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Local governments shell out millions annually to retiring employees for accrued sick and vacation time, an examination by this newspaper found.

Elected officials said they find the practice vexing, but acknowledge they likely can’t break the cycle. Public employees said they’ve earned the cash and save taxpayers money by not taking time off the job.

Over the past two years, an analysis by this newspaper shows local governments paid out more than $5 million to departing employees, including $1.7 million in Butler County and just over $1 million in Warren County.

The payouts come at a time when local government budgets are in the red and forcing them to lay off employees and make cuts in services to taxpayers.

Some examples of the payouts:

• Middletown’s former police chief Greg Schwarber was paid $127,262.

• Fairfield assistant manager Dennis Stuckey was paid $66,181.

• Hamilton police Lt. Michael Lease was paid $60,920.

Hamilton’s Police Chief Neil Ferdelman’s last day is Friday and taxpayers will pay him $48,028 in accrued sick, longevity attendance incentives and clothing maintenance reimbursement. The bulk, $47,655, was for unused sick days.

Ferdelman has been on vacation most of this year and as a result saved the city $10,150. He said saving the city money on his vacation pay wasn’t his primary goal, but added he also doesn’t feel bad about collecting unpaid sick pay. Ferdelman accrued 4,000 hours of sick time he never took, but was only paid for 900 hours.

“Those are hours I just never used so I think the taxpayers got a pretty good deal with me. I turned most of it back in. I only got paid for a small fraction of what time I had actually sitting there,” he said. “If I hadn’t chosen to be conscientious and just take off every time I had a sniffle, I could have just gotten my hours of sick time and used it and got paid. But I didn’t.”

Butler County Commission Don Dixon said the payout hurts governments in the long run. Employees are reimbursed at their highest salary rate for days they might have accumulated when they were making less money, according to Dixon.

Using his example, if an employee earned $15 an hour when they started and banked some days then, when they leave they get paid at their exit salary rate, which for Ferdelman was $52.95 an hour.

“You either pay it then or you pay it now, but the difference is you’re paying a lot higher rate if they carry it over. Those are big numbers,” he said. “That somehow needs to be paid at the rate they accumulated it, when they accumulated it.”

State law mandates both union and non-union employees earn sick and vacation day payouts. Gary Sheets, human resources director for the county, said state law says if an employee retires they are entitled to one-fourth of the sick days they accrued but didn’t use, but it’s capped at 40 days. The county must by law also pay all unused vacation days.

Sheets said all but one of the 14 unions in the county adheres to the state cap. The Clerk of Courts union gave up 10 sick days in exchange for other contract concessions, according to Dixon.

Middletown Mayor Larry Mulligan said union contracts have driven his city’s sick and vacation payout rules and there is little if anything they can do about it. The biggest chunk of Schwarber’s payout was $65,723 for 181.5 banked holidays. This perk is only extended to the police and fire staff through their contracts and the chiefs and assistant chiefs.

“Greg was with us close to 30 years so through the contracts that were in place through the years, that’s the way it works,” Mulligan said. “There’s no way to avoid the contractual obligations of the city there is no easy way, we can’t not pay it.”

Dixon says he thinks the state, given these tough economic times, should take another shot at limiting perks public employees enjoy that most private sector employees — who pay public workers’ salaries and benefits — don’t. Sen. Shannon Jones, R-Clearcreek Twp., tried to address a host of issues, including sick and vacation payouts, with Senate Bill 5, the legislation that became law last year, then was overturned by Issue 2 on the November ballot. Voters resoundingly rejected the law that tamped down the rights and powers of unions by a 62 to 38 percent margin.

Dixon said it will take state lawmakers to fix the problems, but said the first time around they took the wrong approach. He said rather than come out of the box with an all encompassing bill, they should have had a face to face with the unions first.

“They have to negotiate, they said we don’t like part of it so we’re going to get rid of all of it, we’re going to change the game right now, we’ve decided we’re not going to play anymore by these rules,” Dixon said. “That’s not how it’s going to get fixed.”

Because of the unilateral approach legislators took, Dixon said local governments are left in an untenable predicament.

“Instead of getting some of it, or part of it, or half of it, we get none of it,” he said.

Gov. John Kasich offered to meet with union leaders after the bill became law if they would agree not to put the issue on the ballot. When asked if she might resurrect some of the issues she addressed in SB 5, Jones said she took her shot and now it’s up to local governments to deal with it.

“The question has to be on the local governments and the taxpayers who fund them to come forward with a solution on how they are going to pay for these benefits,” she said. “This is not an issue of whether or not this is a problem, there is a problem, what I don’t hear a lot about is how are we going to deal with this, other than they don’t want to deal with it the way Issue 2 dealt with it... I’m kinda done.”

Unions have oftentimes negotiated generous perks for their people, but Middletown Fire Union President Jon Harvey said he is tired of everyone always placing blame on them for financial woes.

Harvey said there are good reasons, especially on the sick pay accruals, for the benefits. If people know there is a benefit for not calling off sick all the time, they are less likely to do so, said Harvey, adding it doesn’t happen all the time but overtime could be the negative impact of too many sick call-ins.

He also took exception to the suggestion that firefighters have arranged “lavish” benefit packages that are breaking the state’s bank. He said he doesn’t know of any firefighter who has received a gold-plated retirement package. He suggested legislators ought to look in their own backyards.

“I think the people in Columbus need to quit pointing their fingers at the unions and saying it’s their fault, it ain’t. It’s irresponsible for someone at the top to say ‘I want to change your benefit but I’m not willing to change mine’,” he said. “I don’t think state legislators took any reduction in pay, they didn’t end up working any more hours, they still get the same lavish cash out. Let those guys make the change, then city managers might make a change and then after they’ve all done it, maybe the grunt worker at the bottom will say, ‘Hell, I’ll make the change if they’re willing to do it.’”

Warren County Commissioner Dave Young said governments ought to be able to manage their affairs like private industries do but state legislators would have to remove mandates for things like sick and vacation payouts. He said the whole thing makes him “sick to his stomach” but he doesn’t see a change on the horizon.

“The voters of the state of Ohio essentially told us they are willing to pay out this money to the retired government workers,” he said. “They would have had the opportunity to overturn much of this. There are ramifications for votes. And this is one of the ramifications of the vote. We will be spending significantly more money than I believe we should.”

Warren County hasn’t had to order mass layoffs like so many other jurisdictions have, but Young said as salaries increase and mandates prohibit flexibility, government workers will make more money but there will be fewer workers splitting the pot, which will impact services.

In comparison, Rick Kennedy, spokesman for GE Aviation, Butler County’s second largest employer, said his company does not allow employees to carry over sick and vacation days from year to year. He said he can’t speak for the entire private sector, but very few private sector employers give perks like they do in the public domain.

As a publicly traded company, he said GE has a responsibility to its shareholders and expensive perks for employees doesn’t fit into that equation.

Mason Fire Union Chief Mark Gerano said there is a key factor many forget when public employee benefits are debated.

“It should not be forgotten that fire fighters and other public workers are taxpayers too,” he said. “About 350,000 public employees in Ohio and their family members were affected by the unfair provisions of SB 5. Those taxpayers benefit because governments will not be able to take away their voice in the workplace for safety and benefits.”

Dixon said he’d be willing to ask legislators to reopen discussions on some of these issues and Kasich’s spokesman Ron Nichols said they’ll be glad to listen.

“We want local governments to offer cost saving ideas to us, we encourage them to do it, tell us how you think we can help you reduce your costs,” he said. “But we are not planning to roll out a series of proposals in the wake of Senate Bill 5.”

There is a sticking point however, according to Mulligan, who said they could face lawsuits if they try to make retroactive changes.

“We may make some attempts to change it going forward, but there is no magic wand that we can wave, especially with the public’s approach to what Senate Bill 5 would have given us,” he said. “And I think it would be a legal issue at that point, we can probably do something going forward, but typically someone’s accrued benefit, it’s pretty hard to go back and change that.”

Contact this reporter at (513) 696-4525 or dcallahan@coxohio.com.