Castro Contract: Were Termination Procedures Followed?

News 8 has learned new details about the employment contract of fired Rochester Housing Authority Director Alex Castro. Late Friday night, an RHA attorney emailed News 8 documents requested under the Freedom of Information Law.

Castro was fired during an RHA board meeting on October 14. Minutes reveal City Councilman Adam McFadden was hired at that same meeting, though the board chairman told News 8 the following day the board would consider several candidates.

An attorney for the board said Castro's contract was "overreaching," in that it went through 2021 and included a just cause and arbitration provision. Castro's salary upon termination was $140,584. Castro's attorney has said termination could cost taxpayers $1 million.

Castro was hired in 2010 at a salary of $125,000. In 2012, the contract was extended through 2016. In early 2014, the contract was extended through 2021. Both the 2012 and 2014 contracts have a termination clause, which says Castro can only be fired if:

"found guilty or confesses to a crime of moral turpitude, malfeasance, or misfeasance, including personal dishonesty, willful misconduct, breach of fiduciary duty failure to perform required duties, willful violation of any law, rule or regulation (other than misdemeanor traffic violations or similar offenses), specific proven incompetence or material breach of this Agreement. This Agreement shall not be terminated by the Authority during this term except upon a showing of serious or repeated failures on the part of Castro to comply with Authority policy, or upon a showing that Castro has failed without just cause to comply with any lawful decision or directive of the Authority or for similar just cause...Castro shall be afforded due process as proscribed in the Personnel Policy and shall be given an opportunity to present his side of any issue, which is purported to be grounds for dismissal for any reason."

The contract says Castro must be given written notice of any problems and have 30 days to make corrections. The contract also has an arbitration clause saying any controversy or claim must be settled by arbitration.

The RHA board did not follow these procedures, according to Castro's attorney. 

The minutes of the October 14 meeting say, "Chairman Moses and Director of Human Resources Milne had a discussion about the process for separation of employment.  Director Milne indicated that she has to review Mr. Castro’s contract and will have more information in a day or two."

The RHA board sent Castro a letter dated October 15 terminating him "effectively immediately." The letter bars him from RHA property.

The director who preceded Castro, Anthony DiBiase, had a termination clause that including a provision allowing the board to fire him without cause. In that event, he would get a full year's salary and 30 days notice. His contract also had an arbitration clause.

As part of our open records request, News 8 received performance evaluations of Castro's work. The date is not legible on one of the reviews, which generally gave Castro good marks. "Alex is highly regarded by the staff and members of the community," the review said. "He recognizes the importance of teamwork and fosters this among the entire staff. He is open and willing to work with all RHA stakeholders. He does not back down from doing what is right."

Another undated review gave Castro credit for improving morale, handling budget cuts overseeing the Voters Block housing project and increasing resident involvement.

RHA board chairman George Moses has said there were "questionable business practices" under Castro and the board wanted to "go in a different direction."

The records received by News 8 include McFadden's contract. His three-month contract has him working as a consultant through January 15, 2015. He is being paid $12,083.33 a month. McFadden does not have any benefits as part of this job.

The records also include Mayor Lovely Warren's termination letters to RHA board members. The mayor wrote, "As I hope you can appreciate, however, it is my intent to bring new voices to the various boards and commissions that have City representation, and to provide opportunities for others to serve in these roles."

The mayor followed up with two board members whose terms had not expired, telling them the previous administration had not filed the proper certification with the state, making their appointments null and void.

The mayor replaced five of seven board members upon taking office.

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