MEMORANDUM 06-183

TO: Mayor Hornaday and Homer City Council

THRU: Walt Wrede, City Manager

FROM: Sheri Hobbs, Personnel

DATE: October 3, 2006

RE: Retiree Rehire Program

Under the 2001 HB242 the City was allowed to hire PERS retirees. They could continue to keep their retirement benefits while working full time for the City. This allowed the City to retain and hire experienced employees. Depending on the date employees were hired HB242 ended for some on June 30, 2005 others December 30, 2006. We currently have 1 Police Officer and 1 Jail Officer in the retiree rehire program that will end December 30, 2006.

We are experiencing difficulties hiring police officers. In 2005 we advertised three times and received less than 15 applications each time. In 2006 we have advertised twice and received 15 applications each time. Of those applications received in 2005 and 2006 several withdrew for other jobs, failed the written test or background check. We often end up with no qualified applicants. The job requirements for a Police Officer are two years of public contact and knowledge of criminal codes. Applicants must pass a written test which is the basic police test administered by many departments across the country. Criminal, character and reference checks are also completed. We have also experienced difficulty hiring Jail Officers.

In 2005 the Legislature realized the continuing difficulty cities were having recruiting. HB161 was enacted which allowed cities to continue a new retiree rehire program until 7-1-09 but only with strict guidelines. The intent of the guidelines is to be ensure if other qualified applicants apply they would be hired before a retiree.

The Chief of Police has requested Administration to obtain authorization from PERS to implement the new retiree rehire program under HB161.

There is a savings to the City as retiree PERS rates are currently at 4.6% instead of 17.92% for FY07. If the PERS rate increases to 35.96% for FY08 the savings will double.

RECOMMENDATION: Approve Resolution 06- .

FISCAL IMPACT: Estimated annual PERS cost savings of $6,000. (Based on $45,000 salary at 17.92% PERS rate, 4.6% PERS retiree rate.)