Leader Blues

Friday, January 08, 2010

TOP STORY >> Probe starts into officials’ ‘retirements’

By JOHN HOFHEIMER
Leader senior staff writer

Two Lonoke County officials caught double-dipping — drawing their salary and state retirement — claim at least three county officials knew when they “retired” last year, although a legislative committee is looking into the matter.

Assessor Jerry Adams and Treasurer Karol DePriest — each of whom now draws both the salary for their constitutional office and simultaneously state retirement benefits — say they were advised they could step down for three months and then draw two paychecks.

But they’re willing to return their retirement money if they did anything wrong, even though their attorney says everything was done above board.

They were so quiet about their retirements last summer and about their resuming their offices three months later that the quorum court members were unaware of their retirements. Adams and DePriest continued to attend meetings and apparently attended to business in their official capacities.

They are two of about 10 city or county officials across the state receiving pay and retirement pay, according to Jerry Wills, attorney for the Arkansas Public Employees Retirement System (APERS), which administers the state retirement program.

Those who are serving in office while drawing state retirement say they had been told that not drawing a paycheck for three months constituted resigning, making them eligible for retirement benefits.

Eddie Jones, executive director of the Arkansas Association of Counties, testified Friday at a hearing of the state Legislative Audit Committee that county officials were told last year that they could trigger retirement benefits by going off the payroll for 90 days. That’s according to Denise Hoggard, attorney for Adams, DePriest and most of the others in question.

According to Hoggard, Jones said he heard APERS retirement coordinator Pam Stroud give that information to people at a meeting of the Association of County Executives.

Retiring under APERS rules is not the same thing as vacating the office, Hoggard added.

DePriest and Adams earn $48,500 a year. APERS retirement runs between 45 percent and 52 percent, meaning they would draw about $21,800 a year from the retirement fund.

Adams declined comment, referring questions to his attorney. DePriest did the same, although she did say they hadn’t done anything wrong and that at least three county officials knew what they were doing — County clerk Dawn Porterfield, who signs the paychecks, county judge Charlie Troutman and county attorney Jeff Sykes.

The two are prepared to return the retirement checks or do whatever is required to satisfy APERS, according to Hoggard, but these officials did what they believed in good faith. They followed what APERS was saying were the rules, he insisted.

“Double dipping is a negative term without justification,” Hoggard said. “They are elected officials who, according to statute, had a right to retire, then go back into position. Double dipping sounds like something wrong.”

DePriest said she and Adams believed that termination was simply going off the payroll for at least three months.

“County elected officials were being told at association of counties that termination was off the payroll,” she said.

“Some time later the attorney general’s opinion disagreed,” she said. “Now they are saying the rules are changing and they’ve done something wrong. They want to follow the law and the rules.”

The state Legislative Audit Committee met with APERS officials, including executive director Gail Stone, for about two hours Friday, trying to sort through facts and issues and determine what needs to be done.

Typically, when a county official resigns or retires during an elected term, the county quorum court declares a vacancy, the county judge recommends one or more replacements and the governor appoints a replacement, who is not eligible to run for the office at the next election.

But apparently none of the quorum court members knew they had resigned and, in fact, both appeared to fulfill their duties during the three months they did not draw salary, according to Troutman.

“We’ve been waiting since June, since the attorney general’s office came out with the opinion,” DePriest said. “If we did something wrong, they need to tell us how to fix it.”

DePriest stopped drawing pay on April 9 and returned to the payroll on July 16, Hoggard said, and Adams stopped drawing pay on March 12 and returned to the payroll on June 18.

Hoggard says state statute now says it requires 180 days off to be terminated. The new definition says that termination means that the employment relationship has been brought to an end and no longer exists in any form.

State Sen. Bobby Glover (D-Carlisle), who represents Lonoke County and who attended the meeting, asked, “The big question is, when they actually terminated their positions to draw retirement, is that a permanent termination or do they have the authority to go back into their office?

“I foresee that this matter will be a legal question before it’s over with,” Glover said.

Troutman said he was only marginally concerned because, “it cost the county not one single cent.”

He said as far as he knew, DePriest and Adams were the only Lonoke County employees who had resigned and kept working.

“I don’t know if the law is broken or if they got bad advice,” said quorum court member Mark Edwards. “Common sense would say that if you retire from your post, you have to retire and leave that post. It only makes sense to me that if you did retire, the governor would have to appoint someone to fill your term and you wouldn’t be eligible to run again. I don’t know as a quorum court if we can do anything or if we should do anything. I wish the attorney general would say.”

“They are elected officials,” said quorum court member Mike Dolan. “We have little if any control over them. But it doesn’t put them in a pretty light.”

“We have looked at every county and municipal official employee who has retired (in recent years),” said Wills, the APERS lawyer. He said concerns, if any, are limited to fewer than 10 of 480 who have retired since about 2000. “Most never returned to work.

“If we make the determination that they didn’t properly terminate employment — if they continued working, kept the office keys or an official car — we’re required to terminate their current payments until there is proper termination.”

He said taking back payment could have negative consequences to taxpayers. “We’d have to give them back credit for the additional time they served in office, in some cases several years and that could result in even higher benefits upon actual retirement,” Wills said.

Wills would not comment on individual cases, but in general, he said, the APERS director, he and an internal auditor will review “suspect individuals.” Stone, the director, will decide. “If appropriate, we’ll cut off benefits until retirement. We may also make demand on benefits that have been paid,” Wills said.

“To ensure the integrity of our results, a team of (legislative auditors) will come behind the work we’ve done,” Wills said.

“I don’t think anyone did this with an evil heart,” he said, although the attorney general’s opinion may have changed that feeling by the public.