Town of Independence Did Not Enroll Employees in State Retirement Systems; Mayor Allegedly Had Town Lower Son’s Utility Rates

Officials in the Tangipahoa Parish town of Independence consistently failed to enroll eligible employees in two state retirement systems, a possible violation of state law, according to an investigative audit released Monday by Legislative Auditor Daryl Purpera.

The report also said town management charged Mayor Michael Ragusa’s son a reduced utility rate. A third finding in the report noted the town didn’t report Ragusa’s $4,400 in vehicle allowances from July 2013 to June 2014 as income to the IRS.

Auditors reported that the town “has consistently failed to enroll eligible employees in the Municipal Employees Retirement System (MERS) and the Municipal Police Employees Retirement System (MPERS).” While state law mandates all full-time municipal employees (unless specifically excluded) be enrolled in either MERS or MPERS, there were 45 eligible town employees who were not. Only two employees were enrolled in either program; the rest contributed to Social Security.

Based on the tally of 34 employees that should have been enrolled in MERS, the town should have contributed $141,129 to the system from employer and employee contributions. For the remaining 11, the town should have paid MPERS a total of $157,273. Auditors recommended that the town “consult with legal counsel about making the appropriate payments to MERS and MPERS to fund contributions for eligible employees who were not enrolled in those retirement systems and to determine if amounts paid in to Social Security for those employees can be recovered.”

Also in the report, auditors noted that Ragusa’s son was being improperly billed reduced utility rates from June 2013 to December 2014. Former town employees told auditors the mayor instructed them to charge his son the rate for customers within the town limits even though he lived outside of them.

Ragusa said he did not instruct the town to change his son’s utility rates and claimed the town’s former utility clerk changed it “to make him look bad before the next election.” Auditors recommended that the town try to recover the $1,155 in owed charges.