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Elmer Heap, Jill Olen, Wendi Brick and Joanne SawyerKnoll all worked their last days at the city of San Diego last New Year’s Eve — laid off as a result of Mayor Jerry Sanders’ budget cuts.

The next day was New Year’s Day, a city holiday. The four got paid to take that day off — a holiday from jobs where they no longer technically worked. And over the next several months, the four were paid for eight more holidays.

An audit released today by Eduardo Luna, the city’s auditor, found that the four former employees continued receiving holiday pay, pension contributions and other fringe benefits for months after they were laid off. Heap and Olen continued to earn auto allowances until someone on Luna’s staff inquired about it.

When they left the city, the four employees had hundreds of hours of accrued vacation. Instead of paying that vacation out in a lump sum, the four stayed on the payroll — a practice called “terminal leave.” As a result, the four — Brick, customer services director; Heap, deputy chief operating officer; Olen, homeland security chief; and SawyerKnoll, the Office of Ethics and Integrity chief — kept being paid for holidays as if they still worked at the city.

None took more holidays than Heap, whose 503 hours of accrued vacation kept him on the payroll until April 13. He earned holiday pay on New Year’s Day, Martin Luther King Jr. Day, President’s Day and Cesar Chavez Day.

The city also paid workers’ compensation and disability insurance for the four former employees.

They weren’t the only ones. The audit found that the city paid out $660,000 in fringe benefits to 111 terminated employees who took terminal leave between July 1, 2008 and March 20, 2009. That money could’ve been saved if the employees had been given a lump sum payment of their unused time, the audit states.

The audit recommends abolishing the practice of terminal leave, but notes that the city has conflicting policies about it. One regulation requires employees to take a lump sum; other city policies allow city employees to decide whether they want to take terminal leave.

New labor agreements with five city unions will prohibit employees from taking terminal leave, the audit states. But it will still be allowed for laid off employees because of budget cuts.

The audit also notes that Olen and Brick didn’t return their city IDs.

ROB DAVIS

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