"I made a management decision to sever ties with an individual that I could not trust," says Mayor Greg Hines.
A decision which funneled $630,000 out of city coffers, and into former treasurer Jerry Hudlow's pockets.
"It's a lot of money, and it hurts," Hines says.
The Mayor says when he took office in 2011, Hudlow was a handful.
"I was warned coming into office by my predecessor about some issues with Mr. Hudlow," he says. "I attempted for a year and a half to work through those issues... and it didn't work."
He asked City Attorney Ben Lipscomb how to terminate the treasurer, who was originally appointed by Mayor Steve Womack in 2002. City ordinance states the appointed Treasurer can be fired for cause by a two-thirds vote of the City Council, but Hudlow was never reappointed after his first term.
"I looked at all the law that I could find," Lipscomb says. "There were no cases exactly on point in Arkansas to give me guidance... It was my opinion that his status was that of nothing more than a department head."
Lipscomb told the Mayor he could dismiss the Treasurer, but after being fired, Hudlow filed a wrongful termination suit, and won.
"It turns out that my opinion was incorrect according to Judge Hendren," Lipscomb says. "If you want to blame somebody, blame me, and that's just the way it is. I, the buck stops here."
Rogers taxpayers covered the cash settlement, through the city's general fund, but Hines says no city functions will suffer.
"We always collect more sales tax and revenue than what we project, and so you've got always additional revenues collected over what is projected," he says. "Just as an example, we cashflowed the construction of fire departments within an annual budget without touching reserves, so that gives you an idea of that flexibility."
But that doesn't mean he's taking the loss lightly.
"No one has lost more sleep over it than I have," he says. "No one has agonized over it more than I have... It's the wounds more than the money, because this is not the way that we conduct business. Rogers is a very progressive city. "We don't have these, sort of if you want to call it, scandalous issues that occur in our city."
However, Hines says he would make the same decision today.
"I hate it as a mistake, that we've had to pay this individual this amount of money to be severed with him," Hines says. "I will tell you, sometimes subtraction equals addition, and the city is way better off than where we were."
Next Thursday, July 31st, in part two of our special report, we will look into where the animosity among city leaders stems from, and hear Hudlow's side of the story.
Click here for KNWA's 2012 report, detailing the reasons given for Hudlow's termination.
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