BILLINGS (AP) — The supervisor of the city of Billings landfill resigned after city officials determined $12,000 in recycling payments were not turned over to city accounts, according to personnel records a judge ordered released to The Billings Gazette.

The newspaper had requested the documents in June and the city sued the newspaper, asking a judge to determine which documents should be released. District Judge Michael Moses ruled on Jan. 21 that information about an investigation into two employees should be released, but a third was not a supervisor and had a right to privacy.

Documents released Tuesday indicated supervisor John Arellano resigned on June 16, a day before a hearing was to be held to determine possible disciplinary action.

A city investigation found Arellano told employees at a recycling business to reimburse the city for recyclables in cash, rather than by check, as had been done previously. 

Investigators found Arellano kept some of the money. The city found another employee, Barb Butler, knew about the cash and that she and Arellano used some of it to purchase coffee and other items for department staff.

The city said Arellano’s vacation pay was withheld as allowed by law and that Butler was suspended for four weeks without pay and had to sign a “last chance agreement” to keep her job. A third employee was suspended for a day.

“The records released show that the City of Billings Human Resources and Public Works departments performed a thorough investigation,” City Manager Tina Volek said in a statement.

Volek said no criminal charges were filed because police were unable to determine who took the money. City investigators believed that Arellano had kept several thousand dollars and took steps to cover up the thefts, such as throwing out the receipts, ordering drivers not to log their trips to the recycling center or to leave recyclables for Arellano to redeem.

An ongoing operational audit of the Public Works Department recommends it initiate a recyclables inventory. Recycling agencies in Billings also have been instructed to provide a monthly check to the Public Works Finance Division rather than giving cash to city employees.

Moses also ordered the city to pay the newspaper’s attorney’s fees.