Avalon Disputes Inclusion In Employee Compensation Abuse Report

AVALON — “There is no doubt that some municipal governments in the state of New Jersey can do a better job with managing its money. In Avalon, we follow the State’s statues, implement new ideas decades before the state figures out how to conduct business, and take a proactive position by anticipating retirements before they occur,” said Avalon Mayor Martin Pagliughi in response to the borough’s inclusion in a recent state report on local government abuses in employee pay practices.
“Perhaps state government should follow our lead.”
On Dec. 1, the State Commission of Investigation (SCI) released a 55-page report entitled “The Beat Goes On: Waste and Abuse in Local Government Employee Compensation and Benefits,” which suggested that state taxpayers would save tens of millions of dollars if local governments eliminated wasteful and excessive public-employee benefits.
The SCI is an independent New Jersey watchdog agency established in 1968 to investigate organized crime and corruption, waste of tax money and other abuses of the public trust.
“At a time of economic distress unprecedented since the Great Depression – with government budgets depleted and austerity the theme of the day even in the private sector –the gravy train continues to roll without impediment for select groups of employees on the public payroll,” the report states. “Startling amounts of taxpayer-funded booty continue to be dispensed across New Jersey without regard for the common good.”
The report cited municipalities and agencies throughout the state that gave their employees exceptional perks or excessive benefits and payouts. One of the municipalities named in the report was Avalon.
“In 2007, heightened fiscal pressures stemming from debt service payments, contractual obligations and other fixed costs forced an increase of nearly 4 percent in this Cape May County community’s annual operating budget,” the report stated.
“That same year, Avalon officials cut a check for more than $172,000 to retiring police Chief Stephen Sykes for unused accumulated vacation, sick and personal time and other leave.”
The report also noted that a year later borough Public Works Director Harry DeButts collected more than $78,000 for unused leave for a grand total between the two employees of more than $250,000.
“Payouts of this magnitude were made possible by unique contractual provisions for select Avalon employees and by a special off-contract arrangement involving Sykes individually,” the report explained
“Under the terms of Avalon’s existing policies and contractual provisions governing benefits for its personnel, police and non-unionized civilian employees hired before July 1989 qualify for “terminal leave” cash payments when they retire,” the report continued.
“These entitlement payments, made above and beyond vacation and other leave redemptions, are calculated based on a formula that provides employees with four free days of pay for each year of service.”
In addition to cash payments for terminal leave, the report said Sykes and DeButts were able to use a substantial portion of their accumulated sick days in the months leading to their respective retirements — 90 for Sykes and 72 for DeButts.
Both Sykes and DeButts responded to the SCI regarding their investigation. Their letters were included in the report.
Jeffrey April, Sykes’ attorney, said Sykes had no administrative officers below him when he was police chief so he was “limited in being able to take vacations, holidays and even taking time off from work when he was ill.”
“Stephen was being treated for lung cancer starting on Dec. 6, 2006 when he was diagnosed,” April wrote. “On Jan. 1, 2007, after discussing this matter with borough officials, it was determined that he would go on extended sick leave…in early March 2007, it became apparent to Stephen that he was not going to be able to return to his position…he gave the city six months notice…retiring on Aug. 31, 2007.”
“It appears that there was nothing unusual between the contract with Stephen Sykes and the Borough of Avalon as many chiefs of police have similar contracts,” April wrote.
“Over the years, I was committed and dedicated to my work at the borough,” DeButts said in an affidavit to the SCI. “Thankfully, I did have 72 days available when I became seriously ill prior to my retirement.”
“Unfortunately, even with that time I was unable to recover to the point at which I could resume my position as Director of Public Works that I held for so many years and was forced to retire.”
In response, Pagliughi noted the two retirees were dedicated, longtime employees of the borough — Sykes worked for 35 years and DeButts for 20 years.
“I find it disappointing that the State is making recommendations in this report that Avalon implemented 20 years ago,” said Pagliughi in a release. “One of the new policies proposed in the report, the elimination of terminal leave payments, was implemented by Avalon two decades ago.”
Pagliughi said the state’s own civil service regulations require employees to get 15 days of sick time per year, a regulation that Avalon follows.
The mayor’s release noted that the state acknowledges that both Sykes and DeButts had legitimate medical conditions and used sick time they earned during their combined 55 years of service to Avalon. The amounts paid to both men were accrued over the many years of service, during which time they used very little paid benefit time to which they were entitled.
The release stated that payouts had zero effect on Avalon’s 2007 tax rate because money was placed into an account in previous years to cover those expenses.
“The state’s report also calls for more transparency and accountability when it comes to benefits,” Pagliughi said.
“I would invite anyone from the SCI to visit Avalon Borough Council meetings where contracts and benefits are openly discussed and voted on by Borough Council. Or, take a look at any Avalon municipal budget or audit where thoughtful planning and budgeting for retirements is included every year.”
Avalon also maintains one of the lowest tax rates in the state and has an exceptional Aa3 bond rating set by Moody’s, the release noted.
In a published report, Pagliughi said he believed the report was political payback for Avalon’s successful lawsuit over the state Department of Environmental Protection’s beach-access rules. The DEP wanted 24-hour beach access for the public. Avalon opposed the plan for public safety reasons.
“I guarantee this is payback over the beach rules,” he said.
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