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Here’s The Scoop … Former Town Manager Esther Colon …Doing The Right Thing … Or …. You’ll Be Hearing From My Lawyer ? ….

5 DAYS ….TO…..

Dear Readers … The Interim Town Manager following the direction of the Commission sent certified letter on May 28th to former Town Manager Esther Colon…asking for her to reimburse thew Town for over payments received by her in her lightning fast payout…It included the below letter and a “detailed explanation of how the Town made this determination” which was previously posted on this site as well as contained in the backup for the last RegularCommission meeting (still on the Town website …until Friday ….under the Town Manager Report http://www.lauderdalebythesea-fl.gov/town/backup2009.htm) …It was discussed on the dais resulting in the Commission giving direction to Ms. Hoffmann with a 5-0 vote to pursue the return of the monies from the former “beancounter”…

Now we will see if the former Town Manager will “do the right thing”…or will get lawyered up to keep the extra bucks the Town determined she was not entitled to…Former Town Manager Colon has until June 7th at 5 p.m … We should know by the time the Int.Town Manager gives her June 8th, 2010 Town Manager Report at the Regular Commission meeting if the former Town Manager decided her “beans” were indeed off or if she is going to play hardball putting the ball in the Commission’s court …pun intended …

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“May 28, 2010

By US Certified Mail
Ms. Esther Colon
xxx xxxxxx
Miami Lakes, FL. 33014
Dear Ms Colon:
The purpose of this letter is to advise you that the Town of Lauderdale by the Sea has
determined that you were overpaid in the amount of $69,308.62 in the payouts that were made
by direct deposit to you upon your termination from the position of Town Manager and to ask
that you reimburse the Town for those funds paid in error as soon as possible The amounts
overpaid can be summarized as follows:
Deferred Compensation $7,499.96
Vacation Leave $18,593.56
Sick Leave $43,215.10
Total $69,308.62

I have attached to this letter a very detailed explanation of how the Town made this
determination so that you fully understand how we came to these conclusions.

As a former Finance Director I know you understand the necessity that the Town be reimbursed
these funds paid in error and ask that you remit the $69,308.62 to the Town by 5 p.m. on
Monday June 7th 2010. Please consider this a formal demand for payment.

Very Truly Yours,
Constance Hoffmann
Interim Town Manager
Enc (1)
Cc :Mayor and Town Commission
Susan Trevarthen Town Attorney
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ATTACHMENT TO LETTER TO ESTHER COLON EXPLAINING REQUEST FOR
REIMBURSEMENT OF OVERPAYMENTS

DEFERRED COMPENSATION: One of the direct deposits made into your bank account by
the Town in the week in which you were terminated was for compensation in the gross amount
of $169,276.84. According to the Town’s HR & Risk Manager, that payment was comprised of
three calculations. 1)$160,541.94 for one year salary in severance pay 2)$7,499.96 for
deferred compensation and 3) $1,234.94 for wages for Monday, April 19 and Tuesday, April 20
2010.

The Town has concluded that you were not entitled to receive the $7,499.96 in deferred
compensation under the terms of your contract. Paragraph 140 of your contract stated that “In
addition to base pay TOWN agrees to pay $7,500 annually into the ICMA-RC or National
Employees Trust on the employee behalf in equal proportional amounts each pay period….”
Nowhere in the contract does it state that deferred compensation is to be included in, or added
to your severance pay.

ACCRUED VACATION LEAVE PAYOUT: You were also compensated in the gross amount of
$41,479.25 by the Town for 537.41 hours of accumulated vacation leave We acknowledge that
your contract provided for payout of “all accumulated vacation leave” if you were terminated, but
it is our determination that you were compensated for more vacation leave hours than you were
entitled to under the terms of your contract. The net impact of our findings on vacation leave
indicates that an overpayment of $ 18,593.56 was made to you for accumulated vacation leave.

Since there are several issues regarding your vacation leave accrual that you may have
questions about, I have explained in detail in the paragraphs that follow various issues that
relate to those accruals.

We understand that you were not subject to the cap established in the personnel rules
on accumulated vacation leave of 240 hours once you became Town Manager because
paragraph 110 of your contract stated that “Except as herein provided, TOWN
MANAGER shall receive the same… benefits as are granted to other managerial non
union employees of the TOWN, without cap.”

Your contract provided that you would receive “15 days vacation days added to her
current bank of vacation days upon commencement of employment. Thereafter she
shall accumulate vacation leave as provided under the rules and regulations for other
managerial employees of the Town including payout fore unused vacation leave upon
termination.” We have verified through a review of the payroll records that the 15 days
of additional vacation leave granted by the contract was added to your accrued vacation
leave.

We determined that the Town has no policy that managerial employees shall accrue
vacation leave in a manner different from non-managerial employees. The Town’s
Personnel Policy Manual provides that an employee with up to 10 years of service with
the Town will earn 10 days annual leave (vacation) per year. Since you began
employment with the Town in June of 2000, and your contract stated you would accrue
vacation in accordance with the rules and regulations for other managerial employees,
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you should have been accruing 10 days of vacation per year. However a review of
Town records revealed that you began to accrue vacation leave at the rate of 20
vacation days per year from the time you were appointed Town Manager. We found no
record that the Town Commission authorized you to receive 20 vacation days per year
subsequent to approval of your contract. It appears that the over accrual occurred
because the Risk Manager failed to reset the vacation accrual rate the ADP system
to reflect the proper accrual rate when you were placed into the Town Manager job
classification. Former Town Manager Robert Baldwin was expressly authorized by the
Town Commission to receive 20 days vacation per year so the system was probably set
up to accrue at that rate. Our research indicates that you were paid $18,304.89 for
237.16 vacation leave hours (77 pay periods x 0.38 hours) that you were not entitled to
accrue.

A detailed evaluation was made to compare the Town’s leave slips and time sheets
record for you to the ADP payroll system records since your appointment as Town
Manager and we found some discrepancies in which time off recorded on the timesheet
and leave slips was not properly entered in ADP. As a result we have determined
you were overpaid by 3.74 hours- $288.67 on vacation accruals in addition to the over
accrual of the 237.16 hours previously identified.

ACCRUED SICK LEAVE PAYOUT: You also received compensation in the gross amount of
$56,293.88 for 100% of the value of 729.35 hours of accrued sick leave. The Town has
concluded there were two errors made in that calculation 1) the payout should have been
made at the rate of 25 of accrued sick leave and 2) the total number of accrued sick leave
hours exceeded what you were entitled to under your contract and the Town policies
Before addressing the issue of rate of payout it was necessary to determine whether the
number of accumulated sick leave hours used to make the calculation was correct. I have
provided information on how we determined what was the proper amount of accrued sick leave
in the paragraphs that follow so that you can understand how we came to the conclusions we
did.

Accrual Cap Issue: We acknowledge that once you became Town Manager you were
no longer subject to the 480 hour cap on accumulated sick leave established in the
Personnel Policy Manual because paragraph 110 of your Town Manager contract
exempted you from the cap.

In the last payroll (5/20/2007) before the effective date of your appointment as Town
Manager (5/24/2007), the Town’s records show you had 527.85 hours of accumulated
sick leave which put you over the cap you were subject to at that time by 47.85 hours It
is the Town determination that your sick leave accrual should have been reset to 480
hours (the cap) concurrent with your appointment as Town Manager at which point you
could begin to accrue beyond the cap.

Credit for 10 Sick Leave Days: Section 10.3 of your contract provided that you would be
credited with “10 sick leave days added to her current bank of sick leave upon
commencement of employment Thereafter she shall accumulate sick leave as provided
under the rules and regulations for other managerial employees of the Town, including
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payout for unused sick leave upon termination.” You were granted the additional 10
days during the pay period ending June 15, 2007.

Verification of Sick Leave Accounting: Following the same process as the vacation
leave a comparison was made of your leave slips and time sheets to the ADP payroll
and accrual records. In some cases there were discrepancies where time off recorded
on the timesheets/leave slips was not always properly updated in ADP. A reconstruction
of your sick time taken and earned from the date of your appointment as Town Manager
to your dismissal was done and revealed that you were not credited with 3.7 hours of
sick leave that you should have received.

As a result of these findings we concluded that your accumulated sick leave total at the time of
your termination should have been 677.80 hours (729.35 – 47.85 + 3.7), not the 729.35 hours
used in the calculation of your payout.

The second significant issue on your sick leave payout is the rate at which the payout was
made. As noted earlier it is the Town’s determination that the payout should have been at the
25% rate not at 100% Section 10.3 of your contract provided that “she shall accumulate sick
leave as provided under the rules and regulations for other managerial employees of the Town
including payout for unused sick leave upon termination.” The Termination section of your
contract states that upon termination you shall receive compensation for “an amount for
accrued and unused sick leave.” It did not state that you would be compensated for all accrued
and unused sick leave, as it does in the case of vacation leave. That is consistent with the
Town’s Personnel Policy Manual that provides for full payment of vacation leave upon
separation from employment but provides employees shall be compensated for 25% of their
accumulated and unused sick leave upon separation from the Town in good standing.

Given that your accumulated sick leave hours should have been 677.80 you should have been
paid only $13,078.78 for sick leave in your final payout (677.80 x .25 = 169.45 x 77.1837). You
actually received $56,293.88, so you were overpaid by $43,215.10 for sick leave.

3.

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more to come…..

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