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DeKalb puts interim city manager on leave after officials uncover misdirected funds

Officials say budget altered city’s contribution to health premiums

DeKalb Finance Director Molly Talkington explains the city's budget dilemma in December at the DeKalb Municipal Building in DeKalb.
DeKalb Finance Director Molly Talkington explains the city's budget dilemma in December at the DeKalb Municipal Building in DeKalb.

DeKALB – Molly Talkington has been placed on leave from her position as DeKalb’s interim city manager after officials said they discovered that the city was not fully covering its obligations to pay for retiree and employee health benefits.

City Council members on Tuesday will consider a measure to make a $250,000 supplemental payment to the Intergovernmental Personnel Benefit Cooperative. A separate item on the agenda calls for Talkington’s removal as interim city manager. She would be restored to her position as city finance director, according to city documents.

“This has been a very difficult week at City Hall and [for] those of us on the council,” Mayor Jerry Smith said. “While I’m disturbed and taken aback by what may be a misappropriation of funds, I’m concerned that this may have been kept from the City Council or never brought to the City Council for any subsequent action.”

Talkington could not be reached for comment. She blocked calls from a Daily Chronicle reporter this week. Raymond Munch, the interim assistant city manager, could be appointed interim city manager by the council Tuesday.

According to city documents, the city pays 80 percent of the cost of health benefits for employees, while the employees cover the remaining 20 percent through payroll deductions. However, Smith said the cost-share ratio was fudged in the budget this year, making the city’s general fund appear to be $250,000 better off than it should have been, and staving off the need for additional budget cuts.

Neither the Finance Advisory Committee nor the City Council were informed of or consulted about the decision, Smith said. He said the city’s reserve fund, which is about $9 million, would cover the emergency payment to the insurance cooperative.

“We’ve got to fix this right away because this is money that, it doesn’t belong to the city; it belongs to the city’s employees,” Smith said.

Talkington was hired as the city’s finance director in September 2017 by former City Manager Anne Marie Gaura and would have been a key participant in formulating this year’s budget – as Gaura would have been. After Gaura resigned in March and the first interim city manager, Patty Hoppenstedt, left because her husband took a job out of the state, Talkington took over the interim position in June. She recently had been mentioned as a finalist for the city manager position in Lake Geneva, Wisconsin.

Smith said position changes and the internal investigation will “in no way impact the search for a new city manager.” Talkington was not a candidate for the job, Smith has said.

The personnel change will add urgency to the council’s search for a new city manager. The council is scheduled to review the top 20 applications for the job Friday in a closed meeting, after which it is expected to identify the top five or six candidates and interview them, Smith said.

City officials were careful to point out that money may have been misdirected, but it was not stolen.

According to a city of DeKalb news release, if the city’s internal investigation reveals that the misappropriation of funds was in violation of its policies and standards, the city will move to hold all responsible parties strictly accountable. 

“This alleged wrongdoing has not resulted in any missing funds,” the release said. “Every dollar involved in this possible misappropriation of funds has been accounted for. All money was spent for official city business, and funds will be made whole in the coming days.”

This year’s budget process already has proved challenging, with official projections calling for a $1.6 million budget deficit without spending cuts.

The city will have to ensure that it is working with the correct numbers in its projections before continuing with the process, Smith said.

“If there was any misappropriation or any information not given to the council, my hope is that it was an honest attempt to put a more positive spin on the [budget] numbers,” Smith said. “However, we don’t want numbers that are bogus. We want numbers that are real.”

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