MILL CREEK — When Mill Creek and its embattled city manager agreed to part ways on Tuesday, both sides made concessions.
The city terminated Rebecca Polizzotto without cause, despite employee complaints that sparked months of personnel investigations. Polizzotto agreed to drop a $1 million damage claim, a potential precursor to a lawsuit against the city.
The city will pay her the equivalent of six months of salary, or roughly $87,000, plus up to six months of benefits. She’s due to receive nearly 125 hours of unused vacation compensation in a lump sum.
The City Council voted 7-0 Tuesday evening to approve those terms and to end Polizzotto’s employment contract.
Her attorney, Joel Nichols of Everett, said that his client and city leaders reached a mutual agreement about her departure.
“Mrs. Polizzotto is grateful for her opportunity to serve the city and she’s proud of her accomplishments,” Nichols said. “She doesn’t wish any ill will on anyone and wishes the city success and hopes the parties can move forward in a positive fashion.”
Polizzotto, 53, has been on paid leave since June. The City Council voted several times to extend her absence.
A former assistant attorney general in Alaska with prior experience running a small town in Georgia, Polizzotto joined Mill Creek in mid-2015 amid high expectations. The City Council hoped she would shore up government finances, promote tourism and help attract new businesses to the city of 20,000.
By the following year, former employees were accusing her of driving an unusually high number of people to quit their city jobs. The situation escalated in April of this year, after the police chief and three other city directors filed whistleblower complaints about her conduct; three of the whistleblowers had been hired by Polizzotto.
The city attorney contracted an outside investigator to look into the complaints, but the result of that work has not yet become public. Also this spring, the state Auditor’s Office released a report that flagged questionable meal and alcohol expenses on Polizzotto’s city credit card.
The damage claim Polizzotto filed against the city of Mill Creek in July alleged breach of contract, violation of due process rights, defamation and interference with her supervision of employees. Her separation agreement ends that legal action, with the understanding that she will not bring any future case on those issues. She specifically agreed not to pursue claims of lost salary, libel, slander, fraud or wrongful discharge.