Atlanta city attorney: Cash for unused leave puts city at legal risk

The issue: Payments Mayor Kasim Reed's administration made to nine employees in exchange for unused vacation, sick and compensatory time.

The argument: One councilmember says such payouts violate city code, which allows payments for vacation time when a worker leaves city employment. Reed disagrees, but he concedes the payments may not have been fair to all.

The details: Under the little known program, Atlanta Police Chief George Turner, the city's highest-paid employee with a $241,000 salary, was paid more than $80,000 last year for nearly 700 hours in unused vacation. Two other deputies in Reed's administration were each paid nearly $30,000 for hundreds of hours in unused sick, vacation and compensatory time. Three other employees were paid a combined $6,000 for unused vacation time. And three city workers were granted a combined $12,000 in advance pay — effectively a loan against future earnings.

Atlanta City Attorney Cathy Hampton said Wednesday payouts that Mayor Kasim Reed’s administration made to select employees under a little-known hardship program — acts that one councilmember maintains were illegal and others say was unfair — has put the city at legal risk.

Reed has insisted the payments were lawful, but has previously said he’s considering compensating employees who experienced hardships in recent years, but weren’t afforded the option of trading unused vacation, sick or compensatory time for cash. Such a move could cost upwards of $2 million, he said in August.

Hampton and members of the council’s finance committee met in executive session on Wednesday to discuss the payouts, some as high as five figures to top deputies.

Human Resources Commissioner Yvonne Yancy and Chief Financial Officer Jim Beard approved the hardship payouts to at least nine employees since 2012. While most received cash for unused leave, three received pay advances.

Police Chief George Turner, Atlanta’s highest paid worker with a $241,000 salary, was the top beneficiary. He was paid more than $80,000 last year for more than 700 hours of unused vacation hours. Two Reed deputies received nearly $30,000 each for unused leave.

The administration has taken a number of hits over the payouts since they became public in August. Many city workers said they were unaware of the program and have decried the payments as inequitable. Some councilmembers have criticized the administration for being slow to provide answers.

District 9 Councilwoman Felicia Moore has repeatedly said that the payments are illegal and violate city code, which allows employees to be paid for vacation time when they leave city employment — not while they’re still employed. City code also caps the amount of unused leave time an employee is allowed to carry into a new year, but many of those receiving hardship payments were compensated for hours beyond the limits.

Reed, who quickly suspended the program following complaints, has said the payments were an “error” and acknowledged that they could raise fairness concerns. But he has aggressively refuted Moore’s assertion that the actions broke the law.

In an August hearing, Reed made waves when he told Moore that she is unqualified to make such a statement because she works in real estate and isn’t an attorney.

During that meeting, Reed cited two laws that he said gave Beard and Yancy broad discretion to award the payments. One such law reads that a CFO can make operating expenditure decisions “with the approval of the mayor.”

The AJC requested documentation of that approval. After several inquiries, Reed spokeswoman Anne Torres said: “There are no documents with approval from the mayor because he did not approve.”

In the same August meeting, Reed said the decision to award the payouts pale in comparison to staffing decisions made between 2002 and 2007. During those years under former Mayor Shirley Franklin, between 100 and 200 people were allowed to leave the city, collect payments for benefits, and were quickly rehired, according to Reed.

Despite several requests under Georgia’s Open Records Laws, Reed’s office hasn’t provided all of the data to support that assertion. However, Yancy told councilmembers on Wednesday that her office is compiling information related to Reed’s statement.

Beard and Yancy, speaking to the finance committee on Wednesday, reiterated their belief that they were acting within the law in granting the payments to employees facing tough circumstances, such as an eviction.

“The intent was clearly to help someone in distress,” Yancy said. “I want to be clear that I certainly regret the process. I regret the fact that assisting people or trying to help people has created such a continuous dialogue about whether or not that was a good idea.”

“You can trust ensured that I will never assist another person here again,” she continued.

Beard said he approached the employees’ hardships with a “What would Jesus do?” stance. His primary role was to ensure that the payments were within the budget, he explained. In his view, employee troubles impact city operations if they are unable to perform their duties.

“I felt like this was in the best interest of the city to keep things moving along,” he said.

But given the fallout, Beard said he’d now approach those problems differently: “If I stood back and did it all over again, would I take a different path? Probably so.”