Lake City Wrong Again: Severance Payout to Ex-City Manager Paul Dyal NG - City Overlooked Legal Requirements: Who Pays?
May 19, 2025 12:30 pm | 3 min read
Columbia County Observer graphic and photos
By
Stew Lilker
LAKE CITY, FL – Former City Manager Paul Dyal’s severance payout found wrong again. The cost to the City taxpayers is over $250,000 with legal fees and staff time adding tens of thousands more.
On the City docket tonight is Cavendish Report Number 2 from the consultant and outside counsel David Cavendish of Tallahassee. While the agenda (item 10) calls for discussion and possible action, as is the City’s usual dysfunctional way, Mayor Walker, the City Manager, and City Attorney have not given the public a clue about what the “possible” action might be.
Cavendish Report Number 1 and extensive background information can be found here: Lake City: When a City Manager Voluntarily Quits, He Doesn't Get Severance. The LC Mayor and City Attorney Said, ‘Pay ‘em, anyway.’ A Legal Analysis Says – WRONG
“We are of the opinion that a reviewing court would not find that Resolution 2024-131 created a retroactive approval of, or ratified, the 16-week sum paid to Mr. Dyal, post-employment, or the Separation Agreement that included the payment and a ‘release of claims’ as contract terms.”
Michael Cavendish
Important dates:
October 19, 2023: City Attorney Todd Kennon (Robinson Kennon & Kendron, P.A.) emails City Manager Paul Dyal regarding his separation agreement. He asks Mr. Dyal to fill in the separation agreement with the dates to receive “your paid time off, annual and sick accumulations.”
April 1, 2024: City
Attorney Clay Martin (Folds & Walker, P.A.) changes the items to be
included on the consent agenda to include budget
amendments. This is the first time in Lake City
history that budget amendments have been
included on the City’s consent agenda.
June 1, 2024: Don Rosenthal, an experienced municipal manager with an MBA, is hired as City Manager.
November 4, 2024: A budget amendment attempting to fix the monumental Paul Dyal Severance screw-up found its way onto the City consent agenda. The entire budget amendment was over $2.5 mil. During the meeting, no one from the public noticed it. It is unknown if any of the Council members noticed the multi-million-dollar amendment. They did not comment.
November 18, 2024: Noah Walker becomes Mayor.
Consent agendas are known as a place for unscrupulous governments to hide things that they don’t want folks to see or pay attention to. They are supposed to be for routine business, like approving minutes and other ministerial or recurring tasks.
Approving
multi-million-dollar budget amendments is not
the purpose for which consent agendas are
designed.
City Attorney Clay Martin should have known that. It is unknown if he did.
Don Rosenthal could have been a check on Attorney Martin and sought transparency by not putting the Dyal and other budget amendments on the consent agenda. He didn’t.
Cavendish Report Number 2
The original problem: The City Council didn't approve the Dyal Separation Agreement that included the payment, which, under the City Code, requires their approval for salary payments and settlements of over $5,000. The payment was made anyway, making it ultra vires, meaning it was beyond the authority of whoever authorized it without prior Council approval. The Council didn’t approve it.
The November 4, 2024, budget resolution was passed after the fact. The Cavendish Opinion 2 analyzed this.
The resolution approving the Dyal payout was part of a consent agenda item approved without discussion. The single-subject rule in Florida law (Fla. Stat. §166.041(2)) states that each resolution must cover only one subject. If the resolution's main subject is the annual budget, adding ratification of the Dyal payment could violate this rule, making the resolution invalid for that purpose.
The resolution wasn't posted on the City's website within five days as required by Fla. Stat. §166.241(9). It was posted much later. [It is not clear why City Attorney Clay Martin, an experienced municipal attorney with supposed knowledge of municipal law, overlooked this.]
Cavendish Opinion Number 1 specifically mentioned that budget amendments for salary payments require Council approval via a resolution. Even if Resolution 2024-131 is about budget amendments, the lack of specific mention and the procedural issues (like late posting and consent agenda without discussion) may mean it doesn't satisfy the requirement to cure the ultra vires (authorized without prior approval) action.
Epilogue: Lake City Should Be Embarrassed, It’s Not
Every opportunity the City Attorneys, the City Managers, the Mayors, and the Council members had to make right the severance payment to the quitting Paul Dyal, they didn’t.
Putting the Cavendish findings together: the Dyal payment was just a line item in the budget resolution. The Council never discussed or approved the payment. The omnibus budget resolution may not meet the single subject rule, as it applies to Mr. Dyal if it's seen as covering multiple topics. There's a procedural flaw in not posting it on time.
The City actors did not address the substantive legal mandates for approving employment settlements and salary reallocations.
The purpose of Cavendish Report 2 was to address the budget resolution and answer the question: Did it cure the defects in the Dyal Separation Agreement and the resolution transfer of funds?
Mr. Cavendish said it did not:
“We are of the opinion that a reviewing court would not find that Resolution 2024-131 created a retroactive approval of, or ratified, the 16-week sum paid to Mr. Dyal, post-employment, or the Separation Agreement that included the payment and a ‘release of claims’ as contract terms.”
