County may owe $1 million in pay dispute

County may owe $1 million in pay dispute

Flathead County owes a group of sheriff's deputies three years of past wages after miscalculating their salaries, according to a ruling handed down last month in Flathead County District Court.

Preliminary estimates indicate that after past wages, penalties and attorney's fees are paid, the county is "likely looking at a million-dollar hit," Flathead County Commissioner Joe Brenneman said.

In November, Flathead County District Court Judge Katherine R. Curtis issued a partial summary judgment ordering Flathead County to pay past wages to 29 former and current sheriff's deputies.

The total amount of compensation owed deputies won't be known until accountants recalculate the salary, overtime wages and longevity payments of each deputy affected. Attorney's fees and penalties, which are based on a percentage of compensation owed, will be hashed out in a final judgment expected in a few months.

"Judge Curtis has set the penalty portion of the judgment at 15 percent if we pay within two years," Brenneman said.

By statute, deputies earn a percentage of the salary paid to the sheriff. In 2006, deputies sued Flathead County and successfully argued that $2,000 added by the state to the sheriff's base pay should be included in that calculation.

Adjusting the deputies' salaries to reflect the additional $2,000 in the sheriff's salary will also mean recalculating past overtime wages, county contributions to benefit plans and longevity payments.

In 1981, the Montana Legislature passed a law entitling deputies to receive a longevity payment equal to 1 percent of their minimum base salary for each year of service. In Flathead County, all longevity payments had been based on the minimum base salary a deputy could receive - 74.1 percent of the sheriff's salary - rather than on the minimum base salary corresponding to a deputy's rank. By statute, corporals receive 84.5 percent and sergeants receive 86.5 percent of the sheriff's salary.

"This interpretation would defeat any incentive within the longevity pay program for a deputy to be promoted or to improve at the job," Curtis wrote, quoting a Montana Supreme Court decision in a similar case originating in Lewis and Clark County.

Curtis rejected arguments by Deputy Flathead County Attorney Jonathan Smith that the same method had been used to calculate deputies' wages for decades and that the deputy sheriff's union had given implicit consent to the calculation method by approving numerous contracts with the county.

"Unfortunately, the law isn't clear, and counties throughout the state have interpreted the statute differently and subsequently calculations for deputy pay vary," Smith said.

County officials had calculated deputies' salaries without including the sheriff's additional pay from the state since 1981. However, Curtis ruled that deputies were eligible only to receive past wages for the three years before county officials changed their calculations to reflect the $2,000 in July 2006.

"In 2006, after the Lewis and Clark County decision and after careful review of a prior Attorney General opinion gave us more guidance in interpreting the statute, we changed our calculation method and as a gesture of good faith made it retroactive for three years," Flathead County Sheriff Mike Meehan said.

About double the number of deputies named in the lawsuit may actually receive back wages.

"Even though only 29 deputies were involved in the dispute, everyone affected who has money coming will be compensated," Meehan said.

To pay the expected judgment, Brenneman said county commissioners have considered increasing property taxes. A county is permitted to levy a mill increase above the statutory cap when facing court-ordered payments.

Commissioners also have discussed using funds due the county for untaxable lands under federal ownership.

This is the first year Congress has fully funded the Payment in Lieu of Taxes program, resulting in an anticipated $800,000 windfall for Flathead County. Brenneman said commissioners had hoped to use the Payment in Lieu of Taxes funds on county road construction.

"We don't know how much it's going to be," Brenneman said. "There isn't a million dollars floating around to allocate to this."

Smith said he didn't yet know if the county would appeal Curtis' decision.

"We may determine that there isn't much reason to appeal," said Smith, who noted that Curtis' ruling was very similar to one handed down by the Montana Supreme Court. "But we'll have to take a look."

Reporter Nicholas Ledden can be reached at 758-4441 or by e-mail at nledden@dailyinterlake.com