Red Bank’s borough hall during a roof replacement job in November. (Photo by John T. Ward. Click to enlarge)

By JOHN T. WARD

Retirements by three senior employees in coming months won’t put an immediate squeeze on Red Bank taxpayers, two municipal officials said Tuesday.

But the departures will all but deplete a rainy day fund created to cushion the blow of outsized payouts for unused sick and vacation time, said Councilwoman Linda Schwabenbauer, who heads the finance committee.

As reported by redbankgreen, the borough council agreed in executive session on December 14 to pay two prospective retirees — Administrator Stanley Sickels and police Captain Tom McDonough — a total of $327,356 in coming months for unused sick days and vacation time accumulated over their careers.

A borough native, volunteer firefighter and 37-year borough employee, Sickels is to be paid $173,828.20 for unused sick time, according to a payout schedule provided by finance department. That sum will be divided into two payments of $86,914.10, one due by the end of this week, the other at the end of June.

Here’s the payment schedule: 16-304-sickels-schedule

If not for a borough policy capping compensation for unused sick time, Sickels would be entitled to another $115,614.86, the records show.

The payout slightly exceeds the $173,824 Sickels collects in combined salary for his jobs as administrator, construction official and purchasing agent. 

McDonough, who serves as second in command under Chief Darren McConnell, plans to wrap up his 30-year career in the police department with a $153,528 payout in two checks of $76,764, one payable this week and the other by the end of February, according to the documents.

Here’s the McDonough payout schedule: 16-304-mcdonough-schedule

Chief Financial Officer Eugenia Poulos said the Sickels and McDonough payouts will be fully covered by a trust fund known as the “reserve for accumulated absence liabilities.” At present, she said, the fund holds $443,000.

The fund “has always been there, but little by little, we’ve been putting more into it,” Poulous said.

More attention was paid to keeping the account funded after a wave of expensive retirements in 2010 forced the council to float a $750,000 bond, , said Schwabenbauer.

McConnell told redbankgreen that another senior department member, Lieutenant Eliot Ramos, has also announced plans to retire early in 2017. But because Ramos did not participate in the deferred compensation plan along with Sickels and McDonough, his payout “won’t be as high” as McDonough’s, McConnell said.

Still, Schwabenbauer said the combined effect of the three departures will all but deplete the fund. Re-funding it won’t, however, necessitate a tax increase, she said.

The fund is needed to buffer the impacts of retirements by employees hired before 1994, when the borough imposed sick and vacation-time payout caps on new hires. Schwabenbauer said that with each passing year, the number of employees eligible for payouts is reduced, but she had not yet received a report from Poulos that projects the annual impacts.

McConnell said that after McDonough retires, his department will have only four officers with more than 25 years of borough service, including himself.

McConnell said McDonough had taken only about 28 sick days over the course of his career, which from an administration standpoint is “helps keep overtime in check.”

Including McDonough and Ramos, the police department has 40 full-time officers, two fewer than in the past, McConnell said. Following their retirements, he hopes to get the squad back to 40 by the start of summer, but has not yet begun the search for new hires, he said.