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August 19, 2008  

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Regulating retirements

(by Daniel O'Keefe - April 02, 2008)

The mayor and council have presented an ordinance that establishes new guidelines for the retirement and particularly for the retirement pay outs for borough officers and employees. The ordinance establishes more council oversight over the process of retirement. The ordinance comes after the recent retirements of several of the borough‘s highest paid employees at the end of 2007, including Police Chief Steven Nienstedt, Captain Thomas Farrell and borough administrator Timothy Stafford.

The ordinance establishes guidelines for employee retirements and specifically for final pay outs of accumulated time. The new ordinance would require approval of the chair of the Finance Committee and council adoption of a separate resolution specifically for the amount. Furthermore, the amount is not to be paid to the employee until at least 30 days after the effective date of retirement. The ordinance also says as much as possible should be done to encourage the retiree to receive the money over a two-year or greater span of time.

Currently the borough has no mandatory length of time between notice of retirement and effective date, according to borough clerk Mary Kriston, nor clear guidelines for how payments are to be approved.

The ordinance also requires employees to submit their resignations in writing to the borough clerk at least 30 days prior to the effective date of resignation. An interview process with the borough clerk and applicable department heads is established in order to determine "whether there is a reason other than that stated for the employee leaving the employ of the borough." In addition, terminal payments aren’t to begin until at least 30 days after the effective date of retirement.

Stafford, whose resignation letter was submitted on Jan. 1, the day it took effect, received a retirement package of $24,000 in accumulated time in addition to $8,000 for three months’ health benefits. Stafford’s $24,000 was approved by the mayor and council on the same day as part of a resolution on paying a month’s worth of borough bills and not as a separate agreement, according to Kriston.

"Their terminal payments were being heaped in with regular payroll," said Councilwoman and finance chair Rose Inguanti. "That’s a lot harder for the council to see and review."

Stafford’s compensation was a cause of concern for Councilman John Genovesi, who brought the matter up briefly at the mayor and council’s Jan. 22 work session before borough attorney Lane Biviano advised him to discuss it in closed session. The matter has since been listed as a topic for address in several closed session meetings. The matter is currently being looked into by the borough auditor, according to Inguanti.

Nienstedt and Farrell didn’t submit their retirement notices until Nov. 27, 2007, four days prior to their effective date of retirement on Dec. 1, 2007. Between the two of them, Nienstedt and Farrell made agreements with the borough as part of their retirements to receive $500,000 in accumulated unused sick, personal and vacation time.

Since the beginning of the new year, the new council has somewhat delayed payment of the half million dollars the former council agreed to award the officers. Nienstedt and Farrell have only received $300,000 of the money so far, according to Cortright, due to a shortage of funds in 2007. The other $200,000 has not yet been sent.

"We’re referring the matter to counsel and looking into it," said Mayor John Hipp. According to Councilwoman Maura Keyes, the borough has received numerous requests for the money from the two retired officers. The two officers’ memoranda of agreement say the payments are to be made "as soon as possible."

Inguanti said one of the goals of the ordinance is to keep a more watchful eye on the size of final payments.

"[We want] to make sure they’re all accurate, that everyone on the council knows what they’re for and that they be spread out over time," said Inguanti. "[A large payment] can be a real hit to the borough."

The ordinance passed its first reading at the mayor and council’s March 25 meeting with five ayes and one abstention.


 

 

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