Consideration and Approval of Cooperative Purchasing Contract:  Contract phased retirement program through cooperative purchasing agreement with Mohave Cooperative.

The phased retirement program 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 and demonstrating above average performance would be eligible for the phased retirement program.  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.  Some reasons why a division may request an extension could be the recruitment process was not successful, changes in the budget situation, or a project has experienced unexpected or uncontrollable delays.

SmartworksPlus provides phased retirement services to cities, counties and state agencies throughout Arizona.  This concept allows retirement eligible staff to retire from Arizona State Retirement (ASRS) and return as a leased employee 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 leased employee 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 leased employee 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.

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 SmartworksPlus.  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.

The approval of this contract does not impact any existing City policies.

The approval of this contract 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.

No.

1. Award the contract for phased retirement services through a cooperative purchasing agreement with Mohave Cooperative.
2. Do not award the contract for phased retirement services through a cooperative purchasing agreement with Mohave Cooperative.
3. Advise the City to conduct a formal solicitation process in lieu of utilizing the cooperative purchasing agreement with Mohave Cooperative.

Procurement located multiple cooperative purchasing agreements and identified the Mohave Purchasing Cooperative as the lowest price to the City.
 

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 exiting employee's knowledge and expertise through transferring this information to another employee within the municipal organization.  Utilizing the exiting employee's knowledge and expertise to finalize high priority projects provides a positive benefit to the community in term of time and outcome.

Inform.