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DROP plan approved for police command

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published February 9, 2018

ST. CLAIR SHORES — Command officers in the St. Clair Shores Police Department are working under a new contract, which includes raises and a provision to retain some members before retirement, after its approval Feb. 5 by City Council and its ratification Feb. 7 by the union.

Effective July 1, 2017, the contract calls for 2 percent wage increases retroactively effective from that date and for the next two years that will cost $30,584 for 2017-18; an additional $31,195 in 2018-19; and an additional $31,819 beginning July 1, 2019. The contract also eliminates the refunding of employee contributions to the pension system upon retirement and specifies that employees will contribute 4.5 percent of payroll to the pension system. 

The pension multiplier also changes with this contract to 2.25 percent for the first 25 years of service for those hired after August 2015, and a 1 percent multiplier for years 26-30 and any years after. Officers hired after that date will also have their final average compensation calculated only on base wages. This means the city will save about 0.37 percent on employer contributions as members are replaced.

But because of the difficulty the department is having hiring new police officers, the contract also makes provisions for a Deferred Retirement Option Plan, or DROP. 

The way the program works is that command officers eligible for retirement can instead voluntarily enter the DROP program, freezing their pension benefits at that point. The officers can then continue working for an additional three years, collecting their salary but not their pension benefits. They would not make any further contribution to the pension system, nor would the city, and at the end of the three years, the retiree would get a lump sum of the pension that the retiree would have been paid over the prior three years. 

Command Officers Union President Gary Crandall said that officers in the DROP program can leave anytime within the three years, but cannot remain on the job longer than three years after entering the DROP program.

“Now I can work up to three years and the money the city would be paying in my pension (benefits), they get to keep now to invest and I get to keep my job,” he explained. “Whenever I retire, the city would then give me back the money they’d been holding and investing.”

Depending on the rate of return, there could be a benefit to the city getting to keep the money for investment instead of having to pay it out to the retiree, but according to a memo provided to City Council, “the supplemental valuation projects the cost for the DROP to be approximately $64,211 per year for the next five years.”

“What we’re attempting to do ... is stem the tide of folks leaving as soon as they get 25 years in,” City Manager Mike Smith told City Council Feb. 5. “We’re losing great resources; we’re losing great people and we’re not able to replace them.”

Smith said that over the past decade, the number of people interested in a career in law enforcement has dropped. Over the past year, he said they advertised for police officers three separate times, and “the best showing we had for a test was 33 candidates, and of those 33, less than 20 passed” the written examination. 

“We have done everything we can to get good, quality police candidates. We had folks who scored in the 40s. We’re not going to hire those folks.”

At the same time, however, of the 16 members of the command staff, half will become eligible for retirement during the contract.

Police Chief Todd Woodcox said that the department is currently short four officers, a number that could grow in about a year when the command officers are eligible to retire. 

“That’s why we’re here,” Mayor Kip Walby said. “The idea that our command staff would be gone ... we’re concerned with that.”

Councilman Ronald Frederick said that this should be a “wake-up call” for the city to make itself more appealing for the few people applying for police officer jobs. 

“We’ve got three years to get this right,” he said. “We’re holding the top of the house here, not adding at the bottom of the house. 

“This is a wake-up call where we need to start looking at what we’re doing on the contract side. What are the things they’re looking for?”