A nearly $200,000 severance payment for the ouster of sewer administrator Dean Marriott will be the largest golden parachute awarded by the city of Portland since 2001 under a separation program that’s cost the city more than $4.7 million.

Marriott’s exit will become all but official Wednesday, when the City Council is scheduled to approve a separate $49,000 payment to cover Marriott’s legal expenses since being placed on paid administrative leave in October.

Commissioner Nick Fish forced Marriott out of his job in the wake of a critical city audit over the Columbia Building, an $11.5 million office project that tripled in price.

Marriott, director of the Bureau of Environmental Services since 1994, threatened to sue Portland and claimed that Fish and then-Auditor LaVonne Griffin-Valade colluded against him to advance their own political goals.

But Marriott has now agreed to drop legal claims and resign in exchange for one year’s salary, or $199,160, plus six months’ health benefits and legal fees.

Because of his tenure and responsibilities, Marriott’s severance will be significantly more than any of Portland’s 92 other separation payments, according to a database of severance records obtained by The Oregonian/OregonLive under the state’s public records law. Our review provides the first comprehensive examination of the use and costs tied to Portland’s long-standing targeted severance program.

Despite the conflict between Marriott and the city, Mayor Charlie Hales characterized Marriott’s severance as a “thank you” for his 20 years of service. Among his accomplishments, Marriott led the bureau through the on-time and on-budget completion of the $1.4 billion Big Pipe project

Marriott’s severance will be paid by the Bureau of Environmental Services, which is funded by sewer and stormwater ratepayers.

“The targeted severance program is designed to give thanks to an employee for service, and to effect a transition,” Hales said in a prepared statement. “That’s what we’re doing here: Thanking Dean for decades of service to the city, and making a transition to a new director.”

Top officials frequently targeted

Portland created its targeted severance program in 1997 to “mitigate the impact” of layoffs that were expected because of changes to the state’s property tax system, a key source or revenue for the city.

The policy also noted that severances would be offered for “changes in leadership,” with a maximum payout capped at 30 weeks’ pay.

Four years later, in October 2001, the City Council tweaked the program into its existing form, which allows up to a year’s salary.

Anna Kanwit, director of the Bureau of Human Resources, said targeted severances offer an effective way to encourage employees to resign, force top-level management changes or avoid layoffs and union-mandated bumping rights.

“It provides flexibility,” she said. “A one-time expense that can avoid an ongoing cost to the city, or protracted litigation.”

Portland frequently uses its severance program to remove top city officials, our review of city severance payments found.

Including Marriott’s pending deal, Portland has spent nearly $1.3 million – more than a quarter of the overall total – ousting 13 directors or top managers of city bureaus and offices.

The next-highest payment was made in 2013 to former Chief Financial Officer Rich Goward. Goward complained that he faced retaliation as a whistle-blower and received $162,302 – nearly $40,000 less than Marriott’s severance.

Including Marriott, the city has authorized six severance payments of $100,000 or more.

The short list of recipients includes: Bruce Theurer, who oversaw the city’s troubled troubled SAP software system, at $130,291 in 2012; Mort Anoushiravani, the Water Bureau director until 2005, at $121,033; and Gil Kelley, the former planning director replaced in 2009 during a bureau merger, at $113,315.

Our review also found that Portland paid out nearly $1 million in 2009, more than any other year, just as the recession began to batter city finances.

Half of that money went to 13 employees in to Bureau of Development Services, which faced layoffs when developers halted construction projects and permitting revenues dried up. The development bureau has spent more than any other agency offering severances: nearly $671,000 to date.

After Marriott’s severance payment, the Bureau of Environmental Services will rank fifth among city agencies for the total amount of severances paid, at about $260,000. Only three other bureau employees received severance packages in the preceding 13 years before Marriott’s departure.

Best interest of the city?

In October, Fish said he placed Marriott on paid administrative leave, pending an outside investigation by a law firm, because it was in the “best interest of the bureau.”

Fish’s move came after a city audit found that insufficient design oversight, elaborate design choices and an expanded project scope dramatically increased costs for the bureau’s Columbia Building project.

But Marriott, in a tort claim filed in November, contended that Fish wanted to get rid of him since May 23. Marriott alleged that Fish blamed him for making misstatements to reporters about the project, according to Marriott’s legal filing.

Even if true, Fish couldn’t simply fire Marriott. That’s because Marriott was hired with civil service protections, making it difficult to oust a bureau director without cause.

Voters approved changes to the city’s hiring rules for top officials beginning in 2001, designating them at-will employees, but Marriott was the last remaining bureau director with grandfathered special protections.

Charese Rohny, an attorney who represents Marriott, said those protections entitled Marriott to due process that he believes he didn’t receive.

“It allowed an excellent manager like Dean to remain in place with protections from political motivations,” she said. “That’s the sad part: he was the last man standing.”

As a result of Marriott’s agreement to resign, the scope of Fish’s outside investigation has now shifted.

Although Fish initially said the review was necessary to determine “whether laws, rules, ethical guidelines have been violated,” the report is now expected to focus on “lessons learned” and recommendations for future projects.

Fish, citing the pending City Council vote on Marriott’s deal, declined through an aide to comment for this story.

On average, the severance program used to force out Marriott has cost the city about $350,000 a year. Kanwit, the city’s human resources director, said it is working as intended.

“I think it has been used effectively,” she said. “I don’t see any changes coming.”

— Brad Schmidt

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