When Mark Schmidt retired from Portland Fire & Rescue in June 2012, shortly after picking up his 35-year pin, he didn't actually go anywhere.

In fact, although Schmidt began collecting a $132,812 annual pension upon retirement, he returned to work immediately in a position newly created by his longtime colleague, then-Fire Chief John Klum. 

Schmidt's new duties included most of his old duties. But now he's getting paid twice to do the same work—at a total cost to city taxpayers of $272,514 a year. 

Firefighters protect their pay and benefits nearly as zealously as they protect public safety, but even the union is calling foul on Schmidt's gig.

"It seems contradictory to what we're trying to do as a bureau," says Lt. Alan Ferschweiler, president of the Portland Firefighters Association. "If we could have a firefighter in that position instead of a retiree, that would get another person working."

As the city draws up its 2014-15 budget, no bureau has more riding on the outcome of this year's allocation of city resources than Portland Fire & Rescue. 

Mayor Charlie Hales campaigned on bringing fiscal discipline to a bureau that for a decade enjoyed the protection of then-City Commissioner Randy Leonard, a retired firefighter. 

Last year, in the first budget after Leonard's retirement, the city announced a previously unthinkable move—that 26 firefighters would lose their jobs due to budget cuts. 

Yet those cuts never happened. In December, the bureau secured a federal grant that preserved all 26 positions for two years. Now, the bureau wants to restore those positions permanently and add three positions.

Fire Chief Erin Janssens' success in securing that funding depends on her ability to convince the City Council that her embrace of reforms—such as sending two-person SUVs rather than four-person fire rigs on routine medical calls—is more indicative of the bureau's culture than Schmidt's double-dipping.

Prior to his retirement, Schmidt, 59, rose to division chief, the bureau's second-highest rank, topping out at an annual salary of $145,745. His primary focus in his final years was to integrate a new radio, dispatch and record-keeping system the fire bureau had purchased with a $72 million bond measure voters passed in 2010. 

As Schmidt moved toward turning in his helmet in spring 2012, Klum sought an exception to a hiring freeze the city then had in place.

Klum received permission to create a new position that would report directly to him. The job required deep knowledge of the fire bureau and specific expertise with the bureau's communication and record-keeping systems. 

"It is crucial that PF&R maintain a single point of contact with the background and expertise to make high-level decisions," Klum wrote in a letter dated April 17, 2012. 

The job opening was posted citywide, but there was only one applicant—Mark Schmidt. 

Schmidt retired as a sworn officer in June 2012 and immediately returned as a civilian employee. He benefited from reforms intended to reduce the expense of the Fire and Police Disability and Retirement system by gradually ending that system and placing new employees in the state's Public Employee Retirement System.

Because Schmidt was retiring from one system and joining another, he could double-dip, earning a second paycheck and full medical and pension benefits. 

Schmidt effectively created that opportunity for himself by failing to train a replacement to implement the bond-funded projects.

He says the bond work was more complex than anticipated.  

"I didn't have the experience of managing a project like this," Schmidt says, "so I became the technical person myself."

Schmidt denies that his friendship with Klum had anything to do with his getting the retirement job. He says if maximizing earnings was his goal, he would have retired from Portland after 30 years and taken a job with another metro-area agency. 

“If I’d wanted to, I’d already be vested on a second pension,” Schmidt says. 

Janssens, Schmidt's boss, defends him but not the events that led to his current position. 

"Mark does bring an enormous expertise to a high-profile project," Janssens says. "But since I've become chief, succession planning is something we've worked really hard to address."

Fire Commissioner Dan Saltzman's bureau liaison, Matt Grumm, says Saltzman only recently learned about Schmidt's double-dipping. 

"This situation is a vestige of the past that Dan would not have approved if he'd been in charge of the bureau," Grumm says. "And it will not happen in the future.”