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Lee County’s aim in resignation: Save money

Former employee claimed to have been ‘laid-off’ on state form

Kathy Lalley
Kathy Lalley

DIXON – There were discussions and an agreement made prior to a former Lee County employee resigning in March. The agreement included unemployment benefits.

Lee County Chairman Rick Ketchum said the county saved money by allowing Kathy Lalley to submit a resignation letter and agreeing to not contest her unemployment claim. Lalley was the assistant director of the Lee-Ogle Transportation System (LOTS).

The county saved money, Ketchum said, because the expense of unemployment benefits would be less than paying Lalley’s salary. He said the county had planned to lay Lalley off in 3 months when her position was likely to be eliminated.

Lalley hand-delivered her resignation letter to Ketchum on March 14, which stated her resignation would be effective March 19.

“For payroll purposes, I understand that it might be easier for the county if I use personal time for March 17 and 18, and I am willing to do that, provided that the county not contest my application for unemployment benefits,” Lalley wrote in the letter.

On March 23, according to records obtained by Sauk Valley Media through a Freedom of Information Act request, Lalley applied for unemployment benefits and indicated that she had been laid off.

When asked Thursday if that was an accurate description of why Lalley’s employment with the county ended, Ketchum declined to commnet.

“I’m not going to comment one way or the other on that,” he said. “We agreed not to talk about it, and we’re not going to talk about it.”

According to Ketchum, there were discussions between him, Lalley, an assistant state’s attorney, and Jaime Blatti, the LOTS director, leading up to Lalley’s exit, although the group never sat down together to discuss it.

The agreement was made, in part, because of insubordination issues, Ketchum said, and in his opinion, Lalley didn’t get along with Blatti.

On May 15, Sauk Valley Media reported that Lalley was under investigation, but officials hadn’t released details.

Ketchum said Lalley left before the end of her contract on her own terms, and by agreeing to start paying her unemployment benefits 3 months early, the county saved money.

“We never talked about her seeking employment [after she left],” Ketchum said. “We were just under the assumption that she’s too young to retire and would be working somewhere else.”

The state Department of Employment Security runs the unemployment compensation program. IDES spokesman Greg Rivara said that in order to receive unemployment benefits, a person must be out of work at no fault of their own and be looking for work.

Rivara said he isn’t authorized to discuss a specific case, but he could speak in general terms about the program.

When a person applies for unemployment benefits, Rivara said, the department confirms details about the person’s identity and eligibility, part of which includes contacting the former employer.

An IDES letter to Lee County indicating that Lalley claimed to have been “laid-off” was sent March 26. A second letter, indicating that the county wasn’t contesting Lalley’s claim to benefits, was mailed to the county March 31.

The decision to claim that she was laid-off, Ketchum said, was made by Lalley. But, he added, by agreeing beforehand not to contest the claim, the county meant that it was willing to pay the benefits.

The laws regarding unemployment and unemployment claims are highly nuanced, Rivara said, and when it comes to fraud, the department considers a person’s intent.

“We don’t apply fraud to words,” he said. “We apply fraud to actions. Fraud would not be something we consider, in essence, of the words chosen as to why or why not a person may not be working. ... That is why the timely and vigorous response of the employer is critical.”

An investigation of an unemployment claim could be started if the state gets information contradicting what was filed. That investigation, Rivara said, usually begins with IDES contacting the employer and former employee again.

There is a cost-benefit analysis involved in determining whether to pursue an investigation, Rivara said, which keeps in mind the nuances and available information.

Lee County doesn’t pay unemployment insurance as private-sector employers would. Instead, it is among the state employers that reimburse the unemployment trust fund for each claim.

Lalley will receive about $418 a week in unemployment, which would save the county about $428 a week in salary.

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