City Council Meeting - FINAL

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Meeting Date: 06/01/2021  

Consideration and Approval of a Contract:  The Employee Staffing Agreement with Educational Services, Inc. for the phased retirement program through a Cooperative Purchase Contract with the Mohave Cooperative Services in an annual amount not to exceed $800,000, plus applicable taxes.
  1. Approve the Employee Staffing Agreement with Educational Services, Inc. ("ESI") for an annual amount not to exceed $800,000, plus applicable taxes; and
  2. Authorize the City Manager to execute all necessary documents.
Executive Summary:
The phased retirement program offered by ESI is a tool for succession planning within the municipal organization. It allows for City employees with extensive lengths of employment additional time to share their knowledge with other City personnel prior to leaving the organization or to finish high priority projects.
Many times, the transfer of knowledge does not occur prior to retirement because the employee's retirement date may have come earlier than expected or the employee has been too busy with day-to-day operations to focus on the transfer of knowledge. This additional amount of time dedicated to the transfer of knowledge is incredibly important to the success of the municipal organization and service to the community.
All employees eligible for retirement with Arizona State Retirement System ("ASRS") and demonstrating above average performance would be eligible for the phased retirement program under ESI. In the request, the employee specifies what transfer of knowledge would occur and/or what high priority projects would be completed within the contract period. There must be a recommendation from the Immediate Supervisor and an agreement between the Immediate Supervisor, Division Director, Deputy City Manager and the employee regarding the projects and/or succession steps that will be completed. The contract period would range from three months to a year with the ability to extend for a maximum of one more year.  A division may request an extension if a recruitment process was not successful, there were changes in the budget situation, or a project has experienced unexpected or uncontrollable delays. ESI provides phased retirement services to cities, counties and state agencies throughout Arizona. This concept allows retirement eligible staff to retire from ASRS and return as a worker to their same position in the City or another one for which they are qualified. This opportunity is available under the current ASRS Return to Work rules. The worker would be compensated seventy-five percent of their existing salary, sick leave, a reduced number of vacation hours and pay for all City recognized holidays. The City recognizes savings of thirty to forty percent per worker due to the reduction in the employee's salary, FICA, Medicare, State Retirement, Unemployment and Workers Compensation expenses and the elimination of group insurance. The savings remains in each division's budget to offset the exiting employee's retirement payout first and then may be used for other budgetary expenses.
Financial Impact:

This purchase provides the City with the opportunity to retain key personnel while saving money. The City will pay seventy-five percent of the employee's salary plus a four percent service fee to ESI. The City will save on employee related expenses and group insurance for each employee resulting in the minimum savings of thirty percent for each employee leased back through the phased retirement program.

Policy Impact:
The approval of this Employee Staffing Agreement authorized by the Cooperative Purchase Contract from Mohave Cooperative Services does not impact any existing City policies.
Connection to PBB Key Community Priorities/Objectives & Regional Plan:

The approval of this Employee Staffing Agreement authorized by the Cooperative Purchase Contract from Mohave Cooperative Services supports the retention of qualified staff for an additional period after the employee has chosen to retire in order to create success for the organization and leave behind tools for those who succeed after them. This supports the personnel related Council Goal and the Team Flagstaff Strategic Plan.

Has There Been Previous Council Decision on This:
Options and Alternatives:
  1. Award the Employee Staffing Agreement for phased retirement services authorized by the Mohave Cooperative Services Cooperative Purchase Contract.
  2. Do not award the Employee Staffing Agreement for phased retirement services authorized by the Mohave Cooperative Services Cooperative Purchase Contract.
  3. Advise staff to conduct a formal solicitation process in lieu of utilizing the Cooperative Purchase Contract with Mohave Cooperative Services.

The Procurement Department located multiple cooperative purchasing contracts but identified the Mohave Cooperative Services Cooperative Purchase Contract as the lowest price to the City for the Employee Staffing Agreement.

Community Benefits and Considerations:
The community benefits from the transfer of institutional knowledge and the completion of high priority projects. The phased retirement program provides valuable transition time, so the City may retain the worker's knowledge and expertise through transferring this information to another employee within the municipal organization. Utilizing the worker's knowledge and expertise to finalize high priority projects provides a positive benefit to the community in terms of time and outcome.
City Co-op Contract
Coop Award Letter
Coop Extension
Mohave RFP with Terms & Conditions of Contract


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