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1b - Santa Clara Grand Jury - Municipal Rehiring of PensionersMEETING DATE: 9/6/2011 ITEM NO: ! COUNCIL AGENDA REPORT DATE: SEPTEMBER 1, 2011 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER SUBJECT: APPROVE RESPONSE TO THE SANTA CLARA COUNTY GRAND JURY REPORT REGARDING MUNICIPAL REHIRING OF PENSIONERS RECOMMENDATION: Approve response to the Santa Clara County Grand Jury report regarding the municipal rehiring of pensioners. BACKGROUND: On June 16, 2011, the Santa Clara County Civil Grand Jury issued a report regarding the practice of rehiring pensioners. Rehired pensioners are individuals who have retired from public service, are collecting a pension for their prior work and subsequently return to a public agency for hourly employment. The report directs individual cities to respond to specific findings and recommendations. DISCUSSION: The scope of the study on rehiring pensioners included the County of Santa Clara and the 15 cities within the county. The Grand Jury acknowledged that the public perception is that the rehiring of pensioners is a bad and costly practice, citing recent press coverage which implied systemic abuses. On the basis of the Grand Jury's work and report, however, it is their conclusion that the rehiring of pensioners is a prudent and economical practice. In the report, the Grand Jury concludes, "...rehiring of pensioners is a good business decision helping agencies to fulfill short- term or urgent work assignments where specialized skills, typically amassed over the career of a retiree, are needed. In some cases, retirees also have the capacity to work twice as fast as a new hire, thus saving agencies time...it appears hiring managers are making generally good business decisions in rehiring pensioners." The Grand Jury found that of the 26,000 employees in the County and 15 cities, rehired pensioners comprise 1.55% of the workforce for an average of nine hours worked per week for all agencies combined. For the Town of Los Gatos, the average hours worked by pensioners is at the county -wide average of nine hours per week. PREPARED BY: RUMI PORTILLO HUMAN RESOURCES DCT012' �1� iG�� Reviewed by: /( �.) Assistant Town Manage 1 Town Attorney Finance N::MIGR`.AdminWnrkFiles•201 I Council Rcpons``,Gmnd Jury Response Rehiring of Pensioners 9-I-I Ldoc PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: APPROVE RESPONSE TO THE SANTA CLARA COUNTY GRAND JURY REPORT REGARDING MUNICIPAL REHIRING OF PENSIONERS SEPTEMBER 1, 2011 The following are responses to the Grand Jury's specific findings and recommendations: Finding 1: In spite of public opinion, there are situations that warrant rehiring pensioners and often it makes good business sense to do so. Town of Los Gatos Response: Agree Recommendation 1: If the Town desires to end the practice of rehiring of pensioners, they should make that official by means of a policy decision. Town of Los Gatos Response: The recommendation has been implemented. The Town does not desire to end the practice of rehiring pensioners, and should it desire to do so, it will make it official by means of a policy decision. Finding and Recommendation 2: Applies to City of Santa Clara only. Finding 3: The fifteen towns and cities Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale and the County may be inadvertently creating a demand to rehire pensioners because the public sector retirement age is relatively young at 50 (police and fire) or 55 (administrative positions). Town of Los Gatos response: Agree Recommendation 3: The Town should pursue a higher retirement age with its public sector unions and associations. Town of Los Gatos Response: The recommendation has not yet been implemented but will be implemented in the future, The Town Council has authorized the adoption of a two-tier pension system for all newly hired employees pending completion of any meet and confer obligations. Decisions have been reached for three of the Town's employee groups and the Town is continuing to pursue this objective with the two remaining employee groups. CONCLUSION: Staff recommends council approve the responses to the above reconunendations. Staff will prepare a letter to the Grand Jury to document the Town's responses as required. FISCAL IMPACT: There is no fiscal impact for approving the responses to the Civil Grand Jury report. Attaclunents 2010-2011 Santa Clara County Civil Grand Jury Report, "Rehiring of Pensioners: Bad Policy, Good Business, or Both?'' RECEIVED JUN 13 2011 TOWN MANAGER June 10, 2011 Honorable Joe Pirzynski Mayor Town of Los Gatos Town Hall 110 East Main Street Los Gatos, CA 95030 Dear Mayor Pirzynski and Members of the Town Council: COPY Pursuant to Penal Code § 933.05(f), the 2010-2011 Santa Clara County Civil Grand Jury is transmitting to you its Final Report, Rehiring of Pensioners: Bad Policy, Good Business or Both? Penal Code § 933.05(f) A grand jury shall provide to the affected agency a copy of the portion of the grand jury report relating to that person or entity two working days prior to its public release and after the approval of the presiding judge. No officer, agency, department or governing body of a public agency shall disclose any contents of the report prior to the public release of the final report. Leg. H. 1996 ch. 1170, 1997 ch. 443. This report will be made public and released to the media on Thursday, June 16, 2011, at 1 P.M. if you have any questions please contact Gloria Alicia Chacdn at 408-882-2721. Sincerely, ?&4C�j EENEI.POPENHAG Foreperson 2010-2011 Civil Grand Jury HIP:dsa Enclosure cc: Mr. Greg Larson, Town Manager, Town of Los Gatos SUItIZIiq<coi!Rt t3uun^::: 1`>1 Nc ert! 1!;.— 2010-2011 SANTA CLARA COUNTY CIVIL GRAND JURY REPORT REHIRING OF PENSIONERS: BAD POLICY, GOOD BUSINESS OR BOTH? Summary Recently reported public perception would suggest that municipalities engage in the practice of hiring numerous double dippers —persons who collect a government pension and concurrently receive government salary/payment for work. Further, public perception seems to be that this is a bad and costly practice and is a barrier to employment opportunities for new candidates. The Grand Jury sought to understand how Santa Clara County (SCC) and the fifteen SCC cities approach rehiring retirees, the number of rehired pensioners (RHPs) presently on payroll, and the pros and cons of this practice. The Grand Jury found that all cities and SCC rehire retirees, but in very small numbers relative to the total number of employees: of nearly 26,000 employees countywide, -1.6%, or 404, are RHPs who work, on average, nine hours/week. Cities and SCC limit rehired retirees to 960 hours in a fiscal year, which is less than half-time. In Grand Jury interviews, Human Resources (HR) managers outlined the costs of hiring a regular full - or part-time employee versus rehiring retirees and the advantages and disadvantages of this practice. The Grand Jury found one case of possible abuse. Otherwise, rehiring retirees appears to be a prudent way to secure highly skilled talent for short-term tasks at a relatively low cost to economically strapped municipalities and does not in itself appear to be a barrier to hiring new workers. Background Santa Clara County and all of its fifteen cities rehire pensioners. Table 1 shows the data for the present fiscal year, July 2010 - June 2011. In all cases, year-to-date (YTD) numbers reflect fiscal year to date. The percent of RHPs as a function of total persons employed in the county ranges from 0 to 7.33% of total employees, and is just 1.55% countywide. Based on a 40-hour workweek, each RHP, on average, accounts for less than one -quarter of a full-time employee, working a countywide average of nine hours/week. Table 1: Countywide survey of public sector agencies shows the number of rehired pensioners compared to full-time Municipality Campbell eupertm? Gilroy Los Altos Hills 'Los -Gatos_= Milpitas steno Morgan Hill NAP. Palo Alto Santa Clara Sunnyvale Totals Number of Number of RHPs Employees Hired FYTD 155.0 237.0 21.0 381.0 170.4 1,018.6 874.0 832.0 25,997.7 1 5 1 1 5 58 37 18 404.0 Avg or RHPs as a `. actual percent of r RHP total FTEs `. Hours F- YTD 0.65% 2.11% 4.76% 0.26% 2.94% 5.69% 4.23% 2.16% :55% 960 197 213 960 2,242 28,351 277 3,834 112,479 Average''". RHP hrsiwk (based on 34 wits)' 18 6 6 18 12 14 8 7 Methodology The Grand Jury interviewed SCC HR, finance and benefits managers, as well as a sampling of HR managers of large, medium and small population cities, to determine the HR practices of rehiring pensioners. The Grand Jury also surveyed all HR managers to gather specific data on the subject. Discussion All HR Directors/Managers interviewed confirmed they rehire a limited number of RHPs for various reasons as noted below: • Continuity of service, such as in the following situations: - When a retiree provides very short notice of retirement (e.g., a family emergency), to allow time to recruit or succession plan - Until replacement is hired or fully trained 2 • Training, such as in the following situations: - When lack of time or union rules prevent transition training of a new hire from occurring prior to the departing individual's last day. - When remaining employees need to learn a job -specific concept or procedure that is well known by the retiree. • Specific -knowledge or time -dependent projects, such as for the following: Where an IT system being phased out has not been fully retired. No need to recruit, hire and train on a system that will not be in use, but needs to stay running until the new system is in place. - Where a detective is retired, but a case they investigated is now coming up for trial. To complete a project started prior to retirement Financial reports, with a short and urgent timeframe and that require very specific knowledge to complete. To complete a short—term assignment or project that a retiree can perform quickly because their knowledge allows them to "hit the ground running" and/or is short enough duration that it does not warrant hiring a full- or part-time employee. • Seasonal, part-time work (e.g., librarians, parks and recreation lifeguards) Limitations on Rehiring Pensioners The two pension plan providers to the cities and SCC, California Public Employees Retirement System (CaIPERS) and the Federated Cities Retirement System, require contributions to the pension fund to resume if a rehired retiree works more than 960 hours in a fiscal year. To avoid this expense, all agencies limit RHPs to 960 hours per year if they return to work for an agency that has the same pension plan as the retiree's plan. San Jose's pension plan is managed through the Federated Cities Retirement System, and carries the same 960 hours limit. It is possible for a retiree from an agency with one pension system to be rehired by an agency with a different pension plan without a limit on hours. A typical accounting calendar assumes 2080 working hours per full-time employee. 960 hours is 46% of a full-time position, which is less than half- time. Most agencies will not authorize a requisition to add a position or to fill a vacant position unless workload demand is closer to 100% of a full-time person equivalent (FTE). Some agencies prevent a person retiring on disability from being rehired, and some agencies prohibit them from returning to the position they retired from on disability. Occasionally there is a circumstance where an RHP is hired to fill a position that has a different retirement age. In this circumstance, CaIPERS requires a 60 — 90 day cooling - off period before the RHP is permitted to end retirement, just to be sure that the RHP truly wants to end this "time off" benefit. 3 Wait Period When a skilled employee retires, departments naturally feel the loss of that skill. Retraining or rehiring a new employee is time consuming. So it is understandable to want to immediately rehire a retiree. The City of San Jose has a 30-day waiting period preventing retirees from being rehired. This period is designed to test a rehiring department's dependency on a retiree by determining whether a department is actually able to perform the retiree's tasks in their absence. While a wait period makes sense in performing routine work, it does limit an agency from taking advantage of a highly skilled retiree to perform a time -critical task during the first 30 days of their retirement. For retirees seeking to return to work as independent contractors, there is a wait period (typically two years) to ensure fair competition with other bidders. Typically, competitive bids are required in most purchasing departments; however, sole source justification situations can occur. In this case, buyers justify purchasing a resource without competition because that resource has a very unique skill not possessed by competitors or when work to be done has an urgent deadline that going out for competition would prohibit meeting. Written Procedures With the exception of San Jose, agencies interviewed do not have formal written procedures covering rehiring of retirees; however, all have approval and periodic review processes. In the approval process, HR and business manager approvals are required if a manager requests to bring a retiree back on payroll. A key reason for this approval is to determine whether a rehire is a retiree; if so, the 960 hours limit is put in place. Most HR and business managers interviewed confirmed they also receive a regular report detailing hours of RHPs, and closely monitor the use of RHPs to ensure the 960 hours limit is adhered to. Some agencies have a pre -hiring step that first asks existing employees if they want the overtime work assignment an RHP would be recalled to perform. If existing employees turn down the assignment, managers are then free to rehire retirees for short -duration projects. Succession Planning Because managers typically rehire pensioners to perform the same work they did before retiring, the question of succession planning arose during Grand Jury interviews. Succession planning is a process whereby departments plan for who will be promoted into key positions in the event a person currently performing such critical work departs. In most cases, interviewees reported succession planning is done ad hoc at best. The reasons why formal succession planning does not happen were somewhat consistent: in this economy, there is no need to succession plan because agencies are looking for ways to eliminate the vacated position. Particularly in today's tough economy, agencies reduce costs through attrition, redistributing work to remaining employees. Short term, if there is a delay in redistributing tasks, a retiree may be rehired to help bridge the transition. 4 The Grand Jury applauds agencies for rethinking how work may be done and who best to accomplish the tasks. As long as employees are not overly burdened with added responsibilities such that their performance suffers, it can be a good business decision to combine roles where it makes sense, e.g., San Jose's combining the directorship of the Airport and Team San Jose. Driven by budget woes, such creative thinking can create a healthier and higher performing work group. To prepare workers for added responsibilities or to provide a broader view of the agency's work, agencies offer general development programs such as formal and informal mentoring and speed coaching for employees with interest. Some agencies conduct leadership development for a selected group of high potential employees to help transition them to higher -level responsibilites when those opportunities open up. How Pay is Determined and What Benefits RHPs Receive If brought back, an RHP's hourly wage is not to exceed their wage at retirement; however, in all cases the pay rate is that of the job the RHP will fill. For example, if the job the RHP is to perform is in a lower salary range than the one they retired at, the rehired pensioner is paid in the lower salary range. RHPs do not receive fringe benefits. Typical employer contributions for regular and RHPs are illustrated in Table 2. Hiring departments do enjoy a cost savings in not having to pay fringe benefits to RHPs. Table 2: Employers enjoy cost savings when rehiring pensioners: RHPs receive wages but no fringe benefits. Employment Cost Categories Paid to regular, full-time Employee? Yes Paid to Re -hired Pensioner? Yes Wage lac N" i { ii ' 2 R it t'r .i Ilfi' x fi} ic��psu�ance,i�n�"���?�����„�;��`��yr avu ..s-. a i✓ W "'i �yl ui �lega.a�14` d�t � wu ,c ��� Dental Insurance Yes No ics Q xtGrs��F k t!. Y-i'yU:. +3-'v ,� 7 H zs-i. r 3 �r vytsJO afe l iu ar ce �<t z°r f-0 LN t �Sre.. u S x� , s f5' >• ^A. �, N .4. PERS/Pension Yes No TeEll Af 4 f <�iaJ 9eettr4GoRt bfiiftasrct r?P r 1 3i, Y'�No N %AY oik:�,L Personal Time Off (Vacation, Holidays, Sick pay) Yes No Lo e? DAM Y,:. -., a%s,r bs °#. Employee Assistance Program Yes No fi fY 1%ia' 14 fi �.. �fip St#F t la uar s� ,. ?? 1 ,i .'4J �A f • f ye n & _ i... 7r t Y`!� il k o.° es, Asa+ Certification pay Yes No ..> Yw�,m kt'HR k"f a'A q 1W ailr s c 1ar� z 5 w { les r� ri: J a Ys�' t t �3 dKQ Medicare Contribution Yes No Disadvantages of Rehiring a Retiree While there are good business reasons to rehire pensioners, some personnel concerns are worth considering when rehiring a pensioner: • Who is the boss? It can be challenging for the newly hired (replacement) person to establish authority if a retiree is still in the work environment • Will old ways impede new ideas? If an RHP is present while reorganization is taking place, they may stand in the way of change • Double-dipping? Perception of taking advantage of taxpayers twice —for their pension and for their RHP wages —for personal advantage Back -scratching? Perception that the rehired retiree is not actually doing anything, and the hiring manager is doing them a favor by supplementing retirement pay with additional earnings. Union Leadership Influence Unions are reportedly not in favor of rehiring pensioners, largely because if a person were hired to fill a full-time position, that individual would be a contributing union -dues - paying member. However, as noted above, most hiring managers hire retirees to fill a short-term, urgent need, for which a full-time person would not otherwise be hired. Comment on Recent Rehires in the News The San Jose Mercury News recently reported' on double-dipping abuses, implying a systemic use of a misguided hiring practice. The Grand Jury agrees with the article only in the instance of the rehiring of the City of Santa Clara Fire Chief. In this case, the City of Santa Clara rehired its retired fire chief more than six years ago. The initial reason given for rehiring the chief was because a search for his replacement was not fruitful. It has now been more than six years since the chief returned as a part-time worker. While the Grand Jury sees the business rationale of continuing this arrangement (the City of Santa Clara reports to have saved the city over a million dollars in salary and benefits), it is unclear how a fire chief can be considered a part-time job. If this is truly the case, perhaps the city should consider department consolidation and save even more money. Regarding the lack of qualified candidates, it should be noted that both San Jose and Milpitas have successfully recruited and hired well -qualified fire chiefs within this six - year period. 1 "Best Part of Retiring? The Pay Raise —'Double -Dipping' Workers Get Pension and Contract Work,' Karen de Sa, San Jose Mercury News (CA), December 31, 2010. 6 Outlook Some HR managers indicated they expect a potential increase in the practice of rehiring retirees. As cities deal with the continuing wave of retiring baby boomers, combined with the scarcity of funds to hire replacements, RHPs offer an effective interim solution. Conclusions Most cities in SCC and SCC itself rehire retirees. For the most part, rehiring of pensioners is a good business decision, helping agencies to fulfill short-term or urgent work assignments where specialized skills, typically amassed over the career of a retiree, are needed. In some cases, retirees also have the capacity to work twice as fast as a new hire, thus saving agencies time. Hiring RHPs saves agencies the cost of fringe benefits that otherwise would be paid to a full-time replacement worker. Some members of the SCC Board of Supervisors recently made public their opinions that rehiring pensioners is bad policy. By contrast, it appears hiring managers are making generally good business decisions in rehiring pensioners. An unintended consequence of a relatively early retirement age (55 years for public sector employees versus a private industry average of 65) is that employees are incentivized to leave the workforce earlier than they may be ready to stop working. For instance, interviewees consistently stated that if they work past their retirement age, they "lose" money, because they could receive the same pay in pension while not working at all. This creates the well -publicized public sector pension liability that could be avoided for ten years or more by raising the retirement age. The early retirement age also creates a void agencies must fill and, because workers may wish to continue working past age 50 or 55, creates the desire to return to work as a rehired pensioner. 7 Findings and Recommendations Finding 1 In spite of public opinion, there are situations that warrant rehiring pensioners and often it makes good business sense to do so. All managers interviewed follow existing procedures, which allow rehiring of pensioners. Recommendation 1 If the County or the City/Town of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale desire to end the practice of rehiring pensioners, they should make that official by means of a policy decision. Finding 2 For over six years, the City of Santa Clara has filled a previously 24/7 type of management job with a part-time employee. Clearly, the job is not a temporary or limited -time -urgent -needs position and six years is more than sufficient time to find a replacement. Recommendation 2 The City of Santa Clara should consider consolidating with another agency's fire department for fire services and eliminate the part-time fire chief position or fill the position with a permanent part-time employee. Finding 3 The fifteen towns and cities —Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale —and the County may be inadvertently creating a demand to rehire pensioners because the public sector retirement age is relatively young at 50 (police and fire) or 55 (administrative positions). Recommendation 3 The fifteen towns and cities —Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale —and the County should continue to pursue a higher retirement age with its public sector unions and associations. 8 This report was PASSED and ADOPTED with a concurrence of at least 12 grand jurors on this 19th day of May, 2011. Helene I. Popenhager Foreperson Gerard Roney Foreperson pro tem Kathryn Janoff Secretary CUPERTINO August 3, 2011 FILED AUG U 5 2011 OFFICE OF THE CITY MANAGER DAVID H. YAMASAKI Chief Executives Officer/ Superior Courtof CA wIH of ere CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3212 • FAX: (408) 777-3366 Ms. Helen Popenhager, Foreperson Santa Clara County Civil Grand Jury Superior Court Building 191 North First Street San Jose, CA 95113 Dear Ms. Popenhager: The Mayor and City Council of the City of Cupertino received the Santa Clara County Civil Grand Jury final report, "Rehiring of Pensioners: Bad Policy, Good Business or Both?" Please note that the City of Cupertino does not have its own Police or Fire Departments. The Council has determined as follows: the City agrees with findings 1 and 3 and authorized the City Manager to send this letter on its behalf. In response to recommendation 1 which is: If the City of Cupertino desires to end the practice of rehiring pensioners, they should make that official by means of a policy decision. The City Council of Cupertino has determined: pursuant to Penal Code Section 933.05(b)(1): The recommendation has been implemented. The City of Cupertino does not desire to end the practice of rehiring pensioners and, should it desire to do so, it will make it official by means of a policy decision. In response to recommendation 3 which is The fifteen towns and cities -Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale -and the County should continue to pursue a higher retirement age with its public sector unions and associations. The City Council of Cupertino has determined: pursuant to Penal Code Section 933.05(b)(2) This recommendation has not yet been implemented, but will be raised with the appropriate unions or associations in the future. The City of Cupertino does not have its own Fire or Police Department. Sincerely, David W. Knapp City Manager THIS PAGE INTENTIONALLY LEFT III .A N IC LOSALTOS HILLS as CALIFORNIA July 22, 2011 The Honorable Richard J. Loftus, Jr. Presiding Judge Santa Clara County Superior Court 191 North First Street San Jose, CA 95113 FILED AUG 042011 ChefExee�; aa� S Superior Court of CA County o BY - Re: 2010-2011 Santa Clara County Civil Grand Jury Final Report — Rehiring of Pensioners: Bad Policy, Good Business or Both? Dear Judge Loftus, Attached please find the requested response to the subject report as filed with the Clerk of the Court on June 16, 2011. The Town relies on a small in house staff of 21 employees to provide the full range of general government services to the community. Law enforcement services are provided by contract with the County of Santa Clara's Office of the Sheriff. Fire services are provided by an independent district, the Los Altos Hills County Fire District. When one of the Town's employees retires, an opportunity may arise for that pensioner to assist with special ,,projects, train his/her successor, and/or otherwise fill an operational need. Pensioners "are fully trained, well acquainted with the community, and possess invaluable institutional memory. Strategically, pensioners can provide an excellent bridge between the Town's past and future workforces. The report accurately identifies the significant cost savings opportunities available when retaining a pensioner compared to a full time benefited employee. Therefore there is no recommendation to end the practice of retaining pensioners for limited scope duties at the Town of Los Altos Hills. On behalf of the City Council, I would like to thank the 2010-11 Civil Grand Jury for studying and reporting on the pros and cons of pensioners in the workforce. Respectfully submitted, Carl Cahill City Manager 26379 Fremont Road Los Altos Hills California 94022 630/941-7222 Fax 650/941-3160 Date: July 22, 2011 To: The Honorable Richard J. Loftus, Jr., Presiding Judge From: Carl Cahill, Town of Los Altos Hills City Manager Re: Requested response to 2010-2011 Santa Clara County Civil Grand Jury Final Report —Rehiring of Pensioners: Bad Policy, Good Business or Both? Finding # 1 — In spite of public opinion, there are situations that warrant rehiring pensioners and often it makes good business sense to do so. All managers interviewed follow existing procedures, which allow rehiring pensioners. Response: Agree. Recommendation # 1 — If the County or the City/Town of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale desire to end the practice of rehiring pensioners, they should make that official by means of a policy decision. Response: Not implemented. Rehiring a fully trained pensioner to assist with operations on a Limited basis is a fiscally responsible practice and provides a practical alternative to creating a new position. No recommendation to eliminate this practice is recommended at this time. Finding # 2 — For over six years, the City of Santa Clara has filled a previously 24/7 type of management job with a part-time employee. Clearly, the job is not a temporary or limited -time - urgent -needs position and six years is more than sufficient time to find a replacement. Response: To properly opine on this matter the Town requires a more comprehensive understanding of the City of Santa Clara's operational structure. Recommendation # 2 — The City of Santa Clara should consider consolidating with another agency's fire department for fire services and eliminate the part-time fire chief position or fill the position with a permanent part-time employee. Response: To properly opine on this matter the Town requires a more comprehensive understanding of the City of Santa Clara's operational structure. Finding # 3 — The fifteen towns and cities — Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale —and the County may be inadvertently creating a demand to rehire pensioners because public sector retirement age is relatively young at 50 (police and fire) or 55 (administrative positions). Response: Agree. Recommendation # 3 — The fifteen towns and cities — Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Nlonte Sereno, Morgan Hill, Milpitas, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale —and the County should continue to pursue a higher retirement age with its public sector unions and associations. Response: Implemented. Effective September 1, 2011, the Town of Los Altos Hills will enroll all newly hired employees in the "2% at 60" CaIPERS pension benefit. CaIPERS does not offer a pension formula requiring a higher retirement age.