Paris: Least experience, but best severance Contract more lucrative than other nearby city managers

Published 12:00 am Sunday, July 20, 2014

SALISBURY — Doug Paris had a sweet deal.
Compared to his peers in nearby cities, the former Salisbury city manager had a contract with a longer severance, more generous payout for accrued leave and only one reason that City Council could fire him without a severance — conviction of a felony.
The city paid Paris a severance worth nearly $210,000, including a lump sum payment of one year’s salary and more than $70,000 in accrued leave, after he left his job June 17 following a nearly five-hour closed session with City Council.
The city also paid a $32,700 severance to Elaney Hasselmann, the former public information officer, who quit the next day.
No one has said why the council terminated Paris’ contract in what was called a mutual decision or why the city violated its own personnel policy by giving Hasselmann a severance.
No other city managers in five surrounding communities — Kannapolis, Concord, Albemarle, Statesville and Mooresville — have a one-year severance in their contract. All serve “at the pleasure” of their city council, language that does not appear in Paris’ contract. (See accompanying story on 2A for contract comparisons.)
The contract for Brian Hiatt in Concord, a city with more than twice the population of Salisbury, comes the closest to Paris’ payout. Hiatt, who signed his original contract with Concord in 1998, has a nine-month, lump sum severance, but he would receive only accrued vacation leave with his severance, not vacation plus sick leave, annual leave and holidays, like Paris.
Paris’ contract also included a unique clause that prevents City Council members from making “disparaging comments or statements” if they terminated his contract. Paris also cannot make disparaging remarks about council members.
Jay White, a Concord attorney who served for six years as a Cabarrus County commissioner and hired a county manager, said he was surprised by Paris’ contract and would have had concerns about the document as an elected official.
“It’s concerning when one party is getting quite a bit and you don’t see where the other side is benefitting commensurately,” White said.
White, who reviewed the six contracts for the Post, said the others were similar and consistent in theme. But White said he was struck by what he called Paris’ surprisingly high salary — $135,000 for a 27-year-old with no previous city manager experience.
Paris also had more leave payout than any other city manager, with his severance including all accrued annual leave, sick leave, vacation time and paid holiday. While City Council could fire Paris with cause only for a felony conviction, the other contracts have at least two reasons a city council could fire their manager for cause, and some have many.
“Do we have a diamond in the rough, or did someone not do their homework?” White said.
Paris started working for the city as a summer intern in 2006 under the tutelage of former City Manager David Treme. Paris became assistant to the city manager in 2007, then assistant city manager and eventually interim city manager when Treme retired.
City Council members serving at the time unanimously promoted Paris to city manager in March 2012.
It is not clear who wrote his contract, whether council members compared the document to other contracts or what if any changes were made during negotiations.
City Council worked with a consultant to draft Paris’ contract, said Mayor Paul Woodson, who issued a brief statement.
“Council worked with a consultant to draft the former manager’s contract,” Woodson said. “This was a standard contract based on the economic climate in Salisbury at that time.”
Woodson brought up Fibrant as a reason that Salisbury may have written Paris’ contract differently than other cities.
“The terms of the contract were not unusual,” Woodson said. “But, unlike most city managers, not only was he responsible for running the city, but he had the additional responsibility of running a high-tech utility.”
No other city in the contract comparison has a high-speed broadband network, but Concord has a municipal airport and in Statesville, the city manager oversees an electric utility.
When Paris took the top job in Salisbury, Fibrant was losing millions of dollars a year. When they chose Paris over 69 other candidates, City Council members noted his expertise with municipal broadband, as well as his experience in Raleigh as the city defended Fibrant against repeated attempts by big cable to shut down the network.
Paris did not answer questions from the Post about his contract or what role Fibrant played in negotiations with City Council.
Susan Kluttz, who was mayor when the city hired Paris, said any discussion about his contract was done in closed session and she cannot comment. She would not say if the city compared Paris’ contract to others or how it was negotiated.
Kluttz, now state secretary of cultural resources, said she was “absolutely surprised” to hear about Paris’ departure and does not know why he left. She said she is always saddened when things are not going well in Salisbury, and she has confidence in City Council members “to get this all straightened out and find the right person to lead them.”
“I do know that it’s difficult to judge people by what goes on in closed session if you’re not in it yourself,” Kluttz said.
Councilman Pete Kennedy said City Council had legal advice from attorneys who specialize in personnel when they signed Paris’ contract. Kennedy said he has no regrets about the document.
“No, not at all. At that particular time, we did the right thing for the city,” Kennedy said. “In the last two years, Doug did a great job for us and he turned the city around. Unfortunately, things did not work out.”
Mayor Pro Tem Maggie Blackwell and Councilman Brian Miller also hired Paris. Neither commented for this story. Councilwoman Karen Alexander was appointed to replace Kluttz 10 months after Paris was hired.
White said several items in Paris’ contract caught his attention, including the salary. He also spotted either a typo or an oversight on the first page. The portion of the contract that details Paris’ compensation should refer to a section on performance evaluation, White said. Instead, it refers to a section on resignation.
White said the performance evaluation section was too vague, and Paris should have been serving at the pleasure of the council year-to-year with a shorter severance that could have been extended after he established a track record of excellence.
White pointed to Kannapolis City Manager Mike Legg’s contract as an example. Legg’s severance increased as he gained experience. When first hired in 2004, Legg had a three-month severance, which increased to six months in 2008 and eight months in 2012.
If Kannapolis City Council ever terminates Legg’s contract, the city will pay his severance monthly, not lump sum like Salisbury paid Paris. Legg’s original salary was $105,000. He’s now earning $142,000.
White said Paris’ contract amounted to double-dipping. Paris received a one-year salary when he left, but he also was paid for vacation time, holidays and sick leave, which were already included in the salary, White said.
“I would be concerned about entering this contract,” White said. “… There may be answers why the contract was written like it was, but it would be hard to justify.”
The unusual nondisparagement clause in Paris’ contract is usually found in a termination agreement when a city manager leaves, White said.
“That’s typically something negotiated if the city manager is asked to step down,” he said.
An employment agreement, which marks the beginning of a relationship between a city and manager, usually does not have language that anticipates either party making negative comments, White said.
The city paid Paris $209,442, which included:
• One year salary, $135,000
• Payout for holiday and leave hours of $70,288.65, including 303.28 annual leave hours, 629.50 sick leave hours and 82.50 paid holiday hours.
• Health insurance for one year. The city did not assign a value.
• Regular pay of $4,153.85 for eight days from June 9 to June 18 equaling 60 hours.
Paris was city manager for two years and three months. If City Council had terminated Paris’ contract after his third year in the job, his severance would have decreased to six months’ salary, six months of health insurance and all accrued annual leave, sick leave, vacation time and paid holidays.
Typically, two parties negotiate the parameters of a contract, White said. That dynamic was not evident in Paris’ contract, he said.
“It seemed like it was very favorable to him,” White said. “Which is fine if you’ve got a diamond in the rough.”
Contact reporter Emily Ford at 704-797-4264.