They are Milwaukee’s new million-dollar bonus babies.
Four Milwaukee County retirees walked away from their government jobs last year with a lump-sum check exceeding $1 million along with their regular monthly pension — the first time this has ever happened. No other public workers in Wisconsin are eligible for these so-called backdrop payments.
Leading the way was former Deputy District Attorney Patrick Kenney, who was awarded a backdrop payment of $1.34 million last year, the largest such payment by the county to a county retiree. Kenney also receives a regular annual retirement of $79,705.
Following closely behind was Karl Hackbarth, former operations manager at the Milwaukee County Zoo. Hackbarth received a $1.27 million check to go along with his standard pension of $52,574 a year.
Also hitting the $1 million-plus retirement jackpot last year were B. Thomas Wanta, former administrator of the Delinquency and Court Services Division, and Gary Mahkorn, an ex-senior assistant district attorney. Wanta died in November.
The highly controversial backdrop program, initially pitched as costing little or nothing, pays out bonuses to county workers who agree to work past their retirement date. In exchange for taking the upfront payment, retirees see a small reduction in their monthly retirement checks. Those hired by the county before 1982 also get a 25% boost in their pension benefits.
The public furor over the lucrative benefits, approved more than a decade ago, led to the ouster of then-County Executive F. Thomas Ament and seven county supervisors and to the criminal conviction of the architect of the program.
“It’s hard,” Hackbarth said last week of his decision on the backdrop payment. “Did I take it? Yes. Did I feel it was 100% right that it was done? No. Let’s put it that way. But I question how many people would not take it.”
There were a few elected officials or candidates, such as Ament, former Milwaukee County District Attorney E. Michael McCann and former Deputy Inspector Pete Misko of the Milwaukee County Sheriff’s Department, who waived their rights to the lump-sum pension option.
They were the exceptions.
Here is the reality:
Since 2001, this pension perk has been paid out to more than 2,200 former county bureaucrats — enough to fill two-thirds of all the current jobs in Milwaukee County government. And they’ve cashed in to the tune of $294 million, which is more than last year’s entire county tax levy. Better yet, that sum could cover the payrolls for the Green Bay Packers, Milwaukee Bucks and Milwaukee Brewers, combined.
To date, the average backdrop check comes to $133,000 per retiree in addition to his or her monthly pension payment.
And the numbers aren’t getting better for the county.
Despite several reforms intended to blunt the financial impact of backdrops, the county handed out lump-sum checks to more than 100 county retirees in 2016 at a cost of nearly $25 million. That’s the second highest annual sum over the past decade.
Milwaukee County Executive Chris Abele said Saturday that backdrops continue to be “huge anchor” on the county’s bottom line, even with the progress made in other areas of the budget.
“Decisions made by previous administrations and previous County Boards continue to pose challenges we have to address in the budget each year,” Abele said in a written statement. “Even if we don’t pay out any new backdrops for the rest of this year, we’re already facing a budget gap for 2018 that could be as high as $50 million.”
Just how much money are we talking about?
If the county experienced a windfall of $1.34 million — the amount of Kenney’s backdrop — it could buy nearly three new Milwaukee County Transit System buses, which run $460,000 each, said Brendan Conway, chief marketing and communications officer for the system. The Public Policy Forum has said nearly one-third of the county’s buses have passed their expiration date and should be replaced.
And with Kenney’s regular monthly pension, the county could easily cover the salary for a county bus driver, even with overtime.
This year is likely to see some more large backdrop payouts from the pension system.
That’s because, even though the number of workers eligible for backdrops is steadily declining, those still in line to cash out have long tenures with the county. Or big salaries. Or both.
In the case of Mahkorn, the former senior assistant district attorney, he can chalk up his big backdrop primarily to his good pay. Yes, he put in 34 years with the county, but that’s less than most of the others high on the list. He stands out because he was earning about $120,000 annually at the end of his tenure in the DA’s office, double the pay of the average worker in the county pension system.
Reached last week, Mahkorn, 62, expressed few regrets about cashing in with the backdrop. He said he paid little attention to the controversy over the bonus provision when passed in 2000 and 2001.
“I wasn’t one to vote for it,” said Mahkorn, who added that he has put much of the money into paying his three children’s education.
For Hackbarth, the zoo’s former operations manager, it was a matter of longevity.
Hackbarth, also 62, earned a comfortable $97,000 in his final year on the job. Even more important, however, he took his first job at the zoo in 1971, slowly climbing the ranks over more than four decades.
He might have stayed even longer, but he said he decided to file his retirement papers after a fellow worker died unexpectedly on his way to work. A cancer survivor himself, Hackbarth said he was afraid he could miss out on the benefit if he waited too long. A surviving spouse is not eligible for a backdrop payment.
“The county was really great to me,” said Hackbarth, who went on an international trip with his wife with a small portion of his bonus payment but invested the rest. “Even without the backdrop, it was a wonderful place to work.”
Kenney finished No. 1 on the backdrop list because of his long service and good salary.
The former deputy DA worked in the prosecutor’s office for nearly 40 years, pulling down a salary of more than $127,000 in his final full year.
In deciding whether to take the backdrop, Kenney said he opted to do what was best for his family. When he received the check, he paid off the mortgage on his Wauwatosa home, took his children and grandchildren on a vacation to a resort “up north” and invested the rest into a retirement account.
“I certainly feel very fortunate and very lucky,” said Kenney, 66. “When I started to work in the district attorney’s office 40 years ago, I never anticipated that it was something that would make me financially comfortable. That was not a circumstance I was anticipating. But I was grateful that was the end result.”
A widower, Kenney is looking to sell his house soon. And he might even take his first trip to Europe.
“I haven’t been to Europe yet,” he said, “but I know now that I will get there.”
All thanks to the county perk that wasn’t supposed to cost the taxpayers an extra dime.
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