Selling sick leave nets millions for top Tucson police, fire officers

2014-04-06T00:00:00Z 2014-04-07T12:33:57Z Selling sick leave nets millions for top Tucson police, fire officersBy Darren DaRonco Arizona Daily Star Arizona Daily Star

Tucson spent nearly $5 million buying back unused sick days from police officers and firefighters the past two years — and shelled out another $2 million in what the city attorney now says were illegal pension contributions for those unworked days.

The city expects to spend another $2.6 million buying back sick days this year.

City policy lets police and fire personnel cash in up to 208 hours of unused sick hours each year as a way to reward long-time officers and keep them in the fold. Other city employees also can cash in unused sick days, but only when they retire — and even then, they only get 25 percent to 50 percent of the value of those hours.

Police employees can get full pay for their sick time if they have worked for the city for 15 years and have at least 480 hours banked. Fire employees can start cashing in after five years if they have a minimum of 360 hours.

A public safety employee can earn about 3,200 hours of sick time over a 25-year career. A 30-year employee could earn more than 4,000 hours.

In 2012, the city paid $2.4 million to 520 police and fire employees for unused sick time, 158 of whom cashed in $6,000 or more. The following year, the city paid $2.5 million to 547 employees, with 178 employees taking home $6,000 or more.

The biggest beneficiaries of the policy over the past two years are Police Chief Roberto Villaseñor, who cashed in almost $32,000; Fire Chief James Critchley at $30,000; interim TCC director and former Deputy Police Chief Sharon Allen at $29,000; Assistant Police Chief John Leavitt at $27,000; and Assistant Police Chief Brett Klein at $25,000.

Villaseñor defended the program and said it’s integral to attracting quality officers and keeping them from fleeing to higher paying cities like Phoenix or Mesa.

The city once attempted to keep pace with police and fire wages but quickly fell behind, he said. City officials didn’t like the idea of handing out regular pay raises to police and fire employees and not to other workers, so programs like sick-leave sell-back were implemented instead, Villaseñor said.

He said he resents that some would criticize top officers who received the extra dollars. If the extra compensation weren’t available to everyone across the ranks, he said, top commanders would head to wherever the pay is better.

“We definitely respect that people who work in the private sector do not have benefits like that, but we don’t ask the people in the private sector to do the things we ask police officers to do,” said Jason Winsky, government affairs director for the Tucson Police Officers Association, the union representing local police.

“Police officers aren’t special, but they are different,” he said. “We ask them to do more than the average citizen.”

Winsky said if an officer decides to save his sick leave he should be rewarded, “Because when that officer consistently shows up for work, that enables us to provide the community with better service.”

Pension contributions

On top of direct payments to employees, the city has contributed more than $2 million toward the pensions of public safety employees over two years as a result of cashing in unused sick days.

But City Attorney Mike Rankin concluded in a legal opinion on March 26 that state law prohibits the city from counting unused sick-time dollars toward an employees’ pension.

Although the city has been paying pension benefits on unused sick hours for 14 years, Rankin said, “In my opinion, it is outside the definition of pensionable compensation.”

Rankin said his office looked into the matter after Phoenix was sued over a similar issue last year.

The union disagrees with Rankin’s findings. Winsky said the union considers sick-leave sell-back to be longevity pay since it applies only to TPD veterans. Longevity pay can apply to pensions under state law. However, the City Council abolished longevity pay more than 25 years ago.

He said the Phoenix lawsuit will ultimately determine which definition is correct, but for now the city is dropping the pension contributions associated with sick-time sell-backs based on Rankin’s opinion.

Retirement benefits for most fire and police personnel are calculated using their three consecutive highest-earning years, said Jared Smout, deputy administrator of the state’s Public Safety Personnel Retirement System.

The Legislature passed a law about eight years ago to prevent employees from pumping up their pensions by using lump-sum payments, like the sick-time sell-back, to boost their salary in the final years of their careers, he said.

The practice, often referred to as pension spiking, creates a disparity between what employees contribute over their careers and what they receive when they retire.

If annual pay in those years is significantly higher than what an employee earned in a typical year, the amount received in retirement doesn’t align with what a person paid into the system.

“The pension (contribution) does not match with the pension being paid out,” Smout said.

Smout said the state retirement system doesn’t take a position on what local municipalities count or don’t count toward pensions. He said the decisions one city makes regarding its pension doesn’t affect another.

But those decisions do affect taxpayers, said Goldwater Institute attorney Jon Riches.

Riches, whose group is suing Phoenix over pensions, said inflated final salaries can translate into millions of dollars down the road for taxpayers who have to cover bloated monthly payments to employees who typically retire at much younger ages than other workers.

He said sick leave was never intended to pad a nest egg.

“If someone gets sick, then they stay home so they don’t contaminate the rest of the workforce. And that’s reasonable,” Riches said. “But that same day was never meant to be added to employee retirement benefits.”

He said state law on that point is “clear as day, and it doesn’t take a lawyer to tell you these payments are illegal.”

CHANGE OF COURSE

Based on Rankin’s opinion, the city will discontinue the practice of counting the sick-leave sell-backs towards retirement, Chief Financial Officer Kelly Gottschalk said.

But the change, to take effect by summer, cannot apply retroactively and will only affect employees in future years.

The change doesn’t require a council vote, she said, but the council would need to vote if it wants to end the annual sick-leave payments entirely.

And one City Council member plans on doing just that.

“The purpose of sick days is so someone doesn’t take a hit when they’re out sick,” Councilman Steve Kozachik said. “They shouldn’t be used as an annual Christmas bonus for those at the top of the pay scale.”

Kozachik said with budget cuts on the table this year, he’s going to call on his colleagues to end the practice.

“The council can’t be nickel-and-diming bus fares for poor people and leave this kind of money for the top of the food chain.”

In the past, governments may have adopted more generous benefits to help lower-paid public servants keep up with their private-sector peers, but Kozachik said the rationale doesn’t apply any longer.

“That doesn’t hold water,” he said. “Our employees aren’t poorly compensated. And when you factor in some of these benefits, they exceed what you can make in the private sector, especially in this economy.”

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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