Below is the original email to the city administrator and to the mayor; the city administrator’s response; a response to his email
May 9, 2017
When a city employee retires from the City of Ashland, PERS (Public Employees Retirement System) rules state that they may be hired back by the city for no more than 1,039 hours in a calendar year.
Mike Faught, Director of Public Works, retired on March 31, 2017 and was rehired on April 1, 2017. He is considered a “new hire” according to his 1,039-cap contract, a copy of which is available to the public upon request from the City Recorder’s office. In this contract, Mr. Faught will receive his same departmental salary plus $350/month for use of his own car for public business, plus healthcare insurance benefits of $10,000+, for a contract period of six months.
According to Administrative policy (refer to Policy No. 2004.01.20), the subject of which is “Treatment of city of Ashland retirees continuing work with the City temporarily with no break in service,” the policy clearly states that “Premiums for health insurance will be the employee’s responsibility….” Temporary post-retirement employees will receive no other (COBRA) City benefits.”
Why is Mr. Faught receiving these benefits when no other City employees hired under a 1039-cap contract is entitled to receive such benefits?
City Attorney Lohman, and former City Administrator Kanner both signed Administrative Policy No. 2004.01.20 on October 17, 2014. The contract between the City and Mike Faught was signed by John Karns, Interim City Administrator, and Mr. Faught on March 23, 2017.
Why are taxpayers being asked to pay $10,000 in unauthorized retiree benefits for Mike Faught, benefits clearly disallowed under Administrative Policy? Why have the City Council and Mayor failed to notice or completely overlooked this contractual error? Has the Council been asked to approve the new contract that specifically includes payment for illegal, expensive, and unfair benefits?
Response by Email from John Karns, Interim City Administrator:
May 11, 2017
Thank you for your inquiry. The decision to retain Mike on a 1039 agreement as well as maintaining his health insurance was mine as the City Administrator. Mike was considering retiring at the end of March which put the City in the position of potentially having three either brand new, or interim department heads simultaneously (Finance Director, Fire Chief and Public Works Director). This I wanted to avoid. Mike had a number of other options to act on though I wanted him to stay around for up to another six months. PW is in the middle implementing the planning and engineering for the water treatment plant, sewer capital projects, East Nevada St. project, and numerous street overlay projects.
1039’s are quite common and certainly lately as many employees are exercising retirement ahead of anticipated PERS reform legislation. The decision to offer the insurance was simply to get Mike to stay for a while and again, it was my decision.
Reply from Carol Voisin:
May 13, 2017
Thank you for getting back to me. I appreciate your comments. I assume that codified Administrative Policy rules are not optional; they are set forth for a specific reason and are meant to be followed. Otherwise, the City is simply making things up as it goes along. I do know that during his tenure, City Administrator Kanner adhered to this rule with respect to numerous employees. However, now you have made an exception and are setting a counter precedent. I find this of great concern.
To be clear on the issue, none of the examples you provided of interim department heads apply to the Administrative Policy rule 2004.01.20. Bev Adams is not a former employee requesting a 1039 contract. David Shepherd was being trained to replace you in January, 2017. Scott Fluery has been ready to step in as the interim Public Works department head for several months; Scott also stepped in as department head for at least two months when Mike’s daughter died.
My questions remain: Why pay this particular city retiree an extra $10,000-$15,000 in benefits when there is clearly a countermanding Administrative policy which specifically governs this contractual decision? Especially when this establishes an exceptional precedent for a policy that was meant to preclude retirees from continuing to receive costly benefits? And especially when the search for a new Public Works Director will soon begin?
According to the City Charter, new hires for department heads are to be taken to Council for approval. I am mystified as to why this did not occur. Mr. Faught is a “new hire” according to his contract; accordingly, the Council should be informed that you are making an exception to Administrative Policy 2004.01.20 and should, in my opinion, be required to approve or reject the exception.
John, $10,000-$15,000 added to the budget does in fact make a difference, especially to the vast majority of our citizens who struggle daily to afford the high cost of living in Ashland. You are laying an additional cost burden on them, which seems both unwarranted, counter to policy, and patently unfair.