City was wrong on benefits, letter says

Former City Manager Russ Kreager's attorney, saying his client was defamed, refutes the city's claims that Kreager improperly collected unemployment money.

By JOSH ZIMMER

© St. Petersburg Times, published July 8, 2000

CRYSTAL RIVER -- The attorney who represents former City Manager Russ Kreager has fired off an angry letter accusing the city of misunderstanding Kreager's severance agreement and defaming his client with claims that he wrongly filed for -- and received -- more than $7,150 in state unemployment benefits.

Kreager was fired in February 1999 but eventually accepted a $23,000 settlement two months later that erased his sudden dismissal from his employment record. Although he agreed not to seek unemployment benefits for the short time the city continued to pay his salary, Kreager never gave up his right to those benefits, attorney Jim Neal of Inverness wrote.

The strongly worded letter, which seems to reflect the hard feelings that linger more than a year after Kreager's departure, says the city should have discussed the issue with Kreager before airing the disagreement in public. At most, Kreager owes Crystal River about $60, Neal wrote.

"He never received a bill, nor was contacted by the city manager regarding reimbursement, but instead the City Council has now chosen to initiate a defamatory attack on his character more than a year after this should have been resolved," Neal wrote.

"Due process and fairness dictates that an issue such as this should be attempted to be resolved prior to a trial in the local press or discussion in a televised public meeting."

Due process is an extremely sensitive issue regarding Kreager because he garnered his $23,000 settlement by successfully claiming he was denied the right to respond to the charges against him. He threatened to sue the city in federal court on that issue.

Despite Neal's broad condemnation, opinion among City Council members is far from unanimous.

Council members Paula Wheeler and Alex Ilnyckyj, who voted to remove Kreager, have criticized the unemployment benefits. Their frustration was matched by city staff, which vigorously challenged the state's decision to pay Kreager between spring and fall of last year.

The city lost and ended up paying interest and penalties that raised the final figure to nearly $8,000.

But the new council majority, which did not vote against Kreager, has shown more reserve on the subject. The faction -- council members Mike Gudis, Ray Wallace and Kyle "Joe" Chrietzberg -- recently turned down City Attorney Clark Stillwell's advice to immediately pursue the repayment from Kreager. Instead, they voted to give Kreager a chance to respond.

In a short response to current City Manager David Sallee, also written this Wednesday, Stillwell said he would talk about the issue at the council meeting Monday. He could not be reached for comment.

Sallee did not return a call seeking comment. Kreager also could not be reached for comment.

"I'll honor Mr. Neal's request not to (make comments)," Wheeler said.

Kreager, who spent several months as administrator of Fairport Harbor Village, Ohio, before being ousted by the incoming administration, signed his severance agreement on April 12. But Neal says Kreager filed for unemployment the month before, weeks before he agreed not to seek unemployment compensation.

Neal says Kreager never gave up his right to collect unemployment. Kreager simply agreed not to collect benefits for the short period during which the city continued to pay his salary, he wrote.

The state said Kreager was entitled to the unemployment because he was not fired for misconduct.

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