HomeMy WebLinkAboutResolution 2010-016 separation incentive plan for fiscal year 2011MARANA RESOLUTION N0.2010-16
RELATING TO PERSONNEL; APPROVING AND AUTHORIZING STAFF TO
IMPLEMENT THE SEPARATION INCENTIVE PLAN (SIP) FOR FISCAL YEAR 2011; AND
DECLARING AN EMERGENCY
WHEREAS the Town Council is authorized by A.R.S. § 9-240 (A) to control the finances
of the Town; and
WHEREAS the Town Council finds that authorizing staff to implement the Separation
Incentive Plan (SIP) for fiscal year 2011 as described in the SIP program outline is in the best
interests of the Town and its residents.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, ARIZONA, AS FOLLOWS:
SECTION 1. The Town of Marana hereby approves the Separation Incentive Plan (SIP)
for fiscal year 2011 as described in the SIP program outline, attached to and incorporated by this
reference in this resolution as Exhibit A.
SECTION 2. The Town's Manager and staff are hereby directed and authorized to
undertake all other and further tasks required or beneficial to implement the Separation Incentive
Pian, to include the execution of separation agreements in compliance with the provisions of the
Separation Incentive Plan as described in the SIP program outline.
SECTION 3. Since it is necessary for the preservation of the peace, health and safety of
the Town of Marana that this resolution become immediately effective, an emergency is hereby
declared to exist, and this resolution shall be effective immediately upon its passage and
adoption.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF
MARANA, ARIZONA, this 161h day of February, 2010. ~+, ~~
~" ~ ~
/'
Mayor Ec~~ Honea
ATTEST:
Jocelyn .Bronson, Town Clerk
APPROVED AS TO FORM:
("~nk Cady, Town A~orney
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
SEPARATION INCENTIVE PLAN (SIP)
PROGRAM OUTLINE
FISCAL YEAR 2011
The purpose of the Separation Incentive Plan (SIP) is to facilitate reductions to the Town's FY 2011 budget
during the current economic crisis by providing incentives to retirement-eligible and other employees who wish
to voluntarily separate their employment with the Town. The SIP, as described in this program outline, shall
apply through FY 2011 only, subject to the timelines described herein.
Eligibility
This program applies to all Town departments and to all classified and unclassified employees who are
retirement-eligible in either the Arizona State Retirement System or the Public Safety Personnel Retirement
System and to all benefit-eligible classified and unclassified employees who elect to resign.
Definitions
1. Benefit-eligible-regular full- and part-time classified and unclassified employees. Part-time employees
must have a normal schedule that is at least 20 hours but less than 40 hours per week.
2. ASRS-Arizona State Retirement System
3. COBRA-Consolidated Omnibus Benefits Reconciliation Act-provides that covered employees and
their qualified beneficiaries may continue health insurance coverage under the Town of Marana's health
plan when a qualifying event such as loss of employment would normally result in the loss of
eligibility.
4. Election Period -March 1, 2010 through Apri130, 2010
5. FY 2011-July 1, 2010 through June 30, 2011.
6. Incentives~ne-time financial assistance to support the retirement-eligible or resigning employee in
his or her transition.
7. PSPRS-Public Safety Personnel Retirement System.
8. Retirement-eligible employees-employees who have accumulated the necessary credited service in a
public entity retirement system or in the military service and/or attained the necessary age to qualify for
ASRS or PSPRS retirement. This applies to both early and normal retirements.
9. Timeline-the dates within which retirement-eligible and resigning employees must notify the Town of
their decision to retire and/or resign.
Policies and Procedures
Election
1. Employees who decide to separate their employment and take advantage of this program must notify the
Human Resources Department of their decision to elect retirement or to resign.
2. The Human Resources Department must receive the notification during the election period and no later than
close of business (5:00 p.m.) April 30, 2010. The retirement or resignation must be effective no later than
December 31, 2010.
3. An employee's election to resign or retire is irrevocable as of the close of business (5:00 p.m.)
April 30, 2010.
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EXHIBIT A TO MARANA RESOLUTION N0.2010-16
4. The Human Resources Department will respond to all employees who elect to participate in this program and
may contact ASRS or PSPRS if requested by the employee.
Incentives
Employees who separate between July 1 and September 30, 2010 will receive 100% of the incentives.
Employees who separate between October 1 and December 31, 2010 will receive 50% of the incentives.
• Incentives if Separating July 1-September 30, 2010
1. Sick-Leave Payout. Participants will receive a payout at 50% of their accrued sick leave balance.
2. Life Insurance Continuation. Participants will remain on the Town's basic life insurance plan at the Town's
expense at one times their salary for one year.
3. Medical Plan Subsidy. This subsidy will be available to the participant only if the participant is (a) eligible
for COBRA coverage or the ASRS or PSPRS retirement health care coverage and (b) elects coverage under
COBRA, ASRS or PSPRS during the election period. Eligible participants will receive a subsidy of $150
per month for up to six months following their separation to offset the costs of COBRA continuation
coverage or coverage under the participant's retirement health care plan. This subsidy shall be payable
directly to the participant's health care plan. The Town will not pay the subsidy for any other type of health
insurance coverage. The Town will pay the subsidy only for those months that the participant elects
COBRA, ASRS or PSPRS health care coverage, for a maximum of six months. If the participant
discontinues COBRA, ASRS or PSPRS health care coverage for any reason before the end of the six-month
period, the Town will discontinue payment of the subsidy as well. This subsidy does not take the place of
any subsidy offered directly by the retirement plan, but is in addition to any such subsidy.
4. Severance Pay. Participants will receive severance pay in an amount equal to a percentage of the
participant's annual base salary multiplied by the participant's length of service with the Town. The
percentage of base salary that will be used to calculate a participant's severance pay will be based upon the
participant's length of service with the Town and the date of separation as elected by the participant as
follows:
Length of Service % of Annual Base Salarv
0 to 10 years 1.5%
>10 to 15 years 1.75%
> 15 years 2.0%
Examples:
• $40,000 annual base salary, 5 years of service:
$40,000 x .015 = $600 x 5 years = $3,000 severance pay
• $40,000 annual base salary, 11 years of service:
$40,000 x .0175 = $700 x 11 years = $7,700 severance pay
• $40,000 annual base salary, 16 years of service:
$40,000 x .02 = $800 x 16 years = $12,800 severance pay
Participants will receive credit for partial years of service under this formula. Notwithstanding this formula, the
total amount of severance pay that will be paid to any participant is capped at a maximum of $50,000.
• Incentives if Separating October 1-December 30, 2010
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
1. Sick-Leave Payout. Participants will receive a payout at 25% of their accrued sick leave balance.
2. Life Insurance Continuation. Participants will remain on the Town's basic life insurance plan at the
Town's expense at one times their salary for six months.
Medical Plan Subsidy. This subsidy will be available to the participant only if the participant is (a)
eligible for COBRA coverage or the ASRS or PSPRS retirement health care coverage and (b) elects
coverage under COBRA, ASRS or PSPRS during the election period. Eligible participants will receive
a subsidy of $75 per month for up to six months following their separation to offset the costs of
COBRA continuation coverage or coverage under the participant's retirement health care plan. This
subsidy shall be payable directly to the participant's health care plan. The Town will not pay the
subsidy for any other type of health insurance coverage. The Town will pay the subsidy only for those
months that the participant elects COBRA, ASRS or PSPRS health care coverage, for a maximum of
six months. If the participant discontinues COBRA, ASRS or PSPRS health care coverage for any
reason before the end of the six-month period, the Town will discontinue payment of the subsidy as
well. This subsidy does not take the place of any subsidy offered directly by the retirement plan, but is
in addition to any such subsidy.
4. Severance Pay. Participants will receive severance pay in an amount equal to a percentage of the
participant's annual base salary multiplied by the participant's length of service with the Town, then
multiplied by 50%. The percentage of base salary that will be used to calculate a participant's severance
pay will be based upon the participant's length of service with the Town as follows:
Length of Service % of Annual Base Salary
0 to 10 years 1.5%
>10 to 15 years 1.75%
> 15 years 2.0%
Examples:
• $40,000 annual base salary, 5 years of service:
$40,000 x .015 = $600 x 5 years = $3,000 x .50 = $1,500 severance pay
• $40,000 annual base salary, 11 years of service:
$40,000 x .0175 = $700 x 11 years = $7,700 x .50 = $3,850 severance pay
• $40,000 annual base salary, 16 years of service:
$40,000 x .02 = $800 x 16 years = $12,800 x .50 = $6,400 severance pay
Participants will receive credit for partial years of service under this formula. Notwithstanding this formula, the
total amount of severance pay that will be paid to any participant is capped at a maximum of $50,000.
Separation Agreement
Employees who elect to retire or resign and accept the SIP incentives will be required to enter into a separation
agreement with the Town. Sample separation agreements will be available for employees' review during the
election period. Employees must sign and return the separation agreement to the Human Resources Department
by the deadline specified by the Human Resources Department in order to be eligible for the SIP incentives.
Failure to sign and return the separation agreement by the deadline specified by the Human Resources
Department will result in the employee's disqualification from the SIP program and no incentives will be paid;
however, the employee's election to resign or retire remains irrevocable as of close of business (5:00 p.m.)
Apri130, 2010.
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
Separation Incentive Program Notification Form
Employee Name: Department Name: Supervisor Name: Date: Current Job Title:
I elect to participate in the Town of Marana Separation Incentive Program (SIP). I intend to separate my employment with the Town
of Marana via:
f ]Retirement Resignation
Effective Date (no later than December 31, 2010)
I understand that the election to separate my employment with the Town is irrevocable as of the close of business (5:00
p.m.) Apri130, 2010.
I understand that by participating in the SIP, I will receive the following incentives which I am not otherwise entitled to:
A. Sick leave accrual payout depending on the date of my separation in accordance with the following schedule:
Separation Date % of Sick Leave Pam
July 1-September 30, 2010 50%
October 1 -December 31, 2010 25%
B. Continuation of the Town of Marana basic life insurance for the employee only for one year if separating July 1
through September 30, 2010; or for six months if separating October 1 -December 31, 2010.
C. Severance pay in an amount equal to a percentage of annual base salary multiplied by length of Town service, to a
maximum of $50,000 if separating July 1 -September 30, 2010; or 50% of the same benefit if separating October 1 -
December 31, 2010.
D. For those employees who are eligible and elect coverage under COBRA or the ASRS or PSPRS retirement medical provider,
a medical premium subsidy of $150/month for up to 6 months if separating July 1-September 30, 2010, or $75/month for up
to 6 months if separating October 1-December 31, 2010, to assist with the cost of premiums under either the Town COBRA
coverage or the ASRS or PSPRS retirement medical coverage. The Town will not pay the subsidy for any other type of
health insurance coverage. The Town will pay the medical premium subsidy directly to the health insurance provider, not the
employee. If the employee discontinues coverage under COBRA or the retirement medical provider for any reason, the
Town will discontinue payment of the subsidy.
I select the following medical coverage option:
^ Waive ^ COBRA ^ASRS ^PSPRS
I select the following payout option for sick leave bank payout and severance pay:
^ Lump sum payout
^ Payout over pay periods (maximum of 12)
I understand that in order to receive the SIP incentives listed above, I will be required to enter into a separation agreement
with the Town of Marana. Final payment of all incentives will only be made upon the Town's timely receipt of a fully
executed Separation Agreement.
Name
Signature
{ooo i 9 ~ ab.~oc i 2 }
EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
SAMPLE SEPARATION AGREEMENT
This Agreement effects an agreeable separation of the employment relationship between
("EMPLOYEE") and the TOWN OF MARANA ("EMPLOYER"), as well as resolution of any claims, known
and unknown, now existing between the parties. The terms of this Agreement are as follows:
1. Resignation. EMPLOYEE agrees to voluntarily retire/resign from employment
with EMPLOYER effective (hereinafter referred to as the "Resignation Date").
2. Consideration. Upon execution of this Agreement, and in consideration for each of the
terms of this Agreement, EMPLOYER will provide EMPLOYEE with the following:
a. EMPLOYEE will be paid severance pay in an amount equal to % of EMPLOYEE'S
annual base salary as of the Resignation Date multiplied by EMPLOYEE'S years of
service with EMPLOYER as of the Resignation Date, [multiplied by 50% if separation date
between October 1 and December 31, 2010] for a total amount of $
b. EMPLOYEE will be paid for % of unused, accrued sick leave as of the
Resignation Date, calculated based on the EMPLOYEE'S annual base salary as of the
Resignation Date.
[F EMPLOYEE CHOOSES COBRA OR RETIREMENT PLAN
c. If EMPLOYEE elects health insurance coverage through EMPLOYEE'S retirement health care
plan under the Arizona State Retirement System (ASRS) [or the Public Safety Personnel
Retirement System (PSPRS),] EMPLOYER will pay [$150 or $75, depending on date of
separation] per month directly to EMPLOYER'S health care plan on EMPLOYEE'S behalf to
subsidize the cost of EMPLOYEE'S health insurance premiums for up to six months. If
EMPLOYEE discontinues coverage under EMPLOYEE'S retirement health care plan before
the end of the six-month period, EMPLOYER will discontinue payment of the subsidy as well.
-OR-
If EMPLOYEE elects COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
continuation coverage through EMPLOYER'S COBRA administrator, EMPLOYER will pay
[$ISO or $75, depending on date of separation] per month directly to EMPLOYER'S COBRA
administrator on EMPLOYEE'S behalf to subsidize the cost of EMPLOYEE'S COBRA
premiums for six months. If EMPLOYEE discontinues COBRA coverage before the end of the
six-month period, EMPLOYER will discontinue payment of the subsidy as well.
SELECT APPROPRIATE PAYMENT METHOD
d. The amounts payable under paragraphs a and b, above, shall be paid in a lump sum, less
applicable state and federal withholding taxes as required by law. Payment shall be made by
direct deposit to EMPLOYEE'S bank account currently on record with EMPLOYER within 5
business days after the Resignation Date or within 5 business days after this Agreement is fully
executed by all parties, whichever is later.
-OR-
d. The amounts payable under paragraphs a and b, above, shall be paid in the following manner:
in biweekly payments, less applicable state and federal withholding taxes as required by
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
law. The payments shall be made by direct deposit to EMPLOYEE'S bank account currently
on record with EMPLOYER on EMPLOYER'S regularly scheduled pay dates, beginning on
the next regularly scheduled pay date after the Resignation Date or the next regularly scheduled
pay date after this Agreement is fully executed by all parties, whichever is later.
e. If EMPLOYEE is deemed eligible for coverage by EMPLOYER'S life insurance carrier,
EMPLOYEE will remain on EMPLOYER'S life insurance plan at EMPLOYER'S expense at
one times EMPLOYEE'S annual base salary as of the Resignation Date for [six or 12 months,
depending upon date of separation] after the Resignation Date.
EMPLOYER does not make any representations as to the taxability of any item paid pursuant
to paragraphs a, b, c and e above, and EMPLOYEE agrees that shall have sole
responsibility and be liable for any federal or state taxes which may be required by virtue of
receipt of funds or benefits pursuant to this Agreement and agrees to indemnify and hold
harmless EMPLOYER against any and all liabilities including but not limited to taxes due,
penalties assessed for unpaid taxes or any costs or fees incurred by EMPLOYER should the
taxability of any part of the payments or benefits be challenged by any taxing authority.
3. Release and Covenant Not To Sue. EMPLOYEE agrees that will not initiate or
cause to be initiated against the TOWN OF MARANA or any of its current, past, or future agents, attorneys,
insurers, council members, elected officials, employees, subsidiaries, affiliated entities, or any person or entity
acting by, through, under or in concert with it, in both their personal and official capacities, (collectively
referred to as "Released Parties") any lawsuit, compliance review, action, grievance proceeding or appeal,
investigation or proceeding of any kind (collectively referred to as "claims"), or participate in same,
individually or as a representative or a member of a class, under any contract (express or implied), law or
regulation (federal state or local), including but not limited to claims pertaining to or in any way related to
employment or termination of employment with EMPLOYER. EMPLOYEE agrees that pursuant
to this Agreement, releases and forever discharges EMPLOYER and the other Released Parties from any
and all claims, demands, damages, causes of action, and any liability whatsoever, including but not limited to
claims on account of or in any manner arising out of EMPLOYEE'S employment or termination of employment
with EMPLOYER. By way of example only, and without limiting this release, EMPLOYEE releases
EMPLOYER and the other Released Parties from any cause of action, right, claim or liability under Title VII of
the 1964 Civil Rights Act, as amended, the Family and Medical Leave Act, the United States Constitution or
Arizona Constitution, the Arizona Wage Statute, the Arizona Civil Rights Act, the Arizona Employment
Protection Act, the Americans with Disabilities Act, and any other equal employment opportunity law or
statute, any due process or other constitutional theory, any Arizona statute, any federal statute, any common law
claim including wrongful discharge, implied or express contract, the covenant of good faith and fair dealing, or
any other claim in tort or contract arising under any theory of the law.
EMPLOYEE understands and acknowledges that this release forever bars from suing
or otherwise asserting a claim against EMPLOYER or the other Released Parties on the basis of any
event occurring on or before the effective date of this Agreement, whether the facts are now known or
unknown, and whether the legal theory upon which such claim might be based is now known or
unknown.
4. Provision for Unknown Claims. EMPLOYEE warrants that does not have any
claim, charge, or complaint, either formal or informal, pending against EMPLOYER or any of the other
Released Parties with any court, tribunal, administrative agency, governmental agency, or other such body.
EMPLOYEE further waives any right to monetary recovery should any administrative or governmental agency
pursue any claim on behalf.
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
5. Bar. EMPLOYEE agrees that this Agreement may be pleaded as a complete bar to any
action or suit with respect to any claim under federal, state or other law including, but not limited to, any claim
relating to employment or termination of employment from EMPLOYER.
6. Indemnification. EMPLOYEE agrees to indemnify and hold harmless EMPLOYER and
the other Released Parties from and against any and all loss, costs, damages or expenses, including without
limitation, attorneys' fees, arising out of a breach of this Agreement or the fact that any representation made
herein was false when made.
7. Denial of Liability. No provision of this Agreement shall be construed as an admission by
EMPLOYEE or EMPLOYER of improper conduct, omissions or liability.
8. Notice of Time for Reflection. EMPLOYEE acknowledges that this Agreement
constitutes written notice from EMPLOYER that should consult with an attorney before signing this
Agreement, and acknowledges that has fully discussed all aspects of this Agreement with
attorney to the extent desires to do so. EMPLOYEE agrees that has carefully read and fully
understands all of the provisions of this Agreement and that is voluntarily entering into this Agreement.
EMPLOYEE agrees that, as part of this agreement, has been provided with consideration in addition to
anything of value to which EMPLOYEE is already entitled. EMPLOYEE has also been provided with a
reasonable opportunity to review and consider this Agreement.
-OR (For Employee Over 40 Years ojAge):
[8. Notice of Time for Reflection. EMPLOYEE is advised as follows pursuant to the Older Workers'
Benefit Protection Act, because is over 40 years of age and in this Agreement waives
claims for age discrimination:
a. This Agreement constitutes written notice from EMPLOYER that EMPLOYEE should
consult with an attorney before signing this Agreement, and acknowledges that
has fully discussed all aspects of this Agreement with his attorney to the extent
desires to do so.
b. EMPLOYEE has carefully read and fully understands all of the provisions of this
Agreement and is voluntarily entering into this Agreement.
c. As part of this Agreement, EMPLOYEE has been provided with consideration in
addition to anything of value to which is already entitled.
d. Because is over 40 years of age, prior to waiving claims for age discrimination
that EMPLOYEE may have under the Age Discrimination in Employment Act,
may take up to forty-five (45) calendar days to consider this Agreement before signing
it.
e. In the event EMPLOYEE chooses to sign this Agreement prior to the expiration of 45
calendar days, EMPLOYEE acknowledges that voluntarily and knowingly agrees
to waive entitlement to take 45 days to consider this Agreement for the purpose
of expediting the payment outlined in Section 2, above.
f. EMPLOYEE may revoke this Agreement within seven (7) calendar days after
signs this Agreement. If EMPLOYEE wishes to revoke this Agreement, or
counsel will notes EMPLOYER in writing, addressed to Suzanne Machain, Human
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
Resources Director, at the Town of Marana Municipal Complex at 11555 W. Civic
Center Dr., Bldg. A3, Marana, AZ 85653, delivered on or before the expiration of the
revocation period.
g. If EMPLOYEE does not revoke this Agreement before the expiration of the seven-day
revocation period, the Agreement will become irrevocably effective and enforceable on
the eighth (8th) calendar day after EMPLOYEE signs it.
h. EMPLOYEE is aware is not waiving any rights or claims that may arise after the
date this Agreement is executed.
EMPLOYER'S exit incentive program applies to all of EMPLOYER'S classified and
unclassified employees who are retirement-eligible and/or benefit-eligible.
j. The eligibility factors for EMPLOYER'S exit incentive program are: eligible
employees must be benefit-eligible, defined as regular full- and part-time classified and
unclassified employees, with part-time employees working a normal schedule of at least
20 hours but less than 40 hours per week, and/or retirement-eligible, defined as
employees who have accumulated the necessary credited service in a public entity
retirement system or in the military service and/or attained the necessary age to qualify
for ASRS or PSPRS retirement.
k The time limits for this exit incentive program are that employees must notify
EMPLOYER of their decision to elect retirement or resignation under the program by
May 19, 2009, and employees must separate employment no later than August 31,
2009; additionally, eligible employees who are over the age of 40 will have forty-five
(45) days from the date they receive this Agreement to consider whether to sign it.
1. The attached charts provide the job titles and ages of all individuals eligible for the exit
incentive program (Exhibit A) and the job titles and ages of all individuals who have
elected to participate in the exit incentive program (Exhibit B).
EMPLOYEE understands that is waiving all rights and claims has or may
have under the Age Discrimination in Employment Act, 29 U.S.C. Section 626, et seq., and any other
federal, state, or municipal law or regulation relating to age discrimination.)
9. Return of Property. EMPLOYEE shall return all property of EMPLOYER in
possession, including, but not limited to, any keys for EMPLOYER'S facilities as of the Resignation Date.
10. Complete Agreement. This Agreement sets forth the entire Agreement between the
parties.
1 1. Choice of Law. This Agreement shall be construed, enforced, and governed by the laws of
the State of Arizona.
12. Severability. Should any provision of this Agreement be declared or determined by any
court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected
thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement.
13. Effective Date. This Agreement is effective upon execution by all parties.
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EXHIBIT A TO MARANA RESOLUTION NO. 2010-16
OR (For Employee Over 40 Years of Age):
[13. Effective Date. This Agreement is effective upon expiration of the seven-day revocation
period outlined in Section 8, above.]
***WARNING - DO NOT SIGN THIS AGREEMENT UNLESS YOU UNDERSTAND IT! THIS
AGREEMENT INCLUDES A WAIVER OF YOUR RIGHTS!***
TOWN OF MARANA EMPLOYEE
By
Gilbert Davidson
Town Manager
By:
Date: Date:
APPROVED AS TO FORM:
Jane Fairall
Deputy Town Attorney
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