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Scottsdale City Council accepts resignation of city manager 6 – 1

Photo of Scottsdale City Hall
Scottsdale City Hall is found in the heart of downtown Scottsdale.
(Photo: Arianna Grainey/DigitalFreePress.com)

Scottsdale mayor is dissenting vote as restructure plan due Oct. 10

By Terrance Thornton | Digital Free Press

Scottsdale City Council — by a vote of 6 to 1 — accepted the resignation of City Manager Jim Thompson, meanwhile the top administrator at City Hall will be staying on in an interim role until a replacement is found.

However, by Monday, Oct. 10, Mr. Thompson is due in front of the local governing board to explain how day-to-day duties will shift at City Hall, 3939 N. Drinkwater Blvd., pending his ride into the sunset of his golden years.

Scottsdale Mayor David Ortega was the lone dissenting vote on resolution No. 12588, which triggers several items including termination of the existing employment contract with Mr. Thompson, effective Oct. 10, but does enact the intention to hire him on a temporary basis through a municipal contract with Educational Services, Inc., at a salary of $347,000.

Records show Mr. Thompson’s salary today is $375,000.

“I have a great deal of confidence in city management; however, I am not comfortable with a third-party arrangement,” Mayor Ortega said speaking to his dissenting vote. “I think things can be worked out or might be worked out by the October deadline. I would, respectfully, like to offer that as explanation for my vote.”

The adopted resolution does five things, which are:

  1. The acceptance of Mr. Thompson’s request to terminate employment contract No. 2016-188-COS effective Oct. 10.
  2. Appointing Mr. Thompson as acting city manager effective Oct. 12, 2022, until a new city manager or acting city manager is appointed, but no longer than Oct. 13, 2023.
  3. Approving Mr. Thompson to continue to perform services for the city through the city’s contract with Educational Services, Inc. (ESI), at a salary of $347,000 per year base compensation.
  4. Directing the human resources director and ESI contract administrator, city treasurer, and city attorney to prepare such documents.
  5. Directing Mr. Thompson to report back to City Council prior to Oct. 10.

Photo of Scottsdale Mayor David Ortega
Scottsdale Mayor David Ortega at the local dais earlier this summer at City Hall, 3939 N. Drinkwater Blvd. (Photo: Arianna Grainey/DigitalFreePress.com)

HR mechanisms at play in Scottsdale?

Leading up to the Scottsdale City Council vote, former City Treasurer Jeff Nichols, who is retired, penned a cautionary letter to the local governing board regarding potential HR mechanisms turning.

“Back in 2016, I approached Jim on behalf of an employee (Dennis Enriquez) that wanted to retire, be hired back as a contractor for a period of one year, and then return to the city as a full-time employee, all in the same position,” he said. “Jim told me that he was not interested in such a program. Now, six years later, it seems that Jim is interested in such a program, one that benefits him greatly. How much would this benefit Jim?”

Mr. Thompson told the Scottsdale Daily Beat Wednesday evening his no. 1 priority is public service.

“I hope and believe I have served Scottsdale with integrity, efficiency and effectiveness,” he said addressing comments regarding his employment decision.

“I am disappointed and disagree with the comments of someone who aspired to this position but did not ultimately get selected. It has been one of the greatest honors of my life to serve Scottsdale and it’s taxpayers. I look forward to doing so for as long as the mayor, City Council and community would like me to do so, in whatever capacity that may be. The direction of our mayor and City Council will always be my guidepost, as will humility in the service of the finest community in America.”

The Arizona Digital Free Press confirmed authenticity of the letter from Mr. Nichols, and he says his motivation is to save the taxpayer money.

“To help answer that question you need to know the ‘inputs’ for calculating retirement benefits in Arizona State Retirement System,” he wrote.

“If the number of years you have worked, plus your age, is greater than 80 you are eligible for ‘retirement’ in the ASRS. When Jim arrived in Scottsdale, we had conversations regarding our work histories. Jim shared that he was stopping the ASRS retirement benefit he began receiving when retiring from the city of Casa Grande and getting back into the ASRS to gain more years in the retirement system.”

Mr. Nichols goes on to explain the “double-dip” approach.

“At that point (2016) I recall Jim telling me that he had 30 years in the ASRS. He has received more than six years of credit in the ASRS since that time. When you have more than 25 years in the ASRS your annual multiplier for calculating your retirement benefit is 2.3%,” he said in his letter.

“Thirty-six years in the ASRS would earn you a multiplier of 82.8%. It is this figure, the multiplier, that you use, along with a three-average of your annual salary. Jim’s current salary is $347.000. Even if Jim’s three-year average salary was $300,000 it would produce an approximate annual retirement benefit of $248,400. If you approve the contract to pay Jim $347,000 annually what you are in effect approving is an annual retirement and salary combination of $595,400 and a program for this citywide.”

Mr. Nichols says this kind of municipal move can have more effects than one.

“I also believe that as written this action will have a chilling effect on recruitment of a new city manager, if in fact the intent is to hire a new city manager,” he said.

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