MILL CREEK — Before Mill Creek parted ways with its city manager, it spent nearly $50,000 on outside investigations to examine whether she mistreated employees and used a city credit card for personal expenses.
One report found that Rebecca Polizzotto bought alcohol and possibly treated family members to meals on the city credit card. She knew those charges weren’t allowed and later manipulated reimbursement files to put them in a more favorable light, the investigator concluded.
Another report determined that Polizzotto created a toxic work environment at City Hall. That was based on witnesses who said she berated subordinates, often in profane, demeaning language. Employees said they sometimes ran personal errands for their boss, such as chauffeuring her to the airport and assisting with her daughter’s school science project.
Polizzotto denied the conclusions, which were described in public records obtained by The Daily Herald.
“I do not engage in abusive behavior,” she wrote in a statement that her attorney provided to the newspaper.
The 25-page statement accompanies a rebuttal letter that runs 30 pages.
The rebuttal lists more than 30 accomplishments from Polizzotto’s time at the city. She takes credit for attracting new businesses, streamlining government and overseeing union contract negotiations.
“In short, I was tasked with serving as a change agent for the city,” she wrote.
For some of the questionable expenses, her letter blames other employees for poor oversight.
Polizzotto and the city reached a separation agreement on Oct. 2. She had been on paid administrative leave since June. Criticism of Polizzotto’s management style persisted through much of her tenure, but escalated this spring with formal complaints from some of the highest-ranking people who reported to her: the police chief, human resources director, finance director and communications director. That happened as state auditors were preparing a report highlighting a series of alcohol and meal purchases on city credit cards with no clear business purpose, mostly by Polizzotto. That included a ribeye dinner with two cocktails at a Ruth’s Chris Steak House during a work conference in San Antonio. State law prohibits buying alcohol with public funds.
The separation agreement provided her with six months of pay and benefits. She agreed to drop a $1 million legal claim against the city.
Polizzotto had been earning almost $174,000 a year to run the city of 20,000. Hired in mid-2015, she brought experience as a senior assistant attorney general in Alaska. She also holds a master’s degree in public administration.
Mill Creek now finds itself in a familiar place: Searching for a new city manager.
The City Council has been looking at hiring executive search firms and is expected to revisit the issue on Nov. 27, Mill Creek spokeswoman Joni Kirk said.
Polizzotto’s attorney, Joel Nichols of Everett, emphasized Mill Creek’s turbulent history with city managers. By his count, three of his client’s recent predecessors were forced out after two years.
“As you are aware, the city of Mill Creek has a long history of high turnover in city managers, indicating a systemic problem that is larger than any one individual manager,” Nichols said in a written statement.
Nichols highlighted Polizzotto’s contributions.
“It is understandable not everyone will agree with management, but Mrs. Polizzotto’s job required her to make tough decisions,” he wrote. “Her track record of success and excellent performance speaks for itself.”
Kirk, the city spokeswoman, disputed that the departure followed a normal pattern.
“What happened with Rebecca Polizzotto is different from what happened to any other city manager in Mill Creek,” Kirk said. “The city is pleased to have the outcome of the investigation completed and is supportive of the City Council’s decision to separate from Rebecca Polizzotto. We’re very relieved. This is the closing of the chapter.”
For the human resources complaints, the city hired Seattle attorney Rebecca Dean at $250 per hour.
“(A)lthough any single incident or decision may be considered to be minor, the cumulative impact of Polizzotto’s actions and behavior have created a toxic work environment,” Dean wrote.
Dean’s report credited Polizzotto for applying “well-accepted management practices” and other improvements. The city manager also showed the investigator numerous emails where she gave “kudos to employees in appropriate situations.”
On Polizzotto’s credit card, state auditors identified $269 of alcohol charges and another $955 for meals with no clear business purpose.
To explore those expenses, the city hired Martha Norberg, a certified public accountant and fraud examiner from Seattle-based Seabold Group. Norberg said the evidence she uncovered showed that Polizzotto “knew it was explicitly prohibited for a city employee to charge alcohol or meals for family members to the city credit card,” but did so anyway.
Norberg’s report describes Polizzotto’s reaction when state auditors expanded their work.
“When Ms. Polizzotto learned of the more detailed scope of their examination, she went through her expenditures, repaid the ones she knew were not allowed, and created memoranda for the files to conceal the true facts around the repayments,” the report states.
Some of those memos were likely back-dated to two months before they were drafted, Norberg wrote.
Bob Stowe has been working under contract for Mill Creek since June as interim city manager. A consultant and former Mill Creek manager, Stowe was arrested in October after sheriff’s deputies responded to his house for a domestic incident. No charges have been filed in that case. He continues to run daily city business.