Officers to be enrolled in LOPFI

Decatur mayor reacts by refusing his salary for the next year to make up costs to city

— There was little fuss on Monday as council members voted 5-1, at a brief 6-minute meeting, to enroll Decatur police officers in the Arkansas Local Police and Fire Retirement System with back-pay.

City recorder Leslie Haag polled the council and members David Sutton, Gina Holt, Nan McClain, Sandy Duncan and James Jessen voted for the retirement program, while Kim Goble voted against it.

The controversial vote was cast after two heated council meetings last week. On Nov. 14, Decatur officers appeared before the council, demanding to be enrolled in the program as required by state law and threatening to sue the city if it did not comply.

Council members asked for more time to research the issue and met again on Nov. 17 to cast their votes, but a misunderstanding led to a snarled 3-2 vote.

The LOPFI retirement will cost the city an additional $52,000 next year alone to cover all six full time officers. The state will reimburse Decatur for 40 percent of that amount, but the city won’t receive the reimbursement until July of 2013, which won’t help the 2012 budget, mayor Charles Linam said Monday. After 2013, state reimbursements will help cover the annual cost of the program.

Since 1983, Arkansas law has required cities to enroll police officers and firefighters in LOPFI or provide no other retirement program but Social Security. Decatur’s councilminutes reveal that Decatur has offered a 401K retirement program to all its employees, including police officers, since 1989. Decatur firefighters have been enrolled in LOPFI for a number of years.

Currently, the law requires that all cities which enroll officers in the LOPFI system pay back to the date of hire, but that law is set to change on Jan. 1, 2012. At that time, cities will no longer have to submit back-pay.

Thursdays meeting

AT A GLANCE

What is LOPFI?

The Arkansas Local Police and Fire Retirement System was created to provide retirement coverage for police officers and fi refighters and does not extend to civilian personnel. It provides a pension-like pay out of up to 86 percent of an officer’s salary after 28 years of service.

What does the law say?

Arkansas Code 24-10-302 requires that law enforcement officers and firefighters either be covered by LOPFI or have no other retirement program provided other than Social Security. Currently cities enrolling in LOPFI must pay officer’s back-pay to their hire date. After Jan. 1, 2012, back-pay will not be required.

Yearly premium costs for six police officers Current 401K plan: 4 percent of the officers’ salary or $7,300 for four officers.

LOPFI without back-pay: 17 percent of the officers’ salary or $40,900. After state reimbursement the total cost would be $24,500.

LOPFI with back-pay: 25 percent of officers’ salary or $59,500. After the state reimburses 40 percent, that total would be decreased to $35,700.

Linam said he thought council members voted 4-1 at a special meeting on Thursday to enroll Decatur police officers in LOPFI, with back pay, as long as the officers turn their 401K money back to the city.

A minimum of four members must vote in favor of a motion for it to pass.

Though most council members also left the meeting with the impression that council members Sutton, McClain, Holt and Duncan had voted in favor of the motion - with Goble voting against it - on Friday morning, McClain said she had accidentally voted against the measure instead of for it because she misunderstood the motion made by Sutton.

Because Sutton phrased his motion, “Lets move forward and give the officers back pay,” McClain said she initially thought he meant to enroll them in LOPFI starting Jan. 1, without any back pay for prior service. McClain also said she felt his motion left too many loopholes in the council’s intent - discussion was heated on both sides of the issue on bothMonday and Thursday.

Linam and city administrative assistant Kim Wilkins voiced concerns that the city budget does not have room for the sharp increase in retirement fund costs.

Currently, the city contributes only 4 percent of four officers' salaries towards retirement. Under LOPFI, it will contribute 24 percent of all salaries before state reimbursement.

Linam and Wilkins also pointed out that they feel officers will be “double dipping” since they will benefit from the pension-like LOPFI plan and from their 401K plans.

The six officers average around $15,000 each in their retirement plans. In comparison, LOPFI will pay up to 86 percent of an officer’s monthly salary after 28 years of service.

Both Wilkins and Linam said they felt it was unfair that police officers get such a good retirement while other employees do not.

“Is any of you’alls retirement ever going to be that good?” Wilkins asked the council, “Mine will never be and I have to do all the paperwork on it.”

Sutton replied that what the council members get personally should not sway their decision on what was right for the police officers.

Wilkins also asked why, after all these years, the police officers are complaining about these issues.

“You guys are having trouble with it, so its like 'how are we to know?'” said police chief Terry Luker.

“When I came on board I was just happy to be here and happy to have a job,” said officer Jeannie Yates, who told the council she thought the whole timeshe would be getting a law enforcement retirement because she was working in the state of Arkansas.

It was a year and a half before Yates said she found out that she would have to sign up for a 401K plan to receive retirement benefits. At first she thought the 401k was a supplemental plan.

“I had no idea we didn't have LOPFI until 2010,” said Yates, who explained that without back-pay she will be set back years.

“It means that on Jan. 1 I walk in here like a newbie on my first day and I'm 44 years old,” she said.

Where will the money come from?

Linam reacted to Thursday’s vote by demanding the council make a motion not to pay him his annual salary of around $12,000 for the next 12 months.

“It is essential that we have a balanced budget,” he said.

The city will not be applying for a grant to buy land on Hill Street to develop a park, which would have cost around $40,000, Linam said on Monday morning when asked where the extra money will come from.

Linam said he has asked Luker to present another budget for 2012 that is at least $20,000 less than the budget he presented for 2011. This year’s budget included funds for a new patrol car, Linam explained, so he is asking the police department to keep its budget the same, minus the patrol car.

Returning their 401K

Police officers offered to return their 401K money to the city if they could be enrolled in LOPFI with back-pay, but it is unclearif they could turn over the money legally, according to city attorney Tom Smith.

Early withdrawal fees and taxes would eat up most of the $96,000 the officers collectively hold, according to Smith, Linam and McClain.

Officers offered to sign an agreement turning the retirement fund over to the city once they are eligiblefor retirement, but once again it is unclear if the city could enforce such an agreement, Smith said, especially if the matter were to become complicated by the death of an officer.

“You’re asking me questions from Utopia, where people always do what they say they’re going to do. This is reality,” he told the council.

News, Pages 3 on 11/23/2011