Payouts add up

Governments in Clark and Washoe counties have paid tens of millions of dollars annually to departing employees for their unused sick and vacation time. according to the Virginia-based organization, which bills itself as the world’s largest human relations professional society.

But when college professors surveyed city and county governments nationwide in 2014, they found more than half of respondents paid separating employees for their unused sick hours. The survey did not ask about vacation leave.

Payouts were offered to employees at all of the Nevada governments surveyed by the Review-Journal. Rank-and-file workers had the perk enshrined in union contracts, and government executives often extend the same benefits to themselves and managers.

Some cities — like Las Vegas, North Las Vegas and Henderson — have four-day workweeks, ensuring employees receive long weekends without using paid time off. A handful of public employers — including Clark County, University Medical Center and the city of Sparks — do not cap the number of sick days most employees can cash out.

“Clearly, practices in the private sector are a lot less generous than in the public sector,” said Reilly, who co-authored the study while serving

as director of the Morrison Institute for Public Policy at Arizona State University.

County employees cash out

One of Nevada’s largest public employers, Clark County, gives workers with at least a decade of service more than a month of paid leave each year. The county has paid departing employees nearly $35 million for accumulated sick and vacation leave in the past five years. More than 50 of those employees received at least $100,000.

County Manager Yolanda King said she sees no need for a policy change, because payout programs encourage employees to take less time off work. She also noted that employees aren’t eligible to receive payment for all their unused sick leave until they spend 30 years with the county.

“You want to be able to provide benefits that will incentivize people to have long careers here,” King said.

Some citizens on the Review-Journal’s voter panel criticized the policy.

Jim Sida, a Henderson resident and former California police supervisor, said he received about $50,000 for his unused sick and vacation time when he retired in 1994. He said allowing employees to accumulate and sell back unused time off can be beneficial to recruitment and retention, but such programs need limits.

“It’s a matter of fiscal responsibility. It’s a matter of good planning for the expenditure of the taxpayer dollars, and, finally, it’s to demonstrate to the public and other entities in the community the confidence that they are managing their workforce and their costs effectively,” said Sida, 69.

William Bradley, a commercial pilot who lives near the Strip, said government employees should be allowed to roll over some sick leave in case of an extended illness. But he also said accumulation of unused vacation time can encourage unethical behavior.

“I saw that all the time when I was a federal employee with the Department of Defense,” said Bradley, 49. “People would try to take vacation without logging it, and I’m sure it happens here in local government.”

Indeed, a Review-Journal analysis revealed this month that now-retired Las Vegas Convention and Visitors Authority CEO Rossi Ralenkotter did not claim about 300 hours of paid time off for days he didn’t work.

Ralenkotter would have received about $65,000 for the leave when he retired, but he declined to take a payment for it and his other accrued hours, worth more than $234,000 in total.

Liabilities loom

As of last year, Clark County was liable for more than $120 million of unused paid time off to its workers. The Metropolitan Police Department, which is partially funded by the county, owed $122 million to its employees.

Despite the massive IOUs, the county does not budget for end-ofcareer payouts.

Instead, when an employee leaves, that position is left vacant until any payout costs are covered by the savings of not paying salaries and benefits. Some positions, like firefighters and department heads, are excluded from the practice.

“We can have a position that has to remain vacant for a full year because of the cost recovery time,” King said. “For the most part it’s probably within a two-, three-, four-month time period on the recovery period.”

Similar cost recovery strategies are employed by the cities of Reno and Mesquite.

Robert Fellner, transparency director for the Nevada Policy Research Institute, said the practice flies in the face of government’s duty of serving the taxpayers. “The county’s entire purpose for existing is to provide ostensibly vital public services,” Fellner said. “Leaving positions unfulfilled to pay for county employees’ ability to cash in hundreds of days’ worth of unused leave doesn’t make that perk free. It instead represents a failure by the county to perform its core function, or an admission that residents’ tax dollars are being used to fund a bloated workforce.”

Clark County does not forecast how many of its 7,300 full-time employees are expected to retire in the coming years, county spokesman Erik Pappa said. But a large, ongoing wave of retiring baby boomers is expected to last until 2028, said Geoff Sanzenbacher, associate director of research for Boston College’s Center for Retirement Research.

“The baby boomer population is probably the largest generation to go through the U.S. economy, and it was one of the first generations where women worked a lot,” Sanzenbacher said. “Those two things combined means there will be a lot more retirees than previous generations.”

Time off essential

Though he is critical of payout programs, Reilly said he recognizes paid time off is an essential employee benefit.

“It’s very important that employees have access to sick leave when they need it for themselves or their families,” he said. “It’s more a question of how you manage the payouts and the accumulation.”

Clark County employee and union representative Brenda Marzan said being able to roll over unused sick hours each year allowed her to take months of paid time off following the birth of each of her two children and weeks for two surgeries. “If I had to go out without an income, I would have no house,” she said.

But redeeming unused hours for an end-of-career payment, some at many times the value as when they were earned, remains a practice under scrutiny from executives such as Las Vegas’ Tarwater.

“There’s no logical reason for the city to pay out $100,000 in sick benefits that aren’t used when someone leaves,” he said. “A sick program is just that. It’s supposed to be an insurance policy while you’re here working. It’s not supposed to be a cash program.”