The Circus Is In Town!

AP Photo/KEYSTONE/Eddy Risch at http://animal.discovery.com/

The three-ring circus we fondly refer to as our City Council will be putting on another show tonight! Come one, come all -- watch as our Alderclowns, lead by our duly elected Ringmaster Schmidt, make a freak show of the democratic process! You'll be amazed and astounded by their depth-defying leaps in logic! You'll thrill to the sounds of Alderclown amendments and motions to defer! And you'll grip the edge of your seat as you witness Ringmaster Schmidt welcome ladies, gentlemen, and children of all ages to the greatest veto show in town!

Interested and faithful PRU readers can check out the revised agenda (.pdf) for tonight's show! And for a sneak peek at Ringmaster Schmidt's act, you can read the following press release --

from: Dave Schmidt
to: presscontacts@electdaveschmidt.com
date: Thu, Sep 30, 2010 at 2:31 PM
subject: Fwd: Mayoral veto of City Manager's contract

Pursuant to the powers vested in me by the City's Ordinance, I am vetoing the City Manager's employment contract which was approved by the City Council on September 20, 2010.

There are several reasons for this action. The first reason involves the payment of approximately $8500 in deferred compensation in return for the City Manager opting out of the City's health and dental insurance plan. I have serious reservations about whether the payment complies with federal law. I have no reservations at all that the payment is inappropriate, even if technically legal.

When Mr. Hock was first hired in 2008, then-Mayor Frimark negotiated a cash payment of $7720 to Mr. Hock in return for his opting out of the insurance plan. In July 2009, one of the City's attorneys, Seyfarth Shaw, wrote a letter stating that such a payment likely violated Section 125 of the Internal Revenue Code, because it discriminated against lower-paid City employees who were not given the same option. The attorney's concern was that the payment could jeopardize the City's tax exempt status which could have adverse tax consequences for the City and its employees.

In the subsequent contract which I attempted to negotiate with Mr. Hock, Mr. Hock purported to remedy the tax issue by calling the payment "deferred compensation." Since the City Attorney who drafted the new contract apparently believed this would solve the tax problem, I agreed to the payment, but at a lower amount, approximately $3500. This Council subsequently voted to reject my recommendation, and then voted to actually increase the amount of the payment to $8500.

Upon further reflection, I am not convinced that using sleight of hand to call the payment "deferred compensation" would avoid running afoul of the IRS provision. However, I need not make that determination, because I am convinced that the payment is inappropriate since it discriminates against lower-paid City employees who have not been given the same option to receive deferred compensation in lieu of insurance coverage.

I fully understand that some will claim I am reneging on a promise made by Mayor Frimark to Mr. Hock. However, that contract provision was unfair from the outset, and it put the City's tax exempt status in jeopardy. It is my duty to make sure that error is not compounded. I can and must do what I believe is right, and approving this payment is not right.

A second and equally important reason exists for vetoing this contract. The citizens of Park Ridge have the right to a completely open and transparent government. However, the non-disparagement clause in the contract is the antithesis of transparency. The City Manager is the highest paid official in Park Ridge, earning almost nine times the combined salaries of the mayor and all seven aldermen. The taxpayers are paying his salary. He answers to them as much or more as he answers to the aldermen and me. As written, the clause would effectively prevent any elected official from explaining to the taxpayers why certain action regarding the City Manager was taken. I cannot condone such enforced secrecy against the citizens of Park Ridge.

Finally, the constructive discharge clause is also inappropriate. Mr. Hock's original contract contained no such provision, and I see no reason why it should be included now. In effect, the provision would tie the Council's hands if it decided that a salary reduction for the City Manager was necessary and/or appropriate, because it would trigger a potential severance payment which could cost the City up to $100,000 or more. It is simply unwise for such a new provision to be included in the contract.

I ask the Council to support my position and to come up with a contract which is in the taxpayers' best interests and which is fair to other City employees.

Enjoy the show!