Ryan Hagen, Staff Writer
Posted: 10/13/2012 03:53:03 PM PDT
Retirement doesn’t just bring a watch for employees leaving many local cities – it can mean hundreds of thousands of dollars in cashouts for unused vacation, sick time and other benefits.
The costs of those payouts threatened to overwhelm San Bernardino’s ability to pay employees in the weeks after the city authorized a bankruptcy filing.
The city paid more than $1.6 million to 67 employees who left between that July 10 announcement and Aug. 6, when the City Council suspended payouts because, members said, they just couldn’t afford them.
“The taxpayer simply can’t afford that kind of cashout,” said Mayor Pat Morris. “I think it’s remarkably overreaching, what we’ve done, unlimited accumulation of sick time and then administrative leave time and vacation time. That just – I’ve been stunned by the kind of payouts we’ve obligated ourselves to.”
San Bernardino is hardly the only place wrestling with millions of dollars in liability for accrued employee time, but its near-crisis illustrates how serious the problem can get.
The largest single payout from July 10 to Aug. 6 was $98,704, according to the City Attorney’s Office. But at other times, employees have retired with more than $300,000, Morris said, which quickly multiplies across a large work force.
“We’re a city that’s remarkably modest in terms of our income,” he said. “Even as we escape this (bankruptcy), public agencies can’t afford this kind of largesse. … (In future contracts) I pray that we’re a little more diligent about overseeing these resources.”
Each city negotiates agreements on payouts with each of its employee unions. For instance, vacation time for San Bernardino police officers – often pointed to as among the most highly compensated – is capped, police union President Steve Turner said.
He points to a side letter to the union’s contract, which in 2009 increased those limits by 15percent- in exchange for reductions in other areas of the agreement – to a maximum of 460 hours for employees with at least 21 years of service.
“One way or another, the city’s going to pay that time,” Turner said. “If they use the vacation, then you’re paying employees to not go to work. … Police officers are already picking up the slack from not having enough officers, and they don’t want to leave the city when they’re needed.”
And taking away that policy would make the city less competitive, lowering the quality of employees, Turner added.
Different approaches, different places
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