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City officials say sick leave buy-back needs changes

August 16, 2003|by SCOTT BUTKI

scottb@herald-mail.com

The Hagerstown City Council may need to change its sick leave buy-back program for union employees to avoid increasing taxes, city officials said Friday.

The program, under which employees can sell some of their unused sick days back to the city every year, cost $271,020 in the last calendar year. The program has cost the city about $2.5 million over the last 10 years, Assistant Finance Director Ray Foltz said Friday.

Earlier this year, the City Council cut the program in half for the city's 128 nonunion employees. Those employees will now be given one day's pay for every two sick days.

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The city projects the cost of the program will drop to $228,990 this year because of the change, but officials say more cuts may be needed.

"We need to be responsible to the taxpayers," Donna Messina, director of human resources, said Friday.

However, the program for the city's 306 union employees can't be changed until new contracts are negotiated, city officials said.

The city has renegotiated contracts with three of the four city employee unions in the last year. It has not yet approved a new contract with police department employees.

The contracts with the other three unions expire June 30, 2004.

City Administrator Bruce Zimmerman said he has been instructed by the council to raise the sick leave buy-back issue with unions in future negotiations.

"Right now, I believe our benefits package is extremely generous, and this is one area I think we can cut back and save the city a lot of money and still be fair to our employees," Councilman N. Linn Hendershot said Friday.

The city wants to make information about the program's costs known to taxpayers because of its potential impact on future budgets, Messina said. The city is projected to have a $1.2 million deficit for the next fiscal year.

The city has a problem with expenses growing faster than revenue, and the buy-back program is part of that problem, city officials said.

There also is an issue of equity since the program is now more generous for union employees than nonunion employees, Foltz said.

Mayor William M. Breichner said he would like to see the nonunion employees and union employees treated the same under the program. He thinks the program is good but the amount of time union employees can sell back is excessive.

At Tuesday's council meeting, Foltz and Messina presented information showing how the sick leave buy-back program is more generous than those offered at other municipalities and companies surveyed.

Messina said a city committee made up of representatives of the four unions and the nonunion employees will explore the impact of changing the program.

It Frederick, Md., employees can sell back up to 24 hours per year. If the city adopted those limits, it would save the $105,000, Foltz said.

The committee is scheduled to make recommendations to the council in November, Messina said.

A second committee will look at possible changes to retirees' health insurance. While Washington County does not pay for retirees' health insurance after they reach age 65, the city pays 100 percent of retirees' health insurance costs and 50 percent of their dependents' until death.

The sick leave buy-back benefit, instituted in the 1970s, was intended to deter abuse of sick leave.

James Bestpitch, the chief negotiator for two of the union groups, said that without the program employees would call in sick more often. The program provides employees an incentive to work instead of calling in sick, he said.

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