CORRRECTIONS & CLARIFICATIONS: Taxpayers stuck with $72,000 retirement bill, By MARY SCHLEY, The Carmel Pine Cone, December 2, 2016, 1A & 27A

 RE: A CHANGE that was to save the city tens of thousands of dollars by having employees contribute more of their own money toward their retirements was approved by the workers and the city council more than a year ago. But the change was never implemented, human resources manager Maxine Gullo discovered during an examination of city records. Gullo, who was hired six months ago, also found that the city was behind on its payments to the union’s separate pension plan.

“I was going through our contracts, making sure we were current and in compliance,” she told The Pine Cone. “When I realized those deductions were not being held back, that was when I backed up to figure out why, and it was because the CalPERS paperwork had not been completed.”

“Although employees in this bargaining unit agreed to pay, staff failed to process the required CalPERS documents, and employees have not been required to pay the additional member contribution,” Gullo said in her report to the council.

The state requires that certain procedures be followed in order to impose such amendments, including the council adopting a resolution of intent, the employees voting in a “secret ballot election,” the city certifying that the future annual costs were made public, and then the council adopting an ordinance on first and second reading.

SOURCE: Taxpayers stuck with $72,000 retirement bill, By MARY SCHLEY, The Carmel Pine Cone, December 2, 2016, 1A & 27A

However, e-mail correspondence per public records act requests demonstrates that contrary to the aforementioned reporting by The Carmel Pine Cone that Human Resources Manager Maxine Gullo “discovered” CalPERS cost sharing had not been implemented, Public Safety Director/Police Chief Mike Calhoun, attorney Samantha Zutler, Finance Manager Paul Wood and Finance Specialist Deanna Allen knew prior to Human Resources Manager Maxine Gullo’s “discovery” that CalPERS cost sharing had not been implemented. To wit, in a December 2, 2015 e-mail to staff, then-Interim City Administrator/Public Safety Director/Police Chief Mike Calhoun wrote “At the December 1st Council meeting, Council approved the LiUNA General & Management MOU to increase salaries recognized by the MOU by 3% effective 7/1/2014. The second 3% salary increase will take effect January 1, 2016. The PERS pension cost sharing by employees will commence at a date yet to be determine. This will be determined after the PERS contract is amended.”  Furthermore, even though Public Safety Director/Police Chief Mike Calhoun wrote to Human Resources Manager Maxine Gullo “I spoke with Deana specifically to work on the PERS contract amendment and it was my understanding that she started the process since both POA and LIUNA agreements were approved by council,” there is no written documentation that Public Safety Director/Police Chief Mike Calhoun communicated to Finance Specialist Deanna Allen “specifically to work on the PERS contract amendment” and followed up on the PERS contract amendment matter. Moreover, Interim City Administrator/Public Safety Director /Police Chief Mike Calhoun and later City Administrator Chip Rerig had the authority to direct only Finance Manager Paul Wood, not Finance Specialist Deanna Allen, to proceed with the CalPERS contract amendment. In fact, work on the CalPERS contract amendment commenced in July 2016 when Human Resources Manager Maxine Gullo contacted a CalPERS representative regarding the CalPERS Employee Cost Sharing amendment. To wit, in a July 15, 2016 e-mail, Human Resources Manager Maxine Gullo wrote to Public Safety Director Mike Calhoun and attorney attorney Samantha Zutler, “I made contact with a live CaiPERS representative (yah!) and she has provided me the first step to kick off this employee cost sharing amendment.”

And importantly, Finance Specialist Deanna Allen, in a September 29, 2015 e-mail to Paul Wood stated that “We are waiting too long to start the process…I will wait…. But it only makes the effective date farther out.”

In sum, prior to City Administrator Chip Rerig hiring Maxine Gullo as the City’s human resources manager in June 2016, Finance Manager Paul Wood and Finance Specialist Deanna Allen advocated for “starting the process” in September 2015, but Public Safety Director/Police Chief Mike Calhoun did not specifically direct the finance manager to start the process. Notably, not only did Mike Calhoun benefit from additional compensation due to continuing payments as if he were still acting interim city administrator/public safety director/police chief between March 2016 and September 2016, but Calhoun also benefited due to the fact that implementation of CalPERS cost sharing begins in January 2017, after Calhoun’s retirement date of December 30, 2016.

Bottom Line: In September 2015, Finance Manager Paul Wood and Finance Specialist Deanna Allen advocated for starting the CalPERS cost sharing process, but Public Safety Director/Police Chief Mike Calhoun and later City Administrator Chip Rerig stalled the process until City Administrator Chip Rerig hired Human Resources Manager Maxine Gullo in July 2016. Importantly then, City Administrator Chip Rerig, Safety Director/Police Chief Mike Calhoun and Human Resources Manager Maxine ensured that implementation of CalPERS cost sharing would occur in January 2017, post-Mike Calhoun’s retirement from the city.

REFERENCES:

From: Deanna Allen

Sent: Thursday, October 27, 2016 4:25 PM

To: Maxine Gullo <mgullo@ci.carmel.ca.us>

Subject: FW: LIUNA Contract

Maxine,

I did find this email stating PERS cost sharing was to be done at a later date, to be determined.

Thanks.

Deanna Allen

City of Carmel-by-the-Sea

From: Mike Calhoun

Sent: Wednesday, December 02, 2015 2:31 PM

To: Rob Mullane ; Sharon Friedrichsen ; Janet Bombard

; Marc Wiener

Cc: Mike Branson ; Rob Culver ; Margi Perotti ; Deanna Allen

Subject: LlUNA Contract

Department Directors: This message is intended for LiUNA General & Management Employees. To avoid any miscommunication, please distribute to your staff.

At the December 1^st Council meeting, Council approved the LiUNA General & Management MOU to increase salaries recognized by the MOU by 3% effective 7/1/2014. The second 3% salary increase will take effect January 1, 2016. The PERS pension cost sharing by employees will commence at a date yet to be determine. This will be determined after the PERS contract is amended. You will be notified in advance of this payment obligation.

This increase in salaries (hourly rates) will be seen on this week's payroll (for pay period November 16-30th- payroll date December 4th).

The retro pay earnings due from July 1st, 2014 to November 15th, 2015 will be distributed to your Supervisor no later than December 31st, 2015.

All retro payments will be issued in the form of a check, not direct deposit.

If you have any questions, please see me.

Thanks,

Mike

Michael Calhoun

Director of Public Safety/ Chief of Police

Carmel Police Department City of Carmel-by- the Sea

Po Box 600 Carmel Ca, 93921

(831) 620-2029

From: Deanna Allen

Sent: Tuesday, September 29, 2015 11:53 AM

To: Paul Wood

Subject: RE: MOU

But I have to give Calpers the heads up.

We are waiting too long to start the process.

And shouldn’t we be making sure this implement will be correct?

I need some direction. This is not how we have done it in the past.

I will wait…. But it only makes the effective date farther out.

Deanna Allen

Finance Specialist/Deputy City Clerk

City of Carmel‐by‐the‐Sea

From: Zutler, Samantha W. [mailto: ]

Sent: Tuesday, September 29, 2015 11:49 AM

To: Paul Wood <pwood@ci.carmel.ca.us>

Cc: Mike Calhoun <mcalhoun@ci.carmel.ca.us>

Subject: RE: MOU

I don’t think that’s necessary at this point (when the MOU is a draft, and certainly not if it’s going to slow down the process). I’d suggest we finalize it and then deal with CalPers.

From: Paul Wood [mailto:pwood@ci.carmel.ca.us]

Sent: Tuesday, September 29, 2015 11:47 AM

To: Zutler, Samantha W.

Cc: Mike Calhoun

Subject: RE: MOU

Sam,

Can I give a copy of this DRAFT to Deanna to forward to CalPERS so they can advise us on when/how to implement some of this (most particularly the –EE pmt of –ER contributions)?

Paul

From: Mike Calhoun

Sent: Monday, September 19, 2016 12:23 PM

To:Maxine Gullo

Subject: FW: llUNA Contract

Here's the information I sent to all the Directors. I spoke with Deana specifically to work on the PERS contract amendment and it was my understanding that she started the process since both POA and LIUNA agreements were approved by council. I'm still looking but can't find an email to Deanna regarding this subject. Mike

Director of Public Safety/ Chief of Police

Carmel Police Department City of Carmel-by- the Sea

Po Box 600 Carmel Ca, 93921

(831) 620-2029