Our View: New direction costing city in transition
September 17, 2013
Last week, we learned Grass Valley City Administrator Dan Holler had resigned.
This week, we learned Holler will receive more than $81,000 in a severance package, which included accumulated sick pay, vacation and other leave that was not used during his tenure. Also part of the package, according to city officials, is the equivalent of three months salary he was paid as the city's administrative leader.
Typically, severance packages are offered to employees who have been laid off or have retired, although they are sometimes negotiated under an employee's contract. Yet, that was not part of Holler's agreement, according to his employment contract provided by the city this week.
"In the event Employee terminates his employment with the City by resignation, in writing … the city shall have no obligation to provide thirty (30) days advance notice or to pay the severance pay set forth," the contract reads.
Considering the end of Holler's tenure as city administrator came by resignation, why did the city offer an additional three months salary?
Apparently, as City Attorney Michael Colantuono told The Union, that's because Holler "proposed that in his letter of resignation, and the council approved it in open session (of a Sept. 4 special meeting)."
But beyond Colantuono asking for a motion to accept the letter of resignation and the council then unanimously adopting, there was no discussion on the topic — nor was there any mention of the expenditure of funds on the meeting's agenda.
One week later, Holler had left his position, and the city had moved ahead by hiring Jeff Foltz as a consultant at $65 per hour for an estimated 30 hours per week. Foltz, a former Yuba City city manager, served as Grass Valley's interim city administrator prior to Holler's 2008 hiring. Among Foltz's first tasks, according to the city attorney, is to facilitate a way for the city to hire Foltz in an interim capacity without violating California's employee pension program's prohibition on a person serving in such a role a second time.
Despite the apparent conflict of interest in hiring someone to facilitate his own hiring, Culantuono said the ideal extent of Foltz's employment would be no longer than six to eight weeks, when he hopes the city is able to hire Holler's replacement. It should be noted, however, the last time Foltz worked in such a capacity, in 2007, when Grass Valley fired former City Administrator Gene Haroldsen after 15 years at the helm, a full year passed by the time Holler was hired.
Holler faced tough economic times in his tenure, which saw the city substantially shrink its budget — laying off employees, leaving unstaffed positions vacant, implementing furloughs and cutting pay and benefits. Considering this tightening of the budget, the approval of a non-negotiated three months severance to the departing city administrator, while also funding a consultant or an interim city administrator, is not an example of fiscal prudence with taxpayer dollars.
Those taxpayers, after all, just approved a half-percent sales tax increase last November that council members called "critical" to address public safety requirements. Approval of the ballot measure, on which Holler was lauded for his work, expects to bring an additional $2.4 million but is to fund "essential city service" needs within the police, fire and public works departments.
It should also be noted that both when Haroldsen was relieved of his duty as city administrator and upon Holler's announced resignation, council members said the city was heading in a "new direction." In fact, Holler stated in the city's news release announcing his resignation that "I frankly believe that I am not the right fit with the direction they want to go." However, Mayor Dan Miller told The Union that Holler was not told of any future council directions, only informed of his evaluation by council members, which led to his resignation.
We look forward to hearing what the new direction entails, considering it has required a change in the city's top leadership position, as well as the funding of a non-negotiated three months severance and the hiring of a consultant to assist in the transition toward it.
The Our View represents the opinions of The Union editorial board, which is comprised of members of The Union staff, as well as informed members of the community.