The Benton City Council Personnel, Health & Safety Committee has voted to seek the opinion of the Arkansas Attorney General on how the city should proceed in regard to the overpayment of two retired Benton Fire Department firefighters.
According to findings discovered by the Legislative Joint Auditing Committee for the year 2019, the city paid two firefighters, upon retirement, a total of $50,763 for 100 percent of their unused sick leave, for the period Jan. 1 through Dec. 31, 2019. The overpayment is in conflict with Ark. Code Ann. § 14-53-108. Overpayments to the two firefighters totaled $23,004 ($10,381 and $12,623 respectively).
The question before the committee concerned whether the firefighters should be required to repay the money to the city. The city would file suit against the firefighters to recover the funds.
Stuart Duke, with the Local 2765 Firefighters Union, spoke on behalf of the two firefighters in question at the meeting. The union sought a legal opinion on if it was legal for the city to not require the firefighters to pay the money back. According to Duke, the findings show that it is legal for the city to not ask for the money to be returned.
“It’s a situation that nobody wants to be in,” Duke said.
The firefighters are not being accused of any wrongdoing and according to City Attorney Brent Houston, in meetings with the firefighters both said they were unaware they had been overpaid. Had they known, Houston said that it was “without a doubt” that the city should seek a repayment.
“We have no proof that they knew,” Houston said.
The human resources director who approved the payments is no longer employed by the city. She resigned from her position once the mistake had been found.
According to Houston, in his research on the topic, there was an opinion issued by then AG Steve Clark in 1984 on a similar case where a county had overpaid two sheriff’s deputies.
“The AG opined at that time that it could be an illegal exaction and unjust enrichment if the city didn’t go after and pursue that money,” Houston said. “ … I think that city has a fiduciary obligation to look at it and determine exactly what it should do and that falls upon the city council to say yes or no, we are going to proceed with this.”
Also in attendance at the meeting was Baxter Drennon who will be sworn in as the new city attorney once Houston leaves for his new position as a Saline County Circuit Court Judge in January. Farmer asked both attorneys to be in attendance at the meeting due to the fact that the issue might not be settled before Houston leaves office.
“I think, without question, the city messed up,” Houston said. “Our employee messed up to the tune of about $23,000 and so now the question is whether or not you say we should go after these two firefighters for this payment that occurred back well over a year ago in 2019.”
Houston said that the council must decide whether the city should move forward with a lawsuit to recover the funds from the two firefighters.
“I do know the hardship that would be on the two to give you back that money,” Duke said. “(It’s) why they were so concerned with the initial letter that they received from the mayor by Mr. Houston.”
Duke added that moving forward, steps have been taken to better educate the firefighters about what exactly they should expect to receive upon separation so that mistakes like the overpayment do not happen again.
“We will do a better job on our part,” Duke said.
Farmer informed the council that it was recently discovered that a third firefighter had been overpaid on a much smaller scale and that he had already repaid the money to the city. Should the council decide to not seek a payback from the two firefighters in question, the city will need to decide whether or not to return the money paid back from the third firefighter in order to be fair.
Houston said that the city met with the two firefighters approximately a month ago and asked them to repay the money and the firefighters opted to ask the council to make that decision.
According to Alderman Steve Lee, the former HR director had known about the overpayment for over a year and “never said a word.” He also added that the two firefighters in question had their money direct deposited rather than receiving a paper check so that there was no check and balances system to catch the error. Checks issued over a certain amount require an approval process. Lee also believes that any jury would side with the firefighters due to the fact that the former HR director knew about the overpayment for so long and never alerted the city.
Both the current HR director, Jennifer Perry, and Benton Chief Financial Officer Mandy Spicer told the council that neither were consulted on the payment to the firefighters or asked to double check the large amounts being paid. Perry previously worked in the HR department before being promoted to her current HR director position upon the previous director’s resignation.
Houston said that if a lawsuit is filed, the case would be a civil matter and that the firefighters would have the right to a jury trial.
“Personally, I don’t see no way of winning,” Lee said. “It’s my opinion and I’ve been wrong more than once.”
Alderman Bill Donnor questioned the costs of moving forward with a lawsuit stating that he would not want to spend more money than would possibly be recovered should the city move forward with the suit and win.
“I am certainly not willing to sue two hero firefighters for our mistake, the city’s mistake,” said Alderman Jeff Morrow.
Houston said that if the city does not choose to pursue the repayment of the money, the city puts itself in the position of being sued for the illegal exaction.
“So, we are screwed either way we go,” Donnor said.
“Basically, yes,” Houston added.
According to Houston, an illegal exaction can be in many forms such as the city taxing someone when the city did not have the authority or spending restricted street funds in order to build a new building for the parks department. In this case, it is the fact that through the overpayment, the city spent money unlawfully.
“Without question, they weren’t entitled to the money,” Houston said. “It was an unlawful expenditure on our part. The question is, do you want to waive it and go on potentially have someone sue the city?”
Alderman Judd Hart stated he was not in favor of suing the firefighters.
Benton Fire Chief Bill Ford said the issue brought to light the fact that there were many procedural problems in the HR processes.
“I think we are taking steps right now to repair that,” Ford said. “I think everybody can agree with that, so I think we should just take it and move forward and go from there.”
Donnor said that not having a proper procedure in place contributed to the city mistakenly overpaying the firefighters and that new policies have been enacted to help prevent this from happening in the future.
“It’s up to us to figure out,” Donnor said. “Do you want to go after the firefighters and get your money back or risk not doing anything and getting sued for an illegal exaction. I’m for doing the right thing. What we should do is the right thing and if we get sued, so be it.”
Rather than choosing to move forward with suing the firefighters to recover the money, the committee unanimously voted to seek an opinion of the Attorney General on whether the city has to pursue legal action against the firefighters to recover the money.