Top two sheriff officials double and triple dipping
January 24, 2010
Though highly unusual, the methods San Luis Obispo County’s two top sheriff officials have adopted to double and even triple their incomes are entirely legal.
In an interesting twist, San Luis Obispo County Under Sheriff Steve Bolts is taking home between $640,000 and $772,000 this year in retirement benefits and an hourly salary, while his boss, Sheriff Pat Hedges, takes home $340,000, according to calculations based on dates provided by Bolts.
“I can see people saying this is double or triple dipping,” Bolts said. “But this is the pension plan and I am not hiding anything. All of that money is mine anyhow.”
The principal reason for Bolts’ hefty income is the Deferred Retirement Option Program (DROP). Adopted by the board of supervisors in October 2006, DROP allows county employees to simultaneously collect both their full wages and benefits along with their full retirement for a period of no more than five years.
According to Tony Petruzzi, executive secretary of the San Luis Obispo County Pension Trust, actuaries looked into DROP and determined the program does not increase county pension costs. While an employee is in DROP, the county no longer pays into the employee’s pension account.
“DROP allows them (county employees) to build up a nest egg for their retirement,” Petruzzi said. “It’s their own money.”
The primary goal of the DROP program is to retain experienced employees even after they make their full contributions to their retirement programs. Currently, sheriff’s department personnel retire under a pension formula that allows members to retire at age 50 with 90 percent of their salaries.
Opponents of DROP contend that allowing top tier employees, who have already reached their maximum pension contributions, to simultaneously receive retirement and wages results in increased costs to the taxpayers. In addition, opponents question the financial repercussions of allowing law enforcement employees to retire at 50 with 90 percent of their income.
“We are losing positions with the people that work the bottom end,” according to a sheriff’s department employee who asked to remain anonymous. “If Hedges did away with Bolts, his salary could save two to three positions.”
In San Diego, a community with a rising unfunded public pension liability, the sheriff deputies’ union recently agreed to increase their retirement age to 55. In addition, San Diego city officials are currently discussing DROP reform.
There are 24 SLO County employees currently in DROP.
DROP monies are stored in an investment account and paid in their entirety to employees when they retire. After three years in the program, Bolts retired on Jan. 1 and was immediately rehired as a temporary hourly employee.
In addition to collecting his DROP account monies and his retirement, Bolts is currently being paid between $70 and $82 an hour by the county.
According to the county’s temporary hire rules, Bolts can put in no more than 960 hours a fiscal year. However, because he was re-hired on Jan. 1, the next 12 months fall into two separate fiscal years. Bolts said he plans to get paid for 1,920 hours before he steps down from his second-in-command position at the end of 2010.
Bolts regularly works more than 50 hours a week in his under sheriff position, sources said.
In Jan. 2007, Hedges began to draw both his pension and his sheriff/coroner’s salary. Earlier this year, he announced he would not run for re-election in June.
Meanwhile, battered by a plunging financial market, SLO County is facing a $299 million deficit of unfunded pension liability. Public employee pension promises may be one of the most crippling fiscal disasters facing county taxpayers.
SLO County is one of two California counties with independent employee retirement systems. The trustees who administer the local system have no authority to negotiate for, or to advocate for or against, any benefit adjustment.
Only the SLO County Board of Supervisors has the power to determine whether future county employees will participate in a compensation package that is now far more generous than what most of their employers, the taxpayers of the county, receive.