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Village Council discusses severance, disincorporation

Marie Havenga • Jan 10, 2017 at 11:00 AM

SPRING LAKE — The new Spring Lake Village president had her attorney discuss steps to possible disincorporation of the village and his opinion on the legality of a proposed severance agreement for the village manager during a council work session Monday night.

Village Council members concluded that they'll need a lot more time to digest and discuss the idea of disincorporation, but want to resolve the manager's contract request as quickly as possible.

John Huff, an attorney with Varnum Law in Grand Rapids, told council that it is his opinion that the law does not allow for Village Manager Chris Burns to be paid any kind of severance because she is an “at will employee” and cannot be rewarded extra for work already performed.

Burns said her personal attorney and Scholten Fant municipal and personnel attorney Ron Bultje both are of the opinion that a severance package is legal.

Last month, council tabled Burns' request. Because Joyce Hatton successfully ran for village president last year on a platform of dissolving the village and making it part of Spring Lake Township, Burns said she feels she needs some protection.

Burns is requesting that if her employment is not continued subsequent to a decision to disincorporate, that the village pay her a lump sum of two years of her then-current salary, with an additional four months pay accumulated for each calendar year she works after Jan. 1, 2017 — not no exceed 48 months.

Burns, whose current annual salary is $89,639, told council last month that such an agreement would be an incentive for her to stay on and oversee a disincorporation process.

Her current employment agreement, signed in 2012 when she accepted the village manager job, offers six months of severance pay if she is terminated “without cause.” If she is terminated “with cause,” there is no severance pay.

Huff said it is his opinion that even Burns’ current severance package contract language is not allowed. The Michigan Constitution states that municipalities can't adjust compensation retroactively, according to Huff.

“I think you lack the authority to have that (severance payment) provision,” Huff told council.

Councilman Mark Powers, who is also an attorney, said you can have five lawyers in a room and get seven different opinions.

Powers and other council members suggested that Burns would need an incentive to stay if there was uncertainty as to the future of the village. She would also be the one to work through any disincorporation process.

“Even though there may be low probability (of disincorporating), it's high impact for (Burns) in particular because she bears the risk,” Powers said.

Burns said when she took the job in 2012, she intended to remain here for the rest of her career. However, she said she needs to look out for her own interests.

“If my future is uncertain, and I have graduate school payments to make for my daughter, I'm going to do what’s in my best financial interest,” she said. “If there's no security for me, I have to take that into consideration when other job openings come up.”

Most council members seemed to agree that Burns deserves some protection. Councilman Joel TePaaste said even though he thinks there's a very slim chance the village would disincorporate, all employees deserve such protection.

TePaaste said he agrees in principle, but doesn't agree with the current proposed numbers.

“I think they're excessive,” he said.

Councilwoman Megan Doss praised Burns.

“We should fight to keep her,” Doss said. “In her field, she is the best. It would be a travesty for everyone who voted for me for me not to support our village manager.”

Burns said the longer the uncertainty drags on, the more village staff morale will be negatively affected.

“Every month that goes by that we don't address this creates additional stress and morale issues,” she explained. “They're sitting here saying at what point do we jump ship? We don’t want to lose the staff we have. They're amazing.”

Powers agreed.

“Whatever we're going to do, we should be decisive about it to give people a sense of what their future is here,” he said. “I certainly hope we can settle this quickly.”

Council members agreed to email TePaaste on whether they are for or against some sort of safety net payment to Burns in the event of dissolving the village, and what amount they think that should be. TePaaste said perhaps such a payment could be arranged as a “bonus” versus a “severance” payment.

All four of the audience members who spoke during Monday's public comment period spoke against disincorporation.

Several council members said they need to learn much more before considering a decision on a potential Village Charter amendment that would allow residents to vote for disincorporation.

It would take a two-thirds majority of council or a petition signed by 20 percent of the number of voters who voted in last year’s presidential election to get a charter amendment on the ballot that would provide a means for disincorporation.

If disincorporation were to make the ballot, two-thirds of village voters would have to approve the measure. In a separate vote, two-thirds of Spring Lake Township voters would also have to approve dissolving the village and make it part of the township.

If approved, the township would acquire all village assets, but also all village debt and obligations.

Hatton calls village residents paying property taxes to both the village and township “double taxation.”

Resident Lee Schuitema said he thinks the process could be expensive for the village.

“You opened a very divisive box,” he said. “I see a really expensive process coming up that's going to cost the village thousands or hundreds of thousands of dollars that can't be recouped. Any money saved on taxes is going to cost every person in this village more money than they could save in their lifetime.”

Former Village Councilman Bill Meyers praised Burns' work since she has served as manager. He also asked council to thoroughly explore the true costs and all pros and cons of disincorporation before making any decisions.

“When I first heard the talk of disincorporation, I thought, 'Let's take a look at it,'” Meyers said. “All I would ask this council is to really explore what it’s going to cost. There are many, many obstacles. Research it. Take the time. It's not just 'we will save a few bucks,' but what we're doing for the kids in this community.”

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