By Jennifer Solis Correspondent
Newburyport Daily News
---- — WEST NEWBURY — A proposed $40,000 payment to complete a $100,000 settlement with former finance director Tracy Blais is garnering mixed reaction from town leaders.
Two selectmen and one Finance Committee member are recommending voters at the Oct. 29 special town meeting approve the $40,000 request.
But the remaining five Finance Committee members oppose funding the settlement balance. And Selectman Glenn Kemper — a named defendant in the suit — has abstained from voting.
Following her meeting with selectmen on Wednesday to review the special warrant, Town Moderator Kathleen “KC” Swallow stressed that discussion on town meeting floor must stay centered on the issue of the settlement — and not turn into a debate over the charges within the lawsuit or attacks against the parties involved.
But judging by the tenor of the finance board discussion that followed the selectmen’s meeting, the moderator may find that to be a difficult goal.
According to the 12-page settlement, which is now a public document available upon request from the town clerk, Blais has agreed to dismiss a superior court civil action suit she filed last year. In exchange, the town has agreed to pay her $100,000 — $80,000 from town coffers and $20,000 from Massachusetts Interlocal Insurance Association, the town’s insurance carrier.
A $40,000 reserve fund transfer previously approved by the Finance Committee coupled with the $20,000 from MIIA was to be paid within seven days of the signed agreement. Of that amount, Blais received $36,000 minus state and federal withholdings, with her attorneys getting $24,000.
Town meeting voters must approve the final $40,000, of which Blais would receive $24,000 and her attorneys $16,000.
However, if town meeting denies the remaining $40,000, Blais has agreed to settle for the $60,000 only.
“If the town fails to appropriate funds for the second payment, the first payment of $60,000 is deemed to be full and final settlement of any and all alleged claims,” the document states.
Given that Blais is willing to settle either way, some Finance Committee members are recommending against the article in an effort to save the town $40,000.
Chairman David Archibald, who has opposed the funding request, said his board is charged with recommending the best fiscal decision for taxpayers, not litigating the lawsuit or renegotiating a settlement already agreed to by selectmen. “It is what it is,” he said.
But others on the Finance Committee said they believe selectmen prematurely entered into an agreement for a case they say has very little merit.
Joe Uniejewski said from what he has reviewed, Blais hasn’t made a sufficient case for her charges that she was discriminated against and defamed by Kemper and former selectmen Tom Atwood and John McGrath in retaliation for a sexual harassment claim she had previously made against McGrath. Fellow committee member Bill Bachrach said he was also skeptical of the charges.
According to court documents, on Sept. 19, 2007, Blais filed a sexual harassment complaint against McGrath regarding “a series of sexually crude, unwelcome and inappropriate comments” she claims he made toward her. Blais says McGrath frequently commented on her marriage and sex life, asking if she was having an extramarital affair. In one instance, she alleges he closed the door to her office to tell her about a movie in which a character responded to a wrong number by referencing a sexual act involving the male anatomy. Blais and McGrath eventually entered into a private grievance resolution, in which neither party waived or released their claims. McGrath resigned as selectman in the middle of his term in July 2008.
The court document states that after Blais filed her sexual harassment complaint, McGrath and the others continued to “subject her to hostile treatment and respond to her complaint in a dismissive way.” She contends she “received no explanation” for a decision in February 2011 not to renew her contract after 19 years of service. Instead, she contends Atwood, Kemper and McGrath “intentionally” and “recklessly” made false and misleading statements and insinuations to the public and the Office of the Inspector General that she had misappropriated town funds and received unauthorized merit bonuses. The IG’s office cleared Blais of all allegations of legal wrongdoing eight months later.
In March 2011, selectmen ordered a $25,000 forensic internal control review of the Finance Department. It revealed significant problems with some internal controls and cases of both overpayment and underpayment in a sampling of employee payrolls.
But when Finance Director Warren Sproul took the helm in September 2011, he called Blais’ management of financial reconciliation and reporting “very strong” and said he saw “no red flags” in the audit, though he agreed internal controls could be improved within the system. Selectmen have not requested repayment from any employee who was identified in the audit as being overpaid, nor has the town reimbursed any employees identified as having been underpaid. Blais now works as town administrator in Newbury.
In a joint statement issued by both sides following the settlement, the parties involved said they “wish to avoid the cost and expense of prolonged litigation and focus on moving forward with other priorities.”
In a separate statement, defendants Kemper, Atwood and McGrath said, “We understand the town’s and Ms. Blais’ decision to reach a settlement in this case; however, we deny all allegations made against us by Tracy Blais and continue to believe that her allegations lack merit and substance. In addition, we strongly refute the sexual harassment allegations against John McGrath that underlie some of Ms. Blais’ claims.”
But, they conclude, “Despite our views, we ultimately support the settlement, which we believe to be in the town’s best interest.”
Uniejewski disagreed. He argued that the “unintended consequences” of the selectmen’s action with the settlement could set damaging precedent for future lawsuits if employees or contractors believe the town is quick to settle.
Sherrie Gadd, the lone Finance Committee member to support the additional $40,000 payment to Blais, said although it might seem like “a no-brainer” to reject the article for fiscal reasons, she felt a “moral obligation” to honor a settlement that selectmen negotiated for the town.
But Selectman Dick Cushing, who along with Kemper and Town Counsel Michael McCarron attended the Finance Committee’s discussion, said, “It’s more than a moral obligation.” If the town votes against what was negotiated in good faith, it could make any other plaintiffs more likely to “play hardball” when selectmen attempt to keep future suits out of court, he said.
Cushing said Uniejewski and the others are privy to only a “small fraction of what 12 lawyers during more than 32 executive sessions were throwing at us.” Going to court would have been “a wrenching affair” for the town, resulting in the likely disposition of many employees and residents and the delving into some very difficult charges, he said. A “take the money and run” attitude now serves the town very poorly in the long run, he added.
Earlier in the evening, Cushing criticized Kemper’s unwillingness to support the warrant article, saying, “The town is going through hard times right now and your abstention is not going to help.” Cushing and Knowles have both been strong supporters of Blais throughout the process.
Kemper would not change his vote, but did say he will be happy when the town has the issue behind it. Despite being named in the lawsuit, Kemper chose not to recuse himself from the selectmen’s discussion and vote on Wednesday, having previously done so “when necessary” at other meetings over the course of the last 1 1/2 years.
The Daily News has requested the minutes of all executive session discussions on the lawsuit and settlement. But according to town counsel, the minutes must first be officially released by selectmen and then redacted of any information that is not public.
Funding for the Blais settlement is the last of 13 warrant articles on the Oct. 29 special town meeting warrant. The meeting starts at 7 p.m. in the Town Annex, 379 Main St. A quorum of 40 is needed, with 90 voters required for votes on funding articles of $20,000 or more.