Top planning official in Minneapolis expects to be fired for improper payments

The top planning and economic development official in Minneapolis expects to be fired, because he signed a separation agreement allowing an employee to be paid after leaving the city.

David Frank, who has led the Community Planning and Economic Development (CPED) department for nearly three years, said he believed he had the authority to sign the agreement.

"I made a mistake, and obviously you and I are talking because it was a big one. It was not something that I was aware was a mistake as I was doing it," Frank said in an interview Tuesday. He added later: "I was going about my job doing things that I thought I was able to do."

The allegations against Frank were publicly revealed during a meeting Tuesday of the city's executive committee. The committee voted to suspend Frank for five days without pay, effective Wednesday, the maximum discipline it could impose unilaterally.

The matter now heads to the City Council, which is expected to hold a special meeting on Monday to discuss Frank's status.

"It's my understanding that I will be terminated as both the head of CPED and as an employee," Frank said. "There is not some other position for me to go back to."

The department, one of the largest in the city, oversees programs for affordable housing, small business support, the 2040 Comprehensive Plan and other services.

Frank joined the city in 2011, focusing at times on transit-oriented development and economic policy. He became interim director in July 2017, and Mayor Jacob Frey appointed him to the long-term position in 2018. When Frank came up for reappointment earlier this year, some renters and business groups raised concerns, saying they wanted the department to be more progressive and focus more on issues of race equity.

The city has described the new allegations as a personnel matter. During Tuesday's meeting, representatives from the city's ethics office and human resources department read a series of facts and conclusions; Frank said he agreed with their characterization of events.

Bill Champa, with the city's human resources department, said that on Feb. 10, Frank signed a separation letter with "an exempt, appointed employee," referred to as "Employee One." The city has not released the former employee's name.

In the separation letter, Frank agreed that the employee's last day working would be March 6, but the city would pay the employee through May 31. Those terms were not approved by City Council.

"David Frank admits to signing the separation letter because he wanted to provide an easier transition for Employee One, as Employee One separated from the city," Champa said.

The next day, Frank notified his staff that the employee was "voluntarily leaving the city employment for other opportunities." He also notified the city's elected officials.

On March 4, Frank submitted an electronic notice of employee separation indicating that the employee's "last day physically worked" would be March 6, and the "last day to be paid" would be May 31.

The timekeeping system requires employees to certify that their time is accurately entered and "that the employees understand that submission of fraudulent time sheet entries may result in discipline up to and including discharge from employment with the city of Minneapolis, as well as civil penalties and criminal prosecution," Champa said.

On two dates — March 16 and March 30 — the employee filed for 80 hours of sick leave and Frank approved it. Those filings covered the time period from March 2-13, and March 16-27.

On April 13, the former employee filed for 80 hours of regular time, covering the period from March 30 through April 10. Frank approved it.

A payroll technician noticed the regular time filed and contacted Frank. "When questioned by the payroll technician, Frank affirmed by e-mail that Employee One should be paid for the time entered in the payroll system," Champa said.

He said payroll processed the sick leave requests but did not process the request for regular time paid.

Champa said Minneapolis city ordinances "prevent the use or payment of accrued sick time after separation," unless the employee qualifies for a health care savings plan, for which this employee was not eligible.

It is unclear how much was paid to the employee after they left the city, or whether the employee was asked to reimburse the money. City spokeswoman Sarah McKenzie said they do not believe that data is currently public under Minnesota law.

Frank said he does not know the precise amount of money paid to the employee, whom he would not identify.

Frank and city officials agreed to stipulate that he had violated multiple sections of the ethics code, saying he engaged in the unauthorized use of city funds, used his position "to solicit special privileges or special treatment" and failed to uphold his fiduciary duty.

During the public hearing, Frank apologized "that I have put the city in this position when we have so much very important work to do."

Frank said in an interview that he realized he was wrong after payroll reached out to him. "I said, 'Oh yeah, that's exactly as described in this agreement,' and then all of a sudden there were a whole lot of people who were paying attention to what had happened. It became very, very clear to me quickly that I had been very wrong."

He added, "I should almost certainly not be your expert on this, but I am sure that there are some kinds of agreements that can be made when employees are leaving, but if there is a takeaway here, it would be: check with the HR people, and check with the attorneys."

Asked whether he had done that, he said "yes," but later declined to elaborate or further specify to whom he spoke. The city did not immediately comment on what authority department heads have when approving separation agreements.

McKenzie said the city will comply with a Minnesota law and a Minneapolis ordinance that require governments to report certain offenses or misuse of public money either to law enforcement or to the state auditor. Donald McFarland, a spokesman for the state auditor, said they did not have information to share Tuesday.

As director of CPED, Frank made a salary of $178,660.

Andrea Brennan, the city's director of Housing and Policy Development, will head the department in the interim.

Liz Navratil • 612-673-4994