Wednesday, April 15, 2009 | 12:03 a.m.
The Henderson City Council fired City Manager Mary Kay Peck on Tuesday, saying she mismanaged the budget and created a “culture of fear” among city staff. The council appointed Assistant City Manager Mark Calhoun as interim city manager until a contract could be completed installing him fully in the position.
The city owes Peck $116,552 for accumulated vacation time and a portion of sick leave.
Peck did not comment during or after the meeting, but her attorney, Norman Kirshman, said he would take her case to an arbitrator to determine her compensation. Peck was 18 months into a three-year contract. She received an annual salary of $225,000.
After remaining silent on the reason Peck was asked by city officials to take a 30-day leave on March 17, council members spent more than an hour listing grievances that city employees apparently had told them, as well as their own reasons why she should be “terminated with cause.”
One reason: Council members and Mayor Jim Gibson said Peck had failed to provide them with the full scale of the city’s budget shortfall.
After already cutting about $53 million from the current fiscal year budget ending June 30, city officials reported at the meeting that they need to trim an additional $7.4 million because of a shortage in franchise fees.
“Now, when we have pretty much played our hand, we find that there is nearly $7.5 million we had no clue about and that comes because of our inattention to an important revenue stream,” Gibson said.
When the city went into a financial crises mode in November, the council asked Peck to provide it with monthly reports on actions that could be taken to balance the budget.
Not only did Peck not provide the accurate information on the budget but she also allegedly threatened employees not to talk to the council about it, Gibson said.
“In my estimation, that’s a breach of the manager’s responsibility to the elected officials,” he said.
Councilwoman Gerri Schroder said the decision was not personal but was a business decision for the city.
“I feel that information was intentionally kept from us and I believe that the conduct to the staff prevented the staff from informing us of vital information that has led us to this point in our financial budget,” she said.
Peck has worked for the city for 14 years, previously as an assistant city manager and planning manager.
“I really felt up until recently that we had a very good employee that had been placed in the wrong job,” Councilman Jack Clark said. “The job was just too much.”
Clark said former employees came to him saying they quit because they didn’t want to wait to be fired by Peck, which created a “culture of fear.”
“We simply cannot have a culture in our city where people are afraid,” he said.
Each council member echoed Clark’s allegations but did not identify the employees that lodged complaints or give specifics on when the conversations took place.
“Not a single person was identified. Everything was hearsay,” Kirshman said. “And it still doesn’t explain with all the horrible things she did why they never reduced it to writing.”
Until Tuesday, Kirshman said Peck was never given a reason for the leave nor did she ever receive a written evaluation of her performance during her 18 months on the job. According to her contract, Peck was to be evaluated annually in October.
“If there’s been a failure here, the failure has been on the part of the city,” he said. “There have been no evaluations. There is nothing negative or derogatory in that (her personnel) file.”
Gibson said he and each council member met with Peck individually behind close doors in recent months to relay their concerns and those of city employees. Those face-to-face meetings counted as her evaluation, which her contract does not specify has to be in writing, Gibson said.
“Following those meetings, I came to the conclusion that if we were to conduct a public hearing, an evaluation in a meeting like this in full view of the public, that the consequences could be dire,” he said. “I informed Ms. Peck that I was concerned about having such a meeting. I had no interest in seeing her reputation impaired and having any problems in the future.”
Kirshman said he presented an offer to the city attorney on April 9 with three proposed solutions that included Peck resigning for $1.2 million; arbitrate the severance amount if she was fired “not for cause"; and for both sides to present an offer and allow an arbitrator to determine her final compensation.
Peck will refute the allegations when she testifies before an arbitrator, Kirshman said.