According to two retired city of Ann Arbor employees, some police officers nearing retirement engaged in a pension spiking scheme that involves writing more traffic tickets than usual. The scheme could add hundreds of thousands of dollars in lifetime pension benefits for these individuals, and millions in additional taxpayer burdens.

Writing more traffic tickets generates extra overtime pay because officers are required to spend time in court when tickets are challenged by drivers. Pay boosted by extra overtime in an officer’s final three years increases, or spikes, the annual pension payouts by artificially boosting the final compensation figure used in pension formulas.

According to the former employees, as patrol officers near retirement they try to get on the midnight shift, if they were not already working that late shift. They then write more tickets than they customarily would, knowing that many drivers will fight the charges by taking them to court.

Historically, court appearances by officers are a big trigger of overtime.

One officer collected an average of $22,688 in overtime his last three years with the department. Another who retired in 2015 averaged $22,097 during his last three years on the job. Both worked the midnight shift.

For an officer who had been employed for 25 years, $22,000 in annual overtime in the final years would add $15,125 a year to the individual’s annual pension benefit payments. Many employees of the Ann Arbor police department have retired in their late 40s or early 50s, meaning inflated pensions could be paid for decades.

To place these figures in context, the average annual overtime of all 72 employees who retired from the Ann Arbor police department from 2009 to 2015 was $7,743, according to the city’s response to a Freedom of Information Act request. These 72 employees included detectives, a former police chief and others who were not patrol officers.

The process highlights a problem with government pension systems that use “final average compensation” as a factor in calculating pension payouts, instead of the final base pay of an employee. Years of service and the highest average salary in the final years on the job are the primary factors that determine an individual’s monthly pension payouts.

“Pension rules are supposed to provide stable and plannable incomes to workers that retire,” said James Hohman, the assistant director of fiscal policy at the Mackinac Center for Public Policy. “Unfortunately, rules about final compensation have been gamed in order to spike the value of a pension. It’s no surprise that people want to get more income in retirement, but pension rules should not encourage bad behavior.”

Determining whether any particular officers were writing tickets to spike their future pensions is very difficult. Overtime is a routine part of compensation for police officers. In Ann Arbor, they can make thousands in overtime working football Saturdays.

Ann Arbor Mayor Chris Taylor didn’t specifically address the pension spiking allegation, but did comment in an email on overtime in the police department.

“Overtime procedures are outlined in the collective bargaining agreements,” Taylor said. “These procedures determine how overtime is equalized and offered. If voluntary overtime is available, it is open to all eligible employees, regardless of service time. In a City the size of Ann Arbor, there is often additional police coverage required for special events, such as UM football games, special events (Art Fair, festivals, etc.) and other events requiring higher levels of security.”

Michigan Capitol Confidential received the overtime paid to officers that retired since 2009 in a Freedom of Information Act request.

For nearly a half century, small numbers of architectural preservation activists have used a device called study commissions to get portions of Michigan communities designated as historic districts. These commissions tend to be dominated by the activists and often make decisions that infringe the private property rights of many people. But the rules of the game may soon change.

Rep. Chris Afendoulis, R-Grand Rapids, and Sen. Peter MacGregor, R-Rockford, have introduced bills in the state House and Senate to modify the Historic District Act of 1970, which authorizes these activities. Among other things the legislation would raise the threshold for creating a historic district: Two-thirds of the affected property owners would have to give their assent. The bills would expand individual rights in several other ways as well.

“This will help many communities maintain their historic identity while ensuring that private property owners have a greater voice,” Afendoulis said.

Under current law, once a historic district is created it becomes nearly permanent, regardless of whether people in the community support it. Also, the district boundaries can be altered and even expanded by Lansing bureaucrats — without notice to or input from affected property owners.

The new bills (which aren’t posted online yet) would give local residents the right to appeal historic district actions to the local governing body, city council or township board. Appeals to Lansing bureaucrats would not be required.

“Our law governing historic districts needs to be updated and dusted off,” MacGregor said. “I’m sure the current law was well-meant when it was adopted back in 1970, but over the decades, it has morphed into something that often lacks common sense. This legislation will provide that common sense by enhancing local control and increasing the rights of property owners.”

The legislation would require an affirmative vote by the local governing body to create a historic district. And every 10 years, voters in the community would decide whether to continue an existing district. This latter feature would apply to all historic districts, not just new ones created after the law goes into effect.

In addition, the bills would require that historic district boundaries be clearly defined from the outset, prohibiting changes made later with no disclosure or notice to affected property owners. 

According to Afendoulis, ensuring that the commissions receive the input of property owners and construction experts was one of the primary goals of the legislation.

“That’s an important aspect of this legislation and one that would give property owners much-needed flexibility when choosing construction and replacement materials,” Afendoulis said. “There are materials available now that appear so authentic you can’t tell the difference between them and the original materials used in the earlier time period. Most of these materials were not available back in 1970.”

“Being allowed to utilize these materials would provide private property owners who live in historic districts with significant savings when they make improvements and repairs,” Afendoulis said. “Preserving aesthetic value was the key reason for having historical districts in the first place and being able to use these materials accomplishes that while reducing costs and potentially making the district more economically attractive. However, some historic district commissions refuse to allow these new materials to be used. That’s an example of why this legislation is needed.”

According to the Michigan State Housing Development Authority, 78 Michigan communities currently have historic district ordinances.