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Unemployment appeal upheld

Former city manager receives state benefits after termination

— The state of Colorado has upheld a ruling that former Steamboat Springs City Manager Paul Hughes was eligible for unemployment benefits during the first half of 2006.

Hughes’ contract was terminated by the Steamboat Springs City Council at the end of December 2005, five weeks after he announced plans to retire. In a split vote, members of City Council expressed their wishes for a fresh start under a new city manager. Deputy city manager Wendy DuBord was named interim city manager until Hughes’ successor, Alan Lanning, was hired.

Hughes’ retirement agreement with the city called for him to continue working at full salary until Nov. 3, 2006, or until five days before a new city manager was in place, whichever came first. The agreement also called for him to receive an additional $53,766.03 in the event he was fired without cause or his employment concluded as spelled out in the retirement agreement.



When Hughes was fired last December, he received the $53,766.03 and sought unemployment benefits to offset a portion of the salary he would have made until the new city manager was in place.

The Colorado Department of Labor initially denied his request, interpreting the $53,766.03 as a severance package that would make him ineligible for unemployment benefits.



Hughes’ attorney Shelley Hill, who also is his wife, countered that the money was not a severance settlement but a lump-sum incentive offered by the city to keep Hughes on the job.

Hill appealed the initial ruling by the Department of Labor in April. In May, a hearings officer with the same department ruled in Hughes’ favor.

The city of Steamboat Springs subsequently appealed that ruling.

“We thought the first ruling was correct,” city staff attorney Dan Foote said.

The Colorado Industrial Claims Appeals Office has now upheld the May ruling in Hughes’ favor.

Foote estimated the amount of unemployment benefits accrued by Hughes from Jan. 1 to July 1, when his employment with the city would have reached its natural termination, to be in the neighborhood of $10,000. However, Hughes said he thinks the amount is between $6,000 and $7,000.

The unemployment benefits are paid by the state’s unemployment insurance fund, not the city’s budget.

Hughes said he has been receiving unemployment checks, but he is uncertain whether they are the full amount he would have received had his eligibility not been under administrative review. He has kept those funds in a segregated account, he said, in case the ruling was not in his favor. Hughes also said he has not filed for unemployment since the beginning of July, when his retirement agreement with the city would have come to its conclusion.

Hughes’ annual salary from the city was $121,076.


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