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A Closer Look At Special Pay For SD County Employees

October 5, 2011 1:24 p.m.

As public pensions are increasingly scrutinized, so has the practice of using special pay to boost pensions. Some consider it income that should rightfully be counted toward pensionable pay; others see it as another way to gouge taxpayers. The practice is not universal but is so common among government employees that numerous counties and cities, and now the California legislature, are seeking to ban the practice.

Guest

Kevin Crowe, investigative reporter, Investigative Newsource, non-profit journalism center based at SDSU

Related Story: Special Pay Increases San Diego County Salaries

Transcript:

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: I'm Maureen Cavanaugh. It's Wednesday, October5th. Our top story on Midday Edition, elected officials desperately search for cash to maintain government programs, and public worker pensions are often the folk of their attention. Now, the common practice of adding special benefit pay toward retirement intrinsic coming under increasing scrutiny. The investigative news source is out with a list of benefits San Diego County workers have been receiving. I'd like to introduce my guest, Kevin Crowe is a reporter for investigative news source, nonprofit journalism center based at San Diego state university. Kevin, welcome pack to the program.

CROWE: Good afternoon, Maureen.

CAVANAUGH: We're inviting our listeners to join the conversation. If you worked for the county and have gotten a special pay benefit or if you currently are getting a pension, give us a call with your questions and comments. The number here is 1-888-895-5727. How difficult was it for you to get all the numbers you needed for this story?

CROWE: Well, we have had San Diego County salaries in those databases for some time. And they break those things down by overtime pay, base pay, special pay, all that stuff. We asked the county to compile aggregate data for us in terms of -- broken down by category of special pay. So not necessarily by employee, but broken down by category, so that we could track those kinds of things from it 2007 through calendar 2010.

CAVANAUGH: What was your purpose for doing this story?

CROWE: We just wanted to see how it fluctuated. I had known from analyzing the previous databases that it had been pretty high for 2007, 2008, up around $43million. And then it dropped significantly in 2009 and 2010. And so we wanted to see what accounted for those kinds of drops.

CAVANAUGH: Is there any evidence in the report that you compiled that San Diego County employees are gouging taxpayers as some of the critics claim?

CROWE: Well, I don't think that these are the kinds of special allowances that really allow for that. Typically pension spiking is using unused vacation time or unused sick time or things like that to add on an extra few weeks or maybe a month or so to an employee's final pay, somewhere like 20%. They can't really do that with these kinds of special pay. These are allowances for -- uniform allowance, night shift premiums. Those kinds of things.

CAVANAUGH: And the special pay, it breaks down into a number of categories for county workers. Tell us about that.

CROWE: Right. Of the there are more than 80 categories of special pay. There are, hike, 8 different kind was bilingual pay. If an employee is in a position where they really need to use more than more than 1 language, they'll receive a premium pay for that. Nightshift working, premiums for nurses working in prison, and things like auto allowances, that the supervisors gets and the heads get, and those range from $600 a month to a $6,000 a month. So there's quite a laundry list.

CAVANAUGH: 1 of the important parts of your story is the fact that these benefits seem to keep on giving after a county worker retires. How does -- how do special premium pay benefits get added on to be counted as part of the retirement income that county workers might get.

CROWE: Most of them are counted in special pay. And that's law. And so what happens is when somebody retires, depending on what classification they are or when they started working for the county, they pick either their highest consecutive year of compensation or their average of, you know, the highest 3years. And so a lot of these premiums are factored in had as what's called compensation or pensionable earnings. And so you'll get your uniform allowance if you taking it during that year, or if you elect a year as your highest compensation in which you got a bonus, that bonus is included. A car allowance the same deal. If you made $143,000, for example, and you get -- if you elect that year on which to base your pension, it's 145,000.

CAVANAUGH: Tell us what the county told you about the practice of premium and special pay for county employees. How do you -- do workers quiet these benefits?

CROWE: They negotiate for them. So what happens is a lot of -- they have to pay them -- they're included in pensions by law. But they -- the county can negotiation with the different bargaining groups on how much they pay for a certain thing. So how much they pay for a uniform. Or how much a nightshift premium might be. What they do is go through and organize these things and negotiate for them depending on classes of employees, whether they're safety or not. And 1 situation or 1 group of employees they pulled out as difficult to recruit were nurses. And they said it's hard to compete in San Diego to get great nurses in because they can get really good premiums from places like Kaiser. And so they have to offer maybe bilingual people extra pay for working different shifts and nay vocal build these things into contracts instead of saying, hey, we'll give you a 4% pay bump instead of giving you a 4% pay bump, maybe we'll give you a 2 and a half% pay bump, and give you the opportunity to get some of these premium pays.

CAVANAUGH: I believe we have a clip about what why a lot of these benefits have to be included in pensionable pay. You spoke with county director of human resources Don Turco.

DON TURCO: The predicate to a lot of this is the Venn tour decision in which the state Supreme Court ordered the lower court to consider as retirement earnable compensation a number of these special pays. So this isn't something we can just unilaterally discontinue. It's codified in law. I'll go through some of these, which are negotiated. And having come here from several other county, I can say very safely that these are pretty much industry standards across counties.

CAVANAUGH: And that once again is county director of human resources, Don Turco. I want to let everybody know my guest is Kevin Crowe, he's a reporter with investigative news source. And we're talking about the new article that he coauthored about pensionable pay, and the kind of special pay, the premium pay that San Diego County workers receive because it's been negotiated in their contracts. I don't want to hog the microphone, but we invited a San Diego County representative. In fact, we invited all the county supervisors, and they were unable to join us on Midday Edition. But we did receive a written response, which reads in part "if current premium pay was eliminated during negotiations, it would likely be replaced by an cross the board 1% increase in pay as part of the bargain. That would be about $14million annually, so there's no real impact on pensions. Plus we'd be left with the issue of getting nurses to work in the jails and so forth," all the special kinds of places, activities that county workers are given a bonus are if. That's from Michael Workman, director of San Diego County communications office. Is that more or less the kind of information that you got from the county?

CROWE: Right, right and we -- Kelly Thornton and I were able to speak with them at length last week, and those are the kinds of situations they brought up. Each classification of employee or each group, they have to negotiate fiduciary all these things. So each group is slightly different in thirds requirement step increases or pay increases annually. And so they negotiate and say, okay, we'll make you eligible to receive these -- a given premium if instead of 3% you take a 2%. Instead of 4%, you take a 2.5% increase.

CAVANAUGH: Now, the numbers in this report for premium pay going back to 2007, right?

CROWE: Right.

CAVANAUGH: Hasn't the biggest part of special pay already been eliminated for county workers?

CROWE: Right. It was the Quality the First program, and these were what were called performance bonuses. . It was a program under which, an employee, if they were able to save their department or the county somewhere around 6%, if they instituted some program that led to those kinds of savings, they were eligible for a bonus of up to 4% of their salary. And that would be paid out over a couple of pay periods. That was another example they touted instead of raising, you know, giving annual steps, they would bay these annual bonuses. And those bonuses, however, they count toward pension as well. So it's difficult -- very difficult to quantify the differences in which -- between what would happen if you had step-increases versus -- what you would have if you just gave out bonus us. They said everybody was eligible to receive a bonus, but not everyone did. So you had to save the county some money in order to get some money. But they don't know, and they haven't done any actuarial analyses of how much it costs in terms of the pension, or how much the bonus first program would cost because they say the pot is so small. They wouldn't spend the money doing an analysis on benefits ranging from $13million to $40million.

CAVANAUGH: As you pay in your article, this is a long standing policy that's been negotiated with laborer unions and the county to have these various categories of special pay. And compensation, really, for your cost of driving and for your uniform allowance and things of that nature. The reason that I -- that seems to me that this is -- has come to the fore is because of some really egregious examples of spiking pensions. And that is sort of using all your accumulated sick leave and vacation and whatever else you could throw in the kitchen sink to get -- boost that pension up in the last years of working. And there were some examples in Contra Costa County; is that right?

CROWE: There were some fire district officials up in that area who had retired with a high salary of $220,000 a year, and they were reaping a pension of 280,000 a year. And they can do those kinds of things because they just bump on all of their sick time or -- to really spike their salary during their last year or during whichever year they want to base their pension on.

CAVANAUGH: Speaking generally across San Diego County, employees can't do that with their vacation time or sick time. They get it paid out as terminal leave. So we did a story back in the spring about how much employees can get paid out for their unused sick leave, but they can't use that to spike their pensions.

CAVANAUGH: I saw a quote in your article from Juan Vargas who said you got a few bad apples who may turn this established form of payment upside down for everybody else who works for county entities in California because there is state legislation aimed at changing these policies, right?

CROWE: There was. Nothing's been enacted yet, and there was the piece of legislation that I think Juan Vargas was championing has been tabled or scrapped. And that would have eliminated things like vacation time or sick time on the end. But it would have also eliminated housing allowances and vehicle allowances. The vehicle allowance which is in San Diego County for the 44 people who get them, so the 5 supervisors, and various department heads, Walt Eckert. But by and large, I don't know what that would have done in terms of all of the other premiums like night shift and things like that. They probably would have been facing some court battles.

CAVANAUGH: Well, it's a very complex article, and good reading. And I want to congratulate you and Kelly on that. And I want to let everyone know that you can link to that, you can see that on our website at KPBS.org. And read the entire article. I've been speaking with Kevin Crowe, reporter with Investigative News Source, and thank you so much.

CROWE: Thank you very much, Maureen.