Hidden costs
By Robert Gebeloff The Record
A veteran police chief retires. The town council goes into closed session. And before you know it, the chief is relaxing on the beach with a cool drink in one hand and a six-figure lump sum payment in his bank account - far away from the angry mob at the next council meeting who just read about the deal in your paper, two weeks after the fact.
Sound familiar?
In New Jersey, lucrative buyouts are fairly common for long-time public officials, and the primary justification is unused sick and vacation time. While most private sector employers do not allow workers to carry over or accumulate these benefits, public employees enjoy a different standard.
Recently, we decided to take a stab at measuring the overall impact of such benefits in a way that went beyond the "outrage of the week" type story.
While the lucrative payments being handed to outgoing police chiefs and school superintendents made for good copy, we wondered what was going on at lower levels, when long-time police sergeants and teachers retired.
What reporters Jan Barry, Peter Sampson and Don Stancavish discovered was staggering - that local public employees had banked more than $200 million worth of unused sick and retirement time.
Moreover, they found, this cost was pretty much hidden from public view. In addition to settling the big cases in closed session, most government agencies failed to itemize the cost of paying retirees in budget documents, instead rolling the figures inside line items for salaries or miscellaneous costs.
The back door
Fortunately, the reporters found a back door. State regulators had, since the mid-1990s, urged local officials to upgrade accounting practices to meet national standards. And as part of this effort, auditors for most local agencies had begun calculating the estimated payoff cost for unused sick and vacation time as part of the annual audit process.
The audits were a godsend. Instead of recapping the five most notorious buyouts, our reporters could tell readers in Ho-Ho-Kus how much they'd have to eventually pay retiring town employees and readers in Wanaque how much they'd have to pay retiring public school workers - with official figures generated by auditors working for the government agencies themselves.
But as the reporters began plowing through hundreds of audit documents cover 93 towns, 103 school districts, and a couple dozen county agencies quickly encountered a journalistic obstacle.
Context. It would have been very easy to just stick all the big numbers we were finding in these audits into the newspaper, but the truth is that the numbers alone would mean very little to readers. A $100,000 obligation in a small school district is not the same as a $100,000 obligation in a large county agency. And what does $100,000, $500,000 and $1 million mean to readers anyway - those are just abstract large numbers. Clearly, we needed to do some analysis before we could present this information in the paper.
Putting it in context
We decided to crunch numbers on two levels. First, in an effort to see the story through the eyes of the reader, we decided to express our findings on a town-by-town basis. This meant combining the municipal, school and county obligations into one total figure for each town. It wasn't as simple as adding up three numbers. Many of our school districts serve more than one community. And all of our county agencies cover multiple towns. So we developed a method for distributing the obligations among communities. For county agencies, we made a spreadsheet of assessed property value and calculated the percentage of the county total in each town. Then we assigned that percentage to the county obligation. In other words, if Hackensack contains 2.2 percent of the county's assessed value, then Hackensack taxpayers are ultimately responsible for paying 2.2 percent of the accumulated unpaid sick and vacation days of county employees. We created similar worksheets for regional school districts. Only, we based the breakdowns on enrollment. In general, towns support regional districts based on the proportion of enrollment generated by each participating town.
So we split regional district figures along the same lines.
Once we finished this round of crunching, we were still left with a fairly abstract large number for each community. To bring this figure home, we decided to perform a property tax analysis.
We set up a spreadsheet laying out the property tax characteristics for each town: the tax rate, the total levy, the value of a tax point, etc. We then wrote formulas that calculated how much property taxes would go up if the obligation for unused sick and vacation days were added to the tax levy.
While no town would actually have to bear such a burden all at once, we explained to readers that this was a real cost and that it was a cost they would have to pay eventually in the coming years.
Meanwhile, I'm happy to say that our reporters did an excellent job of NOT bogging down the narrative of their stories with these details. The data gave the story real backbone, but the actual writing was filled with anecdotes and discussion of the issues.
For the paper, we printed a town-by-town chart that contained only the summary data, plus an explanation of our methods. We then put several more charts online that contained the nuts-and-bolts data.
Robert Gebeloff can be reached by e-mail at gebeloff@bergen.com