More money questions for Franklin County

By Kristi Pihl and John Trumbo, Tri-City HeraldOctober 13, 2012 

PASCO, Wash. -- Two Franklin County commissioners and the county prosecutor were overpaid at least $3,200 each for using their personal vehicles for county business last year.

And the amount could be even higher based on a recent analysis by the Franklin County Auditor's Office that has raised more financial problems in the county in the wake of an embezzlement scandal at the hands of a former public works accounting manager.

Commissioners Brad Peck and Rick Miller and County Prosecutor Shawn Sant were overpaid because a wrong rate was used to reimburse them during 2011.

Since that overpayment was discovered, Miller and Peck have repaid the county $3,200 of the $14,100 each received for last year's vehicle use. And Sant has made arrangements for the overpayment to be taken out of his paychecks.

But the recent report suggests that the rate calculated by Dennis Huston should have been even lower. Huston, the county's former public works accounting manager, was fired in February on suspicion of embezzling $2.8 million.

The wrong rates were a result of his deception and illustrate how far reaching the tentacles of Huston's alleged fraud were, Peck told the Herald.

"I hope this is the end of it, but I wonder almost daily what's next," he said. "It's almost like the gift that keeps on giving."

Now county officials are questioning how far back they should check the calculations and where or how to make adjustments.

Based on the latest calculations, Peck, Miller and Sant should have received about $7,580 last year. But that's $6,520 less than what they received, according to documents obtained by the Herald.

Only Peck, Miller and Sant receive travel pay because they are not assigned county cars. Commissioner Bob Koch uses a county-supplied Chevrolet Colorado pickup.

The other three are reimbursed based on the rate set for the same class of light-duty pickups and SUVs that Koch drove. That is the same rate that any department of an employee using a county vehicle is charged and is adopted in a resolution approved by commissioners.

They are paid the same amount no matter how many miles they actually drive on county business.

Matt Mahoney, the county's new public works director, said the rate structure for equipment rentals incorporates maintenance and operation costs, such as repairs, supplies, overhead and fuel, as well as depreciation, a surcharge for replacement and corrections for prior year charges.

The annual cost to operate a vehicle from the pool is broken down by month and billed to the departments, Mahoney explained.

Mahoney said officials are struggling to determine how the equipment rental and revolving fund was operated in the past because they lack the information Huston used to calculate the rates. Folders on Huston's desk that should have included that data were empty.

But Peck believes more work needs to be done to determine what the most accurate rate should have been for all departments, not just the commissioners. Even if the county had Huston's data, Peck said its reliability would be questionable.

Beaton said his staff has finished the analysis of rates that Peck asked for in June.

The review used the approved method to determine the 2012 rates and applied the actual 2011 costs to come up with what were actual rates from 2011.

The report was meant to answer Peck's question, Beaton said. Neither Koch or Miller had seen the report by mid-week but the Herald requested and received a copy from Beaton.

The rate used to pay the commissioners and Sant isn't the only one the auditor's office report calls into question. It also suggests that the sheriff's department may have overpaid about $75,200 to public works last year for its vehicles.

The auditor's office report is the second look at the vehicle reimbursement rates this year.

After Huston's arrest in early 2012, Peck asked Mahoney to recalculate the rental rates from scratch.

Mahoney finished his review in May. His calculation includes an annual rate of $8,521 for commissioners' vehicles and the prosecutor. That is what now is used by the county.

Rental rates are based on prior year expenses, so the 2012 rate is based on the 2011 actual expenses, Peck said. However, the parts listed on the false invoices Huston allegedly used to embezzle county funds were not included in the rate calculations.

Miller said the rate set for 2012 seems to be fair and reasonable. He suggested the county may need to look into a different system for reimbursing officials for using their own vehicles for county business.

The travel allowance is meant to cover the gas and wear and tear on a personal vehicle being used for county business, Miller said. He estimates his job as commissioner adds 25,000 miles a year to his personal vehicle.

Sant, who is paid $128,544 annually, said his office has a vehicle assigned to it, but it is for other employees to use, including the investigator.

Employees who drive their own cars for county business when that vehicle is being used submit their mileage.

Commissioners, who are paid $89,780 each this year, are on about 80 different boards and commissions for the county, Peck said. With the amount of travel they do, it would be unreasonable to ask them to pay for it themselves.

"We travel a great deal for county business," he said. "A lot of that is locally. Some of it is out of town."

The vehicle reimbursement is treated as a fringe benefit and is taxable on tax returns, Peck said.

The reimbursement is not meant to be a true accounting of the miles the commissioners actually drive on county business.

In Benton County, all three commissioners use county vehicles for county business. Benton County Prosecutor Andy Miller said he uses his own car for county business and has chosen not to be reimbursed for most travel.

He said he gets reimbursed for some out of town mileage, such as to Seattle. But trips to Prosser or around Benton County are on his own dime.

Peck and Sant both say as a result of the confusion over the overpayment, they are considering accepting the use of a county vehicle instead of receiving reimbursement for using their own. Both said they were concerned with the perception of using a county vehicle for personal stops.

If they do decide to go with a county vehicle, like Koch, they would end up paying the county for any personal use of the county car.

Koch said he decided to go with a county vehicle after his first four years as commissioner, when he put 24,000 miles a year on his own pickup.

The monthly stipend just didn't cover the travel, he said. It got to the point where he was putting on more miles doing county business than the stipend covered.

Koch said he pays the county for his mileage between his home in Connell and the courthouse, as well as paying 5.6 cents for every mile he puts on the vehicle -- an amount set by the Internal Revenue Service.

That, he said, is supposed to cover any personal stops he may make, such as at a grocery store.

Peck said he has been told the county's equipment rental and revolving fund, which pays for repairs and replacement of vehicles, has been almost exhausted.

He said the county can't rule out the possibility that shortages that may have shown up elsewhere were concealed in that account.

Right now, Mahoney said the fund is not in a healthy state. He said they will work to get the fund to the point where it can handle things such as fluctuations in gas prices without affecting other departments' budgets.

Mahoney said they can see that mismanagement occurred. His department is still working with the auditor's office on the vehicle rates to make sure they are consistent with state law and follow the state auditor's recommendations.

Mahoney said they are continuing to look at last year's rates and also are in the process of determining how far back to go.

"Nobody that is still working here at Franklin County should be held accountable," Mahoney said. "I believe everybody felt like they were working and operating and making decisions on what was good information."

SIDEBAR: Official questioned vehicle rates in '11

Franklin County's vehicle rental rates first came into question two years ago when Commissioner Bob Koch questioned the rate the commissioner's office was being charged to use a 2008 Chevy Colorado pickup.

"I didn't look into the other commissioners' rates, but I was concerned about my own. That (higher rate) was enough to replace my vehicle with a Cadillac," Koch told the Herald.

Koch is the only one of the three commissioners who uses a county-owned vehicle. The other two and the county prosecutor were paid at an even higher rate in 2011 to use their personal cars for county business.

At the time, Dennis Huston, the county's former public works accounting manager who was fired in February on suspicion of embezzling $2.8 million, told him that the fuel cost was accidentally included twice, Koch said.

The county determined the replacement cost for Koch's county pickup after several years' use would justify an annual rate of about $10,900.

So starting in March 2011, that's what public works charged the commissioner's office for Koch's use of a truck. But Peck and Miller continued to collect the higher amount, totaling $14,100 each for the year.

Also, Prosecutor Shawn Sant, who also uses his personal vehicle, continued to collect the higher rate, according to documents obtained by the Herald.

Koch admitted he didn't question the amounts other commissioners were paid to use their own vehicles.

But the arrangement bothered Toni Fulton, who was the confidential secretary to county Administrator Fred Bowen until last month when she took a new job with the city of Richland.

She told the Herald she asked Peck and Miller repeatedly in 2011 about how they wanted her to adjust for the overpayment on their monthly travel checks.

"Every time I processed a travel check I asked if I should continue paying the (higher) rate. I was uncomfortable with it and didn't want it coming back on me," Fulton said.

Fulton says she asked the full board on Nov. 7, 2011, what commissioners wanted her to do. She said Peck told her to do nothing because the rental rate might be changing again.

That same month, a state auditor also questioned why two commissioners were receiving $14,100 a year instead of the amount used for Koch's pickup.

But it wasn't until after Huston's arrest in early 2012, that Peck asked Matt Mahoney in public works to recalculate the rental rates without using any of Huston's data.

Mahoney finished his review in May and that is what's currently being used by the county for the commissioners and prosecutor.

Based on the new rate, Miller refunded $3,211 on June 21.

The next day, Peck sent an email to the county auditor and treasurer asking for a full review of the 2011 rates.

"If people receiving travel allowances were over- or under-compensated we need to document that and make any necessary adjustments," he wrote.

Peck insists he was just waiting for results of the auditor's review.

Beaton said the review was completed by August but he didn't deliver it until Oct. 3 because his office has been understaffed and very busy. Peck repaid the money the next day plus 10 percent interest.

Peck admits commissioners were slow to undertake a review of the vehicle rental rates. It was something they talked about in 2011, but it still hadn't been finished by the time Huston was arrested in February, he said.

Tri-City Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service