OKC taxpayers fork over millions to retiring city workers

By Arthur Kane | Watchdog.org

In the past five years, Oklahoma City taxpayers have cut checks totaling $20.6 million to retiring city employees for accrued vacation and sick leave, Watchdog.org found through an analysis of city databases.

Nearly 500 employees — almost half — left the city with checks of $10,000 or more, including one employee who cashed out $108,000 and another 17 who took home more than $80,000 each upon retiring, records show.

State Sen. David Holt, an Oklahoma City Republican who served as an Oklahoma City mayoral chief of staff, has been a critic of the state system that can take union negotiations out of local elected officials’ hands and can put them before an arbitrator. He said the payouts are based on salaries negotiated in the contract so that’s why payments are costing taxpayers so much.

“The binding arbitrating system is so accepted that most people do not complain about it as much as they should,” he said. “It’s not in the best interests of taxpayers.”

While Oklahoma City policies allow all employees to accrue and cash out 1,000 hours of sick leave and 400 hours of vacation time, police and firefighters account for most of the large leave payments, the database shows.

Of the $20.6 million paid out in the past five years, $9.2 million went to fire department staff and another $4.5 million to retiring police. Of the largest 100 payouts in the past five years, 94 went to retiring police or firefighters, the city database shows.

“They’re only half the city employees, but they take up two-thirds of the budget,” Holt said. “It doesn’t shock me that it’s the lion’s share and the largest proportion of the expenses.”

Eighty-eight employees had 1,000 hours of sick leave and 105 workers had 400 hours of vacation leave. Expenses increase because while hours might be accrued at a lower pay rate, they are often paid out at a much higher pay rate the employee attains by the time he or she retires.

The municipal league, an association of city governments, doesn’t track or suggest best practices for the number of hours employees are allowed to accrue, but some private employers have prohibited the carry over of sick and vacation leave to subsequent years and only pay out what the employee doesn’t use the year he or she leaves the company.

Oklahoma City budget director Doug Dowler said city staff tracks the payout and for most positions the city will keep the job open until the accrued hours are accounted for, but police and fire union contracts require positions to be filled quicker after an employee retires.

“When you’re talking about the fire and police unions, it is extremely difficult,” he said, adding the city budgets for payments and leave costs are on the city books as a liability. “They’re a significant part of the work force and they have a significant base of support in the community so it’s a very difficult issue.”

It’s not just the payouts of accrued leave that’s putting the city into a potential financial crunch. Watchdog.org found in September that Oklahoma City staff salaries are larger than those of top staff in similar-size cities, which is especially surprising since the city has a very low cost of living.

While Oklahoma City’s budget is currently financially sound, salaries and benefits will take an increasing toll on resources in the next few years, budget documents show.

The city’s 2014-15 budget warns increasing salaries would result in a $28.9 million budget deficit by 2019.

“Since Personal Services are the majority of City costs, controlling the growth in this area will be a major key to maintaining financial balance,” according to the budget document. “The most effective means to achieve a balance between controlling personnel costs while maintaining competitive salary and benefit packages for employees in the future will be to limit salary and benefit growth to within the approximate growth rates of City revenues.”

Dowler said the city must balance its budget so departments will have to find a place to cut if revenues do not increase.

“With personnel costs the biggest portion of the budget, we’re going to have to make reductions or gain more efficiency to do more with fewer personnel or provide a lower level of service,” he said.

The local fire union representative didn’t return a call seeking comment.