Glen Cove Council OKs borrowing $900,000 for termination payments
The Glen Cove City Council has voted to borrow as much as $900,000 for termination payments for eight employees who retired, resigned or died.
Termination payments are made to employees, or their estates, for unused sick leave, personal leave, holidays, vacation days and comp time.
"The question always arises about borrowing for separation; unfortunately, money was not put aside in the 2014 budget," Mayor Reginald Spinello said during the meeting Tuesday night. "In a better world, we wouldn't be doing that," he said, referring to the borrowing.
About $440,000 is for the beneficiaries of Ralph Bruschini, a Glen Cove police lieutenant who died last month.
A similar amount will finance termination payments for seven employees and members of the Civil Service Employees Association who accepted buyouts from the city this month. Their payments range from $12,149 to $130,500. The city plans to pay the seven employees a total of $102,489 for agreeing to retire or resign by March 31. Estimated savings on replacement salaries range from $21,766 to $50,109, the mayor's office said.
The State Legislature amended state law in 2012 to permit Glen Cove to borrow for termination payments.
Spinello is continuing a practice of his predecessor, former Mayor Ralph Suozzi, that has drawn criticism from state Comptroller Thomas DiNapoli's office. It described the practice in a 2012 letter to elected officials as imprudent.
"This practice will saddle future taxpayers with repayment of past service costs, with interest, for which they received little or no benefit," the comptroller's office said, urging city officials to create reserves for the payments.
That year, then-Councilman Spinello, an Independence Party member, criticized the practice but voted to approve it. He said 2012 was "an anomaly" because of a large number of police retirements.
Spinello said the borrowing this year differs because the buyouts will save money. "We're borrowing to actually reduce costs," Spinello said. "We're going to have savings every year, so I think this is a borrowing that certainly justifies itself."
The city plans to repay the debt in five years, he said.
Councilman Efraim Spagnoletti, a Republican, said after the meeting that though the council had no choice this year, the policy should change. "Going forward, we should really start allocating some funds to a reserve so when these retirements take place, we don't have to borrow," he said.