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2016-04-14

City SNAFU costs taxpayers $20K

By Judith Pannebaker BCC Editor

(Editor’s note: Several people have doubted the veracity of this revelation from officials with the City of Bandera. Consequently, the Courier has filed an open records request asking for supporting documentation.)

To paraphrase late President Ronald Reagan’s “there you go again” remark to his opponent, former President Jimmy Carter, during a 1980 debate: “Here the City of Bandera goes again!”
City Secretary Sherrie Hamilton apparently uncovered the municipality’s latest SNAFU on March 18.
As the story goes, former City Treasurer Trinity Burnes had served as the city’s human resources director. When Burnes was terminated on March 17, Hamilton inherited HR duties.
“The next day, while going over the insurance records, I did a member eligible search, all these names came up and the termination boxes were not checked,” Hamilton said in an interview on Thursday, April 14. “I didn’t recognize the names of the people who were supposedly still working for the city.” She immediately brought the oversight to the attention of Mayor John Hegemier.
Ex-employees get free insurance
Hamilton’s research indicated that the city was still paying for the health insurance of seven former employees. According to Hegemier, the employees – along with some family members – had been covered for varying lengths of time, depending on the date of their termination from city employ.
“We are not counting the severance package given to former City Administrator Lamar Schulz, which included an additional three months of health insurance, in the ineligible employees,” he said. He added that Burnes was also not included in the tally.
Normally when someone leaves the employ, at a final interview, they are given exit papers that include an application for insurance through the Consolidated Omnibus Budget Reconciliation Act (COBRA). Apparently, this never happened.
In October 2014, city council, with Councilman Jim Hannah leading the charge, approved changing the municipality’s benefits package to UNUM Group, an insurance and benefits plan available through the Texas Municipal League. This insurance plan was less expensive than the city’s former plan. In the not-so-long run however, this decision might have been a “false bit of economy.”
COBRA
According to Hegemier, personnel with UNUM Group have already sent out “COBRA letters” to the ineligible former employees.
As defined on dol.gov, COBRA “… gives workers and their families, who lose health benefits, the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.”
If former city employees have not found jobs that offer healthcare benefits, they can sign up for insurance through COBRA.
At any rate, the city will no longer be paying for their healthcare coverage. However, as Hegemier noted, “The damage has already been done.”
BC/BS to UNUM
In an interview, Don Giles, who provided health insurance through Blue Cross/Blue Shield to city employees prior to the switch to UNUM, explained the sequence of events during his watch. “I coordinated everything with City Secretary Linda Boshek,” he explained. “Enrolling employees and eliminating them from the insurance rolls was taken care of electronically with a software program. It was very simple and efficient.”
Giles continued, “Linda Boshek looked after the city like she was supposed to. It was her job and she did it. We never had any problems.”
No $$$ recouping
According to Hegemier, the city can never recoup the wasted money. “These former employees who were affected might not have even known that their healthcare insurance was still being covered,” he said.
On Tuesday, April 12, Hegemier said the calculated the total cost to city taxpayers as just under $20,000 – $19,992.20 to be exact.
In a previous interview, he had explained, “We have to create a spreadsheet based on the separation dates of the former employees, and we have other more pressing things to take care of, like paying our bills.”
On Monday, April 11, Hegemier suggested the monetary loss might not be that great. “Apparently most of the former employees affected had left the city in December,” he said.
Additionally, city council hasn’t fully addressed the issue, but the latest SNAFU was discussed briefly during a recent special session. At that time, council approved a $2 per hour salary raise for Hamilton, bringing her hourly wage to $18.
When queried as to how the insurance overpayment could have occurred, Hegemier postulated that a rapid turnover of senior staff probably contributed to the expensive gaffe.
“Former City Secretary Karen Chesler was originally in charge of HR, but to streamline the process and open the lines of communication, Lamar Schulz put (former treasurer) Trinity (Burnes) in charge of Human Resources,” Hegmier said.
“A lack of institutional memory enabled former employees to fall through the cracks. The city continued to pay for their insurance and no one caught it.”
‘Sign lot of bills’
Although city council goes over municipality bills on a monthly basis, Hegemier admitted that, for the most part, he “… looks at the invoice sent from the insurance company and makes sure the same amount is on the payment check.” Parenthetically, he added, “I have to sign a lot of bills.”
Additionally, no one on council questioned the fact that the city was paying health insurance for more people than were currently employed by the city – not even those members who take pride in scrutinizing the budget regularly.
Additionally, the blunder was apparently not picked up during the city’s annual outside audit or in the yearly budget process.
“We didn’t do a good job of being fiscally responsible with the taxpayers’ money,” Hegemier admitted. Continuing with his mea culpa, he said, “This is pretty shameful and embarrassing. The buck stops at my desk and I should have been more attentive to the day-to-day details of running this city.”
In fact, all members of city council should have been “more attentive to the day-to-day details of running this city” – especially when it concerned frittering away taxpayers’ money.