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City challenging severance deal

The Crystal River council says former City Manager Russ Kreager broke the agreement.


© St. Petersburg Times, published June 2, 2000

CRYSTAL RIVER -- When former City Manager Russ Kreager agreed to a $23,000 severance package with City Council, he signed a document that clearly waived his right to receive unemployment compensation.

But that did not stop Kreager from applying for, and receiving, such money.

Records from the Florida Department of Labor and Employment Security show Kreager received $7,150 from the state between the second and third quarters of last year. City Manager David Sallee said the payments covered the period from March to September.

On Tuesday, the City Council decided to try to get the severance money back. Since the state just denied the city's final appeal and the city must pay, the only choice is to confront Kreager.

A letter will go out to Kreager's attorney, Jim Neal of Inverness, this week, City Attorney Clark Stillwell said Thursday.

"It's clear that he waived any right to claim (unemployment)," Stillwell said. "We're going to let him know that."

Asked about the payments following Tuesday night's meeting, Kreager refused to answer questions. He repeatedly professed a lack of knowledge about it.

"Until they make an allegation I'm not going to say anything," he said.

Kreager was fired in February 1999 by a deeply divided City Council. The majority, which included two new members, accused Kreager of mismanagement and unethical behavior.

The minority praised his work and lashed out at his opponents for not giving him the chance to respond. The lack of due process would later haunt Kreager's opponents when he threatened to sue in federal court.

Faced with an avalanche of legal fees, the council approved a severance package on April 12, 1999, that erased the firing and said Kreager and the city would go their separate ways. The settlement paid him $13,291, representing 90 days pay, and the salary he would have received between his dismissal and last official employment date, $6,135.

The package also covered his legal fees of $4,181.

The state investigates the legitimacy of every unemployment claim, unemployment compensation program specialist Mary McCarthy said Thursday. She would not provide details about Kreager's case but said the department would have looked to see why he was let go.

Under state law, the employer has to prove misconduct to win unemployment claims cases, she said. That may work to Kreager's benefit because his severance package does not accuse him of bad behavior.

"If they are let go at no fault of their own, the person will get the benefits," McCarthy said.

Council member Paula Wheeler is seething about Kreager's decision to file even before the severance package was finalized.

"When we negotiated that settlement, we paid him a hefty amount, and that was to compensate for all of those things, inclusive," she said. "I really and truly couldn't believe it."

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