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City of Billings

The city of Billings has released some documents detailing disciplinary actions against Solid Waste employees who misused public money at the landfill. 

A landfill supervisor resigned last summer after at least $12,000 of city money went missing, and another employee was suspended for four weeks.

John Arellano, the landfill supervisor, resigned in a handwritten letter dated June 16, 2014. Barb Butler, who was suspended without pay for four weeks, signed an agreement acknowledging her misconduct.

Documents detailing discipline of two of the city’s Solid Waste employees last year over alleged misuse of public money at the city landfill were released Tuesday by the city after District Court Judge Michael G. Moses ruled that Billings city officials must provide some of the records to The Billings Gazette.

The first batch of documents contained Arellano's hand-written letter of resignation and a "Last Chance Agreement" signed July 15, 2014, by Butler, a Solid Waste environmental compliance coordinator. In the agreement, Butler acknowledges violating city policies, including cash handling and ethics policies.

“The records released show that the City of Billings Human Resources and Public Works departments performed a thorough investigation, resulting in resignation of one Solid Waste employee whose vacation payout was withheld as allowed by law, and a 4-week suspension and mandatory last chance agreement for another Solid Waste employee,” City Administrator Tina Volek said in a news release.

Volek said no criminal charges were filed because "it was impossible" for police detectives investigating the case "to determine who took the money."

On Jan. 21, Yellowstone County District Judge Michael G. Moses ruled that The Gazette was entitled to documents related to the investigation of Arellano and Butler, identified in his order as Employee One and Employee Two. Documents related to the investigation of another worker, referred to as Employee Three, were not ordered released because Moses determined the employee’s right to privacy exceeded the public’s right to know.

Eliminating a paper trail

Vern Heisler, deputy Public Works director, wrote in a June 5, 2014, notice of possible disciplinary action against Arellano that the former supervisor lied when he told investigators he did not take city funds for personal use. City investigators obtained copies of receipts for cash totaling $12,007.45 that city employees had received from Pacific Recycling between April 2010 and January 2014.

“You believed you could not use a (city purchasing card) for coffee, kitchen supplies and other things, so you decided to start and put into action recycling some of the City’s metal for cash,” Heisler wrote after an interview process that included 16 people. “You instructed the drivers to leave the recycled materials at (redacted) and you would separately drive to (redacted) in your City truck and pick up the cash. Often along with the cash was a transaction receipt from (redacted). You (did) not give the receipts to anyone at the City, but instead you kept them for a period of time and you eventually disposed of the receipts.”

On 12 occasions from April 2011 through January 2014, Arellano signed for and received more than $300. On six days when Butler was off duty, Arellano signed for a total of $3,346.85.

“You admitted to stealing some of the cash; you then gave the rest of the cash to Barb Butler. … You said that Barb Butler kept this cash in her office. You also said that you and Barb Butler would go shopping with this cash to purchase coffee, kitchen supplies and other food items for the Solid Waste Division. You and/or Barb also disposed of all stores’ receipts that you received for these purchases. It appears that everything was done from beginning to end to cover your tracks and eliminate a paper trail. … ”

Arellano resigned the day before his scheduled due process hearing.

In Butler’s case, Heisler wrote that she spent $539 in public funds for plaques and gift cards for Solid Waste employees even after being told not to by Dave Mumford, Public Works director. She wrote a check from her personal account to cover the purchases, but asked department supervisors to contribute to the amount. One supervisor suggested recycling some old solid waste tanks and using that money to reimburse Butler. At the time, Butler was the acting Division manager.

In addition, Heisler wrote, she failed to follow cash-handling procedures, failed to properly supervise city employees as the acting Division manager and violated the city’s Code of Ethics policy.

In a June 23, 2014, letter, Butler called the investigation “fair” and the allegations made against her “true.”

“Although I am not being accused of appropriating any funds for my personal use,” Butler wrote, “I feel compelled to say for the record, and to assure you in person, that I never put any of the money into my own pocket.”

In an email, Volek wrote that the city’s Public Works department “is in the process of completing an operating audit on all its divisions.”

“The initial audit recommended that the Public Works Department initiate a recyclables inventory across the department,” she wrote. “It has also been suggested that the policy on recycling and cash can be strengthened. Recycling agencies in Billings have been instructed to provide a monthly check to (the) Public Works Finance division, rather than providing cash to those who bring the recyclables in.”

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City Government Reporter

City reporter for The Billings Gazette.