Friday, January 21, 2000
Lebanon buyouts questioned
3 got close to $500,000 at retirement
BY RICHELLE THOMPSON
The Cincinnati Enquirer
LEBANON — Lebanon officials are asking the Ohio Ethics Commission to investigate whether three former top city employees improperly received nearly $500,000 of city money as early-retirement buyouts.
Two of the employees used a program that allows electric department workers to receive buyouts for early retirement, even though they were not electric department employees.
The three employees retired Dec. 31. According to documents obtained by The Cincinnati Enquirer, checks were cut from the $15 million electric department budget for city au ditor Debbie Biggs for $110,565, city attorney Bill Duning for $206,302 and deputy director of the electric department Robert Newton, $169,549,
Mr. Newton and Mrs. Biggs approved their own buyouts.
“You can't as a city official authorize your own paycheck,” Councilman Ron Pandorf said.
“If I'm a taxpayer, am I concerned about this? Yes,” said Lebanon City Attorney Mark Yurick, who replaced Mr. Duning. Even if there is no legal or ethical problem with the buyouts, “we might not like it. And in this case, we definitely don't.”
He met with the Warren County prosecutor, who recommended sending the information to the Ohio Ethics Commission in Columbus. The city did so Thursday.
Mrs. Biggs said she and Mr. Newton approved the buyouts because the city auditor and city attorney did significant amounts of work for the electric department.
Mrs. Biggs and Mr. Duning said council agreed when it approved a measure to transfer funds so the buyouts could be paid. But council members said they weren't aware of the requests.
Mr. Newton could not be reached.
Lebanon's early retirement incentive plan, overseen by the Public Employees Retirement System of Ohio (PERS), dic tates that only employees of the electric department are eligible to participate.
Throughout the state, cities rely on the buyout plan to reduce overall costs, said Craig Scholz, PERS supervisor of benefit maintenance.
“The idea is to get rid of those who are more top heavy in terms of salary,” he said, “and hire somebody younger and at a lower salary.”
Mrs. Biggs, Mr. Newton and Mr. Duning were three of the top five highest paid of Lebanon's 120 employees, earning between $55,000 and $87,000. Each had served the city for at least 27 years.
Because the city of Lebanon stipulated the plan was available only to electric workers, an employee would have to be paid through the electric department payroll to be eligible for the early retirement buyout plan, Mr. Scholz said. A complex system involving service years and pay is used to calculate the buyout figure.
While Mr. Newton was paid through the electric department, Mrs. Biggs and Mr. Duning's salaries came from the general fund.
Yet Mrs. Biggs said her position and the city attorney's should be classified as part of the electric department.
“I'm their chief financial officer. I handle payroll and take care of their books,” she said. “I even sign their (early retirement incentive) plans.”
While Mr. Duning said a substantial amount of his time was spent representing the electric department, he applied for the buyout “knowing that others would make that decision (of eligibility).”
Of whether Mr. Duning considered himself an electric department employee, he said: “It doesn't matter what I think; it matters what others think. What is important is that others approved my application.”
It wasn't clear Thursday whether Mrs. Biggs or Mr. Duning also are drawing from the city's regular pension fund.
Since the buyout program was implemented in 1995, four city employees qualified for and received early retirement buyouts, according to public records. All were electric workers paid out of the electric department budget, which is primarily funded by utility revenue.
As the city's fiscal officer and electric department head, Mrs. Biggs and Mr. Newton signed off on applications for the buyout — including their own.
City Manager Jim Patrick said that in their cases, he should have been asked for final approval or council should have been requested to pass a resolution.
The Ohio Ethics Commission reviews such requests and votes whether to pursue it, Executive Director David Freel said. The 50 to 60 investigations the commission conducts each year average six to nine months.
The commission has several options, including to report no finding, issue public reprimands, demand restitution or recommend the local prosecutor's office press criminal charges, Mr. Freel said.
Although Mr. Scholz called Mrs. Biggs and Mr. Duning's claims “unusual,” he said the request did not raise red flags at the state agency. The role of PERS is not as a watchdog, he said.
“It's the city's money. They're the ones who implemented the plan,” Mr. Scholz said. “How they administer the plan is up to them. They're the ones who would be open to any liability as far as mismanagement is concerned.”
At a Dec. 28 meeting, city council unanimously passed what was regarded as general housekeeping legislation. The measure, sponsored by Mrs. Biggs, included the transfer of at least $450,000 into an electric department fund to have enough money to pay the buyout.
When Mr. Reinhard asked about the appropriations, Mrs. Biggs said they were for “the early retirement plan in the electric department,” according to a tape of the meeting. No details of who would receive the buyout or the amounts for each employee were discussed in the open meeting.
Councilman Mark Flick requested Mr. Yurick investigate the matter after reviewing the legislation.
At the least, Mr. Patrick said, the situation points out the need for city officials to tighten the buyout procedure and implement better checks and balances.
Mr. Pandorf, the councilman, conceded the appropriations measure “got lost in the shuffle.” The board was trying to finish the 2000 budget and overlooked the appropriations, he said.
“We shouldn't let things like this happen. It's something that got by me, sorry to say.”
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