According to public records released yesterday, Pensacola Mayor Ashton Hayward cut checks for over $95,000 to get his former city administrator to dismiss his lawsuit against the City.
The settlement was not approved by the Pensacola City Council. In fact, they were never notified that a settlement had been reached nearly a year ago.
Inweekly discovered the settlement agreement after the City released the case file on the lawsuit, in reply to a public records request.
On July 8, 2013, Mayor Ashton Hayward announced his decision to terminate City Administrator Bill Reynolds from his position with the city.
“Last week, I received the disappointing news from the State Attorney’s Office that Bill Reynolds chose to leak a confidential employee complaint,†said the mayor. “The wellbeing of the City’s hardworking employees is one of my top priorities. Mr. Reynolds’s actions violated this sacred responsibility. This is unacceptable to me.â€
The State Attorney’s Office had investigated how an employee’s allegations against former Chief of Staff John Asmar, Reynolds’ political rival, had been leaked to former Pensacola Council President Maren DeWeese.
After DeWeese published the allegation, Mayor Hayward put Reynolds in charge of the investigation of the leak, and the city administrator promised the council he would find and punish the source. The mayor hired the Allen, Norton & Blue law firm to help with the investigation. After three months of searching office computers and desks and questioning city employees, the source was not discovered.
In June 2013, DeWeese told the State Attorney’s Office that Reynolds gave her the complaint, unsolicited, at the World of Beer on March 5. Reynolds avoided criminal prosecution because the employee failed to ask the City to keep her allegations confidential.
By the time the employee asked for confidentiality on March 7, 2013, Reynolds had already given Deweese the documents and they had been published on her blog.
The State Attorney’s Office concluded: “Based upon our review, we have determined that the release of the discrimination complaint does not rise to the level of a criminal violation. All criminal statutes are to be strictly construed in favor of the defendant. In applying that standard, we have determined that at the time the document was released it was exempt and not confidential. Therefore, the release of the complaint, while under the circumstances as described inappropriate, does not constitute a crime.â€
When he was fired, Reynolds issued a statement that he was “absolutely wrong†to release the documents.
Later when he applied for Escambia County administrator position in 2014, Reynolds told the commissioners that he agreed with the mayor’s decision. After Board of County Commissioner decided to hire Jack Brown, Reynolds filed a lawsuit against the city.
In his complaint, Reynolds asserted that he was terminated without cause and that he was not fired for misconduct as defined in his employment agreement.
Many considered the case a “slam dunk†for the city. They felt Reynolds was fired for cause—betraying the trust of the mayor, city employees and the public—and therefore wasn’t entitled to severance or the 500 hours of accrued leave the mayor had put in his contract.
On Aug. 21, 2015, Reynolds’ scheduled a deposition with Mayor Hayward. It was rescheduled for Oct. 13, 2015. However, the city settled with Reynolds on Sept. 30, 2015, before the deposition was taken.
In the settlement agreement, Mayor Hayward denied all the claims made by Reynolds. He entered into the agreement to avoid further cost of litigation and to “seek to resolve all matters in controversy, disputes and causes of action between them in an amicable way.”  Read reynolds-settlement.
CFO Dick Barker distributed two checks totaling $95,571—one to Reynolds for $81,113, the other to his attorney, Odom & Barlow P.A., for $14,458. According to the agreement, Reynolds’ check constituted payment for “accrued leave and severance pay under the terms of his employment agreement.” The check to the law firm covered “any and all attorneys’ fees owed in relation to this matter.â€
Reynolds voluntarily dismissed his lawsuit in late October 2015.
The Reynolds settlement brings up several questions:
Did Mayor Hayward have the authority to settle the lawsuit without the City Council’s approval?
When he was city attorney, Jim Messer had determined that the mayor’s settlement limit was $25,000. Personal injury attorneys suing the City are told that any settlement over $5,000 must be taken to the City Council.
Sec. 3-1-7 of the Code of Ordinances states: “No money shall be drawn from the treasury of the city, nor shall any obligation for the expenditure of money be incurred, except pursuant to appropriations made by the council.”
By what authority did CFO Dick Barker cut the checks to Reynolds and Odom & Barlow? To what accounts did he charge the expenditures?
Neither Barker or City Administrator Eric Olson—who signed the settlement agreement—reported the expenditures to the City Council in their October 2015 or November 2015 reports.
According to the city charter, City Attorney Lysia Bowling handles all legal matters regarding the city. Why did she not inform the City Council of the settlement?
Without council approval, what keeps the mayor from settling any lawsuit for whatever amount he wishes? As one attorney told Inweekly, what kept the mayor from giving Reynolds $800,000 instead of $81,113?
Most importantly, why was the settlement hidden from the taxpayers? The settlement agreement was not in Reynolds’ personnel folder. The folder had no records that disclosed why was Reynolds was dismissed in July 2013. The documents in folder showed that Reynolds was not paid severance or accrued leave.
Only by requesting the actual case file was Inweekly able to discover Mayor Hayward had paid out $95,571 to get his former administrator to drop his lawsuit before the mayor had to sit through a deposition.
The Reynolds settlement agreement came one month after Hayward had agreed to pay his former COO Tamara Fountain $54,002 upon their “mutual termination” of her employment agreement. The payout to Reynolds and his attorney was agreed upon one year after the mayor had given his other former administrator, Colleen Castille, $50,000 to leave the city.
Over 12 months, Mayor Hayward paid out $199,573, none of which was ever mentioned to the taxpayers who footed the bill. Legal fees fighting the Reynolds lawsuit for 16 months and negotiating the termination agreement with Fountain put the total cost to the taxpayers well over $200K.
Since last Friday, Inweekly has repeatedly tried to speak with the mayor about the Mayor’s Office, its high rate of  turnover, and his severance payouts. After we received the Reynolds case file, we also sought to ask him about the settlement agreement. Mayor Hayward did not respond to our requests for an interview.
To learn more about the 2013 SAO investigation, read “The Upside of Corruption.”