Simonian to Get $322,000 for Severance

Former Yorba Linda City Manager Arthur C. Simonian, fired in September after being accused of financial malfeasance, will receive a severance package worth an estimated $322,000, including $162,400 for 60 weeks of accumulated sick time, city officials said.

Simonian’s employment contract requires the city to pay him a severance of a year’s salary--$142,000--plus all of his accrued vacation and sick time, even if he is fired for alleged wrongdoing. Simonian stands to collect $17,500 for just over six weeks of unused vacation.

“None of that is budgeted, so we’ll have to take it from our reserves,” said Dan Miller, the interim city manager.

The payment to Simonian will equal almost 2% of Yorba Linda’s $17-million annual budget.

The Yorba Linda City Council fired Simonian on Sept. 7 after a special investigator alleged that he had awarded himself at least $300,000 in unauthorized bonuses and other perks since 1984, including luxury cars leased at city expense. The city filed a lawsuit against Simonian on Tuesday to recoup the money, and is asking the state attorney general’s office to investigate.

From the outset, Simonian has said all of his compensation was approved by the council or clearly spelled out in his employment contracts. He is suing the city for wrongful dismissal of the job he held for 27 years.

The Orange County district attorney’s office reviewed the allegations and has declined to prosecute Simonian, saying the benefits in question could be allowable under the very broad terms on the contracts, which are “subject to a whole bunch of interpretation.”

Simonian’s current contract, passed in 1995, entitles him to the generous severance package and also required the city to give him three months’ notice before he could be dismissed.

Because of that clause, Simonian is on paid administrative leave until Dec. 9. He will receive three months’ salary totaling about $35,000, and also continue to collect his benefits. That includes the use of his leased 1997 BMW 540i, which is costing the city $776 a month.

Simonian has worked as Yorba Linda’s city manager since 1972. He received four weeks of vacation and 12 sick days a year, said Yorba Linda City Finance Director Susan Hartman.

Simonian’s contract stipulates that he must be paid for 100% of his accumulated sick time. The city pays 75% to everyone else, Hartman said. Unlike many businesses in the private sector, Yorba Linda does not limit the amount of sick time employees can accumulate.

Yorba Linda Mayor John M. Gullixson, who led the effort to fire Simonian, called the $322,000 severance package excessive, but said a majority of the council supported those terms when Simonian’s contract was approved four years ago. Gullixson negotiated the contract, then voted against it.

“It’s more generous than I’d ever allow,” Gullixson said. “But, in regards to this case, we’re talking some policies that have been in place for up to 27 years.”

The city does allow employees to cash in unused sick time every year, and Simonian did so. He received $9,482 in 1997-98 and $10,717 in 1996-97, city records show.

However, unlike other city employees, Simonian did not routinely submit weekly time sheets, Hartman said. It was left up to Simonian to declare any vacation time or sick time he used, she said.

The city’s lawsuit against Simonian alleges that he coerced the city’s finance directors to alter budget documents detailing his compensation, and also to withhold some of his benefits from the W-2 tax statements. Hartman, who became the city’s finance director in January, on Wednesday said she was not involved in any of those alleged actions.

Hartman confirmed a separate allegation in the city’s lawsuit: that Simonian was often reimbursed for expenses, included for $8,000 on his leased BMW, without having to submit receipts or itemized expense reports.

“When I was first hired on, Mr. Simonian and I had a conversation regarding that. He said that it was his practice, and that if he was ever audited, he kept the receipts at home,” Hartman said.