, Newburyport, MA

November 10, 2012

Town rejects final $40K for Blais

Despite funding denial, settlement will still proceed

By Jennifer Solis Correspondent
Newburyport Daily News

---- — WEST NEWBURY — Voters at a Special Town Meeting on Thursday rejected a plan to fund the remaining $40,000 of a $100,000 settlement to resolve a lawsuit filed against the town by former Finance Director Tracy Blais.

But because of how the settlement agreement was crafted, all charges in the suit were to be dropped, regardless of the outcome of Thursday’s vote.

Blais had agreed to settle for $60,000 if voters chose not to contribute the additional $40,000 from the town’s free cash account as the final portion of the payment, according to the agreement.

The settlement states, “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.”

Blais, who has since become the town administrator in Newbury, has already received $40,000 through a reserve fund transfer previously approved by the Finance Committee to bind the agreement. The town’s insurance company, Massachusetts Interlocal Insurance Association, is footing a $20,000 portion and covering all legal fees, except $10,000 incurred by former Selectman Tom Atwood. Atwood’s outstanding fees were funded with a second reserve fund transfer.

Atwood was named in the suit along with current Selectman Glenn Kemper and former Selectman John McGrath.

In exchange for the $100,000, Blais agreed to drop charges of discrimination, defamation, retaliation and breach of contract stemming from a decision not to renew her contract in 2011. Blais claimed that decision was related to an alleged sexual harassment complaint she filed in 2007 against McGrath, who has denied the allegations.

As part of the settlement, all parties agreed not to make any further comments about the negotiations.

Thursday’s vote, which was supported by a clear majority of the 124 voters at the Special Town Meeting, will likely end a long and bitter chapter in town history that, in some cases, pitted neighbor against neighbor.

But before they closed the book completely, voters signaled their distaste for how the lawsuit and settlement were handled by rejecting the second $40,000 in funding requested by town leaders to replenish some of the money spent from the reserve account.

But Finance Committee Chairman David Archibald said it didn’t make fiscal sense to pay $40,000 more if the suit could be settled for just $60,000.

But some voters supported the $40,000 settlement payment because they felt selectmen “acted in good faith” when negotiating on the town’s behalf.

“It’s the honorable thing to do,” Judy Mizner said. If the town wants people to negotiate in good faith in the future, it needs to honor its agreement to pay Blais the full $100,000, Mizner said.

Holly Colvin, however, contended good faith had nothing to do with it. She compared the settlement with Blais to the purchase of a new fire truck and concluded that voters would be foolish to pay more than they had to in either situation.

In response to Cynthia Bourquard’s question about why the insurance company was only covering a small portion, Cushing acknowledged he was “disappointed with MIIA.” He said the insurance company covered only some of what was an extensive array of charges in the suit. Cushing said his board was advised by legal counsel that the discovery process to litigate the case in court could have extended for 1 1/2 years or longer, with many town employees and residents called as witnesses.

But many voters still couldn’t get their heads around why Blais had agreed to go forward with her end of the bargain, whether or not the agreed-upon $100,000 amount was fully funded.

Under a second warrant article, town leaders sought to replenish the reserve transfer account with $30,000 from the free cash fund, but voters were not willing to build back the majority of what was withdrawn to pay Blais.

Originally funded at $66,500 this year, the reserve account balance is currently down to $12,800, an amount the finance board said is too low this early in the fiscal year.

Finance officials argued approval of the article would help the town avoid the need to convene another “costly” special town meeting in the event unforeseen circumstances tap the remaining reserves. But when asked how much it costs to hold a town meeting, no town official could offer even an estimated cost.

But voters decried using an account reserved for unforeseen contingencies to pay $30,000 in settlement costs and legal fees.

Rich Baker was unsympathetic when the finance board argued that the account could be tapped out well before the end of the fiscal year next July.

“Let them deal with a very short budget for the rest of the year,” Baker urged his fellow voters.

And Kristi Devine suggested voters would only be “endorsing bad behavior” by supporting the article.

But Devine was quickly and forcefully asked to take her seat when Town Moderator Kathleen “KC” Swallow deemed that her words had become personal attacks against selectmen and said her comments were inappropriate for town meeting floor.

It was not the only time during the 50-minute discussion that Swallow had to bang her gavel to redirect the tenor of the meeting.

Blais, Kemper, Atwood and McGrath were all in attendance. Blais sat directly in front of current Finance Director Warren Sproul, who was seated at the table she had occupied numerous times during her 19-year span as West Newbury’s finance boss. Several voters were seen approaching Blais to chat and offer her a hug when the meeting ended.