Colorado Springs Utilities doles out severance pay under new policy 

Cleaning house

click to enlarge Benyamin has done some house cleaning. - COURTESY CSU
  • Courtesy CSU
  • Benyamin has done some house cleaning.
Colorado Springs Utilities CEO Aram Benyamin approved paying more than a third of a million dollars to four employees to induce them to leave after he was promoted Oct. 1, 2018, to lead the city-owned agency.

Benyamin signed off on the most recent severance payment — to chief financial officer Tamela Monroe — on Oct. 2 following a 21-day administrative leave that ended that day.

While not uncommon at other government agencies, severance pay wasn’t allowed at Utilities until May 2018. City Council, which also serves as Utilities Board, amended personnel policies to give the CEO that option to attract top executives.

Asked to explain his severance pay philosophy, Benyamin at first said he’s bound by the personnel manual for how much can be paid. He then said it’s important to populate his staff with employees who represent “the right fit” in the organization.

Severance pay isn’t unusual in either the public or private sector. It’s given upon termination and usually is based on length of employment. It’s not required, according to the U.S. Labor Department, but often is given when a facility closes, amid a larger layoff, or if the employee has a contract mandating severance pay.

The city’s first strong mayor, Steve Bach, shelled out $1.7 million in severance pay from 2011 to 2015 to rid the city of dozens of employees, including high-ranking officials.

His successor, John Suthers, has been more restrained, saying his policy calls for severance only if he deems it in the financial interest of the city, meaning severance pay would be “cheaper than litigating a particular issue.”

Since his 2015 election, Suthers has awarded severance pay three times: In 2016, then-Fire Chief Christopher Riley was paid $80,000, and former Police Commander Fletcher Howard was paid $59,308; in early 2017, then-Stormwater Manager Tim Mitros was paid $58,525 and retired Jan. 13, 2017.

El Paso County most recently provided Deputy County Administrator Nicola Sapp $150,628 in severance pay in March, and several school districts also have issued such payments.

In an unusual move in the 1990s, Springs Utilities paid out more than $1 million in severance payments to carry out a so-called reorganization that led to laying off many employees. Since then, Utilities’ personnel policy manual contained no provision for severance pay.

Then, that changed last May, a few weeks before Benyamin’s successor of 12 years, Jerry Forte, retired.

Utilities Board member Andy Pico says a provision was added “in order to bring [in] top level executives that wanted to have some level of compensation assurance.”

The policy calls for the CEO to approve severance payments based on years of service, capped at six months’ salary, plus benefits. Severance deals need not be sanctioned by the Utilities Board.

Benyamin approved these severance packages since becoming CEO, records show:

• Carl Cruz, chief customer officer, an 18-year employee, left on Oct. 26. He received $110,858 in severance pay (22 weeks’ salary) and $14,735 in health insurance premiums, for a total of $125,593. His annual salary had been $262,038.

• Sherri Newell Wilkinson, chief strategy and external affairs officer who served for 24 years, departed on Nov. 16, 2018. She was paid $108,914 in severance pay (26 weeks’ salary) and $3,727 in health insurance premiums for a total of $112,641. Her annual salary had been $217,818.

• Kyle Akers, occupational physician with 17 years of service, left on March 8. He was paid $21,558 (eight weeks pay), plus $3,143 in insurance premiums and $6,000 for “reimbursement for expenses related to the procurement of employment transitional services such as resumé writing, interview preparation and/or employment placement,” for a total of $30,701. His annual pay had been $140,130.

• Monroe was paid $67,355 (11 weeks salary) because of her severance agreement, as well as $1,956 in health premiums. Her annual pay was $318,406.

Monroe was hired in January 2018 by Forte at a salary of $274,997, along with $25,000 in “relocation expenses.” She moved from Omaha, where she served as a top official with the Omaha Public Power District.

Benyamin rated her after one year on the job as “meets expectations” in competencies and goals and objectives, records show. Monroe has received two raises during Benyamin’s CEO tenure.

Total: $338,246.

Akers’ job was eliminated and Wilkinson’s reclassified.

As for Cruz’s position, Benyamin promoted Melissa Kellione to fill that job, at a salary of $261,476 on Nov. 5, 2018. She’s since received two raises, adding $25,439.

Utilities barred all four from discussing their severance deals publicly. They’re also prevented from disparaging Utilities or its employees, and if Cruz or Akers violates those provisions, they could be fined $20,000, according to the agreements; Monroe’s penalty is $3,000. Wilkinson’s agreement didn’t contain a penalty clause.

Benyamin, who’s the highest-paid city employee at $480,000 a year, secured a severance provision in his contract that would allow payment of up to six months’ salary and benefits if he’s dismissed without cause. If he’s discharged with cause — defined as misconduct or failure to follow a lawful directive from the board — no severance pay is due.

He declined to discuss the departures for which he authorized severance pay, saying, “I can’t talk about personnel issues, because there are many reasons why that has happened.”

Asked about the severance payout, Pico says he’s “not wild about that number,” but said he expects it to be a one-time spike as the new CEO “puts his team in place.”

Since Benyamin took the reins, at least 10 of 66 members of his executive team and top managers have resigned or retired.

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