Final reports validate council decision to terminate city manager

Separate investigations confirm misuse of city funds, abrasive management style
By Dan Aznoff | Nov 15, 2018

Almost one year after the state auditor’s office launched an investigation into the questionable use of city-issued credit cards by former Mill Creek City Manager Rebecca Polizzotto, separate reports obtained through public record requests have confirmed many of the allegations against the former administrator.

The first report detailed investigations by the Seabold Group into allegations the former city manager violated policy by charging expensive meals and alcohol on city-issued credit cards, then attempted to cover her tracks by explaining the charges were for “informal roundtable” meetings in her hotel room while she was attending a conference.

The Seabold investigation was prompted by a misleading credit card statement the city finance department received Nov. 14, 2017. The final report was issued Sept. 29 of this year.

The second investigation was conducted by attorney Rebecca Dean into whistleblower complaints filed by four members of the senior staff in City Hall that accused Polizzotto of a series of “actions and behavior” that would be considered minor when examined individually, but disruptive when examined together.

Members of the city council voted unanimously to terminate the city manager’s employment contract Oct. 2 after a series of public hearings and extensive executive sessions to review the evidence compiled against Polizzotto.

The separation agreement approved by the council called for the city to pay the former city manager six months of her annual salary of $172,000 and extend her benefits for six months.

Inquiries into expense reports scrutinized by the auditor’s office discovered Polizzotto did not respond to a request by Finance Director Peggy Lauerman for the names of the people who attended a meeting at Ruth Chris Steakhouse that cost the city $158.

A detailed receipt obtained from the restaurant reflected the cost of two cosmopolitan cocktails at $14 each. City policy does not allow the use of city funds for the purchase of alcohol.

A room service receipt for $94 for another meal, obtained by Lauerman, indicated service for two people with cocktails. According to the final report, the city manager was unable to name the individuals or the business conducted for a charge of $269 in alcohol and meals with a third party.

“Additionally, we were retained to examine allegations that Ms. Polizzotto manipulated expense reimbursement files to cover up the nature of the expenditures and/or the facts of how the expenditures were discovered,” wrote Martha Norberg, principal with the Seabold Group.

The whistleblower complaints investigated by the Rebecca Dean firm in Seattle concluded that Polizzotto was a “micromanager” who exercised unusually tight controls over executive decisions while providing only “incomplete or unclear directions that she had made.”

The report also detailed instances when the former city manager intentionally lied about events and shifted responsibility to others for her actions or decisions.

City Attorney Scott Missall contracted with Dean to investigate the city manager on May 3, almost a month after the last time Polizzotto was seen in City Hall.

The attorney firm conducted interviews with city staff on May 5 and June 8. The findings were presented to the City Council during an executive session June 12.

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