When Colorado Springs Fire Chief Chris Riley was forced to leave his job on March 4, according to a transition agreement, he walked away with $80,117 in taxpayer money under a severance-pay deal with former Mayor Steve Bach.
Riley got his payout — six months' salary — because current Mayor John Suthers says he felt obligated to honor the deal.
Turns out, Riley's is one of many such deals engineered by Bach that Suthers is now stuck with, a total potential cost of $1 million.
Six of the 11 severance deals Bach put on the books seem to be ironclad, while five others fall into a grayer area. So Suthers might be bound by some but not others. Either way, Suthers isn't angling for the title of "sugar daddy."
"My policy, simply, is that I will not pay any severance unless I deem it in the financial interest of the city of Colorado Springs," he tells the Independent. "In other words, it [severance pay] would need to be cheaper than litigating a particular issue, and that's the policy that I'm going forward with."
To recap, Bach, who left office in June, shelled out roughly $1.7 million in taxpayer money to get rid of more than 80 people during his four-year term.
Many received severance in a layoff when Bach privatized Fleet Management, but many others were top executives and managers without employment contracts mandating severance pay.
Bach didn't return the Indy's call seeking comment, but he told the Gazette that Riley wouldn't be due severance because he retired. Yet, Bach himself made severance payments to several employees who "retired," among them Police Chief Rich Myers, paid $72,000; Human Resources Director Ann Crossey, $38,500; and Budget Manager Lisa Bigelow, $59,500.
Like those and others, Bach oiled their exit to make way for his hand-picked team. For example, former City Attorney Patricia Kelly was paid $96,164 in severance when she retired in September 2011, a few months after Bach came to power. She was replaced by Bach's choice, Chris Melcher, who in turn collected a severance package worth nearly $140,000 when he rode into the sunset in early 2014.
Former Chief of Staff Steve Cox is another. He was paid nearly $90,000 in severance pay when he retired amid the aftermath of the 2012 Waldo Canyon Fire, only to return 19 months later at a salary of nearly $200,000 a year.
Retirement doesn't usually warrant severance pay, which is Bach's point in arguing Suthers didn't have to give Riley walking money. While Suthers maintains that "the fact of the matter is, he made the choice to retire," he also acknowledges not being surprised by the departure and refuses to discuss it further, calling it "a personnel" matter.
Regardless, Riley's so-called "transition agreement" clearly indicates he didn't simply retire after only 30 months on the job. For one thing, employees who retire usually don't have transition agreements.
The agreement states Riley's severance pay was provided in exchange for Riley's "retirement," his silence on confidential city matters and his agreement not to disparage the city. The transition agreement also required Suthers to "prepare a mutually agreeable media statement announcing [Riley's] retirement" and write "a positive letter of reference" from Suthers and Human Resources Director Michael Sullivan.
If Riley breaches the confidentiality and non-disparagement clauses, he has to pay the city $35,000, according to the agreement, signed by Riley and Suthers on March 1. Later that day, Riley's retirement was announced by the city communications office, and his last day was March 4. Riley also takes with him cash from 212 hours of unused vacation time, totaling $16,356.
To date, Riley is the only Bach appointee to leave the city since Suthers took office. But one might reasonably wonder how much Bach has obligated the taxpayers for in his other deals.
Answer: Roughly $1 million, based on current salaries. Of course, pay rates could go up, as they have since the employees with severance deals were hired. Two employees have seen their salaries climb by 23 percent in 3 to 31/2 years. (See chart.)
It's worth noting that before voters approved the mayor-council form of government in 2010, the city rarely made severance payments, and severance pay isn't a given under the new form of government, either. Denver, for example, operates under a mayor-council arrangement and doesn't give severance pay to departing executives.
But in Colorado Springs, six managers appointed by Bach have agreements that state unequivocally the city "agrees to pay" or "will pay" severance of up to six months salary if an employee is dismissed without cause.
Those six are Emergency Management and Recovery Director/Deputy Chief of Staff Bret Waters, Aviation Director Dan Gallagher, Parks Director Karen Palus, Planning Director Peter Wysocki, City Clerk Sarah Johnson and City Attorney Wynetta Massey. (Riley's agreement stated the city "agrees to pay.")
Total potential liability: $470,621, excluding the Riley payment.
Another five deals made by Bach say the city "may" pay up to six months' salary on termination without cause, or that severance pay is discretionary. Those include Chief Information Officer Carl Nehls, Chief Financial Officer Kara Skinner, Human Resources Director Sullivan, Police Chief Pete Carey and Public Works Director Travis Easton.
Total potential liability: $406,792.
Suthers says any agreement containing the discretionary language "does not bind this or any subsequent administration." That's the language he used in striking agreements for six months' severance pay — only at the mayor's discretion — with his two appointees, Chief of Staff Jeff Greene and Public Communications Director Jamie Fabos. Total potential liability: $151,000.
All of the agreements disallow severance pay if an employee is dismissed for cause, defined as violating city policies, committing fraud, willful dishonesty or misconduct in discharging responsibilities, or disclosure of confidential information.
The agreements also require appointees to acknowledge they serve "at will," meaning "the city may terminate the employment relationship at any time with or without notice, cause, or severance, except as expressly required by this agreement."
Whether Suthers will change some of the agreements is unclear, but most if not all of them allow for it based on this provision: "The city also reserves the right to change the terms and conditions of [an appointee's] employment (i.e. compensation, job responsibilities, vacation, benefits, etc.) with or without notice or cause, except as otherwise set forth in this agreement."
So Riley's payout might be unique during the Suthers administration. Although before taking office Suthers termed severance pay a tool to achieve "basic fairness" when dismissing an employee, he said he thought Bach spent "way too much" on ushering out certain people. Suthers hasn't changed his mind about that.
"Unlike my predecessor, who entered into contracts guaranteeing a certain level of severance under particular circumstances if the person left," Suthers tells the Indy, "I am adhering to something called Policy 66 [for at-will senior managers] that simply says the mayor in his sole discretion can pay up to six months severance."
Suthers notes he'll also abide by another part of Policy 66 that requires City Council to be briefed quarterly on any severance payments, a requirement ignored by Bach.