This is really good, i think this gonna help them a lot
By Anna Pulley
By Erin Sherbert
By Chris Roberts
By Erin Sherbert
By Rachel Swan
By Joe Eskenazi
By Erin Sherbert
By Erin Sherbert
Illustration by David Plunkert
Many an offbeat film is highlighted by the crafting of a cockamamie plan blessed with the endorsement, "It's so crazy, it just might work!" Leave it to San Francisco to make this notion the basis for establishing public policy.
In 2008, San Francisco found itself unable to properly staff its police force. The solution enshrined by city voters: Allow cops to simultaneously work and be retired — and earn both hefty salaries and pensions at the same time. The effectiveness of this plan is a matter of debate. Its craziness? Less so. "It appears you're paying people twice," former city Controller Ed Harrington notes, "because, in fact, you are."
The Deferred Retirement Option Program (DROP) was sold to the city and its voters as the cure for a police department that was unable to attract new recruits, yet losing cops who took advantage of 90 percent pensions at age 55. The San Francisco Police Officers Association — which pushed DROP onto the ballot via a signature-gathering drive — argued that the city needed to entice the oldest officers to stick around. The means: Offer them a financial windfall. Earning a salary and pension at the same time, commonly known as "double-dipping," contravenes nearly every notion of fiscal common sense — and, not insignificantly, the city charter.
DROP participants, however, use some nuance to get around charter rules regarding double-dipping. While cops draw their pay, their pension payments are socked away in a tax-deferred account with a guaranteed 4 percent return. When they officially retire after up to three years in the program, they receive a lump sum payment — which can easily exceed $300,000. Then regular pension payments commence. For example, one inspector who drew $174,372 in take-home pay in fiscal year 2009-2010 walked away with a lump sum of $265,331 in June after two years in DROP — and then retired on a pension in the vicinity of $130,000 a year.
You'd think this would have been a hard sell, but DROP's backers knew the magic word: "cost-neutral." Not only would the program stave off manpower shortages, argued the police union in its ballot measure, "it will do so without any cost to the taxpayers." Not a single opponent chose to publicly differ with the influential union. Proposition B of February 2008 was, in fact, backed by the majority of the Board of Supervisors, which even referred to institutionalized double-dipping as "good public policy" in a union-funded voter pamphlet statement. DROP breezed to a victory with 65 percent of the vote.
Yet no city analysis was ever undertaken to back up claims of cost-neutrality — since the measure was brought before voters via signature-gathering, the city had no means to do so. "While the initiative states that the program shall be cost-neutral, no cost analysis is to be conducted until April 15, 2011," reads a 2007 letter from Clare Murphy, then-director of the San Francisco Employees' Retirement System, to the Department of Elections.
In fact, unbeknownst to the police union, the actuary it hired was the target of lawsuits by several California government entities for scores of millions of dollars' worth of negligence at the very time he was crunching its numbers and assuring it DROP was, indeed, cost-neutral. Three years — and many millions of dollars — into DROP's existence, the city controller is slated to complete the first cost analysis of the program this week.
No cost analysis is necessary, however, to judge that DROP has been a rip-roaring success for the police who have participated in the program. Those who have already departed DROP have been handed retirement nest eggs exceeding a quarter of a million dollars on top of their forthcoming pension payments. The officers still enrolled are accumulating still tidier sums. It will now be up to the Board of Supervisors to determine whether DROP is working for the city and its residents. Or, perhaps more accurately in this political climate of exploding pension costs and rampant budget shortfalls, the supes will have to decide what it's worth to potentially incense one of the city's most powerful unions.
DROP is a policy encased in amber. It remains preserved, a snapshot in time — while the world around it has changed radically.
When the police union began pushing DROP in 2007, the police department, like many others, was unable to attract new blood. San Francisco cops' salaries were significantly lower than those doled out by neighboring cities — locales offering more sanguine working conditions than for those patrolling, say, Sixth and Market. Departed S.F. cops already earning generous pensions could, with relative ease, land spots in police departments in the Central Valley or elsewhere. And the notion of tossing an additional, unfunded burden onto the city's pension system was neither a political nor practical concern.
The times — they have a-changed. San Francisco has showered police with generous raises: The total compensation for a rank-and-file officer leaped from $92,844 in 2007 to $111,363 this year. Police salaries are now 2 percent over the pay rate for all Bay Area cops; as recently as 2004, they were 12 percent below. San Francisco's finest are due raises in June of this year and January of the next one, which will only push the city's pay rate that much higher than the regional average.
This is really good, i think this gonna help them a lot
SFPD = Organized Criminals!
Bend over and spread those cheeks Frisco taxpayers and prepared to be reamed bareback!
As a cop with 15 years, most in the Tenderloin, I gotta say this is a pretty good article. I read this leftist BS rag because you must know your enemy. This article however seems fair and lets the reader decide what he/she thinks about SFPD staffing and only has a bit of bias. Nice work SFWeekly and no Im not eligble for DROP.
Wow is right! Organized crime at it's finest. And yet people wonder why the state and all its municipalities are broke.
SFPD says an academy class costs about $5 million with $4 million going for salaries and benefits. But that’s for a class of 50. The DROP program allows captains and higher ranking officers, not just patrol officers, to participate. So basic math tells you the DROP program does not end up cost neutral.
No, the drop program does NOT allow high ranking officers to participate. In LAPD, yes you can. In SFPD, the highest rank is a Sergeant. Maybe a Lieutenant, but they have to give up their status as a commissioned officer.
Milk- the DROP information is free from the SFPD. Go look it up.
Cost-neutral? Probably. What a lot of people aren't considering is the hiring cost of a large department like this, which after all the testing probably could cost between $3-$8K. Then there's the fallout rate from those who didn't make the academy or FTO, let's say for example 10 recruits per year don't pass FTO, that's close to $1,000,000 lost to the city if you include benefits. That brings me to my final point, benefits.
People forget that there are health benefits and contractual benefits associated to each employee, at a cost separate from their salary, which probably could run in the neighborhood of $25K per year, per employee. A salaried employee making $110,000, actually costs the city $135,000 per year, right? So to not pay additional benefits to a NEW employee probably makes the "cost-neutral" argument valid.
There should probably be some sort of measured productivity for DROP employees though, so they can't park it in an alley for 10 hours?
Whoa whoa, the $110,000 that Mr. Eskenazi quoted is our total salary + health benefits/retirement contributions made by both us/city.
Academy pay was about $72k for us, and I think that made it around 90 with everything factored in. But until you get off of probation you are subject to get fired "with or without probable cause" so to speak. In my Academy class we had 52. After completing everything (7 months academy, 4 months field training, and 12 months probation), we're down to around 24. Factor that against keeping some a couple older guys, it might be cheaper to keep them on, than put numerous classes through the hiring cycle, academy, etc only to keep half.
Actually Pappa Bear is right. ANY job be it government or private entity that offers health, dental and vision has an unseen cost to the employee. Say you make $35K/year or $200K/year, and you get all the good bennies, that stuff ain't free, even though the employee doesn't pay it, the city or Wal Mart or Dr. Shivago's office does pay for it. That's how total compensation is calculated, which is why Pappa Bear and the SF POA's point of view may be somewhat accurate in that it could be cost neutral.
Regardless, it will be interesting to see what the controller reports tomorrow.
It boggles my mind to try and wrap my head around how any tax paying citizen can think this is a good idea. I work in the private sector and recently did my 2010 taxes...what makes me angry is not the money I paid last year but knowing that I'll have to scrape by and save every penny I possibly can from now until at least age 70 hoping I'll be able to retire by then with no safety net what-so-ever and no guarantee that I'll ever be able to retire. Then I read an article like this and realize that the money I'll have to pay every year for the rest of my life will be funding a lifestyle for people that can retire at 55 or 60 roughly, get a big wind fall of my money that I'm working hard for and then get a pay check to sit around for the rest of their 30-40 years riding on my back while I'm still working. This is the reason so many of us in the private sector are so angry and don't want to see higher taxes as we KNOW there is still a lot of fat to cut! No gaurantee for us but death and taxes while the (pampered) people in the public sector get the golden parachute.
BTW - Double dipping" is the practice of getting two retirement checks each from a different job. Not unusual and nothing wrong with it. The alternative to the practice described in this article would be to hire new employees to do the work. So where would there be any savings. Why not have experienced people in these jobs. As long as public employees are being paid, there will be some right-winger opposed to it.If police pay is so great, go ahead and apply.
Greg, the "savings" would be not paying these people double--their regular pay (at the top of their pay scale) and their pension. Though you'd have to still pay other officers to replace them, these would be at starting salaries and at substantial savings. As to "right-wingers" not liking it, you can't point that one at me.
What is it going to take to get Police and Fire (wages 35% above Bay Area counterparts) to stop draining the City treasury? I cannot think of another example of persons taking an absolute reservoir of good will and exploiting it for financial gain. Just awful.
Joe, why are you letting the Controller's office (Ed Harrington, again) off the hook here - you know, the standard ballot understatement of the cost of new employee benefits to taxpayers/the voting public. The Controller stated it was "probable" the DROP program would meet its goal of being "cost-neutral."
People should be sketical they'll get an honest answer from the Controller's office as to the cost of the DROP program given the Controller's long history of misleading statements on employee benefit costs. It's how we got into this mess in the first place.
San Diego is the poster child for DROP. Started in 1996 as a payback for underfunding the pension fund. It is still in place but not available to new hires. Did I mention San Diego is basically bankrupt. Pension fund is underfunded by at least $2B
OK, so let's say they didn't do this, and the police department had to hire new officers. Know how much it costs to train a new cop? The initial hiring is a written and physical test, a psychiatric interview, an oral board. Then the academy. Then FTO. They're making a salary this entire time, plus taking up the time of several officers to train them. So yeah, in the long run, it probably WAS cost-neutral, they kept good cops on the force, and the city stayed protected. The naysayers are just jealous that THEIR career doesn't allow THEM to do this!
Just one thing to add here...training should be a fixed cost. The police force will always retire officers hence there always needs to be a crop of new ones being trained. Paying the experienced ones twice the amount of money to stay on a few more years does nothing to help with the training of new officers. In the end you have paid double salaries to current officers and you you still don't have anyone to replace them. In the short term it sounds good because you're wiping out the cost of training but in the long term you still need to do the training which is still going to cost money. Training = Fixed cost, paying double salaries = stealing
Great Points! However you miss a very important one...when that recruits fails the academy or FTO, the city just lost all of that money. Academy classes usually start with 50 officers. After the academy and FTO are done you average 30-35 officers.
Yes, I agree great job Joe. Sadly, your article makes my skin crawl, when I look around and see the mess my generation ( baby boomer ) is leaving for future generations to clean up, it makes me want to scream, shout and cry. Everything bad we may have said about our parent's greedy generation has been compounded by us by 100Xtimes. Yes it's me and you which includes everyone whether red or blue. We wanted to close our eyes and pretend that our double dipping, asking outrageous prices for homes (that we inherited) and not paying our fair share of taxes, wasn't going to catch up to US. How can we look into the faces of our children and not cringe, when our actions created a future that is both bleak and dark.Let us start here and now by sitting down and working together to find real solutions and make serious reparations for our mistakes. This includes government and private employers, employees, union and non-union, retirees who retired before their time, those receiving pensions, recipients of entitlement big and small or expect too.
Average cop at 55 or more years of age with 30 years service makes around $185,000. That makes them eligible for a pension of $166,500. So, that's $351,500 they're raking in with the pension money guaranteed a 4% return on interest. Plus, of course, health insurance adds minimally another $36,000 a year. And, there's your COLA and when the fund wins (no matter how insolvent) a year on Wall Street, you get a bonus.
I've been writing about this since I first saw the legislation in 2008 and been ignored. The one thing I can't get anyone to do (including you, Joe Eskenazi) is to print the total payment to an average cop in this program. It exceeds $400,000 a year.
Neither Columbo, nor Dirty Harry is worth that kind of money.
That's over $1,000 a day.
Anyone wanna take me up on my numbers?
Giants win with Wilson striking out side in 9th!
It is mind blowing that people like yourself can spew out made up numbers and want to be taken seriously. A patrol man's base salary is $102,000. After 30 years and at the age of 55 one can take a pension of 90% of the base salary. Base Salary, that's it. Is DROP a good idea? Maybe, maybe not. But lets look at the real numbers, not make up our own.
"I've been writing about this since I first saw the legislation in 2008 and been ignored" Because your NUMBERS are ALL wrong. Like the post said, more like 108,000 - 110,000 a year.
How much do those Giants make per year? How many lives do they save? How many criminals do they put behind bars? I'd rather do without the Giants than do without the police.
$185,000 per year for the "average cop"-I don't think so. On the average for a large city in this state it's more like $108,000.