County Absence Policy Questioned

County Commissioner Rose Rocco said she will look into scrapping a generous employee cash-out program that allows government workers to receive payouts earned at a lower rate and paid out at a higher rate.
The "compensated absences" policy allows employees to build up a financial nest-egg they can cash in annually or upon retirement that essentially amounts to double-time payments to employees.
And the cost to taxpayers is steep.
For fiscal year ending Sept. 30, 2007, the county shows $4.6 million in liability due within one year for compensated absences and another $2.9 million on the books for compensated absences due in more than one year.
The policy, which even the county administrator admits is going to be brought before the county board for review, is akin to someone depositing money in a bank account and earning interest on the money before they withdraw it.
The policy, because it is so generous, encourages employees to leave paid time off on the books each year. While this increases the employees' monetary gain it also increases the burden on the taxpayers.
And this is what Rocco wants to change.
Rocco, who said she was unaware of the policy's costs and potential for abuse, plans to talk with County Administrator David Hamilton about scrapping it.
Rocco said it must be creating a nightmare of bookkeeping problems and leads to a problem with accountability.
Specifically, Rocco wants to know who's tracking these employees and managers who are supposedly banking hours.
"Who really accounts for it and is it accurate?" she asked.
Rocco said she would like to see county government model its employee-time off policy on private industry - the traditional "use it or lose it" system.
If an employee does not take his or her accrued time by the end of the year, he or she foregoes it.
The next year, the employee starts with a clean slate, she said. That is less of a burden on the budget and less hassle with bookkeeping, she said.
Rocco said every employee should be encouraged to take time off during the year just to relieve the stress from the job, she said.
Rocco said Hamilton is already revamping the HR department and looking at policies.
"A lot of things will be changing and this (policy) may be one of them," Rocco said.
Budget Director George Zoettlein said the $4.6 million is a liability on the books that must be there to satisfy the auditors. That money would only be paid out if everyone who was eligible for the cash-out decided to take advantage of it that year.
"Theoretically, it will never happen," Zoettlein said.

How It All Began

In January 2007, county commissioners approved a new human resources policy that established new guidelines for employees' accrued time-off.
Ex-Human Resources Director Barbara Dupre, forced to resign this year after a scathing report of department management deficiencies and nonuniform policy enforcement, had a hand in drafting this latest policy.
The new system is a conversion from the traditional sick and vacation time off model to a "paid-time off," or PTO policy.
The new policy, which includes part-time workers, permits employees to accumulate earned but unused vacation, sick and paid time-off benefits paid upon separation from county service.
The policy also allows employees to either bank a limited amount of unused sick and PTO benefits or receive a cash buyout annually.
If employees have a balance over 240 hours, they are eligible for reimbursement at 80 percent up to 80 hours annually at the rate of pay at time of cash-out.
That means it could have been earned at a lower rate but will be paid at a higher rate of pay.
Employees who retire from Hernando County will receive 100 percent of their accrued and unused PTO.

Who Monitors The Policy?

Employment Coordinator Beth Howley said the administration of the PTO policy is automatically calculated through the county's HR payroll system based upon information supplied by employees and department managers.
Around the middle of September, all government employees who have 240 hours receive a form notifying them how many PTO hours they have and how many hours they are eligible to cash out.
The employees send the form back to HR and let that department know if they wish to cash out those hours.
This encourages employees to voluntarily not take their full PTO each year and leave a certain amount on the books to grow over the years.
All of these appropriations are subject to budgetary restrictions, and county commissioners have the ability to reduce these benefits at any time, the policy states.
The maximum amount of PTO that can be carried forward from one calendar year to the next varies by years of service. However, no employee, regardless of length of service or number of scheduled hours, may cash out more than 720 hours when they leave.
For example:
Joe Smith was hired 16 years ago making $35,000 a year or about $17 an hour and immediately started accumulating his PTO.
Joe decided he really didn't want to use his PTO the following year. He realized an opportunity to increase his PTO number by a substantial amount over the years.
So Joe decided to bank his PTO time during his tenure with the county, at the same time seeing his pay grade steadily increase.
So Joe, who rose through the ranks, leaves the county after 16 years of service. He now makes $62,400 a year or $30 an hour and has banked 90 days of compensated time off. He gets an extra going-away check of $21,600.

Hefty Cash-outs

Many department heads have already received hefty cash-outs after leaving the county.
Dupre was forced to resign in April after a county audit and outside law firm lambasted her professionalism and job skills. She got a severance package worth $24,900. Add in accrued sick leave, vacation leave and paid time off days, and Dupre left the county with another $15,971 for a grand total of $40,871.
Dupre's departure was followed a few weeks later by the firing of Emergency Management Director Tom Leto, who received a cash-out from the county totaling $9,858 for accrued sick, vacation and PTO time.
Former Code Enforcement Director Frank McDowell retired from the county in May and received a cash-out of $8,188.32 in accrued leave.

An Uncertain Fate

Meanwhile, Hamilton has spent the past few months exploring ways for the county to "start rebuilding policies and practices" of the HR department after a critical audit and independent legal review uncovered management deficiencies.
Hamilton said the compensated absences policy is one that is on the drawing board for review.
But its fate is uncertain.
"Currently we will continue to honor this program until revisions, if any, are brought forward to the board to consider," Hamilton said.
Hamilton said the current policy that allows employees to bank hours and cash out at higher rates is standard in many governments. Only the details and applications differ, he said.
In theory, all departments and employees are responsible for tracking and monitoring the PTO system, he said. However, the HR department is ultimately the central agency responsible for making sure it is not being abused and that records are properly kept.
Hamilton agreed that the $4.5 million on the books for compensated absences is a hefty liability on the county budget balance sheet. It is his job as county administrator, Hamilton said, to accentuate the assets side of the ledger.
Hamilton said another policy that will likely get close scrutiny is one that allows employees and department managers to work four-day work weeks, as long as they total 40 hours per week.
When contacted, County Commissioner Diane Rowden said she didn't want to comment on the compensated absence policy because she did not have it in front of her.
However, Rowden expressed confidence that Hamilton would handle the issues with the HR department and looked forward to him bringing this issue before the entire board at an upcoming meeting.