Midtown Raleigh News

Raleigh city manager firing could cost up to $327,000


The city council’s April vote to fire City Manager Russell Allen could cost taxpayers up to $327,000, according to newly released records of Allen’s severance package.

Allen agreed to stay on board through this year’s budget season, but he left June 30 with a year remaining on his contract, which the council had signed in 2012. That means Allen is still receiving his monthly paychecks, while the city’s chief financial officer fills in as manager and the council looks for a permanent replacement.

Allen’s termination letter notes that he was fired “without cause,” and council members have been tight-lipped about why they wanted the head of city government gone after 12 years in Raleigh.

Here’s how the estimated cost of the firing breaks down. The numbers do not include health benefits – given his length of service, Allen is eligible for retiree health insurance, according to human resources director Stephen Jones. The severance package, however, doesn’t include the same benefits arrangement he received as an employee.

What Allen’s owed: The ousted manager will receive a paycheck every other week for $10,386.47 until he takes a new job. If he’s still unemployed when the severance period ends on June 30, 2014, he will have received a total of $270,048 – his $232,800 base salary plus $37,248 in “deferred compensation.”

On July 5, Allen received a check for his 125 unused vacation days, totaling $111,923.08. He was known for working long hours and rarely taking time off.

Interim leaders: Chief Financial Officer Perry James took over as interim manager July 1, and he received an immediate 20 percent pay boost. If the new manager starts work Nov. 1 – the City Council hopes to pick a candidate and start contract talks Oct. 1 – James will earn an additional $10,600 this year for four months in charge.

With James on leave from the finance department, his deputy Robin Rose is serving as interim chief financial officer. She’s getting a temporary 10 percent raise for the extra work, causing her to earn an additional $3,675 this year if James returns in November.

The search firm: In July, the city council hired executive search firm Springsted to oversee recruiting efforts, screen applicants and negotiate a contract with the new manager. The Springsted contract calls for the company to be paid up to $20,950 for its work.

A new manager: After comparing salary data with cities of a similar size, the City Council expects to pay a new city manager between $190,000 and $240,000 a year. The new hire will get an annual car allowance of $6,600, and the pay package will also include deferred compensation equal to 10 percent of the base salary. That money can go toward a supplementary retirement account, for example. If the new manager starts Nov. 1, their pay will total up to $180,000 this fiscal year.

Factoring in these salary costs, the city could pay up to $327,000 more this year than it would have if Allen had remained employed and used his vacation time. That amount could decrease if Allen gets a new job soon, or if the new manager is hired on the lower end of the council’s salary range.