He received a lump-sum payment of $95,450 earlier this year,
shortly before he moved from Port Huron to take an engineering
job in Indianapolis.
Other public documents show Hutka sold his house in the
Colonial Woods subdivision for about $70,000 more than its
apparent market value, a surprising amount given the softness
of the local housing market.
'Monopoly businessmen'
Hutka submitted his resignation at the City Council meeting of
April 24, 2006, and council members voted unanimously to
accept it. Before doing so, however, they also voted to amend
the employment contract he had signed with the city on March
26, 2001.
The original contract called for Hutka to receive 12 months
of severance pay if he was fired. If he resigned, he was to
get nothing. The revised contract changed this clause,
allowing him to resign and still collect severance.
Hutka, who has an engineering degree from Princeton and an
MBA from Harvard, has taken a job with the Indianapolis office
of HNTB Corp., a large architectural and engineering firm. His
duties include providing engineering services to the town of
Speedway, Ind., an HNTB client and the home of the
Indianapolis 500.
In a telephone conversation, he declined comment on the
severance package, the sale of his house or related issues.
However, he did agree to provide a brief written statement
to clarify his reason for resigning.
"A small group of Port Huron monopoly businessmen have
attacked and driven off everyone trying to improve the local
economy," he wrote. "They view these development
opportunities as opening the doors to outside competition.
We've seen investors, developers, retail stores, and even
community leaders chased away. After five years of hard work,
I resigned in frustration after every success was destroyed,
and there remained nothing more to build on."
Cutcher dismissed the idea that an anti-growth cabal
controls the city.
"I'm not aware of any formal group," the mayor
said. "There are a lot of people in town who are
concerned about the future of Port Huron. They don't always
agree on how to get there."
No deliberate deception
Among the many questions regarding Hutka's severance package
is why it's only coming to light now.
At the meeting where Hutka resigned, council members voted
on a resolution that stated, rather vaguely, that council
members could "at their sole discretion, grant bonuses
and/or benefits to the city manager for performance,
excellence or meritorious service."
The resolution also called for "a smooth
transition" in city leadership and indicated Hutka would
be paid for his unused vacation days. Strikingly, it made no
mention of a severance package.
John Ogden, the city's finance director, said Hutka wrote
the resolution himself. The mayor and several other council
members confirmed this.
Although the severance deal went unreported, council
members denied making a deliberate attempt to hide it from the
public.
"I don't think there was any deception or anything on
that order," Councilman B. Mark Neal said, his comment
echoing those made by others.
Some council members said it was their understanding that
Hutka, on the evening of his resignation, provided a Times
Heraldreporter with a copy of the agreement to amend his
contract.
The agreement does mention the severance package. It says,
in part: "In the event (Hutka) shall resign his position
as city manager, (he) shall receive severance pay ... as
provided in paragraph 6A of his employment contract dated
March 26, 2001."
Amending his contract
Hutka was hired in 2001, six months after a sharply divided
council voted to fire his predecessor, Larry Osborn, and three
months after the four council members who did the firing
survived a bitterly fought recall effort. The controversy
polarized the community.
Given the uncertainties involved with taking a job in a
politically-divided community, Hutka negotiated a 12-month
severance package to be paid if council fired him for reasons
other than malfeasance or a felony conviction. Osborn's
contract, by comparison, had awarded him nine months of
severance pay.
Hutka's original contract stated "he shall not be
entitled to any severance compensation" if he resigned.
By amending the contract, the council let Hutka collect a
package that consisted of:
$8,500 in deferred retirement contributions.
He also received $4,666 for dependent health care and a
$214 reimbursement for an automobile repair.
Because of his unused vacation days, the clock on the
one-year severance deal did not begin ticking until nearly two
months after he left office. He is being paid through Aug. 23.
Hutka is collecting his severance from a city deeply in
debt.
Port Huron's budget for the 2008 fiscal year includes no
pay raises and a hiring freeze. The City Council is looking at
sharp spending cuts, including possible layoffs, to avoid
raising water and sewer fees by as much as 112% by 2012.
Terra Land deal collapses
Hutka has steadfastly insisted the decision to resign was his
and his alone, but there is evidence to suggest he was feeling
pressure.
In an interview on April 5, 2006 - three weeks before his
resignation - Hutka expressed dismay with fierce opposition to
his efforts to lock up an agreement with Terra Land Group, a
well-regarded Oakland County developer that wanted to build a
mix of Victorian-style commercial and residential structures
on city-owned property.
"Things are coming to a head, and that's because the
development issues are coming to a head," Hutka said at
the time. "There are people in Port Huron who don't want
it to grow. They don't look at growth as new customers; they
look at it as new competition."
He offered no names, but his comments came shortly after a
Downtown Development Authority subcommittee publicly objected
to Terra Land's plans.
The DDA's influence in Port Huron politics has waxed and
waned over the years. A powerful group in its early years, it
foundered for at least two decades before regaining influence
in the past five years. Its opposition to Terra Land
effectively derailed the project just when it appeared that an
agreement in principle would go before council.
Casino controversies
Hutka's enthusiasm for a proposed $304 million development of
a downtown casino, hotel and water park by Anthony DeFeo also
raised eyebrows in council chambers.
DeFeo, who lives in Oakland County, has a well-documented
history of proposing projects - Indian-owned hospitals and
automotive plants among them - that never gel. A decade ago,
he was named in a lawsuit that accused him of defrauding
investors in an ambitious deal to build a string of medical
imaging centers across the country.
The lawsuit was settled after DeFeo's partners, including
former Dallas Cowboys coach Barry Switzer and two prominent
Oklahomans - former congressman Dave McCurdy and former
attorney general Larry Derryberry - agreed to pay more than $1
million. DeFeo declared bankruptcy on June 11, 2001, two
months before the court entered its final judgment in the
case.
At about the same time, DeFeo accepted a plea deal after
federal prosecutors charged him with conspiracy to deliver
marijuana. On April 4, 2002, he was sentenced to time served
and three years of probation, according to a clerk with the
U.S. District Court in Albany, N.Y.
In December 2005, City Attorney John Livesay sent DeFeo a
cease-and-desist letter, complaining a prospectus for his
proposed casino resort falsely indicated the company had an
agreement with the city to buy 38.5 acres, including the old
county jail.
Six weeks before Hutka's resignation, DeFeo's group made a
public presentation at a council meeting.
Councilwoman Sally Jacobs described it as amateurish and
disturbing in its lack of details. The written presentation,
for example, included little original material, but it was
padded with 15 pages copied from a McMorran Authority report,
six pages of demographic information downloaded from a
government Web site and four pages of photographs from an
unidentified hotel.
"I couldn't believe it," Jacobs said. "I
couldn't believe Tom would give them a public forum and let
them raise people's hopes with something so flimsy."
Council divides sharply
Interviews suggest the City Council that accepted Hutka's
resignation in 2006 was as divided as the council that had
fired Osborn six years earlier, although without the rancor.
Two council members, Neal and Jacobs, had not wished to
hire Hutka in 2001. Later, both gave him poor annual
evaluations, including scathing reviews in 2005.
"I didn't ride the fence with him," Neal said.
"Even during the interview process, he didn't jump out at
me as an especially good candidate."
Jacobs acknowledged she would have voted to fire Hutka had
the question been put to a vote. "Would I have made the
motion (to fire him)? I certainly would have," she added.
Tim McCulloch, who joined the council two years ago, said
he had growing doubts about Hutka's performance.
"He had the same vision for Port Huron that I do, but
we differed on the process of getting there," McCulloch
said. "I feel I probably would have looked for a change
of leadership had we continued along the road we were
following."
Fisher praises Hutka
Jacobs said she suspects Hutka was astute enough to count the
votes for and against him. If so, he may have known his
staunchest supporter was Councilman Jim Fisher.
"I didn't want him to resign," Fisher said
flatly.
He described Hutka as a loyal and tireless public servant
with a coherent vision for bringing development to Port Huron.
"Most people have no idea how seriously Tom took his job
or how hard he worked at it," Fisher said.
Councilwoman Laurie Sample-Wynn had voted to hire Hutka in
2001 when she was mayor. She left the council for a term in
2003 but returned in 2005.
Although she continued to support the manager, she added:
"I was told that he had changed. I hadn't seen it myself,
but I was keeping close watch."
Councilman David Haynes knew Hutka not just as a city
manager but as a community volunteer.
"I was in Rotary with Tom. I served on the
International Day Parade (planning committee) with Tom,"
Haynes said. "He wasn't just sitting behind a desk. He
got out on the street and volunteered his time."
Cutcher held swing vote
Looking back, it appears Hutka had three supporters (Fisher,
Haynes and Sample-Wynn) and three detractors (Jacobs, Neal and
McCulloch) on council. If that indeed was the case, it would
have left Mayor Alan Cutcher as the swing vote.
In the past, Cutcher had been a solid supporter of the city
manager. "Tom has continued to be an excellent city
manager for Port Huron," he wrote in his 2005 evaluation.
"He has embraced new ideas and opportunities."
The mayor indicated his 2006 performance review would have
been less enthusiastic.
"The review I would have given him probably would not
have been the same review I would have given him in the
past," Cutcher said, selecting his words carefully.
"I don't want to say anything negative about Tom."
Hutka resigned before council members could submit their
2006 evaluations. However, the review process was under way,
and Cutcher said Hutka suspected a majority of council no
longer supported him.
He said Hutka approached him with a question: "If he
would resign ... would we consider living up to our contract
with him (and pay severance)?"
Cutcher, a retired director of human resources for E.B.
Eddy Paper Co. (now Domtar), worked with Hutka on the details
of the separation package.
"The mayor decided to take the lead on that and do the
negotiating," Neal said.
Avoiding 'a black eye'
Council members may have been divided on Hutka's performance,
but they were united in their conviction that the city did not
need another political firestorm like the one that accompanied
the Osborn firing in September 2000.
McCulloch, 29, recalled following the Osborn controversy
closely because it occurred at a time when he was beginning to
develop a keen interest in politics.
"It kind of gave the city a black eye," he said.
"I never would have wanted to get us into that situation
again."
Neal also wanted to avoid a public firing. "I was
never a big fan of Tom Hutka," he said, "but in the
next breath, I have to say I'm not sure if we deserved to go
through another situation like we did with Larry Osborn."
Fisher came to much the same conclusion. "It's my
feeling that the majority of council had lost confidence in
Tom," he said. "I believe that Tom agreed to resign
if we gave him the severance package that he would have gotten
had we terminated him. The last thing we needed as a city was
to go through (firing a city manager) again."
Council moves swiftly
Even before he cleaned out his Port Huron desk, Hutka was
interviewing for the city manager's job in Troy, which is
Michigan's 12th largest city with a population of 81,000.
On June 11, 2006, the Troy City Council entertained a
motion to hire Hutka, but before a vote could be taken, a
second candidate's name was substituted. Hutka lost out.
Meanwhile, Port Huron council members moved swiftly to hire
a new city manager. The job was offered to Karl Tomion on June
24, 2006, a week before Hutka cleaned out his office.
Fisher recalled that some of his colleagues were discussing
Tomion even before Hutka resigned.
"I had another city council member come into my work
and mention that there's that guy from Midland that they keep
talking about," he said.
He declined to identify the other council member, but he
indicated there were influential people in the city who
lobbied for Tomion's return.
A city in crisis
Tomion is a Port Huron native who began his career in the
1970s on the staff of long-time City Manager Gerald Bouchard.
He moved to Dowagiac, a town about the size of St. Clair,
where he served as city manager for 12 years. His next stop
was Midland, a city of 41,500, which he led for 14 years.
He said no Port Huron council member approached him about
the job before Hutka's resignation, and if they had, he would
have refused to discuss it.
"Ethically, it would be improper for any city manager
to talk to a city council about their interest in a position
when there is a current incumbent," Tomion said. "I
never had such conversations with (Port Huron elected
officials)."
Last August, he returned home to find the city in crisis,
with problems such as high unemployment, an eroding tax base,
concerns about a new Blue Water Bridge Plaza and crushing debt
from the $185 million effort to separate sewers and replace
water mains.
"Do I think the city is better off with Karl Tomion in
charge? Yeah, I do," Jacobs said. "Tom was there for
five years, when many of these problems developed. Karl's had
it all dumped in his lap."
Fisher remains convinced that Hutka had the city on the
right course, but other council members indicated the city is
better off with Tomion at the helm.
No one was more effusive in his praise than Neal, who said:
"Look at Karl's credentials. They're impeccable. ... If
he's not the best city manager in the state, he's in the top
three."
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