What you need to know:
- Palmer City Manager Stephen Jellie resigned Wednesday night with a $75,000 payout, effective immediately.
- The resignation was triggered in part by accusations from the city attorney that Jellie’s personnel actions against city employees had placed the city at an “imminent threat” of lawsuits.
- Jellie’s exit from Palmer is his third resignation in less than two years. He previously resigned as city manager in Ogdensburg, New York, and as fire chief for Teton County and Jackson Hole.
PALMER — Palmer's embattled city manager, Stephen Jellie, resigned Wednesday night during a nearly three-hour emergency closed session with the City Council. He will leave with a $75,000 payout, effective immediately.
Jellie held the job for 53 days. The resignation was unanimously approved by the Palmer City Council during an emergency meeting following the closed session.
“After deliberation, the City Council accepted the city manager’s resignation and honored the terms of the contract, and directed the mayor to sign a mutual release, effective immediately,” Palmer Mayor Steve Carrington said during the emergency City Council meeting late Wednesday.
Jellie's resignation was triggered by a warning from the city attorney during a Tuesday meeting that Jellie's personnel practices posed an "imminent threat" of lawsuits, coupled with outcry from dozens of the city's public safety employees who said he was working to cut their resources and downsize their departments.
Jellie also placed Palmer Police Chief Dwayne Shelton on two weeks of administrative leave for questioning those decisions, Shelton told the council Tuesday night.
No interim city manager has been named. Shelton remains on administrative leave because city policy requires the city manager to end the leave order before its two-week expiration date, Carrington said in an interview after the announcement. The manager's position will remain vacant until the council meets again on the matter, he said. Such a meeting has not been scheduled.
Jellie said in a statement Thursday morning that he appreciated the opportunity to work in Palmer and linked his resignation to pressure on the council from "a single interest."
“Change is hard, partly because it is hard, and partly because whatever decisions are made, likely one group or another representing a singular interest will be unhappy with the choices, and that weighs heavily on local elected officials,” he said.
Jellie's contract with the city, signed in August, calls for an early termination payment of six months' salary, or $75,000, plus cash to cover the cost of health care for six months, Carrington said. The terms of his resignation and payout are outlined in a three-page separation agreement, a copy of which was not immediately available.
Jellie's departure from Palmer is his third such resignation in less than two years. In late 2022, he resigned from a city manager position in Ogdensburg, New York, and received a $50,000 payout; earlier this year, he resigned from a role as fire chief for Teton County and Jackson Hole, Wyoming, and received a $150,000 payout.
Palmer City Council members said they were unaware of his employment history when they offered him the job because they were barred by personnel rules from researching his background and were never given the results of his official employment check. A public information request for Jellie's background check documents was denied last month on the basis of personnel privacy rules.
Jellie's resignation follows a tumultuous month marked by allegations of employment law violations as he worked to control internal city communications and institute a strict chain-of-command structure, blocking individuals from accessing the city attorney or speaking with City Council members and requiring them to filter all complaints and issues through him, both city staff and City Attorney Sarah Heath told the council Tuesday. Palmer public safety employees also testified that Jellie took dramatic steps to downsize their departments and resources, fearing they would lose their jobs if they complained.
Jellie on Wednesday defended his actions, presenting a dire picture of Palmer's city finances and saying the research into department and resource cuts was ordered by the council and a necessary part of his job ahead of upcoming budget meetings.
“You’re holding me accountable for doing research and work on things that you asked me to do,” he said in a statement to the city council prior to the closed session.
While Jellie told the council that he would be researching potential spending updates as part of the annual budget process, council members said in interviews after the meeting that they did not authorize him to take dramatic personnel actions or preemptive steps to downsize the public safety departments. An August financial audit shows the city's financial condition is sound, they said.
Jellie also used his statement to criticize Heath for what he called "grandstanding" before the council when she outlined concerns about his personnel decisions during Tuesday's meeting. He then asked her to leave the closed session, telling her as they waited with the council for the members of the public to leave the room that she would be suited for a job at a fast-food restaurant, she said.
“Mr. Jellie said I would be ‘an excellent hamburger-flipper at Wendy’s’ and to enjoy my next job, in front of everybody,” Heath said.
Carrington later asked Heath to join the closed session.
Jellie started the job Aug. 19 and moved his spouse and two young sons to town in September with plans to rent a furnished home until they could find a place to buy in Palmer's tight housing market, he said in an interview last month. Palmer law requires the manager to live within the city limits.
Carrington said the council has not yet discussed a plan to search for a new manager.
Dozens of the city's public safety employees waited outside City Hall or at a fire station next door during the closed session. A handful of employees thanked the council for Jellie's resignation during public comment after the resignation announcement.
“Thank you for taking the time this evening to hold this meeting. I know this was not easy for any of you,” said Palmer Police Commander Shayne LaCroix, who is serving as interim chief during Shelton’s leave. “You did the hard job and made the decision.”
The city's next council meeting is scheduled for Tuesday and was to include a presentation by Jellie on recommendations for the 2026 budget. That presentation will instead be made by Gina Davis, the city's finance director, Carrington said.
-- Amy Bushatz can be contacted at abushatz@matsusentinel.com.
This story has been republished with permission from the original at the Mat-Su Sentinel.