Bloomington city officials are looking to take additional steps to limit pension spiking, by further curtailing the city’s sick-leave buyback program.
The city ended the program for all new hires in 2012. The city council last October directed City Manager Tim Gleason to significantly rein in the program as the city negotiates new labor contracts.
“I was told not to bring any collective bargaining agreement with any of the unions back that did not significantly impact, in a positive way to the city, how sick-leave buyback was paid out,” Gleason said.
Aldermen on Monday night will consider the first union contract that limits the sick leave buyback benefit.
Eligible employees have had the option of taking its sick leave payouts over the final three months of their employment, leading to higher pension calculations.
Under the three-year contract with AFSCME Local 699, eligible employees can only take sick leave buyback payments if they retire by April 30, 2020. They would have to signal their intent to retire by Oct. 31, 2019.
“We believe this agreement, if approved, will bring significant savings to the city as it will effectively end future sick leave buy back-related accelerated pension payments and reduce the artificial inflation of employee pensions,” city staff said in a memo to the council.”
The union represents about 100 employees in public works, parks, recreation and cultural arts, police and facilities departments. Gleason said about 12 to 15 employees represented by the Local 699 are eligible for the sick leave buy back option.
Gleason said the city intends to incorporate similar measures in future labor contracts and would then apply the same standard to non-union employees.
Gleason commended AFSCME for coming to the bargaining table “understanding this was a financial impact to the city.”
“So they understood, even though it stung horribly to have this kind of impact,” Gleason said. “It wasn’t their doing, but it wasn’t the city’s doing either.”
Gleason said eliminating the sick leave buyback program for all employees could save the city long term upwards of $10 million.
The three-year contract would bring 1.25% across the board pay raises on May 1, followed by another 1.25% bump on Nov. 1. Works would get a 3% increase in the second year of the contract and 2.5% in year three.
Also, employees who are eligible for sick leave buyback would get a $1,000 signing bonus, provided they don’t leave by April, 30, 2020, while those not eligible for sick leave buyback would get a $250 signing bonus.
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