Lee Zurik Investigation: Retirement plan gives Galvan plenty to smile about

Photo of Dr. Peter Galvan from his campaign web site, ReelectGalvan.com
Photo of Dr. Peter Galvan from his campaign web site, ReelectGalvan.com

Tens of thousands of dollars, in cash.

"This is blatant robbery," said Rick Franzo of the group Concerned Citizens of Lacombe.  "It's just exploitation of trust, it's greed and it's believing that you're above the law."

If true, and ignored, it's the type of cash payoff that lasts a lifetime.

St. Tammany Parish Coroner Peter Galvan has decided to pay himself more than any other elected official in the state, and with that will come a hefty reward -- a lucrative retirement package -- when he steps aside as coroner.

But he may receive more than he deserves.

Our research shows what the Coroner's Office has submitted to the State Retirement Board.  It shows Galvan's salary for the past six years.  Here's why that's important.

To calculate a public employee's retirement payment, the Parochial Employees Retirement System first looks at their years of service and multiplies that by 3 percent.  Then they divide that number into the average of the employee's three highest years of salary.   That employee is paid that figure each year, for the rest of his or her life.

The retirement system says Dr. Galvan has been employed for 13 years.  We multiply that by 3 percent and divide that into the average of his three highest annual salaries.  According to the Retirement Board, that average is $227,000.  So if Galvan retired today, he'd be paid almost $89,000 every year.

But there's a problem.

Take a closer look at the salary Galvan reported to the Retirement Board over the last three years: $221,000 in 2010, $231,000 in 2011, and $230,000 in 2012.  That's actually not his salary -- it's his salary plus the additional unused vacation and sick time he paid himself.  Galvan's salary was actually about $30,000 less every year.

According to state law, earnings shall not include payments made in lieu of unused annual or sick leave.  In other words, that unused sick and vacation cannot be figured into his salary for his retirement.  Galvan's office is misreporting his salary, and it could significantly bump up his future retirement benefit.

So what would this mean for Dr. Galvan?  If he retired today, it would mean an extra $12,000 a year in retirement money. If Galvan decides to wait seven more years to retire, the bump would be an additional $19,000.  And if he chooses to wait 12 more years to retire, misreporting his salary would net him an additional $23,000 of cash every year.

That's lots of extra money, all because the Coroner's Office misreported his salary to the State Retirement System.

State Representative Kevin Pearson from St. Tammany said, "When they're reporting their numbers, it's not up to the PERS system to audit those numbers.  They're going to believe what the department is telling them."

Pearson heads the House Retirement Committee.  He says it's up to the coroner to report the correct numbers.

The Coroner's Office appears to be misreporting salaries of other employees, too.

CFO Kim Kelly made a salary of $104,000 last year.  But the Coroner's Office reported her salary as $123,000, also adding the unused sick and vacation she was paid.

Death investigator Mark Lombard had a salary of $109,000 in 2012.  But the Coroner's Office reported to the State Retirement Board that he made $133,000, including the extra money tacked on from his paid but unused sick and vacation.

And Chief Deputy Coroner Michael DeFatta was paid a salary of $177,000 last year.  The Coroner's Office told the State Retirement Board his salary was $226,000 – once again, because they figured in his unused sick and vacation.

If not corrected, even for a handful of employees, the error could prove to be lucrative.

"It's the others in the state, it's every other department, every other parish, somehow is actually paying for this additional benefit," said Pearson.  "It's costing them more.  It's not as though benefits don't cost enough already.  But it adds to the cost."

Those are costly retirements would be paid for by taxpayers.  If Galvan retired today, he'd be paid $89,000 every year for the rest of his life -- that's more than the Jefferson Parish Coroner's current annual salary.

Such questionable management by the St. Tammany Coroner concerns Pearson.  "Mismanagement of public funds is a serious issue," he said.  "The public is entrusting you with their dollars, and mismanagement, abuse of that privilege – which should truly be a privilege – is something that you can't forgive."