Severance pay that city-owned Memorial Health System has already paid to former CEO Dr. Larry McEvoy will be subtracted from a new $1.15 million separation package that city officials reluctantly decided to honor Monday.

Memorial issued a check Thursday to McEvoy that included six months severance, or about $335,000, under the terms of his 2008 employment agreement.

“From the city’s viewpoint, that agreement was valid at the time,” City Attorney Chris Melcher said Tuesday.

“The legal advice was that we could not, while we were reviewing the 2012 agreement, we could not be acting in bad faith or in violation of the 2008 agreement so that payment was due and that was made,” he said.

But Monday, the City Council decided to honor the new severance agreement rather than challenge it in court.

Former Memorial Board Chairman James Moore signed the new separation package the night before the council demanded that he and the other members of the Board of Trustees resign or be removed.

“There will be no double payment,” Melcher said. “Memorial will move forward and honor (the new agreement).”

In addition to six months severance, McEvoy also received $71,159 for 221 hours of accrued paid time off, and Memorial will pay his COBRA health-care benefits for six months.In related news, Mayor Steve Bach issued a statement Tuesday blasting the actions of the previous Memorial board.

“Greater oversight and tighter control of all City owned institutions is paramount. This kind of disastrous outcome must not be repeated in the future,” Bach said.

“Moving forward, we should have a transparent community dialogue, with appropriate checks and balances in determining the best governance model for all City owned institutions including Colorado Springs Utilities,” he said.—Contact Daniel Chacón: 476-1623Twitter @danieljchaconFacebook Daniel Chacon

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