The Damascus City Council has agreed to pay its city manager, Greg Baker, $10,000 plus legal fees in exchange for Baker's agreement to not sue the city for defamatory statements made by Damascus Mayor Steve Spinnett.

During its Monday, Dec. 17, meeting, the council approved the release agreement by a 6-1 vote, with Spinnett casting the only no vote. The agreement also includes an amended contract — which some are calling a golden parachute — that provides Baker a year's worth of salary and medical benefits if Damascus residents vote to disincorporate as a city next November.

The agreement also states that Baker can get one year of severance pay and benefits if he resigns because of "substantial interference by the Mayor or any member of the City Council in City administration."

And because the contract is valid through 2014, if Baker resigned for such reasons, he could get a two-year payout, plus a year of paid health benefits.

Baker, of Kansas City, Mo., began his duties as city manager in early July, taking the job in part because he likes a challenge. Damascus has struggled to agree on how the area should be developed since incorporating as a city in 2004. And since Spinnett took office in 2011, the council has been embroiled in fights over everything from alleged secret meetings to campaign sign placement and theft.

Councilors have complained they can't accomplish anything because of all the distractions.

The release agreement and improved severance package stem from a dispute between the mayor and Baker that began just two months after Baker started as city manager.

City staff on Sept. 5 reported to Baker that the mayor's wife, Cindy, had stopped by City Hall and appeared to have been using a cell phone to take photos or images of confidential code enforcement documents that contained a Damascus resident's personal information. The documents were on a city employee's desk.

Baker reported the allegation to the Clackamas County Sheriff's Office, which investigated and found no evidence of criminal conduct or wrongdoing of such photos being taken on or deleted from Cindy Spinnett's cell phone.

Defamatory statements

Spinnett, during a Sept. 17 council meeting, which is televised, read a statement that he'd already posted to a Facebook page.

“In my opinion this is the sleaziest amateur political maneuver I have ever seen. Perhaps if city manager Greg Baker was managing instead of spending his time concocting a political smear campaign he would have a staff that knew how to handle sensitive information in a more professional manner.”

Horrified city councilors and Baker asked Spinnett to apologize for his damaging statements.

Instead, he upped the ante with a new public statement.

"I regret referring to Mr. Baker's campaign of misinformation to the media regarding my wife as sleazy and amateur," Spinnett said. "I now find Mr. Baker's actions to have been instead calculating and deliberate."

Baker is out of town for the holiday and was unavailable for comment on his new contract.

Spinnett said he completely opposes what he called “that potential payoff of a quarter of a million dollars."

The approved agreement is valid through December 2014. So, for example, if Baker resigned tomorrow due to mayoral interference, he would receive his year of severance plus payment for 2014, totaling roughly $230,000, plus one year of health insurance coverage.

The improved severance package compensates Baker for alleged non-monetary harm he has suffered as a consequence of Spinnett's actions, including emotional distress and damage to professional reputation, according to the agreement.

Before councilors had a chance to discuss the agreement during the council meeting, Spinnett tried to get City Attorney Ronald Guerra to say the council could fire Baker for not meeting with the mayor for three weeks.

"Is that just cause for termination?" Spinnett asked.

The attorney said making such legal determination on the fly would be "inappropriate … in a meeting such as this."

He was sitting next to Baker at the time.

Position “precarious”

The mayor's statements put the city in a "precarious legal position," said Council President Diana Helm. "We do feel that his (Spinnett's) comments are so vindictive that there is a potential lawsuit."

Baker's potential legal claims against the city include but are not limited to those for retaliation, breach of contract, defamation and deprivation of a liberty interest without due process, according to the agreement.

This coupled with the possibility of Damascus disincorporating next year led the council to rework Baker's contract to provide what Helm described as a safety net of more job protections and benefits.

According to the agreement, the changes recognize the fact that the city doesn't want Baker to resign, he relocated from out of state to accept this position, “he has already experienced retaliation for faithfully carrying out his duties as City Manager, and he would suffer substantial financial and professional harm if abruptly terminated for political reasons and through no fault of his own.”

The release agreement's $10,000 payoff also avoids litigation and potentially saves Damascus taxpayers hundreds of thousands of dollars, Helm said.

“The mere filing of a lawsuit would cost you substantially more than the value of a release agreement,” Guerra said, adding he recently represented a client who spent $125,000 defending a lawsuit that was dismissed before it went to trial. “This represents nuisance value.”

Under Baker's original contract, if he were fired without cause — or for any reason the council saw fit — Baker would receive two months' salary for each year of employment, plus health insurance premiums for an equal number of months. Severance was capped at six months of salary, meaning Baker would have to work for the city for three years in order to reach that maximum amount.

Generous severance packages are the norm for city managers because such positions are the governmental equivalent of a chief executive officer, Guerra said. City managers also are considered at-will employees, meaning they can be fired for any reason. Given the nature of politics — and the fact that it is the city council that hires and fires its city manager — the position comes with some inherent risks that severance packages are designed to counteract.

Baker's original severance package, however, was rather stingy in the wake of outgoing city manager Jim Bennett's one-year severance package, Helm said. The council felt it was too generous compared to what he'd accomplished as city manager, so it negotiated a smaller package for Baker, she said.

“We were gun shy,” she said. “We went too far the other way.”

Pushing for apology

Councilor Barbara Ledbury, the longest serving member on the city council, kept pressing Spinnett to apologize to Baker throughout the Dec. 17 meeting, which was her last one because she did not run for re-election.

"I mean, it would be so simple to do it and look how much money it would save if all he would have to do is just apologize.

I mean, here it is, all the taxpayers are going to have to pay all this money just because you won't apologize?" she asked. "…I don't understand. I totally don't understand."

Spinnett said he could answer her question and has chronicled the reasons, but did not want to discuss them publicly.

"I don't think it would bring healing to the community right now," he said.

"I would think it would bring healing all the way around," Ledbury said.

" … Is it the testosterone in the male?" she asked, followed by wild laughter from the audience. "... Females, you kind of give and take a little bit. You work with people."

"We're going to miss you, Barb," Councilor Marlo Dean said.

"If you want to have a city remain as a city, this would be the best way to do it, right now, is if you were to apologize," Ledbury continued, clearly exasperated.

A few yeses and applause came from the audience.

Councilors then began to cast their votes for the contract amendment and release agreement.

"I'm being forced to have to say yes, because you won't apologize," Ledbury said.

More yes votes followed.

At last, it was Spinnett's turn to vote.

"No," he said.

Aghast, Ledbury asked, "You don't want a city to remain or a plan to take place or anything?"

"Councilor Ledbury," Spinnett said, silencing her.

"OK, sorry," she replied, and stopped talking.

And just like that, the matter was dropped.

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