Payout for Hot Springs’ ousted city manager set at $223,312
HOT SPRINGS — The former Hot Springs city manager will receive $223,312.20 in severance after resigning last week over accusations that he made racially insensitive remarks to a black Hot Springs School District administrator in the gated community where both men lived.
City Attorney Brian Albright said Tuesday that David Frasher agreed to receive the payment in two installments, with the first to be disbursed later this week and the second after the first of the year, instead of in the lump sum stipulated by his January 2016 employment agreement.
“That helps us from a cash flow standpoint, and I assume it helps him from a tax standpoint,” Albright said.
The Hot Springs Board of Directors unanimously requested Frasher’s resignation June 12 after Lloyd Jackson, the deputy superintendent of the Hot Springs School District, complained in an email to city directors that Frasher shouted “you don’t live here” at his passing SUV as Jackson and his wife left the neighborhood pool area of Red Oak Ridge the night of June 7.
The employment agreement’s severance provision provides one year of salary and benefits. Albright said Frasher will receive $170,851.20 in base salary, a $12,000 vehicle allowance, $20,370.72 equal to 248 hours
of accrued paid time off and $20,090.28 in annual health insurance premiums.
In October, Frasher reached a $389,500 settlement in the April 2017 wage claim he filed against Oregon City, Ore., in federal court. The Oregon City Commission, citing a strained relationship with Frasher after he was accused of racially insensitive remarks, fired him as city manager in October 2015 without severance pay despite an employment agreement that entitled him to nine months of salary and benefits and a contribution to a retirement account based on the value of the severance package.
A minimum of one year’s salary and benefits is recommended by the International City/County Management Association’s model employment agreement, which is the industry standard according to Martha Perego, the association’s director of member services and ethics.
Perego said six months of salary and benefits were the average severance for a municipal chief administrative officer, according to the association’s data. She said the recommendation stems from the deliberate tack local governments take when reviewing city manager candidates, making it difficult for those out of work to find prompt employment.
The Hot Springs board hired Frasher three months after Oregon City fired him and 17 months after his predecessor, David Watkins, died from a fall at his home in August 2015. Frasher’s first day on the job was March 31, 2016.
“One of the reasons there is that level of severance is an acknowledgment that the process of selecting a new city manager is lengthy,” Perego said. “It can take three, four, five months or longer. Local governments are not speedy at filling city manager positions. The process, even when it moves quickly, can take four to six months.”
Frasher’s $170,851 base salary was 27 percent more than the $134,875 median salary for municipal chief administrative officers identified by the 1,090 International City/ County Management Association members who responded to the association’s 2017 salary survey. Municipalities within the 25,000-to-49,000 population range paid city managers a $165,000 median base salary. No Arkansas city managers within that population range responded to the survey, but one in the 50,000to-99,999 group reported a $126,402 base salary.
Many provisions in the association’s model employment agreement are reflected in Frasher’s contract with the city, including the section absolving the city of severance responsibilities if Frasher were convicted of a crime. The city’s contract includes an added provision waiving severance if Frasher failed to inform the city board he was a finalist for another city manager position.
Albright said the board had the option of disciplining Frasher instead of asking for his resignation, which it requested during the executive session convened June 12.
“I don’t know how Mr. Frasher would’ve responded, and I don’t care to speculate,” Albright said. “It’s conceivable that he could have been suspended without pay. If they had done that, I’m not sure what would have been the response from Mr. Frasher.”