DOROTHY A. ABBAS, Complainant,

and

IOWA CIVIL RIGHTS COMMISSION

vs.

CITY OF HAMPTON, Respondent.

Findings of Fact continued:

Reason # 2: Reduction in Workload Due to Implementation of the New Computer System:

62. Herwig's letter of September 30, 1988 to Respondent's counsel states, in part:

The implementation of the City's computer system has substantially reduced detail work and typing time in invoice and claim preparation and processing, check writing time, bookkeeping time and report preparation and printing time.

(R. EX. # 3).

63. The city obtained two computer systems. The first was an electronic posting machine, sold in approximately 1978, used for payroll checks and utility billing. (Tr. at 224, 225). The second computer, installed in the summer of 1986, was a super microcomputer used for payroll, utility billing, and fund budgeting which included budgetary functions, general ledger and accounts payable. (Tr. at 225). The general ledger portion, however, was never installed. (Tr. at 229). This system was fully operational by January 1, 1987. All training had been completed by that date. (Tr. at 230). It is this second system which is referred to in Herwig's letter of September 30, 1988.

64. The 1986 computer enabled Complainant Abbas to do all checks on the computer. Prior to this, some checks were written by hand. (Tr. at 105). Specifically, accounts payable checks were done by hand. Payroll and utility billing checks were done by the first computer. (Tr. at 106, 226-27). Abbas credibly testified that the 1986 computer saved her approximately four to eight hours of time per month, all in the checkwriting function. (Tr. at 143). Abbas' testimony is considered credible because she actively used the system.

65. The testimony on this issue does not yield a reliable estimate of the total amount of time saved by the system in the clerk's office. Ken Herwig estimated that it saved 30 or more hours per month, with the time savings approximately equally split between Rozann Herwig and the complainant. (Tr. at 210). Herwig, however, did no input on the computer. (Tr. at 226). He acknowledged that the time savings for him were negligible. (Tr. at 211-212).

66. Caryle Merritt's computer software and hardware business, Merritt Computer Service, Inc., sold both computer systems to the city. (Tr. at 224-25). Merritt's business received, from the City of Hampton, $77,000 for software for the 1986 system, including installation and training, with an additional 10%-12% of the software price for software maintenance and customer support services. (Tr. at 233-35). Merritt also handled, as the support group for NCR, the installation of the hardware, a $25,000 minicomputer and a $13,000 printer sold through NCR. (232-33, 235). The amount Merritt received from the City for such installation is not clear in the record.

67. Merritt estimated the 1986 system saved the clerk's office 40 to 60 hours per month just for utility billing and replacing handwritten checks. (Tr. at 228, 230). He acknowledged, however, it would be difficult to accurately estimate the amount of time the system saved the city clerk's office. (Tr. at 228). Furthermore, he was familiar only with the basics and not the details of the internal operations of the clerk's office. (Tr. at 232). After installation he would not spend much time there. (Tr. at 232).

68. Whatever impact on the city clerk's workload the computer system had would have been evident by early 1987, as the system was fully operational by then. Yet, there was no proposal to reduce Abbas hours until late 1987, after the filing of the complaint. There is no evidence of Abbas' total workload being reduced to the point that there wasn't enough to do to keep her busy until the retaliatory reduction of her duties after she filed her complaint in August 1987. Also, if the computer system had a dramatic effect on the total workload at the city clerk's office, why was it necessary for the Herwigs to work overtime to perform the duties they had taken from Abbas? See Findings of Facts Nos. 1, 21, 28-30. The Commission is not persuaded that Herwig would have recommended Abbas' reduction to part-time, based on the time savings resulting from the installation of the 1986 computer, in the absence of a retaliatory motive.

Reason # 3: The Poor Economic Condition of the City and the Reduction of Property Tax Valuations:

69. Herwig's letter of September 30, 1988 to Respondent's counsel states, in part:

The City's poor economic condition and the reduction in property tax valuations of over $12,276,000, in the last three years which at the $8.10 per thousand levy limit imposed by the state has resulted in a $99,435 decrease in general fund property tax receipts. In trying to cope with this large decrease, the police department did not replace one police officer who resigned in May of 1988 and when the fixed based operators left at the airport, they were replaced by an employee from the water department so the police department and the water department have each sacrificed one employee each in order to help offset the decline in revenues. In keeping with these efforts, I am not able to reconcile paying full time salary for half time work.

(R. EX. # 3).

70. There is no question that the City of Hampton faced serious adverse economic conditions in the years 1986-88 which required budget cutting measures. See Findings of Fact Nos. 72-74, 76. But, the only employee in the entire city workforce who suffered any economic loss due to budget cutbacks was Complainant Abbas. All other budget cutting measures were either directed at non-personnel items or relied on reductions through attrition and transfers. See Finding of Fact No. 75. As demonstrated by a comparison of the amount of the positive balance of $75,865.00 in the general fund, achieved by the fiscal year ending June 30, 1989, only 8 months after Abbas' reduction to part-time, and the amounts of savings achieved by the other budget measures, with the savings of $8,100.20 achieved by the reduction of Abbas, it is clear that Abbas' reduction to part-time had a relatively minor impact on the deficit problem. See Findings of Fact Nos. 77-79. The elimination of the deficit and the restoration of the general fund to a positive balance, even in the absence of any reduction of Abbas' position, was certainly anticipated by February of 1989 and probably anticipated by September of 1988, prior to her reduction. See Finding of Fact No. 77. Under these circumstances, the Commission is not persuaded that the budget situation, in the absence of retaliation, would have resulted in the reduction of Abbas to a part-time position.

The General Fund Deficit as of June 30, 1987:

71.

The General Fund is the general operating fund of the City. All General tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid the general operating expenses, the fixed charges, and the capital improvement costs that are not paid through other funds.

(R. EX. # 5). The general fund includes salaries for the city clerk's office.

72. On January 20, 1988, Herwig reported to the city council that property valuations as of January 1, 1987 would be utilized for the 1988-89 budget. The valuations had decreased from $67,287,911 on January 1, 1986, to $59,102,955 on January 1, 1987, an $8,184,956 decrease. This resulted in an expected decrease of $66,298 for the General Fund if the property tax rate was maintained at $8.10 per thousand, the maximum allowable level. Agricultural land valuations also decreased by $73,804, resulting in an additional decrease of $222 for the general fund. This total reduction in the General Fund levy of $66,520 resulted in a decrease of approximately 11.5% from the amount which was available for the 1987-88 budget year in the General Fund. (R. EX. # 12, 13; Tr. at 132, 135, 194, 196).

73. The general fund was also impacted by a decrease in federal revenue sharing funds from $21,709.00 for the fiscal year ending June 30, 1987 to zero for the fiscal year ending June 30, 1988. (R. EX. # 5 at p. 20, 30, # 8; Tr. at 197).

74. On March 7, 1988, the state auditor issued its audit of City of Hampton finances for the fiscal year ending June 30, 1987. The audit indicates there was a $496.00 deficit at the end of that year for the general fund. The prior fiscal year had ended with a debit (i.e. positive) balance of $27,859. The auditor recommended that the city investigate alternatives to eliminate the 1987 deficit. (R. EX. # 5 at p. 25, 63).

Abbas - The Only City Employee Sustaining Economic Loss Due to Cutbacks:

75. On June 8, 1988, the city council passed the salary resolution giving Herwig the authority to reduce Abbas to part-time. See Findings of Fact Nos. 43, 45. The city council minutes reflect that "[i]n accordance with the union negotiations and contracts the salary schedule for both union and non-union members remain the same for the 1988-89 fiscal year as they were for the 1987-88 fiscal year. The fringe benefits remain the same also with the exception of the increase in premium for health and medical insurance which is paid by the city." (R. EX. # 12). The evidence in the record on budget cuts does not reveal any reduction in salary, hours, health insurance benefits or any other economic loss for any employee except Abbas. She was reduced from full-time to half-time with Herwig reserving the right to adjust the hours weekly for a greater or lesser amount. (CP. EX. # 5). Her hourly pay was reduced from $6.548 per hour to $5.50 per hour. (CP. EX. # 5; Tr. at 42). She was required to begin paying for her own health insurance benefits which were previously carried by the city. The initial monthly premium cost was $316.00 per month. (CP. EX. # 5).

General Fund Deficit As Of June 30, 1988:

76. On September 7, 1988, the city council was informed by Ken Herwig that the deficit in the General Fund had increased for the year ending June 30, 1988 to $21,663.08. (R. EX. # 12). As previously noted, Complainant Abbas' reduction to part-time was effective on October 31, 1988. (CP. EX. # 5).

Restoration of Positive General Fund Balance Anticipated By September 1988:

77. At the time budget cuts were implemented, Ken Herwig was aware that the total amount of the budget cuts was in the range of $70,000 to $80,000 per year. (Tr. at 220- 21). At sometime prior to February 9, 1989, Herwig was aware that the city's budget projections showed that the General Fund would be balanced by June 30, 1989 due to its budget cutting efforts. (R. EX. # 6 at p. 59; Tr. at 199- 200). This was probably known to him on or shortly after September 7, 1988. By that time, the following facts were known: (a) all the information in the city's financial report for the fiscal year ending June 30, 1988 including the amount ($21,663) of the general fund deficit for that fiscal year, (b) that $17,000 of this deficit was due to delinquent payment of property taxes, (c) property valuations utilized and anticipated general fund revenue for the fiscal year ending June 30, 1989, (d) all the facts in the budget and salary resolutions for the fiscal year ending June 30, 1989, and (e) that all the budget cutting measures set forth below except the reduction of Abbas (which had already been authorized) and the replacement of a resigned street department employee with a mechanic in May of 1989 had been implemented. Most of these budget measures were initially implemented during or after the fiscal year ending June 30, 1988. Some were initiated in 1987. (R. EX. # 12). See Finding of Fact No. 79.

General Fund Deficit Eliminated and Positive Balance Restored By June 30, 1989:

78. The City's budget cutting efforts resulted in the elimination of the deficit and restoration of a debit (i.e. positive) balance for the general fund of $75,865.00 by June 30, 1989. (R. EX. # 7 at p. 9.; Tr. at 202).

Budget Cutting Measures In Detail:

79. Official notice is taken of (a) the budget cutting measures undertaken by the City of Hampton and savings therefrom listed in Respondent's Answers to Interrogatories Numbers 17 and 18, and (b) the lost wages and benefits for Abbas which were listed in Complainant's Answers to Interrogatory Number 4, both of which were referred to during the course of the testimony. (Tr. at 43, 207). The savings have been calculated from the date the measure took effect to June 30, 1989, the end of the fiscal year in which Abbas was reduced to part-time, the deficit eliminated, and a positive balance restored to the general fund. Fairness to the parties does not require that they be given the opportunity to contest these facts: (Some of these facts were also directly mentioned in the testimony as indicated by transcript references):

A. Non-Personnel Cuts:

1. Police Car Replacement Schedule. Prior to 1987, the practice was to replace one car annually. Since that time, practice changed to replacement of one car every two years. Total savings as of 6/30/89: $28,000. (2 cars not purchased - 1987 and 1989). (Int. # 17; Tr. at 121, 205-06).

2. Street Department Truck Replacement: Prior practice was to replace dump trucks every two to three years. No replacement now since 1985. Anticipated replacement would have been in 1987 or 1988. Total Savings as of 6/30/89: $35,000. (1 truck not purchased - 1985-89). (Int. # 17; Tr. at 206).

3. Street Department Sweeper Replacement: Sweeper not replaced in 1988 as scheduled. Total Savings as of 6/30/89: $75,000. (Int. # 17; Tr. at 206).

4. Fire Truck Replacement: The city had established a fire truck replacement fund in which it had planned to place $10,000 per year in FY 1986, 1987, 1988. This $10,000 per year contribution was to continue until $100,000 was reached. The city could not complete its commitment and shifted the funds to general operations. Total Savings as of 6/30/89: $40,000. (Int. # 17).

5. In House Equipment Repairs: On May 1, 1989 city hired a certified mechanic to replace a street department employee who resigned. Mechanic now repairs city vehicles and equipment formerly sent to private shops. Total Savings: Unspecified costs for labor due to increased repairs given age of equipment. (Int. # 17; Tr. at 206-07).

B. Personnel Costs:

1. Airport operators and managers resigned. A water department employee assumed their duties effective June 1, 1987. No additional employees were hired to replace them. Total Savings as of 6/30/89: $30,000 in salary. (Int. # 18; Tr. at 122, 206).

2. Police officer resigned effective May 1, 1988. He was not replaced. Total Savings as of 6/30/89: $30,045.32 in salaries and benefits. (Int. # 18; Tr. at 121, 206).

3. Reduction of Complainant Abbas to part time effective October 31, 1988. Total Savings as of 6/30/89: ($5317.20 in salary + $4801.75 in benefits, i.e. vacation, holidays, health, IPERS, FICA, longevity) = $10118.95. (Int. # 4, 18). See Findings of Facts Nos. 94-95.