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METRO EDITION

METRO EDITION

L O UIS VILLE, KENTUCK Y

courier-journal. com

SUND A Y , M A Y 2 9 , 2 0 1 1

USPS 13 5560

MSD pa id fi re d offi cial $140,000

Deal ke pt him quiet on wa ste allegations

By James Bruggers

jbruggers@courier-journal.com Th e Courier-Journal

Five months after firing its hu- man resources director last year, the Metropolitan Sewer District paid him $140,000 as part of a set- tlement that required him to keep

silent about allegations he’d made about waste, fraud and misman- agement within the agency, The Courier-Journal has found. A copy of the Dec. 15 settlement, which the newspaper acquired un- der the Kentucky Open Records

law, shows that MSD denied the the agency’s executive team, also

validity of Jerry Ferguson’s allega- tions but agreed to provide (him) with certain conditions,” including the money, which was slightly less than a year’s salary at the time of his departure.

agreed to turn over to MSD all doc- umentation he had accumulated for a threatened lawsuit under state whistleblower protections. Ferguson’s accusations about the agency had been outlined in a

Ferguson, who was a member of

SUNDAY PRINT EXCLUSIVE

in a Ferguson, who was a member of SUNDAY PRINT EXCLUSIVE F e r g u

Fe rg uson

MORE

INSIDE

De al boosted pension of fo rmer MSD human re - sources director’s predecessor. Story, A10

clined to provide a copy of the let- ter to the newspaper. Assistant le- gal counsel Stephanie Harris said releasing Ferguson’s claims would constitute an unwarranted inva- sion of personal privacy” and re- veal preliminary correspondence in which opinions are merely ex- pressed.” But the newspaper obtained a copy of the letter, which claimed some employees or contractors

letter his lawyer, Garry Adams, sent to MSD six weeks after his cli-

ent was fired, for undisclosed rea- sons, on Aug. 12, 2010. MSD de- Se e MSD , A11, col. 1

GOD KNOWS IT KILLS ME EV ERY DAY,

BUT I’M PROU D OF THE WAY HE WENT.”

Ka re n Hi ll, mother of Na tional Guard Sgt. Jo nathan Ad am Hughes From left: Se nior Airman Ashton Goodman, Sgt. David Ne il Wi mberg, Sgt. Jo nathan Ad am Hughes

Sgt. David Ne il Wi mberg, Sgt. Jo nathan Ad am Hughes REMEMBERING THE FA LLEN

REMEMBERING

THE FA LLEN

Once a year, on Memorial Day, we pay tribute to those who have died while serving our country. But for some families in Kentucky and Indiana, the loss is felt more deeply, every day. Tricia Wimberg, for example, has been known to take a lawn chair to Zachary Taylor National Cemetery, where sometimes she’ll talk to her son, Sgt. David Wim- berg, who died in 2005 in Iraq.

Allyson Echols has a living lega- cy of her husband, Lance Cpl. Thomas Echols. Their daughter, Julia, was born not long after Tom was killed in Iraq in 2006. And Mark G oodman’s daugh- te r, Senior Airman Ashton Goodman, is still making a dif- fe re nce in the live s of wo men in Afghanistan through a grant es- ta bl ished in her name fo llowing her death in 20 09.

READ THEIR STORIES AND OT HERS TO DAY IN FEATURES, E1.

READ THEIR ST ORIES AND OT HERS TO DAY IN FEATURES, E1. “ THAT’S THE WO
READ THEIR ST ORIES AND OT HERS TO DAY IN FEATURES, E1. “ THAT’S THE WO

THAT’S THE WO RST FEAR AS A MOM PEOPLE WILL FO RG ET.”

Pa tricia Mo ntgo mer y, mother of Spc. Rya n Mo ntgo mer y From left: Spc. Rya n Mo ntgo mery, La nce Cpl. Th omas P. Ec hols, Cpl. Jo shua Mo ore

Th e legend of Va lhalla is about to grow

Jo shua Mo ore Th e legend of Va lhalla is about to grow By Matt

By Matt Stone, Th e Courier-Journal

Hale Irwin peers ove r a hill in the ro ugh along the 17 th fa irway Sa turday at the Se nior PGA Championship at Va lhalla Golf Club.

Valhalla Golf Club has already collected a dazzling stack of cre- dentials to certify it as one of the top 100 American courses. Jack Nicklaus designed it. Tiger Woods won a ma- jor title here. The Amer- ican team soaked Val- halla with champagne during its Ryder Cup victory three years ago.

Today, Valhalla’s list of un- last Senior PGA Championship forgettable moments is primed that was played here in 2004.

pens.” Let’s do. Start with Ir-

win, the co-leader at 9-under-par, 207. He sur- vived a three-putt, dou- ble-bogey 7 on the final hole to shoot a 2-under 70 on a muddy Saturday. All Irwin has done is win three U.S. Opens and more events (45) than anybody on the Champions Tour, including the

Rick

Bozich

anybody on the Champions Tour, including the Rick Bozich to grow. Check the leaderboard as we

to grow. Check the leaderboard as we move into the final round of the Senior PGA Champion- ship presented by KitchenAid. It’s a stretch to say that you have to prove you’ve won a PGA

Tour major championship to three years.

play in one of the final Sunday groups. But not much. Six guys who have won a combined 18 majors are packed into the top dozen players on the Senior PGA leaderboard. We all put on our pants the same,” Hale Irwin said. We all play golf. Let’s go see what hap-

He’s also 65 years, 11 months and nearly 4 weeks old. That means a Hale Irwin vic- tory today would make him the oldest winner ever on the Champions Tour — by nearly

What’s that old granddad doing?” asked Tom Watson, who shot a 68 Saturday to park him- self at 8-under, one behind Irwin and co-leader Kiyoshi Murota of Japan. I mean, geez, what’s that

Se e BOZICH , A4, col. 1

SENIOR PGA CHAMPIONSHIP

Complete cove ra ge of Sa turday’s ro und includes Eric Crawford o n To m Wa tson, five questions fo r To m Le hman and more i n SPORTS. More photos of the to urnament are at www.c ourier-journal.com.

BREAKING NEWS ON YO UR CELL PHONE Text CJNEWS to 44636 (4INFO) fo r the
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Text CJNEWS to 44636 (4INFO)
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MT

SUN

WEATHER | B2 36 -HOUR FO RECA ST Lo uisville area: Most- ly sunny and
WEATHER | B2
36 -HOUR FO RECA ST
Lo uisville area: Most-
ly sunny and hot to day
and to morrow.
TO DAY
92 72
ly sunny and hot to day and to morrow. TO DAY 92 72 TO MORROW 93

TO MORROW

93

INDEX

10 0 PAGES

Ar ts

I-1

Metro

B1

Business

D1

Movies

I-2

Class. F1, G1, J1

Racing

C17

De aths

B6

Spor ts

C1

Fo rum

H1

TV

TV We ek

Fe atures

E1

Lo tte ry

A2

TOMORROW Hike Bike and Paddle.org SUBWAY® isaregistered trademark of Doctor's Associates, Inc. ©2011 Doctor's
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CJ-0000310122

Time: 05-28-2011 19 :36 User: lhack PubDate: 05-29-2011 Zone: KY Edition: 1 Page Name: A 11 Color: Black

KY2-

FROM PAGE ONE | courier-journal.com

THE COURIER-JOURNAL | S UNDAY , M AY 29, 2011 | A11

MSD | Offi cial agreed to re main silent

Continued from A1

were being paid to do little

or

overpaying employees and billed the agency and that Courier-Journal reported at

the time that settlement was for $195,000 and included re- quirements that Ford, while not agreeing to any wrong- doing, would take steps to document its diversity pro-

MSD got its money’s worth from his team-building ses- sions, seminars, personality testing and one-on-one counseling. This is an organization

tially more hours than he Rights Commission. The

uate of Harvard Law School said that is his standard rate. He said he worked substan-

tion agreement” in 1999 in a racial-discrimination case before the Kentucky Human

no work; that MSD was

giving bonuses to some who weren’t eligible for them; and questioned the financ- ing of certain MSD land deals. It also accused Bud

Schardein, MSD’s executive with more than 600 em- gram with the commission.

director, of favoring his friends in the agency; assert-

ed that MSD wasted its less (the executive team) budget of $110 million, hired

functions as a team, the pub-

state senator as a team- lic is not going to get the resources department in Oc-

building consultant at $350 an hour; and raised concerns

about MSD’s no-bid con- Smith gave to Schardein:

Cooksie, who retired Jan. 1,

money by hiring a former

Ferguson to lead its human

ployees, and it’s led by an ex- ecutive team,” he said. Un-

MSD, an agency with 650 employees and an operating

services … it’s entitled to.” Included in the advice

tober 2008 at a salary of $130,000. He replaced Kathy

advice tober 2008 at a salary of $130,000. He replaced Kathy A lette r from the

A lette r from

the atto rney

fo r f ired MSD

official Jerry

Fe

details wa ste

accusations

and claims

Executive

Director Bud

Sc hardein,

shown at left

at a west

Lo uisville

sewe r

fa cility,

fa vo rs his

friends.

Courier-Journal 2006 file photo

rg uson

tract with its main outside

The executive team and all

2009.

legal counsel, Larry Zielke,

employees needed to under-

If

there were any prob-

Marty Hoehler and past

cent rate increase, just under

$850 million sewer rehabil-

saying it wasn’t properly

stand his objectives with

lems with Ferguson’s work

chairwoman Beverly

the 7 percent limit that offi-

itation program as part of a

awarded and was wasteful great force and clarity and at MSD, they weren’t re- Wheatley — resigned from cials say would require Met- 2005 settlement with the

must agree with them and flected in his two annual the board at Fischer’s re- ro Council approval — a U.S. Environmental Protec-

tion Agency and Kentucky

and excessive.”

Adams also asserted in support them with enthu- performance evaluations — quest.

move that would subject the

the letter that Ferguson was

let go in retaliation of good

faith reports of waste, fraud and mismanagement and vi- olations of law he discov-

ered at MSD,” and in direct

contravention of the Ken- aside personal agendas.

tucky Whistleblower Act.” As part of the settlement, Ferguson’s termination was

changed to a resignation, have been paid at least show.

and both he and MSD agreed

to neither discuss the case

nor say anything derogatory $950,000 for handling the leader due to his courage icy.

about the other side. Ferguson declined to talk about the settlement for this

story, citing the conf iden- case.)

tiality agreement. His attor- ney said he could only con- firm that he had sent a letter outlining Ferguson’s accusa- tions to MSD and then en-

tered into negotiations in fall MSD’s in-house legal serv- and more consistent man- percent to 7 percent annual- should raise their rates every nel” matters.

2010. Those negotiations

ended in a resolution satis- factory to the parties,” Adams said.

siasm that borders on pas- sion under-girded by a sense of urgency.” Smith also said

including one given just four months before his Aug. 12, 2010, termination. As part of

The resignations came proposal to broad scrutiny water-quality regulators.

after a March 20 Courier- Journal story detailing how

For their part, Schardein and MSD board members defended the agency at their May 9 board meeting. As one example, they cited how the city has survived record rains and high waters on the Ohio River this year without

We have no vote,” he flooding in its protected

zones. Schardein described himself as one of the com-

members are appointed by munity’s most fiscally re-

said. We have no say over those people.” The agency’s eight board

from 26 locally elected rep- resentatives. There’s no accountabili- ty for how they spend their money,” Louisville resident and MSD customer David Johnson said of the MSD

the executive team mem- that evaluation, Ferguson businesses that the three

bers needed to learn how to trust each other and set

Other records detail Zielke’s no-bid contract.

was given a $4,118 annual pay increase, pushing his salary to $141,107.20. MSD also gave him a $4,110 lump-sum per-

owned did work for the agency they helped oversee. MSD subsequently adopted a tighter ethics policy, and

formance award, records the Metro Council has board.

Zielke and his law firm provided to the newspaper passed a resolution calling

Ferguson’s 2010 review described him as a natural

on all city boards and com- missions, including MSD, to adopt the city’s broader pol-

and decisiveness.” He was praised for strongly promot- ing MSD policies and proce- dures and for having made outstanding progress in

resources procedures and practices.” Hiring is done in a fairer

ner,” the evaluation said.

Grow ing controversy

Ferguson’s claims and

ly since the mid-1990s, in large part to meet provisions of the Clean Water Act and protect the city from flood-

$5.9 million by MSD since

Jan. 1, 2006, including

The work is in addition to

ices department, with its staff of four attorneys. Zielke said state law al- lows public agencies to hire

sponsible public servants and challenged anyone to provide examples of finan- cial waste at MSD. Fischer declined to be in-

about $1.2 million in legal ‘reinventing’ MSD’s human increasingly become a focus MSD customer, said she terviewed about the Fergu-

son case. Poynter said the mayor didn’t want to com-

I just don’t think they ment on internal person-

work from several other out- side attorneys over the past five years, and work by

of public attention, as the agency has taken on record debt and raised its rates 5

agency’s bond sales. (As of February, it had billed MSD for $29,000 in the Ferguson

Three new board mem- bers who don’t do work for MSD were sworn in Mon- day. MSD finances also have

the mayor, and its executive director and chief engineer serve at the pleasure of the mayor. Laura Bentley, another

would like to see some MSD belt tightening.

time they fall short in their budget,” she said.

come under criticism for its

He has conf idence in Bud,” Poynter said. When

The agency has also there have been concerns,

they have agreed on a good

Arnold J. Celentano, lawyers, much as they can settlement occurred just ing.

hire engineers and other months before three board

members — chairman Aud- win Helton, vice chairman

mounting debt — about solution.”

$2.6 billion, including inter- est, with more borrowing to come to pay for a 19-year,

MSD’s board chairman, said in a telephone interview that the board agreed to the set- tlement last year after hear-

ing both from Schardein and

Ferguson. We all came to the con- clusion that Bud was telling

the truth, and the way to and expensive and you have

solve the problem was do

whatever had to be done,” he said, adding the board agreed with Zielke then that it’s OK to pay” Ferguson to resolve the dispute.

Celentano said Ferguson rates as low as possible —

wasn’t doing a good job”

and employees were having a real rough time with him.” Schardein declined to discuss the case, writing in

an email that the newspaper

was seeking to harm rather than benef it the agency.”

Mr. Ferguson’s claims work on MSD bond issues

were settled at the direction

of the MSD board,” Schar- $180 million to $330 million

dein wrote. The board de- cided upon settlement to avoid additional protracted litigation expense, and there was no admission of wrong- doing or liability.” Schardein

said he supported the among Zielke, the MSD

board’s decision.

Allegations detailed

Phillip Sparkes, director of the Chase Local Govern- ment Law Center at North-

ern Kentucky University, fessional services allow said such settlements over a you to give work to your dispute firing aren’t un- friends,” said Louisville

usual. And it’s not uncom- mon in those kinds of settle- ments to include conf iden-

tiality agreements of one tracts.

kind or another,” he said,

which can help the em- took office in January, has

ployee move on to another

job and allow a public agen-

cy to focus on its priorities.

But University of Louis- ville professor Steven G. Ko- ven, who directs the Master

of Public Administration only applies to metro gov-

Program, said that the conf i- dentiality agreement makes it difficult for the public to determine if Ferguson’s alle- gations are valid. Through open-records requests, however, The Cou- rier-Journal uncovered some details about allega- tions outlined in Adams’ let-

ter to MSD.

Before coming to work

For example, records for MSD in October 2008,

Mayor Greg Fischer, who

Metro Council member Jer- ry Miller, R-District 19, who has criticized such con-

board and management — and whether MSD could save money through more competitive bidding of pro- fessional services. No-bid contracts on pro-

in the past three years. Zielke declined to say how that would translate into an hourly rate. Some MSD critics have questioned the relationship

that ranged from

$130 an hour. My normal rate is $400 an hour. MSD is get- ting a great deal.” But the $130-an-hour rate doesn’t apply to legal work on bond issues. Zielke’s firm has charged fees ranging from $125,000 to $150,000 for

to know what you are doing. I know what I am doing.” He added that no local lawyer knows MSD matters as well as he does. I’ve been there 26 years. I’ve kept my

professionals for their serv- ices — without competitive bidding. And he said most of what he does for MSD is le- gal defense work, which re- quires his expertise. De- fense work is complicated

MSD board members gave preliminary approval May 9 to yet another 6. 5 per-

Reporter James Bruggers can be reached at (502) 582-4645

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CJ-0000310669

said he plans to bring more competitive bidding for pro- fessional services contracts throughout metro govern- ment. While the new policy

ernment, Fischer spokes- man Chris Poynter said the mayor encourages all local agencies, including MSD, to adopt the same approach. MSD officials wouldn’t say whether they would adopt such a policy.

Fe rg uson’s MSD career

Ferguson worked two months as an insurance ad- ministrator in the Kentucky Personnel Cabinet, state of- ficials said. Before that, he worked from 1997 to 2001 in

something the agency al- human resources for Ford

lows for small purchases,”

Motor Co., MSD records and

according to Harris. The his resume show.

work in 2010 was covered by

Officials for the Person-

a no-bid contract dated nel Cabinet and Ford de-

clined to comment on Fer-

April 1 of that year.

show MSD paid former state Sen. Lacey Smith $19,750 for team-building work done in 2009 and $25,000 for similar work in 2010. The 2009 work was done without a contract,

One of Smith’s invoices guson’s work performance.

While working at Ford, Ferguson won a concilia-

listed an hourly rate of $350, and in an interview, the grad-