Lake City: Former City Manager Paul Dyal’s Illegal $1/4 Mil Severance Package Is a ‘Gift That Keeps On Giving’ – Majority of City Council Wants Criminal Investigation
February 25, 2025 8:20 pm | 7 min read
Photo: Kira auf der Heide via Unsplash |
Columbia County Observer graphic
By
Stew Lilker
LAKE CITY, FL – Former City Manager Paul Dyal’s Illegal $1/4 Million Severance Package is a ‘Gift That Keeps On Giving. As the City’s inside and outside attorneys get richer off the backs of the taxpayers, last Tuesday evening (Feb. 18), a majority of the City Council wanted an investigation by the State's Attorney, John Durett.
Background
Former City Manager and City Utility Director Paul Dyal was moved up in the City ranks under former City Manager Wendell Johnson. While Mr. Johnson was controversial in some circles, he was widely considered as a person who knew how to be a city manager.
City veterans, on the whole, consider Mr. Johnson a professional. However, looking back over Mr. Dyal’s subsequent performance, it appears Mr. Johnson made a mistake on the Dyal front.
After
a circuitous route to the permanent City Manager
position (see:
LC City Manager Search: Interim City Manager
Paul Dyal Gets Nod for City Manager Position –
No Vetting Allowed), Mr. Dyal was
appointed permanent City Manager on January 23,
2023.
On September 14, 2023, after nine months on the job, Mr. Dyal signed an employment agreement to go to work in Homer, Alaska. Five days later, on September 19, Mr. Dyal submitted his resignation letter to the Lake City City Council.
There was word going around in the City that some folks inside City Hall had been communicating with Mr. Dyal during his Homer expedition and were aware of Mr. Dyal’s future employment plans.
During Mr. Dyal’s tenure as City Manager, he installed a new finance director and personnel director, handing out generous raises to both of them, as well as a few chosen others.
The finance director signed Mr. Dyal’s severance checks.
Mr. Dyal also promoted Dee Johnson from the purchasing department to the Interim City Manager position, with a raise in salary, that was off the charts to a position for which he was clearly not qualified.
Upon Mr. Dyal’s resignation and departure from the City, Mr. Johnson was appointed to the Interim City Manager position by the City Council. Mr. Johnson was not qualified for the City Manager job. Along with the Finance Director, Mr. Johnson also appeared to have signed Mr. Dyal’s severance payment checks.
On
May 6, 2024, in spite of mass confusion, the
City Council voted to investigate
investigating the $1/4 mil illegal Dyal
severance package.
Two-and-a-half months later, on July 15, the City Council hired a legal consultant, Michael Cavendish, to investigate the City's payment of severance after Mr. Dyal quit.
After meeting with the City Council members in secret meetings, something which could have been done in a workshop, Mr. Cavendish appeared before the City Council last Tuesday, February 18.
Mr. Cavendish reiterated his findings, which are summarized here: Key Findings In a Nut Shell: the City did nothing right
Voluntarily Quitting a Job or a Voluntary Termination?
A "voluntary termination" means an employee chooses to leave their job of their own accord, essentially resigning from their position without any pressure from the employer.
City Councilman James Carter thought the Dyal
severance payment was "preposterous."
Unlike involuntary termination – or 'you're fired' – where the employer initiates the dismissal, voluntary termination – ‘I quit’ – is entirely driven by the employee's decision to leave.
Typically, a voluntary termination – ‘I quit’ – is communicated through a formal resignation letter submitted to the employer (what Mr. Dyal did).
Common reasons for quitting include accepting a new job offer – what Mr. Dyal did, but didn’t tell everybody – career change, relocation, family needs, or health concerns.
The Dyal Contract by the Numbers:
Not Rocket Science – What Did Dyal Do?
Section 7 of Mr. Dyal's contract explains "Termination" to include one of the following:
Termination occurs if the majority of the City Council votes for it in a public meeting; or a disproportionate salary or benefit reduction compared to other directors constitutes a breach and termination; or if Mr. Dyal resigns following a suggestion from the City Council, he may declare it a termination; or finally, a breach of contract where either party can declare a breach, allowing a 30-day cure period with written notice.
None of these things occurred.
Councilman Ricky Jernigan was interested in
having the State's Attorney investigate Paul
Dyal's severance payment.
Section 8 of Mr. Dyal’s contract explains “Severance” shall be paid to Mr. Dyal when his employment is terminated as in section 7 and section 8:
If Mr. Dyal is terminated without cause, he receives 16 weeks of salary and benefits, paid as a continuation or lump sum, and will be compensated for all accrued paid leave at termination.
Mr. Dyal was not terminated without cause. He quit. He is not eligible for severance pay.
Section 8 also explains that termination and severance will follow an agreed "Separation Agreement."
Section 9 of City Attorney Todd Kennon’s Dyal Approved Contract Approved White Slavery
Section 9 of Mr. Dyal’s contract explains what happens should he resign: In the event that Dyal voluntarily resigns his position with the City, Dyal shall provide a minimum of thirty (30) days' notice unless the City and Dyal agree otherwise. If the City Council offers to accept Dyal's resignation by a majority of the City Council, Dyal may resign and declare a voluntary termination as of the date of the offer to accept Dyal's resignation.
Of course, this was totally unenforceable, as the City Council could not force Mr. Dyal to stay on as City Manager after he resigned. However, another faux pa by Attorney Kennon had Mr. Dyal receiving another two weeks of pay because he came to the Council meeting without a prepared resolution.
Mr. Dyal’s contract included an appendix. Of the three versions of Mr. Dyal’s contract provided to the City Council, the version of Mr. Dyal’s contract was the version accepted by the City Council and City Attorney Todd Kennon and apparently by association with the partner firm of Mr. Kennon's firm (Kennon's firm is RKK), Folds & Walker.
The appendix titled "Separation of Employment and General Release" was never approved by the City Council. Mayor Stephen Witt, Mr. Dyal's bankruptcy attorney and the keeper of Dyal's secrets, is an accountant and an attorney. Mayor Witt executed the separation agreement under the cover of darkness on behalf of the City.
The Dyal contracts and the separation agreement are here:
The Plot Sickens: New City Manager Hides $3,407,629 Budget Transfer on Consent Agenda
City Manager Don Rosenthal addresses the Council
as Councilwoman Chevella Young looks on.
For months, new City Manager Don Rosenthal had been adding items to the City Consent Agendas which had no business being there. Consent agenda items are used for routine business, such as approving minutes, job descriptions, warrant registers, and generally, things that don't cost a lot of money.
Unscrupulous use of consent agendas to hide contentious items is frowned upon.
On November 4, 2024, as required by Florida statutes, the City had to true up its prior fiscal year budget via a budget amendment. The total budget transfer was $3,407,629. This was the first time that this reporter had seen a City Budget True-Up on a City Consent Agenda. (Your reporter, along with almost everyone else, did not notice this transfer. It is unknown if City Manager Rosenthal or Asst. City Manager Johnson advised the Council members of this transfer).
Former City Council members Todd Sampson and Glenel Bowden volunteered they did not see this item on the Consent Agenda.
The first budget transfer was a $114,500 transfer with the explanation: “CM [City Manager] severance payout was not budgeted. It was paid due to signed appendix A of the contract [City Manager contract].”
Was this a coverup? By this time, it was clear that the City Manager, Assistant City Manager, Finance Director, Personnel Director, City Attorneys, and many others knew that the City Council never approved the severance payment as it had to be.
Cavendish Partners, i.e., Mr. Cavendish, was tasked to look into this payment
As
the discussion with outside counsel Michael
Cavendish concluded during Tuesday's Feb. 18
Council Meeting, Mr. Cavendish was tasked with
providing the City with "an additional opinion
based on the November 2024" budget amendment.
Citizens & Council Members Are Seeking a Criminal Investigation
Former Council members Sampson and Bowden are encouraging an investigation by the State’s Attorney. Current Council members Carter, Jernigan, and Harris also spoke about having the State’s Attorney investigate the Dyal Severance Affair.
Mr. Cavendish said sending his opinion along to the State’s Attorney would do the trick. It won’t.
State’s Attorney John Durrett has not returned calls from your reporter (left a message at the SA Office) and former Councilman Todd Sampson.
Epilogue
Councilwoman Tammy Harris listens. Ms. Harris
wants the State's Attorney to investignate.
If the City Council genuinely wants to get to the bottom of the Dyal Severance Affair, it needs to vote to have the City Manager send a formal letter to the State’s Attorney, FDLE, and the Department of Revenue Auditor General, asking for an investigation into the illegal payment of severance pay to Paul Dyal after he voluntarily quit his $160,000 job to take a job in Homer, Alaska.
City Manager Dyal was kept on the City payroll after he quit and was not only collecting his pay, but was also getting medical benefits, accruing vacation time, and having the citizens of LC paying his taxes and other required exemptions, as well as paying into his state retirement benefits.
In Florida, it is against the law to pay a public employee for work they have not done.
Lake City, FL – the saga continues.
