EDEN — In the wake of the August larceny conviction of Brad Corcoran, longtime city manager, Mayor Neville Hall on Tuesday explained to a packed City Council chamber the reasoning behind Corcoran’s salary and early payouts.
The mayor also assured citizens he and the city council will scrutinize city managers more than ever before. And Hall announced the city has hired an independent auditor to review all of Corcoran’s expenditures while city manager.
“Since the conviction of the previous city manager, there have been many requests for information dealing with the manager’s expenses and his contractual compensation during his career with the city,’’ Hall said during Tuesday night’s regular monthly council meeting.
Citizens of Eden have held heated debates on social media forums about just how Corcoran, 58, got away with embezzling. Many social media posts seek answers to why Corcoran received a hefty sick pay allowance each bi-weekly pay period during his 18-year tenure.
Hall explained that Corcoran’s contract stipulated that his “unused vacation and half of his sick pay accrual, which he received each pay period, would be paid out to him upon leaving his employment with the city.’’
The manager’s sick leave accrual was increased to 16.2 hours per pay period, Hall said. “This was done in an effort to retain the manager in Eden. At that time, the city was having difficulty retaining a highly qualified manager for more than a couple of years, creating multiple transitions in leadership.’’
Hall further explained that Corcoran had worked in city management in Virginia for 15 years prior to being hired in Eden. “And those 15 years would not be allowed into the North Carolina Retirement System upon retirement,’’ Hall said.
So in an effort to mitigate that loss by Corcoran, the city allowed him to transfer 840 hours of accrued sick leave to the City of Eden from his former employer, the Town of New Market, Virginia. Eden City Council, in fact, passed a personnel ordinance amendment on Jan. 16, 2006, to allow the transfer, Hall explained.
Philp K. Price was mayor of Eden when Corcoran was hired. And by 2009, the late John E. Grogan had taken over the office.
Beginning in 2009, the City of Eden began making early payouts to Corcoran, Hall told the chamber audience Tuesday.
“ … the mayor made the initial decision to allow the manager to begin taking early payouts of his leave as the leave had accumulated significantly,’’ Hall said.
“This decision was made to avoid having to make a large lump sum payment at one time when the manager left the city. Both former mayors of the city authorized such payments, and financial experts told the city that “had those payouts not been made during the employment of the manager, the city would have been contractually bound to make a large lump sum payment equal to what was paid out during the employment … upon Mr. Corcoran’s departure,’’ Hall said.
“There was no clause in his contract that would have given the city the ability to avoid this payout, even though the manager was convicted of a crime.’’
Corcoran was convicted in August of embezzling from the city by padding the time sheets of his three children who worked for the city between 2007 and 2017.
Hired in February 2001 with a salary of $85,000, Corcoran resigned making roughly $139,000 annually.
Corcoran resigned from his post just before his court appearance, meaning the city was not obligated to grant him severance pay.
A Rockingham County Superior Court judge sentenced Corcoran to a suspended prison term of five to 15 months. He was ordered to serve 18 months of supervised probation and complete 75 hours of community service, as well as pay the City of Eden $20,000 in restitution.
“His contract also called for a severance payout for nine months of his salary had he been terminated or fired,’’ Hall said Tuesday.
“Because he was allowed to resign, the city was able to avoid paying this severance payout. There was no such provision for the leave or accrual. As such, we have been advised that there is no legal recourse for collection of this money from the previous city manager,’’ Hall said.
“This also confirms the FBI’s and SBI’s interpretation of the matter,’’ Hall said. “All payouts were also reviewed by these agencies and not pursued.’’
A key concern of citizens posting on social media has been Corcoran’s use of the City of Eden credit card.
“After meeting with the SBI and FBI to discuss their investigations, we felt there had been adequate investigation into those expenditures,’’ Hall said of the credit card purchases.
“All property that was purchased had been documented and property purchased was in possession of the city. Therefore, those expenditures were also not pursued by the FBI or the SBI,’’ Hall said. “The SBI and the FBI were satisfied with the outcome of the investigation and estimates for an outside investigation were up to $30,000.’’
Hall explained that city leaders were told by experts that an outside investigation of such expenditures might not yield findings comparable to the cost of conducting it.
“However, due to the citizens’ concerns, the council has hired an outside auditor, Bert Davis, Jr., from Davis Forensics Group to review all expenditures by the former city manager,’’ Hall said. A date for the completion of the audit is forthcoming.
A look at Corcoran’s 2007 employment contract shows a couple of additional generous perks.
While Corcoran had the same health, dental, and life insurance all other city employees are provided, his contract gave him the added coverage for his spouse and three children at no cost.
The city further paid for civic club costs for Corcoran and a monthly automotive allowance of $400 with mileage above the monthly allowance.
“So where are we now and how do we insure accountability and transparency in the future?’’ Hall said, explaining he and city leaders had met with the FBI and the SBI to discuss the agencies’ recommendations for instituting more checks and balances within Eden’s city government.
“We’ve also worked with the city’s auditors and the League of Municipalities’’ for similar recommendations, Hall said.
The result: a series of new policies the council adopted Tuesday night:
- An annual January review of the city manager’s performance to include a review of the terms of the employment contract, pay, performance, and any existing leave accrual.
“This is important because it insures that current council members will be made aware of what former council members who are no longer on the board have done with respect to the manager’s contract,’’ Hall said.
- All personnel matters for the city manager or any employee answering to the City Council will be made by all members of the council and reviewed by the city attorney.
- Any future employment contract for a city manager will include a clause that prevents the manager from collecting any severance or payouts if any immoral or criminal activity has occurred.
- A report containing all accounts payable and checks written will be submitted monthly to the council for review. This will include all expenses, including credit card expenses.
- All travel and discretionary expenditures by city employees will be reviewed by the city council.