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BRH: Severance paid for 'continuity of operations'

Board didn't learn of payments until two weeks later

Posted: February 6, 2014 - 1:08am

The Bartlett Regional Hospital Board of Directors didn’t find out about severance agreements between the hospital and former CFO Ken Brough and former human resources director Norma Adams until two weeks after they were signed, former board President Linda Thomas said at a Wednesday meeting.

The board met with the City and Borough of Juneau Assembly on Wednesday night for a special meeting to discuss “some of the issues that are going on out there at the hospital,” Mayor Merrill Sanford said.

Thomas began the meeting by giving a timeline of events leading up to former Bartlett CEO Christine Harff’s resignation, starting with the CBJ investigation of complaints filed against hospital management that began in June 2013. Current board President Kristen Bomengen was out of town and didn’t attend the meeting.

“I hope (the timeline) gives you a feeling and understanding of the environment we were working with,” Thomas said to the Assembly.

She said she was notified by Harff on Aug. 22 that Brough and Adams had signed severance agreements that promised them $140,915 and $90,193, respectively, on Aug. 9. The rest of the board was informed Aug. 27, Thomas said. On Sept. 24, the board accepted Harff’s resignation.

Thomas said the board had no control over the severance packages offered to Brough and Adams. Those two employees and their separation of employment with the hospital were under Harff’s purview, she said.

Assemblymember Randy Wanamaker had compiled a list of seven questions for the Bartlett board that he passed out to everyone at the meeting. He questioned the board’s involvement in approving the severance packages given to all three hospital executives. Thomas said the board was only responsible for overseeing Harff’s own severance package.

It’s written into CBJ ordinance that the hospital CEO is responsible for managing his or her staff, city attorney Amy Mead said. It was perfectly legal for Harff to oversee the separation agreements of Brough and Adams, she said, and neither the board nor the city assembly needed to be involved.

“Those agreements were not known by anyone that I am aware of,” Mead said. “They were made by the CEO for whatever reason she had.”

Harff told the board in August she awarded the severance for the sake of “continuity of operations,” Thomas said. Harff needed Adams and Brough to remain accessible to the hospital as it transitioned to new management in order to keep the place running smoothly. Also, Brough and Adams were in charge of financially significant projects the hospital needed them to finish before they left, Thomas said. The severance was compensation for that.

Board Vice President Bob Storer said severance packages for upper management are a common practice in hospitals. Harff and Brough had stipulations for severance agreements written into their employment contracts.

“Severance is not a new issue and ... it is a national issue as well,” he said. “Bartlett is a public entity but it also has competition in the private sector. I know that transparency is an issue.”

Assemblymember Jerry Nankervis said he had heard a lot of questions from the public about Harff’s decision to give out severance packages before resigning herself.

“It seems like someone’s going out the door and is just saying, ‘Here you go, here you go,’” Nankervis said.

An additional severance package was awarded to another departing hospital manager under Harff’s leadership, Storer said. The city assembly was unaware of this severance package. The situation was very different from Brough’s and Adams’, Mead said. It happened about a year and a half ago, at the beginning of Harff’s time at the hospital, she said.

“There was a situation that occurred,” Mead said. “A mutually-agreeable separation of employment” was reached between the manager and Harff.

Mead said it was a personnel issue and she couldn’t discuss details outside of executive session. She said the employee was given a severance of six months’ salary. Wanamaker requested the assembly and board enter executive session to learn more about the additional severance package.

Before entering executive session, Thomas said the hospital’s CEO recruitment committee is going through applications and setting up preliminary interviews to hire a permanent CEO by May or June. The hospital is currently headed up by Interim CEO Jeff Egbert.

The hospital is “developing a tree of decision making,” Thomas said. The hospital entered a shared services agreement with the city’s human resources and law departments to make sure “this never happens again,” Storer said.

“Right now it’s a work in progress,” Thomas said.

• Contact reporter Katie Moritz at 523-2294 or at Follow her on Twitter @katecmoritz.

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Frank Heart
Frank Heart 02/06/14 - 10:24 am
Industry severance package standard

Industry severance package standard

The only standard I have seen is two weeks of pay for an hourly employee or one month’s salary if a salaried employee. I have not seen a year’s worth of pay in a severance package

Harff walked away from the job with a total of $47,060 in severance pay and health insurance, with the city paying about $1,000 in payroll tax on the amount. Her annual salary had been $262,500.

• Adams ended her employment with $90,193 in severance pay and health insurance, with the city paying an additional $3,952 in payroll tax. Her salary had been $138,350.

• Brough’s agreement promised $140,915 in severance pay, health insurance and retirement, with the city paying an additional $8,003 in payroll tax. His salary had been $200,000

Judy Hodel
Judy Hodel 02/06/14 - 01:22 pm

They gave themselves undeserved raises. Give me a big severence check or I won't finish the job? Corporate extorsion.

What are the 7 questions Wanamker had and the answers ?
He really didn't do anything to keep CBJ from being extorted in the future for severence pay by Bartlett top brass.

James Coleman
James Coleman 02/06/14 - 09:04 pm
And we wonder

We wonder why healthcare has skyrocketed over the past few years. Here is a shining example. Basically, we have the foxes watching the henhouse. I hope this new "tree of decision making" isn't a Weeping Willow.

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