Town Borrows $800,000 for Golden Parachutes

After obtaining permission from the State, the Mayor and Council tonight put the finishing touches on a plan to borrow $800,000 to help pay sick and vacation payouts to retiring Borough employees.

According to CFO/Administrator Glenn Cullen, about 15% of the Borough's workforce is retiring this year, and these retirements account for over 40% of the town's accumulated sick and vacation leave.  The cost for retirement payouts is unprecedented this year and is expected to top a million dollars.  This is about four times what the Borough normally pays in a year. 

Most of the retiring employees were hired in the early to mid 1980s, when the Borough did not have a policy in place capping sick or vacation time, and because of that, several retirees either have received or will receive over $100,000 upon retirement.

By borrowing part of the money for the payouts, the Council hopes to avoid the huge spike in the tax rate that would otherwise occur if the funds were paid out of current expense.  The cost will now be spread over five years, with the town taking advantage of a low-interest loan to keep the costs down.