Palmer’s new city manager facing possible removal over ‘imminent threat’ of employee lawsuits

What you need to know:

• Palmer City Manager Stephen Jellie faces possible censure and removal by the City Council after putting the city at an “imminent threat” of lawsuits through a series of recent personnel directives, including an order Tuesday that placed the city’s police chief on administrative leave for questioning those decisions.

• An emergency council meeting is scheduled for Wednesday to discuss Jellie’s administrative leave, with a resolution for his removal set to be considered later this month. Jellie’s contract allows for his termination with or without cause. He said he wants to meet with the council to respond to the allegations.

• Jellie joined Palmer in August after resigning from similar positions in Wyoming and New York, both of which ended with substantial severance packages.

PALMER — Palmer’s new city manager is facing possible censure and removal by the City Council after putting the city at “imminent threat” of lawsuits through a series of recent personnel directives, including an order Tuesday that placed the city’s police chief on administrative leave for questioning those decisions.

“I am highly concerned and legally obligated to tell you about the rapidly growing legal liabilities. He is potentially violating employment law, constitutional rights of employees, and opening up avenues for both criminal and civil lawsuits,” City Attorney Sarah Heath told the Palmer City Council in a letter sent by email and presented during a council meeting Tuesday evening. “I’m obligated to warn you of the significant legal consequences and the imminent threat that this poses for the city of Palmer.”

An emergency council meeting was scheduled for Wednesday night to discuss placing Palmer City Manager Stephen Jellie on administrative leave. A council resolution ordering his removal will be considered later this month.

Jellie took over the manager role in late August after the retirement of former manager John Moosey. He came to Palmer after resigning from two previous jobs in the Lower 48, first in late 2022 and again this year. He left those roles with a combined $200,000 in severance pay, plus some health care coverage.

Palmer City Council members said they were unaware of his resignations when they offered Jellie the job because human resources officials instructed them not to conduct their own research on his background and they were never given findings from his employment check.

Jellie’s contract with Palmer allows him to be fired for cause without further pay or removed for any reason and paid six months’ salary, about $75,000, plus cash to cover some health benefits. It was not immediately clear Tuesday which option council members plan to pursue.

Jellie on Tuesday afternoon ordered Palmer Police Chief Dwayne Shelton to turn in his badge and gun and placed him on two weeks of paid administrative leave after he raised concerns about employee rights and safety after recent decisions by Jellie, Shelton told the council.

“I believe this is a retaliatory action because I brought forth public safety concerns and employee rights regarding significant policy changes he has implemented,” Shelton said during a public comment period. Those changes include eliminating a policy that allows police to take cruisers home as a way of improving overall response time and public safety, he said.

“In 45 days, Mr. Jellie has all but undone the public safety fabric of our society that you, together with the citizens and employees of Palmer, have woven,” he said.

Palmer Police Commander Shayne LaCroix will serve as interim chief during his leave, Shelton said in an interview. The council was not notified of Shelton’s leave order before the meeting.

Jellie this week also barred the city’s department heads from speaking to any member of the City Council about personnel or other issues, reminding them that they “serve at the pleasure of the city manager” and warning “that you all know what happens when any of us try to end-run the structure and system of governance that is in place,” according to a private email signed by Jellie.

Jellie said he plans to ask the council to allow him to respond publicly to the allegations, either in public or in closed session, depending on the topic and whether doing so would violate personnel rules.

“I look forward to the opportunity to be heard by the city council, especially those members who have never had one conversation with me about their concerns in private or public since my arrival,” he said in a statement early Wednesday.

In a scathing five-minute statement delivered during Tuesday’s meeting from her seat next to Jellie on the council dais, Heath, the city attorney, laid out a list of Jellie’s actions that she described as “just a sample of harmful conduct.”

Heath said those actions include prohibiting all city employees from communicating with the city attorney and members of the City Council or talking to each other about their employment concerns; repeatedly blocking Heath from speaking with the city’s police department about criminal matters; interfering in ongoing city legal matters by communicating directly with opposing attorneys; appointing himself as human resources manager after the previous manager resigned last month due to a family medical issue; eliminating official systems for employees to share workplace concerns; and threatening to deny Heath’s work invoices unless he approves their contents and her legal strategy and findings.

“This is highly abnormal management behavior, and it is 100% an intimidation tactic in employment law,” she said. “This is not a matter of conflicting management styles and disgruntled employees or contractors.”

Heath said Jellie asked her not to share her concerns with the council.

“I have refused to provide him sole confidentiality for those actions. He asked me not to share anything related to these potential legal actions with the city council, and I refused,” she said.

Jellie left the meeting during a break after the first hour of public comment and did not return. He called Heath’s statement illegal and unprofessional.

“Unlike the serious breaches of law and professionalism committed by the city attorney to obtain and maintain favor among the crowd, I will remain committed to high-integrity leadership,” he said in his statement Wednesday.

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Fears of retaliation, public safety concerns

Over his six weeks on the job, Jellie has worked to downsize public safety equipment and removed personnel protections by requiring employees to filter all complaints through him because he is the acting human resources manager, according to commenters who attended Tuesday’s nearly three-hour meeting.

“Stephen Jellie will undoubtedly continue to slash our resources, silence all dissidents, violate employee rights, and ultimately place the good people of Palmer in a position of dire need and vulnerability,” Palmer Police Detective Matthew Moore testified. “Never in my 23 years of civil service have I encountered one individual so dead set on leaving a wake of destruction behind.”

Dozens of Palmer public safety officials attended the often raucous three-hour meeting. A standing-room-only crowd filled the council chambers, while about 30 fire and police officers watched the meeting via livestream from a fire station next to city hall. Mayor Steve Carrington agreed to extend the regular public comment periods to allow for more testimony.

Jellie listened to about an hour of comments from his seat at the dais but left the council chambers during a break and did not return.

Employees of Palmer’s police dispatch center, which handles police calls transferred from the region’s Wasilla-based 911 service known as MATCOM, said research started by Jellie last month into whether the two centers should consolidate services made them fear for their jobs and prompted them to leave the city for open MATCOM dispatch positions.

“No dispatchers applied to MATCOM until it became clear that consolidation assessments were taking place without the knowledge or involvement of Dispatch Supervisor (Whitney) Daw or Chief Shelton,” said Hilary Schwaderer, a Palmer police evidence custodian and former dispatcher who spoke on behalf of some dispatchers at the Tuesday meeting.

Jellie said in an interview this month that he plans to recommend that the City Council close the Palmer Police Dispatch Center and contract all services to MATCOM, which already handles all calls for the city’s fire stations. Consolidating could save the city about $1 million a year, he said.

He said that plan was prompted by news that at least three of the center’s seven dispatchers had accepted higher-paying positions at MATCOM, and that the dispatchers did not apply for those jobs because of his meetings.

Whether to combine the two dispatch centers has long been a subject of contentious debate, longtime city officials said. Matanuska-Susitna Borough public safety officials, who oversee the region’s emergency services, said that unless Palmer can invest millions in upgrading its dispatch equipment — an unlikely move — combining the services makes sense.

But Palmer-area police said that is not true. Eliminating the city’s dedicated dispatch team poses a safety risk because it would increase police call response times while limiting support for uniformed officers, they said in interviews at Tuesday’s meeting.

MATCOM officials did not respond to requests for comment.

A history of leadership challenges

Jellie joined the City of Palmer after tumultuous tenures in his two previous roles in Teton County and Jackson Hole, Wyoming, and Ogdensburg, New York, where budget cuts he proposed to the regions’ emergency services sparked outcries and ultimately led to his resignation, he said in an interview in August.

He served as fire chief for Teton County and Jackson Hole from late 2022 until early this year. In early January, he was placed on administrative leave and submitted his resignation later that month. The county paid him $150,000 in severance, he said.

Before taking the job in Wyoming, Jellie served as city manager of Ogdensburg from July 2020 until the end of 2022, when he resigned. He received $50,000 in severance and was granted health care through the end of 2023, according to his Ogdensburg buyout agreement. City officials also agreed not to speak negatively about Jellie to future employers, according to the document.

The International Association of Fire Fighters union censured Jellie late last month for “callous and careless actions that compromised the safety of the community” during his employment in both New York and Wyoming. During public meetings last year, county employees in Wyoming described Jellie’s management style as “tyrannical.”

A resume Jellie submitted to the Palmer City Council as a part of his job application stated that he left his position in New York because he was hired in Wyoming, and that he left his position in Wyoming because he was “not a good fit for the organization.”

A public records request for the results of Jellie’s background check with the City of Palmer was denied by Heath early last month, citing the city’s personnel privacy laws. Carrington said Jellie was forthcoming about his past during his interview process with the council.

Several Palmer City Council members pledged Tuesday to seriously consider the issues raised about Jellie during the council meeting. Other council members called Jellie’s hiring a mistake.

“He presented himself very well. Obviously, it’s time to realize a mistake was made,” said council member John Alcantra.

Republished with permission from the Mat-Su Sentinel, an independent, nonprofit, nonpartisan online news source. Contact Amy Bushatz at abushatz@matsusentinel.com.