On Tuesday, the Redwood Falls City Council voted to terminate the employment of Redwood Area Hospital CEO Jim Schulte after charges against him were filed in Redwood County District Court earlier that day.
Schulte was charged with two gross misdemeanor counts, one for theft, the other for theft by swindle. Each count includes a penalty of one year in jail, a $3,000 fine, or both.
According to the statement of probable cause filed in district court, between August 2010 and Nov. 2011, Schulte attended five board meetings with Central Minnesota Diagnostic, Inc. (CDMI) for which he was paid $997.02 in mileage expenses from CDMI.
The statement says Schulte billed the city mileage for the same trips. The city was not aware of the payments by CDMI, and paid Schulte $1000.84 in mileage expenses.
During the investigation, the investigator interviewed Redwood Area Hospital Chief Financial Officer John Peyerl, who stated in Jan. 2012 he received a check made out to Schulte from CDMI for mileage claimed in Nov. 2011.
After reviewing hospital records, Peyerl saw Schulte had already been reimbursed by the city for the mileage claimed.
Peyerl reviewed the previous three year’s records and saw Schulte had been reimbursed on several occasions by the city for trips made for CDMI meetings.
Peyerl stated he contacted CDMI and requested copies of the canceled checks written to Schulte for mileage claimed. Peyerl told the investigator CDMI sent copies of the checks to Schulte, who asked Peyerl why he had requested the information from CDMI.
Peyerl stated Schulte acknowledged he had been paid twice for the mileage, and allegedly asked Peyerl “What are you going to do?”
Peyerl told the investigator he told Schulte to reimburse the city for the mileage, and that Schulte said he would, but never did.
Peyerl stated Schulte said he would report the incident to the Redwood Falls City Administrator, but never did.
After several days passed, Peyerl reported the incident to the city administrator. Schulte was placed on unpaid administrative leave on May 3 while the matter was investigated by an officer from the Marshall police department.
On May 18, 2012, the investigator interviewed Schulte, during which he admitted he had received the payments from both the city and CDMI.
At Tuesday’s Redwood Falls City Council meeting, the councilors considered the personnel subcommittee’s findings and recommendations.
State statues require that in any meeting where a council will be considering “allegations or charges of wrongdoing against an individual subject to its authority,” the meeting must be closed.
However, if the subject of the allegations wishes the meeting to be kept open to the public, he or she may request it.
According to Mayor Gary Revier, the city received a letter from Schulte’s attorney earlier on Tuesday waiving the right to keep the meeting open.
Before the councilors met in the closed meeting, about 20 members of the community gathered to watch the proceedings, and discuss their support for Schulte.
After the room was cleared for about 40 minutes, the public was allowed back in.
Revier thanked the members of the public for attending the meeting, but reminded them that elected officials often have do to things that are unpleasant, and have information state statues don’t allow the public access to see. He also reminded them that it was at Schulte’s request the meeting was kept closed.
Council President Corey Theis read the following motion into the record:
The council would “accept (the) report and recommendation from personnel subcommittee and ratify the city administrator’s decision to terminate Mr. Schulte’s employment as hospital chief executive officer for misconduct, dishonesty and possible criminal violations under (section) 15 of the personnel policy for requesting and receiving $2,342.50 in inappropriate duplicate mileage reimbursement from 2007 to November 2011 from three different vendors and from the city of Redwood Falls.”
After the motion was seconded, the council voted unanimously to terminate Schulte’s employment.
Following the meeting, City Administrator Keith Muetzel said the city would begin the search for a new hospital CEO next week.