New London - The city plans to recoup about $7,000 in compensation time that it paid to police Chief Margaret Ackley.

Finance Director Jeffrey Smith said Tuesday that the chief should not have been paid for comp time in two pay periods in January and February. He said the city would recoup the time by docking Ackley's vacation days.

"There was definitely some confusion about the contract,'' Smith told the City Council's Finance Committee. "When I realized there was a mistake, we fixed it."

Smith said he and his staff had operated under the assumption that the employment contract, which was singed by Ackley and Mayor Daryl Justin Finizio, was valid. But the City Council rejected the contract on Jan. 17.

"In that time between January 1 and when you folks voted, there were a lot of things that were up in the air,'' Smith said. "My understanding was it was a contract, and I honored it."

Smith said he put a stop to the payments when he learned of the council's action.

City Councilor Adam Sprecace questioned Smith about the payments, asking why they were made even after the council refused to approve them. "I think this constitutes very serious issues,'' he said.

Smith said the Jan. 23 and Feb. 4 payments should not have been made. "We goofed,'' he said.

Under her contract, Ackley would have been paid for 1,196 compensation hours she had accumulated since becoming chief in 2009.

The agreement was intended to end the casual practice of accumulating comp time, according to Bernadette Welch, the city's director of personnel. The chief is still entitled to claim the comp time when she retires, Welch said.

Councilor John Maynard asked why payments to two retired police captains were stopped after the council rejected their enhanced retirement packages, yet when the council rejected the chief's contract it took weeks for the paperwork to catch up.

"I'm confused. With union guys we immediately stopped, and with an administrator she was paid,'' Maynard said.

Smith said it had nothing to do with union issues. "Let's face it," he said, "there's been a lot of confusion going from one form of government to another."

Sprecace also asked why former City Manager Denise Rose had received about $30,000 in comp time and about $14,000 in unused vacation time when she left her position Dec. 31.

Rose, who was hired for one year to run the city during the transition from the city manager to the mayor form of government, was paid a one-year salary of $120,000. The city also made contributions to her 401(k) retirement fund.

Smith said he would have to look into it. Rose's severance package, if it was not spelled out in a contract, would have to be similar to what was done for past city managers, he said.

"We have to put a stop to these kind of golden parachutes,'' Sprecace said.

k.edgecomb@theday.com