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Agenda 06/09/2009 Item #16F 6 Agenda Item No. 16F6 June 9, 2009 Page 1 of 8 EXECUTIVE SUMMARY Recommendation that the Board of County Commissioners authorizes an offering of the Voluntary Separation Incentive Program pursuant to Collier County Ordinance No. 09-13, empowers the County Manager to implement the program, and authorizes the Chairman to sign the enabling Resolution. OBJECTIVE: To authorize an offering of the Voluntary Separation Incentive Program, empower the County Manager to implement this program, and authorize the Chairman to sign the enabling Resolution in an effort to assist the County Manager's Agency in meeting its financial goals. CONSIDERATIONS: The County Manager's Agency is committed to continuing efforts to identify cost-saving opportunities and implement programs that will successfully reduce recurring fiscal costs throughout the organization while minimizing the impact to our employees and each operating department. We continue to seek opportunities to streamline budget costs for FY2009 and in preparation for further budget reductions in FY2010. As a result, the County Manager wishes to provide an offering of the Voluntary Separation Incentive Plan with the intent of benefitting the organization as well as employees who elect to participate. _. Over the years, the County Manager's Agency has provided a comprehensive benefit package offering to its employees. Compensation is more than monetary, as it also includes medical, dental and other benefits that are afforded by employment with our agency. Under this plan, the County will continue to pay the full premium costs for the participant's health and dental benefits for a period of up to three years, or will provide a financial incentive in lieu of benefits if the employee so chooses. The County Attorney's Office may choose to opt-in to the program. DEFINITIONS AND GUIDELINES: The option to join the Voluntary Separation Incentive Program will be extended to any regular full- or part-time employee scheduled to work 30 or more hours per week who meets the eligibility criteria outlined by the Florida Retirement System for Pension Plan members, making them eligible to retire without penalty under FRS as of July 1,2009 or who will meet the FRS eligibility criteria no later than June 30, 2010. This does not mean that an employee must be a member of the FRS Pension plan. The conditions for eligibility are being applied to determine the group of employees who will be covered by this program offering. Based on current projections, approximately 154 employees of the County Manager's Agency would be eligible to participate in this program. The enrollment period is Wednesday, July 1, 2009 through Friday, August 14, 2009. Employees may not meet the FRS eligibility criteria to participate in the program until after this window closes, however, if they will become eligible before June 30, 2010 and wish to participate, they must still make the election within the enrollment period. Eligibility for FRS Pension is defined as the following: .:. Anyone enrolled in the Deferred Retirement Option Program (DROP). - .:. In Regular Class, Elected Officers Class and Senior Management Service Class Pension (defined benefit) Plan, anyone age 62 with a minimum of 6 years of service, or 30 years of service at any age under these categories. Page 1 of 4 Agenda Item No. 16F6 June 9. 2009 Page 2 of 8 .:. In Special Risk Class Pension service, anyone age 55 with a minimum of 6 years of special risk class service; OR anyone with 25 total years of special risk class service AND age 52; OR 25 years of special risk class service regardless of age; OR 30 years of any creditable service. The structure of the plan is as follows: (1) The duration of participation in this plan is up to three years. To participate, employees must meet the eligibility criteria in the period from July 1, 2009 through June 30, 2010. Once an employee has met the eligibility criteria and has confirmed enrollment, he/she will begin a notice period and will separate from service with the County at the end of that notice period. Generally, an employee's notice period to the County will be two weeks. Exceptions to the two week notice period will only be granted when approved in writing by the County Manager. In no event will an employee's notice period extend beyond July 15, 2010. (2) Eligible employees will have a period of forty-five (45) days in which to enroll. The enrollment period for this plan will begin on Wednesday, July 1, 2009 at 8am and will close at 5pm on Friday, August 14, 2009. Once enrolled in the plan, an employee will have a period of seven (7) calendar days in which they may revoke their choice or amend their enrollment election. After the revocation period, the election will stand, no changes will be allowed, and the election is considered final. The date the election is finalized will start the employee's notice ending their employment with Collier County. (3) Employees who are not eligible during the enrollment period under the conditions outlined above, but who will meet the FRS criteria by June 30, 2010 may also elect to participate in this program. In order to do so, the employee must provide written notice of their intent to leave the County during the enrollment period (between 7/1/09 and 8/14/09), with a resignation date effective on or before June 30, 2010. Once they have submitted their notice, they will be enrolled in the plan. After enrollment, the employee will have a period of seven (7) calendar days in which they may revoke their choice or amend their enrollment election. After the revocation period, the election will stand, no changes will be allowed, and the election is considered final. For employees in this group, the date on which he/she becomes eligible under FRS guidelines will start the employee's notice ending their employment with the County. (4) While eligibility to participate in this program is determined by criteria outlined by FRS, employees who elect to participate in this program are not required to retire under the FRS Pension Plan or withdraw funds from their FRS Investment account. (5) This will be a limited period- offering. (6) Eligible employees may elect from three options: (1) Medical & Dental insurance coverage for a period of three years, (2) an up front one-time cash payment in lieu of three years of coverage, or (3) a combination of both insurance coverage and a cash payment. (7) Cash payments are calculated by averaging the rates for single and family medical plan premiums and averaging the rates for all dental plan premiums. Employees electing a cash incentive in lieu of medical and dental coverage would receive a payment equal to Page 2 of 4 Agenda Item No. 16F6 June 9, 2009 Page 3 of 8 50% of calculated value in each of these plans, less applicable payroll taxes. Premium costs are defined as total combined costs for the employee and employer portions of coverage for medical and dental insurance. (8) A blended option will include medical and dental insurance coverage, together with a partial cash payment. Cash payments will be made at the time the insurance coverage ends. (9) The employee will be able to continue health and dental insurance coverage at their current participation level (Single or Family Medical and Single, Single +1, or Family Dental) as of the date the program takes effect. If the employee has waived his/her right to coverage by the County, he/she will have the option to elect medical & dental Single Coverage (under the Select Medical plan and Basic Dental Plan) or take the cash payment equal to 50% of calculated value as outlined in #5 above. (10) If an employee becomes re-employed by the County during the three year period and is covered by the County Benefit Plan, there will be no premium charges to the employee until that period ends if he/she elects to be covered by Medical and Dental insurance. If the employee elected the cash payment during that period, he/she would be eligible to re-enroll under the benefit plan, but would be required to pay 50% of the Medical and Dental premium costs. (11) Employees who elect the insurance coverage for a period of three years, or who would be covered for a period two years or more with a cash incentive to complete the third year will waive their rights to benefit continuation under COBRA, as the offering period exceeds that required by COBRA regulations. Employees electing insurance coverage for a period less than two years with cash incentives, or full cash incentive for three years will be eligible to continue participation in the group insurance plan should they choose to do so under COBRA. (12) Eligible employees who elect to participate in the program will be asked to enter into an Agreement and Release with Collier County. The Agreement will include the details of the program and specifically identify and explain the benefit that the employee selected under the program. The Agreement will also include a Release as required by the Age Discrimination in Employment Act (ADEA). This Release will place the employee on notice of his/her rights under the ADEA and ask the employee to consent that the Agreement and Release is entered into "knowingly and voluntarily." LEGAL CONSIDERATIONS: This item has been reviewed and approved by the County Attorney's Office. This item is not quasi judicial, and as such ex parte disclosure is not required. This item requires majority vote only. This item is legally sufficient for Board action. - CMG FISCAL IMPACT: Fiscal impact for this program will depend on many factors, including the number of employees who opt to participate, the salaries of these employees, whether the employee elects benefits continuation or the monetary incentive, and other separation costs. Based on current projections, approximately 154 employees of the County Manager's Agency would be eligible to participate in this program. In order to address the potential impact, two scenarios have been identified for review and are provided below for informational purposes. Page 3 of 4 Agenda Item No. 16F6 June 9, 2009 Page 4 of 8 The average fully burdened salary for a full time employee eligible to participate in this program, is approximately $77,100 per year. Based on this figure, total burdened personnel services costs per employee for a period of three years would be $231,300. The average liability should an employee elect coverage under the Medical and Dental insurance for three years would be approximately $10,250 per year, or $30,750 over a period of three years. This level of savings assumes the vacated position remains unfilled. A reduced amount of annual savings would be realized if the position is subsequently filled at a future time at a salary level less than that of the separating employee. Under this scenario, the County Manager's Agency could realize a personnel services cost savings of approximately $200,550 over a period of three years, or $66,850 per year per participating employee. If an employee elected the cash incentive plan in lieu of participation in the Medical and Dental insurance program, the liability would be greatly reduced. Again, the total burdened personnel services cost would be $231,300 for a period of three years. The value of the cash payment is $5,500 per year, which would provide the employee a one-time payment of $16,500, less applicable payroll taxes. Based on these figures, the County Manager's Agency could realize a personnel services cost savings of approximately $214,800 over a period of three years, or $71,600 per year per participating employee. The figures above represent an estimated cost savings; employees electing to participate will have will have several options available from which to choose, and actual cost savings to the County Manager's Agency will vary based on the incentive option selected by each participant, and whether positions vacated under the Voluntary Separation Incentive Program would remain unfilled. GROWTH MANAGEMENT IMPACT: None. RECOMMENDATION: That the Board of County Commissioners authorizes an offering of the Voluntary Separation Incentive Program pursuant to Ordinance No. 09-13, empowers the County Manager to implement this program and authorizes the Chairman to sign the enabling Resolution in an effort to assist the County Manager's Agency in meeting its financial goals. PREPARED BY: Amy Lyberg, Director, Human Resources Page 4 of 4 Page 1 of 1 Agenda Item No. 16F6 June 9, 2009 Page 5 of 8 COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS Item Number: Item Summary: 16F6 Meeting Date: Recommendation that the Board of County Commissioners authorizes an offering of the Voluntary Separation Incentive Program pursuant to Collier County Ordinance No, 09-13, empowers the County Manager to implement the program, and authorizes the Chairman to sign the enabling Resolution, 6/9/20099:00:00 AM Prepared By Amy Lyberg Employment Operations Manager Date Administrative Services Human Resources 5/21/200910:09:28 PM Approved By Amy Lyberg Employment Operations Manager Date Administrative Services Human Resources 5/22/200911 :56 AM Approved By Colleen Greene Assistant County Attorner Date County Attorney County Attorney Office 5/22/20094:09 PM Approved By Jeff Klatzkow County Attorney Date County Attorney County Attorney Office 5/27/200911 :45 AM Approved By Len Golden Price Administrative Services Administrator Date Administrative Services Administrative Services Admin. 5/27/20095:15 PM Approved By OMS Coordinator OMB Coordinator Date County Manager's Office Office of Management & Budget 5/28/2009 1 :38 PM Approved By Laura Davisson Management & Budget Analyst Date County Manager's Office Office of Management & Budget 6/1/20093:32 PM Approved By Leo E. Ochs, Jr. Deputy County Manager Date Board of County Commissioners County Manager's Office 6/1/20094:53 PM file://C:\AgendaTest\Export\131-June%209,%202009\16.%20CONSENT%20AGENDA\16F... 6/3/2009 Agenda Item No. 16F6 June 9, 2009 Page 6 of 8 RESOLUTION NO. 2009-_ A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, PROVIDING AN OFFERING OF THE VOLUNTARY SEPARATION INCENTIVE PROGRAM AND AUTHORIZING THE COUNTY MANAGER TO IMPLEMENT THE PROGRAM IN COMPLIANCE WITH COLLIER COUNTY ORDINANCE NO. 09-13. WHEREAS, the Board of County Commissioners of Collier County Florida, desires to provide an offering of the Voluntary Separation Incentive Program to certain eligible County employees; and WHEREAS, the Board of County Commissioners is committed to continued efforts to identify cost-saving opportunities to and implement programs that will successfully reduce recurring fiscal costs while minimizing the impact to County employees and departments; and WHEREAS, the Board of County Commissioners has enacted Ordinance No. 09- 13, an ordinance establishing authorization and procedures for the Collier County Voluntary Separation Incentive Program; and WHEREAS, the County Manager IS authorized to implement the Voluntary Separation Incentive Program; and WHEREAS, the Board of County Commissioners finds that implementing this Voluntary Separation Incentive Plan serves a valid public purpose. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that The Board of County Commissioners hereby authorizes an offering of the Voluntary Separation Incentive Program: 1. The Program is designed as a cost-saving opportunity for the County Manager's Agency due to anticipated budget shortfalls. Agenda Item No. 16F6 June 9, 2009 Page 7 of 8 2. The County Attorney's Office may choose to opt-in to the program as a cost- saving opportunity due to anticipated budget shortfalls. 3. This Program offering will only be available for a limited time frame, specificaJly Wednesday, July 1, 2009 to Friday, August 14, 2009. To participate, employees must meet the eligibility criteria in the period from July 1, 2009 through June 30, 2010. Employees must confirm participation in writing within this 45-day election period with the Human Resources Department, regardless of the date within this period when they become eligible. Once enrolled in the plan. an employee will have a period of seven (7) calendar days in which they may revoke their choice or amend their enrollment election. After the seven (7) day revocation period ends, the employee's notice to separate from County employment will start. 4. Generally, the notice period will be two weeks. Exceptions to the two week notice period will only be granted when approved in writing by the County Manager. In no event will an employee's notice period extend beyond July 15, 2010. 5. Program notice letters and required documentation will be provided to eligible employees on or before Wednesday, July 1,2009. 6. Eligible employees are those regular full-time and eligible regular part-time employees who meet the eligibility criteria outlined by the Florida Retirement System (FRS) for Pension Plan members, making them eligible to retire without penalty under the FRS. An employee may be a member of either the Pension or Investment Plan to be eligible, but is not required to be an FRS participant. 7. The benefit of this Program extends for up to three years. An eligible employee may choose from three incentive options. The options include (1) County paid medical and dental benefits for three years, (2) fifty percent of the cash equivalent of Agenda Item No. 16F6 June 9, 2009 Page 8 of 8 medical and dental benefits for three years, or (3) a combination that will include medical and dental insurance coverage, together with a partial cash payment. 8. Eligible employees who elect to participate in the Program will be asked to enter into an Agreement and Release with Collier County. The Agreement will include the details of the Program and specifically identify and explain the benefit that the employee selected under the Program. The Agreement will also include a Release as required by the Age Discrimination in Employment Act (ADEA). This Release will place the employee on notice of his/her rights under the ADEA and ask the employee to consent that the Agreement and Release is entered into "knowingly and voluntarily." 9. The County Manager shall be authorized to sign the Agreement and Release on behalf of Collier County. 10. This Resolution shall take effect immediately upon adoption. PASSED AND DULY ADOPTED by the Board of County Commissioners of Collier County, Florida, this day of ,2009. ATTEST: DWIGHT E. BROCK, CLERK BOARD OF COUNTY COMMISSIONERS COLLIER COUNTY, FLORIDA By: DONNA FIALA, CHAIRMAN Deputy Clerk Approved as to form and egal sufficiency: ~ olleen M. Greene Assistant County Attorney