Turnover In Omaha’s Police Chief Job Leads To High Pension Costs

OMAHA, NE &#8211 Omaha’s next police chief will be the city’s fourth in 4½ years.

The last three men to hold the job all turned in retirement papers before they turned 50 — and will collect six-figure annual pensions for the rest of their lives.

All three chiefs were young enough to go onto other jobs.

The recent track record raises troubling questions about stability in one of the community’s most important jobs. It also offers another window into an underfunded police and fire pension system that has resulted in tax increases and that city officials have been trying to clamp down on for years.

The latest police chief, Alex Hayes, who recently turned 48, will receive a pension of $127,405, making his the largest pension ever paid to a city employee.

After he has been retired for a year, Hayes — like other police retirees — will begin receiving an annual $600 cost-of-living increase.

Hayes’ pension is based on a police management contract approved unanimously last August by the Omaha City Council.

Under that contract, Hayes received retroactive raises for 2008, 2009 and 2010 — when he had been working under a pay freeze — as well as raises for 2011 and 2012.

“He is not doing anything wrong by retiring when he is and taking his police pension,” said Omaha City Councilwoman Jean Stothert, “but it’s a problem for the taxpayers.”

Hayes has spent 2½ years in the city’s top police job. He replaced Eric Buske, who collects a pension of $105,173 after serving 13 months as Omaha chief.

And Buske succeeded Tom Warren, who was chief for four years. Warren collects a pension of $101,912.

To be sure, Omaha’s top cops were simply doing what’s allowed under their contract. All paid into the pension system throughout their lengthy careers in Omaha.

If all three recent chiefs live through age 76, the average life expectancy for a U.S. male, their payments from this year on will total nearly $9.8 million.

Two other retired Omaha chiefs — Don Carey and Jim Skinner — also are drawing pensions.

But the retirements carry a cost for the city’s already troubled police and fire pension fund, which faces an estimated $573 million shortfall. At Suttle’s urging, the City Council imposed a 2.5 percent city entertainment tax to help address the shortfall.

Suttle promoted Hayes to chief on Dec. 22, 2009. At the time, both spoke of the need for stability in the department.

Suttle said then that the department had seen too many chiefs leave too quickly.

Before he hired Hayes, the mayor said in an interview Friday, he had conversations with all the candidates about the need for a long-term commitment to the chief’s job. Suttle said he had a verbal understanding from Hayes that he would stay throughout Suttle’s tenure as mayor.

However, Suttle said, he understands Hayes decided to retire after lengthy discussions with his family.

“The stress on this particular job, I know it takes a toll on a person,” Suttle said.

The mayor said he also will seek that kind of informal commitment from his next chief, but it won’t be the only factor in his appointment. He said leadership ability and a commitment to community-oriented policing also will be key.

Suttle said he won’t ask his next chief to sign an agreement to stay on the job for a certain period of time. “That is not my style, and I don’t feel that’s appropriate,” he said.

In addition, City Attorney Paul Kratz has advised the mayor that the police management contract may prohibit such an agreement.

In response to the turnover and the size of recent chiefs’ pensions, some council members said the police management contract needs to be re-examined when it expires at the end of this year. The contract covers Hayes and his four deputy chiefs.

Councilman Chris Jerram predicted the pension provisions in the police and fire contracts will be a key issue in next year’s mayoral and City Council races.

“Alex Hayes has been a great chief and has done wonderful public service,” Jerram said. “People are not criticizing him, but the package.”

Some council members want the next permanent chief to stay on the job at least five years, assuming he or she is doing a good job.

The managers’ contract is separate from the police union contract approved in 2010. The two contracts include many similar provisions, however, including rules for pensions and health insurance premiums, said Steve Kerrigan, the city’s labor relations director.

Both contracts include new requirements that future retirees, including Hayes, pay part of their health insurance premiums.

New retirees will be required to pay 7 percent of premiums, or $126 a month for family coverage, and that cost could change in the future.

“We are making strides,” Jerram said.

In addition, midcareer officers are now required to reach age 50 before they can be paid a full pension. Newly hired officers have to work until age 55 to receive the maximum benefits.

The contracts also eliminated a controversial practice known as pension spiking, in which compensatory time, overtime and other compensation were factored in, and pensions were based on the officer’s highest single year of pay.

Under the revised rules, pensions are calculated using a career average of overtime, as well as regular pay.

Still, Jerram said, he sees a need for more changes.

Currently, an officer receives up to 75 percent of pay that applies to pensions. Jerram wants to lower that percentage.

He pointed out that despite the new provisions, Hayes’ pension works out to be more than 75 percent of his $153,455 annual salary because the calculations factor in overtime he worked before his time as chief and deputy chief.

“The public is clamoring for more pension reform,” Jerram said. “In the next contract, we have to look at the length of service, and decreasing the maximum percentages for the pension.”

Hayes qualified for his pension after working for the Police Department for 25 years.

He joined the force in November 1986 and has worked as deputy chief and in high-profile positions, including the homicide, gang, narcotics, crime analysis/intelligence and child victim/sex assault units.

Hayes has not said what he will do after he retires March 30.

Buske, who retired in 2009, is police chief in Bryan, Texas, with a roughly $130,000 salary in addition to his Omaha pension.

Warren, who retired in 2008, is president of the Urban League of Nebraska. He is paid about $95,000 a year, according to the nonprofit’s Form 990 federal tax filing.

Tom Martin, who retired as an Omaha police officer in 1989, said the turnover in the Police Department’s top ranks is not good for Omaha. He said the rapid changes in leadership ripple through the department.

“When you have a one-year chief, a two-year chief, nobody is really in charge of the ship,” Martin said.

He said two years is not enough time for chiefs to carry out their initiatives.

“If your chief is always turning over, where is your experience? It’s going out the door,” Martin said. “Without experience, crimes don’t get solved, particularly serious crimes.”

By contrast, Lincoln has seen little turnover in its police command staff.

Lincoln’s police chief is not covered by a union contract and is not covered by the police pension plan. Instead, the chief participates in the city’s civilian retirement plan, which operates similar to a 401(k).

Tom Casady, 58, was Lincoln’s police chief for 17 years before his promotion last year to city public safety director.

Some turnover in a department is acceptable, Casady said, but constant changes are unhealthy.

“It’s hard to maintain any momentum and have any control in certain projects,” Casady said. “Having a new pastor at your church, it’s not necessarily a bad thing. Four pastors in three years, not such a good thing.”

Though Suttle hasn’t announced his search process, Jerram, Stothert and Council President Tom Mulligan said they want a national search for the next chief to ensure the best candidate is selected.

A side benefit: an external chief would not have an incentive to retire just a couple of years into the job. Outsiders haven’t accumulated years of city service to count toward their pensions.

The city’s last outside chief, Carey, stayed for five years and retired at age 57. His initial annual pension was $13,104.

Pointing to the rapid exodus of chiefs, Stothert said she doesn’t want to see the recent pattern repeated.

“For the future, we have to take into consideration how many years of service someone has,” she said.

From The Omaha World-Herald.