Item 8AAGENDA ITEM # 8A
OCTOBER 8, 2007
CITY OF ATLANTIC BEACH
CITY COMMISSIONER MEETING
STAFF REPORT
AGEND ITEM: Employee "Severance" Package and Pay
SUBMITTED BY: Jim Hanson, City Manager
DATE: September 18, 2007
BACKGROUND: During the 07/08 Budget process, the City proposed the deletion on one
position and the change of another position. Based upon these actions, two
employees were projected to lose their jobs effective 10/01/07 with
approval of the 07/08 Budget.
OnlAbout Friday July 27, 2007, the proposed budget recommendations
became public knowledge and in order to provide the employees with an
opportunity to locate new employment, the City placed both employees on
paid Administrative Leave effective Monday July 30, 2007. The
employees were verbally advised that if the proposed budget was
approved, that their paid Administrative Leave and employment would be
ended September 30, 2007.
On July 30, 2007, a follow up letter was sent to both employees advising
them that "Based upon a proposed reorganization within the 2007/2008
budget that eliminates your position, you are being placed on paid
administrative leave through September 30, 2007. During this period of
paid administrative leave, you will receive all pay and benefits as
previously provided to you with the exception of Life Insurance and
Workers' Compensation." In addition, the letter advised the employees
that in order to prove them with employment assistance, the City had
contracted with a company that they could contact for outplacement
services.
During the budget workshops, this subject was discussed and the
Commission indicated that the City should provide one week of severance
for each year of service. As the employees were already on paid
Administrative Leave, the City considered that, as of October 1, 2007, the
employee with 5 years of service would have 9 weeks of paid
Administrative Leave and the employee with 15 years of service would
need to have his Administrative Leave extended until November 9, 2007 in
order to be provided with at least one week of paid Administrative Leave
far each year of service.
On August 29th, the employee with 15 years of service was advised that
the City was continuing his paid Administrative Leave through November
9, 2007, i. e. 15 weeks total.
AGENDA ITEM # 8A
OCTOBER 8, 2007
ISSUES: Several issues concerning severance pay have been raised as follows:
Tssue Z. Does paid Administrative Leave count as a severance benefit?
Issue 2. When does the severance period begin?
Issue 3. Is it equitable to provide an employee with 5 years of service 9
weeks of paid Administrative Leave and an employee with 15 years of
service with 15 weeks of paid Administrative Leave?
DISCUSSION: There are no Federal or State legal requirements to provide employees
with a severance package; however, the City believes that it is the "right"
thing to do.
Severance packages vary for company to company and range from no
severance to continuation of current salary or lump sum settlements, and,
may or may not include continuation of employee benefits. Most
severance packages are based upon years of service and/or position with
the company with a minimum and maximum amounts being provided.
Issue 1: The City believes that the paid Administrative Leave that was
provided to the employees effective July 30, 2007 should count as
severance as the employees last workday with the City was July 27, 2007.
Additionally, the City has continued employee benefits, to include health
insurance, since July 30, 2007.
Issue 2. The City believes that any severance considerations should begin
when the employees were place on paid Administrative Leave, i.e.,
effective July 30, 2007.
Issue 3. Using July 30, 2007 as the effective date of severance, the
employee with 5 years of service will receive approximately 9 weeks of
paid Administrative Leave and benefits through September 30, 2007. The
employee with 15 years of service will receive 15 weeks of paid
Administrative Leave through November 9, 2007 and, as health insurance
ends at the end of the month, will receive 18 weeks of health insurance
benefits ending on November 30, 2007.
Nate: In addition to above, employees may be eligible for unemployment
compensation from the State of Florida that the City will pay in the amount
of $275 per week with a maximum of $7,150.
BUDGET: Sufficient funds are included within the budget for this action.
RECOMMENDATION: None. This staffreport is being provided for information only.
CITY MANAGER: