By Karen Sloan
Omaha World-Herald
Copyright 2007 Omaha World - Herald
Distributed by McClatchy-Tribune Business News
OMAHA, Neb. — You name it, and Omaha Police Sgt. Billy Higgins has seen it: shootings, stabbings, assaults.
The detective has spent the past 12 years investigating violent felonies while working the overnight shift. He loves the job, but decided recently that it was time to hand in his badge.
Higgins, 50, thought about sticking around two more years. But the uncertainty surrounding the city’s contract negotiations with the police and fire unions persuaded him to move on.
He is hardly the only Omaha police officer or firefighter contemplating retirement. More than 115 police officers and firefighters are considered likely to retire. If all or even most of them leave this summer, the city could see double the usual number of retirements.
There are two primary reasons, and both boil down to money.
First, pension payments under the existing contracts will reach their highest amount on July 1, meaning those who retire after that date but before the contract expires at the end of the year will earn a larger percentage of their salaries than ever before.
Secondly, city officials are pushing for changes in the new union contracts. Mayor Mike Fahey has said he will ask police and firefighters to help pay health insurance premiums.
Some City Council members also want other contract changes that could lower pension payments. The city’s police and fire pension fund is facing a projected $280 million shortfall based on future obligations to existing employees and retirees.
Some police and firefighters who are eligible will likely retire rather than risk seeing pension payments or other benefits change under the new contracts.
It’s impossible to know exactly how many police and firefighters will head for the door this year, though the city has prepared estimates of who is likely to leave.
Those police officers considered most likely to retire have at least 22½ years of experience and have reached the minimum retirement age of 45. Finance Director Carol Ebdon said an estimated 67 police officers fall into that category; the department has about 800 officers.
On the Fire Department side, Ebdon estimated 51 out of the approximately 670 firefighters could retire. Those firefighters have at least 20 years of service apiece and have reached the minimum retirement age of 50.
The number of retirements fluctuates from year to year, based largely on the size of the police and fire recruit classes from 25 years earlier.
But since 2000, an average of 24 police officers have retired every year. For fire, the average has been 18 a year.
Fahey is aware of the potential spike in retirements, said spokesman Joe Gudenrath, and has “complete confidence” that the Police and Fire Departments will absorb the losses without problems.
Police Chief Thomas Warren said the Police Department has handled large waves of retirements before -- most recently in 2003, shortly after he was named chief. He said he has confidence the department can handle the impending retirements. For example, more than one recruit class is planned this year.
City Council President Dan Welch said it’s no surprise the city will see a wave of retirements this year. Nearly a year ago, Fire Chief Robert Dahlquist and Warren warned the council’s Public Safety Committee there would be a “mass exodus” in early July, Welch said.
“You can’t blame them for retiring, because the contract they’re operating under now is very generous,” Welch said. “They’re taking a look at this and saying, ‘We’re never going to have a better contract than we have now.’”
The current contracts, which expire at the end of the year, were the product of tough financial times for the city in 2004. The unions agreed to wage freezes to help Fahey manage through a budget problem without cutting city services or raising taxes.
In exchange, pension benefits also were sweetened, though the police and firefighters also agreed to make larger pension contributions.
Police and firefighters with 25 years of service can retire with full pensions, leaving them with little financial incentive to stay on the job.
Under the 2004 contracts, pension payments increase on July 1 to 75 percent of their highest 12 months of wages during the previous five years.
The take-home pay for those who stay on the job is 85 percent of their salary, after their pension contribution is deducted. So those with 25 years of service are going to work every day for only 10 percent more than what their pension check would be.
In addition, pension payments do not increase after 25 years, and retirees can collect their pensions while moving on to other jobs.
The city also covers retiree health care until age 65, when Medicare kicks in. The retirees, like police and firefighters, currently do not pay insurance premiums.
Any changes in benefits likely will not impact those who retire before the new contracts kick in. Theoretically, the benefits could be adjusted retroactively in a new contract, said Human Resources Director Tom Marfisi, but the unions would have to agree to the changes, and that is highly unlikely.
Police and fire union officials said that people who haven’t yet reached the 25-year mark are now eyeing retirement. That’s a departure from the past. Officials said those decisions are being fueled by apprehension about what could happen with the new contracts.
“Officers are leaving because of their anxiety over the future,” said Police Union President Aaron Hanson.
Higgins, 50, is retiring after 23 years with the department. That means he is two years shy of retiring with the maximum retirement benefits.
“I had always planned to stay around for the full 25 years, but I had to think about the financial future of my family,” he said.
Hanson said the uneasiness is fueled by Welch’s public comments about reining in police and fire spending, and his involvement in several cost and efficiency studies of the departments.
Fire Union President Darren Bates said some firefighters also are looking to retire before they hit 25 years because of the contract discussions. He said the union anticipates more departures than the city’s estimate.
“Some guys are willing to take less of a pension just as a safety measure,” Bates said.
Fire Battalion Chief Mark Lane said he has heard from a number of minority firefighters thinking about retirement, and is concerned the department could see a bigger shortfall of minority leaders. Currently, minorities fill about 35 of the department’s 213 leadership positions.
Lane is the highest-ranking black firefighter in the department, and said he intends to retire in September, after 23 years. The upcoming contract is a major factor, along with the dangerous nature of his job, he said.
“Why should we risk our lives when members of the City Council are trying to take away what we’ve worked so hard for?” Lane asked.
Though the fire union is concerned about the effect on staffing and experience, Bates, the fire union president, said the retirements could have at least one benefit.
“This is a job for the young,” he said. “You don’t want a 65-year-old up on an icy roof cutting a hole during a fire, do you?”