ASHEVILLE - Before she admitted to taking bribes from a longtime contractor, Mandy Stone walked away from her Buncombe County manager job with two final paychecks totaling more than $140,000.

That last month of pay amounted to more than three times Asheville's annual median household income, thanks to her high salary, a six-figure retirement benefit and other county payouts.

The pay of Stone and other former administrators now is well-known because the information surfaced amid a major federal corruption investigation into Buncombe government.

But less known is this: Even after cutting six-figure checks to these retiring employees, the county received bills from the state to pay even more.

Public records obtained by the Citizen Times show that despite regular employer retirement contributions, state officials determined Buncombe hadn't contributed enough money in the state pension system to cover the costly benefits of several employees, including Stone and former managers Wanda Greene and Jon Creighton.

And Buncombe, by far, is the highest-billed local government in North Carolina for what's known as pension spiking, or artificially inflating salaries to gain a bigger retirement benefit.

Invoices provided by the NC Department of State Treasurer show county taxpayers paid some $1.7 million in additional pension liabilities.

The other 117 agencies to receive pension-spiking bills don't come close. Wilkes County Schools, the second-highest billed, has received about $600,000 worth of invoices. Tenth-place Mecklenburg County, the next county government on the list after Buncombe, has been ordered to pay about $471,000.

How does pension spiking work?

While the state's anti-pension spiking law aims to make sure each local government pays its fair share for retirement plans, it's also intended to prevent high-ranking officials from padding their salaries late in their careers to boost pensions. The law only is applied for employees whose average final compensation is $100,000 or more annually.

It's drawn criticism from school systems, for example, that argue the law penalizes late-career promotions. But in Buncombe, the retiring administrators who triggered pension-spiking bills were well-paid for years, and in some cases, collected generous employee benefits.

That includes a county policy under which staff could sell back unused paid time off, resulting in large payouts — and a boost to their pension.

It's the same policy that allowed Greene, Stone and Creighton to collect thousands of dollars more during their final years in government — and according to prosecutors, further defraud Buncombe County.

Kenneth Ardon, chairman of the economics department at Salem State University in Massachusetts, said pension spiking "is a place where a small number of people get to take advantage of a system."

"And it makes the system look bad," said Ardon, who studies public pension systems. "It makes the average employee look bad, who doesn't get to take advantage of it."

$1.7 million extra for some of the highest-paid

To determine whether more money is owed for pensions, the state uses a formula that considers average compensation of an employee's four highest-paid consecutive years, years of service and age at retirement. The anti-pension spiking law applies only for retirees whose average pay is $100,000 a year or more.

Records show that Buncombe received 10 invoices as of January 2019, more than half of which billed for six-figure amounts. The state began issuing bills in 2015.

Though pension-spiking bills are public, employee names are redacted. But dates listed on the bills coincide with the departures of Buncombe's highest-appointed officials.

On July 1, 2017, the day Greene's retirement took effect, the county was ordered to pay more than $163,000. A county employee for nearly two decades, Greene earned a $247,000 annual base salary, though personnel records later revealed she made more than $500,000 during her last six months alone.

When Creighton retired in January 2018 after a 36-year career at the county, the state sent a bill for about $200,000. Creighton made nearly $177,000 annually, though his public personnel file reports he made more than $450,000 in his final year.

Buncombe's largest bill from the treasurer's department arrived in July 2018, when the state sent two invoices totaling nearly $604,000. The county saw the retirements of two longtime, high-ranking employees at that time: Stone and Clerk Kathy Hughes.

Stone made a $220,000 salary, though it was boosted in her last years by hundreds of thousands of dollars in other county benefits. Hughes made about $120,196 and worked for the county for 35 years.

Through two invoices, Buncombe also was billed for nearly $500,000 in September 2018. Among the retirements that month was the departure of Budget Director Diane Price, who began working for the county in 1991 and made more than $177,000 a year.

Annual leave helped boost county pensions

Buncombe County policy allowed employees to sell back each year an unlimited amount of unused leave days, costing the county about $13 million over a roughly 12-year period. Employees also received a payout upon retirement for their unused leave.

That's since changed. County commissioners in October 2018 capped annual leave sales to 40 hours a year after then-Interim County Manager George Wood warned of costly policies.

But before the policy was reined in, Creighton sold back more than $58,000 over his last four years of employment. Stone received more than $86,000 for unused leave between 2014 and her mid-2018 retirement.

Greene received the largest payout of them all: $325,000 for unused leave over a nearly four-year period.

County attorney Michael Frue confirmed that annual leave sales are considered compensation for pension calculations.

According to prosecutors, the managers defrauded the county through their annual leave payouts. Greene, Stone and Creighton all have admitted in court records that they claimed they were traveling on official county business while on some of the 20 domestic and international vacations funded by Georgia-based engineer Joe Wiseman.

They did not use their annual leave during the trips.

"By doing so, they were able to preserve their hours of annual leave, which they were later able to 'sell' to the county, thereby receiving monetary payments to which they were not legally entitled," court records state.

The trio soon will learn their sentences for participation in a yearslong kickback scheme with Wiseman. All, including Wiseman and former business intelligence manager Michael Greene, will be sentenced Aug. 28 after reaching plea agreements with the U.S. Attorney's Office.

Aside from Wiseman, they've paid financial settlements to the county totaling nearly $1.2 million. Ron Payne, an outside attorney and former judge hired by the county to handle the civil suits, said part of the money represents compensations to which the managers were not lawfully entitled, including the annual leave payouts.

State treasurer: Buncombe shows pension-spiking law works

Buncombe's 2017-18 financial statements, the most recent available, estimated that its potential pension-spiking liability for current active employees set to retire was about $1.4 million.

Local governments receive monthly watch lists from the treasurer's office advising them of employees whose salary is $95,000 or greater and are eligible to retire in the next 13 months. Buncombe Finance Director Don Warn said the county uses those lists to budget for future pension-spiking invoices.

The county declined to provide copies of the watch lists, saying they're considered private under state law.

State Treasurer Dale Folwell said his office provides an online tool to help local governments calculate potential added pension costs ahead of granting pay increases.

RELATED: Buncombe County used A-B Tech sales tax to pay salaries for Wanda Greene, Jon Creighton

Folwell, who took office after the law was passed, said anti-pension spiking efforts aren't meant to discourage career advancement — they're not meant, for example, to target an assistant principal who is promoted to principal.

He said his own department has paid pension-spiking bills.

"It isn't my role to tell any governing board how they should compensate their employees at any level," Folwell said. "But as the keeper of the public purse, it is my responsibility to implement laws that have been passed by the General Assembly that prevent a decision by a board from increasing the cost on every member in the plan."

Folwell said he considers Buncombe's bills as an example that the law is working. He also noted the county's case is further complicated because of the officials' criminal charges. It will mean the state's felony forfeiture law — something Folwell says he's in favor of strengthening — will play a role.

"There's no Democrat, Republican or independent money at the treasurer's office," said Folwell, who is a Republican. "It's all green. Because it's your readers' money, we don't pick and choose which laws to apply or who to apply them to."

'This is bad news'

New manager Avril Pinder has taken the helm, filling positions that were vacated amid the investigation and making clear to her employees that they're expected to report concerns and to hold themselves to a higher standard. Commissioners, too, have pledged to increase transparency.

But while sentencing has been scheduled for the corrupt officials, another grand jury indictment was handed up July 16: Former Commissioner Ellen Frost, charged with 11 counts of fraud and conspiracy, is accused of using taxpayer funds to pay for personal equestrian activities in North Carolina and elsewhere.

She's due in court July 24. Federal officials say the investigation in county government continues.

The county has acknowledged public trust has suffered as a result of the corruption schemes.

MORE:

► A timeline of the Buncombe County corruption investigation

► 'It's all of ours to fix': Avril Pinder talks opioids, achievement gap, racial equity

► 2 assistant Buncombe County managers hired, Pinder announces

Chris Cooper, a political science professor at Western Carolina University, said the high pension-spiking bills don't help.

"This is bad news and this has consequences that go beyond specific dollar amounts," he said.

Cooper said studies have shown a long-term decline in trust in government. And while the highest level of trust usually is placed in local government, he said, citizens often don't differentiate.

"I think people are unclear on what city roles and what county roles are, so I think it's a bigger story even than Buncombe County," Cooper said. "I think this is going to hurt local government in general.

"I think it contributes to this stereotype that bureaucrats don't work very hard but get paid a whole lot. And I don't think that's true, I would defend bureaucrats, but I think obviously that is the perception."

Most billed for pension spiking

Records obtained by the Citizen Times through the state treasurer's office show that Buncombe County is the highest-billed local government in North Carolina for pension spiking. Here is the top 10.

1. Buncombe County $1,725,166.94

2. Wilkes County Schools $601,165.21

3. Union County Schools $550,937.03

4. Johnston County Schools $541,746.51

5. North Carolina State University $506,748.33

6. Department of Transportation, highway administration $504,839.25

7. UNC Chapel Hill $497,245.04

8. Charlotte-Mecklenburg County Schools $487,496.26

9. City of Charlotte $475,763.79

10. Mecklenburg County $471,468.16