Elk Rapids village manager resigns over payroll error

Dec. 7—ELK RAPIDS — In a 5-1 decision, the Elk Rapids Village Council voted to accept the resignation of Village Manager Bryan Gruesbeck, following a three-hour closed session for council members to discuss disciplinary action against village staff for their accused role in a $32,000 payroll error.

Gruesbeck attended the regular council meeting, which adjourned late Monday night, though did not make a public statement or return a call or email seeking comment Tuesday.

Village attorney Scott Howard, in an investigative report released last month, said Gruesbeck and two other village staff, Clerk Kaitlyn Szczypka and Planning and Zoning Administrator Kerri Janisse, were delinquent in protecting taxpayer dollars.

Howard said in his report there was plenty of blame to go around for why an October 2021 double payroll made by Janisse, who was at that time the village's treasurer, was not reported to village council members, was not made public or remedied.

Howard's report, however, placed final responsibility with Gruesbeck.

"The buck stops with the Village Manager," the report states. "It is clear from our investigation that Bryan's oversight and management of the overpayment issue — and the Village's overall finances at the time of the overpayment — were deficient."

Council member Laura Schumate was the lone no-vote; Schumate was also named in Howard's report as learning of the overpayment months before it was made public or discussed by the full council.

Council members also voted Monday to place a letters of reprimand in Szczypka's and Janisse's personnel file, and to suspend Janisse for two weeks without pay, and undergo a 90-day performance improvement plan with reviews in 30-day increments.

The disciplinary action against Szczypka was unanimous, the disciplinary action against Janisse was 5-1 with council member Kellie Sergent voting against.

Howard's report states Janisse downplayed her role in the error and tried to shift the blame to others, and Szczypka exhibited a sense of helplessness, rather than taking action.

The disciplinary decisions for the three staff members are the latest fallout stemming from what Howard's report states was an error by Janisse, who in October 2021 mistakenly submitted a double payroll, debited from village accounts and paid out to 37 village employees and elected officials.

The error, which internal emails show Gruesbeck, Janisse and Szczypka were aware of within a day or two, cost the village $32,595.29.

Of that overage, $17,418.72 has so far been paid back, with $15,176.57 still listed as an "account receivable" on the village's books — meaning a bill that's owed and yet to be paid.

Internal emails show Gruesbeck, Janisse and Szczypka did have discussions with department heads, yet no substantive corrective action was taken and the error was only made public when a resident, Teri Kuffner, began asking questions nearly a year later, after she said she heard anecdotal stories of the extra paychecks.

By then Janisse had changed jobs, becoming the village's planning and zoning administrator and a new treasurer, Kristine Davis, had been on the job for several months.

A community outcry came next, the Record-Eagle filed a Freedom of Information Act request for internal communications, and the village council voted at a special Oct. 25 meeting to task Howard with investigating what happened.

Janisse is married to former Village Council President Jim Janisse, who served on the council since 2006, and in November he lost his re-election bid to a local business owner, Karen Simpson.

Prior to the election, Jim Janisse, who Howard stated in his report had abrogated his duties after learning of the error months before it was made public, apologized and offered to reimburse the village for any payroll overages not paid back by employees.

A local resident, Mike Weber, who grew up in Elk Rapids and retired after a lengthy career in corporate finance and accounting, offered during public comment at a previous council meeting, to examine the village's books pro bono.

On Tuesday, Weber, said the offer was still good and he hoped council members would take him up on it.

Simpson said Monday she would be making a public statement about Gruesbeck's resignation on Tuesday morning, though no statement was posted on the village's website and Simpson did not return a call seeking comment.

Council members also voted to establish a committee to consider the recommendations listed in Howard's report, though there was some apparent confusion surrounding who would be named to serve.

A resolution included in the council's packet stated Simpson, Shumate, Gruesbeck and council member Kellie Sergent would serve on the committee, though no public discussion of these members were previously discussed.

After accepting Gruesbeck's resignation, council members voted to name President Pro-Tem Barb Mullaly, Shumate and Sergent, all members of the council, to the committee.

Howard's recommendations include rethinking the way the village manager and the treasurer are supervised, issuing clear instructions to staff to contact counsel with even daily questions, modifying the employee handbook with a specific payroll overage policy, forming a finance committee, encouraging the deputy treasurer to take a more active role in payroll, and ensuring that the staff provides the council with regular — and more detailed — financial reports.

A first meeting date for the committee has yet to be set.