MERIDEN — The City Council agreed to pay $705,000 to settle a federal lawsuit filed against the city by its former City Manager Guy Scaife, according to records obtained by the Record-Journal.

That total, covered by the city’s insurer, consists of three payments — $242,226 to Scaife’s attorney and two separate $231,386 payments directly to Scaife, according to a six-page “settlement agreement, release and covenant not to sue” document the newspaper received in response to a public records request.

The agreement was signed by Scaife and city officials on Sept. 9 and Sept. 10, respectively, following a joint settlement conference. Judicial records showed a joint stipulation of dismissal was filed on Oct. 8.

According to the settlement’s terms, the first direct payment to Scaife was scheduled to be paid within 30 days of the signing. The second payment is due in January 2022.

Scaife’s employment as city manager began in September 2016. The council voted to fire him in December 2017. Scaife filed a lawsuit alleging wrongful termination five months later. The suit included claims of discrimination and retaliation by City Council leadership at the time, and that Scaife’s reputation had been ruined as a result of the firing.

According to Scaife’s complaint, he claimed he discovered questionable expenses, improper cost allocations to taxpayers and misrepresentations in the city’s budget in October 2016, less than two months after his employment with the city began.   

Scaife’s original complaint was later amended to include a claim that in early 2017 he discovered overcharges to the city’s Public Utilities division that totaled $700,000. The discovery led to an independent audit of the division’s overhead costs. The findings have not been publicly disclosed in a finalized report. 

In the settlement, current city officials strongly deny the former city manager’s “claims, charges and allegations” of discrimination and retaliation. 

Deputy Mayor Michael Cardona, in an email to the Record-Journal, wrote he believes the settlement “was in the best interests of the City and its residents because it resolved litigation that had been ongoing for multiple years and allows the City to focus on its future.”

Mayor Kevin Scarpati stated similarly the city, including its legal department, needs to move forward. 

“We need to put this behind us … It’s unfortunate that it cost the amount of money that it did,” Scarpati said. 

Scaife, who now resides in Iowa, offered brief remarks regarding the settlement. 

“If the unbiased observer looks at the terms of the settlement, that will really clarify what happened,” Scaife said. 

Scaife’s lawsuit included a claim he had raised concerns about financial issues to the City Council’s then leadership in the spring of 2017 and that the council’s leaders at the time attempted to block public disclosure of those financial issues.

Former City Councilor Miguel Castro, who chaired the finance committee during Scaife’s tenure, was one of the council members directly named in the lawsuit. Scaife’s complaint alleged Castro held a secret meeting convened between the city’s Democratic and Republican party caucuses prior to a May 2017 meeting of the finance committee, which the suit stated had been in violation of the state’s open meeting law.

Scaife’s complaint stated he had reported his concerns to the council’s leaders that Castro’s attempts to prevent disclosure had been illegal. 

Castro, reached Wednesday, defended his decision to have conversations with committee members to discuss items on the May 2017 meeting agenda beforehand. He said the financial plan proposed by Scaife included additional spending without a source of funding. 

“It was concerning,” Castro said. “Our employee who reported and worked at the pleasure of the City Council was proposing spending proposals that were not only concerning but it was just not good financial practices because the source of funding was never there.”

mgagne@record-journal.com203-317-2231Twitter:@MikeGagneRJ