Source: Rhino Times Greensboro

The Cagey Fox Is Set For Life

by Scott D. Yost

May 24, 2012

This week Guilford County Manager Brenda Jones Fox has been meeting with and speaking on the phone with county commissioners in an effort to convince them of the benefits to Guilford County of an enhancement in the county’s voluntary retirement plan that, if it stands, will pay Fox more than $61,000 when she retires next February.

The Guilford County commissioners got a jolt on Thursday, May 10, when they learned that they had unknowingly voted on Thursday, March 1 to approve the removal of a cap on bonus pay for 30-year county employees who notified human resources (HR) by Tuesday, May 1 that they might retire by Friday, Feb. 1, 2013.

The board temporarily lifted the cap that limits the amount paid to retiring county employees with 30 or more years service to a maximum of $16,500. That motion was approved by the board as part of their consent agenda, which is usually a list of routine housekeeping matters. The board typically approves the consent agenda with little to no discussion since it’s supposed to be reserved for items that are non-controversial.

On the consent agenda for the March 1 meeting, buried in the fine print, was the removal of the cap on retirement bonuses for a two-month window. That cap is now back in place for any 30-year employee who decides to retire. But the March 1 vote by the commissioners lifted that cap long enough for Fox to finagle a $61,000 bonus – if, that is, the board doesn’t rescind the action, something that might happen at the board’s next scheduled meeting on Thursday, June 7.

On Thursday, May 17, Commissioner Linda Shaw met with Fox at the manager’s office in the Old Guilford County Court House to discuss the issue. Shaw said she had questions for Fox about why the commissioners weren’t made aware of the modification in the plan, or the fact that it would give Fox the large windfall upon her retirement.

Shaw, who said her conversation with Fox was “very cordial,” said Fox told her the plan would save the county money in the long run because long-time employees making high salaries would be out of county government and, in some cases, those positions would be left unfilled.

In other cases, when those positions are filled, the expectation is that the employees who replace retiring employees will likely be making less money.

Shaw said that, after the conversation, she informed Fox that she wouldn’t go along with the move – now that she’s aware of it.

“I told her I can’t support it,” Shaw said.

Shaw was one of many commissioners to unwittingly support the move at the board’s March 1 meeting. At that meeting, the consent agenda – which contained the removal of the cap – passed 8 to 3, with the three no votes being Commissioners Billy Yow, Bill Bencini and Paul Gibson. Commissioner Mike Winstead did not attend that meeting.

Though Shaw voted for the consent agenda that night, she said she had no idea the retirement plan was being modified and that Fox would be eligible for the large bonus.

Shaw was informed of Fox’s large bonus by reporters on May 10 in the commissioners meeting room of the Old Guilford County Court House. Last week, The Rhinoceros Times and News & Record both reported that Shaw said Fox deserved the money, but Shaw said this week that she never made that statement. Shaw said that, instead, she indicated to reporters that she wanted to look further into the matter – specifically, she wanted to see if the move would save the county money.

Shaw said this week that the reason she wasn’t critical of the removal of the cap in that initial conversation with reporters was because she was just learning about it at that moment, and, Shaw said, she didn’t want to come out and be critical of the change in the retirement plan without knowing much of anything about it and then perhaps having to reverse herself.

Shaw said, after her conversation with Fox, that she didn’t see the wisdom of changing the plan.

Of all the commissioners who voted to remove the cap, perhaps Shaw has the best excuse for not knowing that the controversial item was included in the agenda packets that night. Shaw had missed several meetings and, at the time, she was looking after her ailing husband, former State Sen. Bob Shaw, who died on April 7.

Chairman of the Board of Commissioners Skip Alston, who has been a close ally of Fox’s in recent years, said he knew full well what he was voting on. Alston said that, as chairman, it’s his job to stay informed about everything that comes before the board.

Winstead, the only commissioner who missed the March 1 meeting, said he was alarmed to learn the cap had been removed and Fox was in line to get a $61,000 bonus.

“The first thing I want to say about it,” Winstead said, “is that I feel bad about missing that meeting because I feel certain that if I were there, as thoroughly as I study the meeting agendas, I would have caught it.”

Winstead chuckled after he said that; then his tone got more serious.

“To me, it’s a question of ethics,” Winstead said. “If you were going to put in place a plan, and, oh by the way, it means that you were going to get $61,000 – then wouldn’t you have an ethical duty to tell the board that?”

Winstead said Fox should have informed the board what they were voting on and should have made it clear to the commissioners that she would benefit personally from the plan. He said she should have explained to the board exactly how much she stood to make.

Winstead also said he thinks the cap on early retirement benefits is a good idea and it should never have been removed.

“I think there needs to be a cap,” Winstead said.

Winstead, a property developer who co-owns the construction firm Mega Builders LLC, said it’s very strange to him that, in order for employees to benefit from the plan, they didn’t have to submit anything in writing. County employees planning on taking advantage of the removal of the cap merely had to inform someone in the Human Resources Department – though it wasn’t specified who in that department employees were supposed to tell.

Shaw said that, during her talk with the manager, Fox said she had submitted her intent to retire in writing to the Human Resources Department.

However, if employees chose to notify human resources verbally, that would suffice as well.

Guilford County Attorney Mark Payne said last week he prefers items of this nature be put in writing. He said this week that nothing in the motion adopted by the board March 1 requires it. He said the policy doesn’t specify how notification should be given.

“So I agree oral notice is OK,” he said.

Payne added that there should still be a record.

“It is incumbent upon HR to record the notice so HR has a reliable list,” he said.

Guilford County employees who are used to jumping through bureaucratic hoops over the simplest matters were scratching their heads at what they say is a strange policy, given the county’s penchant for formality and bureaucracy. The joke going around among county employees recently was that, as one employee put it, “County employees applaud the informality of the plan – it’s a breath of fresh air since Guilford County administration is finally showing an ability to not make everything so formal and rigid.”

One Guilford County department head who asked not to be identified said it would be incomprehensible that, in his department, matters of similar importance wouldn’t require written documentation. There may be hundreds of thousands or even millions of dollars riding on the implementation of the retirement plan modification. The department head said of the requirements placed on even much less important matters by county administrators, “No, you cannot just whisper it to someone in HR and hope everyone remembers the date correctly.”

There are 45 county employees who qualify for the plan and, of those, 23 notified the Human Resources Department that they intended to retire. Any employees who have been with the county less than 30 years were still subject to the cap even during that two-month window.

Of course, the fact that 23 employees notified the county of an intent to retire by Feb. 1 really doesn’t tell the county how many employees plan to retire because there was no downside to expressing an intent. It didn’t even require writing a letter or an email – so any employee who was remotely thinking about retiring would have been irrational not to notify the county and say he or she might take advantage of the plan.

Guilford County’s Human Resources Department won’t release the names of those employees who have notified the county of their plans to retire. Assistant County Manager Sharisse Fuller, who’s also the county’s human resources director, said the list was confidential, and, she said, by law she wasn’t even allowed to tell commissioners – or Fox for that matter – who was on that list.

While the list of those who have announced an intention to retire is confidential, the names of the county employees who qualify to take advantage of the removal of the cap, on the other hand, are public record.

Here are some of the more well-known county employees who are among the 45 eligible to retire and collect four months pay, subject to no cap, if they retire before Feb. 1 of next year: Fox, Fuller, Guilford County Sheriff BJ Barnes, Parks Planner Roger Bardsley; Betty Garrett – who’s been interim planning and development director for about 3 years; Facilities Director Fred Jones; Sheriff’s Department Major Debbie Montgomery – who is Barnes’ right-hand woman; Emergency Services Director Alan Perdue; Environmental Health Director Tobin Shepherd; Clerk to the Board Effie Varitimidis; and Property Management Director Sandy Woodard.

Payne said it wasn’t a conflict of interest for Fox or Fuller to put forward the plan, even though they were eligible to participate in it, because it was the Board of Commissioners that ultimately took the action.

“It is not a conflict of interest, it is part of the job description,” Payne wrote in an email to The Rhino Times. “Implementing administrative changes and recommending policy changes on benefits – such as VER [Voluntary Enhanced Retirement plan] – to the Board of Commissioners is required of staff. The recommendation may come from the manager or HR.”

Gibson and other commissioners have expressed a desire to restore the cap and limit what Fox could make in bonus pay to $16,500.

Payne was asked by The Rhino Times this week, if the commissioners do away with the retirement enhancement, can they do away with it just for the county manager? For instance, could they make the cap applicable only to those employees who don’t work for the board, or for those, such as Fox, who are contract employees? Or would the board – if they decided to rescind the action –remove the cap for everyone or no one? Payne responded in an email; the bold type below is Payne’s.

“This is a very difficult one to answer,” Payne wrote. “I have expressed my opinion that it is legally possible to modify the VER benefits. (I take no opinion as to whether they should or should not). I also feel that any discussion on this matter should be a full and complete discussion because there are many issues tied together here. First, caution is appropriate because: a) you are dealing with personnel benefits – a sensitive matter in and of itself; b) in dealing with the benefits of employees with 30 years of service you are dealing with a constitutionally protected class, i.e., older workers, and the law requires strict review on any matter impacting a protected class; c) most importantly, reasonable people could, I believe, come to a different interpretation of the legality of making a change now.”

Payne then went in to detail on his reasoning as to why he thinks the move is something that could be undone by the Board of Commissioners despite the board’s March 1 vote to lift the cap.

“To explain,” Payne wrote, “I think it is legal because, I think the proper review is whether or not there is a legal contract in place between the county and its employees. To have a contract you must have an offer and acceptance. I do not think you have that here. I think you have a conditional offer for a benefit that is not accepted until the employee retires; thus, you can change the terms of the offer until it is accepted.”

Payne said that, given all the legal considerations involved, he still thinks it is a close call on which there could be legitimate disagreement among reasonable legal minds.

“I certainly could see someone arguing that the plan was the offer and the notice of intent was the acceptance,” Payne wrote. “This would mean you could not make any changes after May 1st. I do not agree with that conclusion – the notice of intent, I think, was just a preliminary, non-binding indication of interest (as opposed to commitment), more a planning tool than an acceptance. Because the answer is certainly not unequivocal, I have asked the School of Government for their comment on the issue.”

Payne then responded to the question of whether the board could maintain the cap for Fox but not for the other county employees who qualify and who gave notice of intent before the May 1 deadline. Payne said that, in his opinion, they could not.

Payne wrote: “Now, I have argued caution in taking an action impacting a protected class of 23 or less employees, you can see I would have strong reservation on an action that impacted one. So the short answer to your question is that if the board took action, it should be all or none.”

With the exception of Alston and Commissioner Bruce Davis, who both say Fox deserves the $61,000 bonus, the other nine commissioners have either stated that they want to rescind the removal of the cap or said they want a lot more information about what has transpired.

Commissioner Kay Cashion also said the large bonus for Fox raised all sorts of red flags in her mind.

“I have a lot of questions about it,” Cashion said.

Commissioner Kirk Perkins, who said he wouldn’t have voted for the plan on March 1 if he had realized what he was voting for, said he just can’t see how the county can justify paying Fox $61,000 when many vital community programs are being cut.

The manager’s budget proposal that Fox brought to the board in April cuts out funding for such things as the Gibsonville library in Perkins’ district, as well as some funding for dental care for indigent children. Perkins expressed a great deal of concern over those recommended cuts even before The Rhino Times reported on May 10 that Fox was set to get the giant bonus.

Perkins said that, especially in light of cuts that the county is considering making, there’s a huge disconnect for giving the bonus to Fox, who, Perkins said, is already set for life.

Fox currently makes $183,200 a year as the Guilford County manager. If she does get the money she would have a very lucrative 2013. Fox would get the $61,000 as well as pay for any leftover sick time or vacation time and her retirement pay.

According to information provided by Fuller, the county’s annual retirement benefit is based on the following formula: “1.85% of average final compensation TIMES years (and months) of creditable service.”

“Average final compensation means the average salary during the four highest-paid years in a row,” Fuller wrote, which in almost all cases is the last four years of employment.

“If an employee’s four highest-paid years in a row include a final payment for unused vacation leave and/or prorated longevity, the employee’s average final compensation may be increased by the extra payment(s),” Fuller wrote. “(Final payments, if any, for unused sick leave or reimbursements for expenses are not includable in your average final compensation.) Also not included in Average Final Compensation are any retirement incentive payments, such as the Guilford County Voluntary Enhanced Retirement (i.e., payment for 2, 3, or 4, months of service).”

If Fox, 69, retires in February of next year, she would have 42 years of employment by that formula, with just shy of four years at $183,200. So, roughly, Fox would be entitled annually to 1.85 percent of that amount, or $3,389, multiplied by 42, which comes out to $142,346 a year each year after she retires.

That amount plus $61,000 comes to $202,000, which is roughly how much Fox would get in 2012 if she gets the bonus – not counting any sick time or vacation time that Fox has accrued in her years of employment with the county.