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HomeMy WebLinkAbout11-27-2000 Legal Opinion - City Manager's Severence PayBROWN, WARD, SALZMAN & WEISS, P.A. ATTORNEYS AT LAW Usher L. Brown' John H. Ward • Gary S. Salzman' Jeffrey S. Weiss Suzanne D'Agresta Anthony A. Garganese° Scott D. Danahy James G. Vickaryous Allison Carmine McDonald Alfred Truesdell Arthur R. "Randy" Brown, Jr. William A. Davis, Jr. ' Board Certified Civil Trial Lawyer ° Board Certified Business Litigation Lawyer ° Board Certified City, County & Local Government Law 111 North Orange Ave., Suite 875 Post Office Box 2873 Orlando, FL 32802-2873 (407)425-9566 (407) 425-9596 FAX Email: firm@orlandolaw.net Website: www.orlandolaw.net agarganese@orlandolaw.net November 27, 2000 The Honorable Paul P. Partyka and Members of the City Commission City of Winter Springs 1126 East State Road 434 Winter Springs, FL 32708-2799 Re: Legal Opinion - City Manager's Severance Pay Dear Mayor Partyka and Members of the City Commission: I. Introduction Several citizens have claimed that Section 5.02 of the Winter Springs City Charter ("Section 5.02") does not allow the City Commission to approve an employment contract with the City Manager that provides for severance pay greater than thirty (30) days in the event the City Manager is terminated from employment with the City. The City Commission has directed that I provide a legal opinion regarding whether the claim is supported by law. Admittedly, the City Charter is not crystal clear on this issue. On the one hand, Section 5.02 might be reasonably interpreted to limit severance pay to thirty days when that section is read literally and independently, without consideration for the remaining provisions of the City Charter. On the other hand, for the reasons that follow, the City Charter, when considered in its entirety, can be reasonably interpreted to permit the payment of severance pay in excess of thirty days if the severance pay is provided for in an employment contract for a definite term of employment. Mayor Paul P. Partyka Members of the City Commission November 27, 2000 Page 2 II. Factual Background The impetus of the citizens' claim appears to be the current employment contract with the City Manager, Ronald W. McLemore ("McLemore"). On November 28,1995, the City Commission directed then City Manager John Govoruhk and former City Attorney Frank Kruppenbecker to negotiate an employment contract, consistent with law and the Winter Springs City Charter, with McLemore for the position of City Manager. On January 22, 1996, the City Commission' approved a three (3) year employment agreement with McLemore for the position of City Manager ("1996 Agreement"). Relevant hereto is Section 3 of the 1996 Agreement which provides: In the event Employee is terminated by the City Commission during the first thirty (30) months of Employee's initial employment and Employee is willing and able to perform his duties under this Agreement, then, in that event, the City agrees to pay Employee a lump sum cash payment equal to six (6) months' aggregate salary; if Employee is terminated during the thirty-first to thirty-sixth month of the employment period, then the Employee shall only be entitled to the remaining months of severance under the term of the Agreement.... Section 3 further states that the City shall have no obligation to pay severance if the City Manager is terminated for cause or resigns. On September 16, 1999, the City Commission' approved a second employment agreement with McLemore for the position of City Manager (" 1999 Agreement"). The 1999 Agreement is a four (4) year agreement with one three-year extension. Although Section 3 of the 1999 Agreement is substantially similar to Section 3 of the 1996 Agreement, several amendments contained in the 1999 Agreement are relevant to severance pay. Section 3 of the 1999 Agreement states: In the event the Employee is terminated by the City Commission while Employee is willing and able to perform his duties under this Agreement, the City agrees to pay Employee nine (9) months (or remaining months under the term of the Agreement if less than nine (9) months), as severance pay. ` Mayor John Bush and Commissioners Larry Conniff, John Ferring, Cindy Gennell John Langellotti, and David McLeod. ' Mayor Paul Partyka and Commissioners Michael Blake, Cindy Gennell, Edward Martinez, David McLeod, and Robert Miller. Mayor Paul P. Partyka Members of the City Commission November 27, 2000 Page 3 Section 3 of the 1999 Agreement also provides that the City is not obligated to pay severance pay if the City Manager is terminated for cause or resigns. Both the 1996 Agreement and 1999 Agreement provide for a maximum amount of severance pay. If the remaining number of months under the agreement is less than the maximum severance pay, the amount of severance becomes the number of months remaining under the agreement. Thus, if the city manager is terminated for cause with one month remaining on the agreement, the city manager would receive only one month severance pay in that case. III. Legal Analysis The gravamen of the issue presented is one involving the interpretation of the Winter Springs City Charter. As such, statutory rules of construction apply to interpreting the provisions of the Winter Springs City Charter. See Great Outdoors Trading, Inc. v. City of High Springs, 550 So. 2d 483 (Fla. 1 st DCA 1989). When interpreting the provisions of a city charter, the provisions must be considered as a whole. Alsop v. Pierce, 19 So. 2d 799 (Fla. 1944). As stated in Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992), "all parts of a statute must be read together in order to achieve a consistent whole. Where possible, courts must give effect to all statutory provisions and construe related statutory provisions in harmony with another." Further, the provisions should be construed so as to be reasonable and consistent with one another. City of Opa Locka v. State, 257 So. 2d 100 (Fla. 3rd DCA 1972). A literal interpretation of the city charter should not be given, however, when to do so leads to an unreasonable or ridiculous result or to a purpose not designated by the lawmakers. City of Boca Raton v. Gidman, 440 So. 2d 1277 (Fla. 1983). A city charter should be construed together with other laws having the same purpose so that the provisions are in harmony with each other. Id. at 1282. In addition, city charter provisions relating to the same sub j ect matter are in pari materia, and to the extent that the understanding of one provision would aid in the interpretation of the other, they should be construed together and compared with each other. See Goldstein v. Acme Concrete Corp., 103 So. 2d 202 (Fla. 1958). It is within this context that the aforementioned citizens' claim and Article V of the Winter Springs City Charter relating to the City Manager should be analyzed. Several provisions of the Winter Springs City Charter are relevant to the claim raised. Section 5.01 of the Winter Springs City Charter provides that "[t]he commission may appoint a City Manager for an indefinite term and fix his compensation." And, Section 5.02 of the Winter Springs City Charter provides "[t]he commission may remove the city manager by motion of the City Commission requiring four (4) affirmative votes; the city manager shall receive thirty (30) days' severance pay in all such cases." Also relevant is Section 3.01 of the Winter Springs City Charter which states that "[t]he city shall have all powers possible for a city to have under the constitution Mayor Paul P. Partyka Members of the City Commission November 27, 2000 Page 4 and laws of this state as fully and completely as though they were specifically enumerated in this Charter." Except as otherwise provided by law or the Winter Springs City Charter, all powers are vested in the City Commission. Section 4.06, Winter Springs City Charter. Provisions of the Florida Constitution and Florida Statutes set forth powers possessed by municipalities. Specifically, Article VIII, Section 2(b) of the Florida Constitution provides that: Municipalities shall have governmental, corporate and proprietary powers to enable them to conduct municipal government, perform municipal functions and render municipal services, and may exercise any power for municipal purposes except as otherwise provided by law. Further, the Municipal Home Rules Powers Act, § 166.021(4) of the Florida Statutes, provides in part: It is the further intent of the Legislature to extend to municipalities the exercise of powers for municipal government, corporate, or proprietary purposes not expressly prohibited by the constitution, general or special law, or county charter and to remove any limitations, judicially imposed or otherwise, on the exercise of home rule powers other than those expressly prohibited. (Emphasis added). It is axiomatic, therefore, that the City of Winter Springs is vested with a broad range of municipal home rule powers with the exception ofthose powers that are expressly prohibited by law. The home rule powers possessed by the City of Winter Springs are incorporated into the Winter Springs Charter as though they were specifically enumerated in the Charter. Section 3.01, Winter Springs Charter. Unless otherwise provided by law or the Winter Springs City Charter, those powers are vested in the City Commission. Section 4.06, Winter Springs City Charter. Therefore, based on the foregoing, the City Commission is clearly vested with the authority to exercise the broad range of municipal powers provided by the Florida Constitution and Florida Law unless expressly prohibited by law. It is self-evident that a municipality clearly has the power to enter into an employment contract for purposes of conducting municipal government, functions, and services. After exhaustively researching the issue, I was unable to find any state or federal law that would prohibit a city commission from entering into an employment contract with a city manager that provides for severance pay in the event the employment contract is terminated for cause by the city commission. Accordingly, the claim made by the citizens should be analyzed as follows: Mayor Paul P. Partyka Members of the City Commission November 27, 2000 Page 5 Whether the Winter Springs City Charter expressly prohibits or expressly limits the City Commission's authority to provide severance pay by written contract to the City Manager in cases where the city manager is terminated from employment. The only provisions of the Winter Springs City Charter relating to the employment relationship between the City Manager and the City Commission can be found in Article V, City Manager. Section 5.01 of Article V pertains to the appointment of the City Manager and Section 5.02 of Article V pertains to removal of the City Manager. Because Sections 5.01 and 5.02 relate to the same subject matter, that is, the employment of the City Manager, a reasonable argument can be made that the two sections are in pari materia and must be construed with reference to each other. See Goldstein v. Acme Concrete Corp., 103 So. 2d 202 (Fla. 1958). As such, the meaning of Section 5.01 should be used as an aid in interpreting Section 5.02 so that the two sections are construed in harmony with each other. Section 5.01 provides that "[t]he City Commission may appoint a City Manager for an indefinite term and fix his compensation." In other words, the City Commission may, but is not required to, appoint a City Manager for an indefinite term of employment. An indefinite term of employment is employment without an employment contract that specifically obligates the City Commission and the City Manager for a definite term of employment. See Maguire v. American Family Life Assurance Co. of Columbus, Ga., 442 So. 2d 321 (Fla. 3rd DCA 1983); Perri v. Byrd, 436 So. 2d 359 (Fla. 1 st DCA 1983). Where the term of employment is "indefinite," either party for any reason may terminate it at any time and no action may be maintained for breach of employment contract. DeMarco v. Publix Super Markets, 384 So. 2d 1253 (Fla. 1980). Apparently, Section 5.01 contemplates employment of the City Manager without a definite term contract. It is, therefore, reasonable to argue that Section 5.02 relating to termination and severance pay should be interpreted in the context of an employment contract for an indefinite term. As such, if the City Manager did not have an employment contract for a definite term, Section 5.02 by operation of law would require that the City Manager receive thirty days severance pay if terminated by the City Commission. On the other hand, if the City Manager had a definite term employment contract, severance pay could be negotiated and agreed to in the employment contract. Furthermore, Sections 5.01 and 5.02 do not "expressly" prohibit severance pay greater than thirty days in instances where the city manager has an employment contract for a definite term. An "express" prohibition must be "clear; definite; explicit; plain; unmistakable; not dubious or ambiguous; made known distinctly and explicitly, and not left to inference." See Blacks Law Dictionary (Westlaw). Absent such an express prohibition, the City Commission is arguably vested with Municipal Home Rule Powers necessary to contract for severance pay greater than thirty days. Therefore, pursuant to the Municipal Home Rule Powers Act and Sections 3.01 and 4.06 of the Winter Springs City Charter, one could reasonably interpret the Winter Springs City Charter to Mayor Paul P. Partyka Members of the City Commission November 27, 2000 Page 6 provide that the City Commission is vested with the authority to enter into a definite term employment contract which provides the city manager with severance pay greater than thirty days. In this case, the past and current City Commissions have entered into two separate employment contracts with McLemore for the position of City Manager. Both contracts have definite terms of employment. The 1996 Agreement was for three years and the 1999 Agreement is for four years with a three year optional extension. Further, both contracts provide for severance pay. The 1996 Agreement provided for a maximum of six months severance and the 1999 Agreement provides for a maximum of nine months severance. Severance pay is only paid in the event the City Manager is terminated by the City Commission when the City Manager is "willing and able to perform his duties" under the Agreement. Even then, under the 1999 Agreement, the City Manager shall receive only a maximum of nine months severance pay. If the City Manager is terminated with less than nine months remaining under the Agreement, severance pay will only be paid for the remaining months left under the Agreement. The City is not obligated to pay severance if the City Manager is terminated for cause. There is, therefore, no guarantee that the City Manager will receive any severance pay under the 1999 Agreement. Two City Commissions, apparently with advice from legal counsel, have approved definite term City Manager employment contracts with McLemore that provide for the possibility of severance pay in excess of thirty days. In other words, the City Commission appears to have construed the City Charter as not prohibiting the payment of severance pay greater than thirty days under a definite term, written employment contract. Based on the foregoing, one could reasonably argue that the City Commission's interpretation of the City Charter is supported by law. If that interpretation is challenged, the City Commission's interpretation ofthe City Charter should be given considerable weight by the courts construing and applying the Winter Springs City Charter. See Pepe v. City of New Britain, 524 A.2d 629 (Conn. 1987); Mile High Enterprises, Inc. v. Dee, 558 P.2d 568 (Colo. 1977). In sum, it is fair to say that a reasonable person could interpret Section 5.02 of the Winter Springs City Charter in a number of ways. A person could choose to isolate Section 5.02 and interpret it literally without regard to other relevant provisions of the City Charter and law. Alternatively, a person could choose to interpret Section 5.02 in conjunction and harmony with other relevant provisions of the City Charter and law. Reasonable people can disagree. In fact, even courts can disagree. See Partyka v. Blake, et al., 731 So. 2d 749 (Fla. 5th DCA 1999) (trial court's interpretation of the City of Winter Springs Charter relating to the City Commission's authority to terminate the City Attorney overturned), rev. denied, 744 So. 2d 456 (Fla. 1999). Accordingly, unless it is judicially determined otherwise, the interpretation of the previous City Commission and the current City Commission that the City Charter does not prohibit the payment to a City Manager Mayor Paul P. Partyka Members of the City Commission November 27, 2000 Page 7 of severance pay greater than thirty days under a definite term, written employment contract appears to be reasonable based on the foregoing and should be given considerable weight. I trust this answers the City Commission's inquiry within the full context of existing legal authority. %-ALY EitIUrnCy AAG:kj F:\DOCS\City of Winter SpringsTegal Opinions\city mgr severance