PARC Vice President Talks to St. Louis Post-Dispatch About Ferguson Consent Decree Costs

Analysis: Did Ferguson inflate the cost of federal consent decree?

By Stephen Deere, St. Louis Post-Dispatch (Feb. 21, 2016)

FERGUSON • Of all the moments that led up to the U.S. Department of Justice lawsuit against this city, perhaps none was more pivotal than a presentation by Ferguson Finance Director Jeffrey Blume on Feb. 6.

Before an audience of roughly 200 people, Blume outlined one dismal financial picture after another.

Near the end, he hit on a positive note — at least for some. A proposed “consent decree,” negotiated between Ferguson and the Justice Department to avoid litigation, would mean 25 percent raises for city police.

A handful of residents, sympathetic to what officers had endured in the 18 months since Michael Brown’s death, exchanged smiles. Some applauded.

But Blume’s words stung activists, whose protests helped produce one of the nation’s most comprehensive plans to reform a police department.

To them, it appeared as if the same employees accused by the Justice Department of acting as collection agents for a revenue-hungry municipal court would now be rewarded.

As Blume continued, the cost of the decree rose. Raises for officers would mean higher pay for firefighters. Other employees would want salary increases, too.

Now the first-year cost of proposed reforms totaled $3.7 million in Blume’s worst-case scenario.

But an examination by the Post-Dispatch has found that to arrive at that number, city officials:

• Accelerated deadlines within the agreement.

• Used salary data from cities beyond the required scope.

• Ignored the context of an essential phrase in the decree.

They also appear to have discounted the possibility that some terms could be worked out later under the supervision of a neutral arbiter.

Nevertheless, the figure weighed heavily in the Ferguson City Council’s decision to unilaterally revise the consent decree at a meeting on Feb. 9, a decision that drew the ire of the nation’s top law enforcement officer, Loretta Lynch.

It had all started with just two words: “most competitive.”

Of the decree’s more than 450 provisions, one requires Ferguson to develop a plan to offer police salaries that are among the “most competitive” with comparable agencies in St. Louis County.

The interpretation of that single mandate provided the basis for Ferguson Mayor James Knowles III to insist that a lawsuit would be cheaper than abiding by the terms of the decree.

It also has fueled speculation that some city leaders always intended to fight the Justice Department in court and inflated expenses to stoke fear.

“I think they have shown absolute manifest bad faith,” said Scott Greenwood, a leading police accountability expert and general counsel for the American Civil Liberties Union. “What Ferguson has done has been to essentially try to stick its finger in the eye of the Civil Rights movement and of the Justice Department.”

In the city’s financial analysis, roughly $1.9 million of the $3.7 million first-year cost of the decree comes from salary increases resulting from the “most competitive” provision.

“It seems like the council, at the very least, was rejecting the idea that they could talk with the DOJ and an eventual monitor about what that provision meant,” said Matthew Barge, the court-appointed federal monitor overseeing Cleveland’s consent decree.

Another aspect of the city’s decision did not go unnoticed: The price of the decree was provided by a city official portrayed by the Justice Department as helping create the conditions that made it necessary.

The ‘Muni Shuffle’

The term “most competitive” does not appear in any other consent decree. But anyone familiar with St. Louis County could deduce its intent: to address a phenomenon peculiar to the area known as the “muni shuffle,” as well as to attract a diverse work force.

Roughly 60 departments police the county. Often officers with discipline and performance issues are forced out of one city only to be hired by another that is unable to attract better candidates.

“Here’s one case where they are saying, ‘Let’s create really high standards to attract the best workforce possible,’ ” said Chuck Wexler, executive director of Police Executive Research Forum. “How the city views that in terms of the economic implications is really a different issue.”

Although the phrase “most competitive” is not defined, Ferguson officials have interpreted it to mean that the city must raise pay by an average of $12,100 per officer to ensure salaries are in the top quartile of “similarly sized” agencies.

The decree specifies that those agencies be in St. Louis County. But city officials factored in salary figures from departments in Lincoln, Warren and St. Charles counties, according to documents on Ferguson’s website. The city also included salaries from police departments that are twice as small as Ferguson’s, which employs roughly 55 officers, along with those that are more than twice as large.

It’s unclear why.

The city’s estimate also seems to have discounted the context in which the phrase “most competitive” appears: in instructions about how Ferguson is to develop a “recruitment plan” with “goals, objectives, and action steps” — one being that Ferguson offer competitive wages.

The decree allows Ferguson six months to create the plan. The city has an additional two months to enact it. So even if all sworn officers must receive 25 percent pay raises, as Ferguson suggests, those increases would not necessarily take effect for at least eight months after signing the decree. That later date would drop the price of executing the decree in the first year.

The city’s analysis also fails to make another important distinction, namely that a requirement to plan to meet a goal is not the same as a requirement to meet it.

In other words, nothing appears to prohibit Ferguson from adopting a strategy that would raise salaries over time, instead of all at once.

“Goals and objectives are down the road,” said John Ammann, a St. Louis University law professor and supervisor of the school’s legal clinic, an organization that has filed two federal lawsuits against Ferguson. “It doesn’t give a deadline for which those things have to be in place. A plan is just that, it’s a plan.”

City officials reject any notion that they inflated the cost estimates to influence a decision on the decree.

“The City has interpreted the provision based on discussions with DOJ and, specifically, an emphasis placed on retaining the same police officers that will be undergoing the arduous training required by the agreement,” Ferguson officials said in a statement.

The Post-Dispatch sent follow-up questions to a Ferguson spokesman in an email on Monday. Although Ferguson officials were reviewing the questions, none had responded by Friday evening.

Meanwhile, a Justice Department spokeswoman declined to comment, noting the matter was in litigation.

The gamble

As the decision about the decree loomed, statements from some city leaders never seemed to consider the possibility that certain provisions were intentionally vague to allow both parties to work in good faith to accomplish the goals.

Federal judges oversee the agreements. After a decree is filed, the parties are able to make their case at a fairness hearing and even later.

“Just like with a lot of other private party agreements, if it looks like something isn’t tenable, or something isn’t working out, one of the parties can go to the judge and say, ‘This is completely unconscionable,’ ” Barge said.

Fears that a consent decree might bankrupt Ferguson, as many speculated during three public hearings, were unfounded, Barge said.

“Logically it can’t be that the effect or the goal of a consent decree or a major reform of a police department is to bankrupt the city,” said Barge, vice president and deputy director of the Police Assessment Resource Center. “Effective, safe, constitutional policing can’t happen if you don’t have a city to do it. It sort of defeats the purpose.”

If the case goes to trial and Ferguson loses, the city could be saddled with millions of dollars in legal fees — and the cost of enacting a court order.

By that point Ferguson will have sacrificed much of the influence it might have otherwise wielded in the process, said Greenwood, who recently negotiated a consent decree in Albuquerque.

“There is no chance, zero, that the city of Ferguson will prevail in this Kamikaze mission,” Greenwood said. “They are not ever likely to get the deal that they had … . It will never be that good again.”

Greenwood was also the principal architect of the Cincinnati Collaborative Agreement, which includes a number of court-ordered reforms, resulting from a partnership between African-American community leaders, the ACLU, the Black United Front, the Cincinnati Police Department and the Fraternal Order of Police.

The agreement is often praised as the most innovative, comprehensive and successful police reform process to date. It led to Greenwood’s founding a consulting firm with former Cincinnati police Chief Tom Streicher — once his adversary.

Ferguson officials are familiar with Greenwood and Streicher. The City Council interviewed the pair several months ago about representing Ferguson in negotiations with the Justice Department.

“They were not interested in fixing their problems,” Greenwood said. “They were interested in arguing about their problems.”

The city instead retained Dan K. Webb, a former U.S. Attorney from Chicago, now a defense lawyer specializing in white-collar crime.

The decision, some said, indicated the city intended to fight the Justice Department, not partner with it. After he watched Ferguson take the latest defiant step, Greenwood said: “I’m glad they didn’t hire us.”

A key player

When the City Council voted to revise the consent-decree proposal this month, some members said they hoped the Justice Department would return to the negotiating table.

But if that was the case, it may have been the most spectacular miscalculation of all.

The Justice Department sued Ferguson the next day.

Immediately, questions about the figures provided by Blume surfaced on the most visible of stages: a news conference at which U.S. Attorney General Attorney Lorretta Lynch announced the litigation.

Lynch declined to speculate on the city’s cost estimates. But she noted that they “did change.”

Over a 10-day period, the city’s estimates went from $800,000 in a New York Times article to $1.5 million at the city’s first public hearing on the agreement to its most recent projection of up to $3.7 million.

For the past year, the finance director had largely remained in the background, despite being mentioned 19 times in a 105-page Justice Department report published in March.

The report depicts the unidentified “finance director” as working in concert with the police department to ensure that the city’s court provided a steady stream of revenue — frequently at the expense of African-Americans.

According to the report, the finance director wrote to the police chief in a 2010 email: “unless ticket writing ramps up significantly before the end of the year, it will be hard to significantly raise collections next year. What are your thoughts?”

Three years later, another email from the finance director stated: “Court fees are anticipated to rise about 7.5%. I did ask the Chief if he thought the PD could deliver 10% increase. He indicated they could try.”

One passage in the Justice Department report may have been less than accurate.

It says that in 2011 the finance director issued a directive ensuring that bond refunds could be issued only through the mail, not to defendants in person. The report references a statement from another city official saying that “it is not entirely uncommon for these refund checks to be returned as undeliverable and become ‘unclaimed property.’ ”

City officials say that policy came from a former policy chief in 2003 — five years before Ferguson hired Blume.

The city said it was indeed uncommon for the checks to be returned. Only two have come back to the city since 2013. And Ferguson does not keep “unclaimed property,” but sends it to the Missouri state Treasurer’s Office in the defendant’s name, a statement said.

Ferguson declined to make Blume available for an interview.

In the days that followed the council’s decision, Knowles repeatedly invoked the estimates Blume presented as evidence that fighting in court was less expensive than abiding by the decree.

But Knowles’ calculation ignored yet another important variable — the possibility of defeat.

Conditions for the acceptance of the Ferguson consent decree

The Ferguson City Council placed these seven conditions on the city's acceptance of the consent decree with the U.S. Department of Justice:

• The agreement contain no mandate for the payment of additional salary to police department or other city employees.

• The agreement contain no mandate for staffing in the Ferguson Jail.

• Deadlines set forth in the agreement are extended.

 • The terms of the agreement shall not apply to other governmental entities or agencies which may, in the future, take over services or operations currently being provided by the city of Ferguson.

• A provision for local preference in contracting with consultants, contractors and third parties providing services under the agreement shall be included.

• Project goals for minority and women participation in consulting, oversight and third-party services shall be included.

• The monitoring fee caps in the Side Agreement are changed to $1 million over the first five years with no more than $250,000 in any single year.