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Attempt to terminate city manager fails

By Staff | Jan 7, 2020

A bid to fire the city of Cape Coral’s top administrator without cause failed Monday when the motion failed to garner enough support.

Cape Coral Mayor Joe Coviello made the motion to terminate City Manager John Szerlag for what Coviello called a lack of transparency regarding an investigation into late or inaccurate payroll tax submissions to the Internal Revenue Service. The city had more than $370,000 in expected gas tax revenues taken by the IRS, which levied $402,000 in fines and penalties for the FICA payment snafu.

Much of that money has been recovered by the city, according to Coviello, who said that Szerlag failed to fully inform Council before the elected board unanimously extended his contract and gave him a pay bump in November.

Coviello’s motion failed 5-3, with only Council members Lois Welsh and Jennifer Nelson going along with the mayor, though for different reasons.

In an action begun at a special meeting held last Thursday, Council then agreed 7-1 to have City Attorney Dolores Menendez retain an administrative investigator to look into both the timeline of the IRS issue as it pertains to when Szerlag became informed as well as other issues raised by a city department head who alleges that her professional relationship with the city manager went south after she refused to sign off on financial matters she believed were imprudent, improper or illegal.

According to the motion made, any significant evidence is to be immediately sent to City Council for its consideration.

The Council did not vote on whether to place Szerlag on administrative leave while the investigation is under way.

Monday’s action followed an emotional debate that took place toward the end of a more than five-hour meeting, with most on Council saying the matter has been blown out of proportion and that Council may have jumped the gun by bringing the issue up in public well before all the facts have been ascertained.

Currently, what the city has is the letter in which the allegations were raised by Finance Director Victoria Bateman, who disputes the reason she was placed on administrative leave was due to issues related to the IRS problems which originated in her department after a “low level” employee no longer with the city failed to transmit payments properly.

“This all started as a ‘he said she said’ and this is usually kept in house. Now the city manager’s reputation is stained after more than seven years. I feel bad it has gotten to this point,” Councilmember Rick Williams said.

Coviello disagreed, pointing to the three employees who were placed on administrative leave in the aftermath of the IRS incident, Bateman and two of her subordinates.

“What about Victoria Bateman’s reputation? She refinanced loans by the city that saved us millions of dollars. The problem was the lack of transparency after this took place,” Coviello said before countering a list of Szerlag’s accomplishments with a list of things he said have not been completed. “I want Szerlag dismissed without cause.”

Councilmember John Carioscia warned against that, saying it would again place Cape Coral in a negative light and would jeopardize the ability to find a good replacement for Szerlag, who is set to retire in November at the end of the contract extension approved to give the city more time to find his successor.

“This is embarrassing for this Council. Show me the evidence in the ‘he said she said’ letter,” Carioscia said. “What candidate will ever think of working here when every time we face an allegation, we put them on paid leave? He doesn’t deserve that.”

Nelson and Welsh said that maybe Council should dismiss Szerlag without cause to allow him to save face as their reason for voting in favor of dismissal.

Szerlag didn’t say much, except that regardless of what happens, his reputation has been damaged.

“Being fired won’t save my reputation. When we investigate, it’s based on evidence and not ‘he said she said.’ When something happened, I didn’t make it public,” Szerlag said. “My reputation means more to me than money or my job.”

The motion to terminate then failed.

Carioscia later made a motion hire an investigator, Deborah C. Brown with Brown Law & Consulting out of Tampa.

Coviello was the lone dissenter, saying it would be archaic to have investigators stop their work to notify Council on any evidence. He also said that with Szerlag retiring in 10 months anyway, there would not be much bang for the buck in spending $20,000 on an investigation.

The Florida Department of Law Enforcement, meanwhile, will determine whether there is a predicate, or basis, for a criminal investigation into the allegations brought forward by Bateman.

After the meeting Coviello said he was disappointed that Council was not decisive.

“I see inconsistency and a lack of transparency. I don’t think we need to investigate when I have a report that there was an employee with no contract and then a retroactive contract,” Coviello said. “It’s a shame we put a finance director on leave without documentation. It was just done.”