North Carolina State Auditor Dave Boliek released his office’s special report on the $305,000 settlement agreement between the City of Charlotte and Charlotte-Mecklenburg Police Department Chief of Police Johnny Jennings, which was initially kept from the public.
He announced in May that he would formally investigate the matter after a report by WBT News report that the Charlotte City Council allegedly held a closed-door vote to authorize a payment exceeding $300,000 to Jennings. This payment was reportedly intended to prevent him from filing a lawsuit against the city. The potential lawsuit stemmed from alleged reputational damage Jennings claims he suffered due to comments made by former council member Tariq Bokhari surrounding a controversy with bulletproof vests.
The North Carolina Office of the State Auditor (NCOSA) said in the report that the investigation’s objectives were to determine the circumstances and sources of funding for the city’s settlement payment and to determine whether the city’s actions complied with the North Carolina Public Records Act, the North Carolina Open Meetings law, and other applicable laws.
Boliek said in a press release that his office’s investigation found that, of the total payment, $280,000 came from the city’s General Fund and $25,000 came from the Risk Management Fund. The Risk Management Fund, which is typically used to pay claims made against the city, had a total of $27.4 million in expenses for Fiscal Year 2024.
The agreement’s text revealed that the city’s payment to Jennings included severance pay, additional vacation days, a retention bonus, a merit-based salary increase, and a reimbursement for legal expenses.
The auditor said the payment had been kept from the public until he requested that Charlotte Mayor Vi Lyles disclose the amount. Five days later, Jennings announced his upcoming retirement and released information about the agreement. The breakdown of the settlement is as follows:
- $175,000 in severance pay from the General Fund
- $45,699 in a retention bonus from the General Fund
- $45,284 value of extra vacation days from the General Fund
- $25,000 legal fee from the Risk Management Fund
- $14,017 in retroactive pay increase from the General Fund
A further breakdown reveals that, according to the city treasurer, the retroactive pay increase of $14,017 and the retention bonus of $45,699 were paid from the FY 2025 General Fund. The value of extra vacation days, totaling $45,284, was split between the FY 2025 and FY 2026 General Funds. The severance payment, $175,000, is scheduled to be paid in January 2026 from the FY 2026 General Fund.
The city confirmed that the expenditures paid from the FY 2025 General Fund were not anticipated or included in the city’s adopted FY 2025 budget.
However, the city stated that these costs were covered through other operational savings realized during the fiscal year. Additionally, the city stated that no internal document exists showing that the $175,000 severance payment was specifically included in the city’s adopted FY 2026 budget, as the settlement agreement had not yet been approved when the budget was proposed. However, the city determined that it was not required to pass a budget amendment to reflect the upcoming severance payment.
The report said it appears that Charlotte’s city council voted to settle with Jennings sometime between the closed session meetings it held on April 28 and May 5, in an effort to avoid litigation related to text messages he received from a former Charlotte City councilman. On May 8, the city officially entered into the settlement with Jennings.
Auditors also said that, as of the report’s publication, the city had not taken any steps to enter the terms of the settlement into its minutes or unseal the minutes from the closed sessions held on April 28 and May 5.
While the NCOSA made no findings regarding the funds used to pay the settlement or the city’s actions under the Public Records Act or Open Meetings Law, it did make three recommendations to promote full transparency with the public.
• Improve transparency in settlement reporting — The City of Charlotte should consider adopting a more nuanced policy or practice regarding the release of information related to settlements with employees. While much information related to settlements with employees may be confidential personnel information, at a minimum, the amount paid to an employee as a result of a settlement agreement is public information and should be “entered into [the city’s] minutes as soon as possible within a reasonable time after the settlement is concluded.”
• Timely release of closed session minutes — The City of Charlotte should consider reviewing its procedures for keeping meeting minutes to ensure that it includes “a general account of [all] closed session[s] so that a person not in attendance would have a reasonable understanding of what transpired.” Although a public body may seal closed session minutes from public inspection for a time to preserve the purpose of the closed session, such minutes should be released as soon as possible to promote transparency.
• Reevaluate use of General Fund for settlement payments — The City of Charlotte should reassess its treatment of substantial settlement-related costs — particularly those incurred to avoid potential litigation — as “normal operating expenses” and charging such costs to the city’s General Fund. Because the Risk Management Fund is designed to cover costs arising from unexpected claims and liabilities, the city should consider whether it is more appropriate to charge all settlement-related costs to the Risk Management Fund.
“We launched this investigation because the people of Charlotte deserve to know how their money is being spent,” Boliek said in the release. “This is the people’s money, and it shouldn’t be kept behind closed doors. Our report brought transparency to the City of Charlotte. However, as shown in the mayor’s response, City leadership doesn’t share our interest in being open and transparent about spending the people’s money.”
Lyles said in her response, dated Sept. 8, that the city maintains compliance with the Public Records Act, the Open Meetings Act, and the Personal Privacy Act, among other applicable laws.
On the recommendation of transparency, Lyles said the city interpreted the settlement agreement as personnel information, and the entire settlement agreement and related records remain confidential and not subject to public disclosure. But, she also said the city will revise, if necessary, the internal practice specifically pertaining to the release of settlements with employees to ensure compliance with state law.
On the recommendation of the timely release of closed session minutes, the mayor said the city currently keeps minutes, including those of closed sessions, and the city attorney’s office, in conjunction with the city clerk’s office, reviews them on a quarterly basis to determine which, if any, closed session minutes may be open to public inspection. Lyles said the city will continue this practice, and the city will also include the approval of closed session minutes on future agendas to ensure the public is informed. This recommendation will become effective immediately.
Finally, with regards to the recommendation of reevaluating the use of the General Fund for settlement payments, Lyles said the city utilizes trust documents applicable to the Risk Loss Fund to evaluate the payment of settlement-related costs. She said the city will review the trust documents to determine the source of funds utilized for the payment of the settlement-related costs, and analyze the types of settlement-related costs and the appropriate fund from which these costs should be paid.
The timeframe for completion of the recommendation is listed as six months from the date of the letter.
Boliek also said earlier this week that his office is investigating the Charlotte Area Transit System (CATS) after the murder of Iryna Zarutska, 23, on Charlotte’s light rail.