The Golden City Council on Tuesday approved a roughly $155,000 severance payout to former city manager Scott Vargo, who was fired earlier this month following a “racist incident” at a city fire station.

The payout is part of a separation agreement that was included in Vargo’s contract with the city. The payment includes six months of Vargo’s salary, equal to just over $143,000, as well as nearly $12,000, equivalent to six months of his medical benefits, if Vargo returns all city equipment and property in his possession within three days.

Despite Vargo’s termination being effective as of Aug. 12, the agreement sets his final date of employment with the city as Sept. 14. During that time, he can use any accrued time off and any unused time will be paid to him after his final day. By accepting the payment, Vargo also cannot sue Golden over his termination, per the terms of the agreement.

Vargo has until Sept. 16 to sign the agreement. He can also revoke the agreement after signing it but must return the payment to do so.

Vargo’s termination came after it came to light last month that a “racist incident” took place in a city fire station in March. Reportedly, a “Snoop on a Stoop” doll, which is an “elf on a shelf” type doll in the likeness of rapper Snoop Dogg, was found hanging by a rope in a stairwell in a fire station.

Members of City Council said they lost faith in Vargo’s leadership after the incident.

Vargo said in a public letter that the doll was immediately taken down upon its discovery, and the employee responsible for hanging the doll was terminated. However, city employees later learned of the incident and expressed displeasure with how the incident was handled by both Vargo and Fire Chief Kasey Beal.

Namely, employees did not believe Vargo and Beal’s response to the incident met the level of seriousness of what happened. Vargo said an internal investigation was launched into the incident and culture and diversity training was given within the fire department.

During the council meeting, Councilmember Don Cameron said that a city employee, who he did not name, told them they were asked for feedback on how the situation was handled regarding decisions that were “already made,” which the employee equated to damage control, not leadership.

Beal was terminated by the city several days after Vargo. A city spokesperson told The Denver Gazette that Beal did not have a severance agreement included in his contract as Vargo did.

After his firing, Beal told several news outlets that he intended to take legal action over his firing. The Golden spokesperson said that as of Wednesday, Beal has not officially informed the city of his intent to sue.

Vargo had served as Golden’s city manager since July 2022. Deputy City Manager Carly Lorentz has been appointed acting city manager as the council searches for a new permanent city manager.

During Tuesday’s meeting, the council also approved an agreement with Lorentz for her to serve as acting city manager, which includes a pay increase of roughly $1,900 per biweekly paycheck, equivalent to a $50,000 per year raise, for as long as she serves as acting city manager.