CENTERTON -- The city will be without a police chief on Sept. 10 because of a state law that governs police retirement.
The city hired Rodney Reed as chief in March. Reed and the city were notified in July he was ineligible to serve because of the retirement plan he selected at a previous employer, said Brian Rabal, Centerton city attorney.
Reed Resume
Centerton Police Chief Rodney Reed took office March 25. He was chief in Bethel Heights from February 2014 until taking the Centerton job after former chief Lance Johnson retired Feb. 13. Reed was with the Fort Smith Police Department from August 1994 to February 2014. He was selected for the chief job from among 26 applicants. His annual salary at the time of his hire was reported to be $55,000.
Source: Staff Report
An appeal to the Arkansas Local Police and Fire Retirement System board Thursday met with no vote. That means the original decision stands and a Sept. 10 deadline is in place, Rabal said.
The city will lose state money unless it terminates Reed's employment or he resigns, Rabal said. That amount comes to roughly $125,000 annually, Mayor Bill Edwards said.
Reed had enrolled in a deferred retirement option plan, said David Clark, executive director of Arkansas Local Police and Fire Retirement System. The deferred plan allows officers to set aside retirement money that builds up 6 percent interest each year and defers taxes until they begin to receive the money. Enrollees can be in the program for up to seven years, but once their employment ends at the agency where they selected the plan, they must retire and cannot start saving for retirement again.
"It takes re-employment off the table," Clark said.
Reed had enrolled in the deferred program in January, but he has received no retirement payments, Rabal said.
"He was not aware that this was a problem," Rabal said.
There are 225 people enrolled in the deferred program now, Clark said. An appeal to keep working once enrolled in the program is highly unusual, he said.
Tontitown faced a similar situation in January when the city was notified days after hiring Denny Upton as chief that he had been enrolled in the deferred retirement program and was ineligible for employment.
His understanding of the law is it was made to prevent "double dipping" from the retirement system, Rabal said. He's researching to see if the city has other options to retain Reed, such as in a public safety position of some kind. He'll present his findings to the City Council.
The city simply cannot change Reed's title to avoid retirement, Clark said.
"That will run afoul of the law," he said.
Not every law enforcement agency in Arkansas offers retirement, Clark said. Centerton and Bethel Heights have retirement set up through the Arkansas Local Police and Fire Retirement System. State law requires cities that use the retirement system to offer the benefit to every sworn law enforcement officer.
If Reed remains a police officer he would need to be covered under the city's retirement plan, Clark said.
The law could be changed, but it is set up to fund the system. If a person enters the deferred program with a higher salary at a larger department, then moves to a smaller department where their contribution is smaller, it upsets the balance of the retirement system, Clark said.
There are retirement benefits through the system without the deferred arrangement, Clark said. Reed will be able to apply for retirement and receive benefits once he leaves Centerton, Clark said.
It's a shame the city will lose its police chief after five months, Rabal said.
"He's been very good for the department and we stand behind him," Rabal said.
NW News on 09/05/2015