The Benton City Council Personnel, Health & Safety Committee voted to approve a repayment plan regarding 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 $23,378 ($10,560 and $12,818 respectively).
The question before the committee in December concerned whether the firefighters should be required to repay the money to the city and whether or not the city would file suit against the firefighters to recover the funds. The committee chose at that time to also seek an opinion from the Arkansas Attorney General’s Office on the matter before moving forward.
Stuart Duke, with the Local 2765 Firefighters Union, spoke on behalf of the two firefighters in question at the December 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 in December.
The firefighters are not being accused of any wrongdoing and according to Brent Houston, who at the time was serving as Benton City Attorney, after 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 in December.
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.
Current Benton City Attorney Baxter Drennon told the committee Monday evening that based on discussions with Legislative Audit and the Prosecuting Attorney’s Office, the firefighters should pay back the money mistakenly overpaid and that if the firefighters did not agree to that, the city has no option other than pursue other avenues such as a lawsuit to get the money back.
“I don’t think we have a choice,” Drennon said. “In an effort to come to a resolution that would save us time and money and the expense of bringing such an action, (the firefighters) have made an offer to return a substantial portion of the money.”
The firefighter who was overpaid by $10,560 will pay back $6,264 over an 18-month period.The firefighter that was overpaid by $12,818 will pay $7,988 immediately. According to Drennon, state law mandates that firefighters who are retiring can be paid for up to three months of accrued unused sick leave. The former HR director paid the firefighters in question for all of their unused sick leave.
Drennon added that Legislative Audit told him that if the money was repaid and no other instances like this were discovered, it would not be part of the city’s audit.
“It would be considered a closed matter to them,” Drennon said.
The Prosecuting Attorney’s Office would also need to approve the proposal. As of Monday night’s meeting, Drennon had not heard back from the Prosecuting Attorney’s Office, but did expect the office to approve the proposed settlement agreement.
“In my opinion,” Drennon said. “Accepting anything less than a penny of what was overpaid, there is some possibility of lawsuit against us, but recouping what we can, recouping it now as part of a settlement, would be a good outcome for the city. We would get our money repaid and we wouldn’t have to go through a lawsuit. We don’t lose the time and expense of a lawsuit.”
The committee also addressed the discrepancy in the amounts being paid back and stated that the reason for the difference is that one was paid more hours than the other.
Alderman Judd Hart asked if Legislative Audit had submitted a written verification that the incident would not be included in the audit or if Drennon only had a verbal agreement.
“We won’t have anything in writing from the auditors,” Drennon said. “They’re not going to put anything else in writing about this. It’s just going to be over and done.”
Drennon added that while the city did seek an opinion on the matter from the AG’s office, the office played no specific part in the decision on whether or not to require the firefighters to pay back the money. The AG’s Office only submitted a legal opinion on the matter.
“Mr. Drennon thinks this is the fairest thing to do and it saves the city of Benton being liable, so I would recommend this,” said Alderman Bill Donnor, who also chairs the Personnel, Health & Safety Committee.
Alderman Steve Lee asked if there would be any penalty for the firefighter who will be repaying his funds over the 18-month period should he fail to make the payments.
“So, how I would draw it up would be that if he failed to make the payments, he would owe 100 percent and he would have a judgement against him that he would owe 100 percent,” Drennon said also adding that the agreement would make the terms clear to both men.
The committee approved a motion for Drennon to move forward with the settlement. The matter will be brought before the full city council for approval and is expected to be on the agenda during its May meeting.