HomeMy WebLinkAbout21 - ERIP and Organizational Restructuring UpdateCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 21
January 26, 2010
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: Early Retirement Incentive Program and Organizational
Restructuring Update
ISSUE:
Should the City Council authorize the City Manager to rehire certain limited -term
positions pursuant to Council Policy F -20 based on the Early Retirement
Incentive Program January Retirements?
RECOMMENDATIONS:
Authorize the City Manager to rehire certain employees pursuant to Council
Policy F -20 based on the Early Retirement Incentive Program and in accordance
with PERS requirements subject to ratification of the contracts by Council in
February 2010.
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.
At its October 13, 2009 and December 8, 2009 regular meetings, the City Council
approved Resolution 2009 -73 and Resolution 2009 -90, respectively, 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-
Earty Retirement Incentive Program and
Organizational Restructuring Update
January 26, 2010
Page 2
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 other related savings. Approximately half of
those annual savings will be realized in the current fiscal year. 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.
Discussion:
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. The City Attorney will assist in reviewing
and preparing contracts. Staff will bring the actual agreements to the Council for
ratification in February. 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.
Pursuant to Council Policy F -20, the City Manager is seeking Council approval
for certain limited duration appointments. The City Manager requests
authorization to enter into limited -term contracts with the following four (4)
employees retiring in January 2010:
The following individuals are retiring by January 29, 2010 and are proposed by
the City Manager to work on a temporary basis. The specific term of the
appointment is noted below. No benefits will be provided to these individuals and
compensation will be paid on an hourly basis.
Early Retirement Incentive Program and
Organizational Restructuring Update
January 26, 2010
Page 3
Administrative Services:
• Dick Kurth, Administrative Services Deputy Director, facilitate transfer of the
department to the new Director, assist with the Facilities Financing Plan, and
manage City investments until replacement (up to 90 days, up to 20
hours /week);
Building:
• Dan Macey, Subtrade Plans Examiner, to train his replacement with expertise
of electrical, mechanical and plumbing plans during transition (up to 180 days,
up to 40 hours /week);
City Manager:
Sharon Wood, Assistant City Manager, to provide expertise on the completion
of complex projects, i.e. Banning Ranch (up to 1 BO days, going from 40 hours
a week until a new Assistant City Manager is hired to up to 20 hours a week
after that, gradually decreasing); and
Marilee Jackson, Public Information Officer, possesses the technical
expertise to operate NBTV, the City's government channel. Training of
remaining staff has commenced, but more training is necessary to complete
the transition completely (up to 60 days, up to 20 hourstweek).
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 Kiff
City Manager
4-�A
As requested, the hourly compensation for the January retirees being retained in a temporary, part-time
status is shown below. The figures represent salary only. No fringe benefits are being paid.
Employee Job Title Hourly Salary
Dan Macey Subtrade Plans Examiner 50.41
Marilee Jackson Public Information Officer 52.03
Dick Kurth Administrative Services Deputy Director 71.55
Sharon Wood Assistant City Manager 87.95