Accrued sick time weighs on Pittsburgh budget
It stung when Pittsburgh police lost the right to amass a treasure chest of unused sick days and cash them in upon retirement for a five-figure payday.
“They were like manna from heaven,” said former police Sgt. Jim Malloy, who retired in 2004 with 150 sick days.
“It was like a savings account. Guys didn't take a lot of sick days for that reason, but Act 47 just devastated the contract in 2004,” he said, referring to one of Pittsburgh's two state-run financial overseers.
Manna has a cost.
Unused personal, vacation and sick days among the city's 3,200 employees add up to an estimated $27.62 million long-term liability, according to Pittsburgh's 2012 Comprehensive Annual Financial Report. By comparison, that's roughly what the city expects to collect this year in EMS transport, building inspection and other service fees as part of its $470 million budget. Officials anticipate a $23 million budget surplus this year.
Malloy said anyone who earned the sick time deserves to reap its financial benefits at the end of a long career, including former police Chief Nate Harper, who collected a $95,000 lump-sum payment from unused vacation, holiday and sick time after he resigned amid scandal in February.
“They can't take the time away from you,” said Malloy, former president of police union Fort Pitt Lodge No. 1.
“It's a major liability,” said Marty Elikan, chief accounting officer in the office of City Controller Michael Lamb, which prepares the report. “It's not as big as workers' compensation, but it's something the city will have to pay.”
City and state officials said they have worked to eliminate from labor contracts the ability to accumulate sick days to align practices with private-sector employees who typically work for companies with a use-it-or-lose-it policy on sick leave.
Elikan said 171 employees are slated to retire this year.
That accounts for $18.86 million of the $27.62 million in “compensated absences” on the city's books, he said.
Elikan said 574 city employees are eligible to retire because they have reached a certain age and worked for a minimum number of years. For police, it's 50 years old and 20 years of service.
Firefighters are the only city employees who still can accrue sick days, up to 112 shifts, or about 896 hours, said Judy Hill Finegan, director of Personnel and Civil Service Commission.
Joshua Bloom, an attorney who represents the International Association of Fire Fighters Local No. 1, declined to comment.
“When we went into Act 47 back in 2004, there were some things that really trimmed our budget. Sick time was one of them,” Hill Finegan said. “We've tightened our belts.”
The cap on Pittsburgh firefighters' maximum sick leave days appears to be in the low range compared with unionized state and local government workers nationwide, according to a 2012 U.S. Bureau of Labor Statistics compensation survey. The average cap of accumulated sick days for such employees was 160; for nonunion employees, it was 114 days, the survey found.
Most of Harper's payment came from 150 unused sick days he accumulated over a 36-year career. They were worth $61,140, based on his career-high salary of $105,981, one of the highest salaries among city employees.
“It's just another example of why city finances are in the shape that they're in,” said Frank Gamrat, a senior research associate at the Allegheny Institute for Public Policy, of the sick leave benefit.
Former Gov. Ed Rendell declared Pittsburgh “financially distressed” in 2004 when it was on the brink of bankruptcy. The designation gave state overseers the ability to impose budget cuts on the city's influential police, fire and other labor unions.
“The only place I've run across the ability to bank them is in the public sector. You don't see it in the private sector,” Gamrat said.
Mayor Luke Ravenstahl forced Harper to resign Feb. 20. In March, a grand jury indicted Harper on one count of diverting more than $70,000 from the city to two secret Greater Pittsburgh Police Federal Credit Union accounts and four counts of failing to file income tax returns.
Harper's attorney has said he intends to plead guilty.
Hill Finegan said Harper would have been entitled to the payments even if he had been fired. Harper could, however, lose his pension if he is convicted and a judge orders him to pay restitution.
Hill Finegan said she could not estimate how many total sick days the city could owe those eligible to retire. She said her office does not keep a running tally of sick days.
Henry Sciortino, executive director of the Intergovernmental Cooperation Authority, said Hill Finegan would be able to track sick time usage and other detailed employee data if the city would comply with the ICA board's recommendation to purchase a financial management system.
The ICA withheld $13.3 million in 2011 to force Pittsburgh to replace its antiquated accounting system, but it's not in place.
“This is one of the reasons we want a comprehensive financial management system,” Sciortino said. “It's designed to break it down to the individual level so the city can better manage its financial exposure.”
Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or email@example.com.