On Tuesday, the Haines Borough Assembly officially approved a $55,000 settlement with the former manager they fired in December. Some of the background about why the assembly made that decision came to light this week.
Bill Seward had been at the helm of the borough for about six months when the assembly voted 4-2 to terminate his contract with cause.
Shortly after, Seward said he was exploring a wrongful termination lawsuit. He also demanded severance pay.
Last week, the interim borough manager announced that the municipality would settle with Seward. The borough would pay him $55,000 and in return he would release the municipality from further legal action.
Borough attorney Brooks Chandler released a statement that said the borough would not be commenting further on the settlement. But Assemblyman Tom Morphet says he thinks the public is owed more of an explanation.
“In instances like these when we’re spending that chunk of public money we have to explain to the voters why we did that,” Morphet said. “Because we work for the taxpayers and the voters. And I know our attorney advised us to stay mum and not say anything, but we don’t work for our attorney, he works for us.”
Morphet says he supported the settlement because of a piece of the borough’s liability insurance contract that the assembly wasn’t aware of when they fired Seward. The insurance policy will only cover legal fees in wrongful termination cases if the municipality consulted an attorney before firing the employee.
The assembly did not contact their attorney as they moved toward terminating Seward during the December evaluation.
“In the ideal world, in the middle of that meeting when it became clear to us that we were about to terminate the manager, we would’ve stopped and said ‘Aha! Page 14 of the insurance policy, quick, call a lawyer!’” Morphet said.
He says because the assembly didn’t contact a lawyer before firing Seward, the borough could’ve been on the hook for attorney expenses if it went to court in Seward’s case. He says ultimately, settling carried less financial risk.
“I want to apologize to the voters that we’re spending this money,” Morphet said. “You know, apparently I should’ve known what was on page 14 of the insurance policy.”
Morphet is the only assembly member who has spoken publically about the reasoning behind the settlement. But at Tuesday’s meeting, two members spoke about the settlement in a different context. Heather Lende and Mike Case defended Morphet against statements from Seward’s lawyer, Isaac Zorea. Zorea told KHNS that he thought some of the things Morphet said about Seward had a racial motivation.
“There was no element at all of prejudice in there,” said Case. “And that smells to me like something an attorney would say, ‘if we said that, they might rush to settle.’”
“The implication that our decision or my decision was somehow racially based or racially biased is too preposterous to dignify with a response,” Morphet told KHNS in an interview.
The settlement was made official Tuesday. The assembly approved it in a 5-1 vote. Morphet dissented because he was not able to make a statement explaining the rationale behind the settlement.
The $55,000 will come out of the areawide general fund balance. A budget amendment to take that amount out of the borough’s savings was introduced Tuesday.
According to borough attorney Chandler, the settlement is almost equal to what the borough would’ve had to pay if Seward were fired without cause and received severance compensation.