To conform to state law, inflated severance pay must be removed from city manager’s contract

Last year before announcing that he would not seek election to a second term in office, former city commissioner Todd Neville challenged city manager John P Regan during a duly called and noticed meeting, asking that at least two other commissioners join him in a vote to remove Regan from office due to his failure to perform.

In the article concerning the Monday night meeting, Historic City News reported that Neville’s motion for removal did not pass.  But what if it had?  It is often mentioned that at his base compensation of $173,479.47, plus benefits, the 57-year-old Regan is being overpaid in relation to other city managers in northeast Florida who are better qualified, holding a higher degree of education, specific to public administration.

In yet another example of city management taking care of its insider cronies, Regan was not overlooked by former mayor Joe Boles at the time his contract was negotiated, May 24, 2010.

The “golden parachute” that is often discussed when taxpayers complain about Regan’s performance and compensation, is truly “golden”.  So much so, that it is larger than would be allowed by Florida law if made today — and it has been since July 1, 2011.

Specifically, had Neville and two other commissioners voted to terminate Regan’s employment, according to his contract, “the Employer shall provide a minimum severance payment equal to ten (10) month’s salary at the Employee’s current rate of pay. This severance shall be paid in a lump sum unless otherwise agreed to by the Employer and Employee.

As if that were not enough, the contract goes on to provide that, “For a minimum period of ten (10) months following termination, the Employer shall pay the cost to continue the following benefits:

1. Health insurance for the employee and all dependents as provided in Section 4 hereof.
2. Life insurance as provided in Section 4 hereof.
3. Long term disability insurance as provided in Section 4 hereof.

The Florida law that applies to such payments (referred to as “severance”) is §215.425(4)(a).

It reads:  “On or after July 1, 2011, a unit of government that enters into a contract or employment agreement, or renewal, or renegotiation of an existing contract or employment agreement, that contains a provision for severance pay with an officer, agent, employee, or contractor, must include the following provisions in the contract:

1. A requirement that severance pay provided may not exceed an amount greater than 20-weeks of compensation.

Regan’s contract was for an initial five-year term; commencing July 1, 2010 and ending June 30, 2015.  The contract provides for automatic five-year renewals unless notice is given 12 months in advance of the next renewal.

After reading §215.425(4)(a) F.S., it appears that any severance payment made to Regan after June 30, 2015 (the first “renewal” date) could not exceed an amount greater than 20-weeks of compensation. 

If for any reason the citizens were able to convince the sitting members of the city commission to make a search for a properly qualified, professional, and competitively compensated city manager, that notice should be given to Regan by the City not later than July 1, 2019. Barring that, or, in the case of a new contract for the next city manager, commencing July 1, 2020 and ending June 30, 2025, the limited amount of any future severance payment needs to be clarified, considering current state law.