HomeMy WebLinkAbout10222018 City Council Laydown - Report on Investigation Requested by City Council✓J pF SF� /
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MEMO OFFICE OF THE
CITY MANAGER
TO: Mayor Squires and Seward City Council Me ers
FROM: Jeff Bridges, Interim City Man
DATE: October 22, 2018
SUBJECT: Report on investigation requested by the City Council.
Summary of Findings
On September 25, 2018 at the Regular Meeting of the Seward City Council, a continuation of the
Council Meeting of September 24, 2018, the following motion was adopted:
"Direct the city manager to investigate the propriety of all the statements made by the finance
director on August 22, 2018 to determine if in violation of the city's defamation and harassment
policy and to determine if there was a violation of a confidentiality or personnel code, and to
investigate the allegations of fraud against Towsley, and provide a report to the public".
This impetus for this motion was a verbal exchange between City Finance Director Kristin
Erchinger and City Council Member Suzanne Towsley which took place at an August 22, 2018
Special City Council Meeting.
Attorney William Evans of the Anchorage law firm Seder, Wendlandt, Evans, and Filippi was
hired to conduct the investigation. Through a series of interviews and his review of the records
related to these issues, Attorney Evans conducted and completed the investigation. His full report
is attached to this memo.
In the issues were defined as follows:
Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special
Meeting constitute defamation in violation of the City of Seward's 2016 Defamation,
Verbal Assault or Harassment Policy?
2. Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special
Meeting breach any confidentiality or personnel rules of the City of Seward?
3. If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was there
credible evidence to support her complaint?
The conclusions of the investigation are as follows:
1. Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special
Meeting constitute defamation in violation of the City of Seward's 2016 Defamation,
Verbal Assault or Harassment Policy?
Answer: No. Per the policy, defamation is the unprivileged oral or written publication of
a false statement of fact.... The key issue is whether or not Ms. Erchinger's comments
about "having filed a complaint against Suzanne Towsley for fraud" is a false statement of
fact. The investigation revealed that Ms. Erchinger did complain to then City Manager Jim
Hunt regarding issues with Ms. Towsley's time sheets which Ms. Erchinger considered to
be fraudulent. Mr. Hunt in his interview stated that complaints were made to him by Ms.
Erchinger regarding filing false time sheets by Ms. Towsley and that he did take corrective
action, however, no records exist in Suzanne Towsley's personnel file of the complaints or
any corrective action taken at the time. "It is, therefore, not surprising that Ms. Towsley
would believe Ms. Erchinger's comments on August 22 to be both false and defamatory as
there is no evidence that she had previously been made award of the complaints being
lodged against her" (City of Seward, Report or Investigation p. 8, line 7-10).
2. Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special
Meeting breach any confidentiality or personnel rules of the City of Seward?
Answer: No. The comments made by Ms. Erchinger were made from information that is
not protected from disclosure nor gained from confidential sources. This is true also for
the statement regarding an alleged workplace violence incident that took place in 2014.
This issue involved a city supervisor and a city employee who at the time was a minor.
Although it was investigated at the time and the supervisor served a suspension for the
improper behavior, no official records of the incident exists since they have been removed
from the employee's personnel file.
3. If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was there
credible evidence to support her claim?
Answer: Yes. The complaints by Ms. Erchinger to Mr. Hunt appear to be supported by
credible evidence. "It is important that this not be interpreted to suggest that Ms. Towsley
actually committed fraud. It simply means that a reasonable person having the same
information as Ms. Erchinger would have been justified, at the time, complaining of
possible fraud". (City of Seward, Report of Investigation, p. 10, line 7-10).
Since no investigation of the complaints regarding Ms. Towsley' time sheets was made at
the time, and it is not possible to conduct an investigation now with the time that has lapsed,
therefore, there is no way to conclude that Ms. Towsley was incorrectly filling out time sheets.
I would like thank Mr. Evans for his diligence and expediency in this matter.
500 L Street, Suite 500
Anchorage, Alaska 99501
Telephone: (907) 677-3600
Facsimile: (907) 677-3605
www.alaskalaw.pro
October 18, 2018
Clinton M. Campion
Allen F. Clendaniel
William J. Evans
Attorneys at Law Lea E. Filippi
Carolyn Y. Heyman
John M. Sedor
John C. wendlandt
Via Email: jbridges@cityofseward.net
Jeff Bridges, Interim City Manager
City of Seward
410 Adams Street
P.O. Box 167
Seward, AK 99664
Re: City of Seward; Report of Investigation
Our File No. 5099-0001
Dear Mr. Bridges:
This report documents the investigation and findings concerning comments made
by Finance Director Kristin Erchinger during the public comment period of a Special
Meeting of the Seward City Council held on August 22, 2018. The active investigation
commenced on October 2 and concluded on October 16, 2018.
The investigation involved in -person and telephonic interviews of several persons
with personal knowledge of the events at issue. In addition to the interviews and a review
of Seward's Charter, Code of Ordinances and policies were conducted. Information from
personnel files, newspaper articles, email messages and written statements were also
reviewed and considered during the course of the investigation.
Description of Investigation:
The scope of the investigation was determined pursuant to directions received by
the Interim City Manager from the City Council.' Per the Council's direction, the
investigation was to include:
The propriety of all the statements made by the finance director on August
22, 2018 to determine if in violation of the city's defamation and harassment
policy and to determine if there was a violation of confidentiality or personnel
I Email exchange between Bridges and Ballou, September 25, 2018.
Jeff Bridges
October 18, 2018
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Attorneys at Law
code, and to investigate the allegations of fraud against Towsley, and
provide a report to the public.2
A complaint regarding this incident was filed by Council Member Suzanne Towsley
on October 5, 2018.3 Ms. Towsley's complaint states:
Please accept this complaint against the City of Seward Finance Director
for violating the City Defamation, Verbal Assault and Harassment Policy,
Page 2, Prohibited conduct, (4)
"Defamation, which (sic) judicially defined to mean and here means the
unprivileged oral or written publication of a false statement of fact that
exposes the person about whom it is made to hatred, contempt, or
ridicule, or subjects that person to loss of good will and confidence of
others or so harms that persons reputation as to deter others from
associating with him or her. Defamation is considered a legal offense
and the City will not tolerate any acts of defamation."
At a special meeting of the Seward City Council on August 22, 2018.4
Ms. Towsley amended her complaint the following day to include more details
regarding the events of August 22, 2018 and to add additional instances of alleged
defamation or harassment engaged in by Ms. Erchinger against other persons.5
2 Id.
3 Towsley Complaint, October 5, 2018.
4 Id.
5 Towsley Amended Complaint, October 6, 2018. The additional instances of alleged
defamation and/or harassment committed by Ms. Erchinger against other persons as
set forth in Ms. Towsley's amended complaint were not researched as part of this
investigation. Given the factual basis for the determinations made in this investigation,
the other alleged incidents, even if true, would not have altered the factual findings of
this investigation.
Jeff Bridges
October 18, 2018
Page 3
Questions Presented:
Attorneys at Law
1) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council
Special Meeting constitute defamation in violation of the City of Seward's 2016
Defamation, Verbal Assault or Harassment Policy?
2) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council
Special Meeting breach any confidentiality or personnel rules of the City of
Seward?
3) If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was
there credible evidence to support her complaint?6
Answers:
1) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City
Council Special Meeting constitute defamation in violation of the City of
Seward's 2016 Defamation, Verbal Assault or Harassment Policy?
Answer: No.
At the special city council meeting on August 22, 2018, Ms. Erchinger took the floor
during the public comment period to address an on -going dispute between her and Ms.
Towsley.' Ms. Erchinger indicated there was "bad blood" between her and Ms. Towsley.$
Ms. Erchinger attributed the bad blood to having "filed a complaint against her for fraud"
6 The Direction by the City Council to the Interim City Manager requested an
investigation into "the allegations of fraud against Ms. Towsley." Because the alleged
fraudulent events occurred more than three years ago, it is not possible to determine
whether or not Ms. Towsley actually engaged in fraudulent activity at that time. What is
critical, however, for the purpose of this investigation and for evaluating the propriety of
the comments made by Ms. Erchinger is whether credible evidence of fraudulent
activities existed that would have justified a complaint by Ms. Erchinger against Ms.
Towsley.
I Seward Code of Ordinances mandates that "[a]ll regular and special meetings of the
council shall be public meetings and the public shall have a reasonable opportunity to
be heard." Seward Code of Ordinances Sec. 3.5(g).
13 Audio Tape of August 22, 2018, Special City Council Meeting.
Jeff Bridges
October 18, 2018
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back when Ms. Towsley was a city employee.9 No further details concerning the alleged
"fraud" were provided by Ms. Erchinger at the August 22 meeting.10
Ms. Towsley denies committing fraud or having any knowledge of any fraud
complaints being made against her. Her complaint alleges that Ms. Erchinger's comments
violated the city's Defamation, Verbal Assault and Harassment Policy ("Defamation
Policy") which defines "defamation" as:
Defamation, which is judicially defined to mean, and here means, the
unprivileged oral or written publication of a false statement of fact that
exposes the person about whom it is made to hatred, contempt, or ridicule,
or subjects that person to loss of the good will and confidence of others, or
so harms that person's reputation as to deter others from associating with
her or him. Defamation is considered a legal offense and the City will not
tolerate any acts of defamation.11
The key issue, therefore, is whether Ms. Erchinger's comment about "having filed
a complaint against [Towsley] for fraud" is a "false statement of fact."12 Did Ms. Erchinger,
in fact, file a complaint of fraud against Ms. Towsley? If she did file such a complaint, her
comment at the August 22 meeting was not "false" and, therefore, not defamatory.13
9 Id. Ms. Towsley was hired by the City of Seward in January 2009 in a split position
between the Police Department and the DMV. In June 2009 she applied for and was
selected as the Executive Liaison for the City Manager a position she held until April
2015.
10 Id.
11 2016 Defamation, Verbal Assault or Harassment Policy, p. 2.
12 Suggesting someone engaged in fraud would substantively be considered defamatory
and likely to result in a damaged reputation and loss of good will in the community.
Accordingly, the only issue is whether such statement is true or not. If it were false, it
could be presumed to cause harm.
13 Not only must it be determined whether a complaint of fraud was actually filed against
Ms. Towsley but also whether such a complaint was made in good faith based on
credible evidence. In other words, Ms. Erchinger cannot claim the defense of truth in
saying that she had previously filed a complaint of fraud against Ms. Towsley if the
underlying complaint was wholly unfounded and unsupported by credible evidence. Put
another way, if the original complaint of fraud was baseless and made in bad -faith, a
Jeff Bridges
October 18, 2018
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The investigation revealed that Ms. Erchinger, and another employee in the
Finance Department, complained to City Manager, Jim Hunt, that Ms. Towsley was
engaging in conduct which could constitute fraud. Both Ms. Erchinger and a former payroll
employee, Marsha Vincent, on separate occasions, advised Mr. Hunt that they believed
Ms. Towsley was submitting false timesheets resulting in her being paid for hours she did
not work.
Ms. Vincent brought the issue to the attention of Ms. Erchinger. Because Ms.
Towsley's work area was in the midst of the Finance Department, Ms. Vincent was able
to observe when Ms. Towsley was present at her work station. Because it was audit
season and the Finance Department was also implementing a new payroll system, Ms.
Vincent and others in the department were working particularly long hours and would
frequently be in the office both before and after the normal workday and could, therefore,
observe when Ms. Towsley was in the office, even if it was outside of normal work hours.14
After hearing the concerns of Ms. Vincent, Ms. Erchinger reported the concerns to
Mr. Hunt who was Ms. Towsley's direct supervisor.15 The allegations brought to Mr. Hunt's
attention by Ms. Erchinger included issues involving Ms. Towsley other than the concern
about the potentially false timesheets.16 When Ms. Vincent did not detect any change in
Ms. Towsley's behavior, she again went to Ms. Erchinger and stated that she could not
continue to knowingly process Ms. Towsley's payroll because she believed it was
fraudulent and she did not want to be held responsible. Ms. Erchinger told Ms. Vincent
subsequent oral or written publication that such a complaint was made could also be in
bad -faith and unprotected.
14 It is important to note that the observations of Ms. Vincent and others in Finance could
not, however, determine if Ms. Towsley was working off -site.
15 Seward Code of Ordinances, Section 3.05.015(d) limits the authority of Department
Heads such as Ms. Erchinger to taking corrective action within their respective
departments. Ms. Towsley, although located in the Finance Department area, was not
in Ms. Erchinger's department. Accordingly, Ms. Erchinger reported Ms. Towsley's
conduct to Ms. Towsley's supervisor, the City Manager.
16 Ms. Erchinger also complained about Ms. Towsley engaging in personal non -business
related matters while at work. Ms. Erchinger wanted Ms. Towsley to be moved out of
the finance department area because her presence was causing a morale problem
among the Finance Department staff who did not feel that Ms. Towsley was working as
hard as they were. This coincided with Ms. Towsley's request to be moved out of the
area as well as she felt harassed by the Finance Department personnel.
Jeff Bridges
October 18, 2018
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Attorneys at Laub
that she had already reported the matter to Mr. Hunt and advised Ms. Vincent that she
should also take the issue directly to Mr. Hunt.
Ms. Vincent then met with Mr. Hunt and told him that she believed Ms. Towsley
was submitting fraudulent timesheets. She stated that as a tax payer and as an employee
she was very upset about the situation and would not be responsible for allowing it to
continue. Mr. Hunt advised Ms. Vincent that he understood and that the responsibility was
on him to address the situation. Mr. Hunt did not provide any explanation for Ms.
Towsley's conduct or in any manner indicate that she was permitted to work extensively
outside of the office.
Mr. Hunt's failure to address and change Ms. Towsley's behavior was an element
in a complaint filed by Ms. Erchinger against Mr. Hunt which resulted in a mediation held
on May 27, 2014. Among other issues, the mediation addressed Mr. Hunt's failure to deal
with the complaints regarding Ms. Towsley as well as Ms. Erchinger's request that Ms.
Towsley be moved out of her department's area.
The Alaska State Commission for Human Rights ("ASCHR") Determination letter
closing Ms. Towsley's sex discrimination complaint filed against the City also contains
references to Ms. Erchinger's and Ms. Vincent's complaints against Ms. Towsley." In
dismissing her discrimination claim, the ASCHR investigator determined:
Investigation showed that the finance director received multiple complaints
form her staff that complainant was often late for work, left work early, left
work frequently when the city manager was out of the office, and regularly
conducted personal business during work hours. The finance director also
observed this behavior, and reported this to the city manager several times,
explaining that complainant's behavior was impacting her staff which was
working full days and sometimes working overtime. Investigation showed
17 On April 16, 2015, Ms. Towsley filed a sex discrimination complaint with ASCHR
alleging that she was "subjected to rude, derogatory remarks and attempt[s] to discredit
[her] professionally." She further alleged that she was threatened by "throwing objects
at me and creating a hostile work environment." See ASCHR Complaint No. J-15-110.
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October 18, 2018
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that one staff member charged that complainant was also claiming wages
for working her full schedule when she was not doing s0.18
Accordingly, based on the totality of the evidence, it is evident that Ms. Erchinger
complained about Ms. Towsley to City Manager Hunt and that such complaints included
allegations (i.e. filing false timesheets) which would be considered fraudulent conduct.
Therefore, Ms. Erchinger's statements at the August 22, 2018 special City Council
meeting were not "false" and do not constitute defamatory conduct in violation of the City's
Defamation policy.19
It should be noted that despite Ms. Erchinger and Ms. Vincent complaining about
Ms. Towsley's potentially fraudulent conduct to the City Manager, there does not exist
any reference to the complaints or any subsequent corrective action in Ms. Towsley's
personnel file. Nor is there any evidence that Ms. Erchinger's or Ms. Vincent's complaints
were brought to Ms. Towsley's attention at the time.
Mr. Hunt claims he addressed the issue with Ms. Towsley and claims he provided
both verbal and written reprimands to her regarding the alleged conduct. Mr. Hunt
believes Ms. Towsley's personnel file was in some manner cleaned of any of the
reprimands he provided which he feels should exist in her file.20 It does not appear likely
18 See ASCHR Determination, J-15-110, June 26, 2015.
19 There does exist some technical discrepancy between what Ms. Erchinger said on
August 22 and what she did when she complained to Mr. Hunt. Ms. Erchinger's
comments on August 22 indicated that she had "filed" a complaint of fraud against Ms.
Towsley. While the evidence indicates that Ms. Erchinger complained about Ms.
Towsley engaging in fraudulent activities, there does not appear any evidence that any
formal written complaint was made. Use of the word "filed" gives rise to the impression
that a document was involved. This distinction, however, is not sufficient to convert Ms.
Erchinger's statements into defamation. The damaging content of the statement is that
Ms. Towsley was accused of fraud, not necessarily the manner in which the accusation
was presented. Accordingly, while Ms. Erchinger's statement made the complaint
sound more formal, it did not sufficiently alter the truth of the statement to render it
defamatory.
20 At some point the entire Personnel file for Ms. Towsley disappeared. The City
reconstructed the file from a copy of the file that had been provided to the City Attorney
for use in defending the City against Ms. Towsley's sex discrimination complaint. The
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October 18, 2018
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that Ms. Towsley was ever reprimanded or in any manner disciplined for any of the
conduct complained about by Ms. Erchinger or Ms. Vincent. Had Mr. Hunt reprimanded
or in some manner disciplined Ms. Towsley, a change in her work behavior should have
been expected and detected. Both Ms. Erchinger and Ms. Vincent report that Ms.
Towsley's work hours and associated behaviors did not change through the end of her
employment. Accordingly, the most likely explanation is that Mr. Hunt never effectively
addressed the issue with Ms. Towsley. It is, therefore, not surprising that Ms. Towsley
would believe Ms. Erchinger's comments on August 22 to be both false and defamatory
as there is no evidence that she had previously been made aware of the complaints being
lodged against her.
2) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City
Council Special Meeting breach any confidentiality or personnel rules of the
City of Seward?
Answer: No.
In addition to stating that she filed a complaint against [Towsely] for fraud, Mr.
Erchinger's comments at the August 22 meeting also included a summary of a so-called
"workplace violence" issue occurring in 2014.21 The Seward Code of Ordinances exempts
from disclosure certain records which would otherwise be open to review by the public.22
Certain aspects of personnel records are protected from disclosure:
City personnel records, including employment applications and examination
materials, payroll and medical records which reveal the financial or medical
status of any specific individual and, in addition, those records the
disclosure of which would constitute an unwarranted invasion of privacy.23
version of the personnel file provided to the City Attorney did not contain any
documented reprimands or discipline.
21 Audio recording of August 22, 2018 Special Session of Seward City Council.
22 Seward Code of Ordinances Sec. 2.05.010 contains the general provision making city
records open to inspection by the public. Section 2.05.030 contains exemptions from
the open records provisions for certain specified types of documents. Section
2.05.030(D) exempts certain portions of personnel records.
23 Seward Code of Ordinances, Section 2.05.030(D)(1).
f
Jeff Bridges Attorneys at Law
October 18, 2018
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Also protected from disclosure are records or information prepared for or produced
"during a legally convened executive session... 1124 This protection is, however, limited.
Public records "which are otherwise subject to disclosure may not be protected from
disclosure by mere submission during an executive session."25 Records "pertaining to
juveniles" are also protected from disclosure.26
At the August 22 Special Meeting, Ms. Erchinger provided information regarding
an incident occurring in 2014 involving a city supervisor and a city employee who was at
the time a minor. The seemingly minor incident has generated significant political interest
and social media attention as it has become linked to various promotion and hiring
decisions that continue to roil various factions in the city.
The comments made by Ms. Erchinger during the August 22 meeting do not
appear to violate any confidentiality or personnel rules. It is important to note that no
personnel records exist regarding this incident. Although an investigation took place and
a two -week suspension was administered, no current official or personnel records exist
documenting the incident.27 The comments made by Ms. Erchinger, however, do not
appear to be necessarily derived from any personnel or confidential record. The
information she provided is consistent in kind with other information regarding the incident
circulating in the public and on social media. Accordingly, her comments, even if deemed
to involve a long -closed personnel matter, do not appear to disclose information that
24 Seward Code of Ordinances, Section 2.05.030(F)
25Id.
26 Seward Code of Ordinances, Section 2.05.030(a)(2).
27 It was reported that City Manager Hunt determined that the investigation into the
matter was not proper and, therefore, all records of the incident should be removed from
the files. This does not appear to be appropriate conduct. Seward Code of Ordinances,
Section 3.30.050(b) allows, under certain circumstances, for disciplinary records to be
sealed in a confidential envelope and replaced in the employee's personnel file. Such
sealed records are not to be referred to again unless there is a later occurrence
requiring further discipline. There does not appear to exist any code provision that
would call for or allow for the complete removal of a record of discipline after the
discipline has been imposed and implemented.
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October 18, 2018
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would "constitute an unwarranted invasion of privacy" and as such do not appear to be
protected or confidential.28
3) If Kristin Erchinger did complain that Suzanne Towsley had committed fraud,
was there credible evidence to support her complaint?
Answer: Yes.
Mr. Erchinger's complaint to Mr. Hunt regarding Ms. Towsley's fraudulent behavior
appears to be supported by credible contemporaneous evidence. It is important that this
not be interpreted to suggest Ms. Towsley actually committed fraud. It simply means that
a reasonable person having the same information as Ms. Erchinger would have been
justified, at the time, of complaining of possible fraud.
Ms. Erchinger was presented with evidence from Ms. Vincent that tracked Ms.
Towsley's absences from the office and correlated her absences with her timesheets,
ultimately indicating that she was working substantial hours when she was not physically
present in the office. A review of the timesheets submitted by Ms. Towsley reveal that
she did designate "flex" time on occasions when she had to work outside of normal
business hours. The concern of Ms. Vincent and Ms. Erchinger's involved hours that
appeared on Ms. Towsley's timesheet when she was not in the office and when no
indication of "flex" time was noted.29
If an employee has been approved for an alternative schedule, that information is
supposed to be provided to payroll. Mr. Hunt acknowledges permitting Ms. Towsley
certain leeway to attend to child care needs. He stated he would not mind if she had to
come in late or depart early in order to take care of her children. No formal adjustment
28 Although a juvenile was involved in the incident in 2014, the juvenile did not file a
complaint and has indicated that he was not the victim of a workplace violence incident.
Ms. Erchinger's comments are not inconsistent with his statements and do not reveal
any new or confidential information concerning the incident. Ms. Erchinger also did not
mention the juvenile's name during her comments on August 22.
29 Seward Code of Ordinances Section 3.15.055 defines the standard work hours for city
employees and permits deviations from the normal work hours as permitted by the City
Manager.
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October 18, 2018
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was made to Ms. Towsley's schedule as Mr. Hunt did not anticipate this flexibility to
constitute a significant amount of time.
Ms. Towsley acknowledges that she tried to avoid having to work in the office as
much as possible, especially when the City Manager and the Assistant City Manager were
out of the office. Ms. Towsley claims this was in order to avoid the harassment she
experienced from the staff in the Finance Department.
Accordingly, Ms. Erchinger was presented with credible evidence that Ms. Towsley
did not appear to be at work for significant periods of time for which her timesheets
claimed she was working. Despite presenting these concerns to Mr. Hunt, Ms. Erchinger
was not presented with any explanation which would justify Ms. Towsley's significant
amount of time out of the office. Therefore, Ms. Erchinger had a good faith belief that Ms.
Towsley may have been filling out incorrect timesheets.
The only way to conclusively determine whether Ms. Towsley was filling out
incorrect timesheets would have been to investigate the situation at the time the
complaints were made. It is not possible to conduct such an investigation at this time as
it would not be practicable or even possible for Ms. Towsley to recall with specificity what
she was doing on particular days in years past.
Ms. Erchinger had credible documented information on which to base her
complaint to Mr. Hunt regarding Ms. Towsley's conduct. Accordingly, her comments at
the August 22 meeting were not "false" and, thus, were not defamatory. It appears that
both Ms. Towsley and Ms. Erchinger were ill -served by the failure of the City to conduct
a timely investigation into Ms. Erchinger's complaints.
Sincerely,
-ANDT, EVANS & FILIPPI, LLC