Posted on 06/21/2009 7:26:31 PM PDT by artichokegrower
County retirement payouts are one more toll on budget
By Kurtis Alexander
06/21/2009
SANTA CRUZ - As county leaders cut health and human services, furlough employees and reduce office hours to close a record budget shortfall, one more expense is weighing on the bottom line: hundreds of thousands of dollars paid to retirees for unused vacation and sick time.
A Sentinel review of county payroll records shows during the past six months retiring employees cashed out nearly $900,000 in unused vacation, sick time and other leave. More than a third of that money went to four retirees, top managers who stepped down after lengthy careers in government.
County administrators say the parting checks are hard-earned benefits. Caps on the payouts, administrators say, ensure they're commensurate with an employee's service and don't significantly rattle labor costs. Santa Cruz County is not unlike other cities and counties that allow vacation and sick time to be accumulated and redeemed upon retirement.
But the payouts add to the county's overhead, which has saddled administrators this year with a $25 million budget gap. Some say the cash-outs are the type of government excess that has contributed to recent hardship.
"Why doesn't the county just go ahead and give these people money for maternity leave they didn't take, too? The policies are twisted," said Mark Primack, a Santa Cruz resident and former candidate for county supervisor. Payroll records show that former assistant administrative officer Pat Busch, who retired in December after 37 years, was paid an extra $171,989 in unused vacation, sick time and other leave. The former public works chief, Tom Bolich, who also stepped down late last year after 38 years, received a payout of $115,730 for his unused time.
Two elected officials, who don't accrue vacation, cashed out for unused sick time. Former Sheriff Steve Robbins, who retired in May, got a check for $41,640, and former county Assessor Gary Hazelton, who also retired last month, got $34,736.
The figures were obtained through public records requests by the Sentinel.
Critics argue the retirement payments are not only more than the county can afford, but are an abuse of vacation time, meant to be used and not cashed out, and the same for sick time, meant to be reserved for illness.
County administrators, though, stand behind the policies.
Vacation payouts, says Personnel Director Mike McDougall, are benefits earned by employees who simply can't take time off because of their workload; the employees legally must be compensated for the time. The payouts for sick time, he says, are designed to prevent employees from unnecessarily calling in sick.
"You're constantly fighting to find incentives to get people to come to work," McDougall said. "I think we've struck a pretty good balance here."
For both vacation and sick time, county policy limits how much employees can amass and ultimately cash out. In no case can unused time be redeemed before an employee leaves the job.
n Under the policy, executive managers, excluding elected officials, can cash out as much as 2.5 years' worth of unused vacation time and up to 12 years' worth of unused sick time. The amount of annual vacation a manager gets, which varies with years of service, tops out at 31 days after 16 years. The amount of annual sick time a manager gets is generally six days, the payout of which is just a fraction of the total accrued. Most managers also get 10 days of annual administrative leave, in lieu of overtime, which is paid out each year if it's not used.
n Elected officials, who don't accumulate vacation time, can cash out up to nine years' worth of unused sick time, also a fraction of the total time accrued.
n Rank-and-file employees represented by Service Employees Union International receive vacation and sick time in one lump sum and can cash out up to 2.5 years' worth of the combined leave. The amount of leave SEIU employees receive annually varies with experience, but tops out at 37 days after 16 years on the job.
During the past six months, payroll records show 65 employees have cashed out vacation or annual leave balances worth a total of $515,752. During the same period, 19 employees have cashed out sick leave balances, totaling $317,288. Smaller amounts of administrative leave balances have been cashed out, too.
McDougall says the county's payouts, which may add 1 percent to the county's total labor costs depending on the year, are not out of line with other cities and counties. He insists that's where Santa Cruz County should be.
"I can tell you that no matter what you look at, we're on the middle or lower end," he said of the cash-outs. "You wouldn't want to be any lower from a competitive standpoint. We can only rely so much on our wonderful weather and wonderful community to attract employees."
But government watchdogs say while cities and counties may have to compete for talent they still have to watch their spending, the bulk of which is typically on labor.
"In a time of belt-tightening you need to reduce the amount of liability the county has when someone leaves," said Bob Stern, president of the Center for Governmental Studies in Los Angeles.
Stern says Santa Cruz County's cash-out policies are generous compared to the private sector and says, like other government agencies, the county will see its budget strained by retirement payments.
Primack says it's incumbent upon county leaders to reconsider how much they're paying retirees.
"We've allowed a flawed system to develop," he said. "The real question is how bad does it have to get, how abused will things have to get, before things change."
County Supervisor Ellen Pirie said last week she was not aware that retirement payouts had exceeded $100,000 in some cases, but said such sums seemed worthy of review.
The Board of Supervisors is currently involved in two weeks of hearings on the budget, which are aimed at patching the county's financial hole. A balanced spending plan, which is expected to include major cuts to services beginning July 1, is due Thursday.
You won't
Got a mirror handy?
Uncle Sugar will pay with depreciated dollars.
I like the quote from the article concerning government workers:
“You’re constantly fighting to find incentives to get people to come to work,” McDougall said. “I think we’ve struck a pretty good balance here.”
The incentive I always had in the private sector was that you came into work or you got replaced.
The Big Default will come sooner or later. After that happens, the “glass ceiling” will make a lot of fine suppositories.
>>s. How the heck are we going to pay for all of this?<<
It is supposed to be in the budget. When you hire someone, you are supposed to put the appropriate funds, including PTO, into the Payroll budget so you don’t end up in this situation. If you rob Peter to pay Paul, don’t be upset when Peter asks where his money is.
PTO is earned and is part of the employment contract. Crying about what you agreed to do is flat-out wrong, whether it is public or private.
The b@stards at the last place I worked didn’t let me take ANY time off for badly-needed vacation and then stiffed me over 200 hours I had accumulated (I got some but not all I had accrued).
So the idea here is to punish people who DO work hard and sacrifice?
Start panning for gold again?
“How the heck are we going to pay for all of this? “
You won’t. Your children and grandchildren will.
My thoughts, exactly. I’d like to see a breakdown of what each COUNTY owes across the land and what each STATE owes.
Wisconsin is in the process of passing a 62 BILLION dollar budget...on top of us already being 6 BILLION in the RED.
It would be VERY interesting to see it on a County level.
They truly haven’t fixed our roads in YEARS around here. No decent infrastructure, no business. No business, no jobs. Part of a major highway literally ‘blew up’ during rush hour last week due to heat and the lack of maintenance.
A police car was sitting in front of a huge PIT in the road that would’ve easily damaged any car driving over it. (I didn’t look down into the pit; for all I know, there were already 10 minivans in there, LOL!)
There seems to be an orchestrated effort all across the land to steal our tax dollars, doesn’t it?
Jerks.
You missed the point I think. These folks are being paid not for hard work but for time off not taken. Is sick leave something to be utilized to protect you financially in time of need or something to be banked and cashed out later because it was not needed. Should it be cashed out at time initial employment when you are not earning much or at time of retirement when your pay scale is at its highest?
P.S. And Thank You for growing Artichokes. I love them on pizza. :)
its California's problem. Not any other states. Good luck
The incentive I always had in the private sector was that you came into work or you got replaced.
_______________________
In the government sector, hiring and firing tends to be a very complex process.
Hiring requires official announcements , testing, affirmative action reports, classification studies, and the signatures and o.k.’s of many different parties. Very expensive, and time consuming, although the process varies from place to place.
Firing someone also is a huge hassle- even in positions not under a govt. union there are civil service rules to adhere to. And BTW, its probably a somewhat prudent move- if you’ll remember the people making the firing decision are government employees as well.
>>You missed the point I think. These folks are being paid not for hard work but for time off not taken. <<
That is exactly the point. It is a benefit that is due and payable upon the initiation of the employment contract. If you contract for something, is it incumbent on you to give it up because it hadn’t been properly accounted for?
>>Is sick leave something to be utilized to protect you financially in time of need or something to be banked and cashed out later because it was not needed. Should it be cashed out at time initial employment when you are not earning much or at time of retirement when your pay scale is at its highest?<<
If that is what the contract says, yes. It is the same, public or private. That is what makes it a “contract.” Some choose to work, some choose to take time off. You wish to penalize the former and aggrandize the latter?
CALPers has developed a 30 year debt roll over. It is being given serious consideration in Sacramento. In other words they will pay the deficit back over 30 years. How, oh by return on investments.
>>My thoughts, exactly. I’d like to see a breakdown of what each COUNTY owes across the land and what each STATE owes.<<
It is supposed to be booked as a liability. Starting in 1999, State entities across the country were supposed to use GAAP and GASB standards. You should know within a few dollars exactly how much PTO accruals are for the entire state — and there should be budget to accommodate it, unless it was flat out stolen (which is what many legislators have done).
The Legislature is about to outlaw small-scale gold mining in the rivers, because yet another environmental study is required. So no one will be able to get enough gold to live on. The miners are hoping the Governor will veto it, but the Indians opposing gold mining have bought the Republicans, so there may be no hope. I hate California government.
A lot of state and county government employee compensation systems are way out of control. They can’t print money, so they’ll have to solve this problem by raising taxes.
Thank God I’m a Federal government employee. The federal government CAN print more money, so my benefits are covered.
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