In one of his first acts as Sacramento city manager, John Shirey last month ended a policy that allowed hundreds of veteran city employees to walk out the door with an average of $33,000 apiece in severance pay.
When unused sick time and vacation were added in, some employees left with more than $100,000.
Shirey said the cash-strapped city no longer could afford to rely on voluntary buyouts that offered longtime employees special enticements to retire early. The city has laid off nearly 200 people this year without such severance payments. More layoffs next year are a near certainty.
A voluntary program doesn't provide the savings needed to address long-term fiscal problems, Shirey said: "We have to take more overt actions to reshape this organization for the 21st century."
Drawn up in 2008 and approved twice by the City Council, the severance policy gave managers discretion to offer voluntary buyouts that included special payouts based on the number of years an employee had been with the city.
City officials said the buyouts – known colloquially as "golden handshakes" – saved the city millions of dollars in the long term that otherwise would have been spent on salaries and benefits. And with so many older workers volunteering to resign, fewer younger workers were given pink slips.
But in a sign of the dire financial times that continue to grip City Hall, the voluntary-separation package – once marketed as a humane cost-cutting move – has gone the way of travel budgets and regular pay raises. With the city in its fifth year of budget shortfalls, officials said, they no longer can allow so many employees to leave on their own terms.
Shirey said the policy had run its course.
It's insane to pay someone for their unused sick time and it's a policy that needs to end. I know policemen who have enough accrued sick time to cash out with $100,000 plus at retirement in unused sick time, which is absurd.
A big hat tip to Shirey who seems to have a more prudent view of the tax payer's money. Maybe, just maybe we are on the verge of a trend change, an end to pay and benefits that are completely useless and egregious.
Shirley also indicates that more prudent thinking about deficit solutions might be forth coming. Wouldn't that be a pleasant change of events, a local leader treating the public's money with respect.
I've said it before, the prior solutions to deficits of accounting gimmicks, more debt and service cuts are coming to an end because there is only so much you can do with those because they are one time events. Eventually, you have to look at re-occurring solutions to solve re-occurring deficits. That forces tougher more prudent financial management at some point, not just in Sacramento but every where.
Hope all is well.
J.D. Rosendahl, Rosey