Police, fire pensions are challenged
Control board head calls for changes
The head of Buffalo’s control board is calling on New York State to exclude overtime from pension calculations for all employees in the state pension system, including police and firefighters.
“You have people working 25 to 30 years and making one salary for 25 to 30 years with little overtime. Then, all of a sudden, they are retiring, and people are using overtime to pump up their pensions . . . and their pensions are in excess of what they are earning,” said Paul J. Kolkmeyer, chairman of the Buffalo Fiscal Stability Authority.
The problem — known as “pension spiking” — could easily be resolved, Kolkmeyer said, if the State Legislature changed the law so that overtime was not factored into pension payments.
Kolkmeyer was responding to an ongoing series in The Buffalo News focusing on public employee pensions.
In the most recent installment, focusing on Buffalo firefighters, The News found firefighter overtime increased fivefold in the past five years, with firefighters about to retire getting a disproportionate amount of the extra money. As a result, firefighter pensions are up an estimated 50 percent, with pensions often exceeding the base pay a firefighter received while working.
In fact, Gov. David A. Paterson’s 2009-10 budget plan includes a new set of pension rules for most future state and local government workers as well as school district employees. The proposal excludes overtime from pension calculations and also raises the minimum retirement age to 62, from the current 55, among other things.
But police and firefighters are not included in the proposal.
“I don’t know why they would make that change and not include police and fire,” Kolkmeyer said of the governor’s proposal. “That is absurd. They are the two unions abusing the system, and everybody knows it. They are the untouchables. Unless someone addresses this, the issue will not be resolved.”
Those groups generally have separate pension provisions from others in the state pension system, but if local officials are interested in making changes to police and fire pensions, the governor’s office is willing to consider it, said Matt Anderson, a spokesman for the state budget office.
“Final budget negotiations are ongoing, and we are willing to hear and consider additional savings proposals from local leaders as that process continues,” Anderson said.
Union opposes changes
Kolkmeyer said he will raise the issue at an upcoming control board meeting to see if the board is interested in submitting a proposal to the governor’s office.
Daniel Cunningham, president of Buffalo Professional Firefighters Local 282, opposed Kolkmeyer’s proposal, saying police and fire are in a separate category for good reasons.
“The governor is trying to control costs but recognizes the importance of police and fire, and that the life expectancy of police and firefighters, once taking their pensions, is much lower than the other employees,” Cunningham said. “That is why he excluded police and firefighters in the bill.”
Responding to The News report on firefighter overtime, Cunningham said: Firefighters have “nothing to be ashamed of and make no apology for the money they have earned. They have worked as many as 93 hours a week away from their families at a very dangerous and demanding job.”
Cunningham also released numbers showing that the city saved about $6.5 million last year by paying overtime rather than hiring new firefighters.
“The cause and those responsible for this overtime are not in this office, or this union,” he said. “Take a look down Delaware Avenue to the large building by the circle. You will find the culprits there [City Hall].”
But Cunningham also said that some less-senior firefighters are dissatisfied with the way overtime is doled out in the Fire Department and have asked that the current system, which is weighted based on seniority, be changed.
“The younger people are complaining they are not getting their fair share,” Cunningham said.
The union earlier in the year put together a committee to address the issue, Cunningham said. The group continues to meet and hopes to make a recommendation in the near future. Any changes in the overtime distribution system, he said, would be subject to a vote by union members.
The exploding overtime in the Buffalo Fire Department and, to a lesser extent, the Police Department have attracted attention over the past year from the city’s control board.
“We talk about it, if not every meeting, then every other,” Kolkmeyer said.
The police and fire commissioners tell the control board that short staffing — following years of staff cuts and a hiring freeze—is to blame for much of the overtime. City payroll records show Police Department overtime was about $2.2 million in 2004, as was the Fire Department’s. In 2008, the Police Department overtime was almost $8.8 million. Fire Department overtime was almost $10.6 million.
Rules are in contracts
The control board approved police and fire budgets that include additional hiring this year. The Police Department is in the process of hiring now, and the Fire Department hopes to hire by the end of the year, once its testing process is completed.
“I will be interested in seeing, when we hire more people, because we have police coming in, if these numbers go down,” Kolkmeyer said. “I am skeptical of that, but only time will tell.”
The commissioners also tell the board that, while the departments authorize overtime, union contracts and rules determine how it is distributed and the commissioners cannot change the distribution rules, Kolkmeyer said.
Police Department overtime is doled out by seniority. Fire Department overtime is disbursed on a rotating basis within each rank, with seniority playing a role in how many times a firefighter’s name is placed in the rotation.
“The overtime goes to the same people all the time, and those people are using it to pump up their pensions, and that’s where I think the real issue lies,” Kolkmeyer said.
“I don’t want to take anything away from these guys [police and firefighters],” he said. “They work hard and have dangerous jobs, but they are abusing the system. Should they be getting overtime? Absolutely. Should some work additional hours and make substantial dollars? Absolutely.”
“But when they are using it to beef up pensions, that’s when I have a problem. The New York State taxpayers, they’re the ones footing the bill for all this, and it’s completely unfair to the citizens of New York State and Western New York,” Kolkmeyer added.
In addition to excluding overtime and raising the retirement age for most new employees — except for police and firefighters, Paterson’s proposal requires employees to contribute toward their pensions for their entire careers and sets the minimum number of years of service required to draw a pension at 10.
The state budget office estimates the changes will save municipalities outside New York City $32.2 billion over the next 30 years. School districts outside New York City will realize $16.6 billion in savings over the next 30 years. Other municipalities and public entities outside New York City, including cities, counties, towns, villages, water authorities and libraries, will achieve $8.1 billion in savings, the state estimates.
Reform targets schools
New York City would achieve additional savings through a companion proposal introduced by the governor’s office at the request of Mayor Michael Bloomberg, Anderson said. New York City has estimated savings of $16.3 billion over the next 30 years from these initiatives. The New York City reform package also excludes police and firefighters.
In addition to cutting costs, the proposal would be expected to address the administrator shortage occurring at some public schools, where superintendents can retire at age 55, then return to work for other districts as interim superintendents. When that happens, the superintendents collect their full pension for the job they retired from and then get a waiver from the state Department of Education allowing them to also receive a full salary in their interim superintendent post.
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