Torrance Approves Stalled Budget : Finances: Administrative leave remains a hot topic. Some council members want to review the cash-out policy.

The Torrance City Council this week approved a budget that had stalled after controversial perks for top managers drew fire from some city employees and council members during the budget review process.

But several council members said they would like to see changes in a policy that allows 66 department heads and other managers to cash out 24 to 36 days of administrative leave annually in addition to vacation time. Last year, such cash outs totaled $498,499.

Councilman Bill Applegate bluntly told City Manager LeRoy J. Jackson on Tuesday that council members were not told how much the program could cost when they voted in 1988 to allow managers to cash out their leave time.

Applegate said he felt he “didn’t get all of the information--the right information” disclosed to him in 1988. Allowing the cash out, he said, amounted to a potential 13.8% raise for department heads in the same year that employees were getting a 4.2% pay increase.

“How can we have this unleashed horse running through the city treasury where we have all these extra funds being paid out and nobody’s watching the door?” Applegate said.

When asked Wednesday if the council had received sufficient information about the administrative leave program before approving it, Jackson said, “I think you have to talk to the individual council members.”

But he added, “I’d suggest that clearly they didn’t know the figures that exist now on cash out.”

The leave policy has become a divisive issue in a lean budget year in which no employees are getting across-the-board raises. The city’s $148-million budget, squeezed by declining sales tax revenues, did not cut services but called for trimming $300,000 in overtime for hourly workers.

That plan drew an angry response from some workers who pointed out that the city was maintaining its administrative leave program, which has been described as a way of compensating managers for overtime hours worked. On Tuesday, in what union members hailed as a victory, the council agreed to restore the $300,000 to the budget.

Leaders of the city’s largest union, the American Federation of State, County and Municipal Employees, had blasted city officials for what they described as inequitable budget cuts.

Two weeks ago, some council members began questioning the policy of cashing out administrative leave to managers and department heads, and they asked for more details about the program’s history and cost.

In response, the city on Saturday released a 93-page report describing the policy’s origins and reporting that $498,499 in leave time was cashed out in the 1991 calendar year, $429,476 in 1990 and $338,545 in 1989.

By contrast, the city budgeted $360,000 in its general fund for cash outs in fiscal 1992-93, $342,000 in 1991-92 and $300,000 in 1990-91, according to the report. And although city salary surveys have assumed managers were cashing out 50% of their leave, the report showed they cashed out nearly 88% in 1991.

Some council members on Tuesday questioned city administrators about the apparent discrepancy between the money budgeted for cash outs and the amount spent.

Administrators said the difference is a result of accounting procedures under which only 75% to 80% of leave costs are paid from the city’s general fund--its primary operating budget. The rest of the money comes from other budgets.

In addition, Finance Director Mary Giordano said that the city generally does not know exactly how much is spent on administrative leave because it is not defined as a separate category in departmental budgets. The city is working to refine its system of monitoring how employees are paid, she said.

Applegate repeatedly questioned Jackson about what the city administration told the council in 1988 when the cash-out provision was approved.

“I guess I have to look to you as the city manager and wonder why it wasn’t presented to us in the same format that every other item that affects salary was presented to each and every member of the council for all the years that I have been here. I just find that almost to be unforgivable,” Applegate said.

The report released Saturday stated that many managers often work more than 50 hours a week. Department heads are expected to attend weekly evening council meetings, and many managers work nights and weekends to handle emergencies, the report said.

Torrance officials defend the administrative leave program, saying that without it their compensation packages would not be competitive with those offered by other cities of comparable size.

Several council members suggested making changes in city policy that might reduce the hours managers and department heads work--thereby cutting the need for administrative leave.

“Mr. Jackson, I thought Lincoln freed the slaves. If these people are working so many hours beyond their normal . . . working week I think something is wrong,” Councilwoman Maureen O’Donnell said. “We are looking at a position-and-a-half situation . . . or perhaps we need to have a time clock to clock people in and out.”

City employee Bob Hildebrand, vice president of the Torrance Professional and Supervisory Assn., an employee group, suggested reducing the number of administrative leave days to 15 and eliminating the cash-out provision.

Councilman Mark Wirth said he wondered whether department heads and division heads needed to attend every council meeting, or if meetings could be arranged so that managers didn’t have to stay for the entire time.

Wirth echoed comments made by other council members who said the city would not negotiate compensation for employees in a public meeting, but he said he would like to see the administrative leave program modified.

“I think that we really need to try to be a little more straightforward and pay people what they need to be compensated,” Wirth said. He said he hopes the council committee assigned to negotiate managers’ salaries will consider including some administrative leave in the managers’ base pay.

Several council members said they would also like to review the bonus/merit pay system for managers.

Jackson said he will be exploring “options, alternatives and recommendations” concerning the administrative leave policy and will be presenting that information to a three-member council committee that recommends how much the city’s managers will be paid in the coming year.

Even as the budget was approved, council members and the city manager expressed concern that the state’s financial crisis might force them to cut more from the budget later.

Said Councilwoman Dee Hardison: “Every indication I hear from the state is that we are going to take some sort of hit--and even though we approve a budget tonight because we need one July 1--unfortunately, folks, we are going to be back again, and we are going to be dealing with this again.”

Administrative Leave Many cities offer cash outs of administrative leave as part of a benefits package for mid-level and top managers. Torrance appears to have an unusually generous administrative leave policy based on a Times survey of cities of varying sizes.

City Population Administrative Cash Out Leave Anaheim 266,406 None N/A Burbank 93,643 5-10 days Yes Glendale 180,038 5-10 days No Huntington Beach 181,519 8 days No Inglewood 109,602 5-10 days No Long Beach 429,433 5 days No Pasadena 131,591 case by case basis N/A Redondo Beach 60,167 6-12 days No Santa Ana 293,742 case by case N/A Santa Monica 86,905 8-20 days Yes Torrance 133,107 24-36 days Yes

Source: City officials