WASHOUGAL — For years, seasonal employees in Washougal haven’t paid into their state-managed public pensions, and now it’s costing them.
The city is trying to retroactively collect an estimated $14,000, possibly more, in overdue premiums to the Washington State Retirement System, following a decades-long oversight resulted in no payments being made on behalf of seasonal workers.
Among the past and present employees on the hook — 25 or so, by the city’s estimation — news of the shrinking paychecks has come as a shock.
Scott Haas has worked as a seasonal employee of the parks department since 2008, spending the summer months performing maintenance and landscaping. The city is charging him $2,750 in overdue premiums to the state’s Public Employees Retirement System.
Although he’s not opposed to paying into PERS, Haas said the retroactive wage garnishments are an unplanned financial burden for Washougal employees. The city has been taking 5 percent out of seasonal workers’ paychecks since mid-July.
“It’s absolutely incredible, because I had no idea I’d have to pay that money back,” Haas said. “There was absolutely no heads up on this at all.”
Haas appealed having to pay back the premiums, but the city denied his request in July.
He considers the mistake Washougal’s and believes the city should pay for it. City officials, on the other hand, say they’re bound by state laws regulating retirement benefits, which require employees to make the payments themselves. The city owes the Washington state Department of Retirement Systems $22,000.
“We checked in with the state auditor and were told we have to recover from those employees,” City Administrator David Scott said. “They’re not losing this money. The contribution they make is going into the system on their behalf.”
He called it an unfortunate situation that predates the current administration. The mistake likely occurred in the early 1990s, when a state law was changed that allowed seasonal workers to collect — but first pay into — a state pension plan, he said. Employees have the option of entering into PERS 2 or PERS 3.
But in Washougal, that never happened. So for years, the city’s human resources department was in the dark about seasonal workers’ PERS eligibility. The mistake was never caught by the state auditor or the Department of Retirement Systems.
The city became aware of the situation in late spring, at a meeting of mayors from around the state, Scott said.
Washougal self-reported the issue to the Department of Retirement Systems in May. In an email to the department, Meagan Morris, a city accountant, wrote that Washougal needed to make “some corrections” for its seasonal employees, dating back to the 1980s.
Seasonal workers who terminated their employment with the city years ago may receive a reprieve because of the difficulty in tracking down their personnel records, Scott said, but the city is awaiting a decision from DRS.
Dave Nelsen, legislative services manager for the Department of Retirement Systems, said while public entities are responsible for writing their own human resources policies, keeping those in line with state laws regarding pension management can raise questions about who’s eligible.
“These are complex rules,” Nelsen said. “They’re complex for employers, and that’s why we have a training program.”
But answers haven’t been as forthcoming as city employees would like. Council members, too, have complained that they’re in the dark about what went wrong and how to fix it.
Council members Brent Boger and Jennifer McDaniel briefly raised the issue at recent council meetings, leading to testy exchanges with the city administration. At a July 22 meeting, Mayor Sean Guard criticized McDaniel for broaching the topic, saying she liked “to take digs at the administration.”
Guard said the matter was something the city would address independent of city council. “We don’t bring up payroll issues with council,” he said.
In June, Guard sent an email to seasonal employee Charlie Dawson, who had requested information from council members about the situation. In his email, he wrote that she was to have no contact with council members.
“Council members are our legislative body for setting policy and ordinances,” Guard wrote. “(They) are never to get involved in the inner workings of the operations of the city.”
He said the city is handling the situation. It would be illegal for the city to pay the employees’ contributions, so that’s not a possibility, he added.
Haas, the parks employee, said the city is offering seasonal employees a repayment schedule to sign. He won’t sign it, he said, even though he already lost his appeal with the city.
“I’m not signing anything,” he said. “It’s going to turn into a legal battle.”