The Gila County Board of Supervisors’ approval of a “double-dip” employment contract for a top sheriff’s department administrator has raised questions and highlighted concerns about the state’s retirement system.
The supervisors approved a month-to-month contract with Claudia DalMolin, which will save the county money even as it increases her monthly income by 50 percent.
Under the terms of the contract, the sheriff’s department will pay DalMolin $4,000 a month on top of her roughly $3,000 per month in retirement benefits.
She will end up making an extra $1,000 per month, but the county will save $2,000 per month in salary, plus her benefits — typically 30 percent of salary.
However, some critics worry that such contracts may ultimately overtax the state’s vulnerable public employee pension plan.
The March 1 vote means DalMolin will keep an office and a cell phone. Her contract stipulates that her consulting company, CJD Consulting, LLC “shall exercise its best efforts to provide consulting services.”
Mac Feezor, a Payson resident whose wife works for the sheriff’s office in the records department, questioned DalMolin’s contract at the meeting.
“I am curious as to what services (DalMolin) can provide,” said Feezor, “She had an assistant — couldn’t she continue these services? Shouldn’t we save money?”
The supervisors listened, but voted to award DalMolin her contract.
In later interviews, Sheriff John Armer said he convinced DalMolin to stay on with a contract after she decided to retire because he needed her help to finish his term.
DalMolin herself pointed out that the county will save money as a result of the contract. “I save the county $30,000 doing this,” said DalMolin.
However, DalMolin’s retirement and contract illuminate questions raised about the soaring cost of the state’s pension systems.
The cost of the state retirement system has grown four-fold in the past decade to $1.4 billion, according to a study published by The Arizona Republic. The system pays benefits to about 110,000 retired public employees at the state and local levels. The system provides guaranteed, lifetime benefits for many retirees, a benefit that has nearly disappeared in the private sector. The system also allows for both double-dipping and huge payouts for firefighters and police officers who take retirement early.
However, the state constitution prevents any changes in benefits programs for current employees.
The problem has grown worse as a result of the economic downturn, which dramatically reduced the annual investment gains made by pension funds.
When times were good and investments returned double-digit interest, pension plans reduced worker and employer contributions. Since the downturn, many pension plans find themselves facing a shortfall.
DalMolin’s retire-rehire situation represents a practice further afflicting state pension plans: double-dipping. This allows workers to retire, collect their pension, then come back to work on a contract usually at a lower hourly rate with no benefit contributions. The practice saves the county money, since it doesn’t directly pay the pension costs.
Dave Cannella of the Arizona State Retirement System said the policy of hiring back retirees is not unusual, nor is it usual.
“Typically you see it with teachers,” he said.
The Payson Unified School District has a few teachers who have retired, but returned on a contract basis.
The Town of Payson recently offered a similar deal to several top town employees with decades of service, including Buzz Walker, who runs the water department.
Cannella explained that if a teacher starts work at 22 and stays for 30 years, she will max out her retirement benefits in her early 50s. This prompts many senior teachers to retire early.
School districts will often hire back these employees, especially in hard-to-fill slots like math and science.
This saves the district the cost of benefits, since the teachers get medical care through their pension plan, said Cannella.
Berthan DeNero, human resources director for Gila County, agrees that DalMolin’s experience makes her difficult to lose.
“Claudia has been with the sheriff’s office a long time,” she said, “Her skill set is hard to replace.”
DalMolin has years of experience and a depth of expertise in sheriff’s department human resource policies, said DeNero.
DalMolin worked for 30 years in the Gila County Sheriff’s Office and her father, Elton Jones, once worked as sheriff in the 1960s. She started as a dispatcher, and then became a clerk in several different capacities ending up the chief administrative officer — a position she retired from in February of this year.
Her duties have included information technology, payroll, human resources, personnel, records, police/crime reports, and civil processing.
“My heart is in it,” she said, “To most people this is just a job, but it hasn’t been that with me.”
When she heard Sheriff John Armer planned to retire, she explored running for sheriff. However, she ultimately decided to retire, but not run. Armer then told her he couldn’t finish his term without her support, she said.
“The sheriff asked me to stay until the end of his term,” said DalMolin. “I’ve worked for this sheriff for 12 years and the previous sheriff for 16 years.”
Armer said he and his staff felt it would be a “frightening experience to see her leave.”
“She’s been here for 30 years and there’s nobody around here that knows what she knows,” said Armer.
He also said the agreement includes a 30-day contract clause where either side may opt out.
In the chief administrative officer position, she received $5,749.47 per month. Her retirement pay will total about $3,000 monthly, said county officials.
DalMolin retired into the Corrections Officer Retirement Plan (CORP), which does not fall under the umbrella of the Arizona State Retirement System (ASRA). However, CORP retirees can purchase their medical insurance through ASRA.
Public safety personnel may apply for retirement after 20 years of service, age 62 with 10 years of service or 80 points (age+ service), said Bonnie Brown, retired members manager of the Public Safety Personnel Retirement System (PSPRS).
Unlike ASRA retirees, public safety personnel must have a local board determine if an employee is eligible to retire, said Brown.
“The local board determines the eligibility, benefit amount, and time of retirement and disbursement,” said Brown.
The maximum amount of retirement calculation maxes out at 80 percent of the employee’s average monthly paycheck.
When DalMolin retired, she received a monthly paycheck of $2,914.72. Her medical benefits are covered through her husband’s private company health insurance.
The question remains, however, can governments continue to offer deals such as DalMolin’s and keep pension plans functioning when those plans are rapidly running out of money?