Portsmouth City Manager Derek K. Allen is proposing a charter amendment dealing with payroll timesheets for city employees.
“One of the assignments I was given upon being hired as the Portsmouth city manager was to address the audit citations that had appeared in the city’s annual audits,” Allen said. “One such citation is the practice of turning in payroll timesheets requesting payment for time periods that have yet to be completed.”
According to Allen, employees are paid on the 4th and 18th of each month, but due to the processing time necessary, employee timesheets are being tuned in with estimated hours of work before the pay period ends. In addition, Allen says the time frame or lack of appropriate time required to perform payroll was established many years ago, leading him to tell city council that he cannot correct the issue in its entirety since payroll is a function of the auditor’s office over which he exercises no control.
“However, one aspect of this situation can be corrected and should be corrected,” Allen said. “The greatest issue is created in December of each year when timesheets are turned in around Dec. 23 of the year for the remainder of the year in order to pay employees prior to the end of the year.”
Allen said this year, as in past years, employees will be paid on the last work day in December instead of Jan. 4 of the following year. He said, as a result, timesheets are due by Dec. 23 and employees will receive three checks in December and only one check in January.
“The reason that the city pays employees three times in December and thus requires the employee to submit timesheets almost a full two weeks before the pay period ends is because of a portion of the Charter Section 49 Annual Appropriation Ordinance,” Allen said.
Section 49, the Annual Appropriation Ordinance, says the city manager will submit to the Council, at the time that he submits the annual budget, the draft of an appropriation ordinance based on the budget and so drawn so as to provide for all expenditures proposed therein for the ensuing year.
It says upon the submission of the proposed appropriation ordinance to the council, it shall be deemed to have been regularly introduced within the document. Within a period of 10 days after the receipt of the proposed appropriation ordinance the council may provide for public hearings on the subject to be held either before a committee of the council or before the council.
After the expiration of that period of time, the proposed appropriation ordinance may be changed or amended by the council, and shall take the same course and be subject to the same procedure in the council as other ordinances but will not be passed before the first meeting of the council in January.
“The reason that employees are not paid on the fourth of January is because there is no appropriations ordinance in place,” Allen said. “By paying the employees in December the city has until Jan. 18 to have an appropriations ordinance in place because that is when the next employee payroll is conducted.”
Allen said, even though a budget can be completed by the end of the year the city charter prevents the third reading of the budget before the first meeting in the next year. He said, in order to have appropriations between Jan. 1 and the first meeting of the year, council would have to either pass a temporary appropriations budget or the city can hold bills and invoices until such time as an appropriations ordinance has been passed.
Allen went on to say the practice of holding bills has delayed vendors getting paid. However, Section 50 of the charter also prevents a temporary appropriations ordinance from being passed until after the start of the new year.
“The only logic that I can deduce to not pass the appropriation ordinance before the yes of the year would be to allow a new City Council to have a say in the budget and to not have an outgoing City Council pass a budget,” Allen said. “The fallacy in this reasoning is that any City Council at any time has the ability to amend a budget either by reducing appropriation or by increasing or supplementing appropriation. By passing an appropriations ordinance does not make it permanent.”
He said he knows of no other community that has a provision prohibiting the City Council from passing the annual appropriations ordinance prior to the beginning of the next fiscal year. Allen said, if City Council were to decide not to pass a permanent appropriation ordinance, they could still pass a temporary budget before the beginning of the new fiscal year which is currently prohibited.