HomeMy WebLinkAboutResolution 2010-102 amended separation incentive plan for FY 2011MARANA RESOLUTION N0.2010-102
RELATING TO PERSONNEL; APPROVING AND AUTHORIZING STAFF TO
IMPLEMENT AN AMENDED SEPARATION INCENTIVE PLAN FOR FISCAL YEAR 2011;
AUTHORIZING STAFF TO MAKE ADDITIONAL PAYMENTS TO FISCAL YEAR 2011
SEPARATION INCENTIVE PLAN PARTICIPANTS IN CONFORMANCE WITH THE
AMENDED SEPARATION INCENTIVE PLAN
WHEREAS the Town Council is authorized by A.R.S. § 9-240 (A) to control the finances
of the Town; and
WHEREAS on February 16, 2010, by Resolution No. 2010-16, the Town Council
approved implementation of the Separation Incentive Plan (SIP) for fiscal year 2011; and
WHEREAS on March 9, 2010, by Resolution No. 2010-25, the Town Council approved
implementation of an amended Separation Incentive Plan (SIP) for fiscal year 2011; and
WHEREAS the Town Council finds that further amending the SIP and authorizing staff
to implement the SIP for fiscal year 2011 as further amended 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 amended Separation Incentive
Plan (SIP) for fiscal year 2011 as described in the amended 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 amended Separation
Incentive Plan, to include the execution of separation agreements in conformance with the
provisions of the amended Separation Incentive Plan as described in Exhibit A.
SECTION 3. The Town's Manager and staff are hereby further directed and authorized
to make additional payments to participants in the fiscal year 2011 SIP in conformance with the
provisions of the amended Separation Incentive Plan as described in Exhibit A.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF
MARANA, ARIZONA, this 19th day of October, 2010.
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°°° Mayor d Honea
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ATTEST:
el .Bronson, Town Clerk
APPROVER AS TO FORM:
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Cass~y, Town Attorney
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v`t 0023453.DOC /}
SEPARATION INCENTIVE PLAN (SIP)
PROGRAM OUTLINE -FISCAL YEAR 2011
(AS AMENDED OCTOBER 19, 2010)
(Added text shown with double underlining and deletions shown with ~~'~° °~~+ +°°+)
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 SIl', as
described in this program outline, shall apply 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 March 31, 2010.
5. FY 2010-July 1, 2009 through June 30, 2010.
FY 2011-July 1, 2010 through June 30, 2011.
6. Incentives-one-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.
{00023456.DOC /} EXHIBIT A TO MARANA RESOLUTION 2010-102
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.) March 31, 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.) March 31, 2010.
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 March 9 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 March 9 -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.
Medical Plan Subsidv. 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 wh9 elect COBRA continuation coverage will receive a subsidy of $150 per
month for up to six months following their separation to offset the costs of COBRA
continuation coverage .This
subsidy shall be payable directly to the participant's health care plan or to the participant's
COBRA administrator. Eligible participants who elect coverage under the ASRS or PSPRS
regiment health care flan, will receive a subsidy of $187.50 ($150 plus 25%lper month for
u to six months following their separation to offset the costs of coverage under the
retirement health care plan This subsidv shall be pavable directly to the a~rticipant 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.
{ooo23as6.DOC /} EXHIBIT A TO MARANA RESOLUTION 2010-102
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 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 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 31, 2010
1. Sick-Leave Pa,~out. 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 who elect COBRA continuation coverage will
receive a subsidy of $75 per month for up to six months following their separation to
offset the costs of COBRA continuation coverage '
. This subsidy shall be payable directly to the participant's
health care plan or to the ap rticipant's COBRA administrator. Eligible participants who
el coverage under the ASRS or PSPRS retirement health care elan will receive a
subsidy of 593.75 (575 plus 25%1 per month for up to six months following their
separation to offset the costs of coverage under the retirement health care plan. This
ubsidv shall be savable directly to the participant. 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
{ooo23as6.noc /} EXHIBIT A TO MARANA RESOLUTION 2010-102
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 Pav. 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.)
March 31, 2010.
{ooo23a56.noc /} EXHIBIT A TO MARANA RESOLUTION 2010-102