In short, it's all about the City denying valuable retirement benefits to almost every single one of its police officers who retired on or after January 22, 2007.
On January 22, 2007, the New Orleans City Council enacted Ordinance 22493 M.C.S. irrevocably electing coverage under La. R.S. 11:2218(J), thus requiring the City to convert its retiring MPERS members’ uncompensated leave to MPERS retirement service credit.
Since Ordinance No. 22493 became effective, the City has not converted all unused earned sick leave accrued and accumulated by employees for which payment was not made at the time of retirement, as required by state law. From January 22, 2007 until May 12, 2013, no retiring MPERS member employed by the City received any retirement service credit for unused sick leave.
One member who retired on May 12, 2013 received such credit (many years later, and only after suing the City), but from May 13, 2013 until June 29, 2021, no MPERS member employed by the City received service credit for unused sick leave.
In 2021, MPERS researched the City's civil service leave rules and determined that, in its opinion, just about all (everyone but those who burned through all sick leave or already earned a maximum benefit equal to one hundred percent of their average final compensation) of its retiring police officers have been getting shortchanged by the City. The bottom line is that, reading MPERS' leave conversion law in conjunction with the City's civil service leave rules, retiring officers MUST get cashed out for the maximum amount possible under the civil service rules before any leave can be converted to MPERS retirement service credit. The leave that must be converted to MPERS retirement service credit is that which is left over, which turns out to be the portion of the sick leave that the City cannot legally pay the retiring officer for at the time of retirement. Annual leave doesn't come into play, because a retiring City police officer can receive cash for all of that leave.
Of course, the City would like the portion of sick leave that it "magically washes away" to stay in City coffers rather than be converted to MPERS retirement service credit. However, no one forced the City to irrevocably adopt the ordinance mandating leave conversion. Presumably, it did so in hopes that officers would take less sick leave, because they could rest assured that they'd be fully compensated in the long run. In fact, that sounds like an excellent policy for a City that is losing over 50 police officers every year but hopes to stem the tide.
At any rate, shortly after MPERS attempted to enforce the law correctly, New Orleans sued MPERS and lost (see the update below).
As of August 8, 2023, only approximately 25 total retiring MPERS members employed by the City have received any retirement service credit for unused sick leave. The City likely shortchanged most (if not all) of those 25 retiring members on their cash payout in order to “compensate” for the unused sick leave that was converted to MPERS retirement service credit.
Given the City's refusal to properly compensate retiring New Orleans police officers, MPERS strongly encourages all of these individuals to consult with their own private attorney before retiring. And if you are interested, you can review MPERS' Motion for Partial Summary Judgment and associated documents.
Update: On December 12, 2023, Judge Johnson signed a judgment declaring that MPERS' interpretation of Ordinance 22493 M.C.S. and La. R.S. 11:2218(J) is correct. Basically, if you retire from the City of New Orleans, then you must receive the maximum cash payout for terminal annual and sick leave. The terminal sick leave that New Orleans can't pay you must be converted to MPERS retirement credit (up to the amount that would provide you a maximum benefit equal to one hundred percent of your average final compensation). The maximum amount of sick leave that can be converted to retirement service credit is 272 days, which converts to 1.1 years of service credit. The actual amount that you must convert depends on how many sick leave hours you have at retirement. New Orleans must pay MPERS for the entire cost of the conversion in order for credit to be granted.
MPERS expects the City to file a suspensive appeal, which will delay the application of Judge Johnson's judgment. However, MPERS expects to prevail in the long run.
Also, the judgment was a partial summary judgment that did not address the prescriptive period (statute of limitations) issue. If MPERS prevails, the courts will have to decide how far the City must go back to rectify the situation.