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New Jersey Police Union Contracts Laden With Financial Largesse

ProPublica and Asbury Park Press, an affiliate of ProPublica’s Local Reporting Network, recently completed an unprecedented analysis of thousands of police union contracts. They uncovered contract clauses throughout New Jersey that protect officer payouts, while costing taxpayers hundreds of millions. Investigators culled 245 contracts from the thousands available on the New Jersey Public Employment Relations Commission website.

A machine-learning assisted computer program analysis identified the 245 contracts with certain financial and disciplinary perks that were in effect as of January 1, 2019. The analyses were intended to uncover publicly funded payouts to police officers as a result of clauses that promote bloated and unwarranted financial incentives. New Jersey taxpayers fund “sick day buybacks” resulting in six-figure payouts and “perfect attendance” bonuses, and these contracts include lucrative “extra-duty” assignments. Contracts also provide for diminished disciplinary mechanisms.

The findings from the contracts’ analyses were shared with state and national experts in labor law, municipal finance, police accountability, and criminal justice. Five have previously studied or worked with police union contracts. Each agrees that it would be difficult to compare New Jersey union contracts with those nationwide as there has been little academic attention to the specific issue. A former police official stated many municipalities have union contracts with similar financial incentives and disciplinary clauses.

Jonathan Smith, who supervised police accountability work in the Civil Rights Division of the U.S. Justice Department, said, “Examinations of police budgets is critically important right now and something communities are demanding all across the country. These provisions may be targets for review as to whether this is really fair compensation.”

Investigators sought comment from the New Jersey Fraternal Order of Police and The New Jersey State Policeman’s Benevolent Association, and each declined. Police union attorney Frank Crivelli has negotiated over 40 contracts in various New Jersey towns, and he says, “Ask somebody who calls 911.”

Crivelli, as to whether responding officers are over-compensated, asserts that the challenges and dangers of police work in New Jersey legitimize the costs. Nearly every town in New Jersey has its own police department; one jurisdiction is a mere one square mile. Absent additional financial perks, New Jersey officers already receive the nation’s third-highest salaries in America, including generous health-care coverage and pensions. New Jersey ranks as having the highest property tax rates in part because of such costly compensation packages for municipal employees. American towns nationwide are experiencing tremendous budget issues, and the pandemic has only made it worse. Small New Jersey town budgets are no different, and reducing costs is difficult. Attempts to rein in costly, excessive provisions by town and state lawmakers have been strongly opposed by the police unions. Experts agree that negotiations with powerful unions place officials at a distinct disadvantage.

The unions “extract the greatest value possible in any negotiation,” said Regina M. Egea, former New Jersey Governor Chris Christie’s chief of staff and current president of the Garden State Initiative.

The only reasonable method to reducing costs, beyond layoffs, is to cut benefits in new contracts. That also has limitations in true cost reductions. Senior employees must be phased out through retirement, and even then, new contracts must typically provide a replacement benefit for each proposed for reduction or removal.

Vincent Caruso was a Lodi, New Jersey, cop for 27 years. Caruso said it is exceedingly difficult to realize true cost reductions in police union contracts. In Caruso’s experience, the reality is that unions typically will not accept the removal of one benefit without implementing another. “It’s an uphill battle on many different levels,” said Caruso.

When lawmakers and union representatives cannot agree on contract provisions, arbitrators are brought in to resolve the disputes, often siding with the unions. One demanding provision found in 66 of the 245 contracts is a “past practice” clause. Caruso retired in 2014, receiving a payout of $342,000. This enormous amount included unused sick and vacation time, as well as “terminal leave” payouts to mark the end of his career. Lodi is home to only 24,000 residents with a force of 45 officers. This small town had to arrange a “special emergency appropriation” to cover Caruso’s retirement windfall and was only able to pay the amount in installments.

Caruso was an officer in 2011 when Lodi first argued that it could not afford three months’ pay to retiring officers. Lodi’s officers are represented by The Policeman’s Benevolent Association Local 26 (“PBA26”). The PBA26 challenged Lodi’s 2011 proclamation to The Public Employment Relations Commission (“PERC”), a state agency that conducts hearings on public employee disputes. PERC’s determinations are binding on New Jersey towns. Lodi officials argued that the contracts didn’t provide guaranteed departure payouts. The PBA26 responded by noting similar payouts in the past, and those acts triggered the “past practice” clause. This clause requires that new hires will continue to receive the same benefits as old hires, even when those benefits are no longer written into the new contracts. PERC ordered that Lodi pay all the owed amounts for end-of-career departure payouts. A “past practice” clause, still found in current Lodi contracts, has cost the town $660,000 for 17 retiring officers since 2011.

Caruso is now Lodi’s town manager and tasked with being financially responsible. Without union agreement, “past practice” clauses make it exceedingly difficult to alleviate costs. Oftentimes, the contract’s expiration is not enough. “It’s almost like you’d need a stick of dynamite to get it out of the contract,” says Caruso.

When Lodi’s last union contract expired, Caruso negotiated a new contract policy which eliminated retirement payouts from future officers. The exchange was to enlarge the yearly salary pay raise from 2% to 3% per annum for current officers – who also still keep their full retirement payouts. A trade Caruso thinks will save Lodi money in the long-term. New Jersey had 250 towns where total liability to municipal employees increased between 2015-2019. As of 2019, the available data show law enforcement is over half of all liabilities.

“Police officers don’t get paid for what they do, they get paid for what they may have to do,” said Caruso. Then he asked, “How many people are going to turn around and strap a gun on, put a bulletproof vest on, kiss their wife goodbye and say: ‘I may not be home tonight?’”

While Caruso’s assessment seems reasonable as to the purpose of significant financial incentives in union contracts, some benefits are beyond what’s necessary. Society has a legitimate need of law enforcement and that need should not be leveraged for unearned largesse. One town’s contract guaranteed $121,000 for unused sick time compensation to a retiring lieutenant. Similar contracts give “perfect attendance” bonuses for not using the sick time; the accumulated time is then sold back upon retirement. Around 54 of the analyzed contracts permit selling back sick time. The average officer can still redeem over $15,000 during a 20-year career. While costs of sick pay may be a reasonable liability, many experts feel the benefit should be a “use it or lose it” as in the private sector.

Former Republican Governor Chris Christie was outraged that public employees sold back sick time for six-figure sums.

Christie signed a new law in 2010 capping payouts at $15,000 for new hires. The 2010 law did not alleviate the liabilities as almost all are exclusively provided to officers hired prior to the law’s passage. The debt for unused sick and vacation time totaled $492.9 million for municipal police alone in just 2019. Four retiring officers in North Bergen received large payouts in 2019; one sergeant received $75,330.32. In 2017, $500,000 was collected by one Jersey City chief.

Eight of the 54 contracts did not have the buy-back clause prior to 2010, meaning the clause is still being added to new contracts after the 2010 law went into effect. Three towns still allow selling back over $100,000 in sick time over a career – over six times the 2010 law’s cap.

State Senator Declan O’Scanlon is disturbed that the law is being subverted. O’Scanlon said, “We obviously changed the law because we felt what was going on was wrong. It’s a disservice to property taxpayers. Pure and simple.”

Finance expert Richard F. Keevey, former state budget director and comptroller, believes the law should be changed. Continuing excess buybacks because of “past practice” clauses violates the spirit of the law even if technically allowed.

A new law was proposed in 2018 with sponsorship by top lawmakers in both state houses that would have lowered buyouts for all public employees. After a police union president met with Democratic Governor Phil Murphy, the law suddenly died.

Murphy had pledged to the police unions in 2017 that he was “going to be here when you need me.” Promises made, promises kept.

The financial largesse was also found in other incentives. Officers can receive “terminal leave,” where they are given six months of pay, without having to perform any duties, at retirement in 12 towns. Delanco gives $600 gift cards for not using sick time. Elizabeth gives up to $2,500 per year in “attendance incentives.” Anthony Salerno retired in 2017 as acting police chief of Asbury Park. Salerno was given a $7,442 gold badge. Salerno was able to initiate the purchase for himself as it was a contractual provision. This outrageous benefit shocked Mayor John Moor, who tried to block the purchase. Salerno kept the gold badge, received $127,000 in unused sick and vacation time payments, a $90,000 a year pension, and still sued the city for discrimination. Asbury Park settled for $85,000.

Contractually obligated, high-paying “extra duty” jobs, like sitting in a patrol car monitoring road construction site traffic, can net $109 per hour for an officer.

Cops performing “extra duty” is a common sight in New Jersey, increasing earnings statewide by millions of dollars. Almost 84 contracts guarantee “extra duty,” and 19 of those guarantee a minimum of four hours pay, regardless of the actual number worked. “We make it a four-hour minimum just to make it worth the officer’s while,” said Flemington Council Vice President Jeremy Long, city liaison to the police department. In 2019, $1.2 million was earned by Rahway officers. Bayonne police received $3.8 million in “extra duty” pay. North Haledon guarantees a rate of $112.69 per hour, with a four hour minimum. Lakewood officer Andrew Solomon worked 980 extra hours in 2019, netting him an additional $63,000. Solomon violated department policy in doing so because an officer is required to work no more than 24 continuous hours without a six hour break to prevent exhaustion.

Albert Maalouf is a police chief in affluent Harrington Park. Maalouf makes $200,00 per year – 25,000 more than the governor. Contractually, Maalouf is not even required to work 40 hours per week. Moonlighting earned him an extra $36,870.22. Most towns are also incentivized to secure “extra duty” from construction or utility firms as the town typically nets one-third of the fees. “It’s definitely a revenue generator, there’s no question about it,’’ said Caruso. The work is not difficult either; sitting in a car, sleeping, or reading the newspaper. A 2017 study found departments nationwide are increasingly using extra duty as a benefit. The study also found that this practice can lead to corruption or other abuses. “Extra duty” jobs have been criminally abused. “For decades there was pattern of corruption in the off-duty jobs program,” a spokesman for the Jersey City mayor’s office and police department commented.

Almost a dozen Jersey City cops, including the chief, were charged with federal fraud crimes in 2017. Most charges included extra duty that was paid for but not performed. Five were eventually sentenced to prison. Another issue involves conflicts of interest. Is a responding officer able to be a neutral arbiter when responding to a fight at the same bar where they provide extra duty? This scenarios presents a legitimate concern with such contractual obligations.

Beyond financial perks are concerns with clauses inhibiting disciplinary proceedings. Twenty contracts, including that of Clinton’s police department, provide a guarantee that an officer shall be given the name of the complainant. Hoboken’s contract provides for the full expungement of disciplinary records from personnel files after only five years. Officials in several towns have said such troubling provisions are not currently followed. Instead, discipline is enforced pursuant to guidelines created by the state’s attorney general. These guidelines purportedly add accountability provisions to previously negotiated contracts. That does not seem to be something a union could honestly oppose.

In our modern era, where examples of police misconduct and abuse get frequent national attention, the police representatives consistently blame a stressful work environment and lack of funding. If these similar contract provisions bear out across the nation, lack of funding and compensation are not the root of many of the problems. We might all be better off if a contract clause requiring solid ethical conduct were included for all officers of the law. 


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