NEW ORLEANS — The city of New Orleans has lost so many police officers that it now faces a major fine to cover police pension losses that could top $38 million over the next 15 years.
City Council Vice President Helena Moreno said she was shocked to learn this week that, under state municipal pension laws, the city has lost so many officers that the Municipal Police Employee Retirement System considers NOPD “partially dissolved,” both in 2021 and 2022. That triggered a state law that requires cities and towns to pay back the police pension fund for unfunded liabilities – in other words, for the funds the city or town would have been paying into the system if it hadn’t lost any officers.
MPERS confirmed the city already made its first monthly payment of $50,314.10 earlier this month. The only way for the city to escape future payments is to restore its June 2021 staffing level of 1,119 employees participating in MPERS.
"There’s really no wiggle room here, other than to get the numbers up," said MPERS Executive Director Ben Huxen. "We support New Orleans and want them to get more police officers and not have to make the payments."
A letter by the MPERS’ actuary in March states that New Orleans partially dissolved its police force in 2021 by losing more than 50 officers that fiscal year. Now, because it lost more than 50 officers in the 2022 fiscal year as well, it will owe another $163,798.57 per month starting in July 2024, for a total of more than $214,000 per month. Moreno said that will add up to a total bill of $38 million over 15 years.
Moreno said Mayor LaToya Cantrell’s administration gave the City Council no warning that it would have to budget for the fines. She said the City Council did not review payments that will total about $600,000 in the current fiscal year budget that's already been approved. She also said the city made no effort to change the law governing the pension system to see if the city could avoid the fines.
"What I’m very frustrated about is that I was not, nor were any councilmembers, alerted to this by the administration, including not even our budget chair," Moreno said, "as to, like, 'Wait a second, this major thing is coming our way, we need to figure out a path here.'"
Police officers rely on the pension for their retirement, and the law was implemented to protect against loss of pension funds if cities farmed out their public safety duties or slashed their departments. Donovan Livaccari of the Fraternal Order of Police said he supports those protections for the pension fund but worries the law wasn't intended for what's happened at NOPD.
"They put rules like this in place to keep municipalities from purposely reducing their contributions," Livaccari said. "But the city of New Orleans is not moving employees out of MPERS to reduce its contributions. This is at least partially the fallout from the pandemic."
New Orleans has been losing officers to retirement and other departments since before the pandemic. It had 1,600 commissioned officers before Hurricane Katrina and dropped below 1,200 over the next decade. NOPD never overcame the attrition it suffered after a hiring freeze imposed by former Mayor Mitch Landrieu more than 10 years ago.
But Huxen said 2021 was the first time that a large city owed the fines for losing more than 50 participating employees in a single year. Previously, only small departments that lost a few officers representing a large percentage of their total employees have been considered "partially dissolved," Huxen said.
And it's now happened two years in a row for New Orleans. The NOMERS actuarial report this March says New Orleans is one of four Louisiana municipalities that partially dissolved its police department in 2022, when NOPD lost 138 employees.
At the end of the 2021 fiscal year, NOPD had 1,119 officers participating in the pension system. By the end of June 2022, that number had dropped to 981. It continued to decrease steadily throughout fiscal year 2023 and is expected to fall below 900 commissioned officers for the first time.
The other three towns that partially dissolved their police forces – Homer, Port Vincent and Georgetown – have tiny departments of five officers or fewer, so losing one or two employees triggered a fine because it depleted each of their forces by more than 40%.