Faced with an exodus of experienced city workers, Palo Alto is turning to familiar faces for help -- its own retirees.
The city has been rehiring its retired employees at a higher rate than any other city in Santa Clara County, according to a recent report from the county. The county's Civil Grand Jury found that 5.7 percent of the city's employees are people who retired and were then rehired (for other cities in the county, the average was 1.6 percent).
The jury investigated the practice of rehiring retired workers because of concern over "double dipping" -- workers who retire and then return to work while collecting their pension. Such cases, the Grand Jury found, are in fact quite rare. In most cases, 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," the Grand Jury wrote.
In Palo Alto, the rehiring of retirees is particularly popular for several reasons. With revenues falling, the city has been shaving away at workers' benefits and instituting new requirements for employee contributions to pensions. These factors led dozens of employees to retire over the past two years, leaving "a rapid and unprecedented municipal 'brain drain'," according to a report from Human Resources Assistant Michele Dallara. It also didn't help that the city already had a large number of employees near retirement age even before the Great Recession.
Sandra Blanch, the city's human resources director, said Monday night that the retirements have come in three waves, coinciding with the city's recent reforms to workers' pension and medical care and new rules requiring greater contributions from employees toward their retirements. These initiatives, undertaken over the past three years, were undertaken to curb the spiking costs of pensions and health care.
The city's plummeting tax revenues also threw a wrench into the city's "succession planning" by forcing the council to trim positions instead of creating training plans. The city, according to Dallara's report, faced a "significant exodus of workers with expertise and institutional knowledge" and ended up rehiring retirees for such positions as deputy fire chief, police investigators, and managers in Public Works, Planning and Human Resources.
The City Council briefly discussed the report Monday night and directed staff to make some brief revisions before sending it to the Grand Jury. City Manager James Keene described the situation as a "short-term" one. Blanch said the city has 45 recruitments in progress and its percentage of retirees has already been reduced to about 4 percent of the city's workforce, she said.
"Clearly, both the economic fiscal crisis and our own actions to try to deal with the long-term situation, for the most part in advance of other jurisdictions here, did accelerate some of the departures and put us in a bit of a predicament here," Keene said.