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On Thursday afternoon, the city of Portland announced that it had recently caught a major error: It had failed to remit $7 million in payroll taxes for the past two tax quarters, including transportation and Social Security taxes.
Just hours before the city emailed its employees about the failure to remit taxes to both local and state governments, the city’s human resources director, Tracy Warren, wrote to bureau staff in an email that the bureau’s operations manager, Tom Schneider, was retiring.
Schneider’s last day, Warren wrote in the email, a copy of which was obtained by WW, is June 7.
Schneider, among other duties, oversees the payroll system. He’s been in the position since 2010.
According to two people familiar with the matter, Schneider was placed on leave and will remain on leave until his last day. The sources say his departure is directly tied to the tax problem.
City spokeswoman Carrie Belding says Schneider was placed on leave on May 16 and later notified the city he would be retiring. Schneider received no severance package.
The city in its Thursday announcement wrote that the Bureau of Human Resources was conducting an internal investigation to find the source of the failure, which the city first became aware of in early May. (Upon learning of the issue, the city says it promptly remitted the taxes.) The inquiry will include a “personnel investigation,” an audit, and an evaluation of the city’s payroll system. The two sources say they don’t believe any laws were broken.
“As a steward of public funds, the City of Portland takes financial responsibility very seriously,” city administrator Michael Jordan said in a statement. “Shining a light on this payroll situation provides an opportunity to ensure that we comply with all requirements and detect any problems quickly.”