Thursday, January 27, 2000
Lebanon ponders suit over buyouts
$486,000 in payments questioned
BY CINDI ANDREWS and RICHELLE THOMPSON
The Cincinnati Enquirer
LEBANON — The city will likely file a civil lawsuit against three former officials to freeze nearly $500,000 in early retirement buyouts, City Attorney Mark Yurick said Wednesday.
City Council on Tuesday ordered a city investigation and authorized Mr. Yurick to seek the return of $486,000 Lebanon paid into the Public Employees Retirement System (PERS) on the employees' behalf.
“If it's found that these employees did something wrong, the chance of us getting that money back is really rather good,” Mr. Yurick said.
Lebanon asked the Ohio Ethics Commission last week to investigate the buyouts to former Auditor Debbie Biggs ($110,565), former City Attorney Bill Duning ($206,302) and electric department Deputy Director Robert Newton ($169,549). All retired Dec. 31.
The commission's investigation, which could take six to nine months, will determine the legality of the buyouts, Councilman Mark Flick said. The legislation he sponsored Tuesday is aimed at quickly determining who is eligible for the benefits and at recouping the city's money.
“We have to set a precedent” by determining eligibility for the program, he said. “There's a whole bunch more people in the building” ready to retire.”
Council members say they were unaware that legislation they unanimously approved Dec. 28 included the transfer of at least $450,000 to the electric department to pay for the buyouts. According to documents obtained by The Cincinnati Enquirer, Mrs. Biggs and Mr. Newton approved the buyouts, even though the city's contract with PERS dictates that only electric department workers are eligible for the plan. Only Mr. Newton worked directly for the department.
Mrs. Biggs and Mr. Duning have said they could receive the buyouts because a portion of their work was for the electric department.
Mr. Duning said Wednesday he welcomes an investigation.
“I fully support a review of my employee application under the Lebanon retirement incentive plan, and I believe the review will verify compliance with the plan,” said the city's former attorney. “I believe I am eligible.”
Mrs. Biggs declined to comment Wednesday. Mr. Newton did not return calls.
The buyouts in effect added five years to each of the three employees' length of service, increasing their pensions by as much as $5,800 a year for the rest of their lives.
The pension is determined by a complicated formula based on years of service, age and final salary, said Craig Scholz, PERS supervisor of benefit maintenance. Calculations show the buyouts will benefit Mrs. Biggs, 51, by about $5,800 a year on top of her existing pension. The buyouts inflated the pensions of Mr. Duning, 56, by about $5,000 annually and Mr. Newton, 52, by about $4,170 a year.
Besides ordering an investigation, council also is considering paying for an independent audit of the city's finances. State audits over the past few years have found only minor problems. But the state's purpose is to make sure the city is complying with Ohio law, Councilman Flick said.
He is not certain a state audit would have picked up on the buyouts because cities frequently transfer money from one fund to another.
An independent audit by a private agency may be able to look for red flags in the budgets, as well as provide long-term projections of the city's finances, Mr. Flick said.
Residents at Tuesday's council meeting offered their thoughts on how to prevent a similar situation from cropping up again.
“Why not publish all proposed ordinances in their entirety in a local weekly, so they can be inspected by more eyes?” suggested Gary Casimir. “We can help you. We're not here to tear down city government.”
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