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Willmar City Council approves $20K relocation payment to new CEO at Rice Memorial Hospital

WILLMAR -- Rice Hospital Board's decision to make a relocation assistance payment to incoming chief executive officer Michael Schramm of Litchfield has received near-unanimous support from the Willmar City Council.

The council voted 7-1 Monday night to approve a portion of the minutes of the hospital board's April 8 meeting that approved Schramm's employment contract, including the $20,000 relocation assistance payment.

The council on April 20 had tabled that portion of the minutes dealing with the relocation payment, and the matter was referred to the council's Labor Relations Committee for discussion on April 22. At that meeting, the rationale for the payment was explained by Wayne Larson, Rice board chairman, and the committee voted 3-1 to recommend the council approve the minutes.

The City Charter gives the council veto authority over hospital board actions.

Council member Bruce DeBlieck said he had no problem with paying moving costs, but argued against the payment because there was no accountability and Schramm was not required to produce receipts for moving expenses. DeBlieck described the payment more like a signing bonus.

Council member Steve Ahmann, Labor Committee chairman, spoke in support of approving the minutes.

Ahmann said not approving the minutes would not be a good signal to send to the volunteers serving on the Rice board.

He suggested the council learn from the experience and discuss "hot topics'' or questionable expenditures ahead of time "so we're not reacting to recommendations.''

Council member Denis Anderson spoke in favor of supporting the Rice board. He said these kinds of payments, in the business world, are relocation expenses and not necessarily a signing bonus. The council needs to step back from micromanaging, he said.

"We did not give them any guidance. For us to come back and say we don't think this is right, is wrong,'' he said.

Council member Tim Johnson supported the payment, calling it a normal practice done everywhere for hiring someone of this caliber and in this type of position.

Voting in favor were Ahmann, Anderson, Johnson, Jim Dokken, Doug Reese, Ron Christianson and Rick Fagerlie. Voting against was DeBlieck.

In other business, Ahmann reported the committee conducted the annual performance review of City Administrator Michael Schmit.

Ahmann said the committee concluded Schmit met or exceeded expectations for organizational management, fiscal and business management, program development and follow-through, relationship with the mayor and council, long-range planning and relationships with public and private sector organizations.

In other action, the council approved a Public Works/Safety Committee recommendation to approve plans and specifications and call for bids to construct two pump stations for the forcemain portion of the wastewater treatment project. Estimated cost of the two pump stations is $2,287,950.

The plans and specs include requirements for seeking a $457,000 grant under the federal stimulus funding package, although city officials and the wastewater project consultant don't know how much of the grant might be eaten up by additional paperwork associated with stimulus funding.

The grant would amount to 20 percent of the $2.2 million cost. Bids will be opened June 6.

"We'll know the exact numbers when the project is bid,'' said Schmit.

Committee chairman Doug Reese supported the recommendation.

"It seems to me that no matter what, the city is going to profit in one way or other through the use of the stimulus funding,'' he said.