St. Petersburg Mayor Ken Welch remorsefully accepted blame for his administration’s well-intentioned bonus payments to employees. “This is where the responsibility ends,” he said Friday afternoon.
The 17 lump sum payments to senior officials, which were later rescinded, totaled $250,000 and were publicly disclosed on August 16. The bonuses – which sparked a storm of public outrage – were a reward for those who went far beyond their usual duties during contentious negotiations over the redevelopment of the Historic Gas Plant District.
Welch anticipated backlash and planned to inform the City Council before the matter inevitably became public knowledge, not anticipating that Chris Guella, human resources director, would falsely claim the payouts were legal under Florida law.
“It’s important to recognize that Chris (Guella) has apologized and admitted that he made a mistake here,” Welch said. “We should have known that our existing policy, which I believe dates back to 2005, was not consistent with current state law.”
Welch also noted that he and City Manager Rob Gerdes rely on experts to make their decisions. Welch asked Gerdes if, as mayor, he had the authority and financial means to make the payments, which range from $10,000 to $25,000.
Welch said the answer to all three questions is yes, but he noted that Guella should have told Gerdes that the bonuses violated state law.
An email dated August 21, which was sent to catalyst confirms these allegations. Guella wrote to Welch and Gerdes, telling them to take “full responsibility” for all matters related to employee compensation and apologized to them and “the recipients who were so negatively affected by this.”
“I should have consulted with the public prosecutor’s office, but I failed to do so,” said Guella. “The public prosecutor’s office was neither involved in the payments nor had the opportunity to assess the matter.”
State law allows bonuses if local governments meet four requirements: Bonuses must be performance-based; policies must describe standards and evaluation methods; all employees must be notified before their work is completed; and everyone must be eligible. The city has not updated its policies since the last law changes.
In a July 25 email, Guella said the payments were for “extraordinary work” in negotiating the gas plant’s $6.5 billion redevelopment deal with Tampa Bay Rays and Hines. This came after City Council members approved the agreements and public subsidies but before Pinellas County commissioners approved their contribution to the stadium.
Recent public discussions about the bonuses have often been vitriolic. Welch stressed that the recipients had no knowledge of the payments and were ultimately victims of a “big mistake”.
“We’re a 3,700-person organization, mistakes are going to happen,” Welch added. “The most important thing to me is that these 17 employees did nothing but try their best to put together the biggest project the city has ever seen.”
“They worked day and night, on holidays, despite personal problems – because of deaths in the family – and were here the next day working.”
Welch revoked the payments on Monday, August 19, after Gerdes recognized the legal discrepancies. He suspended Guella on Tuesday.
Welch felt that the “magnitude of the error” justified the five-day suspension. He also noted that “nobody is perfect,” and Guella promised to ensure that policies and procedures comply with all regulations in the future.
Welch said he discussed possible financial rewards with Chief of Staff Doyle Walsh in July. He directed staff to make the payments later this month, following the commission’s July 30 vote.
He also planned to brief the council, but said the focus quickly shifted to Hurricane Debby and budget meetings. “We thought we still had time to communicate,” Welch added.
He said he “absolutely expected” that there would be a backlash and that “this would come out at some point.” Welch said Gerdes and Walsh neither asked for nor expected their $25,000 bonus. “I budgeted it for those two people.”
Welch isn’t sure how many recipients have repaid the payments or whether they’ve spent the money. He said previous administrations have paid out bonuses before new laws went into effect.
Welch could not provide specifics, but said the administration is conducting a comprehensive analysis of the compensation measures. Asked if he would continue to offer premiums that comply with state regulations, Welch said, “We’ll take a hard look at our current policy and our past and consider what the best path forward is.”
City lawyers have pointed out that eliminating the bonuses protects the administration from potential legal consequences. Welch is aware that anyone can file an ethics complaint “for any reason.”
He is not worried about whether the issue will hurt his political standing or his re-election chances. Welch believes most voters recognize what his administration has accomplished, pointing to the equitable aspects of the gas plant rehabilitation, support for affordable housing and economic development efforts.
“We care about doing the right thing and making a difference,” Welch added. “And that’s exactly what we did.”
