Boosting worker’s pension by $400,000 isn’t unique, city official says

By Kathryn Watson | Watchdog.org, Virginia Bureau

ALEXANDRIA, Va. — Richmond’s top city official defended a decision to transfer one employee’s 800 hours of unused sick leave from her previous city job so she could receive $400,0000 more in pension compensation.

It’s “not a unique transaction,” Chief Administrative Officer Byron Marshall said, according to a recent city audit.

That only raises more unanswered questions about what other transactions happen in Richmond’s senior-level offices as the state drowns in nearly $2 billion of debt, according to the city’s most recent comprehensive annual financial report.

Marshall restored a sick leave balance for Sharon Judkins, the city’s outgoing deputy chief administrative officer of finance and administration, from a previous stint with the city so she could receive a higher pension rate. Those 807.7 unused sick leave hours, which Marshall considered service time, would have translated to roughly $400,000 more in pension cash.

An anonymous city employee tipped off City Auditor Umesh Dalal.

Although it isn’t uncommon for public employers to calculate unused sick leave into pension packages — it’s written into federal law that federal employees can do so — adding in unused sick leave from a previous job is a big human resources no-no, the audit said. Not only that, but Marshall allowed Judkins to take time off for that unused sick leave — and still be financially compensated for it.

“Restoring unused sick leave from prior employment appears to be a unique transaction, which (Marshall) entered into for the sole benefit of (Judkins). In addition, the transaction does not comply with the city’s code of ethics,” the audit found, adding that the mayor’s office should seek out the commonwealth’s attorney to determine whether a criminal act took place.

Marshall, however, said he was “puzzled” by the city auditor’s claim the compensation was “unique,” because it’s common practice to give senior-level management cushy compensation adjustments.

“The OIG’s conclusion is puzzling,” Marshall wrote in his response to the Richmond city auditor’s office. “This is not a unique transaction. As mentioned previously, the city of Richmond has made adjustments to senior executive employment agreements. These adjustments … are made for a variety of reasons, including maintaining a valued employee, ensuring equity among peers, allowing separating individuals close to retirement eligibility to vest or achieve full retirement and helping to protect the city from lawsuits.”

Marshall also expressed his displeasure that any city official may have to pay for his legal defense.

“I accept the fact that the mayor has little choice but to seek a review of the matter, given the OIG’s statement,” Marshall wrote in his response. “However, I find it regrettable that any officer or executive of the city can, in the due course of their employment, find themselves forced to expend their personal funds to defend their reputation based on suggestion and innuendo.”

Revelations of the $400,000 compensation package make one wonder how much the city is spending on executive compensation as its debt increases each year.

Watchdog.org called to learn what other such special benefits senior management members receive. City representatives refused to make Marshall available for an interview.

“As this matter is currently under review, we will offer no comment at this time,” said Tammy Hawley, press secretary to the mayor, who is also handling inquiries into Marshall.

Marshall and Mayor Dwight C. Jones made news last year when a CBS 6 investigation revealed Jones approved tens of thousands of dollars worth of bonuses and deferred compensation for Marshall, who — with an annual salary of $178,000 — already makes the most in the city and more than Gov. Terry McAuliffe.

At the time, Jones’ office canceled a scheduled interview with CBS 6 reporters, instead issuing the following statement:

“We want to respect personnel procedures, and it is not our practice to publicly discuss one individual’s personnel arrangements,” Hawley told CBS 6 in an email.

More than 100 Richmond city employees earned above $100,000 in 2012, according to data compiled by the Richmond-Times Dispatch.

Hawley wouldn’t say whether the mayor plans to review senior-level management compensation practices.

“Other senior-level packages have been under the purview of the CAO,” Hawley said. “As that matter is under review, we will offer not comment at this time.”

Kathryn Watson is an investigative reporter for Watchdog.org’s Virginia bureau, and can be reached at kwatson@watchdog.org, or on Twitter @kathrynw5.