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12-20-2011 - Post Retirement Employment Agreement - City Manage - Item 10 (2).doc City of West Covina Memorandum A G E N D A ITEM NO. 10 DATE: December 20, 2011 TO: Andrew G. Pasmant, City Manager and City Council FROM: Chris Freeland, Deputy City Manager SUBJECT: POST RETIREMENT EMPLOYMENT AGREEMENT -CITY MANAGER RECOMMENDATION: It is recommended that the City Council accept City Manager Andrew Pasmant’s letter of retirement and approve a post-retirement employment agreement with Mr. Pasmant to serve as the City Manager for a period not to exceed one calendar year. DISCUSSION: For the past few months, City Manager Andrew Pasmant has been considering retirement from the City of West Covina. Given the current financial state of the City, his involvement in numerous City projects, and with significant challenges facing the City, Mr. Pasmant has concerns with leaving the organization without giving the City significant time to address these matters and to determine what the City Council would like to do with his position. With Mr. Pasmant’s experience working on various ongoing City projects, he provides expertise and experience that the City can still utilized until those pending matters are addressed. The California Public Employees’ Retirement System (CalPERS) allows retired employees to accept a temporary appointment as a “retired annuitant” as long as the employee in the position works less than 960 hours per fiscal year (July 1-June 30). By back filling the City Manager’s position with a temporary appointee, the City of West Covina can generate significant budgetary savings. The savings would be generated from the City not having to pay the employers share of the employees retirement, health care benefits, accrual of leave banks (i.e. vacation, sick leave, and floating holidays), deferred compensation, life insurance, etc. It is estimated that the appointment of a temporary appointed City Manager under the 960-plan would generate a savings to the City of West Covina of approximately $18,333/month ($220,000/year). Mr. Pasmant has expressed a willingness to work under the 960-plan until the City is able to address some of the pending matters facing the City and determine how to make a transition to a new City Manager over the course of the next year. Based on the current salary of the City Manager, the equivalent hourly rate under the 960-plan will be $108/hour. In addition, Mr. Pasmant will also be entitled the use of a city vehicle or $300/month auto allowance, as afforded to other management employees, and the continued use of City equipment and supplies as currently allowed. Attached is Mr. Pasmant’s letter of retirement (Attachment #1) that will become effective on December 30, 2011, and includes a proposal for the City of West Covina to hire him under a 960-plan, which would generate a savings to the City. If the City Council does not wish to hire Mr. Pasmant on the 960-plan, he has offered to extend his retirement date on a status quo basis through a portion of 2012. If the 960-plan is approved, it will become effective on December 31, 2011. Mr. Pasmant was appointed West Covina City Manager in September 2001. OPTIONS: The City Council has the following options: Accept City Manager Andrew Pasmant’s letter of retirement and approve a contract amendment to hire him as retired annuitant for a period not to exceed one calendar year; or Not enter into a post-retirement agreement with Mr. Pasmant and request that he continue to operate under his existing employment contract. Provide alternative direction. FISCAL IMPACT: The appointment of Mr. Pasmant as a retired annuitant will generate a savings of approximately $18,333/month ($220,000/year) in savings to the City of West Covina, generated from the elimination of management benefits afforded to a benefited City Manager position. Prepared By: Chris Freeland Deputy City Manager Attachment: Andrew Pasmant’s Letter of Retirement Please Note: A copy of the draft post-retirement agreement was not available at the time this report was drafted. It will be shared with the City Council and public prior to the December 20, 2011, City Council meeting.