- T. in the CiTi
In the Information Age, “I.T.” Doesn’t Mean “Inform the Taxpayers”
By Allyson White
The Weekly Recorder
May 2, 2008
[Washington, PA] – It’s quiet at City Hall this week while Mayor Spossey is wining and dining in Las Vegas and Councilwoman Ullom returns from her month long travels throughout Europe. Though it’s been quiet, some visitors and employees of City Hall appear “surprisingly” more pleasant this week while questions quietly pop up about the motives and use of executive sessions by some City officials. Mayor Spossey and Councilwoman Ullom supported hiring Lynn Galluze as a full-time employee with an annual compensation package of almost $75,000 that includes healthcare. In addition, Spossey and Ullom wanted to recognize her as an “18 year” employee (meaning that she would enjoy the perks AND PENSION of a person who has been a City employee for almost 20 years). All paid for by the taxpayers. Why is this and will we ever really know?
Ms. Galluze has been a long-time independent contractor providing information technology services to Washington. She receives a 1099 (self-employed) tax form from the City and sets her own hours to work with clients. Self-employed contractors enjoy the benefit, in order to avoid paying as much in taxes, of writing off expenses such as health insurance premiums, gasoline, travel, equipment and many other expenses that a regular working individual cannot.
Some question if Ms. Galluze’s long-time support for Mayor Spossey had anything to do with the hiring attempt. Many employees and friends, all of which are said to be close to the Mayor, have praised her and expressed concern when three other members of City Council decided that it wasn’t in the best interest of the taxpayers at this time.
Why would some offer such a lucrative benefit package after raising taxes so high and why didn’t the public know anything about this? This action was stopped in its tracks by a 3 – 2 vote with Councilman Blackhurst, Faust and Staniszewski standing up against it.
During a recent City meeting, the quite verbal Councilman Matt Staniszewski questioned the use of executive sessions and publicly asked why some appear to be hiding this from the taxpayers. “The people have a right to know about how their tax dollars are being spent,” Staniszewski stated. The verbal one then questioned the reasoning behind the executive sessions citing that if Ms. Galluze is not an employee; “personnel” couldn’t be the reason. He continued to question her status in which if Ms. Galluze is an employee, where and when was the public vote to hire her? There were also questions if she had indeed sued the City. If she didn’t sue the City, then “litigation matters” couldn’t be the excuse for an executive session. According to the Media Law Council for the Pennsylvania Newspaper Association, it appears that Staniszewski might be right. Most of the audience during the meeting had no idea about this hiring which then sparked more questions.
We later learned that Councilman Tom Blackhurst, a long-time city resident and retired fireman who served to protect citizens for more than 20 years, expressed concern with Spossey and Ullom when they attempted, in addition to the lucrative package, to allow a waiver of the residency requirement. According to City policy, all employees must live within 7.5 miles of the City and Ms. Galluze lives outside that area. Councilman Blackhurst was subject to the rules during and after his tenure as a City fireman and he felt it was unfair to waive it for one individual while all other City employees must follow the rules as he has.
Spossey and Ullom justify their position by contending that Ms. Galluze has been a great asset to the City by creating the accounting system, working with City departments and securing grants for updates to City technology. They also claim that Ms. Galluze has been closely working with the state’s Early Intervention Program in order to receive funding and coordinate many I.T. recommendations that the state provided. One of which, Staniszewski contends, is to find more affordable contractors; though that recommendation “appears to be ignored by some.” Others are said to believe that Spossey’s and Ullom’s reasoning is no excuse for the lucrative package.
Staniszewski, who has a bachelor degree in computer science and claims to have created software programs for large accounting and financial firms while he was a self-employed independent contractor like Ms. Galluze at one time, feels the City pays too much for I.T. services.
According to City finances, in 2004, the City spent $93,720.77 with $76,019.50 as Ms. Galluze’s bill. In 2005, they spent $95,048.50 with $72,121.50 as Ms. Galluze’s share. In 2006, when Staniszewski was new on City Council, the City slightly reduced expenditures to $94,993.82 with $70,640.50 as Ms. Galluze’s share. In 2007, Staniszewski began to express concern of the cost of I.T. services paid for by the taxpayers. That year, the City reduced overall costs by almost 20% bringing down expenses to $77,659.73 with $63,191.50 as Ms. Galluze’s share. In the last 4 years, Ms. Galluze made well OVER a QUARTER-MILLION DOLLARS paid for by the taxpayers. Some people barely make that in a lifetime. We also found that Washington School District shares in these I.T. costs. Ultimately, still all paid for by the taxpayers.
Staniszewski claims that Ms. Galluze simply “calls in” other contractors to fix hardware and software problems. He also complains that the City has too many “maintenance” contracts for “antiquated” equipment that could be cheaper to replace if they break rather than pay these yearly fees. Staniszewski did confirm that some specialized software, such as some used in the police department, will still need yearly support contracts in order to remain up-to-date. He did, however, contend that there are too many “layers” of contractors addressing the City’s I.T. needs and the process could be “streamlined which could save the taxpayers’ money.” Staniszewski, who was the only one to vote no to the tax increase, questioned why others supported raising taxes while also creating high-paying, non-union administrative jobs which would increase expenses further.
The experienced Businessman and Councilman Terry Faust gave the position a careful analysis before making a decision. According to sources, he did his homework and researched other Cities and found that they spend significantly less on I.T. services confirming Staniszewski’s long-time position that the City pays too much. Sources say that after Faust “looked at the numbers,” though he didn’t rule Galluze out, he has become open-minded to looking at other options. Onlookers at City Hall are slowly growing pleased with a “new” Terry Faust who is working his way out of the clutches of the persuasive and powerful Mayor.
As mentioned in the “Big Daily,” Spossey and Ullom fired back contending that Blackhurst, Faust and Staniszewski risk getting the City in trouble with the IRS because they feel Ms. Galluze is an “18 year” employee during her time contracting with the City. They claim that the actions of the three Councilmen will cost the City hundreds of thousands of dollars. Spossey and Ullom also question why the three Councilmen did not follow the advice of the solicitor’s legal opinion.
To date, not one member of City Council, the Mayor or the City’s attorney can confirm that a written legal opinion exists. As for being liable for the last 18 years and costing the City hundreds of thousands of dollars, many attorneys and IRS professionals disagree with Spossey and Ullom. If the City was sued and lost, there is a “statute of limitations” meaning the City would only be liable for up to, for example, 3 years. Typically, cases like this would also be turned over to an insurance company and all the City would have to pay is a deductible which may be $5,000. According to some who used to work at City Hall, Ms. Galluze has never been considered an employee.
While many question what occurred during the executive sessions, the taxpayers may never know.
