Former South Lake Tahoe city manager threatens litigation over councilmember comments in Tribune article
April 27, 2018
The attorney for former South Lake Tahoe city manager Nancy Kerry says comments by a councilmember in a recent Tribune article violated the settlement agreement that cemented her resignation.
In an April 18 cease and desist letter obtained by the Tribune through a public records request, Kerry's attorney Jacqueline Mittelstadt alleged that Councilmember Austin Sass breached the agreement's mutual non-disparagement clause, which prohibits either party from "saying or writing anything negative, defamatory or critical of the other party."
Mittelstadt quoted from an April 18 Tribune article on councilmember Brooke Laine's allegations of Brown Act violations in which Sass said he wishes he could share with the public everything that happened in closed session.
"I believe that doing such would clear this entire matter up and truly show who had the city's best interests at heart and who impeded the process because of a lack of objectivity," said Sass. "I look forward to an outside investigation and sincerely hope that all matters discussed in closed session can legally become public through such process."
Mittelstadt claimed that Sass's "innuendo that he possessed negative information regarding Ms. Kerry and/or her performance which justified the city's prior actions toward her, such as placing her on immediate administrative leave" violated the clause.
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"I have no idea what she is referring to," Sass later told the Tribune. "I never mentioned the city manager or made any comments about the city manager."
In the letter, Mittelstadt went on to say that the city "never provided Ms. Kerry the legally required written allegations against her, nor an opportunity to respond to any such allegations."
Kerry was placed on indefinite paid leave Feb. 6. Citing a personnel matter and the Brown Act, members of City Council refused to discuss why Kerry was placed on leave. This followed a leadership review by consultant Mary Egan of Municipal Resource Group, who was hired under direction by council in closed session — a move that Laine now says violates the Brown Act.
Mittelstadt wrote that it was City Council's decision to not "proceed with public forum discussions of events surrounding Ms. Kerry's departure" which would have given her "an opportunity to fully and completely respond."
The Tribune was not able to determine after multiple calls with councilmembers and Kerry's attorney if Kerry was asked or requested to hold the proceedings in open session. By law, however, an employer cannot waive the employee's right to closed session proceedings; only an employee can do so.
Mittelstadt further alleged that "[r]umor suggests Ms. Egan disparaged Ms. Kerry in closed session to which Ms. Kerry was not afforded an opportunity to respond as required under law and her contract."
Back on Jan. 23, the Tribune observed Egan, a licensed private investigator who handles workplace investigations and executive level reviews, entering City Council's closed session where Kerry's performance evaluation was agendized. City Council said there was no reportable action at the time
The original 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 that "there is no [such] document that exists," according to an email from City Clerk Susan Alessi.
Kerry's review was again agendized for closed session at the Feb. 6 meeting.
After meeting for 3.5 hours behind closed doors that afternoon, City Council again said there was no reportable action. That evening, however, Mayor David called South Tahoe Fire Chief Jeff Meston and asked if he would accept the position of acting city manager.
On March 6, City Council accepted Kerry's conditional letter of resignation, which included the settlement agreement.
The contract with MRG is set to come before City Council on Tuesday, May 1. Though the staff report composed by Meston says the city manager position has spending authority up to $50,000, he requested permission from City Council to authorize the $14,000 payment to MRG.
"In the last several years, similar services were retained pursuant to the City Manager spending authority," reads the staff report. "Specifically, Mr. Ted Gaebler was hired to conduct a variety of tasks including evaluation of the City Manager and Council/Staff retreats. Mr. Gaebler's services amount to a cost of $19,800. Retention of Ted Gaebler was not approved by the City Council and was authorized by the City Manager [Nancy Kerry]."
The staff report also included an amended agreement with MRG dated Nov. 16, 2017, which had an updated price due to hours worked beyond the original estimate.
Egan confirmed that over the course of her review, she met with Kerry, the police chief, fire chief, planning director, finance director, public works director, city clerk, interim city attorney and all five members of City Council.
Also on Tuesday's agenda is an item calling for discussion regarding councilmember Laine's April 14 opinion piece.
In this open letter to the community sent to local media outlets, Laine alleges "multiple violations of law, secrecy, manipulation, lies and power struggles."
Investigators with the El Dorado County District Attorney's office are currently looking into these allegations of City Council's Brown Act violations upon Mayor Wendy David's request.
Middlestadt concluded her cease and desist letter by warning that in any upcoming hearings where Laine's claims of Brown Act violations are discussed, "the City would be well-advised to omit any and all discussions of Ms. Kerry that hints at being negative and critical."
"Failure to do so will result in Ms. Kerry's seeking all available remedies for the City's actions, including damages and recovery of her attorney fees," concluded Mittelstadt.
Mayor Wendy David declined to answer questions emailed by the Tribune Thursday and attorney Nira Doherty did not respond to an email.
"The City of South Lake Tahoe is not the end for Ms. Kerry," added Mittelstadt. "She will enjoy a successful rest of her career in public administration unless elected and appointed officials in this town elect to 'ruin' her by continued public pronouncements disparaging her."
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