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Published on: 8/12/2007
Last Visited: 8/12/2007
Tom Hutka, who resigned as Port Huron's city manager more than 15 months ago, has received more money from the cash-strapped city in the past year than he earned during his final year on the job.
Although it took place without publicity or media scrutiny, Hutka received a lucrative severance package last year when he stepped down as city manager.
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A year ago, Hutka cited vague "personal reasons" for his resignation.Asked to elaborate on this, he issued a statement last week that blames influential - but unnamed -
business leaders for crushing his efforts to bring new investors and developers to Port Huron.
"After five years of hard work, I resigned in frustration after every success was destroyed, and there remained nothing more to build on," he said.
Hutka technically remains on the city's payroll until Aug. 23, although he already has pocketed a lump-sum payment for the money owed him.His car allowance of nearly $100 a week expires at month's end.
Payroll records supplied to the Times Heraldby the city under a Freedom of Information Act request show:
Hutka was paid $133,551 in the 2006 calendar year, nearly $4,000 more than he received in 2005, even though he resigned his position as of June 30, 2006.In a bit of an oddity, he got a 3% pay raise the day afterhe left the job.
He received a lump-sum payment of $95,450 earlier this year, shortly before he moved from Port Huron to take an engineering job in Indianapolis.
Other public documents show Hutka sold his house in the Colonial Woods subdivision for about $70,000 more than its apparent market value, a surprising amount given the softness of the local housing market.
'Monopoly businessmen'
Hutka submitted his resignation at the City Council meeting of April 24, 2006, and council members voted unanimously to accept it.Before doing so, however, they also voted to amend the employment contract he had signed with the city on March 26, 2001.
The original contract called for Hutka to receive 12 months of severance pay if he was fired.If he resigned, he was to get nothing.The revised contract changed this clause, allowing him to resign and still collect severance.
Hutka, who has an engineering degree from Princeton and an MBA from Harvard, has taken a job with the Indianapolis office of HNTB Corp., a large architectural and engineering firm.His duties include providing engineering services to the town of Speedway, Ind., an HNTB client and the home of the Indianapolis 500.
In a telephone conversation, he declined comment on the severance package, the sale of his house or related issues.
However, he did agree to provide a brief written statement to clarify his reason for resigning.
"A small group of Port Huron monopoly businessmen have attacked and driven off everyone trying to improve the local economy," he wrote.
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At the meeting where Hutka resigned, council members voted on a resolution that stated, rather vaguely, that council members could "at their sole discretion, grant bonuses and/or benefits to the city manager for performance, excellence or meritorious service."
The resolution also called for "a smooth transition" in city leadership and indicated Hutka would be paid for his unused vacation days.Strikingly, it made no mention of a severance package.
John Ogden, the city's finance director, said Hutka wrote the resolution himself.
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Some council members said it was their understanding that Hutka, on the evening of his resignation, provided a Times Heraldreporter with a copy of the agreement to amend his contract.
The agreement does mention the severance package.It says, in part: "In the event (Hutka) shall resign his position as city manager, (he) shall receive severance pay ... as provided in paragraph 6A of his employment contract dated March 26, 2001."
Amending his contract
Hutka was hired in 2001, six months after a sharply divided council voted to fire his predecessor, Larry Osborn, and three months after the four council members who did the firing survived a bitterly fought recall effort.
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Given the uncertainties involved with taking a job in a politically-divided community, Hutka negotiated a 12-month severance package to be paid if council fired him for reasons other than malfeasance or a felony conviction.Osborn's contract, by comparison, had awarded him nine months of severance pay.
Hutka's original contract stated "he shall not be entitled to any severance compensation" if he resigned.
By amending the contract, the council let Hutka collect a package that consisted of:
$121,724 in wages for 12 months, including a 3% pay raise as of July 1, 2006, and vacation days accrued during a year when he did not work.
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Hutka is collecting his severance from a city deeply in debt.
Port Huron's budget for the 2008 fiscal year includes no pay raises and a hiring freeze.The City Council is looking at sharp spending cuts, including possible layoffs, to avoid raising water and sewer fees by as much as 112% by 2012.
Terra Land deal collapses
Hutka has steadfastly insisted the decision to resign was his and his alone, but there is evidence to suggest he was feeling pressure.
In an interview on April 5, 2006 - three weeks before his resignation - Hutka expressed dismay with fierce opposition to his efforts to lock up an agreement with Terra Land Group, a well-regarded Oakland County developer that wanted to build a mix of Victorian-style commercial and residential structures on city-owned property.
"Things are coming to a head, and that's because the development issues are coming to a head," Hutka said at the time.
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"I couldn't believe Tom would give them a public forum and let them raise people's hopes with something so flimsy."
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Two council members, Neal and Jacobs, had not wished to hire Hutka in 2001.
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Councilwoman Laurie Sample-Wynn had voted to hire Hutka in 2001 when she was mayor.She left the council for a term in 2003 but returned in 2005.
Although she continued to support the manager, she added: "I was told that he had changed.I hadn't seen it myself, but I was keeping close watch."
Councilman David Haynes knew Hutka not just as a city manager but as a community volunteer.
"I was in Rotary with Tom.I served on the International Day Parade (planning committee) with Tom," Haynes said.
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Looking back, it appears Hutka had three supporters (Fisher, Haynes and Sample-Wynn) and three detractors (Jacobs, Neal and McCulloch) on council.
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"Tom has continued to be an excellent city manager for Port Huron," he wrote in his 2005 evaluation.
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"I don't want to say anything negative about Tom."
Hutka resigned before council members could submit their 2006 evaluations.However, the review process was under way, and Cutcher said Hutka suspected a majority of council no longer supported him.
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Cutcher, a retired director of human resources for E.B. Eddy Paper Co. (now Domtar), worked with Hutka on the details of the separation package.
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Council members may have been divided on Hutka's performance, but they were united in their conviction that the city did not need another political firestorm like the one that accompanied the Osborn firing in September 2000.
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"I was never a big fan of Tom Hutka," he said, "but in the next breath, I have to say I'm not sure if we deserved to go through another situation like we did with Larry Osborn."
Fisher came to much the same conclusion."It's my feeling that the majority of council had lost confidence in Tom," he said."I believe that Tom agreed to resign if we gave him the severance package that he would have gotten had we terminated him.
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On June 11, 2006, the Troy City Council entertained a motion to hire Hutka, but before a vote could be taken, a second candidate's name was substituted.Hutka lost out.
Meanwhile, Port Huron council members moved swiftly to hire a new city manager.The job was offered to Karl Tomion on June 24, 2006, a week before Hutka cleaned out his office.
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Fisher recalled that some of his colleagues were discussing Tomion even before Hutka resigned.
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"Tom was there for five years, when many of these problems developed.
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Fisher remains convinced that Hutka had the city on the right course, but other council members indicated the city is better off with Tomion at the helm.
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Ask yourself: who benefits most by Hutka leaving?
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