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Though she made it an issue late in her election campaign, Omaha Mayor Jean Stothert is unlikely to pursue $1 million in excess pay given to police officers in early 2009.
“Based on the advice I got, it's not worth my efforts,” she said. “… If I could do it, I would jump on it. I'd do it in a New York minute.”
On Thursday, Stothert told The World-Herald she had ruled out seeking the payments entirely. However, on Saturday, the new mayor said she will explore one possible option for recovering the money. That statement came after the newspaper shared with her the comments of some outside lawyers who say that the city still has legal options for making officers repay.
During the last week of the mayoral campaign, Stothert criticized then-Mayor Jim Suttle for not asking officers to return the overpayments amid a serious financial crisis.
Stothert's campaign hammered Suttle for handling the matter secretly and criticized him as “giving a $1 million handout to his union supporters,” in the words of her campaign manager.
Suttle argued that it was a complex legal issue and that a court might not allow the city to collect. As recently as November, he weighed in on the matter with his administration, sending a memo to his finance director and telling her not to pursue any collection proceedings.
Stothert's statement Thursday came days after she started putting extra pressure on the Fire Department over its finances, including submitting a request for a list of employees and duties, for written communication between department members and more.
She previously had urged Fire Department Chief Mike McDonnell to retire.
Both the Fire and Police Departments supported Suttle in the election, but Stothert has taken a different approach with the Police Department. Even during a budget crunch, she said, she's committed to hiring additional police officers and updating police radio equipment.
She said she's doing as she promised during her campaign: trying to get the Fire Department budget under control, and increasing anti-crime efforts while still asking for reductions from the Police Department.
“Don't think for a minute I'm doing any favors for the police,” she said.
The payments in question date back to the first five months of 2009, when the city overpaid 260 police officers as it worked to implement the state labor court's changes to police pay scales.
During that time officers received extra pay ranging from $22 to more than $9,000. Detailed data on the recipients, obtained by The World-Herald through a public records request, also show that:
» Thirty-nine of the payments were for less than $1,000; 98 were for $5,000 or more.
» Some of the names are familiar. Police Chief Todd Schmaderer, then a captain, received about $1,200.
» The vast majority of the payments — 221 — went to officers, who received an average of $4,651. Sergeants, captains and lieutenants also received extra pay, though at lower amounts.
City Attorney Paul Kratz said he believes the statute of limitations to ask for repayment passed in May, four years after the last of the overpayments was made. So by the time Stothert took office, the city's opportunity had passed, according to the city's position.
“The conclusion around here was that we're out of time on it,” Kratz said.
But several other attorneys said the matter is not so clear-cut.
James Silverman, an Omaha attorney specializing in collections law, said the matter is murky because of the timing and varying limits on how long debts can go uncollected under state statute.
A debt generally has to be collected within four years. But if the agreement is in writing, the creditor is given five years to collect, Silverman said.
That leaves some wiggle room for repayment, which could give the city funds to help stop its budget gap next year.
In Silverman's opinion, the key question is whether a court would say the overpayments stemmed from a written agreement.
“Absolutely an argument could be made,” Silverman said. “For seven figures? It's certainly worth exploring.”
David Kramer, a public sector labor attorney who was director of Stothert's mayoral transition team, agreed there's not a clear answer as to whether the city could go after the overpayments.
But he said he's confident the city attorneys would go after the money if they felt there was any chance of a victory.
“I know that in this climate, every rock is being overturned in search of nickels, dimes, quarters,” he said. “If this had a chance of success, this option would be on the table already.”
Going after the money could pay off, he said, but it also carries significant financial risk that makes the option unattractive.
If the city asked officers to repay, the police union would likely sue, Kramer said. If the city lost the case, it would be on the hook for the union's attorney fees.
Police union President John Wells, who the city says was overpaid by $200, said there's no doubt the union would sue.
“And I'm fairly confident we would prevail,” he said.
Bill Harding, labor and employment counsel for the League of Nebraska Municipalities, acknowledged that the situation was complicated. But, he said, the city could pursue the overpayments without taking on financial risk.
“The answer's pretty obvious: You file a motion with the Commission of Industrial Relations, a motion to clarify,” he said. “I mean, these are hard dots to connect. But someone can only connect dots if they choose to.”
Stothert said Saturday that lawyers have told her that would be a long shot, but that she would explore the option.