PORTAGE — Clerk-Treasurer Nina Rivas released more information about the Portage payroll controversy in a 76-page memo to employees.
The year 2021 is a payroll leap year for employees, with 27 pay periods instead of the normal 26. That won’t happen again until 2032.
Hourly employees aren’t affected; they’re paid for their actual hours worked. But salaried employees met their base wage, set by the annual salary ordinance, as of the Dec. 17 pay date, Rivas said in the Dec 23 memo.
Rivas was criticized at the Dec. 21 City Council meeting by Council President Collin Czilli, D-5th; Budget Committee Chair Deb Podgorski, D-At-Large, and Mayor Sue Lynch, among others, for not letting employees know sooner about the payroll issue.
In addition, the premium pay bonuses city employees are expecting in federal American Rescue Plan Act money will be deposited Dec. 30, depending on the financial institution, she said.
Turning 2022 into a payroll leap year will mean smaller biweekly paychecks to spread out the salary across 27 paychecks, Rivas said.
“It appears the assumption that lack of communication with staff on this matter was intentional, inept or lack of care,” Rivas said. “Although that wasn’t articulated well at the Dec. 21, 2021, council meeting, that is not the case.”
On Dec. 7, Czilli and Podgorski questioned the bimonthly payroll schedule, Rivas noted.
“Meanwhile, the Dec. 3, 2021, payroll was posted, and it became evident various department budgets within the city would not have the appropriations or funds to absorb the Dec. 31, 2021 pay date for hourly employees,” she said. “Ultimately, the city’s revenue/receipts could not match the city’s expenditures/disbursements.”
Complicating the situation is that contracts approved by labor unions specify biweekly paydays.
“Had the city built adequate reserves, upon council approval, the payday leap year could have been absorbed by the city, and amendment to the salary ordinance could have corrected any compliance concerns,” Rivas said.
When Rivas took office in 2020, the city had deep financial trouble, with just $11,906 in cash, and has been working on getting to the cash reserves of 15 to 20 percent recommended by the Government Finance Officers Association. The city ended 2020 with $1,831,794 in reserve.
Baker Tilly Municipal Advisers recommended a minimum of $4,398,724 in general fund reserves for 2020, or 15%. Ideally, the city would have 50% in reserve to offset delays in receipts or unforeseen expenses.
