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Home My WebLink About15.E.2. Severance Provisions for Natural Resource Director IS:E.;L, CITY OF SHAKOPEE Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Severance Provisions - Natural Resources Director DATE: July 1,2004 INTRODUCTION: The Council is asked to consider additional severance provisions for Mark McQuillan, the former Natural Resources Director. It would involve amending the current Personnel Policy regarding involuntary separations of long-tenured employees. BACKGROUND: The position of Natural Resources Director was eliminated due to restructuring on June 4th. The actual end of job duties was May 4th, but in recognition of the fact that the incumbent, Mark McQuillan, had served the City for 23 years, the Council did act on staff recommendation to provide an additional 30-days of compensation, and $500 for outplacement services. That additional 30 days was a recommendation based upon a survey of other cities, and what those cities did for employees whose positions were eliminated due to restructuring or other involuntary action, that was not job performance related. The majority of cities did not treat "downsizing" any differently than if the employee voluntarily resigned or retired. A few cities provided some additional benefits, and that was upon which the Shakopee action was recommended. Mr. McQuillan has since contacted the City and has asked that additional severance benefits be considered. His proposal to us was based upon a request to increase the amount of buyback of his unused sick leave (the City's standard policy is 45%). He also asked for additional outplacement assistance, indicating that the $500 was inadequate for sorts ofthings needed to find another job in his field. He felt $3500 to $5000 was more realistic. DISCUSSION: Mark did serve the City for 23 years, and we do recognize that finding a job in his line of work may not be immediate. I am concerned, however, about the precedent that will be set by changing the sick leave buy back policy - that is a source of discussion with other employee groups. After meeting with Mr. McQuillan, it is instead proposed that the City adopt a practice based more on the private sector, in which involuntarily separated employees (who are not discharged because of performance issues} would receive a week of pay for each year of service. The City ofBurnsville is the only city that we could find in our survey that provided something similar to that. Burnsvilleprovides a week of severance for each year of service, up to 12 years. If the City of Shakopee was to adopt the Burnsville policy, Mr. McQuillan would receive an additional 8 weeks of pay (assuming that the 30-days which he was previously granted equals 4 weeks). Based upon his rate of pay, that would be as additional $11,560. This would be a lump sum, and other benefits (such as vacation accrual or health insurance payments) would not accumulate during that eight-week period. In addition, after looking at the numbers that he presented, I am comfortable with recommending $3500 for outplacement services. In exchange, Mr. McQuillan is agreeable to signing a document releasing the City of any further claims. By State law, Mr. McQuillan would have 21 days in which to consider this offer; once signed, he has 15 days in which to rescind his agreement. PERSONNEL POLICY AMENDMENT: Such a change should be considered for all future involuntary separations for long-term employees. After some discussion with staff, it is recommended that this be available for employees who have served the City of Shakopee in excess of 12 years. If the Council is supportive ofthis, it should direct staff to bring back an amendment to the Personnel Policy referencing these provisions. BUDGET IMPACT: The total additional amount that would be offered is $14,560 and would come from the Natural Resources budget. It may impact the amount of consulting work that may be coming from this budget during FY 04. RECOMMENDATION: I recommend that staffbe directed to present this proposal in written form to Mark McQuillan, and provide to him a Release to sign. In addition, the City Personnel Policy should be amended to accommodate long-term employees who are involuntarily separated (not for reason of performance issues), staff should be directed to amend the Personnel Policy for consideration by the Council at a future meeting. Further, I recommend that the City Personnel Policy be amended to allow for outplacement assistance, which while recommended to be $3500 for this position, maybe adjusted from time-to-time, based upon the type of position - some positions will need more career assistance than others. Note that this would not be a direct payment to the separated employee, but instead, would go into an account upon which payment could be drawn. ACTION REQUIRED: If the Council concurs, it should, by motion, approve the additional eight weeks of a lump sum severance payment, and deposit of an additional $3,000 (for a total of$3,500) into an outplacement account, for the benefit of Mark McQuillan. Further, it should direct staffto bring back an amendment to the City's Personnel Policy, reflecting the discussed severance provisions for involuntarily separated long-term employees, and outplacement assistance provisions. ~~~ut# Mark McNeill City Administrator MM:th CC: Marilyn Remer Mark Themig