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Retire-rehire policy recommended for Chardon
(by Joseph Koziol Jr. - September 09, 2010)
Retire-rehire policy recommended for Chardon
By JOSEPH KOZIOL JR.
So called "double dipping" or an opportunity to save tax dollars, depending on the point of view, is to be addressed at an upcoming meeting of Chardon City Council.
City Council's legislative committee recommended approval last week of a policy that would apply to all full-time Chardon municipal workers. It spells out guidelines for workers and the city to follow in future retire-rehire situations.
Although the matter was passed on to council with the committee's recommendation for acceptance, council in unlikely will not address the issue at its Sept. 9 meeting. Officials said it would be addressed at a future meeting.
"Double dipping," resident Ken Ovark said, questioning whether the new policy benefits the city or individual workers.
But city Finance Director Jeff Smock, who is eligible for retirement himself, said the bottom line is that the city could save up to $578,000 over six years with such a policy. He said that's based on 10 employees who would be eligible under the policy to retire in the next 16 months. "With this policy, it's a win-win situation," he said.
City Manager David Lelko, who co-authored the policy with Mr. Smock and also may be eligible, said the administration identified topics for council committees last spring and believe the retire-rehire issue is one that the committee should handle. He said officials believe it will be better to have a uniform policy for handling all retire-rehire applicants, rather than deal with them on a case-by-case basis.
Mr. Lelko said the policy is not focusing on individuals. He said the state has five pension plans for public employees to draw from when they reach a certain age or years of service.
Ohio law provides that employees may retire and be rehired to continue employment in the public sector, Mr. Lelko said.
The policy states that the "city may choose to rehire employees who have retired from public service provided employees under OPERS (Ohio Public Employees Retirement System) have a minimum of 30 years of service credit at any age or 25 years or more of service credit and be at least 55 years of age."
Mr. Lelko said, even if the city denied such a policy to its employees, there is nothing to stop it from hiring someone who retired from another municipality and applied for work in Chardon.
He said the city's policy would provide a cost savings while also acknowledging a benefit of keeping on a long-term employee. "At the end of the day, there's a benefit to the employee and a benefit to the city," he said.
Councilwoman Nancy McArthur said the policy does not require employees to retire if they meet the requirements set up by PERS.
Mr. Smock said the city is not obligated to rehire a person choosing to retire, and it's not likely to rehire someone who was not a "stellar employee."
The city manager is responsible for deciding such matters as the authority for most city hirings, Mr. Lelko said. Police department workers, although recommended for hiring by the city manager, require City Council confirmation, he said. Positions such as city manager, finance director and law director are at the sole discretion of council, he said.
Savings would come from other provisions in the policy. A rehired employee would not be eligible for merit increases nor longevity payments. Retired workers also receive one-third of their accumulated sick time at retirement. Mr. Smock said, while the remaining two-thirds could be used by the rehired employee, that person receives no other payments upon retirement for good.
The policy also states that all rehired workers can stay no longer than five years. Mr. Lelko said an employee could be terminated during that time if performance falls short of expectations.
Mr. Ovark said he believes that workers should be rehired on a year-by-year basis, rather than the five-year term.
But Mr. Smock said he personally would not accept those terms, because there would be no job security.
The policy allows for workers to "continue to earn vacation time as if the employee's employment had not been interrupted."
Councilman John Mallen said that, without such a policy, the city could continue to pay employees not ready to retire at ever increasing rates. "Benefits would accrue, and it would cost this city a lot of money," he said.
Mr. Smock said he would likely take retirement only if the policy is approved. "Without this policy, I'm not going to quit my job," he said.
He said he faces what many people do at his age. His house has likely lost value, as did his investment portfolio in the poor economy, and he cannot afford to retire, he said.
Mr. Ovark said bringing in a new employee also would create savings, as that person would start at the lower end of the pay scale.
But Mr. Lelko said it is unlikely that the city would hire someone with no experience for critical positions such as finance director. "To get someone with 30 years of experience would not be paying at step one" of the pay scale, he said.
Mr. Mallen said he has respect for city employees and believes they have and will continue to serve Chardon well under the policy. "In the six or seven months I've been on council, my respect for those running the city has done nothing but grow," he said.
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