The city of Phoenix just paid out more than $2 million in vacation and sick time to police and firefighters.
Last year the city council voted to allow police and firefighters to get a lump sum payment of their accrued sick and vacation time. In return, the city would not add that time to an employees pension at retirement, in essence, eliminating pension spiking. This past July 1 was the first time city public safety employees could take advantage of the cash payout.
"We had about 359 people request those payments for a total of just over $2 million," said the city's assistant human resources director, Cindy Bezaury.
Councilman Sal DiCiccio, who represents Phoenix's District 6, is a staunch opponent to pension spiking. It was no surprise he's shocked by the payouts.
"The person that pays our bills, pays the bills of the City of Phoenix government, they're not allowed to roll over thousands of hours and cash them in," DiCiccio said.
But city labor director Cindy Bezaury says that a multi-million dollar payout isn't new. In fact, police and firefighters had been able to take payouts on a month-to-month basis.
"The new program allowed them to request on lump sum payment each fiscal year," Bezaury explained.
She says the city even budgeted for such payouts.
"We think this is just an initial interest because we had a lot of questions and we automated their ability to request those payments online," Bezaury said about the amount of employees of the change.
Employees with at least 1,289 hours of sick time can take the lump sum payouts. Payouts can only happen once per fiscal year. Sick hours can be cashed-in a max of three times in a career. Vacation hours can only be cashed-in four times in a given career. And those month-to-month payouts are no more. Bezaury says the change, part of overall pension reform, is expected to save the city money.
"One of the initial forecasts on it was about $600 million over 25 years," she said.
But Sal DiCiccio says talk of savings isn't realistic.
"Last year, the cash out of accrued sick and vacation time was $8.5 million," he said. "That was at the same time that the City of Phoenix was facing this huge financial crunch."
The city says the option of a lump sum payout is only available to sworn police and firefighters. Other city employees have their vacation and sick accruals capped at a certain point and they cannot apply those accruals to their pension at retirement.
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