So How Big Is "Golden Handshake" Council Voted To Give Mayor O'Neill On Her Retirement? How Much Are Councilmembers Considering Giving Themselves In July?
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(June 21, 2006) -- As first reported by LBReport.com, LB City Councilmembers voted 8-0 on May 23, 2006 to give exiting Mayor Beverly O'Neill a taxpayer-paid "golden handshake," crediting her on her retirement (mid-July) with 50 hours of sick leave per year of incumbency -- in her case amounting to 600 hours of sick leave. The Council action added the Mayor to a list of three other citywide officials (City Auditor, City Prosecutor, City Att'y) eligible since a 1997 Council action for 50 hours of credited sick leave per year of incumbency.
So what does that mean?
The City of LB's Human Resources Director, Kevin Boylan, tells LBReport.com that although the benefit has no "cash-out" value (she won't receive imemdiate dollars in her pocket), it will be worth roughly $31,000 to O'Neill in helping her pay her health insurance costs after she retires.
Mr. Boylan explained that when a public employee is eligible for retirement, they have the ability to use their unused sick leave for the purpose of assisting in the purchase of health insurance when they retire. City employees do not receive city paid health insurance on retirement...and this allows city employees to put their unused sick leave into a type of credit bank to assist the employee in paying for health insurance after they retire.
As a practical matter, city taxpayers wind up paying for part of the health insurance of retirees.
At their June 20, 2006 Council meeting, Councilmembers voted to take up the issue of whether they should include themselves in the same category as other citywide elected officials and make themselves eligible for the same benefit.
So what does that mean?
Councilmembers get paid 1/4 of what the Mayor makes...and if they were to receive the benefit of 50 hours of sick leave per year, that value would be about $650 per Councilmember per year. (They can only collect the benefit if they retire from the CA Public Employee Restirement System at age 50 or greater with a minimum of five years or more covered employment.)
So how did the Mayor and Council retirement benefit items arise?
The item for the Mayor originated (as best we can tell) with city management. It was agendized for the May 23, 2006 City Council "consent calendar" (items not receiving Council discussion unless requested by a Councilmember or a member of the public) when Mayor O'Neill wasn't presiding and Vice Mayor Kell was.
A transmittal memo to the City Council for the May 23, 2006 Council meeting, signed by Mr. Boylan and approved on the signature of City Manager Jerry Miller, described the Council action requested as "correcting the provision dealing with sick leave benefits for elected officials," saying that "[i]n 1997, sick leave benefits were provided to the full-time elected positions of City Attorney, City Prosecutor and City Auditor. At that time, it was considered that this provision would also be extended to the City Mayor as well. However, it was recently discovered that the final resolution did not contain that position. City Council action would correct this discrepancy by amending the resolution to include the position of City Mayor."
At the May 23 Council meeting, Councilwoman Tonia Reyes Uranga pulled the item for discussion and asked City Manager Jerry Miller why Councilmembers weren't included. LBReport.com has transcribed the colloquy:
Councilwoman Reyes Uranga: ...I wanted to find out why City Council was not included...Upon asking why City Council was not included, there were a couple of reasons given. One is that the City Council in the past, there had been discussion about the Council not being full time. It's my understanding that on paper we're full time, we're just not compensated full time. In fact the National League of Cities did state that in a city our size, the average Councilperson works 45-55 hours a week if not more. The second reason that was given was that most of the Councilpeople have other jobs, where in fact most of the other Councilpeople either don't have jobs or have part time jobs. I believe there's only two or three on the Council that have full time jobs. It really should not be a factor. And the last reason that was given was that this was considered well over ten years ago and had not been discussed since, so my question was, is there a reason why Council, other than the reasons given earlier, why Council would not have been included in this action? And if there's an overwhelming reason why there wouldn't be included in it?...
City Manager Miller: Madam Vice Mayor and Council, it might be that if you wanted to talk about that provision more so, that you might want to refer that for example to the Personnel and Civil Service Committee...I do feel that this matter has some degree of urgency and I would ask you to consider moving this ahead tonight.
Councilwoman Reyes Uranga: Well, I would not have a problem doing that. However, if it's been ten years since it was last discussed I'm not sure what the urgency other than, perhaps, well, there is someone who I guess one of the elected officials [Mayor O'Neill] will be leaving office soon. Is there anything we need to know other than if we were to make a motion tonight to include City Council, would that be something that would have other factors that maybe we weren't able to foresee today?
Assistant City Attorney Heather Mahood: ...Just because of the Brown [open meetings] Act, you would have to bring it back. That's a different pay code so you could easily bring it back at your next agenda...
Councilwoman Reyes Uranga: Well then I will make a motion to go ahead and approve the item and to bring back the consideration of the Section Five elected officials [citywide elected officials, including the Mayor] for inclusion of the City Council. [seconded by Councilwoman Bonnie Lowenthal]
When the item returned at the June 20, 2006 meeting, Councilmembers then confronted applying the same formula to themselves (amounting to 400 hours of sick leave credit for a retiring eight year Councilmember). As indicated above, management says this will amount to a retirement benefit of about $650 per year of incumbency for each Councilmember [a health care benefit amounting to $5,200 for each retiring eight year Councilmember).
The discussion comes almost exactly four years after a 2002 Council-approved "pension spike" for non-public safety city employees (that also benefited Mayor O'Neill). The Council's 2002 action, in two 9-0 votes, was set for the last day of the outgoing Council (with Grabinski, Webb & Shultz) and the first day of an incoming Council (with Reyes Uranga, Webb & Lerch) when attention would be focused on ceremonies, not substance. The vote became an issue in the 2006 Mayor's race...with candidates Bob Foster and Doug Drummond pounding Councilman Frank Colonna for his role in 2002 "pension spike."
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