Peck v. City of Henderson et al

Filing 1

COMPLAINT against all defendants (Filing fee $ 350 receipt number 09780000000001233418), filed by Mary Kay Peck. Certificate of Interested Parties due by 5/25/2009. Proof of service due by 9/12/2009. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B 1-7, # 3 Exhibit Exhibit B 8-15, # 4 Exhibit Exhbit B 16-23, # 5 Exhibit Exhibit B 24-31, # 6 Exhibit Exhibit B 32-38, # 7 Exhibit Exhibit C, # 8 Civil Cover Sheet, # 9 Summons)(Kirshman, Norman)

EXHIBITB

VERBATIM TRANSCRIPT
HENDERSON CITY COUNCIL MEETING
CITY COUNCIL CHAMBERS
NB-073 EMPLOYMENT CONTRACT
MARY KAY PECK, CITY MANAGER
APRIL 14, 2009

Present:

James B. Gibson, Mayor Jack Clark, Councilmember Andy Hafen, Councilmember Steve Kirk, Councilmember Gerri Schroder, Councilmember
Staff: Mark Calhoun, Assistant City Manager Shauna Hughes, City Attorney Monica Simmons, City Clerk Ann Wilkinson, Assistant City Attorney Stephanie Garcia-Vause, Director of Community Development Robert Murnane, Director of Public Works Steve Hanson, Director of Finance Becky Dresser, Deputy City Clerk Tedie Jackson, Minutes Clerk

TRANSCRIPT PREPARED BY TEDIE JACKSON, CITY CLERK'S OFFICE

Henderson City Council Meeting - April 14, 2009 NB-073 - Employment Contract - Mary Kay Peck, City Manager

Page 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

MARK CALHOUN, ASSISTANT CITY MANAGER: Item 73 is the Employment Contract for Mary Kay Peck, City Manager. ANN WILKINSON, ASSISTANT CITY ATTORNEY: Good evening, Mayor and Council. This is Ann Wilkinson, Assistant City Attorney. And before - - I'm not sure, can you hear me okay? MAYOR JAMES B. GIBSON: Yes. MS. WILKINSON: I can't hear myself. MAYOR GIBSON: All right. MS. WILKINSON: Before making a recommendation to Council on this item, I would first like to provide an overview of the background and some of the proposals that have been presented, as well as discuss the relevant portions of Ms. Peck's employment contract. To begin, I want to first note for the record that on March 11, the City Attorney's Office began communicating with Mr. Kirshman regarding the termination of Mary Kay Peck's employment contract and her employment status. Shortly thereafter, Mr. Cooper was retained as outside counsel on behalf of the City, and he has been engaged in ongoing discussions with Mr. Kirshman. In terms of a summary of the proposals that we have received, during the past few weeks, there have been two proposals that have been presented. The first one on April 1st , an intermediary verbally relayed to the City Attorney's Office that Mr. Kirshman was demanding $750,000 to resolve this matter. The City Attorney's Office followed up and requested that the terms of that proposal be provided in writing, but nothing was received.

Henderson City Council Meeting - April 14,2009 NB-073 - Employment Contract - Mary Kay Peck, City Manager

Page 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Subsequently, on Thursday, March - - excuse me. Subsequently, on Thursday, April 9, Mr. Cooper and I did meet with Mr. Kirshman. And at this meeting, 1Vlr. Kirshman offered three proposals. One that was regarding a resignation, one as a not-for-cause termination, and then some commentary/proposal with respect to a for-cause termination. In outlining Mr. Kirshman's proposals as I understand them, the first one regarding the resignation was for approximately $1.2 million. Shortly before Council tonight, I did provide each of you with a copy of a green sheet that was actually presented to us by Mr. Kirshman. I've made extra copies for the City Clerk's Office to include as supplemental back-up for this agenda item. With respect to this particular proposal, Mr. Kirshman - actually, I better keep a copy - - with respect to this particular resignation proposal Mr. Kirshman has demanded one hundred and ninety-five million, four hundred and forty-five dollars. MAYOR GIBSON: It says one million, one hundred and ninety-five thousand - MS. WILKINSON: I'm sorry. Yes. $1,195,455, as identified in the proposal. And along with this, he indicated that he would provide the resignation of Ms. Peck if this was accepted. Alternatively, he proposed that if the Council terminates Ms. Peck not for cause, then he indicated he would proceed to arbitrate her severance amount. And he would ask that the City continue paying Ms. Peck her salary and benefits while the arbitration it pending, and then

Henderson City Council Meeting - April 14, 2009 NB-073 - Employment Contract - Mary Kay Peck, City Manager

Page 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

will give the City dollar-for-dollar offset in the event - - or, at the conclusion of the arbitration. He also asked that the City consider engaging in baseball arbitration, which was described to us as each party presenting its last, best, and final offer and then the arbitrator would decide which offer was most reasonable. Finally, with respect to a for-cause termination, Mr. Kirshman indicated that he would ask the arbitrator to essentially ignore the terms of the employment contract and proceed to arbitrate the amount of full wrongful termination charges. That is my summary of the proposals that we have received. With respect to outlining some applicable provisions in Mary Kay's - - in Ms. Peck's contract, under paragraph 5C, the Council may terminate Ms. Peck not for cause; however, if they choose to do that and find a not-for-cause basis, they must give her a 30-day written notice before her termination can be effective. If she is terminated not for cause, based on our reading of the contract, Ms. Peck would be entitled to a severance amount for the balance of her contract, which we have calculated to be 18 months. For that 18 months, that's approximately $337,500.00 in salary. And she would receive 100 percent of her accrued sick leave, which is $155,000.00 - - approximately and 100 percent of her vacation leave, which is approximately $42,000. That's the not-for-cause calculation under the contract provision.

Henderson City Council Meeting - April 14,2009 NB-073 - Employment Contract - Mary Kay Peck, City Manager

Page 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

With respect to a for-cause calculation, under paragraph six of her employment contract, Council may terminate her employment for cause at any time and without prior notice. The for cause is specifically defined in and set forth in paragraph six of her contract. It outlines various facts that would - - it would - - circumstances that would mean for cause has been met. In particular, I believe that subsection - - paragraph six, subsection four, provides that if you find there's been intentional and continued failure to SUbstantially perform her duties, then she has - - then you have a basis for terminating her for cause. Our calculation under this for-cause termination would be - - would entitle Ms. Peck to her vacation leave, which I outlined before. That's approximately $40,000.00, $42,000.00, and a portion of her accrued sick leave based on City policy, which, as I read today, would entitle her to 75 percent of her currently accrued sick leave hours for roughly a cost of $116,552.00. Finally, I just would like to note paragraph 17 of the employment contract identifies that the exclusive remedy regarding the controversy or conflicts pertaining to this contract is to pursue arbitration. We're here tonight for Council to take its action, whatever that may be, with respect to her employment status. In the event there is a conflict or controversy, then her counsel can proceed to exercise that paragraph under her contract. With that, Council, I would recommend that - - the City Attorney's Office would recommend that you not accept the proposal

Henderson City Council Meeting - April 14,2009 NB-073 - Employment Contract - Mary Kay Peck, City Manager

Page 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

offered by Mr. Kirshman and that instead you proceed to take action as permitted by the contract. MAYOR GIBSON: Thank you. I want to - - before we get into a broader discussion, I want to talk just for a moment about this concept of evaluation. The - - because there is an explanation. And I think that there is more to this than what has been announced here this evening and in the press release that Mr. Kirshman provided the media. Prior to the time when we would have done the evaluation - I don't remember the months because I don't have them readily available to me, although I'm sure we could piece it together - - I met with Ms. Peck and had a conversation with her about her performance. I also indicated to her that I was aware that there were concerns that had been expressed by other members of the Council. I had not spoken to all of them, but I had had occasion to overhear conversation. And I recommended that it was critical that she make the rounds and sit down individually on a one on-one basis, have face-to-face discussion with each member of the Council. That actually occurred. 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. And I informed Ms. Peck that I was concerned about having such a meeting. I had no - we had no interest in - - or, I had no interest in seeing her reputation impaired and having any problems in the future. So I thought it best and I advised her to that extent. My recollection of the conversation was that she agreed with me.

Henderson City Council Meeting - April 14,2009 NB-073 - Employment Contract - Mary Kay Peck, City Manager

Page 7

1 2 3 4 5 6 7 8 9 10
11

I encouraged her to circle back to the members of the Council with whom she had done evaluations and to make certain that she addressed over and over in whatever degree was required by members of the Council the concerns that had been raised. Some of those concerns had very serious - - carried with them serious implication. That's the advice that I gave her. Over time, I met with her and we had occasion to talk in general, in specifics, and about things that I recommended that she consider. My belief was that she was arranging meetings with other members of the Council. I believe that she did hold some of those meetings. Within the last couple of months, I became concerned that the evaluation and the conduct that had been the subject of commentary needed to be addressed further, so I encouraged further discussion with members of the Council. And my understanding as of, I don't know, about a month ago or maybe a little longer, was that all but one of the members of Council had been - - had had an opportunity to sit down and review Ms. Peck's performance. I received an email from one of the members of the Council requesting that the item of her evaluation be placed on the agenda a month ago. I forwarded the request to our City Clerk and I notified Ms. Peck of the request. That is the history of the process by which we got to where we were one month ago when this item, or a similar item, was last on the agenda.

12 13 14 15 16 17 18
19

20 21 22 23 24

25