HUDSON — The city and its police force are in talks to settle a dispute over how officers’ retirement benefits are calculated.
The Hudson Police Department’s union, the New York State Law Enforcement Officers Union, AFSCME, AFL-CIO, Council 82, Local 3979, is seeking to allow officers to retire with benefits based on their single-highest earning year, known as a one-year final average salary, or FAS.
The use of a one-year FAS is permitted according to Article 9.3.1 of the current Hudson police contract, which states that officers are permitted to retire on the basis of their last 12 months salary, and should be honored by the city, according the union’s Associate General Counsel Andre Dalbec in an email.
But that line is directly followed by Article 9.3.2, which states that officers can elect to retire after 20 years of service according to the provisions laid out in Section 384-d of the state’s Retirement and Social Security Law for the Police and Fire Retirement System. Section 384-d determines FAS based on date of hire, with those hired before 1973 qualifying for a one-year FAS.
The city’s position is that officers are subject only to Section 384-d, which Hudson adopted on May 1, 1987. Jonathan Bernstein, an attorney representing the city, called Article 9.3.1 “a holdover clause” from a previous contract that “has no effect as a matter of law.”
Tania Lopez, deputy press secretary for the Office of the New York State Comptroller, said the provisions in Section 384-d of the Police and Fire Retirement System have five tiers, with FAS based on the date of hire.
Hudson has adopted a one-year FAS for officers in Tier 1, Lopez said. Tier 1 applies to those who were hired before July 1973.
The city has not adopted a one-year FAS for their Tier 2, 3 and 5 officers, whose FAS is the average of their highest three consecutive years of earnings, she said. Tiers 2 to 5 cover officers hired between 1973 and 2012.
Tier 6 members, hired after April 2012, are eligible for a five-year FAS, Lopez said.
There is no Tier 4 in the Police and Fire Retirement System.
The union filed a class-action grievance seeking to pursue its case for the one-year FAS in arbitration through the Public Employment Relations Board, the independent state agency charged with assigning arbitrators to resolve public employee union disputes. The grievance was filed April 15, said Jonathan O’Rourke, executive director of the PERB Office of Administration.
Union President Sgt. Christopher Filli said the union seeks to hold the city to its contractual obligations.
“The arbitration process that the city and the union agreed to is the least expensive and most expeditious way to resolve this matter,” Filli said. “The law enforcement officers of the city of Hudson would prefer to have the internal procedures play themselves out.”
The city filed a petition in the state Supreme Court in May to prevent the dispute from going to arbitration, said Bernstein, who is in private practice with the Albany-based firm Goldberg Segallain.
The court will decide whether the matter goes to arbitration, Bernstein said.
Hudson officials warned of financial consequences if the matter goes to arbitration and the dispute is not settled in the city’s favor.
A defeat in arbitration could result in the city being forced to pay more than $900,000 to cover back contributions to the state retirement system, said city Treasurer Heather Campbell. The $900,000 is the amount the city would have underpaid on its retirement contributions based on the one-year FAS.
The city would then need to pay an additional $75,000 or more annually toward the retirement benefits of other officers who use the one-year FAS, Campbell said.
Bernstein said he does not believe the court will allow the dispute to go to arbitration.
“The union is seeking relief through arbitration to obtain a benefit that does not exist under the law,” he said.
“Our position is that arbitration of this matter is perfectly legal,” he said. “Our responses will show that this position has merit and will prevail.”
Nora Mishanec is a reporter for Columbia-Greene Media. She can be reached at firstname.lastname@example.org or 518-828-1616 ext. 2500.