May 21, 2012
KNOXVILLE, Tenn. (WVLT) -- The Knoxville Tourism and Sports Corporation has voted to accept President and CEO Gloria Ray retirement in two weeks, if both sides' lawyers are able to work out terms.
“I am so proud of KTSC, and all the success and accomplishment that we have achieved as a team," said Ray in a statement issued after the hearing. "I appreciate the board taking time to hear from me today."
"It was clear that the board understands that I was told that every contract I signed had been properly approved and, that I entered into all contracts in good faith," she continued. "I look forward to working toward a resolution that is best for all parties involved.”
Moments after the vote to accept Ray's retirement, Interim chair Sue Brown said that when both the city and county mayor call for a change in leadership, they need to to take that advise "very seriously."
Ray told board members on Friday that she was willing to retire immediately, minutes after the board withdrew a motion to terminate her employment. She said her retirement would be dependent upon conditions negotiated with the board and later revised her departure date to two weeks from now.
Earlier the board voted to reject current contracts with Ray and seek to retrieve $96,000 already paid to her.
“I appreciate the difficult work of the Knoxville Tourism & Sports Corp. Board today and am encouraged by the movement toward change in the organization’s leadership," said Mayor Madeline Rogero
"I personally believe there was no wrongdoing on the part of the executive committee and deeply appreciate their service," continued Rogero. "Their resignations will ensure a fresh perspective moving forward, and help restore public confidence in KTSC.”
An attorney for the KTSC claims several parts of Ray's contract were not approved properly and therefore not valid. Attorney Edward Phillips argued two points of the contracts break state laws and bylaws.
"I have not done anything to cause my termination," said Ray defending herself after the board vote. "I am willing to retire if my lawyers and KTSC lawyers can work out an agreement."
Many of the points Phillips touched on focused on incentives, which totaled more than $100,000. Phillips added that Ray's consulting fees have sometimes taken her over her cap, which also raises legal questions. He pointed to a $46,000 bonus payment that was taken from hotel tax money. Duncan admitted he was only board member who signed off on it
"No payments were made or promised that I was not told was approved by the board. It was all signed by the chair (former board member David Duncan)," Ray added.
Duncan stepped down earlier this week.
Ray and Duncan told auditors that while the contracts were designed by "either Duncan or Ray or both," they were approved by the executive board. Phillips noted that the Executive Board claims to have had no knowledge of the details of the extensions or reconciliation agreements.
"They knew they were signing off on extension," said Phillips, "just not what was in them."
Another clause would have reportedly paid Ray over $300,000 in bonuses for staying on as president, and Duncan said he was the the only member who knew about the arrangement.
"One person cannot sign off on this," said Phillips.
Ray's job came into question earlier just days ago when word of her $400,000 salary with incentives came to light.
An auditor in Friday's hearing said there was no way to compare Ray's salary to other CEO's because other cities divide their tourism and sports companies.
