Assemblymember Wallace Announces that her Severance Pay Limitation Act to Prohibit Golden Parachute Severance Packages in State Authorities has Passed the Assembly and Senate

Today, Assemblymember Monica P. Wallace (D-Lancaster) announced that the Severance Pay Limitation Act has passed the Assembly (A.2480). This legislation will prevent public authorities from awarding “golden parachute” severance packages. The legislation passed the state Senate earlier this session.

“I introduced this bill last year in response to an abuse of authority by the Erie County Water Authority, which voted to give a sweetheart ‘golden parachute’ contract to its then-executive director,” said Wallace. “As a ratepayer myself, I was angered by this news because it represents government at its worst. Erie County Water Authority customers expect that when their rates increase, the money will go toward addressing crumbling infrastructure and water quality improvements – not lucrative severance packages. I am glad that my colleagues in the Assembly and Senate have recognized the need to curtail future abuses, and I urge the governor to sign the legislation into law.”

Early last year, it was discovered that a clause in the contract for the Erie County Water Authority (ECWA) executive director would guarantee a severance package estimated between $300,000 and $400,000 if the individual was let go by the Authority.[1] That news came less than two months after a rate hike for all ECWA customers took effect.[2] Last summer, that employee was indeed let go from the ECWA, and Erie County ratepayers were left footing the bill.

The Severance Pay Limitation Act would make amendments to the public authorities law by defining at-will appointees, limiting the severance package allowable for at-will appointees to no more than three months’ pay, and ensuring that severance payments are not considered in calculating retirement benefits.

“Golden parachute severance packages might be appropriate in the private sector, but they have no place in a public authority whose mission is to provide a public service to its ratepayers in a fiscally responsible manner,” concluded Wallace.