The fates of seven retirements are on the line in a pension gaffe that has been called illegal by Grand Island council members. Tuesday night's council session focused on the discovery of a so-called clerical error that could put the city of Grand Island back in court.
It all comes down to a mistake made almost eight years ago.
"I don't know if it was an $80,000 error or a $380,000 error, but there was an error, because we did not follow the law," said Councilwoman Peg Gilbert. It's not because the council was trying to slip under the radar that they broke the law, but because it was never a blip on their screen.
"I did not believe there was a calculation error at all on this claim… I processed it in good faith and did believe it was approved by council," said Jaye Monter. Monter was put on the stand Tuesday night, asked how the council was asked to sign off on a pension that contained several major errors, the largest being an illegitimate policy that goes to its financial core.
The issue at hand started with retired cop Kerry Cole and could end in court. His pension came in at $900,000. Between what he had earned in his account and what his pension promised, there was a difference of $459,000 that the city was forced to pay, or so they thought.
"I thought it was odd," said Councilman Chuck Haase, about the alleged 2005 change to city policy. Odd, because as it turns out the council never approved this change that now puts the city at a potential $700,000 loss – going from pension payouts on a single annuity to a joint for cops hired before 1984.
"A decision was made, the order was given, and at that point it was changed for police and carried out that way," explained Brenda Sutherland, the only one left at city hall with a memory of the action that does not have any documentation. The decision she explained came from above, an executive order by someone in the 2002-2006 Vavricek administration. The only two individuals above city directors at that time were Mayor Jay Vavricek and City Administrator Gary Greer. Vavricek said he did not know about the policy change.
"To not bring this before council is just obscene," said Councilman Mike Paulick.
"It makes me sick to my stomach," said Haase, because that's not the only error.
"I would like to think that if I am sitting here as a council, approving a claim for a retirement of a police officer, that the money hadn't already been spent," he said. That's right, the payout had already been paid.
"Unless the retiree is willing to give back some unknown amount of money, the remedy would take place in court," said City Attorney Bob Sivick.
The hole kept getting deeper for council the more they dug on Tuesday. Discrepancies with the bidding process, the retirement board meetings and the board members themselves were discovered and concern was voiced.
"This was done incorrectly in so many ways, it really warrants a do–over," said Gilbert. A do-over could land them in court pitted against a retired cop who in his defense didn't do anything wrong.
"The difficult thing is what we do in collecting the money if we try," said Niemann. "It's going to be interesting."
Next Tuesday the council will decide whether to go with joint annuities, that although were never approved, do have seven pre–1984 cops banking on, or turn back the clock to single annuities which could open the door for litigation with Sergeant Kerry Cole.