Council members still in favor of Treme bonus

Published 12:00 am Monday, March 14, 2011

By Emily Ford
Most City Council members say they would have approved a $70,000 retirement bonus for City Manager David Treme even if they had known an investigation was under way at the Salisbury Fire Department and the city’s projected budget shortfall would reach $2.7 million.
Council voted unanimously Jan. 18 to give Treme a bonus worth three months of his salary when he retires or dies. If he works until Dec. 31, 2012, Treme will receive a bonus worth six months of his salary.
Treme, 63, earns $139,726.50 and has served as city manager for 25 years. The retirement bonus would total about $35,000 or $70,000, depending on how long he stays.
Mayor Pro Tem Maggie Blackwell said voting for Treme’s bonus was a difficult decision because of the poor economy. She said the city needs Treme at the helm for two more years to ensure the success of Fibrant, the new municipal broadband network that competes with Time Warner Cable and others to provide Internet, cable TV and phone services.
“My decision was based on the Fibrant deployment,” Blackwell said. “The worksheets that staff has developed for us show a two- to three-year buy-back on the $30 million of your money.”
The city borrowed $30 million to launch Fibrant and build a new Customer Service Center.
“For me, to lose the leadership at the head of that project would imperil our investment,” Blackwell said.
Council member William “Pete” Kennedy agreed the city needs Treme’s experience and competency to move Fibrant forward. Kennedy said he voted for the bonus to encourage Treme to work for two more years.
But had he known about the severity of the city’s budget problems and the fire department investigation, which led to the dismissal of three employees and the suspension of another, Kennedy said he would have tried to put off the vote on Treme’s bonus.
“Looking back, I would have delayed the vote,” Kennedy said. “I would not have voted for that bonus.”
Kennedy said he knew the city would face a budget shortfall, but the $2.7 million figure announced by staff Feb. 11 at Council’s planning retreat was larger than he anticipated. If the city has to terminate employees to balance the budget, Kennedy said he would have taken that into consideration when voting on Treme’s bonus.
Treme warns city employees of potential layoffs, furloughs and salary cuts in a recent letter about the shortfall.
The budget gap is one of several reasons the city needs Treme now more than ever, Mayor Susan Kluttz said.
“Basically, we have got to have someone with his experience and expertise to get us through a difficult budget,” Kluttz said. “The fact that we have just started a brand-new business — Fibrant — makes him very important to the city.”
Council did take the city’s budget woes into consideration by deferring until retirement Treme’s reward for exemplary performance, she said.
Council’s closed-door discussion of Treme’s bonus came two weeks after his annual evaluation, where he earned yet another exemplary review, but no raise. Treme’s last salary increase was awarded Dec. 1, 2007. The 4 percent raise totaled $5,374.10 annually.
By Jan. 18, when Council voted for the bonus, Treme had been investigating the Fire Department for about a month. One employee, firefighter Courtney Brown, had been fired, and two others — Capt. Baxter “Buddy” Miller and firefighter Castleman “Chet” Hedrick — had been placed on administrative leave.
Most Council members said they were not aware of the investigation when they voted for Treme’s bonus but do not feel it would have changed their minds.
“I don’t see a link between the importance of your $30 million and personnel issues in the Fire Department,” Blackwell said.
Miller eventually was fired, as was Battalion Chief Chris Lyerly. Hedrick was suspended and then returned to work.
Treme confirmed last month the allegations he investigated were similar to those listed in an anonymous letter, which accused some Fire Department employees of sexual misconduct.
“This stuff happens,” council member Paul Woodson said. “I would not hold the city manager responsible for what employees do.”
Treme thoroughly investigated the Fire Department and protected the city, said Woodson, who said he voted for Treme’s bonus to help ensure the success of Fibrant.
City Council member Brian Miller also said he would not hold Treme personally responsible for the behavior of employees and felt Treme kept Council informed about the investigation as it progressed.
Treme first alerted Council to the situation at the Fire Department on Jan. 25 in anticipation of the Post’s initial story about the investigation.
Kennedy said he would have been reluctant to vote for Treme’s bonus if he’d known about problems at the Fire Department.
A week after Council approved Treme’s bonus, the Post asked whether it would increase his monthly retirement payment and requested a calculation of Treme’s retirement benefit.
“The request for proposed retention bonus information is something we cannot provide to you because we have not calculated what effects it might have, and we do not know when he will actually retire or actually receive these bonuses,” Human Resources Director Zack Kyle said in an e-mail.
Retirement is calculated by the N.C. Retirement System, Kyle said.
In preparation for Sunshine Week, the Post again requested Treme’s retirement information on March 8 using three hypothetical dates and scenarios: without the bonus, with the three-month bonus and with the six-month bonus.
If the city was unable to provide calculations of Treme’s retirement using those dates, the Post requested the name and contact information of the person with the N.C. Retirement System who calculates retirement for Salisbury.
“Regarding the request for retirement payments for Mr. Treme, we have no such public record concerning Mr. Treme’s retirement calculations and cannot currently produce one,” City Clerk Myra Heard said in an e-mail.
She provided the toll-free phone number for the N.C. Retirement system.
A spokesperson for the N.C. Department of State Treasurer said according to state law, any bonus paid upon retirement is not considered compensation for purposes of the retirement system.
“Any bonus paid incident to retirement does not change a person’s retirement benefit,” Heather Strickland said in an e-mail.
Treme has said he will serve Salisbury as long as Council will have him. But Kennedy said members didn’t want to risk losing him.
“Many cities want experienced city managers, and he is sought after throughout the state as a speaker,” Kennedy said.
With a municipal election on the horizon, he said, Council wanted to act now to provide Treme with a safety net.
“I think he’s well worth it. He’s earned it,” Kennedy said. “But in this economy, I don’t know whether we can afford it.”
Contact reporter Emily Ford at 704-797-4264.

Comparison of salaries for mayors and city councils
Mayor $13,905
Council $10,506
Mayor $15,353
Council $8,955
Mayor $12,972
Mayor Pro Tem $9,168
Council $8,544
Mayor $6,000
Council $4,800
Mayor $17,181
Mayor Pro Tem $8,008
Council $7,636