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“I would like to express my appreciation for the opportunity to serve the Town of Pagosa Springs,” Mitchem said. “At this time I would like to submit my resignation and, with your indulgence, I will give you two weeks notice.”
Council member John Egan made a motion to accept Mitchem’s resignation, but before mayor Don Volger could call for a vote, councilor David Schanzenbaker asked Mitchem to mention his housing allowance.
Mitchem responded, “recognizing that there is a severance package, and also acknowledging that the severance package would not include a housing allowance. That’s all.”
SUN staff attempted to contact Volger the next morning to find out if all the members of council agreed with granting Mitchem a severance package, how many had called for his resignation and if any informal voting had taken place during the executive session. However, no response was received before Wednesday’s press time.
Two paragraphs from Mitchem’s contract apply to this situation. One states, “Voluntary resignation shall be without entitlement to severance benefits.”
Further examination of the contract reveals only one situation where Mitchem would be entitled to a severance package: “In the event Employee is terminated at will, as described above and in this paragraph … the Town agrees to pay the Employee a cash severance equal to four (4) months of Employee’s salary and benefits (including housing allowance) as defined in this Agreement.”
While Mitchem conceded his housing allowance would not be included in his severance package, he also failed to request that his resignation be considered a “termination at will.”
The contract specifies, “For the purpose of this Agreement, the following shall be considered termination at will: (a) … the majority of Town Council votes to terminate the Employee without cause at a public meeting, upon providing two (2) weeks notice to the Employee …
“If the Employee resigns following a formal offer of a majority of the Town Council to accept resignation, whether made verbally or in writing, then the Employee may declare a termination at will as of the date of the offer.”
Neither of these things occurred at 10:35 p.m. on Tuesday night, when the council voted unanimously to accept Mitchem’s resignation, and it would have been a violation of Sunshine Laws for such a vote to occur behind closed doors.
Tuesday’s meeting began at 5 p.m., when the mayor announced that one of the items on the agenda was a possible executive session to discuss the town manager’s employment agreement, which he admitted could take a while.
Therefore, in order to spare the general public from needing to stay so late, the mayor rearranged the schedule so the Pagosa Springs Sanitation and General Improvement District meeting came first.
Then, during the regular town council meeting, even though Mitchem’s contract was listed as new business and fell in the middle of the agenda, the mayor moved it to the last item to be discussed.
The meeting then continued as usual, with no indication from Mitchem or the council that anything was amiss. Nonetheless, it was 8:30 p.m. before all other town business was handled and the mayor suggested a five-minute break before continuing.
When council reconvened, Volger asked Mitchem if he would prefer his contract be discussed in the open or behind closed doors. Mitchem asked for and was granted an executive session.
Under Colorado’s Sunshine Laws, personnel matters are one of the few areas of government business that may be conducted in private.
When the public was escorted out of the council chambers and the doors were closed, Mitchem remained inside, contributing to the discussion. About an hour into the two-hour session, Mitchem emerged. He was asked to leave so the council could discuss the matter without his presence. For about a half hour, Mitchem sat and talked with SUN staff about other matters, but gave no indication as to the nature of the discussion going on in the chamber.
Mitchem was then invited back into the chamber, where the discussion continued for another half hour before the meeting was re-opened to the public and Mitchem made his announcement.
However, the nature of the discussion, and its result, were not unexpected.
While other concerns may have contributed to the resignation, the housing allowance issue first came up at the Jan. 7 town council meeting, when Mitchem presented a request for a cost of living increase to his salary and councilor David Schanzenbaker responded, “I think that the cost of living increase is reasonable. Since we are giving it to the rest of the staff I don’t see a problem with giving it to the town manager as well. I do still have a problem, though, with the housing allowance we are giving him. That is intended to be for living in town, and since the manager doesn’t live in town anymore, I guess I would add that to my motion.”
Schanzenbaker then made a motion to approve Mitchem’s cost of living request of 1.934 percent and to also discontinue the housing allowance since it was no longer being used as it was intended. In other words, since Mitchem’s salary at the time was $100,000 he would gain $1,934 per year for the cost of living raise, but would also lose $1,200 per month for his housing allowance.
“I would remind council,” Mitchem responded at that time, “the voters changed the town charter, at council’s request, to permit the town manager to live outside the community but within Archuleta County, so my view is that component (the housing allowance) is part of the compensation package afforded the town manager.”
After a lengthy discussion in which all of the other councilors argued for continuing to give Mitchem his housing allowance, Volger, who at that time was still only a town council member, convinced Schanzenbaker to withdraw his original motion and restate it so it only included the pay increase. Schanzenbaker agreed on the assumption the housing allowance issue would be looked into later.
However, Mitchem continued to take $1,200 every month as a housing allowance even though he never moved back within town limits.
According to Mitchem’s employment agreement, besides his annual salary of $100,000 (including the possibility of merit and cost of living raises each year), paid holidays and 23 days worth of personal time off, he is also entitled to additional employee benefits. These additional benefits include health insurance, life insurance, retirement benefits, reimbursement for general business expenses and a housing allowance to offset the cost of living in Pagosa Springs.