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Phoenix City Council votes on 'pension spiking'

© Jonathan Lowe, CBS 5 News © Jonathan Lowe, CBS 5 News
© Jonathan Lowe, CBS 5 News © Jonathan Lowe, CBS 5 News

The Phoenix City Council voted to put an end to the controversial practice of so-called pension spiking.

Pension spiking is when city workers roll over unused sick and vacation time and then cash it out close to retirement so they bump up their salary and increase their pension payout.

Last week, the City Council voted to keep the practice unchanged. On Thursday morning the City Council reversed it with a 5-4 vote.

Critics say the measure does not go far enough.

Phoenix City Councilman Sal DiCcicio has been one of the most outspoken opponents of pension spiking, but last week he voted not to end the practice.

CBS 5 News asked him whether he had changed his position.

"No, not even. The vote last night was to support the mayor's proposal that did nothing, essentially did nothing," DiCiccio said.

DiCiccio later released the following statement:

"Mayor Stanton was the again the swing vote in a 5-4 vote to keep pension spiking by the Phoenix City Council today, proving he is the union owned Mayor. 

"This is the third time the Mayor has broken his promise to end pension spiking and falls right in line with his broken promise to end the food tax. 

"The process was gamed from the beginning. The Thursday, 10 a.m. special meeting start time, limiting the public participation, the proposal passed is one of the least defensible in court, the last minute discovery that local pension boards will have to act on the council's action, and even the Mayor himself acknowledged most the changes will require going back through negotiations, the same process that created the problem we are in today. 

"By recommitting to the same process we ensured the taxpayers will lose and the unions will win. 

"The motion approved also stopped any analysis of other options. Not only is there no cost/savings analysis for the proposal that moved forward but no other alternatives were analyzed so the Council and taxpayers had a clear decision on what would save the most money. 

"Bottom line: Unions won today and taxpayers lost. The only real solution will be to support the citizen driven imitative that will move Phoenix to a 401(K) and stop the pension spiking." 

Earlier this year, Mayor Greg Stanton directed an ad hoc committee to study ending pension spiking. The full City Council poured over those controversial recommendations at last week's meeting.

"We've asked for multiple options and the cost benefit of each, so we can compare those benefits to his {Mayor Stanton's} proposal, and he was just trying to rush it through. The council rejected it," DiCiccio added.

The proposal would "end the current practice" of allowing vacation and sick time, as well as car and phone allowances, to be pensionable.

"They {employees} cash that in at retirement, then they spike their pension from that so they make more money in retirement then they were supposed to. It's basically a way of cheating," DiCiccio stated.

He said he voted the way he did because the mayor's proposal didn't go far enough to end pension spiking. He says any proposal must include, "deferred compensation, vacation and sick leave."

But not everyone on the council agrees with DiCiccio's claims.

"I disagree. I was one of the four members on the ad hoc committee and this was a very fair proposal," said Councilman Daniel Valenzuela.

He says the options on the table were the best ones.

"Legally, we are given an opportunity to change these rules," he added.

DiCiccio's counterproposals, Valenzuela says, wouldn't be fair to city employees, or to the city's taxpayers.

"Those are things that are not wise to do. We're talking breaking contracts potentially," Valenzuela said.

Stay with and CBS 5 News for updates on Thursday's vote and follow reporter Jonathan Lowe @JLoweCBS5 for updates from inside the hearing.

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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