“Making mistakes is human,” Frazier said in a statement read at the beginning of Tuesday’s council meeting. “Admitting your mistakes and decisively rectifying them is what makes us good leaders. I take full responsibility for this error and hope the citizens of Oakley will accept my sincere apology.”
Under the deal, approved Sept. 27 on a 4-1 vote (Councilman Randy Pope dissenting), the council forgave the remainder of the loan provided at 2.5-percent interest in 2005 as an incentive for Montgomery to move to Oakley from Nevada to become Oakley’s city manager. The agreement had been modified in 2009, when the council agreed to allow Montgomery to defer payments on the loan – about $2,000 per month – because the value of his Brooks Court house had plummeted to $311,000 from the original loan amount of $685,000. The deferred payments were called a bonus, meaning Montgomery was required to pay income tax on the amount.
The new agreement also called for the city to receive half-interest in the property, and guaranteed that Montgomery would receive $170,000 upon the sale of the 3,300-square-foot house.
When the public learned of the amendment though a newspaper story, residents took to the Internet to marshal opposition to the arrangement and call for change. Messages cropped up on forums, blogs and Twitter, and the Facebook group Take Back Taxpayer Dollars From Oakley CA City Manager Bryan Montgomery was formed on Monday.
On Tuesday, Montgomery sent a letter to the council stating he would not finalize the new agreement, which he referred to as “a significant and courageous action” that had received “the most negative light possible.”
“I’m sorry for the controversy that was caused, but that was not the intent,” Montgomery said at Tuesday’s council meeting. “This was well intentioned. There are clear logical and legal reasons for justification of the agreement, but in this climate in the negative spin it’s been given – there is no way to explain those (reasons).”
In his statement, Frazier also defended the original intent of the deal. “When we approved this agreement, our intentions were sincere in providing an incentive for the city manager to stay in Oakley,” Frazier said. “Not only had he taken on the responsibilities of three other department heads who had been lost to budget cuts, he had successfully negotiated millions of dollars in revenue for Oakley taxpayers with the approval of the new Oakley power plant.”
Councilwoman Pat Anderson said she had voted for the agreement because it “felt right,” and because she had heard no public objections to it.
“Not one person e-mailed me to say ‘this doesn’t look right; please reconsider.’ Not one person called me, and not one person at that meeting stood up and made any comment. My assertion from that was we were moving forward on something that felt right and we needed to move forward. I now realize, receiving e-mails and having you come speak tonight, that this is not the case.”
However, apologies weren’t enough for some residents present at Tuesday’s meeting. Jon LaBarge, who created the Facebook group, told the council, “While I appreciate the fact that Mr. Montgomery went back on the offer, I don’t believe it was any of your intentions to go back on it had you not gotten caught.”
Oakley resident Eve Diamond offered similar sentiments: “Bottom line is: you got busted. And there would have been no apology had it not been made public.”
Frazier’s statement also asked the council to agree that all further discussion on the item take place in open session. As the item was not on Tuesday’s agenda, no action was possible, but Frazier asked that the topic be brought back for discussion at the Oct. 25 meeting.
He also asked that an independent representative be brought in to work out a new agreement, and he requested that Montgomery take out a home loan with a bank or mortgage lender for the full amount of what is owed to the city so that the city is repaid.
“I fully understand the public is angry,” Frazier said. “This was a poor decision that we need to rectify immediately. I am taking the first step here today toward acknowledging this mistake and initiating a plan to correct it.”
Following the meeting, La Barge changed the name of the Facebook group to Oakley CA Watchdog Group and posted on the forum that he would personally see to it that Frazier and the remainder of the council members (Vice Mayor Kevin Romick and council members Anderson and Carol Rios) do not get re-elected, as their decisions have proven “unethical.” Several members of the Facebook group, which had garnered 65 members by press time, said they plan to run for the three available council seats in the 2012 election.
Montgomery said he had made back payments on the mortgage and arranged for future payments to be deducted from his paycheck.
“There are far more important things to look into and work on, and this was a distraction that was completely unnecessary,” Montgomery said. “We’re back to where we started, so we can move forward and put this behind us and focus on what is important and critical for the future success of Oakley.”
Rick Lemyre contributed to this story.