Deputy Mayor Aurel Langevin proposed at last Tuesday’s council meeting that future CAOs have a maximum of two years base salary as a severance payout.
He said former CAO Duane Coleman’s resignation in October – and his high severance payout of taxpayer money – is not something that Lac La Biche County should have to go through again.
“[Coleman’s] contract was like a Fortune 500 company – not small-town Lac La Biche,” Langevin said.
Coleman’s severance pay was $606,204.40 and his base yearly salary was just over $191,000. An organizational review conducted by a county-hired consulting firm this summer stated: “Duane Coleman has had a long and successful career with Lac La Biche County,” and went on to say “no issues were raised during this review, that in our opinion would constitute legal cause for dismissal (of the CAO). .... Ultimately, the question rests with council: Do they have confidence in the CAO?"
The municipality will soon choose a recruitment firm to help find Coleman’s replacement. With that in mind, Langevin proposed a cap in severance pay, saying a maximum of two years base salary is fair. After 11 years as the municipality’s head administrator, Coleman was approaching a million dollars in severance pay.
Langevin said the previous Lac La Biche County Council, who negotiated Coleman’s contract, included the high severance payout despite being told it was excessive.
“We had previous councillors earlier this year intimidating council, gloating over us having to deal with an $850,000 [severance] contract,” he said. “That council did that deliberately, despite legal advice that it was way over the top. We need to put something in place to prevent a rogue council from doing this again.”
Ron Mccullough is the current CAO for Brazeau County, located southwest of Edmonton with a population around 7,000 people. He said his current salary is around $175,000 a year, and if he was terminated without cause, his severance payout would amount to 12 months pay plus benefits – about $220,000.
“I’ve worked for 25 years in municipal government and I’ve seen two to three years base salary [for severance] a lot – although it depends entirely on the contract,” said Mccullough, who previously worked for the City of Cold Lake. “I’ve never had a contract like [Coleman’s] though – it’s good for the CAO, not so good for the taxpayers.”
A spokesperson for the City of Fort Saskatchewan said that their departing CAO, who left in October as well, received two months pay for every year he was with the municipality. If Coleman had a similar contract, he would have only been eligible for $350,000 after 11 years with the county.
Mathematically, it seems Coleman’s contract entitled him to at least three months salary per year plus a year’s base salary. Despite requests from the Post, municipal officials declined to release the details of his contract because it is a personnel issue.
Langevin proposed a bylaw with strict guidelines on CAO severance pay.
“It’s untenable – I can’t explain what we’ve gone through,” he said. “If we don’t put something there – a bylaw, something – then we’ve done nothing.”
However, Councillor Eugene Uganecz said he was concerned a cap in severance pay would make it more difficult for the county to remain competitive and attract a quality CAO.
“You’re restricting council’s ability to negotiate a contract,” Uganecz said. “Can we get a CAO if we’re restricting ourselves?”
Langevin countered that once severance gets high enough, like with Coleman, it makes more sense for the CAO to underperform in the hopes of being let go – and getting that golden handshake.
“We need a contract that inspires a CAO to do well, not one that gives incentive to do poorly,” he said.
Councillor Gail Broadbent took it one step further. She suggested council ask Alberta Municipal Affairs to investigate the legality of the previous council’s CAO contract.
“It doesn’t make sense that you can make these decisions and not have accountability,” Broadbent said. “What’s stopping a council from giving a ludicrous salary or payout? There’s got to be something in government that doesn’t allow this type of thing to happen.”
But Councillor Tim Thompson said that digging into the actions of past councils would be more trouble than it’s worth.
“We’re trying to move forward – this would take us back,” Thompson said. “It muddies the water and just puts fuel on the fire here.”
Council voted unanimously to “ask administration to investigate contract parameters for CAO compensation and severance, and the personal liability that Councillors could face in this regard.”
