If you’re wondering about all the talk about “spiking” in the port pension plan, here’s the simple version.

Let’s take an example, one of six that the port’s actuaries were studying.

Employee X made about $94,000 in 2013 and $97,000 in 2017. But, in the last year before retirement, X was allowed to cash out almost $24,000 of unused vacation time and about $18,000 sick time — almost $42,000 of additional income. That “spike” in pay means that X’s average salary for the past five years — the average on which X’s pension is based — is more than $100,000.

It’s a neat trick, having an average salary of more than $100,000 when your budgeted salary never reached $100,000.

That’s what “spiking” is, and it might come as a shock to the many workers who aren’t allowed to carry over vacation and sick time year after year. Most of us go through our working lives on the “use it or lose it” plan.

“Spiking” is one reason that the wharves board, which governs the port, is talking about the pension fund. And, if you read the newspaper regularly, you can bet you’re going to see more on this topic.

But there is a bigger issue here.

This practice has been going on for decades, and previous boards have gone along with it.

Even today, some trustees see no problem at all. But others — a majority, it appears — say this kind of stuff has got to stop and the port has got to change.

If you care about Galveston, stand with those who seek change.

The port is a $158 million public asset, and the public is getting a $200,000 return on its investment. That’s a lousy rate of return. If you put $158 in a savings account you’d expect to earn more than 20 cents in interest.

This underwhelming return prevents the port from doing what it should for Galveston’s economy. The port is generating revenue. It would have the money to make improvements that would attract even more business if it stopped frittering money away.

It’s time to do that.

That means it’s time to look at the benefits the port offers.

It’s time to look at a police force that is bewildering in size.

It’s time to look at the system for managing parking revenues. The port, with its thriving cruise business, collects about $5 million annually in parking fees. If it had a standard system, it might double that.

The port begins the year with a new director, Rodger Rees, and with a majority of trustees who want to see change.

If you care about Galveston, stand with those who seek change.

Heber Taylor, a retired newspaperman, lives in Galveston.

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(7) comments

Don Schlessinger

Thank you for your column today Heber. This is one of the more frustrating things we see too much of in Galveston. What is even more frustrating is the fact that a significant number of Galveston city employees live beyond the causeway. So in the end they do nothing for our Galveston economy but drain it, then take their money and run.

Steve Fouga

God, I love this editorial!

I've long wondered why the Port contributes so little to the Galveston economy. I had concluded it was a combination of poor management and lack of a dynamic vision for the future. Now I find out it's likely that the actual management processes are illogical and outmoded. It's hard enough for an enterprise to reach its potential while managing good processes poorly, or even well, for that matter. It's impossible if the processes themselves are self-crippling. 😕

Curtiss Brown

I think we need to focus on the correct target. If a worker works all year and doesn't take all of his/her vacation or sick leave they are due that value. They earned that value. It is not right to talk about taking that away. But it is right to talk about how that value is counted when a worker retires. While I see no problem with carrying a balance to the worker's credit, I don't think it should all be charged to the final year worked. Instead, it should show up in each year earned for the purposes of retirement. It is proper to ensure that retirement contributions are properly accounted for at the time of retirement.

This is not a clearcut issue. People who scream and shout about the issue just make it more difficult to assess the right course. Their motivations should be suspect.

Doyle Beard

they got paid for working and saved the vacation money instead of taking it then. By working and getting paid plus vacation is double dipping.

Doyle Beard

if it shows up in the year earned its still the same because they made a salary for working and adding that to their gross that year the total are the same as carrying it over.

Don Schlessinger

I wonder why the city and port can't just pay an employee his/her vacation salary annually? The employee can make the decision to save it or go to the mountains.

They can grow a better retirement "nest egg" by putting the money to work instead letting it mold somewhere doing nothing.

Steve Fouga

The focus of this thread has become "spiking," vacation policy, and sick leave, but I think Heber's larger point is that, in general, the Port is being run as it has been for awhile, and it's probably time to change things up. Look for new efficiencies, economies of scale, maybe cut better deals, etc.

The company I worked for went decades with little change in management processes until the entire U.S. manufacturing sector realized it was being outcompeted by foreign companies. This realization fomented sweeping change. Some folks gnashed their teeth, but we emerged leaner, faster, cheaper, higher quality. Sometimes you just have to bite the bullet and change. It is exciting and fulfilling for those designing the improvements, and quite energizing for the workforce.

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