Handsome pay on the way out 

Longtime city employees are collecting big cash payouts when they leave their jobs — in some cases more than $200,000 — from unused sick hours, vacation hours and comp time, according to information from the Controller’s Office.

During last fiscal year, the largest cash payout went to Melinda Pengel, who served in the Police Department for 31 years and finished up her service as the deputy chief of police in the Airport Bureau. Pengel received $214,831 on top of her $114,173 salary, according to the Controller’s Office.

She received a payment of $125,984 in comp time — or hours granted in lieu of overtime payments — an additional $51,994 in unused sick time and $36,853 in unused vacation time. After retiring with the big cash payout, Pengel landed a private-sector job at the airport working for Covenant Aviation, which provides passenger screening services.

One reason the accumulated pay costs The City so much is that the payouts are paid at the rate of the public employees’ salary when they leave and not at the rate when they are earned.

Mayor Gavin Newsom has pushed for civil-service reform since he came into office in 2004. In 2005, the Civil Service Reform Report was issued by the Department of Human Resources recommending improvements — many of which have since been implemented — throughout the personnel system, from fewer labor contracts to better hiring practices as well as increased budget controls.

In addition to Pengel, five other city employees took home large payouts during the last fiscal year. Attorney Daniel Maguire of the City Attorney’s Office took home about $301,000 with nearly $95,000 in banked sick time and nearly $33,000 in vacation time. Linda Klee of the District Attorney’s Office was paid out about $290,400 with about $127,000 from accrued sick and vacation time.

The other three large payouts went to employees in the Fire Department, including Capt. Anthony Soule, who received $287,832, of which $130,411 came from cashing in comp time, sick pay and paid vacation time.

Large payouts are a problem for several departments because retirements eat into departments’ annual budgets, using up money that could otherwise be spent on services. The City has attempted to avoid such large payouts in the future by changing labor policies, but the problem persists.

As of fiscal year 2006, if every employee cashed in on accrued paid sick time and vacation time, The City would be on the hook to pay out $43 million, which does not include any accrued comp time, according to the Controller’s Office.

A well-paid lot

Top payouts for city retirees in fiscal year 2006-07

RETIREE

TOTAL

SALARY

COMP TIME

SICK PAY

VACATION

Melinda Pengel - Deputy police chief, Airport Bureau

$329,004

$114,173

$125,984

$51,994

$36,853

Daniel Maguire - Assistant attorney, City Attorney’s Office$300,987 $173,056

$94,942 $32,989
Linda Klee - Assistant attorney, District Attorney’s Office$290,396 $163,362

$90,085$36,950
Anthony Soule - Captain, Fire Department$287,832 $157,421$25,956$75,160$29,295
Michael Jones - Captain, Fire Department $274,356 $155,013 $25,632$58,426$35,286
Edward Liggins - Captain, Fire Department$261,168 $165,432$2,001$61,290$32,446

City Hall’s top incomes

Top overall earners in fiscal year 2006-07 who did not retire

$297,999.02 Nathaniel Ford

Executive director, Municipal Transportation Agency

$285,327.92 David Kushner

Deputy director for investments, Retirement System

$274,456.74 Amy Hart

Chief medical examiner, General Services Agency

$273,825.07 Christian Kitchin

Special nurse, Public Health Department

$264,024.99 Edward Roland

Captain, Fire Department

$260,264.02 Venus Azar

Assistant medical examiner, General Services Agency

$257,831.00 John Martin

Department head, San Francisco International Airport

$256,769.98 Ed Harrington

Department head, Office of the Controller

$253,711.41 Barry Bloom

Sergeant, Sheriff’s Department

$253,462.25 Mitch Katz

Department head, Health Department

- Source: Office of the Controller

Controller says comp time is to blame in payouts

City Controller Ed Harrington said comp time accounts for much of the big payouts to some retiring city workers, with the effect historically being felt the most in the Police and Fire departments.

"In most of our contracts, we have limits to what you can get. With police and fire, those limits were quite high or were ignored over time," Harrington said.

In the recently negotiated contracts for the Police and Fire departments, strict caps have been put in place for comp time accruals along with policies to draw down accumulated hours.

"We think we’ve fixed it for new hires and for new accruals, but there are historic balances that are still quite high," Harrington said. "They did what they needed to do to get the officers out in the street and not have to pay for it that year, but it ends up costing The City more long-term. It’s not a good way to keep doing business."

As for sick time, city employees are allowed to bank up to 1,040 hours. Those who were employed prior to 1978 are allowed to cash out sick time earned up to that cap prior to 1978.

Employees hired after 1978 were not able to cash out accrued sick time until The City created the so-called wellness program, instituted in 2001, allowing employees to cash out a certain percentage.

Those working for The City prior to 1978 had their sick pay vested and accrued additional paid sick time under the wellness program.

The wellness program has been deemed ineffective and is being phased out, according to Steven Ponder, compensation manager with the Department of Human Resources.

jsabatini@examiner.com

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