Saturday, January 25, 2020

Differing Claims in the Velken Matter Could Leave North Bay Village Broke

The Velken matter has been sent to a judge after the Department of Administrative Hearings heard an appeal from our former contractor, Lewis Velken, who worked as both NBV Police Chief then Village Manager, was told his status as a "contractor" rather than an employee was invalid and appeared to be an end run around the FRS rules that prohibits employment in an FRS agency within 6 months.

The Florida Retirement Systems demanded that Velken repay a total amount of $691,307.41 in retirement benefits he collected.  Velken says he doesn't owe it.

There are two "Proposed Judgments" on the website at the DOAH which the judge will have to decide.  To see them yourself, go to the DOAH website and enter Case # 19-002746.  Then select the Dockets Tab.  

Neither side is disputing the baseline facts.  Both proposed judgments agree that:

  • Velken was never an employee of North Bay Village.  He was paid through Stephanie Leon PA, a lifelong friend, who set up a business specifically to "lease" employees.   
  • Velken and the Village Human Resource Manager at the time were told by the FRS that there was no way around the 6 month requirement.  (Note:  Velken claims that the information provided by the FRS was inaccurate.)  
  • There was never a written contract with the staffing agency and the Village and there was never a commission resolution agreeing to this situation.   
And from the witness transcripts in the hearing, there were three different figures listed as compensation - Velken believed it was $132,000 per year, then Village Manager Marlen Martell thought it was $110,000 per year and Stephanie Leon thought it was $133,000 per year.   This is mentioned in the FRS Proposed judgment and refers to the transcripts.  

Velken's Proposed Judgment further states that Village Attorney Norman C. Powell was consulted on the arrangement and according to the transcript of the testimony, said he saw no problem with the arrangement.  

Powell denied any knowledge of the arrangement at all in the Miami Herald article  calling it a "complete fabrication". But Velken's attorneys seem pretty confident that Powell approved the arrangement.  

Both sides have presented their view and it's now up to a judge to decide.   

It's hard to know what the judge will decide but in my opinion, the absence of a written contract is a big red flag.  

And Florida law states that if an attempt to defraud the FRS is found then "The employee and the re-employing FRS agency will be jointly and severally liable for reimbursing any retirement benefits paid to the employee. §121.091(9)(c)3, Fla.Stat. (2019)."

This means that the Village could face penalties as well if the judge decides against Velken, and Velken has already sent a letter to the Village stating his intention to sue if he is forced to repay the money.  

But Before We Go:

The question must be asked.  

How did a 20 plus year police veteran, a village manager, an HR manager, and a former mayor all of whom have admitted they knew about the arrangement and who presumably knew that there was never a resolution brought to the commission or any written contract, decide to let this happen?   

And while he denies initial knowledge, why did our former Village Attorney Norman C. Powell, who definitely knew by September of 2018,  never bring it to the commission?  

My opinion is that that thought they would get away with it.  

And they almost did.   If it hadn't been for social media and this blog, the whole thing would have never seen the light of day.    

Those of you who have followed me for a while know that I have been the object of hard attempts to shut me up (Powell is "suing" me and the former mayor threatened to) and soft attempts to stop information flowing (the Village refusal to engage with citizens.)

If it hadn't been for this blog, we'd never have known.  That's why I write it.  

I'll keep you informed as soon as there is definite ruling.  

In the Meantime, Here Are My Highlights From the Proposed Judgments

From the DOAH Proposed Judgment:

54. According to Mr. Velken, the salary negotiated was $132,000.00. Tr. 438. 55. According to Ms. Martell, the negotiated salary for Mr. Velken was $110,000.00. Tr. 190. 56. According to Ms. Leon, the negotiated salary for Mr. Velken was $130,000.00 annually. Tr. 139.

From the Velken Proposed Judgment:

32. Ms. Martell then took Mr. Velken upstairs to discuss the contracted employee arrangement with the Village Attorney, Norman Powell. (T-2-185, 186, 189; T-4-432, 469) It was Mr. Velken’s understanding that as the Village Attorney, Mr. Powell had the final say as to whether such an arrangement would be appropriate. (T-4-433, 469) Mr. Powell said that he did not see anything wrong with the arrangement and that he would research it and let them know if he found out anything to the contrary. (T-4-433) 33. Ms. Martell advised Mr. Velken that Mr. Powell told her that everything was okay to proceed. (T-4-434) NBV has contracted with other agencies for individuals to provide services in other high ranking Village positions such as the Director of the Planning Department, the Village Engineer and Public Works Director. (T-2-200; T-3-345) 

Mr. Wrains discussed the Agreement with Village Attorney Norman Powell, who had approved this arrangement, as well as had Ms. Martell. (T-3-355, 382)

Kevin Vericker
January 25, 2020

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