Late last fall, a city audit of Independence Power & Light turned up enough concern with some payroll and timekeeping practices that the City Council authorized immediate review to make sure practices lined up with city policies.
In a city memo dated Jan. 31, the city's management analyst, Mark Thoma-Perry, noted that timekeeping practices have been applied “inconsistently and liberally” and without strong oversight, but didn't amount to fraud. He and Assistant City Manager Adam Norris, who serves as director of public utilities, also recommended that several IPL employees who had been receiving standby or overtime pay fairly regularly didn't need to except for some extreme circumstances.
By tightening those practices and eliminating a vacant manager position, City Manager Zach Walker said, the city should see notable savings in IPL operations.
Walker said the dollar amount definitely won't be $1 million, but he safely estimated a few hundred thousand dollars.
“We don't see anything like fraud,” Walker reiterated, but rather a chance to “improve internal controls” and better align actual practices with the city's personnel policies and procedures.”
The council's resolution from Nov. 26 called for a report back in 45 days, which was last Friday.
“Some of the positions that are supervisory and higher up, when you have overtime, that can add up in substantially and in a hurry,” Walker said. Federal law classifies position types that can receive overtime, he said, and some were earning overtime based on that even if it wasn't completely necessary.
“It's always hard to peg historically where that evolved from,” Walker said, “but at some point they were allowed to accrue that.”
According to the city's personnel policies and procedures manual, stand-by pay is defined as:
“Off-duty hours when the employee is required to respond if called to report to work and is subject to disciplinary action for failure to respond. Employees, both exempt (except department directors and division managers) and non-exempt, will be compensated for time spent on stand-by pay. Stand-by compensation will be two hours at the employee’s overtime rate for each 24 hours of availability, except as provided herein.
Also, “compensation in excess of salary may be granted to exempt employees under emergency conditions which directly involve the health, safety and/or welfare of employees or citizens. Such pay must have prior approval of the city manager.”
Of the 13 IPL positions with standby pay and/or overtime, the memo calls for a transmission and distribution manager position – vacant since the fall and but with at least a $100,000 salary prior, Walker said – to be eliminated and six more in transmission or production to not receive standby pay either immediately or after June 1 when the Blue Valley power plant ceases operations. Another supervisor position was transferred last year and no longer receives standby pay.
Walker said the city also looked at other departments and didn't find similar issues there. Besides IPL, the department that sees the most overtime is police, he said, and specialized grant funds cover some of that. The nature of that job also means some overtime is inevitable.
“Our scrutiny, as part of the council's directive, is to run it in a business-like fashion,” Walker said.