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City attorney claims taxpayers owe him $68K in back pay

By MARY SCHLEY

Published: July 15, 2011

CITY ATTORNEY Don Freeman contends the city owes him $68,041.13 in retroactive pay due to an oversight going back four years — an issue that was set to be discussed by the city council Tuesday. But some members wanted to ask their questions behind closed doors, so they took it off the agenda.

According to a July 12 report from interim city administrator John Goss, when Freeman’s contract — which pays him $7,500 per month for legal services without specifying a number of hours — was last renewed in 2004, it inadvertently omitted a provision obligating the city to contribute toward a retirement plan similar to what other managers receive.

Regardless, the city continued paying his share through April 2007, when he submitted a letter asking to terminate his participation in the city’s public employees retirement system.

“By opting out of the city’s retirement plan, it was with the understanding that he would be compensated an equivalent cash amount,” Goss wrote. “It is unclear why the equivalent compensation was never paid to Mr. Freeman, or why a modified contract was never adopted.”

He reported the cost of paying Freeman the equivalent of his PERS benefit since he opted out more than four years ago would be $68,041.13.

“If Mr. Freeman’s monthly compensation is adjusted to reflect this payment going forward, the cost would be $1,288.58, or $15,462.96 annually,” he wrote, for a total cost of $83,504.09, which would probably come from the general fund reserve account. Goss also said the city’s PERS contributions made on Freeman’s behalf between 2004 and 2007 should be ratified.

Regarding whether to give Freeman the pay he wants, Goss said in his report, “a specific recommendation is not offered, due to the interim city administrator’s short duration with the city and the lack of direct knowledge regarding the history of this issue.”

Although she’s been on the council longer than anyone, councilwoman Paula Hazdovac said she had more questions than answers, too.

“I felt I did not have enough information in the packet to make a decision one way or the other,” she said, explaining her desire to discuss it in closed session first. Closed-door council meetings are restricted to personnel matters, lawsuits and real estate deals, while other business must be approved by the council in public.

Hazdovac said the closed-session meeting would allow Goss to prepare to answer questions about the contract in public later, but councilman Jason Burnett said all the questions could be asked and answered in an open forum.

Freeman confirmed he wanted that, too.

“Ultimately, I want it in open session,” he said.

Mayor Sue McCloud suggested the reason for a closed session was because “it is more than the issue that is before us tonight.”

After the meeting, Burnett said his greatest concern was the lack of a paper trail. He wondered who approved the change in Freeman’s compensation and how it avoided a vote by the full council.

“I’d like to see a document that backs that up, and nobody can find one,” Burnett said. “It’s just really hard to justify spending $68,000 of taxpayer money based on no paperwork.”

He said he thinks Freeman “is prepared to answer all these questions in open session, and people will vote however they’ll vote. That’s how I think this should be handled.”

Burnett also voiced concern the insistence on closed-session talks makes the council look bad.

“I’m worried it’s going to raise suspicions that something untoward is going on, and as far as I can tell, I don’t think there was anything untoward,” he said. “It was just an oversight. And Don said he’s not aware of any question the council wants to ask that should not be asked in open session.”

Freeman did not want to comment on the issue.