Salt Lake City's executive benefit plan, a compensation policy that has awarded more than $400,000 to retiring city office chiefs since 1986, has been overhauled, and city officials say it will save taxpayers money.
The plan, which among other things gave full compensation for unused vacation time and sick time, as well as two months pay for all retiring city executives, was viewed as too generous, some officials said.Since October 1986, the city has awarded $433,263 in executive severance pay to 13 retiring division and department heads, an average of $33,000 per executive, according the city's Human Resource office.
Former deputy police chief and now City Council Chairman W.M. "Willie" Stoler retired in 1985 under the plan. Former city Planning Director Vernon Jorgenson also got severance pay and still works for the city on contract.
The revised plan caps the amount of sick leave at 5 percent for every year an executive works for the city, or pays two months' salary, whichever is greater. Also, severance will be paid out only if a chief leaves involuntarily.
The new plan will result in "significant cost savings" for the city, said Human Resources Director Karen Suzuki-Hashimoto, adding actual savings are hard to determine because accumulated benefits can't be predicted.
"The benefit to the city is that we have modified a program and impacted future expenditures," she said. "The program now reflects a compensation policy (Mayor Palmer DePaulis) is comfortable with."
But the savings won't come immediately, said Mike Zuhl, chief of staff to DePaulis. Executives who have accumulated sick time up until this year will enjoy severance pay for that time under the old plan. An outside attorney hired by the city to study the issue said benefits accumulated under the old plan are "vested rights" and can't be altered.
"We have a lot of long-term executives," Zuhl said, pointing to long-time City Attorney Roger Cutler. Those executives will be compensated at a greater cost for past accumulated time under the old plan.
But new city executives will be subject to the new, less generous plan.
The severance plan is intended to offer executives appointed by elected officials a cushion against loss of their jobs if their boss loses at the polls, Suzuki-Hashimoto said.
But the plan was seen as too generous and fell on the chopping block. The City Council made recommendations to change the plan out of a desire to rein in the program's cost, council Executive Director Linda Hamilton said.
"I think it was their intent to not be overly generous with taxpayers' money," she said.
In other changes in the executive benefit plan, the city curbed moving expenses for newly-hired executives. In 1986, the city paid one executive $17,000 in moving expenses. Now, the city will pay only 50 percent of moving costs.