City of Canton fires 29 employees, asks for state audit

Director of Public Service and Mayor's Chief of Staff Warren Price announced Friday that 29 full-time city employees have been legally separated from their employment with the City of Canton in the wake of irregularities discovered in Canton's retirement and rehire procedures.

The 29 employees were found to have voluntarily retired and terminated their employment as a matter of law following the completion of 44 due process hearings held to determine the employment status of certain City employees who were identified as possibly having retired, then remained in their jobs, but were never reappointed to their respective positions by their appointing authorities.  

"In other words, these 29 employees retired and began collecting their pensions while simply remaining on the City's payroll without their appointing authority's knowledge," said Price, who was appointed by Canton Mayor William J. Healy II to coordinate the City's investigation of the payroll discrepancies.  "None of these 29 individuals were rehired by the City of Canton," said Price, "In fact, most of these 29 personnel legally separated today, as members of a union or as civil service employees, could not have been legally rehired without some action by the Civil Service Commission or first having retested and reapplied to the Civil Service Commission."      

Under normal circumstances and pursuant to State law, when an employee retires from local government service, that employee must terminate his or her employment, Price said.  In the case of almost all of the 29 employees, according to Price, the various appointing authorities such as the Director of Public Service, the Director of Public Safety, and certain other commissions and boards, were never notified of the employees' retirement."  

Service Director Price also stated that none of the 29 employees were properly rehired, "When an employee retires from local government service under certain circumstances it might be legally possible to rehire an employee, but in the case of these 29 individuals, none were properly reappointed to their positions and each and every employee legally separated today would have been treated as a new employee for purposes of salary and benefits if they had been properly rehired."  This fact raises significant issues relating to the pay and benefits the 29 employees received after their retirement, according to Price.  Price explained, "Certain benefits such as longevity and vacation were either overpaid or should not have been paid at all, however the full extent of the types and amounts of benefits overpaid or wrongfully paid is still unknown and will be determined by an independent audit."  

City Seeks Independent Audit:

Price also announced that he has asked the Auditor of State to assist the City with that independent audit, "In a letter sent yesterday, I have asked the Auditor of the State of Ohio to conduct a full and complete special audit of the City of Canton in order to fully account for tax payer dollars, make whatever findings are necessary to correct the situation faced by Canton, and to make recommendations where policies and procedures may have been deficient."  In a letter to the Auditor of State dated January 12, 2012, Price cites the need for a financial review and determination, "by a neutral third party, focused on the irregularities that have been discovered relating to certain retirements within Canton City government."

Regrettably, according to Price, the necessity for an independent determination will prevent the City from paying what is commonly referred to as "terminal pay" to any of the 29 employees, "City employees would typically receive a check after their retirement as payment for any unused vacation and sick leave, if applicable.  Under the circumstances, however, the City must hold these checks until we receive the results of an audit.  While the City had hoped to be able to reach an agreement with employees as to terminal pay and benefits prior to separating them, it would have made the situation worse had we reached a conclusion that later would have been challenged by the State Auditor."  Price declined to say when the City might expect the results of a special audit citing the evolving nature of the situation, "The City obviously wants the audit results as quickly as possible but also wants to assure that no stone is left unturned.  Either as part of our annual financial audit or preferably through a special audit, Canton needs a third party to determine who owes who what.  The standard financial audit of the City of Canton began just after the first of the year and we hope that timing, along with the extensive research we have already completed will help expedite any potential audit results."

Impact on City Operations:

Price said that the impact on City operations should be minimal but that some departments will be impacted, "Our first priority is to assure the continued safe and efficient operation of the numerous departments affected by this action and we will accomplish that, but the loss of almost 30 of our most experienced employees does present a challenging situation."  Price declined to comment on specifics in light of the ongoing criminal investigation but stated, "The administration has implemented measures to compensate for the lack of manpower based on department and need."  

Price has also ordered that security be enhanced at all of the city's numerous facilities, "While I have no reason to believe that anyone will react inappropriately to this decision, I know that the entire process has been extraordinarily difficult and emotional for everyone involved.  We cannot afford to take any chances with the City's numerous facilities and other assets.  Therefore, I have directed all City personnel to take additional security precautions in order to maintain safe and continuous municipal operations.  Residents and employees may notice a slight slow down in processing visitors and employees through security at some City facilities."

Next Steps:

According to Price, the criminal investigation is ongoing, but would not comment further other than to state, "Today's action was not disciplinary in nature.  The City legally separated these employees from government service solely due to their legal status.  Drawing any other conclusion than that at this point would be absolutely inappropriate and unfair to these 29 individuals."  Price also said that the special audit will determine the financial impact on the individual employees and upon City government, "The financial determination of this investigation will be complete when the City receives the results of our audit and I don't know when that will be.  Until then, any further comment regarding funds the City might be entitled to or funds the employees might be entitled to would be mere speculation."

Meanwhile, Price indicated that measures are being taken to fill voids, "Because of the ongoing criminal investigation and other uncertainties I cannot comment on specific measures being taken at this point, however, needless to say, we lost a significant amount of manpower today and the City is already working to address the situation.  While I cannot say at this moment exactly how many positions will need to be refilled, I can say that there will be open positions."

Price said that it has been a tough holiday season for City government, "My heart goes out to our employees and their families who have been affected by this devastating situation.  Despite the many lingering unknowns, I know in my heart that we have good people working for this City, we have employees who care deeply about this community and employees who work hard for the people of the City of Canton, including the employees who were legally separated from employment today.  We lost a combined 870 years or more of experience today and while City government will carry on, I cannot help but mourn that loss.  Today, I think, we are all mourning that loss, and yet I know the Canton City family of employees will continue to get the job done for the people of our city.  I have faith in that."

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