Employees or contractors? Definitions are key to Belleville pension dispute

News-DemocratJune 30, 2013 

— The core of the debate about Belleville city attorneys qualifying for municipal pensions depends upon whether they are considered employees or contractors.

Opponents say the attorneys are independent contractors -- like an engineer hired to do special work on the sewer plant -- and do not work the 1,000 hours a year representing the city to qualify for a pension.

Proponents say the attorneys are appointed officials and are considered employees -- like an appointed city engineer tasked with day-to-day work -- and do put in at least 1,000 hours for the city.

If the attorneys qualify for participation in the Illinois Municipal Retirement Fund, the city of Belleville would have to contribute an estimated total of about $20,000 per year for the two attorneys' pensions.

The IMRF is not a state pension system and is funded in bulk by investment earnings and also contributions from municipal employers and employees.

The organization said May 28 that City Attorney Garrett Hoerner and Assistant City Attorney Brian Flynn, who were appointed this year, are not eligible for the system.

But just a month earlier, on April 29, the pension system approved Hoerner and Flynn's retired predecessors, former Belleville city attorneys Robert Sprague and Mike Flynn.

Mike Flynn is the father of Brian Flynn.

The decision from IMRF's Benefit Oversight Committee came after a nearly five-month review of whether Sprague and Mike Flynn qualify for retirement benefits.

The IMRF staff initially denied a pension for Sprague on Dec. 12 and denied a pension for Mike Flynn on Dec. 14.

"When IMRF first denied pensions for Sprague and (Mike) Flynn it was based on our belief that an attorney cannot run a private practice and be employed as a common law employee for an IMRF employer," IMRF spokeswoman Linda Horrell said in an email.

Sprague and Mike Flynn appealed the decision, so IMRF then looked for evidence to prove that the attorneys were not common law employees, Horrell stated.

"To the contrary, the evidence provided by the city said that they were employees and not independent contractors," Horrell stated.

On April 29, IMRF told Sprague and Mike Flynn that they can continue to participate in IMRF.

Now, Sprague collects $86,763 a year and Mike Flynn gets $41,955 a year from IMRF. Each served more than 30 years in Belleville.

Brian Flynn questions why IMRF is now contesting his and Hoerner's eligibility when IMRF just spent the past half-year reviewing their predecessors, who did essentially the same work.

Horrell said IMRF continues to investigate closely any new enrollments for municipal attorneys because of confusion many employers have over whether these workers qualify.

Horrell said IMRF first started an "Employer Audit" program in 2007 and the audit highlighted how employers were confused about the contractor versus employee issue, and especially so when it came to city attorneys.

"Many of these attorneys have a private practice with many clients and do not maintain an office at the IMRF employer," Horrell stated. "We do not believe an attorney can have a private practice and meet the hourly standard."

Hoerner and Brian Flynn disagree, and are appealing the IMRF decision to deny their participation.

So what are the IMRF guidelines to decide whether someone is an employee or a contractor?

An employee works prescribed hours, works at the employer's office, does not generally offer services to the public, has tools and clerical help furnished by the employer, gets paid a salary or hourly, and gets fringe benefits such as liability insurance, unemployment insurance and workers' compensation.

A contractor sets his or her own hours, works in his or her own office, offers services to the public, has his or her own tools and assistants, gets paid on a per job basis, does not participate in employer offered fringe benefits and has his or her own liability insurance.

Brian Flynn said the criteria IMRF uses are merely guidelines. And, he said city attorneys fall more in the employee category.

Belleville's attorneys cover all the city's legal needs, get benefits from the city, work under the direction of the city, use city stationery and research tools and get clerical help from the mayor's secretary, Brian Flynn said.

Belleville Ward 2 Alderwoman Melinda Hult said the attorneys recently drafted their own contracts with the city and the contracts were written in a way that purposely helps them qualify for IMRF participation.

"I was really concerned with the language that the city was required to provide them staff materials and space in City Hall," Hult said.

Hoerner works for Becker, Paulson, Hoerner & Thompson, and Brian Flynn, works for Flynn, Guymon & Garavalia. Both firms have Belleville offices.

The City Council unanimously approved the attorneys' contracts after agreeing to remove a clause that would have required the city to give money for retirement and health benefits even if the attorneys don't get such benefits.

The council decided to remove the clause and revisit the issue after the attorneys go through the IMRF appeal process. If the clause was left in the contract, then even if IMRF denies the attorneys, the city would have to pay the estimated total of $20,000 they would have given as pension contributions directly to Hoerner and Brian Flynn.

Belleville City Clerk Dallas Cook said the IMRF guidelines are confusing and some workers seemingly could fit the definition of both categories.

"We need to get better laws on the books so they could prevent these municipal attorneys from getting pensions," Cook said.

Cook said IMRF set a bad precedent by allowing Mike Flynn and Sprague to get pension benefits.

"But just because they did doesn't mean it was the correct ruling," Cook said. "We should always be reviewing and making sure we're doing what we can to make sure taxpayer money isn't wasted."

Cook initially called this issue to IMRF's attention after he was elected to the position in April. Cook said when his office tried to enroll Hoerner and Brian Flynn, IMRF's computer system denied the workers.

Cook has said there is no way each attorney works 1,000 hours, or about 20 hours a week, for the city because the attorneys have private firms and represent entities other than Belleville.

Cook himself participates in IMRF and says he qualifies because the city clerk position is full time.

Belleville Ward 5 Alderman Joe Hayden said he wants to know if IMRF asked for proof from the city of Sprague and Mike Flynn's eligibility. To Hayden, city attorneys are contractors.

"If their salary isn't high enough, let's just get down to what the salary of such a contracted employee should be," Hayden said.

Hoerner earns $109,647 a year from Belleville, and Brian Flynn makes $53,613.

Contact reporter Jacqueline Lee at jlee@bnd.com or 239-2655. Follow her on Twitter at twitter.com/BNDBelleville.

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