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Elected officials, government managers can turn perk into profit
By JEREMY HAY & BRETT WILKISON
THE PRESS DEMOCRAT
Rohnert Park City Manager Gabe Gonzalez’s contract outlines his base salary, $165,000, his monthly car allowance of $333 and that he “is expected to be available at all hours.”
It also says he is entitled to all the benefits of other management employees.
Those benefits include a little-known perk termed administrative leave that amounts to a guaranteed cash bonus or extra vacation.
Former Sonoma County supervisors Mike Kerns and Paul Kelley. (PD File)
The leave is essentially a bank of extra hours given to most upper-level public workers across Sonoma County — including elected county officials — that can be used to take more time off or, in some cases, be cashed in at year’s end. In other instances, unused hours roll over each year and a certain amount can be cashed in at retirement.
When that happens, the results can be startling.
This year, five elected officials have retired and cashed in their hours.
Former county auditor-controller Rod Dole retired in May and cashed out leave hours for $44,140, plus used additional time to boost his last year’s salary and, as a result, his retirement pension.
County Supervisors Mike Kerns and Paul Kelley got $50,232 and $39,000 in cash respectively when they retired. They too cashed in additional hours that bumped up their pensions.
Neither Kerns nor Kelley returned calls seeking comment.
Even people who believe the extra-hours benefit is justifiable say it leads to major problems when the option to cash them in is managed poorly and when they are allowed to accrue toward retirement.
“I think the concept is a valid one, if it appropriately compensates someone who is not eligible for overtime and has to work a schedule that goes beyond what most people would consider a normal workday,” said former Rohnert Park Mayor Tim Smith.
“But you have to clean it out so you don’t have a mounting deficit,” he said.
In Rohnert Park, administrative hours cannot be rolled over, but they can be cashed in at the end of the year. Last year, that cost the city $62,000 in cash paid to 10 employees.
“We had a very luxurious package in terms of administrative leave,” said Gonzalez. The policy was tightened this year.
Even when used only as vacation hours, the benefit adds up to extra time off that many would find enviable.
In Santa Rosa, for example, hours cannot be cashed in. Instead, at least 150 managers each took an average of two extra weeks off last year, on top of the two weeks or more of vacation time they get.
“Taxpayers are pretty generous providing that,” said Fred Levin, executive director of the Sonoma County Taxpayers Association.
Administrative leave is widespread in public-sector managers’ compensation, although how it is administered varies. Employees qualify for it if they are classified as “exempt,” meaning that under federal labor law they are ineligible for overtime pay.
It is also commonly part of benefits for confidential employees, who are defined as those whose work involves personnel issues.
In Rohnert Park, Cotati and Sebastopol, where hours can be converted to cash, the total does not count toward state pension benefits that are based on earnings.
However, in county government, a portion of the value of cashed-in administrative hours does count toward the income calculations used to set retirement benefits.
Former Sheriff Bill Cogbill cashed out administrative leave when he retired that added $18,567 to his final year’s salary. That was used by the county to calculate his annual pension, which guaranteed him 90 percent of his top pay based on his more than 30 years in law enforcement.
Dole added $19,994 to his last year’s salary. For both Kerns and Kelley, accrued administrative hours increased their final year’s pay by $12,850.
About 440 county managers and department heads qualify for administrative hours that accrue at the rate of 2.3 hours every two weeks. They can cash in up to 80 hours annually or roll them over into a bank to be used later.
Elected officials do not get vacation time but qualify for more administrative leave hours per year. The county’s four elected department heads — sheriff, district attorney, clerk-recorder-assessor and auditor-controller-treasurer-tax collector — accrue 2.95 hours every two weeks, while the five supervisors get 3.41 hours.
Both groups of county elected officials can cash in up to 160 hours a year. Unlike managers, there is no limit to the hours elected officials can bank, but only 200 hours can be applied to boost their final year’s salary for retirement. For managers that number is 80 hours.
The system is one that needs to be revisited, while still preserving incentives for people to enter public service, Smith said.
“I don’t think every benefit that a public employee has needs to be stripped away, but I think they need to be looked at closely,” he said. “The key is, do you still need that package to attract top talent?”
Bonuses are a staple of private industry, especially among larger companies — which generally pay executives more than their public-sector counterparts — but they are structured very differently.
“Typically there is no guaranteed minimum bonus,” said Radhakrishnan Gopalan, assistant professor of finance at Olin Business School at Washington University in St. Louis.
“Usually bonus is linked to performance, and for top executives especially there is no minimum guarantee,” said Gopalan, who co-authored a 2011 study that surveyed executive compensation packages at 1,500 U.S. companies.
Public officials say the administrative hours benefit is a fair deal for people who are expected to work as much as necessary to meet their responsibilities, even if that extends beyond a 40-hour workweek.
“They’re salaried employees, so they work as long as it takes to get the job done,” said Linda Kelly, city manager in Sonoma, where managers, including Kelly, are given 80 hours a year they can use for time off. But those hours cannot be cashed in.
Administrators note they often use less vacation time than they are given. Santa Rosa City Manager Kathy Millison, who gets five weeks of vacation a year, said she used 16.5 hours of administrative leave last year and “lost” 86 leftover hours.
She used just two days of her vacation time, she said.
“It’s been a busy year,” Millison said in an email.
In Santa Rosa, managers get 80 hours of administrative leave that they also lose if they don’t use it through the year. Unused hours cannot be cashed in.
“It’s a benefit for managers, it’s not a bonus,” said Fran Elm, the city’s Human Resources Director.
Petaluma managers get 80 hours a year of administrative leave and can cash in a maximum of 40. Sebastopol has the same plan.
In Cotati, City Manager Dianne Thompson gets 28.5 vacation days a year and 120 hours of administrative leave, potentially giving her 44 days off a year. She can cash in up to 80 administrative hours at year’s end. Hours she doesn’t cash in or use for time off accrue into a leave bank.
Thompson, the only Cotati employee to get administrative leave, notes that she doesn’t receive sick time and says she uses less than her allotted yearly vacation time.
“It’s really a 24/7 job and I tend to keep working when I’m on vacation,” she said, adding that she and other staff in 2009 took voluntary pay cuts to help the city through its budget crisis.
Levin, though, said the benefit plans need to be changed to mirror the private sector, where boards of directors have the authority to assess whether targets were met and to determine bonus payouts.
“The council has to set defined goals, and then I have no problem with a bonus program,” he said. “But to just give people what amounts to a bonus without any justification other than they work overtime — that’s part of their job, they’re managers.”
You can reach Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com, and Staff Writer Jeremy Hay at 521-5212 or jeremy.hay@pressdemocrat.com.
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Raise your hand if you work in the private sector and get stock options, Christmas bonus, employer match on deferred compensation, company car or lease (my hand is up).
While I find almost nothing to admire in our elected officials I don’t understand the piling on of “regular workers”. Almost everyone is suffering economically but some react by trying to hurt their neighbor. I know a person that works as a manager for a city. He absolutely works more than 40 hours a week and gets called back in at all hours quite a bit. I don’t begrudge him getting 2 weeks comp time at all.
The group “get em” mentality escapes me. Yes, look at positions and benefits and many need to be fixed or eliminated altogether, but not as a lynch mob.
Raise your hand if you work in the private sector and ever got accumulated flex time vacation bumping sick leave buy back family leave act accumulated past/present/future payments wherein you needed 6 people to explain it to you and wound up with $82,000 a year for life and a cash bonus of $32,000 just for being alive.
Doodles-you’re assuming that lowly county workers get overtime. Overtime is frowned upon by the county and most county workers will never see any offered. Please remember that managers are NOT union.
You’re also assuming that managers work overtime and always work an 8 hour day. It’s more likely that they “flex” their time so they don’t have to take sick leave and vacation time allowing them to accumulate huge amounts of both that frontline employees can’t do (flex their time in order not to take sick and vacation times). Ask any frontline worker and they will tell you that some managers are dedicated and work more than they’re 8 hours overall. BUT there are some who seem not to do any work at all or be at their desks.
County workers were able to buy back 80 hours of vacation time per year but got that taken away from them.
The above article is basicly how the managers maximize what they get at the expense of the frontline employees who work for and with you. The ratio of frontline worker to management, with all these layoffs at the bottom, is now very small. The BOA knows this but isn’t doing anything about the “too many managers” problem.
As far as I’m concerned the talent on the frontlines is just as high if not higher than the talent of those at the top collecting all these high salaries and benefits.
OK I ranted about how elected officials and management get better pension deals.
But County Worker made the point that it is all quite legal. Whatever exists was put in place by officials YOU elected. A lot of them were conservative (not to say republican). But they were voting on their own benefits. If you made a list of conflicts of interest in government, this would be one.
But I read your stuff and don’t quite understand what you all want. No benefits and no pensions? That would reduce everything to a salary game, and that wouldn’t be pretty. If it happens, you’re going to see employees going private and contracting to provide government services. “Santa Rosa Police, Inc?” A lot of possibilities for cronyism there?
There seems to be a lot of concern about the long view. How long? Oil companies say we have a hundred year supply. Is that enough oil? Then what?
No matter what changes or stays the same, there is a need for independent citizen oversight of political decisions. A full time job just at the local level. Who’s willing to do it?
I’m going to continue to say that all this is a limited-term revenue problem. If all the people who want work got jobs and paid existing taxes, most of the problem would disappear.
Can this happen?
Trouble is, nobody on the state or federal level seems interested in making it happen. I really can’t see who benefits if the economy stays the same through the 2012 election. What sane person would want to take that on? What have they have won?
Short term power over what?
With a grin, I suggest we all form local, state and national “parallel” committees to monitor local, state and federal budget decisions by department. Like “Consumer Reports” groups on all government spending including “defense”) AND all taxes AND all loopholes AND all offshore tax evasions.
And it would be nice to see some indictments coming out of Obams’s Department of Justice. Or did we really deregulate ourselves that far? Everyone here needs to think about that.
This was the story that first got me upset about “pension-spiking”:
http://online.wsj.com/article/SB124804047828063059.html.html
While I agree with the discontent that has been expressed here, specifically with the padding of retirement benefits through cashing in unused benefits, I do want to point out some notable exceptions.
While I don’t agree with him on everything, I want to commend Supervisor Mike McGuire for having the integrity to follow through on his campaign promise to voluntarily take a 30% pay cut (reducing his pay from the standard supervisor’s salary of $134,097 to $93,864), with the rest being returned to the general fund. In my opinion, that is true leadership, and should be recognized.
I would also encourage people to take a look at what is happening with the SMART district- they are in the process of creating a new bureaucracy that is among the most lenient and generous in their pay and benefit practices. In these economic hard times, is there any excuse for cushy salaries and fully paid for retirement benefits (in other words, no employee contribution)?
We have a chance to send a message to the SMART Board (which is composed almost entirely of elected City Council members and County Supervisors) that this kind of conspicuous consumption and excessive generosity with taxpayer money is unacceptable, and to reverse the trend.
Sign up at this website to be added to the email list, and find out how we can send a clear message to our elected officials, who appear to be completely disconnected from the economic realities of the present day. Help us get this initiative on the ballot to send a clear message that taxpayer money should be treated with more respect.
http://www.repealsmart.org
“Administrative leave is widespread in public-sector managers’ compensation, although how it is administered varies. Employees qualify for it if they are classified as “exempt,” meaning that under federal labor law they are ineligible for overtime pay.
It is also commonly part of benefits for confidential employees, who are defined as those whose work involves personnel issues.”
Sorry writers JEREMY HAY & BRETT WILKISON
…as former chairperson of the SCCEA, I can attest to the fact that Confidential Employees do not, at least while I was there, did not receive additional administrative/vacation leave due to our status as Confidential Employees.
Also, the 25% sick leave payoff is not counted towards final retirement compensation calculations. The 25% plus any vacation and/or comp time payoffs can be rolled over into the employees 457 Voluntary Deferred Comp plan, but does not count towards final retirement compensation calculations.
To the general public, the non-County employee: Your jealousy is getting in the way of the facts. Do some real research or get a job at the County to find out the truth. Yes, there are too many upper managers doing nothing but making bad policy. But don’t take it out on the worker bees who actually bust there behinds to make sure the services you demand are there for you.
Remember, County Employees actually WORK for their pay. Welfare recipients do nothing for theirs. What’s wrong with this picture?
It’s ironic and dishonest for Shirley Zane to talk about excessive pay and benefits. Sonoma County Sups are some of the highest paid in the state. (Seems to shoot down the premise that more pay equals better quality personnel, doesn’t it?)
She has no credibility until she votes to reduce her Board salary and benefits in line with her comments.
She can talk the talk, but she isn’t walking the walk.
It seems everyday some new story come out about more “honest graft” concerning local or state government in California. Too much of it deals with Sonoma County politics.
“Is something rotten in Demark” as Shakespere said. It looks like something has been wrong and continues to be wrong here in the North Bay for some time.
Money giveaways to public employees for “administrative leave,” cash payments, extravagant benefits and pensions and pay way out line with the private sector.
It looks like the local politicans are incapable and unwilling to apply the strong medicine needed to correct the mess. The answer, if left to the politicans, looks like bankruptcy.
RE: doodles – “What county worker fails to mention…”
Another example that ‘County Worker’ doesn’t mention is that county employees can cash out their sick-time at 25% on the dollar if they leave before retiring, or use the accumulated sick-time towards their retirement, thereby padding their annual retirement payout.
Freaking thieves. Period. Every elected “official” is a thief. They purposefully game the system that is rigged for their benefit by the union. This is why every city, state and the feds will go bankrupt at some point. There is no way to justify the outrageous pensions. There is no way to keep paying someone who no longer works a HIGHER salary than when he pretended to work (we all know these people don’t do anything to justify their salary).
It is a joke, and the reason I make every effort to NOT pay sales tax, to avoid paying income tax and to take advantage of the system in every way I can…these thieves do. These thieves constantly bend to the leech-lobby groups who want more and more benefits paid for by the sweat of REAL WORKERS, not leeching government workers.
About the union rank and file there may be little we can do, but elected officials the solution is simple…One Term, do not reelect.
All of this nonsense about leave hours being cashed out, cash bonus payments and other sorted payments are from a bygone era when governments had unlimited funds to spend and treated their managers and employees with payments few know in the private sector.
The golden times are over and now the reality of what being broke is setting in. Like the homeless, local governments are looking for handouts from anyone stupid enough to give them a handout for more drink and drugs called more taxes in the government context.
The sooner these perks are stopped, the sooner the spending spree can begin to be turned around.
Local government politicans need to be put in rehab and dried out. Maybe then they will see the error of their spending ways and begin to act responsibly.
This rehab should start with the Board of Supervisors and the Santa Rosa City Council.
What county worker fails to mention is they get the same retirement “perks” they criticize management for–they are all part of the same retirement system. Department Heads have contracts or are elected and negotiate different “perks” than all other middle managers, who are not eligible for OT so their hourly rate actually goes down every minute over 8 hours they work. The reality is the current pension systems, all pension systems, are unsustainable. The danger is in being short-sighted about how to make changes that will not erode the quality or expertise of professionals needed in county service. Do you know what happens when you don’t provide decent wages and benefits in government–you get corruption, Mexico style. And “capping” the percentage or maximum benefit to a CA average(as some would like) will chase doctors, nurses, and other needed professionals already in short supply out of California—why go to medical school if you will earn what the average high school graduate earns at retirement? Eliminate the obvious allowances like pension spiking and cashing out leave to boost salary—create a new system for new hires to bring down long term costs.
County Worker.
Until Bell Ca ? are you kidding us ? Us mere taxpayers have seen the unsustainable system for over a decade.
I guess you missed it, Unless you aree one of the greedy ones yourself.
Never mind the future, grab all you can now ! Never mind the citizen taxpayers, bleed them dry.
Unsustainable has a meaning.
If nothing else, this story should point out that ELECTED OFFICIALS and their managers, who they can hire and fire at will, get the best deals.
So maybe unions do not control the system? Elected officials determine what benefits they want, then pretend to raise the benefits of the lowly workers. OUR benefits are “not sustainable,” but THEIRS are?
I could name a number of retired elected officials and managers who do NOT want further discussion of this issue. I could also comment that if you were one of the real workers, who did the real work, for a LOT less in salary and benefits, you might be willing to reveal some really interesting info.
County,
Sorry for no editor, but I did try to say that they make the rules. For themselves. I thought that was obvious, and will try to edit better. I left a ” Y ” out. Sorry
@County Worker and others.
My points stand, I know the problems, and if you were a slacker, then NEVER MIND your opinion. Get fired or dismissed or laid off. Be done with bad County Employees.
Nope, you are going to defend your ilk to the very end.
OK, let us all see how unsustainable hits.
If an audit was done for SRJC, ohh my, waste of money.
Lol, reading the above and below posts, no wonder California is the cesspool of America. From the corrupt liberal agenda, liberal’s sick immoral choices, and their no good for nothing free loaders to their Ecco-terrorists, mexi-california is the arm pit of America.
Steve guy,
News flash – Nothing they have done is illegal. You may not like it, it may not be sustainable but no laws have been broken. These were resolutions by city councils and boards of sups. How do you blow the whislte on public information that is not illegal? No one cared to even read these little known bargaining group’s contracts until the City of Bell scandal. Now, anything over minumum wage suggests a beheading. Legal is legal. Don’t even think about mentioning morals. This is California. Our gov’t and wlfare system is the most immoral and disgusting in the country. We’re number one! That is real crime with a felony C.
Has anyone ever heard of elected officials getting vacation time or administrative leave? Just one more way to hide the total cost of what these folks are getting as they drive us into insolvency and cut all the jobs and services.
So much for the new board trying to reinvent this system. They get to much themselves to lead by there own sacrifice.
Gov. Browns new National Guard Chief Maj. Gen. David Baldwin,”Leadership sets the tone for any organization, and our leaders will be held accountable.”
Rod Dole and all his buddies that buried us with debt and created this failed system are retired.
Where are the leaders commensurate with the challenges ahead for Sonoma County? Looks to me same old S***, different day.
Uh, note to GAJ.
Care to provide us with an example of your statement, “Department Heads with major responsibilities …”
What “major responsibilities” are you referring to ?
Just curious.
Not to mention that City and County Department Heads with major responsibilities will now be looking at the ridiculously over the top pay package for the new SMART Chief as the new “bar” for their pay/bennies to the further detriment of rank and file and the taxpayer.
I do feel for the rank and file workers. They are catching criticism and blame by being cast in with the others. The good ones, not the worthless ones.
On the other hand, they went along and are first hand witnesses to years of waste.
Time to whistle-blow yet ? Huh ???????
Ohh, you have been afraid to get fired by the same ones that rule you and rip us all off. Oh well, they are throwing us all under the bus.
Anyone that looks at the numbers realizes that this is unsustainable. Unsustainable means just that. This do nothing about it attitude that most people have seen coming for years ( Dan Walters of the Sac Bee has been warning for years) has only made the problem worse. Still no real pension spiking reform.
So we give our self-aggrandized ‘public servants’ riches for life, health care for life, at a higher rate than what they earned. Having the making the rules does not work. It will end, it’s how it is done. Total collapse is their option it seems. Be greedy until it’s all gone.
What part of ” Enough Already ! , do they not get ? Come on good County workers, whistle-blow. Contact the Grand Jury.
Meanwhile, the lowest paid employees work harder, for less money.
Huge cash payouts to the top county officials while thousands of rank and file employees have been laid off the past few years….enough said!!
One thing puzzles me.
Some of these graft artists get paid salaries and the extra vacation monies.
In the private sector, we normally give the vacation and sick as part of their normal salaries or hourly wage earnings. In other words, I paid them their regulars checks, not an ‘extra’ payment.
I am sure it can be explained by ones that know accounting gimmicks and hidden costs.
Oh, that would be government administrators. That explains their expertise in fleecing.
Just another perk for upper management that is not available to the rank and file. You notice they justify it by saying they are slaried and don’t get overtime. Well, I have a base salary. I get overtime, but it is NOT allowed to be calculated into my retirement. You will notice this benifit is only available to the highest paid. i guess they think that is ethical and justified.
Salaried employees in the private sector are expected to be available 24/7 with no such outrageous perk.
Time for this “hidden” government perk to go the way of the Edsel.
Political leaders often express dismay at “pension spiking,” although they rarely define exactly what qualifies in their minds, and, worse, never seem to put a stop to it.
“Former county auditor-controller Rod Dole retired in May and cashed out leave hours for $44,140, plus used additional time to boost his last year’s salary and, as a result, his retirement pension.”
I listened to Shirlee Zane speaking at an event last month and was pleased to hear her express her dismay with pension spiking. She called the practice “unethical.” Rod Dole, it looks like she was talking to you.