Investigation: City Shells Out Millions in Unused Sick Time
Tuesday, December 06, 2011
The city of Providence has dished out more than $3.2 million in unused sick time payouts to exiting employees over the last three years, with nearly half of the payments coming this year thanks to a surge in retirements in recent months.
In total, the amount paid out in unused sick time (not including teachers) is $3,248,538.16 over a three-year time span. In 2011, the number is $1,555,226.41, an amount that could still grow over during the final month of the year as the number of retirees nears 100.
The number of sick days an employee is allowed to cash out each year depends on the collective bargaining agreement his/her respective union is entered into, but the payouts can be staggering. Records show at least ten city employees have been able to cash out for more than $40,000 in 2011 alone.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTCity Spokesman David Ortiz said the number increased this year thanks to agreements the city reached with several unions in order to help address what Mayor Angel Taveras coined a “category five fiscal hurricane.” Ortiz said police officers were offered an early retirement incentive and members of Local 1033 also received a small bonus for retiring.
“The uptick in retirements this year was a direct result of the administration’s collaboration with our union to find the savings needed to pull Providence back from the brink,” Ortiz said.
Council President: Council Considering Changes
But the amount being paid out each year is enough to cause City Council members to consider making changes to the way the city hands out sick time pay. While already-negotiated contracts will likely be unaffected, Council President Michael Solomon acknowledged that the Council is considering legislation that could alter future agreements.
“Employees must be paid out for unused vacation time under State law; however, the mandate to payout for unused sick time is separate and one whose method of calculation is included in collective bargaining agreements,” Solomon said. “Historically, non-union employees have received parity with their respective bargaining units. The year over year spike in severance pay is a result of more employees receiving severance, rather than a change in method of calculation. The Council is currently considering legislation that will codify the process for both non-union and union employees.”
City Councilman Sam Zurier said he was unaware of any legislation being drafted, but said part of the reason some of his colleagues may be looking to address the situation could be the case of former Police Chief Dean Esserman, who was able to collect about $167,000 in unused sick and vacation days when he stepped away from his position over the summer.
There are Limits
But Zurier acknowledged that anything passed by the Council would likely be limited thanks to existing collective bargaining agreements.
“I can say that there are limits to what you could accomplish with such an ordinance, as it likely could not override provisions in existing collective bargaining agreements,” he said. “For example, I believe that the recent contract with the teachers has a new provision allowing teachers who retire early to receive a payment of a portion of their unused sick leave. The administration stated that they included the provision to encourage early retirements, which could provide a benefit to the city as the teachers’ retirement system is run by the state.”
Zurier said the Council may be able to enact an ordinance for future contracts. He said he believes sick time should be regulated by good human resources practices rather than bonuses for not using the sick time.
“With that said, we have to honor the terms we have agreed to in collective bargaining agreements. I am not clear on how many of our agreements address this issue, but management, for example, does not belong to a collective bargaining unit,” Zurier said.
Councilman: We Must Create New Policies
Councilman David Salvatore said the Council is in the process of vetting legislation to amend severance for sick time. He said he favors performance bonuses over generous severance packages.
“While I appreciate the dedication and commitment of our City workforce, we must continue to examine our financial practices and create new policies that are fiscally responsible,” Salvatore said.
Salvatore said the Council will take steps to address the sick time payouts.
“If there are reforms and improvements that protect taxpayers and employees, we should be looking at these modern day methods and award our employees for exceptional performance – this includes exemplary attendance records,” he said. “The practice of paying generous severance packages is something that has to be taken seriously and the Council is prepared to take the necessary steps that address the issue. I would encourage the administration and the Council to once again work in a collaborative manner and create a new benefit that is performance driven.”
Once in a Generation
But Ortiz cautioned that the spike in sick time payouts this year is simply due to the city’s efforts to reduce the number of employees it currently has.
“The payouts are a result of an incredible once-in-a-generation savings from retirements,” Ortiz said.
He continued: “It’s not like we’re going to have 80 to 100 retirements every year.”
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