Morro Bay personnel controversy could cost the city $305,000

Analysis finds a high cost if the mayor succeeds in replacing the city manager and city attorney

jhickey@thetribunenews.comSeptember 20, 2013 

Morro Bay City Manager Andrea Lueker and City Attorney Robert Schultz will each receive nine months of severance pay — about $114,000 each — if they are terminated without cause.

They would have received less, but on Nov. 1, 2012, the outgoing City Council extended severance pay for Lueker and Schultz from six months to nine months. That was less than six weeks before Mayor Jamie Irons and council members Christine Johnson and Noah Smukler were sworn in.

Irons launched an effort last week to fire Lueker and Schultz, who have been with the city since 1987 and 1997, respectively. They serve “at will,” which means they can be fired without cause, or for no specific reason, if they lose the support of a majority of council members. In that case, they would receive severance pay. 

According to their contracts, Lueker or Schultz could be fired with cause because of gross or habitual failure to perform their duties; misconduct involving moral turpitude or dishonesty (as determined by the City Council) including but not limited to conviction of a misdemeanor or felony; or conduct that demonstrates unfitness to serve. If fired with cause, they would receive no severance.

Asked whether he believes there is cause to fire the two, Irons replied, “I am not going to answer that. It seems evasive to the public, which I apologize for, but I need to protect the confidentiality of personnel matters and the city from litigation.”

Irons will ask the City Council to approve on Tuesday the spending of up to $12,500 — at $250 an hour — for outside legal advice on “city manager and city attorney personnel contracts and related issues.”

Lueker’s annual salary is $152,244. Schultz’s annual salary is $151,589.

If terminated without cause, Schultz is also entitled to $4,500 worth of his total accrued sick leave, according to Morro Bay City Clerk Jamie Boucher.

Lueker is only entitled to sick-leave pay when her employment ends if she chooses to retire, her contract states.

Irons estimated that searches to replace high-level city employees such as city managers and attorneys can cost about $30,000 per search.

That means the total cost of terminating Lueker and Schultz without cause and completing a search to replace them, including legal counsel fees, could be at least $305,000, according to The Tribune’s calculations. That does not include possible accrued vacation pay.

Former Mayor Janice Peters said she believes the city’s total cost for the two terminations, subsequent legal and other advice and searches for replacements could reach $500,000.
Irons would not confirm or deny either estimate.

Irons and council members Johnson and Smukler have not disclosed why they’re considering firing the two employees. Lueker and Schultz also have not commented. 

The two other council members, Nancy Johnson and George Leage, have said they disagree with the proposed firings and the calling of a special meeting Sept. 12, which drew about 300 citizens upset about the proposed firings. Irons said at the meeting that no charges or complaints had been filed against either employee.

Cambrian reporter Kathe Tanner contributed to this story.

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