You can get angry about the city of Tucson’s sick-pay sell-back program for plenty of reasons.
You might argue that sick pay should be used as its name says, for days when you or your family members are sick, not as a late-career bonus.
You could say the city of Tucson should not have deliberately and illegally spiked its own pension costs for years.
You can contend that if the city wants to pay public-safety workers more, it should do so directly, not through a back door.
But the part that rankles me the most is the politics that underlies these problems. Our elected representatives in City Hall should be representing the best interests of the city, but they seem more influenced by the desire to appear to be on the side of police and firefighters and to win their unions’ endorsements. What else explains supporting a plan that deliberately costs the city extra in pension payments?
So the question becomes: If the city government is on the side of the unions they’re negotiating with, who’s on the city taxpayers’ side?
Let’s step back: My colleague Darren DaRonco reported Sunday that over the last two years the city has paid $5 million to police officers and firefighters, mostly those with 15 or more years of experience, for unused sick time that they had accumulated over the years. This program, known as “sick-leave sell-back,” has existed for 13 years.
It was conceived as a way of paying officers, especially experienced ones, more and retaining them without building in salary increases. But it was also used as a way of “spiking” employees’ pensions. Since an officer’s pension is based on his or her best years of pay, a late-career surge in sick-leave payouts increases the pension an officer will make for the rest of his or her life.
Don’t forget — these officers can retire after 20 years, so their pensions may be paid for decades. Also remember: The city’s budget deficit for next year is about $27 million.
In 2008, a new state law specified that using sick pay in calculations of future pensions is illegal. The provision, part of ARS 38-842, is very clear: “Compensation does not include, for the purpose of computing retirement benefits, payment for unused sick leave.”
But for the last six years, the city has been counting payments of unused sick leave to calculate pension benefits anyway. On March 26, prompted by a Goldwater Institute lawsuit against the city of Phoenix over a related issue, Tucson City Attorney Mike Rankin opined that indeed the city’s counting of sick-day sell-backs toward pensions is illegal and should end. The city plans to do so before the fiscal year ends on June 30.
That’s good, if late, and takes care of one symptom of the illness — DaRonco found that the city has paid $2 million more in pension contributions over just the last two years as a result of sick-leave sell-back than it would have paid without the program. But it leaves the political dynamic intact.
Jon Riches, the Goldwater Institute attorney who is suing Phoenix, described the typical public-safety-union bargaining dynamic this way: “There is no taxpayer representative at the table. It’s the union negotiating against themselves.”
To grasp the depth of the issue, recall that our city manager is Richard Miranda, the former Tucson police chief. He retired in 2008 after spiking his own pension with a sell-back of accumulated sick leave. The Arizona Republic, which has been covering municipal pension problems in Arizona, reported that Miranda now gets $137,724 per year from his public-safety pension, on top of his $202,000 salary.
So, we are to trust a man who greatly benefited from this system to rein it in.
Not surprisingly, three council members and a Tucson Police Officers Association representative I spoke with see the situation differently. As far as Jason Winsky of the union is concerned, sick-leave sell-back is the same as longevity pay. It’s a way to reward officers who stay, which is a good way to reduce turnover, he said, and it helps keep pay up when the city refuses to tackle the issue comprehensively.
“The labor organizations have negotiated these benefits because they (the City Council) have consistently said they’re not interested in comprehensive pay packages,” Winsky said.
Certainly you can’t fault the unions for negotiating the best deal they can get. That’s their purpose, and they do represent employees in risky, tough jobs.
But what about the council members? Shirley Scott, the only member who was on the council at the time sick-leave sell-back was established, defended it as a way to keep officers from leaving for jobs in the Phoenix area.
“The councils have been persuaded that in order to be within 95 percent of the (Phoenix) valley’s (salary and benefit) packages, it had to be part of the deal. If this is going to help us retain and recruit, then we agree with the public-safety people,” she said.
Scott has been repeatedly endorsed by the public-safety unions and shares their argument that if you want someone to be there to respond to an emergency in the middle of the night, you need to have benefits such as this.
Councilman Steve Kozachik has burned his bridges with the police officers’ union — first it endorsed him, then last year it un-endorsed him. Unencumbered by that relationship, he argues it’s time to cut sick-pay sell-back.
“Nobody has the (guts) to bring it up, because the instant push-back from public safety is we’re going to quit our jobs or go to Phoenix,” Kozachik said. “They’ve got the best of both worlds. A pretty hefty benefits package to go along with a considerable salary. I’m just saying, let’s take away this one piece of it.”
Now, the city can’t do this unilaterally — sick-leave sell-back is part of the current contracts with the public-safety employees. But it would be an encouraging sign of commitment to the taxpayers if the City Council were to start moving to change the program now. Then we could know that somebody at the negotiating table is on our side.