Admin Services Fiscal Operations Manager 01130/2010 Eliminated
1
-
1
-
-
Building Building Inspector II 01/29/2010 Eliminated until economy improves
1
1
-
-
1
Building Subtrade Plans Examiner 01/29/2010 Eliminated until economy improves
-
1
-
1
-
building Building Inspector, Sr 01/30/2010 Eliminated until economy improves
1
-
-
1
-
City Manager Harbor Resources Specialist 01/30/2010
1
1
-
-
City Manager Maintenance Worker ll 01/30/2010
1
-
-
1
City Manager P10-Video 12/30/2009
-
1
1
City Manager Assistant City Manager
1
1
General Services Equipment Maint Su ervsor 12/30/2009 Retained, but eliminate Sr. Equipment Mechanic position
1
-
1
General Services Auto Paint& Body Mech 12/30/2009 Eliminated
1
-
1
General Services Maintenance Worker 12/30/2009 Eliminated
1
-
1
General Services Beach Maint Supervisor 12/3012009 Replace lower step
-
1
1
(O.S0)
General 5ervices Facilities Maint Supervisor 12/30/2009 Eliminated
1
-
1
General Services Equipment Maint Superintendent 12/30/2009 Replace lower step
1
-
1
General Services Equipment Operator II 01/30/2010 Eliminate pending street sweeping contract
1
-
1
General Services Tree Maint Sery Tech 01/29/2010 Eliminate
1
-
1
General Services Park Maim Supervisor 12/30/2009 Retained, but eliminate Crew Chief position
1
-
1
General Services Refuse Worker It 12/30/2009 Retained, but Refuse Worker l position eliminated
1
1
-
General Services Equipment Operator 11 12/30/2009 Retained, but Maintenance Worker 1 eliminated
-
1
-
-
General Services Refuse Worker ll 01/29/2010 Retained, but Refuse worker l position eliminated
-
-
1
-
1
General Services Refuse Worker II 12/30/2009 Retained, but Refuse Worker I position eliminated
1
-
1
-
-
Human Resources Human Resources Manager 01/29/2010 Retained but RedasslRed
-
-
1
-
1
Library & Cultural Arts Ubfarian II 12/30/2009 Replace lower step
1
1
0.90
(0.90(
31
Library &Cultural Arts Library Services Manager 12/19/2009 Replace lower step
1
(1.40(
Planning Assistant, Administrative 12/30/2009 Retained, but Office Assistant position eliminated
1
Police Police Comm Services Officer 12/30/2009 Eliminated, functions blended with other CSO position
1
Police Animal Control Offcer,sr 01/30/2010 Retained
1
Police Animal Control Officer 01/30/2010 Eliminated
1
Police Police Comm Services Officer 01/30/2010 Eliminated
1
Public Works Civil Engineer Assoc 5% 12130/2009 Retained, but Junior Civil Engineer position eliminated upon promotion
1
Utilities - Electrical Electrical Svs Crew Chief 12/30/2009 Retained
1
Utilities - Electrical Electrician 12/30/2009 Retained, but eliminated part -time Electrician l hours
1
GENERAL FUND TOTAL
1
-
1
-
1
-
-
1
-
1
-
-
-
1
-
1
-
-
1
-
1
-
1
-
1
-
-
1
-
1
-
-
1
-
-
-
1
-
-
-
1
-
-
-
1
-
-
1
-
-
1
-
-
-
1
-
1
-
1
-
1
-
1
-
1
-
1
-
1
0.50
(O.S0)
1
-
1
-
1
-
1
-
1
-
1
-
1
-
1
-
-
1
-
-
1
-
-
-
1
-
1
-
-
-
-
1
-
-
1
0.90
(0.90(
31
10
1.40
(1.40(
Attachment B
ERI POSITIONS WITH CHANGES
Utilities - Water Administrative Manager 01/30 /2010 Eliminated
1
0.5
0.50
- 1
Utilities
Total
Net Full Time Positions Eliminated /Held Vacant
Utilities - Water utilities EqUIR specialist 12128/2009 Retained
- 1
28.00
Net Part Time Staffing Eliminated (FTE)
1.40
]
8.93
City Total
32.40
Utilities - Water Utilities Crew Chief 12128/2009 Retained
36.93
- 1
1
-
- 1
Utilities -Water Utilities Crew Chief 1212812009 Downgrade to Utilities Specialist ll position
-
- 1
1
- 1
utilities - Water Utilities Supervisor 12/28/2009 Downgrade to Utilities Crew Chief
-
- 1 2
1
-
Utilities - Water Utilities Crew Chief 12/29/2009 Retained
-
y
6.28
Utilities - Water Water Production Supervisor 12/19/2009 Retained
y
-
Utilities - Water Utilities Supervisor 01/29/2010 Retained
(1.75)
1 F79 F 4
9.03
y
ff05100
Utilities -Water Utilities Specialist 12/3012009 Retained /New
9.43
(8.93)
1
2
Utilities - Water Utilities Crew Chief 12/28/2009 Retained
1
Utilities - Water utilities Maint Aide /Svc Assist Eliminated (Part Time)
Utilities - Wastewater utilities Specialist New
2
Utilities- Wastewater Utilities Maintenance Aide Eliminated (Part Time)
WNI[rt NNV WXJI[WXILN fUIYW IVIHL
TOTAL CH GESOTY -WIDE
Total Accepting ERIP, City Wide: 51
New positions:
Utilities - Water adding two full -time Utilities Specialists by converting from part time FTE positions.
Also adding a part -time Office Assistant (.5 FfE) to replace to 11 -time ERI position.
Utilities - Wastewater adding two full -time Utilities Specialists
1
General
0.5
0.50
- 1
Utilities
Total
Net Full Time Positions Eliminated /Held Vacant
-
- 1
28.00
Net Part Time Staffing Eliminated (FTE)
1.40
-
8.93
City Total
32.40
4.53
36.93
- 1
-
- 1
-
- 1
-
- 1
-
- 1 2
-
- 1
-
- - -
6.28
(618)
-
1.75
(1.75)
1 F79 F 4
9.03
ff05100
2 19 4
9.43
(8.93)
General
Fund
Utilities
Total
Net Full Time Positions Eliminated /Held Vacant
31.00
-3.00
28.00
Net Part Time Staffing Eliminated (FTE)
1.40
7.53
8.93
City Total
32.40
4.53
36.93
Attachment C
Cost and Position Summary
Net
Part-Time
Net
Current
Annual
Percentage
Employees
Full Time
Employee
Employee
Total
ERIP
Net
of
Accepting
Employee
Change
Change
Salary &
Cost
Cost
Annual
Salary &
Department
ERIP
Reduction
Net FTE )
(FTE)
Benefits
Reduction
5 years)
Savings **
Benefits
Administrative Services
10
-6
0.00
-6.00
6,713,054
- 708,351
219,978
488,372
-7.27%
Building
3
-3
0.00
-3.00
4,467,003
- 391,854
65,429
- 326,425
-7.31%
City Attorney
0
0
0.00
0.00
1,391,161
0
0
0
0.00%
City Clerk
0
0
0.00
0.00
335,155
0
0
0
0.00%
City Council
0
0
0.00
0.00
207,331
0
0
0
0.00%
City Manager
4
-2
0.00
-2.00
3,186,107
- 237,707
94,861
- 142,846
-4.48%
Fire Department
0
0
0.00
0.00
3,611,578
0
0
0
0.00%
General Services
13
-12
-0.50
-12.50
12,317,735
- 1,446,484
192,841
- 1,253,643
- 10.18%
Human Resources
1
0
0.00
0.00
1,450,831
- 52,928
37,591
- 15,337
-1.06%
Library
2
-2
0.00
-2.00
5,051,385
- 236,896
38,177
- 198,720
-3.93%
Planning
1
-1
0.00
-1.00
2,647,622
- 72,969
16,998
- 55,970
-2.11%
Police
4
-3
0.00
-3.00
11,220,455
- 307,797
59,123
- 248,674
-2.22%
Public Works
1
-1
0.00
-1.00
4,732,119
- 149,263
20,576
- 128,688
-2.72%
Recreation & Senior Services
0
0
0.00
0.00
3,803,191
0
0
0
0.00%
Utilities Electric (General Fund)
2
-1
-0_90
-1`90
560,573
- 103.165
36,999
- 66.166
- 11.80%
** *General Fund Total
41
-31
-1.40
-32.40
61,695,300
- 3,707,414
782,574
- 2,924,840
-0.74%
Water & Wastewater Funds
10
3
-7.53
-4.53
5,910,426
- 320,071
166,516
- 153,554
-2.60%
Total
51
-28
-8.93
-36.93
67,605,726
-4,027,484
949,090
- 3,078,395
-4.55%
*
Includes actual
projected ERIP payments,
including PARS admin cost, for the first five years; plus pre- funding of payments after
five years, using long -term
discount rate
of 3% (as recommended by
PARS).
**
Includes cost impact of several assumed reclassed positions
related to department restructuring, both
upgrades and downgrades.
Does not includes potential savings due
to reduced operating costs, i.e., vehicle and equipment maintenance,
computers, etc.
* *'
Includes Tidelands
Fund and Equipment Maintenance &
Replacement
Fund.
RESOLUTION NO. 2009-
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NEWPORT BEACH
AUTHORIZING AN EARLY RETIREMENT INCENTIVE PLAN
THROUGH PARS
WHEREAS, the City of Newport Beach (the "City °) is a member of the Public Agency
Retirement System (PARS) for the purpose of providing tax qualified retirement benefits;
and
WHEREAS, it is to be determined to be in the best fiscal interest of the City and its
employees to provide an Early Retirement Incentive Plan (ERIP) to eligible employees who
wish to voluntarily exercise their option to separate from City service; and
WHEREAS, the PARS Trust has made available an ERIP /Supplementary
Retirement Plan (SRP), supplementing CaIPERS and qualifying under the relevant sections
of the Internal Revenue Code and the California Government Code; now therefore be it
RESOLVED that:
1. The City Council, being a member of the PARS Trust, does hereby adopt the
ERIP /PARS Supplementary Retirement Plan, effective December 9, 2009; and
2. The City Council hereby appoints the Human Resources Director or his/her
successor or his/her designee as the City's Plan Administrator for the
ERIP /PARS Supplementary Retirement Plan; and
3. The City's PARS Administrator is hereby authorized to execute the PARS legal
and administrative service documents on behalf of the City to implement an
ERIP /PARS supplemental benefit program. In addition, if the City's PARS
Administrator finds that the plan must be limited under Section 415 of Internal
Revenue Code, then the Plan Administrator will implement replacement benefit
programs at no additional cost to the City.
ADOPTED this 81h day of December, 2009,
ED SELICH
Mayor of the City of Newport Beach
ATTEST:
LEILANI BROWN
City Clerk of the City of Newport Beach
Restructuring —Phase
Newport Beach City Council
Tuesday, December 8, 2,009
a
L
About Restructuring
At least three phases:
Phase I - Early Retirement Incentive Program (ERIP).
Goal: A significant enough ERIP to:
Meet fiscal objectives (at least $2 million in savings).
Meet managerial goals - i.e. Create Room to Restructure
(Phases II and III).
Timing for Phase I = October Zoo9 to January 2010.
At least 2 Retirement Celebrations:
December retirees = 12/r7/o9 at 2:00 P.M.
January retirees = 1/27/2010 at 3:00 p.m.
About Restructuring
At least three phases (con't):
Phase II - Move, Analyze, Plan. Goals:
Take advantage of ERIP vacancies to consolidate, re- think, improve
processes. Move people accordingly into "acting" roles.
Analyze:
Safety retirements (Fire, Lifeguards, PD) for opportunities to
restructure.
Effectiveness of Planning - Building - Public Works functions;
Contracting in, contracting out opportunities;
Fleet Optimization Study; and more
Plan: Envision what we want to be in 3 -5 years. Map out a path to
get there.
Timing: December 2009 to June 2010
s.
About Restructuring
At least three phases (cont'd):
Phase III - Go Down the Path. Goals:
Become a flexible, efficient organization that:
Continuously improves;
Takes advantage of new technologies;
Measures our performance regularly and makes changes
accordingly;
Considers breaking things - even when they are not broken.
Timing: July 2010 onward
About ERIP
An ERIP encourages people nearing retirement to
retire now.
Must meet both fiscal and managerial goals to work.
As proposed tonight, the ERIP would, if positions
eliminated or filled as proposed:
Save $4 million in annual salary & benefit costs.
Cost $950,000 a year for five years (est).
Includes cost of administration - PARS 5% fee
Net is a $3.078 million savings annually (about 4.74% of
General Fund sal /ben and 4.55% of all funds sal /ben
expenses)
s.
Why an ERIP versus Layoffs?
Willing v unwilling participants.
Less organizational trauma.
MOUs establish "bumping" rights. A bumping right:
Allows a person in a position being eliminated to
"bump" someone else out of another position.
Postpones org's retirement impacts - the people
bumping down will retire soon anyway.
i.
About Employees &Positions
In the General Fund:
41 people will be given the ERIP
Net reduction = 32.40 positions.
In the Water & Wastewater Fund:
io people will be given the ERIP
Net reduction = 4.53 positions.
Total:
51 people will be given the ERIP
Net reduction = 36.93 positions
What does this mean to the
organization?
About an 8% decrease in Gen Gov't Positions.
About a 3.2% decrease in PD Civilian Positions.
No impacts to sworn public safety.
Fixes a PT concern in Utilities.
General Fund
Enterprise
Funds
Total
Today
Post ERIP
%Decrease
Today
Post ERIP
%Decrease
Today
Post ERIP
Full Time, Gen Gov't
388
357
7.99%
38
35
7.89%
426
392
7.98%
Full Time, PD Sworn
149
149
0.00%
0
0
N/A
149
149
0.00%
Full Time, PD Civilian
92
89
3.26%
0
0
N/A
92
89
3.26%
Full Time, Fire & LG Sworn
141
141
0.00%
0
0
N/A
141
141
0.00%
Full Time, Fire & LG Civilian
15
15
0.00%
0
0
N/A
15
15
0.00%
Full Time Equivalents
142.31
140.91
0.98%
8.03
0.5
93.77%
150.34
141.41
5.94%
Totals
927.31
891.91
3.82%
46.03
35.5
22.88%
973.34
927.41
4.72%
%Decrease
s.
Who's Most Impacted?
General Services ( -12.5 positions)
Utilities ( -6.43 positions)
Administrative Services ( -6 positions)
Building ( -3 positions)
Police ( -3 positions)
City Manager ( -Z positions)
Library ( -Z positions)
About Replacements
Some positions will be filled temporarily, asking the
retirees to come back on a part -time basis (generally)
to train replacements. But it's time - limited. Up to:
Zo hours a week
Up to go days
Tonight asking for approval of 6 persons to come back
(see page 8) per Council Policy F -ao.
January retirements may lead to similar request, will
come to Council per F -ZO.
For example, Sharon Wood - Banning, Koll, Conexant
i.
Making the Savings Stick
Careful control over new positions. This only saves
money if positions are not filled and /or are filled at
lower levels.
Recommendation:
Incorporate a more detailed Position Control action in
the City's budget process (Council approval required)
Include Part -Time FTEs.
If the City Manager proposes a new position, the
Manager must show how it impacts the Zoog ERIP.
Credit Where it's Due
ERIP Team:
Human Resources (Terri Cassidy, Lauren Farley, more)
Admin Services (Dick Kurth, Dan M, Susan G, more)
City Manager's Office ( Jan Perkins, Tara Finnigan, more)
The Management Team
The employees
It's not easy to think about retirement so suddenly.
Questions