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Langley mayor tried to clean house as city called in lawyers on pay dispute

Langley Mayor Paul Samuelson tried to clean house in the city’s finance department after employees there raised concerns about his vacation pay, according to records released Friday by the city.

In response to public records requests made by the Record in the days following the swirl of controversy over the mayor’s pay in early July — prompted by City Treasurer Debbie Mahler’s request for the county prosecutor to investigate alleged “improper actions” by Samuelson — Langley’s lawyers released more than 300 pages of records on Aug. 6.

While relatively few of the documents are related to the controversy over the mayor’s pay, however, attorney bills included in the now-public records show the mayor had an extended meeting with the city’s attorneys on the same day that Mahler sent a confidential whistleblower memo to attorneys that called into question the mayor’s attempts to be paid for city work while on vacation out of state.

Records also show that in the days that followed, the city’s lawyers contacted a Bellevue-based headhunting company that finds permanent and interim employees for local governments, repeatedly called a manager in the risk-management section of the agency that handles the city’s insurance, and also contacted people who had previously served as interim financial officers for cities.

The city paid its legal team thousands of dollars to examine “personnel issues” in the days and weeks that followed Mahler’s memo about the mayor’s pay, and budget records show that Langley has already spent more than its entire budget for legal work in 2010 during the first six months of this year.

Councilman Robert Gilman said Monday he couldn’t say if the city council knew that the city’s lawyers were talking to others outside city hall about personnel changes.

He also declined to say exactly what he knew about the work the city’s lawyers were doing on behalf of the administration, and would not address the timing of the intensive ramp-up of attorney work and the dispute over the mayor’s pay that began just before.

Likewise, he deferred on questions about the city’s contacts with headhunters and any search for interim or replacement employees.

“You’re going to have to talk to Paul; that was an administrative action,” Gilman said.

When reminded that the city council approved the bills for all the legal work, Gilman said he did not examine the invoices before authorizing pay.

“What I’m saying is, we are, in many ways, we depend upon the staff and groups like the finance committee to alert us to these issues,” he added. “So we are now alerted.”

Samuelson did not return calls to the Record on Monday.

Legal bills pile up on city’s ‘personnel issues’

The internal turmoil at city hall over the mayor’s pay became public in early July, after city officials learned that Mahler had sent a letter to Island County Prosecutor Greg Banks, asking him to investigate possible “improper actions” by Samuelson.

In the letter, Mahler said the mayor had been paid for vacation time, and noted Samuelson’s claims to be always on the city’s clock, even while on frequent vacation trips outside the state. Mahler asked Banks to investigate; Banks later declined, but tipped off Samuelson about the letter after the county was set to release it to the Record as part of a public records request.

The problem over the mayor’s pay, however, was rooted in a series of ordinances approved by the council that made the mayor a full-time city employee and gave him a benefits package equal to the city’s department heads.

As Langley’s first mayor to be paid a full-time salary, Samuelson receives $53,532 a year, plus benefits.

One ordinance approved by the council set a 40-hour work week for the mayor, and Mahler raised concerns that the mayor was getting paid for vacation time he didn’t earn.

When she confronted him on Dec. 11, Mahler said the mayor became angry and said city staff had no business determining if he was on vacation or not, and said he was always working on behalf of the city, even when he wasn’t in town.

On Dec. 22, Mahler sent a confidential memo to the city’s legal team, repeating her concerns. She had also contacted the state auditor’s office, and the state had told her that paying for vacation time that had not been earned would be an illegal “gift of public funds,” and that the issue would be investigated during the city’s next audit.

Records released last week show the mayor met with two of the city’s lawyers on the same day; subsequent invoices show the attorneys working on e-mails to city staff, including Mahler, about the vacation-pay issue.

The amount of lawyer time spent on personnel issues quickly added up in the weeks that followed. Records show the time spent on personnel issues far outpaced the time the city’s lawyers spent on other things, such as reviewing ordinances, handling lawsuits or other city business.

The city spent more than $7,300 on legal fees for personnel issues during the five-month span of December 2009 through April 2010, according to legal bills paid by Langley during that time.

By comparison, those charges were higher than the costs the city tallied in a five-month period through June on the quasi-judicial hearings and review of Langley Passage. The city spent approximately $6,500 on legal work for the controversial housing project in the Edgecliff neighborhood.

The amount spent on legal review of personnel issues also greatly eclipses work by the city’s attorneys on other high-profile issues. Langley has spent just $200 this year on the legal review of its new zoning rules — which Gilman has called the “biggest policy initiative” faced by the council in years — and the legal work on the city’s recent moratorium also totaled just $200 through June.

During some weeks, in March and February, starting days after the council approved the last ordinance on the mayor’s pay — the one prompted by Mahler’s concerns that the mayor was collecting vacation pay — found the city lawyers working nearly every day of the week on personnel issues.

The city budgeted a total of $12,108 for legal work in 2010. Through June 30, the city has already spent $13,526 in attorney fees.

City council tries to put controversy behind

Langley’s elected leaders have tried to move quickly past the brouhaha over the mayor’s pay in recent weeks.

In a memo to city staff on July 2, the day after the mayor was told about Mahler’s letter to the county prosecutor, Samuelson warned city staff about an impending story in the Record about the controversy.

Samuelson said he was surprised that his pay was still a concern, given an ordinance on his compensation that was adopted in February, which he said resolved the issue.

“According to the city attorney and the prosecuting attorney, I have done nothing wrong and no laws have been violated,” Samuelson said in the memo.

The mayor noted he worked “many more hours on behalf of the city” than a typical workday or 40-hour work week.

“I take my position as mayor seriously, which is why one year into my term I left my barber business to devote full time to serving as mayor,” he concluded. “I want to acknowledge that this employee action and subsequent media coverage may effect the environment at city hall.”

Roughly two weeks later, the council repealed two ordinances that detailed the mayor’s pay, including one that was approved in mid-February that attempted to fix problems with the November 2008 pay ordinance that deemed Samuelson a city employee with the pay and benefits to match a department head. Council members admitted they made a mistake in labeling Samuelson an employee of the city, and the council and Samuelson said they never intended for the mayor to collect vacation pay.

The council is expected to give its final approval to a new ordinance that details the mayor’s benefit package at the council’s next meeting on Aug. 16.

Langley’s release of records related to the controversy came after two delays, with officials saying they needed more time to collect and review the documents. The lawyers did not release any e-mails between city employees or officials related to the pay controversy, and — citing attorney-client privilege — refused to release the memo Mahler wrote to the city’s legal staff that lies at the heart of the pay-dispute controversy.

The public also apparently does not have the right to review how the city spends its money on legal fees, as lawyers also blacked out information on attorney billing records in more than 30 instances in the documents released late Friday. The city’s legal staff said it could keep that information secret because it represented the “work product” of attorneys, or was covered by attorney-client privilege.

Langley’s lawyers also said, due to the impending vacations of staff members, further records would not be released until Sept. 10.

Concerns were raised earlier by city staff

It was the worry about the mayor’s accrual of vacation time — which could potentially leave the city on the hook for a financial payout at the end of his service with the city — that prompted unease in the city’s finance department.

Mahler wasn’t the only one worried.

Former city employee Mary Jo McArdle said she raised the issue with the mayor himself.

McArdle said she doubted the mayor was devoting 40 hours to city business — as the ordinance approved by the council dictated — while he was out of state.

“What could he possibly be doing as a mayor in Southern California? A mayor can’t do very much work from across state lines other than make a few phone calls or maybe write a few e-mails,” McArdle said. “For him to say he was working 24/7 …”

“I just said, that’s just not right. You’re in Southern California with your grandkids,” she recalled.

McArdle also said she took her concerns to Councilman Russell Sparkman, but said the councilman gave her “the brush-off.”

Sparkman said he had already heard from others about the issue. He also promised to look into it, she said.

But when she talked to him again later — the day Samuelson left for a trip to Utah with family in June — Sparkman defended the mayor and said he was working a lot of hours. McArdle just didn’t understand, the councilman said.

“He said you have no idea what were dealing with now, and he turned around and walked away,” she said.

Sparkman did not return a reporter’s call for comment Monday.

Growing troubles for Langley’s bottom line

McArdle, who was hired as the city’s public records coordinator in April 2008, said Langley’s tenuous financial situation in late 2009 made employees keenly aware of city expenditures that would push the town deeper into the red.

Things started to go downhill in November, and the relationship between the mayor and his chief financial officer worsened to the point where Samuelson wanted Mahler fired, McArdle said.

She said Mahler had been telling the mayor for months that she had concerns with the budget.

But trouble arose after a council member asked the treasurer about the budget and Mahler gave an unvarnished answer. It was an embarrassing moment for the mayor, McArdle said, because the council hadn’t already been told.

“That was the first time it had gone beyond the folks at city hall,” McArdle recalled. “So Paul was kind of caught being exposed, as the budget had been in a downward spin and it had always been kept under city wraps.”

“That began Paul’s attempts to find cause to have Debbie fired,” McArdle said. “From then on, he began to take steps to undermine the workings of her department.”

Soon after, she said, the mayor told employees in the finance department he was going to be making cuts under the guise of “restructuring” the department. Every job would be looked at, and it didn’t matter how long the employee had been with the city.

McArdle also said Mahler confronted Samuelson about singling out the finance department for cutbacks that reduced employee hours by 20 percent, while other city workers in other departments would get only 5-percent cuts. She said people at city hall could hear the mayor shouting at Mahler in his office.

“All of a sudden the city attorney bills started coming in,” said McArdle, who had the job at city hall of opening the mail and date-stamping it.

She also said she noticed something: Her name and Mahler’s name were showing up on the invoices, next to words that said “personnel issue.”

“Little things started happening around the office,” she added, noting that Mahler was being excluded from team meetings she normally attended.

McArdle said she thought her job was at risk, too, after she filed two whistleblower complaints about expenditures in the city’s building department, complaints she said the mayor took months to address.

McArdle said spending decisions were being made without the treasurer’s knowledge, including the hiring of an AmeriCorps worker and improvements the mayor authorized at the city’s surplus fire hall on Second Street, which was being rented out to private businesses.

Noting the shape of the budget, McArdle said the city was spending money it didn’t have.

“Things were being done that weren’t being run by Debbie. Budget decisions, which were just exacerbating the budget situation,” she said.

Spending decisions get greater scrutiny

Newly released public records from the state auditor’s office show Mahler also raised concerns about unbudgeted expenditures made by the city while it has been sinking in red ink.

Mahler alerted the state auditor’s office about the mayor’s approval of unbudgeted utility work at the city’s old fire hall on Second Street, now a rental property for a glassblower and a beer maker.

The work totaled nearly $4,500, and one contractor is still awaiting payment.

Some critics have said the bill should have been paid by the tenants. But Gilman, the mayor pro tem of the council, downplayed the expenditures at the fire hall.

“The administration is supposed to have some flexibility in the way that they deal with the budget,” Gilman said.

When reminded that the work was not actually in the budget — a central point of concern, especially given the city’s financial state — Gilman said it still fell “within the standard operating procedure that I’m familiar with.”

When asked if it was a wise use of city money at a time when Langley had been struggling financially, Gilman told the Record in an earlier interview that he had too little information to comment.

“These are all fine questions,” he said.

He recalled the controversy of Shirley Sherrod, a case that made national news when a government employee was falsely accused of racism, and said he needed to get more information before talking at length about the expenditures.

“Informed by that experience, I want to make sure I find out a little more before I offer any opinions,” Gilman said.

Budget records show the improvements at the fire hall were not budgeted in any capital improvement account, but were instead later assessed to a “city facilities maintenance” account that is now overspent at 268 percent

of the amount set in the city’s 2010 budget.

Mayor blames city treasurer

Samuelson, in an earlier interview with the Record, blamed the treasurer for authorizing the payments, a claim she later denied.

“Debbie authorized those,” Samuelson said.

“They should have been in the budget, and I don’t know why they weren’t in the budget,” he added.

The mayor also said that as part of the lease, the city was obligated to provide utility service to the property.

“It’s the landlord’s responsibility to provide service to the tenants. Any internal tenant improvements are the leasee’s responsibility,” he said.

“That was all talked about,” he said, in the finance committee and through the lease process.

If the treasurer had concerns about the payments, she shouldn’t have paid the bills, he added.

“She must have felt the funds were available in some form,” he said.

Mahler said she paid most of the bills for the fire station after the state auditor’s office told her she should.

“I felt the contractor did it in good faith and needed to be paid,” she said.

Mahler said she knew about the lawyer bills filled with costs on personnel issues because they crossed her desk for processing. She knew she might be replaced, though she said the mayor never spoke to her directly about it.

“All I know is I got bills every month that showed he had been talking to a municipal headhunting agency, and that the city attorney had been making calls to interim finance directors and interim city clerks,” Mahler said. “He certainly didn’t discuss it with me.”

Mahler, who has been city treasurer and clerk for nearly 18 years, said the situation made her feel “pretty darn bad.”

“It makes it very difficult to go to work every day,” she said.

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