By: Richard Montenegro Brown | Original Article at pe.com
Beaumont, which has been the focus of local and state investigations, agreed to part ways with its city manager Tuesday, ending a two-decade career effective Nov. 15.
The separation and settlement agreement – which will pay Alan Kapanicas $213,702.57 – awaits Kapanicas’ signature.
He has been on paid administrative leave since mid-June as investigations by local and state officials continue into the city’s finances and relationships with former consultants that helped run the city for two decades.
Kapanicas’ home and the offices of the consultants were raided by the Riverside County District Attorney’s Office with the help of the FBI in April.
Kapanicas will remain on paid leave through Nov. 15, according to the terms of the separation agreement, when his employment contract with the city will end.
The City Council approved a modified version of a separation and settlement agreement proposed by the city manager’s attorneys at its meeting Tuesday. The vote was 5-0 in favor.
“As one of the newer council members, this is an extremely difficult decision to make … to think about how we can settle this with the least amount of fiscal impact for the city,” said Councilman Mike Lara, who was elected in late 2014 as one of three reformers along with Mark Orozco and Lloyd White.
The agreement pays Kapanicas the rest of his salary, as well as accrued vacation, sick and holiday time in increments through November.
Approval of the agreement was seen as the least costly avenue for members of the council to bring the issue to a close.
A consultant working with the city said Kapanicas has an “imperfect contract” that was lacking basic tenets that are standard in “99.99 percent” of city manager contracts, namely a city manager serving at the will of the council.
Bob Deis, who is working with Urban Futures, a consultant hired by the city earlier this year to unearth institutional problems in management practices and to help prepare a budget, said Kapanicas’ contract did not allow for a “separation of convenience,” or the ability for the majority of the City Council to vote to end the city manager’s contract without cause.
The result was a threat by Kapanicas’ attorneys, the Law Offices of Granowitz, White and Weber, to sue the city for wrongful termination.
Orozco said the situation facing the city “turns my stomach,” while Lara promised to never let the city get into such a predicament again.
Tuesday’s decision came down to choosing either a settlement or a termination with cause that would then result in a court battle that Deis said could cost the city from $375,000 to $750,000 on top of paying Kapanicas’ existing contract.
Deis said the city is still financially insolvent, a problem that will exist for some years. In mid-September, the city passed a budget that included $4 million in cuts and the elimination of 23 positions. Kapanicas’ salary figured into that budget in personnel costs.
Kapanicas was said to be at the heart of many of Beaumont’s problems, according to elected officials and reports from Urban Futures and MGO Public Accountants, a consultant the city hired to conduct a forensic audit.
Calls made to Kapanicas’ home went unanswered Wednesday.
The District Attorney’s Office late Wednesday said there was “no update in the Beaumont investigation,” according to public information officer John Hall in an email.
Consultant Deis told the council Tuesday that in the event Kapanicas is convicted of any crimes stemming from his work with Beaumont, the city would get back any money it pays to him as part of the settlement and separation agreement.
Judy Bingham, a longtime critic of City Hall, soundly rejected the idea of a settlement.
“You are entering into a deal with a devil. Every contract entered into by Alan Kapanicas was a deal with the devil,” Bingham said Tuesday.
Councilman White, before his election, had also been a City Hall critic, saying he had made calls to the district attorney, the state controller’s office and the FBI to look into City Hall.
“It was all falling on deaf ears,” he said. However, White said, “In just 10 months we’ve accomplished some dramatic changes.”
White said the city has worked to restore accountability and transparency, instituting policy changes meant to keep an eye on budget numbers and city finances.
The settlement was a way the city could continue to restore fiscal stability and write a new chapter, Orozco said Tuesday.
“We’re going to look back at this as a turning point for the history of Beaumont.”