Monday, November 07, 2005

The Reid Severance Bonus Legal Problem

Most of our long-time gentle readers are familiar with the Stuart Reid Severance Bonus Legal Problem. Inasmuch as it has been much discussed, I'm not going to summarize it further. New readers can find the basic story here.

On October 9, 2005, The Standard-Examiner published Mayor Godfrey's own written defense of Mr. Reid's $43,000 severance windfall. In that article, Mayor Godfrey sets forth his legal position. It's VERY short, and it fades, unfortunately, into some kind of weak equitable argument. You can read it here for yourself:
Stuart received exactly what is allowed for under Ordinance 99-46, just as other Ogden employees have over the years. Ordinance 99-46 also allows for an employee who has received severance to be immediately rehired by the city. While we did not operate under the ordinance because my agreement with Stuart predated it; we are still in perfect harmony with it. It's important to point out that hiring Stuart's company at Business Depot Ogden is saving us money compared to what his predecessors were being paid, and he comes to the job understanding all the issues.
The Standard-Examiner had also attempted to "explain" Mayor Godfrey's supposed legal argument in this 10/02/05 article:
An agreement that allowed former Community and Economic Development Director Stuart Reid to receive $43,561 in severance pay predated an ordinance that would have prohibited the payment, Ogden officials say.
The verbal agreement between Reid and Ogden Mayor Matthew Godfrey was struck when Reid began working for the city in January 2000, according to Chief Administrative Officer John Patterson. Under the agreement, Reid was to receive severance pay upon leaving the city.
In March 2000, a city ordinance took effect prohibiting employees who resign voluntarily, which Reid did this July, from receiving severance pay.
"The ordinance was not effective until after Stuart Reid was an employee of the city," Patterson said.
As you'll also recall, the public murmurings finally reached such a fever pitch that even Chamber of Peoples' Deputies Chairman Safsten eventually sent the question off to independant counsel, for an opinion on the bonus's legality.

Well... it's been over a month since the council did that, and the townsfolk still await the formal legal opinion.

The question actually came up at the recent League of Women Voters' Candidate Debate, where one perspicacious audience member asked this question of our Godfreyite Gang of six candidate Comrade Kent Jorgenson:

"Has the council received word yet from independent counsel about the propriety and legality of the Stuart Reid Severance? If not; will we receive it before the date of the general election?"

Comrade Kent Jorgenson answered the question succinctly, although not completely. "No, we haven't received the formal opinion yet," he said. Then Comrade Jorgenson rambled on and volunteered, "But we have received some information. We'll hold a work session to discuss it next week. We may have to tweak a statute."

"Tweak a statute? What statute(?) I thought. Before a follow-up question could be asked, the undisciplined event wandered off into pandemonium, and then time ran out.

Being the curious and impatient type though, I thought I'd check it out myself. How difficult is it to read and interpret a statute, I asked myself?

Very difficult is what I found out.

Researching an old Ogden city code section is a problem, I found. Local sources for the Ogden Municipal Code (like the so-called Weber County Law Library) use a "loose-leaf" code update service. When old code sections are amended, the old sections are just ripped out and replaced with the new ones. That makes the old statutory language unavailable. Fortunately, though, the Ogden city recorder's office maintains council ordinance archives; and I was finally able to piece it all together with a few trips to city hall.

I'll report what I found. This is the code section that existed at the beginning of the year 2000, when Godfrey and Reid entered into their purported secret handshake deal. I'm linking here the language of Ogden Municipal Code section 3.44.080, which is the city employee "Classification and Pay Plan" ordinance that was in effect in January of 2000, when Stuart Reid was first hired as Ogden City's Economic Development Director. As our gentle readers can see, there is no reference in the ordinance to a granting of any power to the Mayor to award severance packages. There is in fact no mention of "severance" at all.

The mayor takes the position in his guest editorial that his wings were clipped in March of the year 2000. Code section 3.44.080 was re-numbered as Ogden Municipal Code section 2-6-9 at some unknown point in time, pursuant to a general code reorganization, but the above code language remained intact until December 14, 1999. It was at that point that the outgoing city council, fearful of a "rolling or staff heads" with Mayor Godfrey's new incoming administration, passed the "ordinance 99-46" that Mayor Godfrey complains about in his above quote. This ordinance tacked an additional paragraph "F" to the existing code section 2-6-9 provisions, granting the Mayor the authority to negotiate severance packages, but only in the event of involuntary terminations. The amendement, which Mayor Godfrey did not sign, went into effect on March 22, of the year 2000.

Although Mayor Godfrey has characterized this amendment as a "limitation" on his power to award severance benefits, a plain reading of the pre-existing statute doesn't support this view at all. What's clear is that this December 14 amendment operated as a slight expansion of his Mayoral power, in instances where employees might be involuntarily terminated, i.e., FIRED. Lacking the power to award severance packages under the original code section in the first place, his position seems... well... UNTENABLE, shall we say politely. We are always very polite here on Weber County Forum, of course.

In my never-ending quest to simplify matters even to the point of allowing dimwits like our local board vandal "Mr. President" to understand them, I've created this color-coded code version. Remember, the text that appears in black is the version of the code that existed at the beginning of the year 2000, at the time Stuart Reid was originality hired. This is the code language that was in effect when Mr. Godfrey and Mr. Reid made their purported "oral arrangement." All the rest was added after Mr. Reid's hiring.

It isn't complicated. Read the code and determine for yourself, whether the Ogden city code had granted Mayor Godfrey the legal authority to grant Stuart Reid his $43,000 severance bonus, either at the time of his hiring, or at any other time after that.

Careful readers will note that the city council in 2004 passed a code amendment explicitly reserving the right to amend employee pay at any time at its own discretion.

I suspect that this is what Comrade Jorgenson had in mind when he suggested that the council might have to "tweak" a statute.

What he's talking about is covering the Mayor's butt. My insider "snitches" confirm this; and tell me that's going to happen AFTER tomorrow's election, regardless of how the election goes.

I'm telling you, we have to watch the gang of six like a hawk. There's apparently no limit to what they'll try to pull over on we dumb townsfolk.

I'll also issue a disclaimer. Due to the above-mentioned research contraints, I haven't researched the entire Ogden City Code as it existed at the time of Stuart Reid's initial hiring.

If Mayor Godfrey claims he had the severance bonus-issuing power by virtue of Section 2-6-9 though, he's definitely in need of better legal counsel than the ones he has advising him now.

And what say our gentle readers about this?

17 comments:

Dian said...

Yet another piece of research (thanks, Rudi,) indicating that Mayor Godfrey had no legal right to make this severance deal. The latest in a long line indicating this.

I have not seen one piece of the code, nor one ordinance, nor anything at all that backs up the Mayor's claim that he had/has this authority.

In fact, everything that I have seen states explicitly that the power over municipal funds is in the hands of the City Councils in a mayor/council form of government. And 2-6-9 is equally explicit in stating under what conditions employees should and should not get severance packages.

This really makes me wonder----What on earth is going on down at City Hall? How is this being accomplished? This "severance package" had to be requested, put through, approved, and a check had to be written.

Is the whole machine of our city government operating solely at the discretion of the mayor? Can it be that the mayor, administration, and majority of the city council are either unaware of, or dismissive of, the laws under which it is supposed to function?

Or is there a sort of cleverness going on there, where an attempt has been made to end run around all existing ordinances by citing "previous agreements," and not writing things down, in an effort to squeak through with this one?

If so, and if the squeaking through is successfully accomplished, this will be, in my opinion, yet another one of those things that will be deemed "legal, but not ethical."

I don't think we want the sort of people who are legal but not ethical running our city government. I think we can do better than that. I think, actually, that we need to do better than that.

OzBoy said...

Dian:

Legal but not ethical is just another way to say NeoCon.

John S. said...

"Politeness, n. The most acceptable hypocrisy. ~Ambrose Bierce, The Devil's Dictionary, 1911"

Enthused Citizen said...

We'll have to "tweak an ordinance," says Jorgenson. Tweak an ordinance so that Godfrey can give away $43,000+ of our taxes to his partner in crime, Stu Reid. And these guys, Jorgenson, Reid and Godfrey purportedly symbolize the values of the LDS Church, which are honesty, forgiveness, redemption, etc. And here they are, giving away money to one while "tweaking" an ordinance to make it right with their conscience, their church standing, and hopefully, the law.

Yeah, a vote for Jorgenson today seems in order, doesn't it. I wonder how many other "tweaked ordinances" this guy has initiated, for the good of the city? And there are people out there that think this bunch, this "Gang of 6" + one, is Ogden's future.

Amazing!

former candidate said...

I think it is apparent to most residents that there is a strong division in this community. For whatever the causes behind that division, it needs to end, so we can move forward.

I think it’s fair to say that all the incumbents, including the Mayor, are probably “good” people, who devote a significant amount of time to this city. I think they have done some questionable things that, at the least, violate trust, at the most, violate law. I will give the mayor the benefit of the doubt on this one and say he made a mistake, didn’t mean to violate any laws, and has bumbled to try and keep some dignity in his office.

The problem is that there are too many mistakes, though intentions may be good, and our community continues to tear apart. A true leader may make a mistake, but is able to communicate and repair relationships. Our mayor lacks the ability to connect with people and direct positive results.

People are accepting of mistakes made by true leaders. In my humble opinion, I see Glassman as being a real leader who not only can help turn around our lost and leaderless City Council, but pose as a strong MAYORAL candidate to unseed our mayor. I’m not speaking for Glassman, I don’t really even know him outside of this process, it’s just my thoughts. And first things first, we need to get him elected. But I can’t help but think of the next election. That’s when Ogden residents can get back their city once and for all.

Anonymous said...

Bill Glassman as mayor,
Are you kidding' me.
He won't even make council.

former candidate said...

Anon,
Don’t be such a naysayer. You’re just against any idea that leads to progressive change. I have a problem with you people who only stand for being against something that could bring progress.

Sid E. Hall said...

Former Candidate your the one that has apparently decided that the band of the 4 NO's are the ones that stand for progress.

These people Jeske, Glassman, Stephens and Garcia are simply the John Kerry like candidates that are only offering an anti or No philosophy in Ogden. They won't be successful today!

OzBoy said...

Here's hoping that some one with a lick of common sense gets elected to the Ogden City Council this day!

ARCritic said...

I thought the last sentence in the color coded ordinance, "If prior to the effective date hereof, employment agreements exist with different severance terms, then the eligible employee will be entitled to the benefit of the more advantageous terms." Seemed to say that there might be current agreements that need to be honored. Reid's might fit into that, otherwise why would they put that there. And maybe the tweak would be so that it cannot happen again like stating that the agreement must be a written agreement.

And for Dian, if the money is available in the budget the mayor can spend it even if the money was not specifically budgeted for that item.

This statement should be in no way construed that I support such actions.

Dian said...

Arcritic, could you elaborate on this a bit?

"And for Dian, if the money is available in the budget the mayor can spend it even if the money was not specifically budgeted for that item."

I don't really know how bonuses and/or severances work in the municipal budget. Do they come out of the general fund, or is there a special employee fund or something else from which to draw for these things?

Your statement above implies that a mayor can indeed spend tax dollars on whatever he or she wishes, without getting approval from the City Council. In my opinion, this is not a system of checks and balances, and leaves too much room for one person in a mayoral position to make a series of bad financial decisions which would lead a city to bankrupcy.

Is this truly "custom and practice?" Is there a portion of the state or city code empowering the mayor of a Utah municipality to do this? If so, where is it?

ARCritic said...

From my understanding each department has a budget and that is where the money is appropriated by the city council. How it is allocated to line items within that departmental budget may be spelled out by the council in their budget document but that is not how the money MUST be spent just how much money can be spent.

So if the mayor shifts people around in the department so that after Reid left there is one less person in the department than was authorized, then the money that was appropriated to pay Reid from the time he resigned until the end of the fiscal year, would not be spent on another employee so the mayor could use that money to pay Reid a severance without having to ask the councils permission.

Worse still, if there were money allocated in that department budget to make some purchase and they decided not to make that purchase, the mayor could use that money to pay the serverence, again without having to ask the councils permission.

I was a bit appalled when I found that was how things worked.

And most local governments are conservative when estimating revenue (meaning that they make their best guess then lower it a little) and liberal when estimating expenses (meaning they make their best guess then increase it a little). This means that most department budgets end up at the end of the year with money that is not spent that was allocated. If revenues came in as projected or better then the department may have some extra that can either be turned back to the general fund, or spent before the end of the fiscal year. Guess which usually happens.

Dian said...

Arcritic, thank you.

Good heavens.

I had no idea that the controls on departmental budgets were so loose. Appalling is indeed the word for this.

Because the mayor can shift and reorganize departments, I believe. In fact, I remember reading somewhere that this was one of the first things the current mayor did upon assuming office, and wondered at the time how that worked out for the employees.

But the fact that these council allocated budgets can, after allocation to a department, be gouged with impunity by the Administration without even running it by the Council I think one of the worst loopholes I have ever seen.

Again, thank you for clarifying this.

ARCritic said...

Of course, reoganizing departments, if that entailed moving employees from one to another would require council approval via budget adjustment so that the employees salaries would be reallocated to the new department.

For instance if 2 employees were moved from dept A to dept B the council would need to move money from the budget for dept A to the budget for dept B so that the employees could be paid and dept B would not run out of money at the end of the year.

RudiZink said...

Thanks for today's input ARCritic. It's in discussions like this that the internet public forum format really helps to educate, I think.

voter said...

Well, it's obvious that that idiot "anonymous" (he really should keep in hiding with predictions like that) flunked his Jr Hi Political Science class. Isn't it fun when some dolt like "anonymous," who thinks he's up on things and really smart, gets it shoved right up his butt. Hell fool, we're thinking of asking Glasmann to by-pass the Mayor's seat and run for the U.S. Senate.

voter 2 said...

And another clown, Sid e. Hall flunked the same course. Who are these idiots, Rudi? Did you draw them in to torpedo the Gang of 6 candidates or what?

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