City of Gilroy

Too many public safety employees in Gilroy are claiming the tax-free haven of a disability retirement, according to a June report by the Santa Clara County Civil Grand Jury.
In the past five years, 43 percent of Gilroy’s police and fire department retirees – six of 14 – have retired under disability provisions, which make the first 50 percent of their pensions exempt from state and federal income tax. Only Palo Alto had a higher rate, at 51 percent, while most of the other cities the Grand Jury investigated hovered between 26 and 30 percent.
The Grand Jury raised red flags with these findings: Either Gilroy’s public safety sector is an overly hazardous work environment, or a larger culture of abuse of the retirement system exists at the taxpayer’s expense.
“Gilroy should develop a plan consistent with city objectives to lower its IDR (injury disability retirements),” the report reads.
The City formally disagreed with the Grand Jury’s finding, claiming that the investigation wasn’t thorough enough to put the seemingly high percentage into context.
“The Grand Jury got it all screwed up,” said Mayor Don Gage.
Percentage-wise, Gilroy’s amount is higher, but City officials say six public safety disability retirees over five years – three police employees and three fire employees – isn’t something to make a stink about. Gage pointed at San Jose, which had 151 disability retirements in five years.
Gilroy’s Human Resource Director LeeAnn McPhillips said Gilroy does not have a “more dangerous workplace” than other cities in the county as the report suggests. The injuries reported tend to be chronic and worsen over time, such as back pain, purportedly from carrying a duty belt, or lung problems developed from a lifetime of fighting fires, she said.
McPhillips added that it puts the city in a difficult position because doctors are patient advocates, and they don’t necessarily see the issue from the employer’s side. 
Four of the six employees in the report did not even file for disability until after they retired, according to the City’s response to the Grand Jury.
“It raises the eyebrow a little when you have it happening at the end of someone’s career,” McPhillips said.
When a public safety employee works their full career and claims disability after retiring, the main benefit to the employee is that the first 50 percent of their retirement allowance is non-taxable, as opposed to a normal, taxable pension. The average pension for the 14 public safety retirees mentioned in the report is $133,800.
But the City’s hands are tied, legally. McPhillips, Gage and Council members agree that they are stuck having to follow state law, which inherently favors the injured employee, making it risky and potentially more expensive for the City to fight the claim.
A disability system rife with opportunities for abuse, statewide, is something Sacramento should examine and reform, Gilroy staff and Council say.
And then there are many cases of very legitimate work-related injuries, McPhillips said. Of the six public safety retirees on disability, one was a firefighter who threw out his back when he slipped down the stairs while trying to rescue a heavy man from a medical emergency.
“It was devastating to that employee,” she said. “It changed his life.”
City Council unanimously approved their formal disagreement with the Grand Jury at their Sept. 9 meeting. They do not plan to follow up with the report beyond this response. The Civil Grand Jury does not have any legislative authority over the City – they only publish findings and require written responses to their reports.
Councilman Dion Bracco bluntly summed up his stance.
“Sacramento has got to crack down on this,” Bracco said. “But the Grand Jury, pointing to us? That’s crazy.”
Councilman Perry Woodward didn’t entirely discredit the Grand Jury’s suggestions, but thought the report lacked enough analysis – especially with the small sample size of six employees – to prove any foul play.
“Statewide it’s a real problem. It’s very suspicious when people will become disabled at the end of their career,” Woodward said. “We’d need to do a much more detailed inquiry to know if anyone is trying to gain the system here.”
LeeAnn McPhillips said there’s a certain level of danger that comes with a public safety career, and injuries are, unfortunately, part of the profession.
“You’re climbing fences, you’re chasing people down, and sometimes you can get hurt. And combined with normal aging, people really can become disabled later in life,” McPhillips said.
The Dispatch inquired about the names of the six disability retirees in the past five years as well as the names of their physicians, but “after discussion with the City attorney and review of the government code we are not able to provide” that information, according to McPhillips.

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