Council votes to fire Coburg city recorder.

Byline: Karen McCowan The Register-Guard

COBURG - The City Council voted unanimously Tuesday night to begin termination proceedings against City Recorder Peggy de Montmorency, who has been on paid administrative leave since late July.

The council's notice of intention to fire the four-year financial officer came after a 2 1/2 -hour executive session, closed to the public, to discuss the case. She has the right to appeal the decision to the council, but de Montmorency said Tuesday night that she did not expect to do so.

"At this point, there's so much water under the bridge that it would be difficult for me to go back to work there," she said. Instead, she intends to proceed with a lawsuit claiming she was unfairly dismissed.

According to previously confidential correspondence between de Montmorency and the city released by her attorney just before the closed-door session, Mayor Judy Volta advised de Montmorency in a July 29 letter that she had "failed continuously to perform in a timely and competent manner essential functions of your employment with the City of Coburg, thereby causing it substantial financial losses and placing it at risk of financial penalties for violation of the laws."

Specifically, Volta's letter contended that de Montmorency had caused the city to incur bank overdraft charges in excess of $2,500; had failed to file required Oregon Public Employee Retirement System reports, prompting a threat of $14,000 in state sanctions; violated city policy by writing herself a check for more than $7,500 to cash out vacation and comp time; and improperly "executed an interfund loan" to balance a shortfall in its $1.7 million general fund budget last fiscal year.

The City Council has ordered a performance audit of the city's 2003-04 books and accepted Police Chief Mike Hudson's resignation as city administrator since discovery of the shortfall, which Acting City Administrator Jamon Kent has said is at least $230,000.

Kent has also said he has no evidence that anyone misappropriated funds; rather the city may have simply outspent its revenue.

Coburg officials are eyeing a variety of new license fees or taxes to help the city repay $230,000 it borrowed from its sewer fund to avoid starting the current fiscal year with a deficit in its general fund. In a meeting last week, the City Council heard presentations on potential income, sales and payroll taxes, as well as license fees on various classifications of businesses to raise revenue.

The council took no action on the presentation by Lane Council of Governments consultant Milo Mecham. But Volta said the city must examine all its options in light of the shortfall, which she said took council members by surprise after Hudson reported April 30 that the "proposed budget has been completed and it balances."

Hudson could not be reached for comment Tuesday night.