Sv Councilor Blew Whistle

‘Unethical’ changes triggered complaint to county attorney on manager’s pay boosts

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Gary Coon Star Valley councilor

Budget “irregularities” prompted newly elected Star Valley Councilor Gary Coon to ask for a county attorney’s investigation of the former town manager’s contract and possible open meeting law violations.

Coon says he didn’t raise the matter directly with then-mayor Chuck Heron or the rest of the council, but felt he had a legal and moral obligation to report allegedly improper changes in then-town manager Vito Tedeschi’s contract.

“It’s an uncomfortable thing,” said Coon of the furor caused by allegations that Heron repeatedly approved major changes in Tedeschi’s contract without proper council approval.

“It’s a small community, we’re all friends — so it’s hard on us,” said Coon, a retired General Motors executive elected to the council last year. “But as far as I’m concerned, the law comes before friendship. I swore an oath to uphold the law and we have to do that — otherwise we’re letting down the people who put their trust in us.”

The town council met in executive session on Tuesday to discuss several issues, including a lawsuit filed by Tedeschi seeking $29,000 in severance pay. In events apparently unrelated to the probe of his compensation, Tedeschi last summer notified the council he did not want to renew his contract that expired at the end of the year. The council effectively said he should resign immediately, which he did. Now he’s suing to force payment of severance benefits as specified in his now-disputed contract.

The council discussed the lawsuit and a possible counter suit, but took no action. After the executive session, the council announced a decision to extend the contract of the judge that handles traffic tickets for the town, an issue unrelated to the dispute.

The county attorney’s office has notified Star Valley officials that it is investigating whether the council violated the open meeting law in making frequent changes in Tedeschi’s contract, a probe that triggered Coon.

Both Tedeschi and Heron insist that the council authorized the mayor to negotiate changes in Tedeschi’s contract. Moreover, they say the council openly voted approval of Tedeschi’s compensation and contract periodically.

Tedeschi’s compensation rose from about $98,000 to somewhere between $133,000 and $165,000 in a 20-month period. In that same span, he also shifted back and forth from being an employee to being an independent contractor.

Coon said while serving on the town’s budget committee after his election last year, he noticed the rapid increase in Tedeschi’s compensation and started asking questions.

“The more I looked, the more discrepancies I found,” said Coon. “After awhile, I thought I had enough information to go to the attorney general’s office.”

The attorney general normally enforces violations of open meeting law, but due to budget cuts, had no investigators available. Attorneys in that office advised Coon to ask the Gila County Attorney to investigate, which he did.

Coon said he didn’t talk to other council members directly for fear of himself violating open meeting laws. He didn’t ask for an executive session because of Mayor Heron’s involvement.

“I didn’t know who was involved and because of the open meeting law, I wasn’t allowed to confer with the rest of the council. I didn’t know how much Heron was involved — but I did talk to the town attorney,” Tim Grier, who also serves as the town manager.

Coon remains convinced that the repeated changes in Tedeschi’s contract violated town codes and procedures, even if they didn’t violate the open meeting law. He said since the council didn’t know about most of the contract changes, the other council members probably didn’t violate the open meeting law.

The legal tangle rests on council votes to give Heron the power to “initiate” changes in Tedeschi’s contract and on a confusing flip-flop in his status as an independent contractor.

Coon maintains the council never approved Heron’s decision to sign off on contract changes that shifted Tedeschi from being an employee, to a contractor and back.

The council did approve a pay raise for Tedeschi after he’d returned to employee status. However, Coon said it was improper to approve that raise on the consent agenda.

“Whether it’s technically legal,” to approve items costing more than $5,000 on the consent agenda “you can have attorneys argue about all day,” said Coon. “The fact it was run through that way was a kind of slippery way to get it through without anyone noticing it.”

Heron has said he operated under a grant of authority by the council and kept other council members fully informed.

The council at most meetings approves a bundle of items on the consent agenda in a single unanimous vote. Any council member can ask for a consent agenda item to be pulled for discussion and an individual vote.

Much of the controversy centers on the change to contractor status and the attempt to boost Tedeschi’s pay after he started handling a growing flood of highway photo enforcement speeding tickets. Revenue from those tickets has become a financial mainstay for the town, with the volume far exceeding initial projections.

Tedeschi asked for contractor status to reduce his tax payments. The town manager at that point was renting a house in Star Valley and commuting on the weekends to his home in Casa Grande. The shift entailed an increase in pay to compensate for the loss of benefits.

After about a year, council complaints prompted Heron to approve a change that moved Tedeschi back to employee status.

Coon now says that the council never approved the status change — and most council members didn’t even know about the arrangement. He said the arrangement was improper, since independent contractors can’t legally supervise town employees.

“The law defines the difference between a contractor and an employee — it’s very fussy about that,” said Coon.

Heron has said the change adhered to town codes and the council had both authorized him to negotiate changes in the contract and had full access to the information.

Tedeschi’s flip-flopping employee status could become an issue in the lawsuit he filed for three months of severance pay.

Coon says when Tedeschi switched to independent contractor status, his old contract calling for severance payments became void. Although the council approved a pay increase after Tedeschi was switched back to employee status, that didn’t necessarily reinstate his old contract, says Coon.

“As far as I’m concerned, he left his job when he became a contractor” and the shift back to employee status was a “verbal” deal with the mayor and the town attorney, which the council never formally approved.

Coon also has criticized Heron’s decision to boost Tedeschi’s compensation with a $1 per ticket surcharge for administering the speeding ticket enforcement program. The town also later hired a ticket expert to manage the system, which was actually operated by an independent firm.

The town paid the per-ticket bonus to Tedeschi for two months, but after four months, changed his contract again to include a $900-a-month raise. Tedeschi also got a one-time $3,000 payment to cover the period when he was getting just $1 a ticket. The council did approve that $900 monthly pay, but not until two weeks after Heron, Tedeschi and the town attorney had signed the agreement, said Coon.

Coon said he objected to the ticket arrangement. “I thought it would have some negative repercussions from the community — that he was getting like a little kickback for tickets.”

In an itemized list of some 12 changes in Tedeschi’s compensation over the course of 20 months, Coon said the council properly approved only the two, townwide 3 percent cost of living increases.

Heron and Tedeschi have both said that all those changes were authorized by the council — either by granting Heron the authority to negotiate or by approving the contract changes directly.

Coon said he didn’t think that his questions about Tedeschi’s contract had anything to do with the town manager’s decision to leave last summer. He said he had to take Heron “at his word” that the impending investigation played no role in the former mayor’s decision to resign recently.

However, Coon remains convinced the contract changes were unethical and improper, if not illegal.

“What the mayor should have done is negotiated some sort of an agreement, then go to the council in an open meeting and discuss it in front of the public. That’s what this is all about. We’re not supposed to be doing these things behind closed doors,” Coon said.

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