Wisconsin Legislature: 2002-11-06 Senate Journal

State of Wisconsin

Department of Administration

October 30, 2002

The Honorable, The Legislature:

Included with this correspondence, I am submitting the report of the Department of Administration, Division of Gaming (Gaming), for the first quarter of fiscal year 2003 (July 1, 2002 through September 30, 2002). As required by s. 562.02(1)(g), Wis. Stats., the attached materials contain pari-mutuel wagering and racing statistical information, as well as the revenues for the program areas of Racing, Charitable Gaming, Bingo and Indian Gaming.

If you have any questions or comments regarding this report, please do not hesitate to contact Rachel Meek at (608) 270-2535.

Sincerely,

F. Scott Scepaniak

Administrator

State of Wisconsin

Department of Revenue

October 29, 2002

The Honorable, The Senate:

In accordance with section 71.55(10)(e), Wis. Stats. (1999-00), I am enclosing copies of the Department of Revenue reports on distribution of enrollment cards for the Wisconsin State Medical Society "Partnercare" program.

Sincerely,

Richard G. Chandler

Secretary

State of Wisconsin

Claims Board

October 29, 2002

The Honorable, The Senate:

Enclosed is the report of the State Claims Board covering the claims heard on October 3, 2002.

The amounts recommended for payment under $5,000 on claims included in this report have, under the provisions of s. 16.007, Stats., been paid directly by the Board.

The Board is preparing the bill(s) on the recommended award(s) over $5,000, if any, and will submit such to the Joint Finance Committee for legislative introduction.

This report is for the information of the Legislature. The Board would appreciate your acceptance and spreading of it upon the Journal to inform the members of the Legislature.

Sincerely,

John E. Rothschild

Secretary

STATE OF WISCONSIN CLAIMS BOARD

The State Claims Board conducted hearings in the State Capitol, Grand Army of the Republic Memorial Hall, Madison, Wisconsin, on October 3, 2002, upon the following claims:

Claimant Agency Amount

1. Donald W. Smith Employee Trust $31,214.08

Funds/Justice

2. John Komassa Natural Resources $5,368.73

3. Lynn Kirschbaum Natural Resources $14,370.00

4. Meer Electric, Inc. Administration $8,713.95

In addition, the following claims were considered and decided without hearings:

Claimant Agency Amount

5. Michael Barnhardt Revenue $3,590.21

6. Cabinet Country, Ltd. Revenue $31.00

7. Don Charles Dietz Revenue $398.36

8. HGM Architecture, Revenue $3,608.58

Inc.

9. Mary E. Redlinger Revenue $584.01

10. Carolyn Carty Corrections $5,122.99

11. Jason F. Marshall Corrections $5,000.00

12. Alphoncy Dangerfield Corrections $1,126.44

13. Myron Edwards Corrections $853.20

14. Berrell Freeman Corrections $45.80

15. Dennis Gonzalez Corrections $15.75

16. Dennis Gonzalez Corrections $19.69

S812 17. Dennis Gonzalez Corrections $78.22

18. Dennis Gonzalez Corrections $214.00

19. Dennis Gonzalez Corrections $224.00

20. Mt. Sterling Agriculture, Trade $6,590.48

Cheese Coop. & Consumer Protection

21. Eugene L. Schupbach Military Affairs $79.13

22. Donald Wollheim University of $157,947.30

Wisconsin

23. Lyndon Weberg Employee Trust Funds $548.75

24. Terri L. Nielson Administration $10,842.00

The Board Finds:

1. Donald W. Smith of Madison, Wisconsin claims $31,214.08 for the value of sick leave credits for which he was not eligible due to his retirement date. The claimant served as an assistant attorney general for 26 years. He retired in August 1996 because of health problems. He states that he tried to put off his retirement as long as possible because he knew that the legislature was considering an increase in the amount of sick leave credits that could be converted to pay health insurance premiums after retirement. However, negotiations for the new contract, which would include the increased sick leave credit provision, went far beyond the contract expiration date of June 1995. The claimant states that he was an active member of the Wisconsin State Attorneys Association (WSAA) when the contract expired. In light of his many years of service to the state, the claimant asks that he be awarded the value of the extra sick leave credits.

DETF does not believe it is appropriate to advise the Claims Board on the payment of this claim, since the board does not have the authority to make any payment from DETF funds. This claim relates to the sick leave accrual provisions in the 1997-1999 contract with the WSAA. The contract took effect on December 29, 1997, but provided for retroactive application to July 6, 1997. The claimant, however, retired eleven months prior to the retroactive date. DETF states that the claimant has no legal grounds for relief but appears to be basing his request on his years of service to the state.

DOJ states that, although it sympathizes with the claimant's health concerns and appreciates his many years of service, it cannot recommend payment of this claim. Based on the provisions of the contract, which only provided retroactive benefits to July 1997, DOJ correctly calculated the claimant's accrued sick leave at the time of his retirement.

At the request of DETF, DER concurs with DETF's analysis of the claimant's ineligibility for increased sick leave earnings. DER believes that the negotiated contract with WSAA did not permit retroactive benefits to the claimant and that the claim does not have merit based on the claimant's retirement date.

The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employees and this claim is neither one for which the state is legally liable nor one which the state should assume and pay based on equitable principles. (Member Shibilski dissenting. Member Lee not participating.)

2. John Komassa of Mt. Horeb, Wisconsin claims $5,368.73 for attorney fees related to his employment at the Nevin State Fish Hatchery. The claimant states that his duties at the hatchery include keeping the premises free from all animals because they can spread disease to the hatchery's fish or fish eggs. On November 19, 2001, the claimant noticed a stray cat in the fish hatchery building. The claimant states that the cat was unkempt, did not have tags and appeared to be feral. The claimant states that he was bitten in his initial attempt to catch the cat. The bite punctured the skin on the claimant's hand, despite the fact that he had put on heavy work gloves. The claimant states that he realized that he would be at risk for rabies and that the cat would have to be caught and killed in order for it to be tested. Unable to capture the animal alive, the claimant struck the cat with a metal object, which resulted in its death. The Dane County District Attorney subsequently charged him with mistreatment of an animal. The claimant contacted the DNR to obtain legal representation but was informed that, because he was charged with a crime, the state could not provide representation. The claimant obtained his own attorney at a cost of $5,338.39 to defend himself against the charges, which were eventually dismissed. The claimant believes that he was performing his duties and that his actions were appropriate to the situation and requests reimbursement for his attorney's fees.

DNR recommends payment of this claim. The claimant had been instructed by his supervisor to take whatever measures necessary to keep the hatchery disease-free and to keep all animals out of the premises. At other hatcheries, disease outbreaks have required destruction of fish causing monetary losses of tens of thousands of dollars. The claimant contacted the Fitchburg Police Department for assistance in getting the animal tested for rabies. The Fitchburg Police referred the claimant to the Dane County Humane Society. It was the Human Society that pressed the Dane County Sheriff's Department and the District Attorney to file against the claimant. DNR was not able to provide the claimant with representation because he was charged with a crime and the claimant had to borrow money to pay for an attorney. The DA's office dismissed the charges against the claimant without comment on March 22, 2002. DNR points to the fact that until this time the claimant was the subject of a mean spirited hate-mail campaign and that his case was the subject of much media attention, including newspaper articles and radio talk shows. Throughout this incident, DNR believes that the claimant behaved professionally and, to his credit, declined to take part in the heated public debate surrounding his case. DNR feels that the claimant did not deserve to be prosecuted for simply trying to do his job and that he should not have to bear the cost of defending himself for an act that was not criminal and which was in the best interest of the state.

The Board concludes that a reasonable attorney's fee is $200 per hour and therefore the claim should be paid in the reduced amount of $4530.00 based on equitable principles. The Board further concludes, under authority of s. 16.007 (6m), Stats., payment should be made from the Department of Natural Resources appropriation s. 20.370 (4)(mu), Stats.

3. Lynn Kirschbaum of Glen Haven, Wisconsin claims $14,370.00 for crop damage caused by deer. The claimant states that his property adjoins property where the landowners do not allow sufficient hunting to adequately control the deer population. The claimant alleges that deer from these neighboring properties have been causing significant damage to his corn crop for many years. The claimant states that from 1995 through 2000, he did participate in the Wildlife Damage Abatement and Claim Program (WDACP). He alleges that the program only paid for a portion of his damages and that it took too long to get the money. He also states that he had problems with the hunters that he was forced to allow onto his land under the program and that the hunters would only shoot bucks, not does, which did not sufficiently impact the deer population. Because of his dissatisfaction with the WDACP, he decided not to participate in the program in 2001. He alleges that he made numerous requests to DNR for assistance but that they were unwilling to cooperate because he had not signed up for the WDACP.

S813 DNR recommends denial of this claim. DNR does not dispute that deer have caused damage to the claimant's crops. However, DNR states that it is not responsible for the individual acts of wild animals and points to the fact that there is no right under common law to compensation for deer damage. DNR points to the fact that there was previous statutory authority for payment for certain damages done by deer, however, that statutory program was repealed in 1980. DNR states that this statutory authority was replaced by the WDACP, which is a voluntary program administered by the counties. The DNR points to the fact that the claimant has participated in this program in the past and has received substantial payments for his damages under the program. DNR states that the claimant has also been issued permits to shoot deer causing damage to his property. DNR states that the claimant decided not to participate in the WDACP in 2001; he apparently decided to deal with the problem by leasing hunting rights on his property. DNR believes that the claimant was apparently not satisfied with the results of this attempt and is now trying to collect payment, despite the fact that he has not filed the statutorily required notice under the WDACP. DNR also suggests to the board that there would be large numbers of potential claimants in similar situations as Mr. Kirschbaum. Finally, DNR points to the fact that the Claims Board has denied numerous similar claims in the past. DNR does not believe that this claim is different from those that were previously denied and believes that there is no equitable reason to pay his claim.

4. Meer Electric, Inc., of Richfield, Wisconsin claims $8,713.95 for damages allegedly relating to a contract for classroom renovations at UW-Milwaukee. The claimants did not include the cost of concrete cutting and patching in their bid for this project. The claimants allege that they told Mitch Hyra from the Division of Facilities Development (DFD) that their bid price did not include the cutting and patching costs. The claimants state that when they received the contract for signature, there was no indication in the contract that the cost of concrete cutting and patching was not included. The claimants state that, on the advice of their attorney, they typed additional language on the contract indicating that this work was not included. The claimants allege that when they returned the amended contract to DFD, the state signed the contract without comment. The claimants believe that this indicates that the state accepted the additional language. The claimants state that, after the project was started, the state told them that they had to perform the concrete cutting and patching work or lose the contract. The claimants hired the general contractor to perform the work. The claimants have tried to receive additional payment for this work from DFD but their requests have been denied.

DOA recommends denial of this claim. DFD points to the fact that the claimants admit that they omitted the concrete cutting and patching work in their bid. DFD alleges that the claimants added unsolicited language to the contract, which altered the provisions of the contract, without calling the change to the state's attention. DFD states that the alteration was not apparent and was not discovered until after the state had signed the contract. DFD states that, when it discovered the modification in the contract, it immediately contacted the claimants. DFD claims that it informed the claimants that the state could treat the situation as a bid error or the claimants would need to perform the work without alteration to the original bid price. The contractor chose to do the work at the bid price but would now like to be reimbursed. DFD believes that it cannot condone the claimants' behavior and therefore requests that the Claims Board support DFD's previous denials of this claim.

The Board concludes the claim should be paid in the reduced amount of $5,000.00 based on equitable principles. The Board further concludes, under authority of s. 16.007 (6m), Stats., payment should be made from the Department of Administration appropriation s. 20.866 (2)(z), Stats. (Member Rothschild not participating.)

5. Michael Barnhardt of Waukesha, Wisconsin claims $3,590.21 for return of money garnished from his wages to satisfy estimated income tax assessments for the years 1983-1986 and 1988-1989. The claimant states that he owed no taxes for those years and would have received refunds in the amount of $415 if he had filed his tax returns. He realizes that he should have filed and is not requesting payment of the refunds but feels that the $3,590.21 garnished from his wages is an excessive penalty to pay, especially considering the fact that the state was offering an amnesty program at the time it was garnishing his wages. The claimant states that he never intended to defraud the state. He further claims that it was very difficult for him to resolve this dispute with DOR because he was traveling out of state on business and DOR has no 1-800 telephone number. The claimant believes that the amount garnished by DOR was excessive considering the fact that he owed no taxes for the years in question and he requests return of that money.

DOR recommends denial of this claim. DOR records indicate that department sent the claimant a request to file the income tax returns in July 1991 but that no response was received. DOR therefore issued estimated assessments in October 1991. DOR states that the claimant called the department in May of 1994 and that he was told at that time that he needed to file the returns. DOR states that it received no returns and therefore began certification of the claimant's wages in February 1997. DOR records indicate that the claimant again contacted the department in March and April of 1998 and that he was again informed of the need to file the returns to resolve the issue. DOR states that on April 30, 1998, the claimant alleged that he had filed the returns but that DOR informed him that no returns had been received. DOR records indicate that the returns were received on September 23, 1998. DOR requested additional information for two of the returns in September and October 1998 and certification of the claimant's wages ended in November 1998.

6. Cabinet Country, Ltd., of Janesville, Wisconsin claims $31.00 for bank fees related to an electronic withdrawal from its bank account made by DOR. A taxpayer attempting to make a payment to DOR by electronic transfer submitted their Federal Employer Identification Number to DOR, however, they transposed several numbers, resulting in the electronic transfer being taken from the claimant's bank account in error. The claimant believes that DOR should have corroborated the information prior to making the transfer. Although DOR refunded the money taken from the claimant's account, they were unable to reimburse the claimant for the $31 in overdraft fees charged by the claimant's bank. The claimant requests reimbursement for these fees.

DOR recommends payment of this claim. As soon as DOR determined that an error had occurred, they reimbursed the funds taken from the claimant's account. However, DOR does not have the statutory ability to reimburse the claimant for the fees and recommends that the Claims Board does so.

S814 The Board concludes the claim should be paid in the amount of $31.00 based on equitable principles. The Board further concludes, under authority of s. 16.007 (6m), Stats., payment should be made from the Department of Revenue appropriation s. 20.566 (1)(a), Stats.

7. Don Charles Dietz of Lakeview, Arkansas claims $398.36 plus interest for money levied from the his account to satisfy an assessment based on a DOR adjustment to his 1986 income tax return. The claimant states that he paid $5,000 for equipment to the Maid Rite Corp., but that the equipment was never delivered. The claimant alleges that Maid Rite sent him a $5,000 refund check, which bounced. He states that he deducted the $5,000 bad check on his 1986 federal and state tax returns. He states that the deduction was allowed by the IRS but not allowed by DOR. The claimant alleges that he sent a copy of the bad check to DOR in 1987. He also alleges that DOR agents have repeatedly told him, both in writing and during phone conversations that the deduction was allowable but that they were going after him anyway because he "could afford to pay." He believes that DOR agents have a personal vendetta against him and states that no one from DOR has ever explained to him why the $5,000 deduction was not allowed. He also believes that DOR personnel improperly disclosed his personal financial information to a third party. He requests return of the $398.86 taken from his account, plus 12% interest from 1986.

DOR believes that this claim should be denied. DOR states that it made adjustments to the claimant's 1986 taxes, adding back $392 in additional income and disallowing the $5,000 bad debt deduction. DOR states that, under Wisconsin law, a debt is not considered a deductible "bad debt" until it is proven to be uncollectible. DOR states that the claimant provided no proof that he had made appropriate attempts to collect the $5,000 from Maid Rite and that those attempts had been unsuccessful. Based on the adjustments, DOR issued an assessment for $398.86 in May 1989. The assessment was due July 31, 1989, and DOR records indicate that no timely appeal was filed by the claimant. (An assessment for $227.47 relating to the claimant's 1985 taxes was also made at the same time, disallowing a duplicate $2,000 IRA deduction, which the claimant claimed on both his federal and state taxes. The claimant does not dispute the 1985 adjustment.) DOR states that it has communicated with the claimant for over 13 years, responding to more than 25 letters and numerous e-mails from him. DOR further alleges that in his correspondence, the claimant made it clear that he had no intention of ever paying the assessments. DOR states that after many unsuccessful collection attempts (including the use of an out of state collection agency) the department was finally able to levy an account of the claimant's in 2001. DOR took $1,384.57 to satisfy the 1986 assessment (and $790.17 for the 1985 assessment). DOR records indicate that it extended the due date for the levy in order to give the claimant time to file a petition for compromise but that he repeatedly submitted incomplete forms and never demonstrated in his petition any inability to pay the assessments. DOR eventually levied the account in December 2001. DOR did reduce the interest charged on the assessments from 18% to 12% and refunded $464.61 to the claimant. DOR states that the adjustments made to the claimant's 1986 return were correct under Wisconsin law and believes that there is no basis for payment of this claim.

The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employees and this claim is neither one for which the state is legally liable nor one which the state should assume and pay based on equitable principles. (Members Albers, Lee, Rothschild and Shibilski dissenting.)

8. HGM Architecture, Inc., of Oshkosh, Wisconsin claims $3,608.58 for elimination of interest and penalties assessed on its late filed withholding tax. The claimant states that from September 1996 through December 1999, its employee, Kathryn Eisenreich, embezzled funds from the claimant. The claimant states that Ms. Eisenreich used the state tax withholding funds to cover up her theft and that she also hid mail from DOR and paid the penalties interest incurred on late filings. The embezzlement was discovered and Ms. Eisenreich was convicted. She requested a court hearing to attempt to get her restitution amount lowered. The court set a preliminary restitution amount but provided that the amount would be reduced should the state decide to reduce the interest and penalties charged to the claimant. The court instructed the claimant to come before the Claims Board and request such a reduction. The claimant requests elimination of the penalties and interest assessed by DOR.

DOR does not object to partial payment of this claim. DOR states that the claimant is no longer able to recover money from DOR relating to this incident because of the two-year statute of limitations under s. 71.75(5), Stats. DOR further states that, if the claimant had filed a claim for refund within the two-year time limit, DOR would have reduced the interest and refunded the penalties charged against the claimant. Because of the circumstances, DOR does not object to a refund of the penalties and a reduction of the interest from 18% to 12%. DOR calculations show that this would result in a $1,560.09 refund to the claimant. DOR is unable to refund this money because of the statute of limitations but would not object to payment of this amount by the Claims Board.

The Board concludes the claim should be paid in the reduced amount of $1,560.09 based on equitable principles. The Board further concludes, under authority of s. 16.007 (6m), Stats., payment should be made from the Department of Revenue appropriation s. 20.566 (1)(a), Stats.

9. Mary E. Redlinger of Glendale, Wisconsin claims $584.01 for return of overpayment for a 1997 tax liability. The claimant states that she filed an amended 1997 tax return in September 2001, which reduced the amount of tax that she owed for her 1997 taxes. The claimant alleges that she has had financial difficulty because the state has been late or inconsistent in sending her alimony payments, which are garnished from her ex-husband's paychecks. The claimant states that DOR garnished her paychecks for the 1997 liability but that her amended return resulted in an overpayment of $584.01. The claimant asserts that, contrary to DOR's assertions, section 71.75(5), Stats., does not apply to her overpayment. The claimant believes that s. 71.75 applies only to the return of tax refunds, not to the return of money overpaid on a tax liability. The claimant states that she was never due a tax refund on her 1997 taxes; her amended return only reduced the amount of tax that she owed, but she still owed taxes. Since she is not requesting return of any tax refund, she does not believe that the two-year limit in s. 71.75 applies to her claim.