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Here’s The Scoop … Overpaid By $69,308.62 … No Wonder She Was Smiling!…

$$$$$$$$$$$$$$$$ ……

Dear Readers… For the Commission meeting on Tuesday May 25, 2010 Interim Town Manager Connie Hoffman provided the Commission with a  Summary of  her 4 week inquiry into the payouts made to former Town Manager Esther Colon…

She states it is now “essentially complete”  and that “the issues of the payout were complex and due to other Town business limiting her time it required her to engage the services of an experienced municipal finance professional to analyze the leave accruals, review personnel files of many employees with regard to prior actions and precedents, examine and extract data from payroll records, etc”…Ms. Hoffman then looked into “the development of Colon’s contract, reviewed minutes and did other research.” She interviewed HR/Risk Manager Kathy O’Brien to get her explanations. Ms. Hoffman consulted throughout her inquiry with the Town Attorney Susan Trevarthen and the Labor Attorney in the Town’s law firm as well…She ended her opening to the Commission by stating the Town Attorney Susan Trevarthen reviewed the “Detailed Report” and ‘concurs with the conclusions reached.”…

Below portions of the contents of the Interim Town Manager’s “Summary Of Findings” and the “Detailed Report On Issues Relating To Esther Colon” with commentary…

SALARY…BASE OR NO BASIS?….

Summary-1.Former Town Manager Esther Colon “received 5 separate deposits in the payroll that was processed for the pay period ending April 23, 2010.  One deposit was for her normal biweekly wages. Excluding  her wages for that pay period (Deposit #1), Colon’s final payout in terms of gross compensation was $296, 188.33 and was made in four separate deposits as follows:”

A. Deposit #2 in the gross amount $169,276.84… was comprised of three calculations

a. $169,541.94 -one year’s severance pay

BC- In the “Detailed Report” (pg. 8-9) it shows that Colon took a %5 increase in 2007/2008 ($146,743.00-$152,172.45) and a 5.5% increase in 2008/2009  ($152,172.45-$160,542.03) despite no record of any approval from the Commission’s at the time approving a COLA increase for herself or staff …A look at some Public Records Requests for Department Heads show they too received the increases… The Commissions did not take increases for those years or the following year 2009/2010 when Colon took no increase ..only 2.5% to “line employees”…

Summary- Analysis – Colon’s contract provided for one years severance pay…That amount was $160,541.84 according to the contract

JOBBING THE DEFERRED COMPENSATION….

b. was also received $7,499.96 for one year’s worth deferred compensation ..Town Manager Hoffman and the Town Attorney concurred the contract does not include this along with the salary… An interview with Human Resources/Risk Manager Kathy O’Brien (who we hear has been on paid leave soon after the termination of former Asst. Town Manager /Interim Town Manager Olinzock and the hiring of Interim Town Manager Hoffman) “indicates that O’Brien thought deferred compensation was part of the salary.”

BC- In the “Detailed Report” (pg. 2) “In looking back at the payroll records for Ms. Colon, we determined that she received direct compensation for what was supposed to be the Town’s contribution to her deferred compensation in the amount of $288.46 bi-weekly, beginning with the pay period ending 5/4/2007 and continued through April 2010. Colon did make voluntary contributions to deferred compensation that more than offset that amount, but the way this was handled was neither consistent with the terms of her contract, nor the way a municipality’s contributions to a deferred compensation account are normally handled. The impact of paying the deferred compensation directly to Colon is that it inflated her income for the calculation of her retirement benefits under the Florida Retirement System, and it increased the Town’s contributions to the Florida Retirement System.”

BC- This is only the beginning of problems that arose from HR/Risk Manager O’Brien …not too surprising after this writer obtained her Employment Agreements (future post) that did not include any Employment Agreement for promotion to this position and has been requested again today..)…

PAID FOR HOURS AFTER TERMINATION….

Summary-c. Colon received wages for April 26 and April 27th 2010

BC- Ms. Colon was terminated on April 20, 2010 and received wages for the 26th & 27th?….

WHO NEEDS A VACATION ….

Summary-Analysis-Deposit #3 in the gross amount of $41,479. 25 was noted by HR/Risk Manager O’Brien as compensation for 537.41 accumulated vacation leave at a correct hourly wage  …but “The net impact of our findings on vacation leave indicates an overpayment of $18,593.56 was made to Ms. Colon for accumulated vacation leave”… “Ms. Colon accrued 20 annual leave days per year since being appointed Town Manager, when she was only authorized by the Personnel Policy Manual to accrue 10 days per year. As a result, Colon was compensated for more than 200 hours of vacation leave in her final payout than she was entitled to accrue.”

BC- The error “appears” to have been made by..you guessed it HR/Risk Manager Kathy O’Brien who “failed to reset the accrual rate for the Town Manager position in the ADP payroll system when Colon was appointed to the position, so she (Colon) accrued her vacation time at a higher rate that had been authorized for the previous Town Manager (Baldwin)…The Interim Town Manager states later (pg. 4) in the “Detailed Report” ..”It is difficult to understand how neither O’Brien nor Colon realized over a three year period that the accrual rate was double what it should have been”..Also while Colon was below the cap for pre-Town Manager hrs…(141.10 hrs.)…documentation of the Town records show discrepancies with leave slips and time sheets when compared to the ADP payroll system…those discrepancies needed to be discussed with O’Brien and the consultant felt they were not significant after her explanations were found satisfactory…

TAKING LOTS OF VITAMIN C…..

Summary-Deposit #4 was in the gross amount of $56,293.88 and noted by HR/Risk Manager O’Brien to be for 729.35 hours of accumulated sick leave at her full hourly rate…”In other words, Colon was compensated for 100% of her accumulated sick leave.”…

Summary-Analysis- “We have determined Ms. Colon was overcompensated for accrued sick leave by $43,215.10”..Interim Town Manager Hoffman stated the 1st issue was Colon was allowed to accumulate more sick leave than the Town’s Personnel Policy Manual allowed before becoming Town Manager because …HR/Risk Manager Kathy O’Brien’s “incorrect interpretation” that the sick cap was not to be applied to sick leave accruals, but only to the payout of sick leave upon separation from Town service. “…When Colon became Town Manager her 480 hr. cap imposed on other employees (per manual) would not apply to her ..(due to 10.1 in her contract…prev. posts..”no cap”)”therefore , the HR/Risk Manager paid her for all accumulated sick leave.”…The Town Attorney and the Interim Town Manager agreed that Colon was subject to the cap prior to her appointment as Town Manager….Interim Town Manager Hoffman then states “the sick leave accruals were overstated at the time of her appointment and, as a result, at the time of her dismissal”…

BC- in the “Detailed Record”… (pg. 2)  it states that in the last payroll (5/20/07)before her Town Manager appointment (5/24/07) she was over the cap (480)by 47.85 hrs… and had 527.85 hrs. of accumulated sick leave …The Interim Town Manager and Town Attorney concur that her accrual should have been reset to 480 with her appointment to Town Manager and the 47.85 hrs should have been removed… (pg. 5) also states “sick leave accruals were not accurately tracked for Colon in the ADP system for the period June 2007 thru April 200 When Colon questioned the accuracy of her accruals in 2009, reconciliation was done by the HR/Risk Manager and a retroactive adjustment of +272.15 sick leave hours was made in May 2009.” The consultant looked into it and while the adjustment was correct it was still wrong due to the starting figure being over the cap….Again, just as the inquiry found with the vacation leave  (pg 6) there were discrepancies when comparing leave slips/ time sheets to the ADP system…time sheets/ leave slips was not always properly updated in ADP…in this case the former Town Manager was not credited with 3.7 hrs of sick leave..Colon’s” accumulated sick leave total at the time of her termination should have been 677.80 hrs , not 729.35 hrs.”

WHY NOT ROUND IT OFF TO 100%….

Also, in the summary was the issue of Colon being compensated at 100% of her accrued sick leave in her final payout instead of the Personnel Policy Manual’s 25%..it was incorrect..

BC- in the “Detailed Report”… (pg 6) it states “Section 10.3 of Colon’s contract provides 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.”…Once again (running theme here…folks) HR/Risk Manager (Colon “Galpal”) Kathy O’Brien screwed up by stating she thought the Commission and the Town Attorney’s wanted her to follow section 5 of Colon’s contract and she did not “consider” other sections of the agreement (10. section) or the Personnel Policy Manual in her calculations…She also stated (pg.7) that she did not notice in Colon’s contract that there was no “all” before  the sick leave payout as there was for the vacation leave subsection…The Interim Town Manager and Town Attorney agreed that the sick leave payout for Colon should have been at the 25% and Colon should have been paid $13,078.78 not $56,293.88…Colon was overpaid by $43, 215.10 for sick leave…

WHAT ARE MENTORS FOR IF NOT FOR $$$$$$$……

Summary-Deposit #5 in the gross amount of $29,138.36 was for 377.53 hrs of compensation time at the rate of $77.1836 per hr. …It states Colon’s contract provides for “an amount for accrued compensatory time accrued prior to appointment as Town Manager.”

Summary-Analysis-“The payout for her accumulated comp time was provided in her contract and was calculated at Ms. Colon’s ending hourly rate.”

BC- In the “Detailed Report” (pg. 7) it states they “checked the Town’s files and determined Colon received written approval from the previous Town Manager Bob Baldwin to book 377.52 hours of compensatory time on April 20, 2007, days before the effective date of her appointment as Town Manager. “…It goes on to state there was a memo from Colon to Baldwin where she stated she had accrued time from Oct. 2001-April 20, 2007and attached a detailed accounting of the comp time by pay period for 6 yrs….it showed “she routinely took and added to her comp time a “bank” during those six years. However, none of that comp time was documented in the ADP payroll system as the ADP accrual Report For Active Employees for the pay period ending March 23, 2007 indicates a zero balance for comp time for Ms. Colon.”… The Personnel Policy Manual gives the Town Manager  (sec. 4) “the authority to grant compensatory time off to “administrative and professional employees who work more hours than the standard work week established for their position.” …That means the Town Manager (Baldwin) could authorize time off, not payment for those hours….According to the Interim Town Manager since the former Commission approved Colon’s contract with that subsection for compensation the Town is obligated …It goes on to state the Manual for comp time for professional employees needs to be revised…This writer respectfully disagree with the  “obligation” of the payout…and agrees with an overhaul for the whole Policy manual including this…

COLON SITTING PRETTY WITH NO DIRECTION FROM TWO COMMISSIONS….

Summary-2. “Colon’s Salary at time of termination- Colon’s salary was increased twice since it was set at the time of her appointment as Town Manager by cost of living adjustments granted to all employees in the budget.”

Summary-Analysis- “These raises were consistent with cost of living adjustments given other employees at the same time. The Town Commission did not specifically vote to give those raises to Ms. Colon, but it appears that, historically, approval of the budget which contained funds for cost of living adjustments was considered to be authorization by the staff to process a salary increase for the Town Manager.”

BC- In the “Detailed Report” (pg.  8 – 9) as previously posted above the Town Manager  and her staff took a 5% increase in 2007-08/ and a 5.5% increase in 2008-09 without the direction or approval of the Town Commission!… This is akin to the former Town Manager’s practice with the Auditors in 2008 (prev. posts) when she “informed” the new Commission of her extending the agreement with Rachlin for 3 yrs (giving them old backup, while in receipt of the new $200,000+ price tag) while sending the Auditor’s a signed letter stating the Commission approved it… (she should have been terminated then)… It was quite shocking to read this portion of the report and reminded this writer of the former Town Manager’s antics regarding her contract when Readers will recall (sorry to use the standard “red flag” Colon line) last year the Town Manager “waxing on” about a 2,5% increase for her employees with the implication they had not seen a raise in a long time …(the cuts and 30-hr. employees “blarney”) …as Colon added top staff would forgo theirs…Now we know why…(salaries for her Loyal “Peter Principal” Staff to come in future post)…While it is not recommended to get payment back from Colon..this writer believes this too should be repaid by her and other employees she overpaid …

COLON’S PARTING SHOT AT LBTS ….

Summary-3.  “Pre-payment of Benefits- Colon directed that deductions be made from her severance payout to prepay two years of premiums for health insurance, vision care, dental insurance, life insurance , and disability insurance.”

Summary-Analysis- “This issue is still under review by the Town Attorney and is discussed more detail in the full report.

BC- In the “Detailed Report” (pg. 9-10) the Interim Town Manager states this is “rather complicated”… “The ADP payroll sheets show a voluntary deduction from Colon’s severance deposit of $10,626 to cover 24 months of health insurance at a single coverage rate of $444.75/month, $208.08 for dental coverage which is only sufficient for 18 months (at 11.17/month for Dental coverage), $110.16 for 24 months of vision coverage at a rate of $4.59 a month, and $825.60 for two years of life insurance at the current rate of $34.40 per month. ”

“Colon requested in a letter dated April 20, 2010 (the day she was terminated) to the HR/Risk Manager that two years of health, lie, dental and vision insurance premiums be withheld from her final check for health, life, dental and vision coverage. She states in that letter that she was providing her Florida Retirement System documents to Ms. O’Brien under a separate cover and, “Therefore, I am requesting the same coverages afforded all other FRS retired employees” she notes that “Upon notice of any change in premiums from the Town I will remit any funds due to the Town before the premiums are due.” In another document she submitted on the day she was terminated, Colon states “my effective retirement date is June 25, 2010 at 5:01 pm.” (She was terminated April 20, 2010)…

It went on to state …”The HR/Risk Manager confirms Ms. Colon gave her application for retirement, but those files cannot be found. We  have advised Ms. Colon in writing that her retirement application papers cannot be found and advised her to resubmit them.”

“Retired employees are allowed “the option of continuing the Florida Municipal Heath Trust Fund Insurance Plan at their own expense.” according to Town Resolution No. 1222 adopted in January 1994. There is no policy, however, that provides for the continuation of life insurance benefits or disability benefits for any employees after the leave the Town’s employ.”

BC- It gets worse…in a meeting with Kathy O’Brien “she indicated there was a precedent for allowing an employee to prepay various insurances upon separation fro the Town”…O’Brien also “clarified that she determines an employee is a retiree “when they fill out the paperwork.”

Interim Town Manager Hoffman stated the following “There are several issues here- whether Colon should be considered a retiree, whether the Town has been incorrectly applying the 1994 resolution by allowing individuals to continue benefits beyond specific health insurance referenced in that resolution, how we have handled other employees in similar situations.”

BC- So which is it?…Was Colon terminated and entitled to severance… or…did she retire and therefore is not entitled to severance?…. According to the “Detailed Report”… “Colon requested in a letter dated April 20, 2010 (the day she was terminated) to the HR/Risk Manager my effective retirement date is June 25, 2010 at 5:01 pm.”…According to HR/Risk Manager Kathy O’Brien “clarified that she determines an employee is a retiree “when they fill out the paperwork.” … If there is some possible way to get retirement dated after you are terminated how does Colon get to the June 25, 2010 5:01 retirement she stated without using a “BANK” of her accrued leave days?…The “Detailed Report” shows she was paid for”ALL”…This portion of the “Detailed Report” along with the overpayment to the Florida Retirement System should be fully investigated for she may owe much more than $69,308.62 to LBTS with this and the COLA increases not voted for by the two Commissions and the Compensation collected when there should have been no pay involved for that type of compensation and her comp. time showed zero….

BC- in prev/ future posts this writer will reveal the “Do as I say, not as I do” Employment Agreements former Town Managers Bob Baldwin and Esther Colon gave their “At Will” Employees … which will surely show “how we have handled other employees in similar situations.”… (Wake up “Loyal” employees)….OUCH!…

Summary-The Interim Town Manager finished by stating despite the need to have further research into this …she did not want to hold up the rest of the inquiry information being presented…

The Summary ended with a “Table” showing the over payments … $7,499.96+$18,593.56+ $43,215.10=$69,308.62 …which was followed by Ms. Hoffman stating “If the Commission concurs with the findings it is recommended the Town Manager and Town Attorney be authorized to request the return of the over payments documented above from Ms. Colon.”

THE “DIRTY LITTLE SECRET” CONTINUES…

In the “Detailed Report (pg. 10) “Salary Rate On Which Payouts Were Based ” “It is the Town Attorney’s opinion that the payouts for comp time, accrued vacation, and sick leave should have been calculated on the basis of or her rate of pay on her termination since there were no specific provisions in her contract dictating otherwise. The Town has historically made such payments on the rate of pay at the time of the employee’s separation from Town service.”

BC- In previous posts beginning with the day of Colon’s termination this writer has written about this “dirty little secret” of getting accrued payouts at inflated dollars upon leaving employment in municipalities!… The Commission has to put a stop to accrued hours both vacation and sick rolling over to the following years and being paid out at top dollar upon the employee’s departure from LBTS!….

WHAT ABOUT THE COLON “LOYALISTS”…..

BC- Why no input from Interim Town Manager John Olinzock? …Town Attorney Trevarthen included in her Public Records Request letter  dated April 23, 2010 (pg. 2) that Olinzock  “assured me that the payout was properly calculated, and that you personally authorized and checked the validity of the payout documentation on Wednesday morning.”..The letter included the questions that have been answered above concerning sick leave and the rules and regulations for other managerial employees. …It also stated that being advised orally of the number of hours of sick time paid out without the calculation of that number to reflect the amount due under the rules and regulations (Personnel Policy Manual) and not being advised of the net dollar value of any of the components of the payout left the Town Attorney unable to do the job the Commission directed them to do….

What is not discussed but needs to be is any charges made against former Interim Town Manager/ former Asst. Town Manager John Olinzock for the role he played in the distribution along with HR/Risk  Manager Kathy O’Brien and Director of Finance Kaola King … (more on what their own Employment Agreements contain to come) stupidity and being put in a job above your abilities by the recipient of these over payments  (in this writer’s opinion) should not lead to a simple parting of the ways termination with no accountability for actions made while employed by the Town in that position…

While we’re at it ..what about former Town Manager Bob Baldwin…What did the payout documents show for his $150,000+?  According the now infamous HR/Risk Manager O’Brien, Baldwin did receive compensation for the 10 weeks he was in Lake Worth according to her July 2009 memo to the Commissioners  …(prev. posts)….Baldwin made statements to By The Sea Future Editor Mark Brown he did not receive and was not entitled to compensation for his “unpaid leave” while consulting per his contract…… If the Town Manager and the Town Attorney find that he was compensated….they should be directed to get those funds returned as well…It is also this writer’s opinion that Baldwin had a big hand in all this in the background and his protestations, simmering anger and disbelief of being pulled into the Colon situation were veiled at best!…

When looking into a new Town law firm as the Commission must do after they hire a permanent Town Manager …leave the former Town Attorney off the list!…He too had a hand in the contract (prev. post) and he too did the town a great disservice by remaining mute on the dais May 22, 2007 …. and allowing the misrepresentation of the Colon contract to be presented to the taxpayers, and residents he still served as Town Attorney …

In conclusion…the Commission needs to give the go ahead…to proceed on the recovery of all funds owed to the Town and to look into any criminal charges as well….Give the green light to Ms. Hoffman to start cleaning house …in order to provide the taxpayers…residents and businesses with the qualified personnel firmly positioned in the Department Head and staff positions …and to offer all employees what is rightfully theirs per a much needed newly revised  LBTS Personnel Policy Manual…

Kudos to Ms. Hoffman ….for what she has accomplished thus far in 4 short weeks …Thank you for the transparency …. I know there will be more to come…. as this moves forward upon further direction from this Commission…

STILL GUNG HO?…..

What’s “Clueless” Clottey, and her diminished “Gang” think now?…Hmmmm………..

more to come ……

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