JANUARY 29, 2009 8:01 a.m. (0)the Anderson County budget, Anderson attorney Kurt Gibson said.
Gibson, who specializes in bankruptcy law, said his clients will sue the county if the county council does not rescind its decision and demand Preston pay back the money he received in November.
Preston was dismissed as the county’s top appointed figure on Nov. 30 but not before an Anderson County Council majority that had supported the administrator – calling his work for the county progressive and visionary – voted on the severance package. That majority was supplanted when new council members in January took office, having promised and since followed through with an investigation into Preston’s spending practices.
Gibson would not identify his clients, calling them concerned citizens of Anderson County, including himself, who want to see the Preston’s deal rescinded.
One man in the audience – former County Council candidate Rick Freemantle – stood up and said “Me!” when councilwoman Gracie Floyd asked who Gibson’s clients were.
To pay for Preston's severence, which included a county-owned GMC Yukon, the former council members agreed to cut 25 positions, including an economic development secretary, 911 communications operators, road crew members and a part-time secretary for the coroner’s office.
Gibson said Preston's contract was written in a convoluted way and designed, because it was a rolling, three-year deal, to prevent any council from dismissing the administrator without the prospect of expensive litigation.
Even if the contract was executed legally, the buyout amount was $656,000 more than it needed to be, Gibson said.
The final buyout equated to seven years of pay at Preston’s $168,000 annual salary – much higher than the standard business practice of giving an outgoing official one year’s severance, he said. It included $780,000, minus taxes, to be paid in a lump sum before Nov. 30, and $359,000 to be paid into the state retirement system.
“This was a gift,” Gibson said.
Gibson said the council members who voted for the deal – Bill McAbee, Gracie Floyd, Michael Thompson, Ron Wilson and Larry Greer – could be required to pay back the money if Preston does not.
Wilson, the man who negotiated the buyout, said this week he offered a much lower figure initially, but it “didn’t fly” with Preston and his attorney. Against the advice of the council’s personnel attorney at the time, Tom Bright, Wilson pursued the higher figure, he said, to avoid a drawn-out legal battle with Preston.
Bright had said Preston’s legal argument – an “anticipatory breach of contract” – wouldn’t hold up in court, Wilson said. But he said Bright also maintained his was an opinion and subject to challenge in court.
Preston’s attorney, Robert Hoskins, had written in a Sept. 25 memo to the council that his client’s contract had been breached because a majority of the new council, which was to take office Jan. 4, had said they planned to place Preston on paid leave during an audit of county finances – in effect preventing Preston from doing his job.
“How could they breach his contract,” Gibson said this week, “if they weren’t in office yet? It’s a legal impossibility.”
“It’s speculation maybe, but I felt if we don’t deal with this, the new council would push him and push him and finally under (councilman) Bob Waldrep’s leadership will probably fire him,” Wilson said. “Then we would have the biggest lawsuit ever.”
Gibson said case law shows how and why the county should recoup at least some of the $1.14 million.
A 1996 case, Piedmont v. Cowart (which itself referenced back to the 1948 Newman v. McCullough case) found the appointment or removal of a public officer is a governmental function that can’t be impaired by a contract extending beyond the terms of the governing body’s members, Gibson said.
Preston’s contract, in effect since 1998, included a rolling, annual extension of three years renewed each spring. Gibson argued the termination provisions of Preston’s contract were void because the document extended its reach beyond the terms of the 2008 council.
Terms of the council members who agreed to Preston’s buyout ended a month after he was fired. Two began new terms in January.
Gibson said the severance agreement was further problematic because it appeared to be negotiated without notice to all seven members of council (council members Bob Waldrep and Cindy Wilson knew nothing about the buyout until the agreement was handed out and voted on).
This would be a violation of the state Freedom of Information Act and the council’s fiduciary responsibilities to taxpayers.
The Preston agreement also appeared to be crafted outside the bounds of a public meeting, he said, because members of the council majority came prepared with plans to cover the agreement’s expense and hire Preston’s successor, Michael Cunningham.
“This was government by ambush,” Gibson said.
Wilson said no deals were struck behind closed doors last fall; rather, the five-person majority that supported Preston voted for each other’s ideas because they trusted each other. The Preston buyout, the plan to pay for it and Cunningham's contract were agreed to with virtually no discussion among the five members.
“I had never read or seen Cunningham’s contract before that night,” Wilson said. “We had it in our hands for about 10 or 15 minutes. It was only three pages, so I read it and knew instantly it was a better contract than Joey Preston’s.”
Questions posed by Waldrep and Cindy Wilson were cut off through parliamentary procedures.
“If somebody asked me looking back should we have discussed it longer, probably so,” Wilson said. “Hindsight is always perfect.”
Acting county attorney Andy Artiglierre said he was not aware of any case law that would supersede the 1996 Piedmont v. Cowart case but he said he also knows contracts routinely extend from one council to another.
Waldrep said the old council should be ashamed of itself for not looking after the best interests of county residents.
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