Canton City Council expects to vote at the Feb. 27 meeting on setting aside $1.08 million in case the city is required to pay 30 former employees for accrued and unused vacation and sick time. The legislation is related to the city’s investigation into retirement and rehiring practices.
City Council is expected to vote later this month on setting aside roughly $1 million to ensure the city can pay accrued and unused vacation and sick time to 30 former employees.
The ordinance would set aside $973,730, which would come from a combination of the parking deck fund, sewer fund, water fund, general fund and garbage collection fund.
However, the city could owe up to $1.08 million, according to an estimate from Joe DiRuzza, the city’s finance director. The remaining $108,405 would come from the city’s uncompensated absence fund, which covers the payouts of accrued sick time for city employees, and has a balance of roughly $280,000, he said.
City Council’s next meeting is 7:30 p.m. on Feb. 27 at City Hall.
PAY OR NOT?
But there may be a question as to whether the city has to pay the employees for the vacation and sick time, acknowledged Warren Price, the city’s service director.
The city could be required to pay a portion but not the entire amount, DiRuzza said, because the 30 employees, who lost their city jobs in connection with the investigation into retirement and rehiring practices, may owe the city money for wages and benefits.
The city administration has said the employees retired to collect their state pension, then continued to work in the same job and collect the same wage or salary even though they were never properly rehired.
The city is proceeding “as (though) we’ll have to pay it,” Price said. Ultimately, a determination will be made by the state auditor’s office or through the legal, civil service or union grievance process, he said.
At this point, “it’s simply a legal unknown,” Price said of the payments for accrued vacation and sick time.
A city ordinance says that city employees will get paid for their accrued sick time upon retirement. No timeline for payment is stated in the ordinance.
Price declined to elaborate as to why there may be uncertainty over whether the city will owe any of the 30 former employees for accrued vacation and sick time.
Under city law, employees will receive full payment for up to 1,200 hours of their accrued sick leave at their pay rate upon retirement. There’s also a cap on the payment for unused vacation.
The 30 workers had retired to collect their pensions through the Ohio Public Employee Retirement System (OPERS), then immediately kept working in the same job.
PERS law allows government employees to retire and be rehired into the same public job. The practice is commonly referred to as “double dipping.”
However, the city administration says the 30 employees were not properly rehired. They could not legally continue to work for the city, resulting in their dismissals, which were not disciplinary in nature, Price has said.
Page 2 of 2 - Another issue is that the union and civil service employees did not reapply for their city jobs against other candidates, Price has said. Those retired workers also did not start at a lower wage and with less vacation, he has noted.
The former employees, which include both union and non-union positions, have filed appeals or grievances through the Civil Service Commission or one of the American Federation of State, County and Municipal Employees (AFSCME) unions in an effort to regain city employment. At least some of the challenges also include efforts to get the payments for accrued and unused sick and vacation time.
The appeals with the commission are scheduled for a hearing Friday. The union grievances are set for hearings later this month.
How much the city may have to pay the 30 former employees for vacation and sick time is unknown.
The $1.08 million being set aside is the optimum amount the city could owe, said DiRuzza.
“It’s a precaution in case we’re told we have to pay it,” DiRuzza said of the $1.08 million.