January 27, 2004
SUBJECT: Fiscal Year 2003-2004 Employee Leave Donations Related to Layoffs – January/February 2004
REPORT IN BRIEF
This report recommends authorizing the voluntary donation by City employees of accrued vacation, paid time off (PTO) or paid leave in order to provide funding to defer the layoff and/or extend the COBRA reimbursement beyond the three months already approved by City Council for up to nine (9) employees. Eight (8) employees from the Department of Employment Development are scheduled for layoff on January 31, 2004, and one (1) employee in the Department of Public Works is scheduled for layoff on February 6, 2004. The employees scheduled for layoff are represented by the Sunnyvale Employees Association (SEA).
In addition, this report recommends authorizing the City to match funds on a 50/50 basis between employee donations and City contribution to defer the layoff of the affected employees, and/or extend the COBRA coverage reimbursement to a maximum City contribution of $40,525.
BACKGROUND
The reductions in the Department of Employment Development are due to the State of California not renewing several grant-funded activities for Fiscal Year 2003-2004. As a result, on December 2, 2003, the City Council adopted Budget Modification No. 20 to reduce the amount of Workforce Investment Act funds available to the Department of Employment Development. This Budget Modification included the elimination of ten (10) positions. Vacancies, internal placements and retirements have reduced the total number of employees to be laid off to a maximum of eight (8).
The layoff of the employee in the Department of Public Works is a result of one of the positions eliminated as part of the FY 2003-2004 Adopted Budget. The City has been unable to find placement for this employee.
DISCUSSION
Representatives of the City and SEA have met to discuss ways to address the current layoff situation. The parties have agreed to a process whereby employees may donate accrued leave (vacation, PTO, Paid Leave) to extend the pay status of the affected employees and/or extension of COBRA reimbursement. If this report is approved, the details of the mix between extension of pay status and COBRA reimbursement will be worked out with SEA.
Leave donations with a total value of $68,900 would provide a 30-day deferral of the layoffs of the nine (9) employees. An additional $12,150 would provide three more months of COBRA reimbursement. The total cost would be $81,050 ($40,525 employee donations, and $40,525 City contribution).
If employee donations exceed $40,525, although the City’s maximum contribution will have been reached, donations will continue to be accepted, with the amount of employee donations in excess of $40,525 applied, in weekly increments, towards further deferral of the dates of layoff.
FISCAL IMPACT
The donation of accrued leave hours is at no cost to the City, other than staff time to implement the program, and to process the donations. The amount contributed by the City, to a maximum of $40,525, would be paid from the Non-Recurring Events Reserve in the General Fund.
After the final calculations are made, staff will return to City Council with a budget modification request to appropriate the final City contribution amount and to provide Council with a status report.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.
ALTERNATIVES
1. Authorize the voluntary donation by City employees of accrued vacation, paid time off (PTO) or paid leave in order to provide funding to defer the layoff of nine (9) employees and/or extend COBRA reimbursement based on agreement with SEA; and authorize the City to match funding on a 50/50 basis to a maximum City contribution of $40,525.
2. Do not authorize the voluntary donation of leaves and/or do not authorize the City funding match.
RECOMMENDATION
Staff recommends adoption of Alternative No. 1; Authorize the voluntary donation by City employees of accrued vacation, paid time off (PTO) or paid leave in order to provide funding to defer the layoff of nine (9) employees and or to extend COBRA benefits; and to authorize the City to match funding on a 50/50 basis to a maximum City contribution of $40,525.
Prepared by:
Myriam Castaneda
Human Resources Supervisor
Reviewed by:
Mark Gregersen
Director of Human Resources
Reviewed by:
Mary Bradley
Director of Finance
Approved by:
Amy Chan
Acting City Manager
Attachment
1. Resolution