The City of Long Beach apparently made “separation payouts” recently to a number of politically connected non-union employees, some of whom are still on the payroll.
This included a $108,000 payout in December to former City Manager Jack Schnirman, who collected at least 100 percent of the sick time he had accrued since he was appointed in 2012. The city’s Code of Ordinances states that non-union, or management, employees like Schnirman should be paid 30 percent of total accrued sick days at the time of separation, and can claim up to 50 vacation days.
Officials have said that the city manager has historically had discretion over the code, and that the 30 percent calculation is open to interpretation. But such discretion can lead to fraud, abuse and political patronage.
“Generally speaking, there’s no discretion unless discretion is written into the policy,” Gerard Fishberg, a Garden City-based attorney specializing in public-sector labor and employment, told the Herald. “But that would be unusual, because someone could take advantage of that.”
It’s time for checks and balances — and more accountability — at City Hall.
We agree with State Sen. Todd Kaminsky that the recent payouts are troubling. It’s time for a full audit of Long Beach’s finances by state Comptroller Tom DiNapoli’s office.
Since 2014, city officials say, separation payouts, which are supposed to serve as early-retirement incentives that save the city money, have dropped from $5.6 million to about $2 million.
Officials said that borrowing for the payouts, rather than including them in the budget, has avoided tax spikes.
Experts like Fishberg acknowledge that, at times, paying the money in installments, rather than as a lump sum, could save a municipality money.
It’s one thing to pay a police officer, firefighter or sanitation worker $100,000 upon retirement after 30 years of service, or for an employee to receive a “hardship” payment because of, say, a cancer diagnosis.
It’s another thing to offer management employees separation payouts for political reasons, which appears to be the case.
With Schnirman recently saying that the payouts were “distributed evenly” in recent years, it appears that management and even some union employees might have collected more than the accrued sick, vacation and other unused days they were owed, as outlined in the Code of Ordinances or in their collective bargaining agreement.
A number of management employees left or intended to leave for jobs at Nassau County or the Town of Hempstead after the November elections, or were given payouts amid uncertainty about their jobs. About 15, however, still work for Long Beach, and the city paid out more than $200,000 to at least seven active employees.
The city’s former comptroller, city officials and some council members said they had banked on a $2.1 million borrowing measure receiving City Council approval to make up for the separation payments that they claim were included in the 2017-18 budget as revenue.
The council recently rejected the measure, however, and in addition to a potential 12 percent tax increase, residents and employees are now being told that without bonding, layoffs are imminent and services might be cut.
Two council members — John Bendo and Anissa Moore — voted against borrowing after they questioned the hefty separation payments made to non-union employees, including Schnirman. Given the many questions swirling around the payouts, they were certainly within their rights to question them and to vote against the borrowing.
For years, Schnirman said that while the city continued to face fiscal challenges, its finances were trending in the right direction after his team implemented financial controls, cut spending and reduced the city’s payroll, all while receiving credit upgrades and positive outlooks by Moody’s Investors Service. The city even replenished its reserve fund to $9.4 million last year as part of the administration’s “smart recovery.”
Now the city’s broke?
Contrary to the administration’s outlook, DiNapoli’s office recently said the city has, in fact, “been trending in the wrong direction” financially in recent years and is now in “significant fiscal stress,” refuting the rosy financial picture painted by the administration.
No doubt, the administration faced challenges in dealing with a $14.7 million deficit left by previous Republican leaders and rebuilding costs after Hurricane Sandy.
Still, Long Beach should be in better fiscal shape than this. At the same time, it appears that city officials have flouted the code to reward their political cronies with “discretionary” payouts.
It’s time to reform how separation payouts are calculated and paid — and for a full audit of the city’s finances.