The Bellevue school board went against the wishes of outspoken audience members Wednesday and authorized a severance payment of $417,690 for controversial superintendent John Deegan.
The agreement grants Deegan two years' worth of his current annual base salary, which stands at $208,845. He also will receive retiree health care benefits over that period.
Deegan, 63, did not attend the board meeting. He will receive half of the severance in a lump sum payment by Dec. 31.
He and the board have wrangled for months about issues surrounding his severance pay.
The board blocked his attempt to resign in October and instead put him on paid leave. At the time, the board balked at paying Deegan a severance package that he claimed was worth $800,000.
School board president John Hansen and members Denise Seaman, Frank Kumor, Carol Olsen and Lisa Rybar approved the settlement. Board member Nina Wolford cast the lone vote against the deal.
The board met behind closed doors for 20 minutes before reemerging and taking the public vote on the settlement.
Attorney Mark Fahleson of Lincoln, hired by the board in June, told the audience that the settlement was in everyone's best interests.
Fahleson said the terms of Deegan's multi-year contract granted him two years of severance pay, regardless of whether he resigned or was terminated.
In November 2009, the school board had voted 5-1 to raise Deegan's annual salary to nearly $209,000 and included a provision that he receive two full years of severance pay, plus payment of any accrued vacation and sick leave, if he resigned.
Deegan had claimed unused vacation and sick pay of $350,000.
Under Wednesday's settlement, however, Deegan forfeited his vacation and sick benefits. He also will not receive an annual annuity contribution of $45,000, as he did last school year.
“Dr. Deegan is giving up almost $400,000,” Fahleson told the audience. “He is forfeiting a rather significant sum of money. This represents a significant saving for Bellevue taxpayers and avoids the necessity of a lengthy and costly termination proceeding, the outcome of which is unknown.”
Deegan said he had accrued 329 unused vacation days and had 41 remaining sick days on the books.
Fahleson said his investigation revealed that Deegan kept track of his own vacation time and that the district had no system in place to independently verify the accuracy of Deegan's records.
“While no one questioned Dr. Deegan's work ethic, this issue took on significance once it was learned that Dr. Deegan was receiving a significant salary from the Military Impacted School Association, and questions arose about how he was recording his time spent on MISA matters,” Fahleson said.
Deegan's school contract did not address the issue of whether he could receive outside income for serving as executive director of the MISA organization, which Deegan ran out of his Bellevue schools office.
Deegan had been making at least $84,000 a year to run the nonprofit group on top of his total compensation of $260,000 from the school district.
Fahleson chastised Deegan for failing to disclose his outside income from MISA, which wasn't verified until after the board launched its internal investigation of Deegan last summer.
“While no state law was violated, this issue permanently damaged the trust the board placed in Dr. Deegan,” Fahleson said.
Bellevue resident Hugh Abrahamson, a lawyer, reacted in anger after the board approved the settlement.
Abrahamson scolded the five board members who voted in favor. He called them “miserable” representatives of the taxpayers.
He singled out Hansen, who has served on the board 26 years.
Abrahamson told the board it sent Deegan packing with “one helluva deal.''
“I think you all should resign,” Abrahamson said. “I don't trust you to do a good job in the future. John, are you willing to resign?”
Hansen scoffed at the suggestion. “Absolutely not,” he replied.
Hansen added that Deegan had done a “great job” for many years, serving as superintendent since 1997 and working 38 years for the Bellevue schools.
The board said that, as part of the settlement, it will call on State Auditor Mike Foley to conduct an investigation of school district finances and the MISA organization.
Besides Deegan, a handful of his staff also have drawn extra pay from the nonprofit group.
Wolford said she voted against the severance because it seemed premature, given that the board had not yet contacted Foley.
“I am not comfortable enough with the information gathered,” she said.
The board still doesn't know the compensation history for Deegan and three of his staff members for their second jobs with MISA.
“To me, that's unacceptable,” Wolford said.
Bellevue resident Phyllis Portland bashed the board for failing to provide oversight of Deegan and the salaries he gave to members of his “pet administration.”
This school year, Deegan gave virtually all of his returning principals and administrators raises of 8.2 percent, or pay hikes of between $6,000 and $11,000.
She said she was further outraged that certain Bellevue employees also worked for MISA and drew salaries from both entities.
She implored the board to delay action on the severance until it could bring Foley in to conduct an independent probe. More than two weeks ago, Foley said he would be willing to audit the MISA finances.
“You are too worried about embarrassing yourselves any further,” Portland told the board. “Most of you never questioned Dr. Deegan.”