August 19th, 2008 By COREY PEIN | News | Posted In: CLEAN UP, CLEAN UP, City Hall, Cops and Courts

Who Was Responsible For $3.1 Million Mistake? City Has No Clue

     
Tags: Health
Private_Snafu_1About half of the 1,800 pensioners enrolled in Portland's Fire and Police Disability and Retirement Fund have been getting overpaid by an average of $60 a month for more than a decade, city officials said this afternoon in a meeting with reporters.
Since 1995, when officials believe a "miscalculation" in benefit payouts was introduced into the controversial system, the overpayments have totaled about $3.1 million.
The amount of individual overpayments varies. Mayor Tom Potter, a former police chief, has been overpaid about $19 a month, said his spokesman, John Doussard. Commissioner Randy Leonard, a former firefighter, has been overpaid about $47 a month.
Nancy Hartline, the fund's new business operations manager, discovered the error, which traces back to a 1995 state law mandating increased payouts to city pensioners, which was supposed to make up for state taxes on those benefits.
The law said that the new benefits were supposed to be based on the greater of two percentage calculations. But FPDR was awarding benefits based on the sum of both calculations, in effect giving retirees and their spouses 2 percent more than the law entitled them to.
Apparently, Hartline said, the calculation was correct on policy documents, but incorrect in the actual electronic spreadsheet the city was using.
The city doesn't know who was responsible for the error, or how it was introduced. Staff has turned over and pertinent files are no longer around.
So, is it fair to say that, for at least 12 years, no one was double-checking the numbers on a multimillion-dollar benefits program?
"You're asking me to speculate on something that happened when I wasn't here, and I can't do that," said city HR director Yvonne Deckard, who also chairs the FPDR board.
The pension fund's administrator at the time was Edwin Freeman, and "I can't tell you where Ed Freeman is," Deckard said.
Deckard is trying to accentuate the positive. That the error was discovered, even after all these years, shows that "the reform voters voted in with the (2006) charter change is working."
The FPDR board will talk about how to handle the problem at its Aug. 26 meeting. Deckard said she's ruling nothing out, and suggested the board's legal counsel is investigating whether it would be possible to "recover" the overpayments from retirees.
 
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