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EDITORIAL: A Tale of City and Town Manager Employment Contracts

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by Carla Occaso

Our Montpelier city manager, William Fraser, made the news for a subject most of us would prefer remain nobody’s business: his employment contract. Problem is, because his salary is paid for with tax dollars, it is everybody’s business. Even mine.

Recent public scrutiny both at city council meetings — where Montpelier resident Ken Jones spoke out against secret negotiating proceedings — and a letter by Richard Sheir in the May 19 issue of The Bridge (followed by an appearance by Sheir at a city council meeting May 25), led me to look into how ordinary or extraordinary Fraser’s contract is.

Not looking for specific contract terms, I randomly sampled different contracts from northern, southern, eastern and western towns to compare norms and oddities of municipal contracts.

Not surprisingly, when I Googled “town manager contracts,” the controversial or unusual ones appeared first.

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I have a history of working with — rather, reporting on — town managers. I worked for a daily newspaper covering St. Johnsbury (population of around 7,500) during a time when there was a fairly non-controversial town manager in the person of amiable Ryegate native Mike Welch (from 2000 to 2010). The most controversial thing I recall him doing was dressing up in a Victorian era-type suit (including a top hat) and selling roasted chestnuts during the holidays in the center of town when it was 30-plus below zero. As far as I can remember his contract never made waves. It seems he got annual budgets out relatively smoothly by bringing the department heads to the table with selectmen and talking it all out. But peace was not to last.

Rocky times lay ahead when Ralph Nelson, a former Major League Baseball executive, took over the reins after being appointed town manager in 2010. Nelson had one controversy after another splashed in the local news pages, which culminated in his being dismissed without “cause” in April 2012. Rather than giving specific reasons for terminating Nelson, the selectboard voted “no confidence” following an executive session that excluded Nelson. They did not name precise reasons. The selectboard argued that he worked at the “will” of selectmen and naming a cause was unnecessary.

Nelson disagreed and fought to be reinstated. This led to a lawsuit that ended in January 2015 with Nelson getting a settlement of $175,000. from the Town of St. Johnsbury. Meanwhile, the St. Johnsbury taxpayer also paid for a string of new town manager(s) that followed in Nelson’s footsteps. And finally, the action ended up clarifying a state statute that says, in part, “the town manager is subject to the direction and supervision of the board of selectmen and holds office at the will of selectmen who by majority can remove him at any time for cause.” Superior Court ruled against Nelson’s reinstatement as town manager because he “holds office at the will of selectmen.” But the Vermont Supreme Court held that in keeping with the last part of that section, selectmen, “who by majority can remove him at any time for cause” had to show cause.

Though it was not specifically cited as cause at Nelson’s termination, Nelson was abruptly dismissed in the wake of a big municipal renovation deal.

This brings us to a more recent, but similar case of former Norwich Town Manager Neil Fulton, who resigned effective February 2016 without much explanation. Norwich has a population of around 3,400. In reading multiple documents and meeting minutes, it is clear that at least two selectboard members called into question how he was handling a large construction project, which was still in the bidding stages. This led to scrutiny of his contract — but, oops! He had never had a contract. The Norwich selectboard appointed him to be town manager on April 11, 2012, when they stated his terms of employment ($95,000 per year with “the same compensation and benefits now provided as Interim Town Manager.”) The motion passed.

This is according to a memorandum dated November 5, 2015, authored by Norwich Selectman Stephen A. Flanders. Flanders’ memo asserts that Fulton is validly town manager, and is protected by — and beholden to — Vermont statutes pertaining to town managers. Flanders also stated the Norwich board must adhere to the findings of the superior court in Nelson’s case: he may not be stripped of his duties without “cause.”

As for terms, Fulton would get the same benefits as other employees at his pay grade. But not everyone agreed, as evidenced by the many written lawyer opinions and five executive sessions to discuss the town manager, according to a memo from selectboard Chair Christopher Ashley. The executive sessions ran from October 2014 through February 25, 2015.

Fulton resigned soon after without a contract ever being agreed to.

However, it is interesting to note a few items on the Town Manager job description. In addition to “managing the affairs of the town,” including roads, construction, town personnel, police, fire department, department of public works, parks and playgrounds and emergency management. “Physical demands” included sitting, standing and walking, bending, crouching or stooping.”

And as for other — less controversial — yet eyebrow raising town manager contracts, Kevin Dorn of South Burlington (Pop. 18,600) has a three-year contract that sets his salary of $122,000 in fiscal year 2016, $124,440 in fiscal year 2017 and $126,929 fiscal year 2018. The contract says he may be terminated without cause “at any time.” If termination occurs before June 20, 2018, Dorn will get nine months worth of salary to be paid within 30 days of termination. In addition, the City “will purchase and maintain in effect during your term as Manager a five hundred thousand dollar ($500,000) life insurance policy…”

And if that isn’t enough, the city will provide a vehicle plus reimburse Dorn for any travel he incurs using his personal vehicle. The city will also provide and pay for a cell phone. By comparison, Montpelier’s Fraser specifically provides his own vehicle and cell phone.

TheBreezeKickstarterWebAnother eye opening contract is one that was  offered to Peter Elwell upon hiring him to be Brattleboro’s Town Manager. His salary isn’t that big a deal comparatively at $95,000. He gets nine months’ salary severance pay if he is terminated without just cause (this is the first year of the contract, so amount of severance is a little generous compared to others). It is also interesting that he gets a $5,000 per year car allowance plus moving expenses form Jupiter, Florida, to Brattleboro.

Those above are the contracts that interested me because of their comparative opulence. The following interested me because of the unusually tight and overreaching constraints.

Back up north to St. Johnsbury … following the flap with Nelson, the town had a couple of town managers before settling on Chad Whitehead in 2015. You can bet they were careful with that contract. This contract is careful to the point of curious. Whitehead gets $79,500 per year, payable in weekly installments. However, the salary could be increased upon successfully completing a six-month probationary period. He gets an annual evaluation and must agree to keep confidential information confidential. Once Whitehead signs the contract “Confidentiality Survives Termination of Employee,” meaning even after he leaves the job he is under a gag order from the town. Forever. In addition, “Employer shall have the option to terminate the Agreement if Employee becomes permanently disabled and is no longer able to perform the essential functions of the position…”

No mention is made of a car allowance (except mileage approved ahead of time for attending pre-approved travel to carry out official duties) or cell phone for Whitehead, however, the Town of St. Johnsbury promises to “budget and to pay for registration, travel and subsistence expenses” if they send Whitehead on professional development excursions. If he is removed “due to a court order to reinstate another person,” he will get two months worth of salary. Otherwise, there is no mention of severance in any other scenario. Only if a former town manager is reinstated.

So. That about covers some odd and interesting examples of town manager contracts and the absence thereof. I would say Bill’s falls right in line and is comparatively reasonable.

But don’t take my word for it. According to an executive summary put out by the Vermont Town and City Management Association, the median salary of a full-time manager is $85,000, with the average being $86,076. The report includes data from managers, administrators and administrative assistants. The highest salary in that report is the manager of Hartford Town (est. population 9,812). That person got $133,323 in the year 2014-15. The lowest appears to be Putney’s manager at $59,186. (Putney Town est. population 2,683). Fraser gets $106,550 (Montpelier est. population 7,755). Twenty-seven out of the 71 have severance packages ranging from one month to 10 months’ pay.

Note — the Vermont Town and City Mangement Association report includes town managers, administrators and administrative assistants. Eighty one percent of all managers and administrators responded. Of those who responded, only three managers were women, including the lowest paid town manager, Cynthia Stoddard of Putney (est. population 2,683) mentioned above.