The accompanying chart graphically displays the unvarnished truth about how David Cavazos worked Phoenix’s pension system to his total advantage.
As you see, his base pension (a function of the average of his last three year’s salary) was $146,000 — not shabby by any standards — but it gets a healthy increase of 60-plus percent, or $90,000 more annually when you add in the various “spiking” components like cell phone, car allowance, sick leave, vacation cash-out, etc.
This brings his total annual pension to $236,000, just a shade under the $247,000 his predecessor, Frank Fairbanks, got when he retired in 2009. Both of these individuals took liberal advantage of the “spiking” process. Here is an interesting fact: while Fairbanks’ pension was higher by $11,000, his average pension per year worked was down by $2,000 (see below):
• Frank Fairbanks’ years employed = 37. Pension = $247,000, avg./year worked = $6.7K.
• David Cavazos’ years employed = 27. Pension = $236,000, avg./year worked = $8.7K.
So in total compensation Fairbanks is receiving more due to working longer, but Cavazos worked less and is receiving more per year worked and he worked 10 years less. This is a real life example of “playing the system” to maximize your payout!
I believe “Team Phoenix” (also known as Mayor Greg Stanton and the City Council) needs a time out because they must get real about pension reform as taxpayers don’t need this level of play calling by our elected officials.
The harsh reality is unless “Team Phoenix” wakes up and takes action the next city manager could easily repeat, or should I say three-peat that scenario. Especially if he or she comes from the existing employee base, as they will already have credits in their account for spiking components that they feel are grandfathered in with their level of service.
This is a mandatory call to action to all Phoenix taxpayers. This process is totally out of control and it must be fixed or else we will become another Detroit — filing for bankruptcy — some time in the future.
On a personal note, I worked for AT&T for 32 years in a wide range of positions all across America. I retired with a pension in 1997 that is a little over 50 percent of the average of my last three years salary/bonus monies times a factor for my years of service. We never included items like sick days, vacation time, etc., in the pension calculation base.
Our philosophy on vacation time was “use it or lose it.” The current popular book, titled “The 7 Habits of Highly Effective People,” talks about Habit 7: “Sharpen the Saw,” which is the purpose of vacation time — to balance and renew your resources. We never had a “bank” of sick days. We were expected to be at work. If you were sick you stayed home, got proper medical treatment (if needed) and then came back to work. If it was a serious long-term issue then disability provisions activated.
If “Team Phoenix” still wants to allow the “banking” of vacation time and sick time, then pay it out in a lump sum stand-alone check at time of retirement so the employee is paid for all of the banked time, but in a one-time check that is not co-mingled with their retirement account.
I really believe the City Council needs to look at best practices on the entire compensation/sick days/retirement program. Serious consideration should be given to hiring an outside consulting firm to provide concrete steps on how to fix this their embedded problems.
Here is a vivid example of why outside consultation is needed. The table below shows what a new entry-level city of Phoenix employee gets:
• Holidays, 11.5 days.
• Sick leave (10 hours/month EOY), 15 days.
• Vacation days (8 hours/month EOY), 12 days.
• Personal time, 2 days.
• Total, 40.5 days.
This is their start into the world of entitlements, truly one for the WIIFM theory (What’s In It For Me?). It’s an extremely generous benefit package by any business model for a new hire. This just sets the stage for the pension “spiking” process.
If existing city of Phoenix employees get the OK to fill the position I am confident they will claim prior rights/grandfather clauses, etc., and here we go with a three-peat!
We have two articulate “Agents for Change” on our side: Councilman Sal DiCiccio, District 6, and Channel 12 TV anchorman Brahm Resnik. Please take the time to send them an email voicing your support for permanent changes to our pension spiking issues. Sal DiCiccio can be reached at firstname.lastname@example.org and Brahm Resnik can be reached at email@example.com.
Together we can make a difference.
• Jim Jochim has been an Ahwatukee Foothills resident since 1995.