Spies Like Us

There are 14,000 employees in the naked city--and Denver wants to keep tabs on all of them.

Managing a city can be a sneaky business. How else to explain why Denver ran up a nearly $80,000 tab with R.A. Heales & Associates? According to its advertisement in the Yellow Pages, the firm offers "complete investigative services" including, but not limited to, "insurance defense," "background" and "undercover."

Most of the taxpayers' money has financed the city spying on its own employees. For example, some of R.A. Heales's investigative efforts--secret videotaping, tailing--have involved shadowing Denver workers who made workers' compensation claims against the city and whose managers suspected they were lying. So the city had the employees followed.

Recently, however, much of the snooping has had another objective: "for purposes of conducting surveillance as part of investigations into employee residency violations," according to a September 1995 memo from Denver Health and Hospitals manager Dr. Patricia Gabow, who was seeking another $10,000 in spying services. Her department quickly exceeded that amount.

Although the city has used R.A. Heales for gumshoe work since 1993, the business of tracking down allegedly unscrupulous workers has been remarkably brisk lately. Three years ago the city paid just over $8,800 to R.A. Heales. In 1994 the amount jumped to $23,000.

In 1995 taxpayers footed a $21,000 bill for private detective work, at a flat $50 an hour. During the final two months of last year alone, Denver spent nearly $15,000 following city workers. In the first six months of 1996, Denver sent more than $16,000 to R.A. Heales--putting the city on pace this year to write checks totaling more than $30,000 for surveillance and other cloak-and-dagger work. (Most city contracts over $1,500 have to be put out to competitive bid, but detective work falls into the category of "professional services," which are exempt from bidding.)

The practice of hiring detectives to catch wayward workers is the latest Denver effort to enforce its almost-two-decade-old requirement that city workers live within city limits.

Passed in late 1978, Denver's residency rule has been controversial from the start. The rationale behind it was to inspire city workers to have a greater stake in Denver's smooth operation by making them live here and to guarantee the city some economic base in the wake of the Poundstone Amendment, passed by the state a few years earlier, which prevented Denver from annexing surrounding areas to increase its tax receipts.

But the law had another, unanticipated result: City managers gained an unintentional glimpse into their employees' personal lives. Fred Timmerman, Denver's director of personnel, says he gets an anonymous complaint every week or so that some city worker is not residing within Denver's limits.

The majority of those informants aren't acting out of municipal idealism, he adds. "Most of our complaints typically turn out to be motivated by anger," Timmerman notes. "Two people get in an argument and one decides to get even. Or it could be because of the breakup of a relationship."

About 14,000 people work for Denver; only employees hired before 1979 are exempt from the residency requirement. Because each manager is responsible for enforcing the rule in his or her department, approaches to the policy can vary, and not everyone relies on R.A. Heales & Associates. The police department, for instance, uses its internal-investigations unit to pursue suspected out-of-towners.

Fire department officials say they can't afford to hire private detectives and so rely on the word of their workers. "If they provide us with the proper materials, there shouldn't be any doubt," says Charles McMillan, division chief of administration. Such materials include phone bills, rent or mortgage receipts, driver's licenses, and vehicle, voter and school registrations, he adds.

Both the fire and police departments are either unusually compliant or unusually tolerant. McMillan says he knows of only two residency investigations at the fire department in the past three years; both men turned out to live within city limits. According to police spokeswoman Margaret Chavez, two officers were investigated in the early 1990s; they were fired, then rehired when they subsequently moved back to Denver.

Other departments employ their own surveillance methods. The Department of Public Works, for instance, runs quarterly checks on its workers' motor vehicle records in an effort to constantly verify that their residences are local (as well as to ensure that the workers who drive city vehicles have clean driving records).

Several other agencies, including the water department, reportedly have used private gumshoes to tail their employees. Yet city records suggest that it's the Denver Department of Health and Hospitals that has relied most heavily on R.A. Heales to keep its workers in line--and in the city.

That may be because Denver General Hospital frequently has been at the center of the dispute between city law and city employees who want to live in the suburbs. Several years ago the hospital fired dozens of nurses after it learned the supervisor who'd hired them wasn't enforcing the residency requirement. Since then, nurses have been among the most vocal critics of the policy.

Although 36 municipalities across the state have some sort of residency rule, Denver's is one of the most restrictive, and it has been challenged frequently. In 1988 Governor Roy Romer actually signed a bill outlawing such mandates, but the City of Denver sued the state and won, erasing the legislation. In 1991 a group of Denver employees, mostly nurses and police officers, managed to place an initiative on the Denver ballot that would have ended the residency rule. That effort was defeated by popular vote.

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