Costs To Oust Former City Manager Top $252K
OCEAN CITY -- Removing former City Manager Dennis Dare from office last fall has resulted in town government having to spend in excess of $252,000 to compensate him and land his replacement, according to city records.
On July 9, after much debate among City Council members and the media, The Dispatch filed a Freedom of Information Act (FOIA) request to determine the exact expenses associated with last year’s decision to remove Dare as city manager. Dare was with the city for 29 years, 21 of which as the city’s chief executive. In a 4-3 vote on Sept. 8, 2011, with Council members Brent Ashley, Jim Hall, Joe Hall and Margaret Pillas in favor and Doug Cymek, Mary Knight and Lloyd Martin opposed, the City Council gave Dare 24 hours to answer an ultimatum -- retire or be terminated. With a change in management direction expressed by the council majority, which took over power of the city after the 2010 election saw Ashley elected, former Council President Joe Mitrecic defeated and Jim Hall elected council president, Dare eventually decided to retire with stipulations that were later made official through a severance agreement.
The City Clerk’s Office answered the newspaper’s FOIA request on Wednesday, outlining $252,469 in expenses incurred as a result of Dare’s forced retirement. Per his agreed upon severance package, the figures include $94,272 in salary from September 2011 through March 2012; accrued vacation and holidays of $31,808; health insurance expenses of $6,529; a reduced salary from April 2012 through October 2012 totaling $46,661 and health insurance expenses during that time period of $6,529; pension plan expenses of $4,766 from April through October 2012; $2,500 in ICMA deferred compensation from January-March 2012; life insurance premiums of $865; $4,436 in accrued vacation from April-October 2012; $7,500 in Dare’s attorney fees; $200 in expenses for Dare’s cell phone and radio scanner; and $7,800 in free play through the city’s Gold Card (based off an assumption of an average of 12 rounds of play over 10 years at peak and off-peak times).
Additional expenses not included in the severance package for Dare were $19,886 in total search firm expenses for his replacement; $2,849 in candidate travel expenses; $867 in candidate interview expenses; $10,000 for new City Manager David Recor’s moving expenses; and $5,000 in attorney costs associated with the severance agreement as well as the new city manager accord.
What the information does not include is the fact that the city is currently paying two city managers -- Dare and Recor, who was hired in May officially by another 4-3 vote of the same divide. Recor’s total salary while Dare is on the payroll through October from his start date of June 11 is about $54,000. If that figure is included, it comes to approximately $306,469.
After being presented with the figures associated with the move by this newspaper, Ocean City Councilman Joe Hall said he did not find them to be exorbitant.
“I don’t think if you look at these numbers and compared them to what other communities would have in expenses, I don’t think they’re out of line. I do think some of the line items are unique to us, but in the end if you take Fort Pierce and what their expenses and severance package were for Mr. Recor and what they are going to have to spend to get a new person, the numbers are going to be very similar,” said Joe Hall, who has 10 years of experience on the council and will be seeking re-election in November. “I don’t see anything that’s an extraordinary expense that wouldn’t have occurred if Dennis had chosen to retire or seek another job. A lot of it is normal business expenses … and a result of us making him whole with his retirement and pension …”
In Fort Pierce, Fla. earlier this spring, after a tumultuous couple weeks, Recor and Fort Pierce reached a resignation severance accord that paid him in excess of $153,000, which included nine months’ salary and accrued compensation. Most of those terms were outlined in his employment contract with the coastal city.
Councilwoman Mary Knight, who has been in office since 2006 and will also be seeking re-election this fall, and Councilman Doug Cymek, elected in 2008 and seeking a second term this fall, disagrees with the assumption the expenses were inevitable.
“If Dennis would have told us in a year he was retiring, the only cost we would have incurred was the search firm because we would have known he was going to retire. We wouldn’t have been paying two people at one time like we are right now [Dare and Recor]. There would have been an agreement. It would have been smooth,” Knight said. “It wouldn’t have disrupted the entire city the way it did and still is today, and I don’t know what kind of cost you can put on that.”
Cymek believes the $252,469 in expenses outlined by the city is on the low side, but nonetheless it was a significant amount of resources squandered without legitimate reasons.
“I think it’s very unfortunate this came about the way it did. Obviously, it was without forethought by the members of the council who proposed it, and to maintain there really is no additional expense to the taxpayers I find somewhat humorous. The numbers speak for themselves and I think some of the numbers may be understated,” Cymek said. “The fact remains that it’s still a quarter of a million dollars, at a minimum, it has cost the taxpayers unnecessarily. We had an excellent city manager. In the opinion of the majority of the council members at that time, they felt collectively he was not performing to their liking. I adamantly disagreed with that.”
Ocean City Council President Jim Hall called the special meeting to discuss Dare’s removal in September and personally informed Dare of the council decision on that Thursday evening at City Hall. He said repeatedly the move was made to change the “management direction” of the city and to blow winds of change through a senior administration that fought the majority’s stated changes each step of the way.
Hall said this week the $252,000-plus in official expenses reported by the city needs to be balanced against the savings the council majority has been able to achieve through a reduction of the proposed tax rate during the budget process in the spring as well as numerous other cost-saving measures. He said the majority’s move to lower the tax rate a penny below the property tax rate proposed by then-Acting City Manager and Mayor Rick Meehan in his proposed budget saved the town more than $800,000.
“Whatever your figure is it has to be weighted by the calculated savings we have instituted. We would have paid a city manager during that time anyway. Rick didn’t take a salary. All of the corresponding savings have to be subtracted from whatever that figure is,” Jim Hall said. “We wouldn’t have had the hiring freeze, gotten rid of the 100 employees, the 4-3 votes in the changes to the insurance and benefits, 10% less in salaries … all the 4-3s were because Dennis wouldn’t budge. You have 100 less employees now as a result, a lot less vehicles and a lot less health insurance for all those employees. For a family now, health insurance costs about $19,000 a year. The savings are substantial and the four conservative members of the council are continuing on that path. We want to cut back and conserve and keep this tax rate down.”
Meehan said it’s illogical to tie Dare’s removal to the tax rate change at budget time or any of the previous expense-reduction initiatives broached by the council president. Meehan said those initiatives, such as the hiring freeze specifically, were carried out under a different council before the 2010 election as well as Dare.
“It’s not accurate to say all those savings are a result of this group of four and the so-called conservative majority,” Meehan said. “The downsizing, the hiring freeze and all of these things were carried out way before the most recent election, back in 2008 it started and even before that. I don’t see the relevance to say this may have cost this but look what we saved. It was saved by a previous council for the most part upon the recommendations of the man that they fired. To cast this umbrella over this conservative majority … I haven’t seen where they have been conservative at all. … I think they have gone from making bad decisions to desperate decisions.”
In fact, according to city records and published reports, Dare instituted a hiring freeze in the summer of 2008. That continued for at least three years and in early 2009 a salary freeze was also instituted. The hiring freeze has since been lifted, but the salary freeze remains, although the council did authorize one-time bonuses this month as part of the new fiscal year’s budget.
The current council did specifically uphold the hiring freeze in early 2011 when a request was made to make an exception for public safety personnel and the hiring of six new police officers and six new paramedic-firefighters. It was rejected in a 4-3 vote along majority-minority lines (Ashley, Jim Hall, Joe Hall and Pillas against and Cymek, Knight and Martin for).
In an interview months after he was removed, Dare, who is withholding public comment at this time, addressed the cost-saving initiatives that took place under him.
“We instituted hundreds of cost saving ideas, and these ideas came from the employees. They didn’t come from the council or the city manager, they came from the department heads and the rank and file throughout the city,” he said. “As a team, we were able to reduce spending by $6 million. I felt like we had been staying ahead of things and from a tourism standpoint we were holding our own compared to Virginia Beach and Orlando. We had so much working in the right direction here …”
Knight agreed with Meehan that the majority is anything but conservative as Jim Hall maintains. She pointed to the penny reduction of the constant yield tax rate during the spring’s budget process as a mere political stunt that in actuality could come turn out to be a significant error in the worst-case scenario.
“They’re not conservative, taking money out of the reserve fund to save me $18 [in property tax] is totally ridiculous. The way I look at it is our reserve fund is one hurricane away from being depleted,” she said. “They haven’t saved any money. Firing Dennis certainly didn’t help them save the money they think they saved.”
Cymek maintains citing savings initiatives, such as the tax rate drop, that occurred eight months after Dare was removed is painting an illogical picture for the community.
“It’s saddening to justify the additional expenses to the taxpayers by things that happened after the fact. It’s just trying to shed the light in a different direction. They are taking advantage of the public and trying to cover up what happened,” Cymek said.
In a letter to the editor this week, as a result of the FOIA request by this publication, Ashley said any evaluation of the expenses associated with Dare’s removal should include an examination of the costs involved with the ethics hearing involving Joe Hall.
“May I suggest that you file a similar request to obtain the transcript of the ethics hearing held last April regarding a phone call made by council member Joe Hall. If you're going to get the facts, please get them all,” Ashley wrote. “By the way, it is my understanding that it cost Joe Hall $2,000 out of his own pocket for legal representation, to defend himself against these charges.”
Joe Hall was front and center during the new city manager hiring process in April as a result of a phone call he made to Recor during the final stages of the search process. At the time of the 13-minute phone call on April 11, the city had unofficially narrowed the city manager search to two individuals. Joe Hall’s phone call essentially resulted in Recor losing his confidentiality with the local media and Florida media outlets identifying him as a front runner for the Ocean City post. Joe Hall and Recor confirmed the nature of their talk involved Joe Hall wanting to make sure Recor understood that a 4-3 vote should be taken as the direction of the city. Recor said he did.
After that phone call was revealed through an examination of cell phone records, Citizens For Ocean City spokesman Joe Groves filed a request at City Hall for a hearing before the Ethics Committee, which quickly dismissed the ethics charge against Joe Hall. At the hearing, which was not open to the public, Groves was represented by attorney J. Harrison Phillips and Joe Hall by attorney Joe Moore.
“It was expensive to defend myself against those charges. I felt I did the right thing and did it for the taxpayers,” Joe Hall said. “It was gratifying that [City Solicitor] Guy [Ayres] and the committee agreed, but the line item on my personal expenses to fight that was a surprise.”