{"id":359954,"date":"2017-06-02T11:11:42","date_gmt":"2017-06-02T17:11:42","guid":{"rendered":"http:\/\/nmpolitics.net\/index\/?p=359954"},"modified":"2017-06-03T15:49:36","modified_gmt":"2017-06-03T21:49:36","slug":"more-questions-about-hobbs-city-managers-cash-payouts-for-paid-time-off","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2017\/06\/more-questions-about-hobbs-city-managers-cash-payouts-for-paid-time-off\/","title":{"rendered":"More questions about Hobbs city manager’s cash payouts for paid time off"},"content":{"rendered":"
\"City

Courtesy photo<\/p>

City Hall in Hobbs, N.M.<\/p><\/div>\n

COMMENTARY:<\/strong> Since the presidential inauguration on Jan. 20<\/span><\/span>, there\u2019s plenty to keep our eyes glued to national politics, but I want to stress to my fellow Hobbsans and residents of other communities: There is so little that we can do to influence national politics, even the votes of our congressional delegation; the single greatest use of our time and energy to impact millions of our tax dollars is to get engaged with our local governments, both city and county.<\/p>\n

Attend meetings, watch live and archived broadcasts of meetings, speak to your elected officials, request and review public documents, and when you see something, say something! You really can make a difference in and for your communities.<\/p>\n

What prompts me to write this commentary is the now-annual tradition each January in Hobbs, wherein many city employees are given hour-for-hour cash payouts for their year-end excess paid time off (PTO). I previously shared a history of Hobbs\u2019 questionable PTO policy in 2015\u00a0here<\/a>\u00a0and a follow-up of the 2016 payouts\u00a0here<\/a>.<\/p>\n

While many employers, both public and private, have modernized their benefits to combine sick leave and vacation into one PTO pool, very few offer an annual payout to buy down excess hours above a set cap. Hobbs is the exception, with set caps of 320 hours for \u201call general employees\u201d and 456 hours for \u201cshift employees\u201d of the fire and police departments, according to\u00a0the municipal code<\/a>.<\/p>\n

\"Byron

Courtesy photo<\/p>

Byron Marshall<\/p><\/div>\n

When I first heard of this policy, it struck me as odd, and the fact is, it is. I call the unique City of Hobbs model \u201cPTO+payout.\u201d There are more than 100 municipalities in New Mexico, and yet I can only find that\u00a0the City of Alamogordo<\/a>\u00a0cashes out PTO, but Alamogordo isn’t as freewheeling as Hobbs: it limits employees to cashing out no more than 80 hours per fiscal year at a rate of two hours of pay for every three hours of leave.<\/p>\n

The lavish Hobbs policy was concocted by none other than John J. \u201cJ.J.\u201d Murphy, just months after arriving in Hobbs from Pennsylvania to assume the role of city manager. Murphy has arguably benefited the most among city employees, receiving the highest payouts in 2015 and 2016 \u2013\u00a0$11,418<\/a>\u00a0(gross pay, before taxes) and\u00a0$12,242<\/a>\u00a0(also gross), respectively. In addition, the PTO payouts look a lot like New Year\u2019s bonuses, and the payout provision has reasonably helped Murphy curry favor with some employees, a situation that could have and should have been considered as an underlying motive for the policy change.<\/p>\n

Seemingly confirming this hunch, during public comments at an Oct. 17, 2016, meeting, a city employee praised Murphy and told commissioners that the PTO program ushered in by Murphy is \u201cnot to be tampered with, reduced or removed,\u201d now or in the future.\u00a0View the public comments<\/a>\u00a0at 26:30.<\/p>\n

Converting the city\u2019s then-approximately 425 employees to PTO cost more than $1.4<\/span> million in 2013, but thereafter,\u00a0Murphy said<\/a>, the city would realize annual savings of about $400,000.<\/p>\n

In a column last year about\u00a0Hobbs\u2019 PTO program<\/a>, I called for the savings Murphy had projected to be verified. There\u2019s been no report as yet by the city, and records obtained by way of an Inspection of Public Records Act request are suspicious.\u00a0At the Jan. 3<\/span><\/span> commission meeting<\/a>, Murphy said that the 2017 PTO payout would be $243,000 \u2013 over-budget by $10,000. However, the payout reported at the Jan. 3<\/span><\/span> meeting could not be validated, because the checks acquired through a corresponding IPRA request fell short and only totaled $210,447 in gross pay.<\/p>\n

But, based on the information available to me, I can report a few obvious trends. While the total number of employees collecting PTO payouts has gone down in the fourth year, the average number of hours per employee has consistently gone up. Also increasing each year is the average before-tax payout to each employee.<\/p>\n

\"\"
\nThe jury \u2013 er, the commission \u2013 appears to still be out on whether the city is saving actual money under Murphy\u2019s PTO+payout policy, but one commissioner did take Murphy to task at the Jan. 3<\/span><\/span> meeting. Following Murphy\u2019s presentation regarding 2017 PTO payouts, Commissioner Marshall Newman told Murphy, \u201cWe need to revisit this whole PTO thing. After an exchange with Murphy, Newman concluded, \u201cAt this point, I don\u2019t see the savings.\u201d\u00a0Watch the presentation and discussion<\/a>\u00a0at 3:30<\/span><\/span>.<\/p>\n

Curiously, while the average PTO payout per employee reached new heights in 2017, Murphy\u2019s piece of the plunder was\u00a0$5,376<\/span><\/a>\u00a0\u2013 less than half of each of the previous two years\u2019 payouts. Why the dramatic drop? It seems the Office of the State Auditor might have an answer.<\/p>\n

In the City of Hobbs audit report for the fiscal year ending June 30, 2015,\u00a0published on the State Auditor\u2019s website<\/a>, finding No. FS 2015-002 (Page 175) stated that payroll discrepancies discovered during the audit could result in employees being \u201coverpaid or underpaid or have inaccurate PTO balances.\u201d Concluding FS 2015-002 in the audit report, \u201c[m]anagement\u2019s response\u201d says that by the end of the 2016 fiscal year, the City of Hobbs would have the issues corrected, and corrective action would include \u201creiterating to its staff the importance of internal controls surrounding the payroll process and ensuring those controls are implemented and operating effectively.\u201d<\/p>\n

Well,\u00a0recently published<\/a>\u00a0on the State Auditor\u2019s website is the City of Hobbs audit report for the fiscal year ending June 30, 2016. The latest report includes a follow-up on the previous year\u2019s findings, and the sequel of FS 2015-002 is even better than its debut, because the culprit is finally unmasked.<\/p>\n

Page 177<\/a>\u00a0of the fiscal year 2016 report states an \u201cemployee\u2019s leave usage was not approved in the electronic time keeping system\u201d and was instead \u201capproved via email by the City Mayor.\u201d The audit report further states that \u201cthe approved leave usage was not reconciled periodically to leave balances in the payroll system.\u201d Since \u201c[m]anagement did not deem it necessary to reconcile the approved time to the PTO balances in the payroll system,\u201d the report reads, \u201c[t]he potential impact \u2026 is that the employee could have inaccurate PTO balances.\u201d In other words, the employee could, hypothetically, be notoriously frequently out of town but still collect an unjustifiably massive PTO payout.<\/p>\n

It might seem unclear to which employee the audit finding is referring, but the \u201cManagement\u2019s response\u201d clarifies: \u201cHistorically City Manager time off requests are submitted via email and would then be approved by the Mayor and\/or City Commissioner.\u201d<\/p>\n

Dun, dun, dunnnnnnn. And isn\u2019t it worth asking the following: What about those previous payouts before the audit revealed the problem? Have they been reconciled? Paid back?<\/p>\n

\u201cTaking paid time off without appropriately charging leave balances is a gift of public funds.\u201d At least that\u2019s how California sees it. In 2010, an investigation into allegations a California State University employee \u201cdid not ensure that leave time was appropriately charged\u201d resulted in\u00a0a report<\/a>\u00a0that emphasized the California Constitution \u201cprohibits the giving of any gift of public money or thing of value to any individual for a private purpose.\u201d<\/p>\n

Those familiar with New Mexico\u2019s Constitution \u2013 which should include Hobbs\u2019 city manager \u2013 would recognize this as getting into the territory of the\u00a0anti-donation clause<\/a>: \u201cNeither the state nor any county, school district or municipality \u2026 shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation\u2026\u201d<\/p>\n

So, the question I ask is this: Did the city manager\u2019s failure to reconcile his paid leave cause the city to make \u201ca gratuitous transfer of property from one to another,\u201d or to provide a gift, which New Mexico\u2019s judiciary defined decades ago as \u201can allocation or appropriation of something of value, without consideration\u201d? If the answer is \u201cyes,\u201d then the audit\u2019s Finding No. FS 2015-002 rises at least to the level of a violation of the anti-donation clause.<\/p>\n

In October,\u00a0I wrote about<\/a>\u00a0an attempt by Mayor Sam Cobb, Murphy and the Hobbs News-Sun to pull a fast one on the taxpayers of Hobbs. With the headline \u201cHobbs transitioning to new city manager,\u201d the News-Sun\u00a0published a guest column<\/a>\u00a0by the mayor in which he summarized an eight-page severance agreement into two \u201ckey elements:\u201d \u201c1. Cessation of employment as City Manager on or before June 1, 2017<\/span><\/span>;\u201d and \u201c2. A continuation of Mr. Murphy\u2019s employment as a special consultant to the Mayor and City Commission through July 2, 2018<\/span><\/span>.\u201d<\/p>\n

The News-Sun didn\u2019t care to write an independent article about\u00a0the severance agreement<\/a>, which, if it had been approved, would have given Murphy full immunity for any wrongdoing while serving as the city manager: \u201cCity agrees not to bring any claims against Murphy for any events that have arisen or occurred prior to the Effective Date of this Agreement.\u201d<\/p>\n

Who does that? Certainly not someone with a clear conscience. Did he have the audit\u2019s findings in mind when he sought immunity? Something else?<\/p>\n

Since the News-Sun wouldn\u2019t report on the severance agreement, I tried to share the features of the contract with the readers of the News-Sun by submitting my own letter to the editor. My fears were confirmed in\u00a0the response<\/a>\u00a0that I received from the paper\u2019s editorial management: the News-Sun has protected Murphy from scandal by suppressing \u201cnegative press,\u201d dismissing news tips or critical letters to the editor so as not to hurt Murphy\u2019s chances of leaving Hobbs. The News-Sun appears to be Murphy\u2019s own public relations firm, with the hope that he would become some other city\u2019s problem, rather than doing its job to hold him and others in power accountable.<\/p>\n

To close, I feel obligated to disabuse the News-Sun and some fellow Hobbsans of a couple notions I\u2019ve repeatedly heard:<\/p>\n