Baton Rouge police Officer Dominic Distefano II made $61,000 in 2008. By 2011, he’d almost doubled those earnings, and in 2013, he made $135,223.
Distefano’s base salary didn’t exceed $60,000 over all these years, but he earned much higher pay by bulking up on his overtime hours, according to police salary and overtime data spanning six years.
The officer of 24 years is nearing eligibility for retirement. After 25 years, he can either retire or enter the popular deferred retirement program for public employees, at which point his retirement benefit will be calculated.
At the current rate, DiStefano could receive an annual retirement payment of almost $100,000 a year for the rest of his life.
Over the years, the Police Department has taken heat for allowing some officers to dramatically pad their salaries with hundreds of hours of overtime per year. Police officials say overtime is often considered a perk for low-paid officers and note that much of the cost is subsidized by grants or other agencies, taking pressure off of the city-parish’s general fund budget.
For example, the highest overtime earners are usually involved with a DWI task force, targeting drunk drivers, which is funded using state and federal grants. Officers also commonly earn overtime by volunteering to direct traffic during LSU and Southern University football games, which is reimbursed to the tune of 80 percent by the school.
But the cost of overtime payments catches up with the city-parish in the form of retirement checks, which are funded through a combination of employee contributions, taxpayer dollars and investment earnings.
Baton Rouge Police Chief Carl Dabadie Jr. said he can’t fault an employee for using the policies to their benefit.
“That’s a benefit package these officers have had since they’ve been hired,” Dabadie said, adding that Baton Rouge police officers have a paltry starting salary of only $31,000 a year.
“A lot of times, these officers have the ability to take advantage of the system,” Dabadie said. “They want the hours, and you can’t blame them for taking advantage of a benefit they have.”
Still, the City-Parish Retirement System, or CPERS, has among the most generous policies in the state compared to other public retirement systems when it comes to factoring overtime into calculating retirement pay. That’s especially the case when compared to law enforcement retirement systems.
Neither the Louisiana State Police nor the Louisiana Sheriffs Pension and Relief Fund — which includes all sheriffs’ offices in Louisiana — include overtime costs in their retirement calculations.
The other major law enforcement retirement system in the state, the Municipal Police Employees Retirement System, also doesn’t count overtime into its benefits calculations — with the single exception of its dealings with Baton Rouge police officers, a matter that is being fought out in the courts. MPERS is the retirement system for about 175 municipal police departments in the state.
Baton Rouge police officers have long been under CPERS’ umbrella, along with all the other city-parish employees. But in 2000, they began transitioning to MPERS, a move that in most cases benefits officers because they get higher retirement checks.
The only time CPERS has a higher employee payment than MPERS is when the officer had a large amount of voluntary overtime that isn’t included in MPERS calculations.
But in those cases, CPERS promises to cover the difference for officers, so officers are fully compensated for their hours. This is an arrangement CPERS agreed upon to ensure officers caught in the middle of the transition wouldn’t be negatively affected by the switch. However, officers hired after 2000 are subject to all of MPERS policies.
MPERS has been including some overtime hours for BRPD officers in retirement calculations — overtime considered mandatory, such as working a hurricane. But in 2011, MPERS sued the city, saying it shouldn’t be covering the costs for any form of overtime. The suit is still being litigated in 19th Judicial District Court.
If MPERS is successful in its lawsuit, that means CPERS will be on the hook for millions of dollars of additional overtime hours costs.
But regardless of what system foots the bill, Baton Rouge police officers are among the few in the state that receive retirement benefits that factor in overtime pay.
Their annual retirement check is calculated based on an employee’s years of service and the average of either their three highest or five highest paid consecutive years, depending on the retirement system. Police retirees with at least 25 years of service generally receive checks that are between 75 percent and 100 percent of the average of their highest-earning years.
That means it only takes a few years of extra duty to tip the scales of the retirement system in their favor for the rest of their lives.
Distefano is an outlier. The majority of officers are not doubling their salaries with overtime. But roughly one-third of officers increase their salaries by at least 20 percent from overtime, and about 10 percent of officers boost their salary by 40 percent or more with the extra duty, according to a review of salary and overtime records covering a six-year period.
But for a handful of officers like Distefano, retirement payments padded with overtime hours will far exceed their base salaries.
Timothy Browning, another officer who is on the cusp of retirement with 26 years of service, could receive annual retirement payments of about $89,000 a year, based on his earnings in recent years, based on CPERS’ retirement equation. His base salary in 2013, without overtime, was $60,751.
Baton Rouge Officer Corey Reech, who entered the Deferred Retirement Option Plan in 2010, is set to receive an estimated $82,000 per year in retirement because of high overtime hours. His base salary at the time his benefit was calculated is $58,443.
Officer Harold Williams entered DROP last year and his calculated benefit is $88,000 per year. His base salary last year was $64,801.
Baton Rouge police officers were not permitted to talk to the media for this story, according to Baton Rouge police spokeswoman Sgt. Mary Ann Godawa.
Most of those receiving high overtime payments are pretty consistent about it. Generally speaking, officers either seek out lots of overtime or they don’t.
Jeff Yates, CPERS retirement director, said it’s most problematic for the retirement system when employees “spike” — meaning their salary jumps significantly from year to year, which makes it difficult for retirement system actuaries to make reliable predictions.
For example, Officer Archie Lee went from earning a salary of $84,378 in 2008 to $122,244 in 2012 — the year he entered the DROP program — by increasing overtime hours.
Every major public pension system in the state — including state employees, teachers, district attorneys’ offices — has implemented an anti-spiking policy that will not count increases in salaries toward a retirement calculation beyond a certain percentage.
Depending on the system, the anti-spiking caps range from 10 to 25 percent. CPERS does not have an anti-spiking policy in place; MPERS added a 15 percent cap in recent years.
Robert Travis Scott, president of the Public Affairs Research Council, said anti-spiking caps are an important component of retirement system regulation.
“It helps give people more confidence that the system isn’t being gamed and it’s being applied more fairly to those who are using it,” Scott said. “It also avoids stresses on the system that create unfunded accrued liability.”
This year, Baton Rouge officials are looking at making changes to retirement policy to save money to coincide with plans to give employees higher salaries.
Yates said anti-spiking and overtime are things that will be looked at, but he said it is more likely the system could follow the lead of other retirement systems by using a five-year average instead of a three-year average to calculate benefits.
Dabadie said both overtime opportunities and the way overtime is calculated into their retirement are considered benefits to police officers. He said some of these benefits were offered to officers in previous years in lieu of raises.
He said overtime is carefully monitored and regulated, and it ultimately costs the department and the city less than hiring new officers.
“This is something that can help them afford that extra Christmas gift or maybe it helps pay that school tuition,” Dabadie said. “It’s a benefit to the officers, and it’s a privilege.”
Scott said it’s better public policy to reward officers with salary increases over retirement benefits.
“If you’re concerned a policeman isn’t being paid adequately, then pay them adequately,” he said. “Don’t promise that a half generation or generation from now that another set of taxpayers or decision-makers are going to have to make up for your decisions now.”
Follow Rebekah Allen on Twitter, @rebekahallen. For more coverage of city-parish government, follow City Hall Buzz blog at http://www.nola.com/crime/baton-rouge/index.ssf/2014/09/baton_rouge_police_officers_go.htmlhttp://theadvocate.com/news/10599116-123/pay-raises-for-city-parish-employees">http://blogs.theadvocate.com/cityhallbuzz.