City attorney retirement question goes to Attorney General
By Barbara Arntsen
Published in News on April 28, 2004 2:12 PM
The decision on whether Goldsboro's city attorney is eligible for state retirement is now in the hands of the state attorney general's office.
Michael Williamson, director of the state retirement system, said that he had received a letter from City Manager Richard Slozak about Harrell Everett's employment status.
Williamson sent the letter to the attorney general's office last week, asking for a legal decision on whether Everett qualifies for state retirement benefits.
The city has paid thousands of dollars toward Everett's retirement, even though 15 years ago state officials said that he was not eligible to participate in the system. For purposes of retirement eligibility, state law defines an employee as a person regularly employed by local or state government.
Regular, as defined by the North Carolina Administrative Code, is an employee, "the duties of which require not less than 1,000 hours of service per year." If there is a question about what constitutes regular employment, the state decides.
Slozak said that Everett was a full-time employee, but Mayor Al King and Mayor Pro Tem Chuck Allen said he was not.
According to city records, Everett receives $60,000 in legal fees a year, plus $90,000 for legal services. The city pays about $2,500 a year into his retirement plan.
Slozak says Everett is eligible because he works more than 1,000 hours a year for the city.
That translates into about 20 hours a week. Everett is also a partner in a local law firm.
Slozak maintains that Everett has been classified by the city as a salaried employee and is paid accordingly.
"He has negotiated his salary and employment arrangement directly with the City Council," Slozak wrote.
In the letter to the state, Slozak said that the city pays Social Security taxes on Everett's salary and a retirement system match, but does not pay health insurance.
Slozak said Everett was offered hospitalization coverage by the city, but declined.
Slozak also said that he didn't know if Everett was ever offered vacation or sick leave by the city.
"However, he does not currently and has not, in the past, accrued such leave," he said.
Slozak acknowledged in his letter that the city had continued to make payments for Everett's retirement, even though the state had determined that he was ineligible to participate.
"I do want to point out, however," Slozak writes, "that the North Carolina Local Governmental Employees' Retirement System, after making this determination, continued accepting these payments for approximately fifteen years."
Slozak said that the letter from the city in 1989 to the state retirement office regarding Everett's eligibility, didn't "accurately reflect Mr. Everett's employment relationship" with the city.
The 1989 letter to the state asking about Everett's eligibility came from Al King, while he was employed as the city's personnel director and before he was mayor.
Slozak said he "can find no documentation which supports that Mr. Everett now or ever has been employed on a retainer basis." He also said that he couldn't find any contracts or retainer agreements between the city and Everett, either individually or with Everett's law firm.
But though there are no contracts or agreements with Everett's law firm, Slozak does acknowledge that the city uses the firm.
"When legal services are required by the City of Goldsboro, in excess of the biweekly pay given to Mr. Everett, the services are utilized of his private law firm. These payments are not subject to withholdings of any nature."
Slozak said that though he was city manager in 1989, he knew nothing of the state's questioning Everett's eligibility, or "otherwise this issue would have been addressed at that time."
"Mr. Everett has informed me that he also never received such correspondence. Mr. Everett's personnel file contains no documentation of the 1989 letters which you recently faxed to my office on March 18, 2004."
Wayne County makes retirement system payments for both of its lawyers, County Attorney Borden Parker and Tax Attorney Dortch Langston. The town of Mount Olive makes them for Town Attorney Carroll Turner. All three have private law practices, as well.
County Manager Lee Smith said the two county lawyers are "contractual employees." Smith said that as contractual employees, the lawyers are regarded as full-time employees, receiving W-2 forms from the county, but are exempt from the county's personnel policy.
Not all contractual employees working for the city or county receive that same consideration for state retirement. Bus drivers for the Gateway transit system are contractual employees and are not allowed to participate in the state retirement system.
The lawyers are given the retirement system payments and also health insurance as part of the contracts, Smith said. He said the practice of providing health insurance and retirement benefits for lawyers was common.
Williamson said that there is no such thing as "contractual employees" under the state retirement system.
He also said that state retirement benefits are not an option cities or counties can offer as an incentive.