The board of Sylva-based Smoky Mountain Center for Mental Health accepted the resignation of agency director Tom McDevitt last week (Sept. 16) following a six-hour, closed-door interrogation into allegations that McDevitt had abused his power and taken advantage of his position for financial gain.

The Smoky Mountain Center provides mental health care to 15 western counties and is the state’s largest such agency geographically.

The 30-member Smoky Mountain board in July began questioning some of McDevitt’s actions, including the salary he earned as director of the agency’s non-profit Evergreen Foundation, the employment of his daughter, and profits his wife made from property transactions through the Foundation.

The Foundation is a non-profit 501c3 entity that exists solely to further the interests of the Smoky Mountain Center. It buys, sells and leases properties to mental health providers and distributes low-interest loans. Of the state’s 25 mental health agencies, Smoky is one of just a few to have a non-profit arm.

The Smoky Mountain News investigated the allegations against McDevitt and published the findings in an Aug. 20 article. At the following board meeting on Aug. 28, the board demanded McDevitt address some of the questions raised by the story.

The board compiled a list of questions that McDevitt responded to at the Sept. 16 meeting. Board members expressed varying levels of satisfaction with McDevitt’s answers, but agreed unanimously that it was best for McDevitt and the Smoky Mountain Center to part ways.

“Given all the information we had, it was a very appropriate decision,” said board member and Caldwell County Commissioner Don Barrier.

“Some of the questions were not necessarily answered to the fullest extent that I would have liked, but the appropriate action has been taken,” agreed board member and Haywood County Commissioner Mary Ann Enloe.

The board agreed that the multiple allegations against McDevitt made it impossible for him to continue leading the state’s largest mental health care agency.

“There was just too much animosity on that board for Tom to continue on,” said Glenn Jones, a board member and Swain County commissioner.

“I’m not necessarily pleased that we had to take his resignation, but I felt that perhaps that’s the only way that we can bring peace to the situation,” agreed board co-chair Ed Tarleton, from Wilkes County.

“We accomplished what we thought should be done because he was definitely a thorn to a lot of people,” added Barbara Hughes, a representative of Cherokee County.

It was barely two months ago that the board voted in favor of giving McDevitt a 5-year contract. He’ll now leave the organization on Dec. 31. The board has allowed McDevitt to cash in his nine months of accrued leave and will give him one year of severance pay.

McDevitt profited from position

Information shared with the board during the marathon closed-door talks laid out how McDevitt profited from his roles as leader of both the Smoky Mountain Center and the Evergreen Foundation.

Beginning in 2003, McDevitt’s reported Smoky Mountain Center salary started to increase dramatically. Between 2002 and 2003, it increased $19,642 and totaled $117,665. The increases in salary continued and got steeper — McDevitt received a $23,000 pay raise from 2004 to 2005; a $40,885 raise the following year; and a raise of $32,369 from 2006 to 2007. In five years, McDevitt’s reported salary rose more than $118,000 to a total of $216,407 in 2007. In contrast, the director of Mecklenburg County’s mental health agency earns $153,541 for overseeing a population roughly double the size of that served by the Smoky Mountain Center. The director of Asheville-based Western Highlands, an agency that last year served more people than the Smoky Mountain Center, earns $130,250 and receives none of the special perks awarded to McDevitt, such as a car and unlimited leave accrual.

Earnings from McDevitt’s role as director of the Evergreen Foundation helped his Smoky Mountain Center salary appear larger than it actually was. Though the two jobs were separate, McDevitt reported his Foundation pay as part of his Smoky Mountain Center salary from 2005 until January of this year. The higher salary made McDevitt eligible for larger cost-of-living increases. It also ensured more lucrative retirement benefits, which are based on the four highest consecutive years of salary.

McDevitt’s Evergreen Foundation salary has more than doubled from the $24,000 reflected in his 2005 employment agreement. McDevitt would have drawn $60,000 from the Foundation this year and $66,000 in 2009 for the eight hours of work he bills the non-profit for each week. McDevitt only gave vague answers when the Smoky Mountain News questioned him about exactly what he did each week for the Foundation, but he provided the board a list of responsibilities including managing the non-profit’s $20 million in assets.

Tax issue remains unresolved

Pages of documents presented to the board were dedicated to another issue that could prove lucrative to McDevitt — determining the exact date he was hired by the Smoky Mountain Center, which could determine whether he will have to pay state taxes on his retirement benefits.

Every state employee has a certain amount deducted from each paycheck that goes into the state employee retirement fund. That money is invested by the state and, upon retiring, the employee gets a monthly retirement check.

Employees that worked for the state for five or more years as of Aug. 12, 1989, get an extra perk – they don’t have to pay state income tax on their benefits, amounting to a potential savings of thousands of dollars.

McDevitt purportedly began working for the Smoky Mountain Center on Aug. 15, 1984, placing him right after the cutoff. North Carolina Office of State Personnel records show his effective date of hire as Aug. 15, 1984. The state’s retirement system also logged that as his hire date.

Then in May of 2006, McDevitt’s hire date was changed within the state’s retirement system to Aug. 1, 1984 — placing him in the category of employees who don’t have to pay tax on their retirement benefits.

The amendment to the hire date was prompted by Smoky Mountain Center’s then board chair, Casey Cooper. A letter from Cooper states that a review of McDevitt’s employment contract determined Aug. 1, 1984 to be his official hire date. The letter asks for the date to be changed in the system.

McDevitt maintains that he was hired by the Smoky Mountain Center on Aug. 1, 1984, but didn’t start working there until the 15th of that month. Indeed, records from the state personnel office show Aug. 1 to be the date McDevitt committed to work at the organization. The same records, though, show that the state considered McDevitt’s formal date of hire to be Aug. 15. Documents also show that McDevitt was only paid half a month’s salary in August 1984.

It is unclear at this point from talking to board members whether the changed hire date will be the subject of an external investigation.

Board decisions made by select few

Purportedly, McDevitt’s actions — particularly his pay increases — would have been approved by the boards of the Smoky Mountain Center and Evergreen Foundation. Yet members of the Smoky Mountain Center board say they were kept in the dark when it came to McDevitt’s salary and relied on the recommendations of the five-member executive committee.

“They did so much through the executive committee,” said Enloe. “They came back to the board and made all the recommendations. I know there was never any discussion of what (McDevitt) made. It was never talked about.”

Enloe said the executive committee failed to provide documents that reflected McDevitt’s salary, in much the same way the committee failed to produce copies of McDevitt’s contract for board members to study before they approved it in July of this year.

Hughes doubts the executive committee held much sway at all, and says most decisions appeared to be made solely by McDevitt.

“He’d send out agendas, but everything on them were things he’d already decided on his own,” she said. “He would rush things through so it was unclear. As time passed, he just assumed more authority.”

Tarleton, who is on the executive committee, defends the role it plays. He said the committee deals with smaller issues that come up. If every minor issue had to come before the 30-member board, it would take much longer to get things done.

But according to some board members, the executive committee went too far in its unilateral decision-making.

“The executive committee should never act on behalf of the organization without the consent of the board, and it appears that at times that has happened,” said Barrier. “If the bylaws want to turn over certain responsibilities or authority to the executive committee, that’s fine, but any action taken unilaterally by the executive committee is in my mind inappropriate and illegal.”

A new chapter

Although some had worked with McDevitt for several years, board members say they did not become aware of questions surrounding McDevitt’s actions until as recently as July.

“What we learned were not necessarily things we would have or should have known unless people came forward to tell us, and that’s what they did,” said Enloe.

Things snowballed from there.

“Once the issues that seemed problematic began to surface, then they surfaced quickly,” said Enloe. “These are not things everyone has known about for any length of time.”

Board members say they were quick to take action.

“The board acted relatively quickly to address these concerns and questions, and that’s important, because we’ve got to move on and get back to our mission,” Barrier said.

Barrier said board members took control of the situation — something the board has neglected to do in the past, when it tended to bow to the wishes of McDevitt.

“The board came together and acted as a board independent of any other influence, if you will,” Barrier said.

The process has been a big step for the board, which has struggled to adjust after undergoing a major expansion. Five new counties — Alleghany, Ashe, Avery, Watauga and Wilkes — came on board in July of 2007 and three more — Caldwell, Alexander and McDowell — were added a year later. The large geographic area has made it difficult for board members to meet face to face and has hampered an understanding of issues. Concerns about McDevitt brought forward two months ago by members of the seven original counties west of Asheville served by Smoky evoked no response from the newer board members.

Today, board members appear engaged and knowledgeable about issues the organization is facing. The board has also agreed to meet in person from now on rather than teleconferencing from separate locations in order to improve communication.

“We have a really great, open, responsive group of people,” Hughes said.

“I’m excited about the potential this board has,” agreed Enloe.

Board members are now looking to move forward and leave the McDevitt investigation behind.

“I hope and pray that we move on,” said Tarleton. “We have hammered this thing now to death. What issues that have been brought before us, I hope have been resolved with (McDevitt’s) resignation so that we can move on to bigger and better things.”

Hughes thinks McDevitt’s resignation will help the board do just that.

“He was the source of the problem and we’ve eliminated him, and now we can get on with the reason we are on the board in the first place,” she said.

Barrier is confident it will be a new day for Smoky Mountain Center.

“I feel that the organization is very strong and I’m excited about a very positive future,” he said. “We’re the largest (mental health agency) in the state and we have a tremendous opportunity to demonstrate the way a large, strong (agency) can act.”

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