In a special meeting called by Mayor Dennis Boback on Friday, June 3, 2016, a divided and contentious Fort Myers Beach Town Council voted 3-2 to terminate Don Stilwell “for cause” based on “nonfeasance.”
Nonfeasance is defined by Merriam-Webster as “the failure or omission to do something that should be done or especially something that one is under a duty or obligation to do.”
Boback’s motion included reference to Stilwell’s contract Section 7A “Termination For Cause” which includes misfeasance, malfeasance, and/or nonfeasance in the performance of his duties. The contract goes on to say, “In the event MANAGER is terminated for cause, MANAGER shall not be entitled to any severance payment, but would be entitled to payment for any accrued but unpaid annual leave.”
The motion included reference to the Town Charter Section 6.03 “Powers and duties” subsections (b) direct and supervise all employees, departments and agencies of the town; (d) ensure all laws, provisions of the charter and council directives are executed and (g) keep council fully informed of the condition and needs of the town and make written recommendations regarding town affairs.
Boback did not enumerate specific instances of violation of those manager duties by Stilwell, though the motion came following a discussion of Town finances.
Boback told the packed Council Chambers when he first opened the meeting that it was time to clear the air and find out exactly where the Town stood financially. Addressing Stilwell, he asked for a complete and thorough explanation of the town’s finances beginning when the water line project started in 2014.
Stilwell responded that Director of Administrative Services Maureen Rischitelli had prepared a summary of current balances, but he had not been informed that the mayor wanted over two years worth of financial reports at this meeting.
Rischitelli provided council members with financial data as of May 16, 2016 that showed reserve balances of $3.2 million and operating fund balances of $2.8 million.
Acknowledging that despite those balances, there are unpaid invoices from Mitchell & Stark and Tetra-Tech totaling $3.2 million for water line work that have recently come to light, Stilwell said he’s met with the directors of Public Works and Administrative Services and neither feel the delay in recognition of the invoices is their fault.
When the water line project began, it was paid for out of reserves, plus a FEMA funding grant, Stilwell explained. Then the county said they were ready to start the road project and the Town needed to stay ahead of the road project, so it’s been funded out of reserves and transfers.
In 2014, council authorized staff to investigate loans and they came back with a tentative loan from Sun Trust. A new Administrative Services Director rejected that loan as it included a provision where the entire loan could be called at any time, explained Stilwell. Staff subsequently pursued other private loans and a state revolving loan, which was just approved this week. Stilwell said the application has been in the works for months, but “the state kept asking for just one more thing.”
That loan will fully cover the $3.2 million in current bills and then some. Both companies have agreed to not charge interest or late fees on any unpaid invoices.
When questioned about how this situation was allowed to develop, Stilwell agreed it was unacceptable and that he had requested a third party audit to help determine what happened and make sure it doesn’t happen again.
Council member Tracey Gore questioned why Stilwell did not execute the Sun Trust loan that she said was approved by council on August 18, 2014. She insisted that council saw the loan documents, approved them and directed the manager to execute the loan. Council member Anita Cereceda, who was on council at the time, said that she did not recall that the loan was approved; just that staff was directed to work on financing.
Rischitelli added that she discussed the loan at length with Sun Trust and they insisted on keeping the loan call at any time language in place but the Town did not have $7.7 million to cover a call on the loan, leading Gore to ask Rischitelli if she felt she could over-rule a council decision, insisting that council had approved the loan at the August meeting.
The minutes for the 8/18/2014 meeting state: “PW Financing SunTrust Adopted — Direct staff to work with STI Institutional & Government Inc. (SunTrust) to secure Series 2014 financing in an amount not to exceed $7.7 million for the next phase of the water utility project.”
Council member Rexann Hosafros told Gore that she should read the language carefully; adding that the minutes indicate staff was directed to “work with” STI on a loan. “This is not a final approval of a loan.”
Stilwell added that he could add some good news – the Sun Trust loan had a rate of 1.8% while the state revolving fund loan is 1.02%. (That rate was later lowered to 0.92%)
He summarized the financial situation with the loan.
“Was there a glitch? Absolutely. Do we want to do it again? Heck no! You need to look at the environment we’ve had. I’ve been here 2 ½ years. In that 2 ½ years, we’ve had two Town Managers, 2 Town Attorneys, ten different council members. We are changing things. Daily it’s getting better. There’s better documentation and accounting, not to demean anyone who came before us. This town is like teenager; you grow up and need to do things differently. Right now, we have a great relationship with the county. When we found out about this (debt) we started doing things. We found out that we have a way to pay those invoices even if that state loan didn’t come through. We had a very firm commitment from others to pay those invoices via a loan with a low interest rate.”
Boback then read from prepared remarks, which included the motion to terminate Stilwell.
“I believe that the town has lost the faith and trust that the residents have placed in us to conduct the business of the people in an open and transparent manner,” Boback said. “I do not believe that the town is being operated in an effective and efficient manner under the leadership of our current town manager. I believe there has been a complete breakdown in communication between the town manager, the council and the residents, property owners and business owners of this island. I believe that in order to re-gain the faith and trust of the people of this island that we must make a change in leadership to help guide this town and this council in the very trying times and challenges that lie ahead.
“Having said that, I would put forward a motion to terminate the Town Manager for cause as allowed by his employment contract…”
Gore quickly seconded the motion, then Boback explained that the termination only requires 3 votes, but should there be less than a unanimous vote, the manager has 7 days to submit a request for a hearing according to the Town Charter.
Council member Rexann Hosafros immediately questioned the legality of terminating with cause when no hearing has been held; no evidence or sworn testimony has been presented. Boback responded that Stilwell could request a hearing.
Boback told council that he had already met with an unnamed private attorney who advised him on the subject and “it didn’t cost the town a penny.”
Hosafros questioned the mayor’s actions.
“I have a problem with you seeking outside counsel. We have an attorney. I don’t know if you’ve spoken to her or if the person you spoke to is even the appropriate person to speak to. I firmly believe that if you do this without a hearing for finding of cause, this town will suffer a lawsuit.
“You haven’t provided a major reason for termination, you haven’t educated me on the cause.”
When questioned about the cause for termination, Boback said he did not want to go into specifics. Hosafros told him that if he didn’t, then the court would find against the town.
She also noted that during the last council campaign, both new council members said they’d like to get rid of the town manager and in any lawsuit that could be used as evidence. Boback denied saying anything of the sort. But Tracey Gore weighed in.
“You said two,” Gore said, “so we both said we were going to get rid of the manager and we both won.”
Cereceda said she would not fire any employee without taking into account his entire body of work and she would not support the motion.
Gore said that she represented 6,000 people who are not happy with the direction of the town. “ I have to think about the people I represent.”
When the motion to terminate Stilwell was called the vote was 3-2 with Cereceda and Hosafros opposed.
Boback immediately introduced a motion to appoint Jim Steele as Interim Town Manager, noting that he can step right into the position.
Hosafros was again dismayed that the mayor had already spoken to Mr. Steele.
“I’m really upset that the mayor is going out and seeking an interim manager without any input. I am livid!”
Gore, on the other hand was pleased, “I am actually glad that you brought not just a problem, but a solution.”
The Town Attorney Dawn Lehnert acknowledged that she hadn’t researched the legality of the situation and that she lacked human resources knowledge. She said Stilwell was entitled to a hearing, but noted the Charter was not clear on whether he could remain on duty in the interim.
During the discussion Boback made and then withdrew a motion to put Stilwell on administrative leave.
Gore pointed out that when Town Manager Terry Stewart left, there was an interim manager appointed. Lehnert explained that when there is a resignation, as there was with Stewart in 2014, they can decide when they leave.
“In this situation, by firing him for cause, you are eliminating any of the benefits in the contract. You’re in an odd situation that I didn’t anticipate happening,” Lehnert said.
Gore added that the situation was not as complicated as council was making it.
“You’re confused,” said Hosafros, “because you took an action and you didn’t know what you were doing. You acted rashly and now you have a big mess.”
Cereceda then looked up at the full house and media presence and said, “Let’s remember that there are three TV cameras here and we’re going to look like idiots.”
Too late,” came a reply from the crowd.
Hosafros said that she thought Steele was an excellent choice but could not support the motion as she was unsure whether Stilwell was still the manager legally as his hearing had not been held.
“Don Stilwell has been terminated. I don’t know why this is so hard,” said Gore.
“I’m an attorney and I’m not sure,” said Hosafros. ‘I don’t know why you can be so sure.”
“I’m sure,” stated Boback as he called the motion to appoint Steele as Interim Manager, which passed 4-1 with Hosafros opposed.
The final question of the morning was who would negotiate a contract with the new Interim Manager. A motion was made that Boback work with Lehnert on the contract with Steele, passing 4-1 with Hosafros opposed. (During Monday’s meeting, the council reconsidered and appointed Hosafros to negotiate Steele’s contract rather than Boback.)
After the meeting, Cereceda and Hosafros both said they expected Stilwell to request a hearing.
“I expect Mr. Stilwell to avail himself of any and all remedies to clear his good name,” said Cereceda.
Hosafros suspects that the timing of the managers termination hints at major changes.
“It appears from recent events that big changes are planned by other council members as far as the budget and current projects,” said Hosafros. “The rushed nature of their action to fire with cause just before the first look at the budget and with the July break in the offing indicate to me a desire to make drastic shifts.”
Cereceda shared similar sentiments.
“Changing Town Managers right now is much like changing quarterbacks in the middle of a football game. Mr. Stilwell’s relationship with County staff and understanding of a project of this magnitude made him a valuable resource for the town. As to the budget, Mr. Steele has extensive background in budget analysis and will no doubt advise the Town Council well. I have no worries with regard to the budget.”
The mayor’s unilateral calling of the meeting, consulting an outside attorney and seeking an Interim Manager was also a concern for some council members.
“It is a concern to me that Mayor Boback did not consult with the Town Attorney regarding his plans,” said Cereceda. “It is a greater concern to me that such a decision was made without any other council member having had time or warning to be prepared to make that decision. He was the only one with a plan. I was uncomfortable with this proceeding from the moment it started until the moment it ended. I am afraid there will be residual effects not yet contemplated.”
Having expressed similar concerns during the meeting, Hosafros expanded on them afterwards.
“I am very concerned that the Mayor is acting outside of his authority,” she said. “He admits to having sought outside legal counsel and did not reveal the source….He also chose to independently begin preliminary negotiations with his choice for interim town manager without input from the other four council members. In fact, I believe he acted rashly in calling the special meeting less than one business day before a regularly scheduled meeting. He walked in without a well thought out plan and the results will, at the least, be damaging financially to the town.”