Bice: Milwaukee police union accused of peddling plan like infamous county backdrop scheme

The Milwaukee police union says it has a great idea for rewarding officers who stay on the force past their retirement date. 

They call it a "police retention program." 

It would be a sweet deal for veteran cops. The city would pay them a regular salary to stay on the job for up to six years and then hand them a bonus worth hundreds of thousands of dollars when they walk out the door. And, after all that, they still would draw a cushy pension. 

Top city officials are not fans of the plan. They consider it a spruced up version of the infamous backdrop pension benefit — something that's sent Milwaukee County spiraling financially for nearly two decades.

"I don't think this is the right city for this," said Dennis Yaccarino, the city's budget and management director, who estimates the plan could "easily cost tens of millions of dollars." 

"Hello?" Mayor Tom Barrett said. "Do you remember the backdrop?"

Beyond that, Barrett wouldn't dispute talk that the police union may have implied it would back his proposal to increase the sales tax by a half percent if he could get on board with their deferred retirement plan.  

"I made it clear there was no quid pro quo," Barrett said of his meeting with the union. 

But Mike Crivello, head of the Milwaukee Police Association, dismissed any suggestion he was horse-trading with the Barrett administration last fall.

"I would never support a sales tax increase that was not founded in meaningful benefit to the community — and would only do so if the voter was honestly and completely informed of reason and purpose," he said.  

Crivello said he is pushing his retirement plan because the city has to do something about the surge in retirements from the Milwaukee police force. 

A 2017 document summarizing the police union's pitch said 171 officers had departed the Milwaukee Police Department in the previous 15 months. During the same time span, the city hired only 150 cops to replace them. 

The proposal stated that it takes three to five years to get a new officer to the level of a veteran on the force.

"The intent of the program … is designed to retain experienced officers through offering incentives to current members, with the goal of delaying retirements," says the police union's summary. 

Under the proposal, often called a Deferred Retirement Option Plan or DROP, veteran cops would sign a contract agreeing to stay on the force for up to six years in lieu of retiring. They would draw their regular paycheck during that time.

Once they finish the contract, these officers would get a hefty bonus. The payment would be equal to what they would have received had they not signed the contract and extended their stay with the Milwaukee Police Department. 

Then they would start receiving their regular monthly pension checks. 

Estimates prepared by city pension officials found that Milwaukee cops currently eligible for retirement are, on average, 53 years old and earn a little more than $90,000 a year, including overtime.

Based on those numbers, an average officer who is ready to retire would get $540,000 in salary to stay on an extra six years. That cop would then get a lump-sum payment of $315,000. Finally, this individual would start receiving a pension of little more than $58,000.

The total take for this officer would be about $950,000 by the time the person reached 60. 

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Interim Police Chief Alfonso Morales said he is "indifferent" to the DROP proposal. 

"The unions are looking at it," he said. "There's positives and there's negatives to it."

Crivello said it is not fair to compare this to Milwaukee County's backdrop program, which has resulted in a handful of $1 million lump-sum payments and a total cost of about $300 million since 2001.

He said he would not participate in his union's deferred retirement plan, though city officials say he is eligible. 

"This program was originally designed to be cost neutral to the city/Employee Retirement System and ultimately appears to be, even better, financially beneficial to the taxpayer," Crivello said by email. "We made it clear from the onset of discussions, if our endeavor in any way would jeopardize the ERS, we immediately would withdrawal the proposal."

Crivello emphasized that DROP participants would continue to pay 7% of their salary to the city's retirement program. Plus, by delaying retirements, the city won't have to simultaneously pay the pension for a newly retired officer and the salary for a newly hired replacement. 

But Milwaukee County officials also argued that their backdrop program would also pay for itself. Obviously, it did not. 

Similar deferred retirement plans in other cities are not doing well. 

In Los Angeles, the city has paid out $1.6 billion in extra pension checks. The Los Angeles Times recently found that more than 1,200 veteran police officers and firefighters have entered the program and then taken injury leaves.

The Times investigation focused on a married police captain and detective who collected just shy of $2 million while in the deferred retirement program. Each filed claims for carpal tunnel syndrome and other cumulative ailments after entering the program. During their two years off the job, the Times said, they started a family business and vacationed at their condo.

Yaccarino, the city budget director, said there have been similar problems in Dallas and Houston. 

"They failed miserably and caused lots of financial problems," he said.

Yaccarino also noted that many Milwaukee police and firefighters do not retire as soon as they are eligible. Some stay on for two or three years. To those individuals, he said, this deferred retirement program would amount to "free money." 

And the Milwaukee police union may not be as confident about its financial projections as it sounds. 

At the union's request, Ald. Tony Zielinski  asked city attorneys in November if Milwaukee could increase the city's property tax levy to help defray the city's pension obligations.

City Attorney Grant Langley said the only way to exceed the levy limits was through a vote of city residents in a referendum. But doing this, Langley wrote, could jeopardize how much money the state gives to Milwaukee each year. 

Two days after the city issued its opinion, the Milwaukee police union endorsed Zielinski in his mayoral bid against Barrett in 2020. 

But Zielinski said there was no connection between the endorsement and the letter, labeling the notion "preposterous." He said his support for Milwaukee cops is well known.

Zielinski said the city attorney's letter was "off my radar" since November.

"Did I do anything with this?" he asked. "I didn't do anything with this."

Reminded that he twice voted for the backdrop program as a county supervisor — a sore spot with the alderman — Zielinski said the staffer who created the Milwaukee County plan was convicted of misconduct in office. Also, he said, supervisors were misled by the county's pension actuary, which later paid the county $30 million to a settle a lawsuit. 

Zielinski criticized the mayor and his people for trying to tar him by making an issue of the deferred retirement plan. He said Barrett should focus on his poor record on crime, not Zielinski's letter to the city attorney.

"I do my due diligence," Zielinski said. 

Contact Daniel Bice at (414) 224-2135 or dbice@jrn.com. Follow him on Twitter @DanielBice or on Facebook at fb.me/daniel.bice.