One year since severance issue came to light

What’s happened since, and what’s on the horizon?
By Brandon Gustafson | Aug 07, 2019

The Aug. 6, 2018, Mukilteo City Council meeting started off a fairly typical of Mukilteo’s elected officials.

A few special presentations kicked off the meeting, including an officer taking an oath to join the Mukilteo Police Department, and there was discussion about a new streets program, as well as business licenses.

Things were trucking along when Finance Director Michelle Meyer gave a presentation on the City’s second quarter finances.

While discussing the City’s use of vacancy savings, Councilmember Scott Whelpey had a presentation of his own, so to speak, presenting paperwork of 12 ex-City employees who were given severance while departing the City. The contracts totaled more than $200,000.

A few of those former employees, he revealed, had been given payments that didn’t align with City policy. None of the agreements had come before the council, and all the contracts, Whelpley said, were signed by Mayor Jennifer Gregerson.

This led to a long discussion on the matter, some accusations against Gregerson in regards to misspending, and multiple closed-door executive sessions.

Since that day, one year ago yesterday, a lot has happened in the grand scheme of Mukilteo.

A vote of no confidence passed, two councilmembers announced this is their last year on council, in the primary race (which is certified later this month) two others are running to stay on the City Council (but not keep their current seats), and the mayor and now-council vice president are two of eight candidates for Snohomish County Council. Additionally, there was a clear disagreement regarding the City’s audit, and, oh yeah, Mukilteo may not have a mayor next year.

So, let’s a look back at some key moments related to all of this over the past calendar year, while also examining some of what’s been said.

 

Initial meeting

As mentioned, Whelpley showed up to the Aug. 6, 2018, council meeting, documents in hand, looking for both answers and policy changes. At the very least, policy was changed.

Whelpley had conducted a public records request for 12 former City employees’ separation paperwork, and was confused as to where the money was coming from to pay for those agreements. He said there was no line item for severance pay, as well as why those agreements differed from the City’s policy.

“One of the issues I have is when it comes down to severance,” he said at the meeting. “Where is that money coming from?”

In one case, a former management services director was given one month of pay despite willingly resigning from his position. In two other cases, departing employees were paid three months-worth of salary in one lump-sum payment, despite the City policy stating departing employees who were fired without cause were entitled to two-months’ pay, paid monthly.

One of those employees was state Sen. Marko Liias, who was the City’s former policy analyst before being fired December 2017 during budget discussions. In addition to his receiving three months of pay instead of to, he’d also received over $6,300 in tuition reimbursement, even though there was no record of him passing the class, or that that was the cost of the course.

(Liias later told The Beacon he’d asked then-Management Services Director Steve Edin if he needed to submit those, but was told no. He later sent the transcript showing he passed the course, as well as the receipt.)

Councilmember Steve Schmalz peppered Gregerson with questions about whether she consulted the City’s attorney, and why she would sign off on paperwork if the agreements differed from Mukilteo’s policy.

Schmalz and others took issue with the contracts not coming before the council because they differed from Mukilteo’s policy. They questioned the legality of it.

The discussion continued, and included three closed-door executive sessions, before a motion was made where the City Council would now approve all severance agreements, separation agreements, memorandums of understanding, and collective bargaining agreements. Only Councilmember Bob Champion voted against the motion.

The tense meeting concluded, but it wouldn’t be the last time the situation was discussed at length.

 

No confidence

The very next meeting, Aug. 22, 2018, seemed to be another typical meeting, but at the tail end, Councilmember Anna Rohrbough made her displeasure with Gregerson’s leadership abundantly clear when she made a motion to vote no confidence in Gregerson’s leadership.

Rohrbough asked for progress on getting Liias’ transcript and receipt in the City’s hands, and Gregerson said she hadn’t yet discussed it with him.

Rohrbough said Gregerson regularly circumnavigates the process of City government by excluding the City Council from decisions it should be involved in, withholding factual and valuable information in order to serve her personal agenda, manipulating the truth and lies on record, and using department directors and city employees “as a screen, blaming them for the decisions you are ultimately required to make.”

Whelpley said the motion was necessary as there was “no adult supervision.”

“Now we (the council) have to do it,” Whelpley said.

Rohrbough’s motion passed 4-2, with Councilmembers Champion and Richard Emery  voting against it.

The motion was essentially a political statement, and Gregerson after the meeting said she hoped things could get back on track.

“Now that the council has expressed their views, I hope everyone can work together to focus on what matters most: providing excellent city services, ensuring public safety and planning for the future of the waterfront,” Gregerson said in an email to The Beacon that evening. “This is an important time for our community, and they deserve our focus on these important issues.”

 

Transcripts and emails

A week after the no confidence vote, Liias’ transcript and receipt were given to the City.

In an email from Liias to Edin obtained by The Beacon, Liias asked for his severance to be a one-time payment.

“I would also prefer a lump sum-payout if that is possible, rather than continuing to pay it out over a few months,” Liias said in a Dec. 5, 2017, email.

Whelpley told The Beacon he felt Liias had too much influence in negotiating his severance agreement.

“I don’t know of any other company/organization that can have an employee set their severance, tuition assistance, and payment terms that violates city policy to the tune of $30,000. Do you?” Whelpley said in an email. “Next time I think we should elect/hire someone who is a little smarter on City policy and what is best for the citizens they serve.”

In that same Dec. 5 email, Liias told Edin he had a copy of his tuition statement if the city needed it.

In an email to The Beacon on Aug. 27, Liias said his request for a one-time payment was due to the way he was dismissed, which was through a council vote on Dec. 4.

“I asked for the lump-sum payment because I was pretty disappointed in the way my position was eliminated, and I was ready to move on,” Liias said. “I also thought it would be simpler and easier for me and the city to wrap things up and move on.”

Liias said he wasn’t aware his request could potentially violate the City’s policy.

A few months later, Councilmember Schmalz made an email between Gregerson and the City’s attorney and an attorney from Ogden Murphy Wallace public, to show that Gregerson was told she should come to the council with one of the severance agreements.

The attorney said in a Feb. 9, 2017, email that if the City wanted to enter into a severance agreement that obtained a release of all claims in exchange for payment that would exceed what the departing employee would have received as severance, they could help draft something that “accomplishes that purpose.”

The attorney also said that the City’s attorney would be able to tell Gregerson whether the agreement would need council approval, “in light of the expenditure of funds that would be a part of it and in light of the fact that it would be a variation from the Employment Agreement that (I assume) they approved when he was hired.”

 

 

Attorney acquired

In late October, the council took another step forward in the severance issue, setting $10,000 aside for an outside attorney to look into whether Gregerson violated state law by signing off on contracts that differed from the City’s policy without council approval. Some councilmembers argued that state laws show the council has contract authority.

“It comes down to the separation of powers of City government,” Schmalz said at the time. “There was clearly an overstep by the executive department.”

The main argument against obtaining the legal services was that the City at the time was undergoing an audit.

“Many of these issues were brought to the auditors’ attention,” Councilmember Emery said. “They’ll say whether it needs more investigation.” Champion and Councilmember Sarah Kneller echoed Emery’s sentiments.

Those three were in the minority, however, and the council approved obtaining the attorney in a 4-3 vote. The council approved the attorney’s contract in December, which was for a maximum of $40,000.

During that discussion, Champion again shared his reservations of waiting until the auditors’ report was finished. Emery agreed with Champion, saying, “It doesn’t make any sense to me at this point. I can’t vote for it.”

Whelpley said the issue had gone up to the state Attorney General’s Office, and the council needed to protect themselves.

“$200,000 out the door,” Whelpley said at the time. “If you’ve done your homework, and you’ve read the emails, and you’ve read all the documentation, you’d know this is wrong and it’s been wrong for a while now.”

This resulted in a letter to Mukilteo residents that was made public in June. The letter wasn’t readily available on the City’s website, and The Beacon published the letter, in full, in July. It is also on mukilteobeacon.com.

 

City’s audit

The State Auditor’s Office released its report earlier this year, and while the auditors agreed there were some issues in terms of contract authority, they didn’t have any findings against the City or Gregerson.

The auditors found that the City hadn’t established a clear delegation of authority for what payments require City Council approval and what items the mayor can approve on her own.

Auditors also found that there was nothing in the City’s code or other adopted procedures regarding severance agreements until the council passed its motion last August. That motion, however, wasn’t supported by an approved written resolution or ordinance clarifying those conditions, which the auditors recommended be created.

Gregerson, not surprisingly, was happy with the report, saying, “I’m proud that we have received a clean financial audit. It speaks to our responsible stewardship of public funds and our excellent finance staff. I also am glad to move forward in helping the City Council establish a clear procedure and policy for the departure of employees. Their August motion provided good guidance, and now we can implement the auditor’s recommendation to affirm that through a resolution or ordinance.”

Others were still upset. Rohrbough and Schmalz wrote opinion pieces in The Beacon, saying they were upset with the lack of findings and that it was clear to them Gregerson broke state law.

 

Form of government

In the midst of severance discussions and allegations that the law had been broken, the council decided that change might be in order in terms of Mukilteo’s governmental structure.

In late May, the council approved a resolution to put a measure on the November general election ballot that, if approved by a majority of Mukilteo voters, would change Mukilteo’s government to a council-manager form. Instead of the mayor being the CEO of the City, an unelected City manager would run the day-to-day operations.

The City Council would still be a seven-person body, but instead of a council president and vice president, there would be a mayor and a mayor pro-tem.

If the measure passes, the new government will go into effect when the general election results are certified Nov. 26.

 

Election time

While Schmalz and Cook decided 2019 would be their last year in an elected capacity, others decided to pursue higher offices, and some wanted to fight to stay on the City Council.

Last November, Gregerson announced she was running for the Snohomish County Council District 2 seat, currently held by Brian Sullivan, a former Mukilteo mayor and councilmember. A few months later, she was joined by a fellow Mukilteo elected official – Anna Rohrbough.

In the City Council race, four seats are up in 2019 (Positions 4-7), and with Schmalz vacating his Position 4 seat and Cook doing the same with 7, that left Whelpley and Emery in Positions 5 and 6, respectively. Well, not so fast.

Emery announced his intention to retain his seat in April (about a month before the filing deadline). Whelpley, meanwhile, filed on the final day, but for Position 4, as it had the least amount of candidates at the time. Emery eventually swapped into the Position 4 race, but not to run against Whelpley, with whom he’d butt heads on a variety of issues.

The first wave of election results came through after The Beacon’s deadline this week, and results are certified in a few weeks.

 

What’s next?

Well, it appears the severance issue has been put to bed – at least for now – but there’s likely more drama on the horizon.

We won’t know whether Emery and Whelpley are moving on to the November ballot for a few weeks once the primary election results are certified. We also aren’t sure if Rohrbough or Gregerson will move on in their race.

We do know for certain that Mukilteo voters will have the chance to vote on the City’s government structure. Does that pass, and Mukilteo will have a government that’s not a mayor-council form for the first time since Mukilteo’s incorporation in 1947? Possibly.

There will assuredly be some new faces on the council next year through the City Council election, but there’s the possibility that if things fall a certain way, a new mayor will need to be appointed before a special election if Gregerson takes the race, or a new councilmember would need to be appointed if Rohrbough is elected to the County Council. Or, if Gregerson doesn’t make it through the primary or loses in the general election AND the form of government measure passes, her position is removed.

It’s been a busy, hectic year in terms of Mukilteo’s government, and by Jan. 1, 2020, things could look a whole lot different.

What a year it’s been.

 

Many residents have given their opinions on various government issues over the last calendar year, including the severance packages, obtaining an outside attorney, and the change in government. Have any thoughts? Write a Letter to the Editor and email it to mukilteoeditor@yourbeacon.net.

 

 

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