9News story undergoes Truth Test A statement from the Office of the Mayor of Commerce City

COMMERCE CITY – Perhaps you saw the story on 9News about the employment contract for the city manager in Commerce City. In the interest of holding 9News accountable for the information they air, the City of Commerce City presents the following truth test.

The city worked extensively with 9News, clearly pointing out that the contract was negotiated and approved by a majority of council. City council felt strongly that it was an equitable agreement that followed industry standards for compensation of city managers. The majority of council articulated their support for the agreement at a city council meeting on Aug. 31, 2009. An audio recording of the public meeting where the results of the contract negotiations were stated publically was provided to 9News. Every extension and addendum council approved was done in the best interest of the city. There is no doubt that the provisions of the contract will be satisfied in full on September 1, 2011.

Quote: Councilman Jim Benson was quoted as saying he's never seen a deal like this before.

Truth: This is opinion.
The contract was negotiated and approved by a majority of city council. Council felt strongly that it was an equitable agreement that followed industry standards for compensation of city managers.

It is worth pointing out that Councilman Benson did not object to the loan that was included in each of the contracts and addenda between 2007 and 2009. While he had concerns about the payment of taxes, insurance and interest, he did not state any objection to the loan itself or the relocation allowance when voting on the addendum on Aug. 31, 2009.

According to the handbook called Recruitment Guidelines For Selecting a Local Government Administrator published by the International City/County Management Association: “There now is considerable precedent for local governments—using appropriate safeguards and limits—to assist in the purchase and/or financing of housing for the new administrator. A variety of options exist, including a loan, a salary supplement, or a shared equity purchase.”

Quote: Flannery says the current deal he has was Commerce City's, not his.
Truth: Over a two month period prior to the final approval of the contract, an industry expert and the city attorney structured a proposal on behalf of the city council. On Aug. 24, the city council declined that proposal and presented the contract that was eventually voted on at the Aug. 31 meeting.

Flannery was not present at the meeting for input on Aug. 31 because he was with his wife who was undergoing surgery for breast cancer. Although the contract was not the one that the city manager had proposed, he accepted the contract as presented.

As stated at the city council meeting on Aug. 31, council feels strongly that the agreement is equitable and follows industry standards for compensation of city managers. While some direct expenses for relocation had been reimbursed, no relocation allowance had ever been provided. The contract allowed for a specific amount of reimbursement of expenses as well as relocation allowance. Council felt it was important to fulfill the obligations of the contract.

Quote: "It's just that one thing led to another. He kept being given extension after extension after extension and it was all based on the fact that he couldn't sell the Arizona residence," Benson said. "And then all of a sudden, I find out that in October of last year, he did sell it. I didn't even know about it for six months."

Truth: It is true that the city council, including Councilman Benson, approved a number of extensions on the contract.

Until Aug. 31, the repayment of the home loan to Commerce City was contingent upon the sale of the home in Flagstaff, Ariz. City Council continued to provide contract extensions to the city manager because the house in Flagstaff did not sell. In August 2009, both parties agreed that it was in the best interest of the city to separate the repayment of the Commerce City loan from the sale of the home in Arizona, instead giving a set maturity date for the loan of Sept. 1, 2011. There was no obligation to inform city council when the house in Arizona sold in October 2009. At the meeting on Aug. 31, city council clearly stated that the sale of the Arizona home was no longer part of the deal and was not their business.

Quote: The council discounted the loan and gave Flannery $72,000 and agreed to pay his real estate taxes and insurance for the Commerce City home until Sept. 1, 2011.
Truth: This statement is misleading as to what the city manager has paid on the home in Commerce City.

The city manager personally paid all of the taxes and homeowners insurance on the property from July 2007 to August 2009, as well as income tax on the relocation allowance. After September 2009, the cost of those items was added to Mr. Flannery’s compensation. He currently pays income tax on that amount consistent with the tax rate he pays on all of his income.

Quote: The council called the $72,000 a relocation fee and made the decision in a closed-door, non-public meeting.

Truth: This statement is false. The decision to approve this agreement was done at a public city council meeting with a 5-2 vote in favor of the contract.

Government has the legal right to handle negotiations and personnel issues in executive session. Once an agreement has been reached, the law states that the details of the agreement be shared in a public meeting and that the vote be taken publically. This is what occurred in this instance.

Quote: Despite the sale of his Arizona home, Flannery has not paid the Commerce City loan because the new contract says it does not have to be paid until September 2011.

Truth: This statement is true. The contract clearly states that the loan is due in full on Sept. 1, 2011.

Quote: The final deal with the city essentially gives Flannery an extra $72,000 on top of his salary and allows him to live in the $450,000 home, interest free, with all taxes and insurance paid - without having to repay the loan for four years.

Truth: Council felt strongly that it was an equitable agreement that followed industry standards for compensation of city managers. The home loan is currently accruing interest at the rate of .34 percent annually, the rate the city would earn on any of its short term investments.

The contract included the payment of a relocation allowance that had not been provided prior to 2009. Relocation allowance is standard in public sector contracts for executive managers across the country. The city manager paid taxes and insurance on the home from the time he purchased it until August 2009.The manager has committed to repaying the balance of $456,525 plus interest to the city in full by Sept. 1, 2011 per the provisions of his contract.

Quote: McIntyre poured through Flannery's job contracts and spotted the sweetheart deal after covering a city council meeting. The more she asked about it, the more she feels the council did not answer her questions.

Truth: Documents related to the purchase of the home in Commerce City were sent from a fax machine belonging to the Gateway News.

In June 2007 the city manager received documents relating to the purchase of the home in Commerce City. These documents were sent from the fax machine belonging to the Gateway News, the community newspaper owned by Ms. McIntyre.

Quote: "We've had budget crunches. And that is a lot of money. You can provide a lot of services to people for that amount of money. Services they don't have right now," Benson said.

Truth: Commerce City has maintained, indeed added, services to its citizens.
In the past two years, the city has implemented new direct services to Commerce City citizens. Citizens now receive curb-side recycling, additional trails and playgrounds are being constructed, new businesses are opening, and the number of housing permits issued is rising month after month. All of this occurred during the worst economic times in recent memory. No lay-offs, pay cuts or furloughs have been made during this time. In fact small raises were given to members of the city staff below management level. Councilman Benson objected to the budget item allocating funds to staff raises.