August 28, 2017

Small Town Avoids Potentially Big Expense

Written By

Does a Second job for an elected official require her successor in office to be paid for both jobs even if the successor isn’t doing both jobs?

The small town of Seelyville, IN (pop. 1,032) in Vigo County, a short distance east of Terre Haute, has a municipal utility. For decades, the town paid the same bookkeeper to manage billings and collections for its utility. When the bookkeeper retired, the Seelyville Town Council agreed to hire the person who was at that time also the elected Seelyville Clerk-Treasurer to perform the bookkeeper’s duties. The utility job was renamed office manager. That individual performed both jobs and received the salary allocated for both jobs.

A couple of years later, the Clerk-Treasurer stepped down from her elected office but continued in the employ of the town as the utility’s office manager. As the utility’s office manager, she earned approximately $32,000 per year. She had also earned a separate salary of a bit less than $17,000 as the Clerk-Treasurer, which she relinquished when she stepped down from that office  Her replacement as Clerk-Treasurer understood that she would receive the same $17,000 annual salary as her predecessor for this part-time job.

Trouble began for the town when an auditor from the State Board of Accounts arrived to review the town’s books.  Indiana has a statute prohibiting a town from reducing the salary of its Clerk-Treasurer. Noting the two salaries earned by the person who previously held the office of Seelyville Clerk-Treasurer, the auditor declared that the current Clerk-Treasurer was entitled to both salaries — $17,000 for Clerk-Treasurer and $32,000 for office manager – based on the aforementioned statute. Although this was a misinterpretation of Indiana law, the Clerk-Treasurer began to pay herself both salaries. She also attempted to fire her predecessor Clerk-Treasurer from her position as office manager for the town’s utility. The town disputed both actions.

Our attorneys successfully defended the town at trial when the Clerk-Treasurer sued. That court rejected the Clerk-Treasurer’s argument that she was owed the Second salary regardless of whether she performed the Second job. She then appealed, and the town again prevailed, convincing the Court of Appeals to reject all of her claims, including for the additional compensation and for authority to fire the utility office manager the town had hired. Hinsenkamp v. Seelyville Town Council, Memorandum Decision in Cause No. 84A01-1309-CC-408 (Ind. Ct. App. July 16, 2014).