CHRIS EBIE COUNTY AUDITOR County Auditor Chris Ebie shared a very unsavory report with the board of supervisors at Tuesday’s meeting.

Ebie’s “Grinch-o-gram” outlined his department’s solution to a 16-year-old accounting malfunction that has an effect on a number of Mariposa County employees.

Last April the auditor, who did not seek re-election in the recent primary election, discovered that Social Security and Medicare contributions weren’t being deducted from employees’ deferred compensation contributions.

That amounted to a $385,000 “oops” that the board addressed in June. The supervisors voted to take $385,000 out of the county’s Tobacco Settlement Fund and make payment to the IRS, thereby avoiding a substantial penalty.

Since then, Ebie has determined that under IRS regulations, the employees involved in the under withholding are responsible for paying it back to the county.

Ebie believes the problem occurred in 1993-94 when the auditor’s office converted to another computer system. That was under then County Auditor Evelyn Billings, and Ebie was the assistant auditor.

Since that time, the correct withholding hasn’t been made. Ebie estimates that about 240 current employees will have to pay the piper for the past three years.

Thanks to the statute of limitations in the IRS code, Mariposa County is only liable for the past three years of unpaid withholding, as are the affected employees.

Ebie’s board information item suggested that deductions be made from the affected employees’ pay over four months, this Sept. Oct. Nov. and Dec. Every supervisor except District 1 representative Brad Aborn objected to that plan, as did a number of law enforcement personnel and other employees who addressed the board on the issue.

Supervisors Jim Allen, Janet Bibby, and Lyle Turpin, along with Chairman Kevin Cann urged Ebie to make further arrangements to extend the repayment plans, suggesting time frames from 12 to 24 months.

“The employees are going to suffer and this is a terrible time,” Bibby said. “Our people are going to take this hit and you need to minimize it as much as possible,” Allen said.

Cann asked Ebie to “go to the maximum degree to make this as minimal as possible to everyone effected.”

The auditor’s office has identified all employees who are involved in the under witholding, but they haven’t been advised as to the amount. Ebie said the repayment amount averages about $530 per employee, but varies greatly by level of compensation and contribution.

Ebie had planned to notify employees with their paychecks at the end of August. The board wasn’t going down that road either.

The board insisted that Ebie get the numbers, along with a clear and concise explanation of the repayment options into employees’ hands as soon a possible.

Mariposa County Sheriff’s Sergeant, Kathy Rumfelt, an 18-year veteran, has a particularly complex issue. She told the board, “The county isn’t making this right, it only fixes three years. My Social Security will never be correct. It will be short for the rest of my life.”

Service Employees International Union (SEIU) representative Debbie Macias thanked the board for urging the auditor to extend the repayment options. She said that 202 SEIU employees were effected by the under- withholding.

Child Support Director Debbie Walton pleaded with Ebie to let employees know their repayment totals as soon as possible, as did Assessor Becky Crafts.

Deputy Joe Williams, president of the Deputy Sheriffs’ Association, said, “My people need to know now. My guys live paycheck-to-paycheck, month-to-month and they deserve to know what they’re faced with. You’re going to have deputies standing in the ‘Kops for Kids’ line if we don’t do this right.”

Ebie responded with, “We can try.”

Cann cautioned that repayment options must accompany any notification to employees of the amount owed. “Can you two meet as soon as we’re done here?” Cann asked Williams and Ebie.

Some of those making statements to the board suggested that the county should stand good for the repayment, but County Administrative Officer Rick Benson, backed up by County Council Steve Dahlem, explained that wasn’t possible because it would constitute an illegal gift of public funds.

Benson also flew a flag of caution about extending the repayment option for employees, since there may be tax consequences to stretching payment out.

“We need to talk to our tax attorneys to be clear on that aspect,” Benson warned. Allen wanted to know how soon that could happen, but Benson couldn’t commit to a specific time frame, saying “I can’t speak to how quickly our attorneys can get us that answer.”

There is another side effect too. Every employee who made deferred compensation contributions over the last three years that either retired, left their position, or was terminated, get to stand in the pay back line.

Ebie said, “That’s going to be a challenge.” He said his office plans to invoice those individuals, and if repayment isn’t arranged, the County will issue a W-2, which could initiate tax consequences for those involved.

In any case, every County employee who participated in the deferred compensation plan, back to 1993-94, except those who have participated in the family insurance plans, have had their Social Security earnings underreported, thereby at least minimally adversely affecting their ultimate retirement benefit amounts.

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