ABQ finds loophole in double-dipping law

Once you’re gone, you’re gone.

That was the message the New Mexico Legislature sent to government employees in 2010 when lawmakers banned the widely abused practice of “double dipping” — coming back to work on the taxpayers’ dime while collecting a pension.

But there’s a loophole in the city of Albuquerque through which at least two APD civilian employees have been, for all intents and purposes, pulling two paychecks.

City and state officials say the arrangements don’t specifically violate the prohibition on double dipping. They also don’t appear to uphold the spirit of the law.

In the months before he retired last August, then-Police Chief Ray Schultz drafted memos requesting new positions for two women with whom he had worked closely for years, and who were about to retire themselves.

Diana Padilla had been Schultz’s longtime administrative assistant. JoAnna Hamman was an information-technology specialist who was instrumental in a massive overhaul of the department’s computer systems during the former chief’s tenure.

Hamman left first, retiring May 31 after 19 years with APD. Three days later, she was back at APD, essentially working in the same job she had just left. Her $5,300-a-month pension checks from the Public Employees Retirement Association began rolling in, and so did the $86 an hour she was earning in her new job. That’s a pay bump of more than $40 an hour over the amount Hamman was paid when she was a full-timer at APD.

Padilla retired the same month Schultz did and started collecting her $3,200 monthly checks from PERA. Before August was even over, she had a second income: $23 an hour from processing records requests in APD’s Internal Affairs unit.

How were Padilla and Hamman able to engage in a practice the Legislature had intended to do away with after a series of news stories by KRQE News 13 and other news organizations had exposed it?

Their new jobs were through a temp agency, which acted as a middle man between the city and the employees.

So, once Schultz had written the memos and city Chief Administrative Officer Rob Perry had signed them, Padilla and Hamman were clear to come back to work at APD.

Employing the two through the temp agency kept the city from running afoul of the law, said Wayne Propst, executive director of PERA. But the arrangement was exactly the sort of thing legislators had intended to halt.

“The Legislature was pretty clear where they didn’t want situations again there was a revolving door and people were able to draw both a salary and a pension,” Propst said in an interview. “We identified the potential for people to use third-party agents to get around the law. No law is perfect …

“It’s always difficult to see someone find their way around the law through a loophole, but it happens with almost every law. So I do think it may be something the Legislature needs to look at again.”

Schultz declined to sit down with KRQE for an interview, saying: “I’m retired now, and I’m just enjoying my retirement.”

He did, however, insist in a brief telephone conversation that neither Padilla nor Hamman had received special treatment.

Neither Padilla nor Hamman responded to requests for interviews.

In an interview, Perry cautiously defended the arrangements that brought Padilla and Hamman back to APD.

“The employees had very specialized, unique program knowledge of the projects they were working on,” he said.

Perry also conceded that, in the context of the double-dipping law, Padilla and Hamman coming back to work at APD doesn’t look good.

“The city wants to look at both the letter — and that’s whether the law was complied with — and we think that it was in all of these cases — and the spirit of the law: what was intended to be avoided,” he said. “At the same time, we have to look at trying to complete our technology projects and computer projects in this particular example in the most cost effective means.”

Perry said that in Hamman’s case, Interim Police Chief Allen Banks determined that keeping her on to work on IT projects wasn’t the best use of taxpayer dollars. So last month, Banks “suspended” Hamman’s contract through Select Staff Inc., the temp agency the city uses to hire many of its contract employees.

‘People thought it wasn’t fair’

Propst said the 2010 ban on double dipping was meant, in part, to stop employees from retiring either exactly at the moment they were eligible or, in some cases, even before, then seek a second paycheck in government.

Double dipping, he said, strained the state’s pension fund. That’s because the longer an employee works, the more he or she contributes to the fund – and the less he or she takes out after retirement.

“People thought (double dipping) wasn’t fair,” Propst said. “It wasn’t fair for someone to have a salary from the state and also a pension check from the state …Just the perception that it’s wrong to allow people to receive both a pension and a check from the state of New Mexico.”

State Rep. Bill Rehm (R-Albuquerque) has been an outspoken critic of double dipping through the years.

“We should not allow the return to work for an area where there’s plenty of applicants to come in and fill those jobs,” he said in an interview. “When the individual decides to retire, he’s retired.”

KRQE News 13 explained to Rehm the circumstances of Hamman’s and Padilla’s temporary positions at APD.

“I do not support a person retiring on Friday and coming back to work on Monday morning,” he said.

Rehm is sponsoring a bill in the Legislature that would allow police officers to collect a pension and a paycheck. The proposed legislation is aimed at addressing a statewide officer shortage, which Albuquerque is feeling acutely. APD is down about 200 police officers from the 1,100 it had in 2010, the department’s strongest manpower days.

Rehm had a message for the city of Albuquerque: “When you have a sufficient number of qualified applicants for a non-law enforcement position, don’t come and ask me to support across the board return to work.”

“The public is offended when they find out you’re allowing people to retire on Friday afternoon and come back to work on Monday,” he said. “It’s wrong …By (the city’s) efforts what (it is) doing is adding to the opposition of a return to work in an area (the city) needs it, law enforcement public safety.”

Perry said he asked APD officials whether, in Padilla’s case, there may have been other qualified applicants for the job.

“Because of her knowledge of the Internal Affairs system itself, the filing, the sequestration of files, the utilization of certain provisions of the union contract and the like, her familiarity with that probably made a certain case of uniqueness to that,” he said. “But I think at the same time you could say those are mostly clerical administrative positions and it would be possible to skill someone up to do that and still meet the spirit and letter of the retirement law.”

Another loophole?

KRQE News 13 looked at a third former APD employee’s return to the department.

It wasn’t the same deal Padilla and Hamman had, but Karen Fischer found a way back in, too. She was a longtime civilian employee with the department’s strategic support division who, particularly in the past half-decade or so, worked closely with Schultz on APD’s property crimes initiatives.

Schultz and Fischer won national awards for their work, much of which was done in partnership with the Albuquerque Retail Assets Protection Association, known as ARAPA. The group is a nonprofit that essentially works as a bridge between law enforcement and the retail community to fight property crimes. Schultz and Fischer both were heavily involved with ARAPA, which Schultz often touted as a national model for public-private partnerships.

Fischer retired from APD on Jan. 1, 2013 and began retirement checks that would add up to $55,000 a year. The day before, Schultz signed a one-year contract for ARAPA worth $26,000. And Fischer went to work for ARAPA.

Fischer did not respond to interview requests. Schultz indicated that she didn’t get special treatment, either.

According to corporations records reviewed by KRQE News 13, Fischer is listed as a director for ARAPA – and she’s listed as the nonprofit’s registered agent.

And ARAPA’s physical address? That’s 400 Roma NW, the same address as APD headquarters.

Perry said he wasn’t aware of ARAPA’s address, and he didn’t know whether the group was paying the city rent for office space. He also didn’t know whether Fischer – or anyone else from ARAPA – had access to sensitive police information.


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