Lump-sum Houston Retirement Pay Strains City Budget

Steven Sparks, who called in sick six times in 39 years, claimed his $177K reward.


Feb. 23--For 40 years, Steven Sparks came to work for the Houston Fire Department, often forgoing sick leave, vacation time or a holiday. When he finally retired as district chief last year, he claimed his reward: a $177,000 check on his way out the door.

That was the city's payment for all the days Sparks didn't use his available time off, but instead came to work even if he felt bad.

"Six mornings I called and told them I can't come to work because I'm too sick to work. I did that six times in 39 years," said Sparks, 59, who now works for another fire department. "I came to work (sick) because of the work ethic I grew up with."

Sparks is among 928 HFD employees who have been paid more than $57 million over the last six years in what is called termination pay, due when they retire or quit. And his six-figure payout is not a rarity -- 197 fire employees collected checks of more than $100,000 from 2008 to 2013, according to city payroll records.

The large severance payouts come at a time when the city administration is suing the firefighter's pension fund hoping to gain local negotiating power over the city's future contributions, as well as coping with a projected $8.5 million in unanticipated overtime.

Union officials defended the policy, saying it has saved the city the overtime costs of replacing firefighters who called in sick, took off holidays or went on vacations. One retired fire chief said termination pay was an attractive benefit decades ago, when firefighter pensions were 35 percent of their pay and could not be collected until age 50.

Critics say the policy of allowing public safety employees to accrue their leave time could lead to a financial crisis, since many currently are eligible to retire and would be owed sizable checks for their unused leave.

Political expert Sherri Greenberg found the payout numbers surprising.

"It's just you don't usually see that kind of large amounts," said Greenberg, director of the Center for Politics and Governance at the LBJ School of Public Affairs at the University of Texas at Austin.

Difficult to budget

Greenberg said city officials can't predict when firefighters will retire, making budgeting for the termination payments difficult.

"The employees are going to say, 'Look, it's mine. I worked, it was my holiday or vacation, my sick leave and I earned it,' " Greenberg said. "On the other hand, from a public financial management standpoint, it is very difficult to financially plan for that not knowing when people are going to retire."

State law allows firefighters in Houston and other large cities to accumulate their leave and collect a lump-sum payment. But some departments, including Dallas and Austin, pay less because of caps they have negotiated.

"We don't have (payments) at that high rate," said Battalion Chief Palmer Buck, with the Austin Fire Department. "We have caps on how much vacation and sick leave you can have the city buy back."

Buck said termination pay in Austin averaged $40,000 to $50,000 for most firefighters.

Houston Fire Chief Terry Garrison declined to comment and in a statement said the department has no control or input on termination pay.

Currently, HFD employees can accrue 90 days of vacation, eight days of sick leave a year that is matched by the city and unlimited number of holidays. Employees hired before September 1985 can choose to accrue an unlimited amount of sick leave at a rate of 15 days a year, according to HFD.

"Clearly, it is a budgetary strain," Mayor Annise Parker said of the payments, adding they have been part of the city's labor agreement with firefighters for decades.

The mayor acknowledged the city could attempt to negotiate a "use it or lose it" model common in private industry, limiting the amount of unused sick leave or vacation days. But that comes with another price, she said.

"You have to be careful how you implement that because then the firefighters would go out and then use it," she said, "and then you have to backfill (shifts) with overtime. So it's a complicated situation."

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