Dec. 17 (Bloomberg) -- California Highway Patrol division chief Jeff Talbott retired last year as the best-paid officer in the 12 most-populous U.S. states, collecting $483,581 in salary, pension and other compensation.
Talbott, 53, received $280,259 for accrued leave and vacation time and took a new job running the public-safety department at a private university in Southern California. He also began collecting an annual pension of $174,888 from the state.
Union-negotiated benefits, coupled with overtime that can exceed regular pay and lax enforcement of limits on accumulating unused vacation, allow some troopers to double their annual earnings and retire as young as age 50. The payments they get are unmatched by those elsewhere, according to data compiled by Bloomberg on 1.4 million employees of the 12 states. Some, like Talbott, go on to second careers.
“I think some of our rules were negligent, and I think people were allowed to build up overtime pay who shouldn’t have been, who accumulated leave time and furlough time,” said Marty Morgenstern, a member of Governor Jerry Brown’s cabinet and secretary of the California Labor & Workforce Development Agency, which oversees labor relations, employment and unemployment.
“Those kind of payments are absolutely inappropriate and we’re doing everything we can to see that does not recur,” Morgenstern said.
Brown, a 74-year-old Democrat, hasn’t curbed overtime expenses that lead the 12 biggest states or limited payouts for accumulated vacation time that allowed one employee to claim a $609,000 check last year for accrued leave at retirement. California’s liability for the unused leave of its state workers has more than doubled in eight years, to $3.9 billion in 2011, from $1.4 billion in 2003, according to the state’s annual financial reports.
Brown, who granted state workers collective-bargaining rights during his first tenure as governor more than three decades ago, made reducing pension costs for new state employees a priority after his return to the office last year. He left intact most retirement benefits for current workers.
“Governor Brown is busy fixing the many problems that he inherited from past administrations,” said Gareth Lacy, a spokesman for the governor. “California’s $26 billion budget deficit, and the decades-old structural imbalance, was eliminated in large part by cutting waste and slashing costs. The governor also achieved historic reforms to public pensions and workers’ compensation that will save the state billions of dollars.”
California’s highest-paid state troopers make far more than those in other states, with overtime and lump-sum payouts that inflate earnings, data compiled by Bloomberg show. They also enjoy a retirement benefit that allows them to leave after 30 years with annual pensions totaling 90 percent of their salaries, a standard that became the model for police departments throughout the state.
While more than 5,000 California troopers made at least $100,000 in 2011, only three in North Carolina did, the data show. Talbott’s $483,581 in total pay -- adding six months of his $174,888 annual pension, based on his June 30, 2011, retirement date -- is almost four times as much as the $122,950 collected by the top-paid officer in North Carolina, a commander, the data show. Talbott declined a request to be interviewed, said Patty Zurita, communications manager at the University of the Redlands in Redlands, California, where he now works.
“It’s a supervisory issue,” said Lieutenant Steve Lockhart, the benefits officer for the North Carolina State Highway Patrol, whose employees aren’t unionized. “We just don’t allow our employees to claim that kind of time. By giving them comp time, we give them their time off rather than paying them.”
The gold-standard payroll and pension packages for the California Highway Patrol date to the late 1990s and early 2000s. That’s when the department’s union lobbied for and won the 90 percent pension benefit and regular pay that, by statute, is linked to an average of the five largest law-enforcement agencies in the state, including Los Angeles.
The administration of Democratic Governor Gray Davis, who was recalled by voters in 2003, backed those changes. The biggest U.S. pension fund, the California Public Employees’ Retirement System, also advocated for the pension upgrade.
“You had very strong, influential unions that were very supportive politically, very popular to the public and were very effective at inside lobbying, making their case to the Legislature,” Loren Kaye, president of the California Foundation for Commerce and Education in Sacramento and a trade and commerce undersecretary for former Republican Governor Pete Wilson, said in a telephone interview.
The California Association of Highway Patrolmen, the troopers’ union, won additional concessions during the administration of Republican Governor Arnold Schwarzenegger, who succeeded Davis.
Beginning in 2006, highway patrol officers were also granted a stipend equal to 3.5 percent of their base pay to compensate them for time spent on pre- and post-shift activities, such as donning protective gear and inspecting weapons and vehicles. That same year, the state doubled the amount of extra pay officers earned for working swing and night shifts.
The consequences today are payroll and pension costs that strain California’s budget.
Connie and Vincent Lambres, who were husband-and-wife highway patrol sergeants in Sacramento County, collected $745,947 in overtime from 2005 through 2011, data provided by the state show. Connie Lambres retired last year with a lump-sum payout of $64,729 and Vincent retired in 2010, collecting a lump-sum payout of $132,283 and another $45,727 in 2011. Reached by telephone, Vincent Lambres declined to comment.
Two other retiring officers last year, including Talbott, received portions of their regular salary, checks for unused vacation time and the first installments of lifetime annual pensions, even as they took new jobs outside government. Their earnings of about $484,000 and $392,000, including pensions, compared with about $276,400 in pay and retirement benefits for the top trooper outside California, a retiring officer in Pennsylvania, John Rice. Rice, who took another job as safety director for a regional bus company, didn’t return phone calls seeking comment.
Besides Talbott, 44 California patrol officers earned more than $200,000 in 2011, compared with nine in other states - five in Pennsylvania and four in Illinois, according to the data.
California Highway Patrol officers earned $82.4 million in overtime last year, almost triple the $27.5 million overtime paid in Texas, the second most-populous U.S. state. California Officer Bryce Perry topped the list with $93,795 in overtime, nearly as much as his $96,105 regular salary. Perry didn’t respond to messages left at his home seeking comment.
Boosting of pay and benefits was intended to attract candidates to the California Highway Patrol.
The CHP union had pressed for an across-the-board pay increase while Davis pushed back, telling state workers raises would have to be postponed as he grappled with a ballooning budget deficit.
The union agreed to forgo an immediate pay boost in exchange for the Legislature requiring that pay be linked to an average of the state’s five biggest law enforcement agencies.
Highway patrol compensation in California shot higher in the years that followed. Officers’ pay rose 2.7 percent in fiscal 2004, 12.1 percent in fiscal 2005 and 5.6 percent and 5.7 percent in the ensuing years, according to the independent Legislative Analyst’s Office.
“At the time we accomplished our biggest gains, I actually felt I was losing the recruitment war,” Jon Hamm, the union’s chief executive, said in a statement. “I think it is clear that when our biggest gains were negotiated I did not feel they were ‘excessive;’ in fact, almost the opposite was true.”
The 1999 pension benefit granting highway patrol officers 90 percent of their salaries after 30 years of service, signed by then-governor Davis and approved by the Legislature, was subsequently copied by cities and counties throughout California. As a result, many California municipalities are now hobbled by retiree obligations that consume 10 percent or more of their budgets.
“I signed the bill because Calpers persuaded the Legislature and my administration that these benefits were totally supportable by projected investment earnings, there would be no increase in the contributions by the employer -- meaning the state -- and that Calpers was 90 percent funded and that’s well above full funding,” Davis said in a telephone interview.
In North Carolina, pensions are calculated based on a formula of 1.82 percent per year of service after 30 years of work -- leading to far lower costs than in California, the highway patrol’s Lockhart said. North Carolina state troopers aren’t represented by a union because collective bargaining isn’t permitted in the state, he said.
For the California Highway Patrol, the retirement formula will change for new employees starting in January, to a pension of 2 percent per year of service at age 50 or 2.7 percent at age 57. Current employees receive 3 percent at age 50, except those hired after Sept. 1, 2010, who get 3 percent at age 55, highway patrol spokeswoman Fran Clader said.
California’s pension benefits and top lump-sum payouts to retiring highway patrol officers dwarf those in other states for which Bloomberg assembled data. Yet troopers elsewhere do get such payments -- derided as “boat checks” by New Jersey Governor Chris Christie because some of them are big enough to buy yachts -- and retire young enough to take second jobs.
In Pennsylvania, Terry L. Seilhamer, 62, a former area commander, received $171,995 for unused sick and vacation days when he retired last year, the eighth-highest such payout among the 12 U.S. states in the Bloomberg data.
David L. McNulty, 57, a former administrator in New York’s plainclothes detective division, got a lump-sum payout of $33,565, according to the New York state comptroller. He got an annual pension of $112,400, to Seilhamer’s $75,494.
Now both men have new government jobs. Seilhamer is a police chief in the Pittsburgh suburb of Jackson Township, which pays him $74,595 a year, plus $625 a month for opting out of the municipal health-insurance plan. He didn’t return phone calls and e-mails seeking comment.
McNulty, President Barack Obama’s choice as U.S. Marshal for the Northern District of New York, was sworn in July 20, 2011, the day after he retired as a trooper. He is paid $95,000 to $98,000 a year, he said.
“I consider myself very lucky to have been able to move on and retire, but still keep busy and still keep employed, and have such a good job and work with such great people,” McNulty said in a telephone interview.
After California, Pennsylvania state troopers posted the largest lump-sum retirement payouts in data compiled by Bloomberg. They are entitled to cash out a maximum of 410 sick and 60 vacation days when they leave their department. In 2011, more than 200 Pennsylvania troopers were paid a total of $12.7 million in lump-sum payments, with an average payout of $62,254. Thirty-three officers received more than $100,000, and six got in excess of $150,000.
New York Limits
New York limits leave payouts to 30 vacation days and 200 sick days. Of the sick time, a maximum of 165 days may be converted to credits toward health-insurance costs, and the remaining hours are reimbursed at a reduced dollar amount. The policy kept a lid on 2011 lump sums, with $3 million going to 181 officers. The largest check was $40,678, data show.
In California, Talbott, who retired last June, took a job the following month as director of public safety at the University of Redlands. The university declined to release his pay.
Talbott’s former colleague James P. Leonard, 51, was the second-highest paid trooper in the country when he retired last year, collecting earnings of about $392,000, including salary, pension and a lump-sum payout of $201,555, according to data provided by the state controller and Calpers.
A month after retiring last June, Leonard took a job as an investigator at PG&E Corp., owner of California’s largest utility, according to his LinkedIn profile. Brittany McKannay, a PG&E spokeswoman, declined to say what he earns or to provide an investigator’s salary range. Leonard didn’t respond to an interview request conveyed to him through McKannay.
Leonard in 2010 filed a workers’ compensation claim based on heart trouble from “28 years of cumulative stress and strain of employment.” He was awarded $21,965, less an attorney’s fee of $3,250, according to his claim paperwork.
Asked about the lump-sum payouts, Morgenstern, the state’s labor secretary, said such outsized checks based on unused leave and vacation time shouldn’t be permitted.
“There are rules that said they should be forced to use that time,” Morgenstern said. “They didn’t use that time. And over the years, controls did not exist or were not implemented to make them use that time and instead they took these huge and inappropriate payouts.”
The highway patrol’s backlog of vacation and leave time is declining, spokeswoman Clader said in an e-mailed response to questions.
“The department has continued to reduce vacation/annual leave accumulations, which may accrue over many years,” Clader said. “The department has seen a significant reduction in the number of employees over their cap in the last three years.”
Paying 1.5 times regular salary as overtime is less expensive than hiring new officers because those positions would include additional benefit costs, Clader said. The majority of overtime funded by the department accumulates during mandatory court appearances, she said.
An officer can’t work more than 16.5 hours straight, and daily limits are strictly enforced, according to the department.
The base pay for a California Highway Patrol officer starts at $67,764 a year, with 5 percent annual increases until reaching $84,036, according to the agency’s website. In North Carolina, a trooper’s starting salary is about $34,000 a year, Lockhart said. All state employees got a 1.2 percent pay raise this year, the first in four years, he said.
California’s high compensation levels relative to other states are the fault of public officials who approved pay and benefit changes without adequately considering their long-term costs, said David Crane, a public policy lecturer at Stanford University and a Democrat who was an economic adviser to Schwarzenegger.
“It’s just a remarkable situation where they can make promises for things but not have to worry about the consequences,” Crane said. “It would be like you promising your child that you’re going to pay for their college but then knowing you’re going to be leaving in two to four years and you’re really not responsible for that.”
-- With assistance from Michael B. Marois in Sacramento, California, and Mark Niquette in Columbus, Ohio. Editors: Jeffrey Taylor, Pete Young
To contact the editor responsible for this story: Jeffrey Taylor at email@example.com