Current, former South Lake Tahoe employees: City manager created ‘toxic’ workplace | TahoeDailyTribune.com

Current, former South Lake Tahoe employees: City manager created ‘toxic’ workplace

Claire Cudahy & Ryan Hoffman

South Lake Tahoe City Manager Nancy Kerry is on indefinite paid leave following two straight council meetings where her performance was discussed in closed session.

South Lake Tahoe Fire Rescue Chief Jeff Meston has been appointed as the acting city manager, the city confirmed Wednesday.

It's unclear why Kerry is on leave — and if the move, which was made on Tuesday, was her decision or council's. The Tribune could not reach Kerry for comment on Wednesday or Thursday.

Citing legal concerns over discussing closed session business, South Lake Tahoe Mayor Wendy David declined to elaborate on the circumstances resulting in Kerry's leave. Other members of council either refused to comment — deferring to David — or did not respond to phone messages left by the Tribune.

Just eight months ago, Kerry received an "excellent performance review" and a 5-percent raise from City Council. Within four months of that review, the city entered into an agreement with Municipal Resource Group, LLC. According to a document obtained by the Tribune through a public records request, the city contracted the services of MRG partner Mary Egan to conduct an "assessment of the City leadership effectiveness, the culture of the senior management team, succession planning status and related issues."

On MRG's website, Egan is described as a licensed private investigator who handles workplace investigations as well as executive level performance evaluations. Egan did not return a message left Thursday — the document obtained by the Tribune states Egan is "not to discuss the scope or product of work, or my participation in it, with third parties."

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According to the document, dated Oct. 9, Egan planned to meet one-on-one with Kerry, the heads of all city departments and all five members of council. It was agreed that the city would pay Egan $250 an hour in an amount not to exceed $10,000.

The Tribune could not confirm what initiated this review so soon after her previous evaluation nor why an outside firm was brought in for this review.

On Tuesday, Jan. 23, the Tribune observed Egan entering City Council's closed session where Kerry's performance evaluation was agendized. City Council said there was no reportable action at the time, and Kerry's review was again agendized for closed session at the Feb. 6 meeting.

After meeting for 3.5 hours behind closed doors this Tuesday, City Council again said there was no reportable action. That evening, however, Mayor David called Chief Meston and asked if he would accept the position of acting city manager, according to Meston.

NORMAL PROTOCOL?

For the past two months the Tribune has been looking into Kerry's treatment of city employees after receiving a tip that her conduct was being evaluated.

Prior to the Jan. 23 council meeting and Kerry's evaluation, the Tribune reached out to all members of City Council. Those who responded, upon questioning, waffled on whether it was normal to use an outside firm for the city manager's evaluation — a task typically conducted by City Council.

Councilmember Brooke Laine, however, characterized the use of an outside firm for Kerry's evaluation as "abnormal." Laine said Kerry's June review conducted by all five members of council was the norm: "[It's] how we have for 50 years reviewed our city manager and city attorney. That's just how we do it."

The Tribune spoke with three former councilmembers who agreed that the use of an outside firm deviated from protocol.

Kerry, however, told the Tribune in January that it's not uncommon for cities to bring in outside resources for city manager evaluations.

"What's the culture? What can improve? What works and what doesn't?" said Kerry. "It's a good idea to ask other people — that way you get different ideas and thoughts."

Councilmember Tom Davis reiterated this point, saying he "had some concerns" but he's "always got concerns."

"We brought somebody in this time because we wanted to make sure we're covering all the bases," said Davis. "And we wanted it independent. Maybe if you do it internally somebody is afraid to come forward."

'TOXIC' WORK ENVIRONMENT

After speaking with seven current and former employees, ranging in department and seniority, a picture emerged of a workplace where yelling, public berating and undue reprimands are commonplace — a portrayal that Kerry said she is "shocked" by.

All seven people spoke with the Tribune under the condition of anonymity. Current employees found that the traditional method of reporting workplace issues failed them. Former employees — none of whom were fired — feared retribution from a previous boss that one employee described as "vengeful" and another "a master manipulator."

The Tribune has therefore opted to change the names of the employees and only speak generally about the employee's interactions with Kerry so as not to reveal the sources.

Though not illegal, the culture crafted by Kerry's management style, the employees said, resulted in a workplace that is at best uncomfortable and at worst "toxic."

"For a lot of employees, they really at times live in fear that if they cross her, she is going to make their lives a living hell," said Steve, a former employee. "She'll talk about you behind your back, she'll slam you, and now you're just on the out. It's yelling. I've been in situations where she absolutely goes ballistic and you just sit there and wait for it."

Several of the employees were quick to point out that despite this treatment, they regard Kerry as "a brilliant woman" and "incredibly smart." Kerry's fiscal achievements are well known: elimination of over $30 million in debt, reduction of the city's healthcare costs, and recognition for excellence in budgeting from the Government Accounting Standards Board.

But the effects of her management are costing the city in other ways, sources said, with the loss of long-time, experienced employees. Kerry's treatment was specifically cited as the reason for leaving by three of the former employees the Tribune spoke with.

"I'd wake up and look in the mirror and all I could do was agonize about going into work and running into Nancy. It was horrible," said Jennifer, a former employee, who regularly took notes about her interactions with Kerry to protect herself if she got fired. "I put up with the bullying for a long time."

Witnessing other employees' attempts to seek help through the city's human resources department backfire, Jennifer decided to leave instead.

For former employee Diane, who cited Kerry as her reason for leaving, the workplace was so unbearable she said she became depressed.

"Especially at the airport the work environment is unpleasantly toxic. Not just that you can't stand it, but people don't want to come to work. People are afraid to share an opinion," said Diane, who said she went to human resources multiple times, but was ultimately advised that reporting a "hostile work environment claim" was "not a good career move."

Diane pointed out that most people fear filing claims about the negative work environment because the human resources department reports to Kerry. Kerry only reports to City Council.

"The person that monitors or evaluates the work environment is Nancy Kerry — the person making it hostile. It's not an effective evaluation of the environment," added Diane.

Current employee Jamie reiterated this point.

"If you go to HR, she finds out about it. She will monitor people's email accounts regularly," said Jamie. "She is good at twisting things to make it so that the person who is making the allegation is the liar or making it up. They are the one with the issues."

Multiple employees pointed out the "trickle down effect" that Kerry's management style caused. Former employee Brandon experienced the "chain of screaming" first-hand.

"I've seen Nancy yell at her managers and in turn those managers yell at us," said Brandon. "That kind of atmosphere is very unhealthy to even get work done."

'TOUGH JOB'

When the Tribune spoke with Kerry prior to the Jan. 23 meeting, she acknowledged that some city employees might not like her on a personal level — a reality that comes with handling controversial issues and difficult decisions.

"It's a tough time. We're obviously in the middle of labor negotiations, we got through the retiree benefits, and a lot of people were upset about that," said Kerry. "I think it's a tough job in a tough community with a lot of tough issues."

Kerry said being a public employee is a hard job, one in which you're vilified on social media and the subject of often unjust criticism.

On Thursday the Tribune reached out to city department heads to inquire about Kerry's conduct and the overall workplace culture. Some of those who did respond would not comment, while others deferred questions to the city's communications department.

Several city councilmembers who spoke with the Tribune in January said Kerry has performed well in her role as city manager.

"Nancy had an outstanding performance [review] in June…" said David. "She, like all of us, we have things that we are outstanding at and things we work on together."

Asked on Wednesday if she personally still had confidence in Kerry's ability to perform as city manager, David would not comment.

"I don't think that's appropriate to answer right now. She's still our employee," said David. "I do think I owe taxpayers a little more information. I am bound by the Brown Act not to talk about what happens in closed session … unless we have reportable action."

David was able to confirm that Kerry's evaluation was complete. Neither David nor other councilmembers reached by the Tribune Wednesday would speak to the findings of the evaluation.

The agreement between the city and MRG noted that a "summary written report" would be presented to City Council in closed session. The Tribune requested the document, but was informed on Monday, Feb. 5, that "there is no [such] document that exists," according to an email from City Clerk Susan Alessi.

WORK CONTINUES

There is no timeline for Kerry's leave from her position as city manager. Kerry could not be reached for comment Wednesday or Thursday — her city-issued cell phone was not in service and an email was returned with an "out of office" reply. She did not respond to voicemails left on her personal cell phone and a message sent via Facebook went unanswered.

In a phone call with the Tribune, Fire Chief Jeff Meston said he was not necessarily surprised to be asked to serve as acting city manager — both the fire chief and police chief have served as acting city manager at times when the city manager was out of town.

Pointing to ongoing labor negotiations, questions on how the city will handle the newly legalized marijuana market, and continued controversy over SnowGlobe Music Festival, Meston acknowledged that he would be working long hours. He will continue to serve as fire chief while filling in for Kerry.

"For me I think it's really a matter of more work hours. … It's just a matter of splitting time. Time management really," Meston said pointing to his past work experiences.

Meston, a veteran firefighter and chief, was hired by the city in 2013 more than six years after he moved to Lake Tahoe as a retiree. At the time he was hired, he had 32 years of firefighting experience. Since joining the city the chief has received multiple statewide recognitions. In August 2017 he was voted president-elect of the California Fire Chief's Association.

As acting city manager, Meston said he will be relying on the experience and knowledge of department heads to address the critical issues facing the city. Despite the heavy workload, the acting city manager said he is confident the city's work will continue largely unimpeded.

"The city is fortunate to have a strong team on the bench, so to speak … the reality as I see it is it's really kind of being the orchestra leader, which is really no different than being the fire chief," he said.

Mayor David agreed.

"Jeff Meston … is a respected leader throughout the state of California so I don't believe it's going to impact the city operations in any negative way," she said.

On Wednesday, Meston led the city's scheduled "all hands" meeting — a regular meeting intended to bring city staff together for updates and to recognize employees for achievements. "Everybody seemed upbeat and positive," said Meston, adding that he received "good feedback" and words of encouragement from city employees.

"I will never be as well-versed as Nancy Kerry is on any of the issues that will occur over the next period of time, whether that's a week or who knows … but I don't think I need to. I think we'll do fine."

How we got here

Late in 2017 the Tribune received a tip that there was possibly an ongoing evaluation of City Manager Nancy Kerry’s conduct in the workplace. Recognizing that, if true, such an evaluation and the reason for it would be of public interest, staff members began making phone calls.

After hitting some early roadblocks, those efforts largely slowed through the holidays. With the new year came renewed efforts.

Staff started compiling a list (without outside help) of former employees who worked for the city while Kerry was manager. Efforts were made to track down these former employees and contact them. One declined to speak, two more didn’t respond to multiple messages and several said they would speak, but only on the condition they remain anonymous. In locating, researching and interviewing each source, the Tribune found nothing that would call any of the individuals’ credibility into question.

At the same time, the Tribune started reaching out to current employees. As was the case with the former employees, the current employees were contacted on an individual basis.

When the agenda for the Jan. 23 City Council meeting was released, the Tribune learned that a performance evaluation of Kerry was taking place. The same day the agenda was released, the Tribune made phone calls to all five members of City Council and to Kerry.

Upon completing those interviews, the Tribune decided against publishing at that time. Instead, the Tribune decided to wait for the evaluation process to unfold.

On Wednesday, the city announced Kerry was on indefinite leave. Mayor Wendy David confirmed the evaluation was complete. The Tribune continued reporting.

During the entirety of the process up until this point, the Tribune has talked on the record with four of the five members of City Council (Councilman Jason Collin declined to comment via text message).

Staff members interviewed seven individuals who spoke on the record, but on condition of anonymity.

Four different people spoke to the Tribune off the record — those conversations did not contradict on-the-record reporting.

The Tribune spoke with Kerry in January and, upon learning of her leave, made repeated attempts to reach her for comment. Department heads were given an opportunity to comment as well.

A total of five public records requests have been made — three of those are still outstanding.