State Parks Funding

Accumulated state worker leave prompted California's park scandal

What started as a quiet scheme to draw down excessive leave hours built up by state parks managers quickly spread, first to hardship cases and then to the rank and file, according to recently released state investigative documents.

The leave scandal led to a larger revelation that the state Department of Parks and Recreation hid millions of dollars even while threatening to close parks and forgoing maintenance at its 278 facilities. The news brought down Director Ruth Coleman and has handed opponents of Gov. Jerry Brown's November tax initiative plenty of campaign fodder.

But it's possible none of that would have happened if parks employees hadn't accumulated so much leave time in the first place.

Former Deputy Director Manuel Thomas Lopez told investigators earlier this year that a report on leave balances prompted him to consider a buyout program as a way to spend money as the end of the 2010-11 fiscal year approached.

Auditors found he spent some $270,000 of his budget by cashing out leave through a covert program that sidestepped state protocols. Lopez himself received $28,647, more than any other department employee, by cashing in more than 13 weeks' worth of leave time.

California state government caps accumulated employee leave at 640 hours, or 16 40-hour weeks. It's one of the most generous leave-banking policies of any state in the nation. Once accrued, hours cannot be taken away, even if over the cap.

Many states allow an employee to accrue half that much time – or less – and don't allow hours banked beyond the cap. Such policies virtually ensure employees take time off.

California also loosely enforces its relatively liberal leave cap, especially among managers. When Lopez launched the leave buyout program last summer for himself and more than 50 other employees, he had more than 1,100 total hours on the books, or about 27 weeks, according to an investigation spreadsheet. Another parks manager, Tina Williams, had 1,604 leave hours, or more than 40 weeks.

In recent years, state officials suspect employee leave balances have grown because of furloughs: Employees who take unpaid days off don't take as many paid days off.

The problem, however, existed long before.

Data analyzed by The Bee two years ago showed that state workers had 75.5 million hours on the books by mid-2010. Each of the 176,000 state workers whose leave data are tracked by the state controller's office averaged 11 weeks of paid time off with a cash value of $15,655.

Workers say they can find it difficult to take all the time off they're owed and still get their work done.

Managers and supervisors earn "annual leave" to cover vacations and illness at a rate of 4 1/2 weeks a year for their first three years on the job. Those with 25 years of service or more earn six weeks a year.

Rank-and-file employees, who receive overtime, earn slightly less annual leave.

Managers have a hard time dealing with getting work done and ensuring employees take their time off, Lopez told state lawyers investigating the unauthorized buyout program.

"The problem is, you know, when you've got people that have some – upwards of, you know, a thousand hours – how are you going to get them down in a reasonable timeline," he said. " folks that have been there a while (have to) take probably two days a month off just to cover what (they're) earning."

Some departments ask employees to make plans to draw down their excess leave, but the practice isn't uniformly applied, and managers who control the policy in the workplace often look the other way.

It can be particularly difficult for managers and supervisors. They don't receive overtime, but they feel pushed to keep up productivity.

"I've sat down with managers and said, 'You've got to take some time,' " said Mike Genest, a retired state employee whose last post was finance director for Republican Gov. Arnold Schwarzenegger. "And they say, 'Oh, really? Then you've got to stop giving me all this work.' And they're absolutely right."

Dave Gilb, a former head of the state's personnel department, said sometimes that's an excuse that can be solved with better management and oversight.

"Leave banks can become a de facto deferred-compensation program," Gilb said. "It's a huge unfunded liability."

Once Lopez launched the buybacks for managers with more than 640 hours of leave, investigators found, two parks department managers asked to expand the program.

"(They) indicated that they would like to basically buy back employees other than those that are over – over 640," Lopez told investigators. They specifically wanted to help out an employee, he said, who faced bankruptcy.

Lopez, who has since filed for bankruptcy protection, said he hesitated but relented when other managers said there was precedent for the parks department to buy back leave to help hardship cases.

Subordinate managers put out the word, and more cases came forward. Investigators asked specifically if everyone who came forward in the second wave of leave buyout requests was a hardship case.

"I don't know everybody who was on that list," Lopez said, "but the way it was communicated to me was that those individuals were hardships ."

Eventually, however, the offer went to rank-and-file employees such as Katerina Jose, an administrative assistant. She didn't have close to 640 hours in her leave bank and wasn't facing bankruptcy, but her boss still offered to cut her in, according to the internal report.

She accepted a payout of $1,850.

"I'm remodeling my kitchen and that's what I used the money for," she said during a March 9 interview with investigators.

When asked why she was brought into the department's cashout plan, she said: "We had money in our budget left over."