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Arroyo Grande City Council set to debate severance for Steve Adams 

In the latest twist of an Arroyo Grande saga that refuses to end, the City Council will meet in closed session on Jan. 22 to discuss potential litigation arising from former City Manager Steve Adams.

Attorney Roger Frederickson, representing Adams, wrote a letter to City Attorney Tim Carmel on Dec. 29 requesting a severance payment equal to “six months salary and benefits in effect at the time of termination,” which Frederickson argued is in line with Adams’ city contract. As stipulated in Adams' contract, that severance payment would be a lump sum in the neighborhood of $105,000, city officials estimated.

“Failing to honor the terms of his contract will leave Mr. Adams in the uncomfortable position of having to consider potential litigation,” Frederickson wrote.

“We expected him to submit this letter, and it’s important to note that there has been no claim filed or litigation initiated at this time,” Interim City Manager Bob McFall told New Times. “There is the potential for litigation, however, so it’s wise for the council to consider direct actions and their implications.”

Essentially, the central dispute is whether Adams resigned or was terminated from his position. If he resigned, his employment agreement dictates that he isn’t due any severance pay. If he was terminated without cause, however, which is what Adams is claiming, he’s entitled to a severance package.

During its closed session meeting, McFall said he expects the council to debate whether to grant Adams’ request for severance, deny the request, or take some middle path.

In an Oct. 2 letter published in New Times, Adams announced his “plans to step down as city manager” and said his “resignation will become effective once my replacement has been hired and starts work.” The council accepted this resignation on Nov. 19, placing Adams on paid administrative leave, where he stayed until Jan. 13, when the council appointed McFall.

In the Dec. 29 letter, Frederickson argued that the council's Nov. 19 action was effectively a "premature termination" of Adams because the council had "yet to permanently fill his position." Frederickson concluded that, "Mr. Adams deems the City Council's premature acceptance of his resignation as a termination, and is therefore entitled to the severance."

Councilman Tim Brown told New Times that the council is facing a complex decision.

“I personally don’t think Steve’s argument has merit, but it’s going to cost money to litigate anyway,” Brown said. “If it was a win or lose issue, I think the city would win hands down, but it’s not just a win or lose situation.”

Brown said that Adams has been an excellent city manager who “made some mistakes, and now it’s time for him to pay the piper.”

“He’s not due a dime more, and you can quote me on that,” Brown said. “He said he was trying to do the right thing for A.G., but instead he’s doing what’s best for Steve Adams.”

Shortly before deadline, a reporter obtained a number that connected with a voicemail for the Adams’ residence, but was only able to leave a partial message before being cut off.

UPDATE: At the conclusion of the council's Jan. 22 meeting, McFall announced that city staff is now authorized to negotiate a resolution with Adams over his request for severance pay. Essentially, staff will look to reach a mutually agreeable compromise with the former city manager. Stay tuned for further developments...

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