Sergeants sue for $5 million in back pay
BY FRAN SPIELMAN City Hall Reporter February 19, 2014 10:44PM
Updated: March 21, 2014 3:34PM
The union representing 1,088 Chicago Police sergeants asked a judge Wednesday to order Mayor Rahm Emanuel to pay $5 million in retroactive pay raises with 5 percent interest dating back to November — mandated by an arbitrator’s ruling ratified by the City Council.
City Hall insisted that the mayor’s 2014 budget includes $6.5 million for retro pay and that the delay stems from the painstaking process of calculating amounts owed to individual sergeants — not from a cash-flow crunch.
“Mayor Emanuel has asked that the process be expedited, and we anticipate issuing checks within the next two weeks, ” said Kelley Quinn, a spokesperson for the city’s Office of Budget and Management in an emailed response.
The sergeants association scoffed at that explanation and said the delay raises red flags.
“They’ve known about this since November. What have they got — one guy with an eyeshade and a pencil calculating this?” said a source close to Sergeants Association President Jim Ade.
“With retro pay being a front-page story with the FOP [after a paperwork mistake] and the sergeants being the first to actually get an award that includes retro pay, we’re suspicious about why the city is not paying. I would hate to think the city can’t come up with $5 million it admits it owes its own employees.”
The delay follows a financial squeeze that had forced Emanuel to plow through $25 million in snow removal spending — $4.5 million over a budget that was supposed to cover this winter and the start of next — even before Monday’s storm dropped another eight inches of snow on parts of Chicago with another one on the way.
Earlier this month, Emanuel convinced the City Council to double — from $500 million to $1 billion — a so-called “commercial paper” program used to tide the city over between major bond issues.
Chief Financial Officer Lois Scott said the short-term borrowing program would “ensure the city has liquidity for unseen needs such as retroactive salary payments and judgments.”
Back pay for sergeants is hardly “unseen.”
The 8 percent pay raise over four years was handed down by an independent arbitrator in late September after the rank-and-file resoundingly rejected a negotiated agreement the mayor had touted as a roadmap to solve the city’s pension crisis.
The $5 million debt owed to sergeants covers a series of 2 percent pay raises effective July 1, 2012, Jan. 1, 2013 and Jan. 1, 2014. It also includes an $800-a-quarter duty availability pay for sergeants and their “supervisors’ quarterly” payment. The arbitrator maintained both, even though the city wanted to reduce or eliminate those extra payments.
In exchange for those raises, sergeants who retired after Dec. 31 agreed to make a 2 percent contribution to retiree health care that’s now free.
If the Illinois General Assembly mandates a pension contribution higher than the current 9 percent, sergeants can negotiate an even higher pay raise.
“The City of Chicago has the clear legal duty to pay the debt. Payment….is not a discretionary act…Demand has been made. The defendant admits it owes the debt,” the lawsuit filed Wednesday by the sergeants in Circuit Court states.
“The City of Chicago represented that it will pay the debt in January, 2014, but no payment was made. The City of Chicago represented it will pay the debt by Feb. 25, 2014, but notified the association on Feb. 13 that it will not pay any or all of the debt by that date.”
Ade could not be reached for comment.
Ironically, the sergeants contract is one of several police contracts that ousted Fraternal Order of Police President Mike Shields has charged was “rigged” in the city’s favor.
Last summer, Moody’s Investors ordered an unprecedented triple-drop in Chicago’s bond rating, citing the city’s “very large and growing” pension liabilities, “significant” debt service payments, “unrelenting public-safety demands” and historic reluctance to raise local taxes that has continued under Emanuel.
Next year, the city is required by state law to make a $600 million contribution to stabilize police and fire pension funds that now have assets to cover just 30.5 and 25 percent of their respective liabilities.
Emanuel wants the Illinois General Assembly to put off the balloon payment until 2023. That would give the city time to negotiate a painful mix of employee concessions and increased revenues without raising property taxes so high that it triggers an exodus to the suburbs.
If the city is having trouble coming up with $5 million in back pay for sergeants, it raises questions about how it will bankroll a much larger retroactive paycheck for rank-and-file police officers, firefighters, paramedics and white-collar workers. In March, another round of retro pay is due for 197 police lieutenants.