Friday, June 29, 2012

Sun Valley settles another tort claim

City’s insurer awards $84K to treasurer Michelle Frostenson

Express Staff Writer

Dewayne Briscoe

Following a legal settlement this week with a second whistle-blower who claimed she was retaliated against by Sun Valley city officials and employees, Mayor Dewayne Briscoe said the city is on track to regaining proper functioning.

The city announced in a news release Wednesday that a tort claim notice filed by Finance Manager and Treasurer Michelle Frostenson had been settled for $84,127, of which $13,519 was for attorney fees and costs. In an interview, Briscoe said the claim was both received and settled on Wednesday.

According to the release, the case was settled by its insurer, Idaho Counties Risk Management Program, an insurance pool of state municipalities. The city stated that as in the recent settlement of former City Clerk Kelly Ek's tort claim, neither the mayor nor the City Council were involved in the negotiations.

Ek settled her claim on June 11 for $72,000, including attorney fees. She resigned June 8.

The news release states that Frostenson has resigned from her position but will continue to help during the transition period to find and train a successor.

The basis of Frostenson's tort claim was an alleged violation of the protections afforded by Idaho's whistle-blower law. She contended that she was retaliated against for claiming that former City Administrator Sharon Hammer and other city employees "had abused their respective positions and had thereby misappropriated City assets in various ways."

The claim stated that improper conduct included:

- "Misappropriating funds of the City."

- "Use of the City's motor vehicle and other City assets for personal benefit."

- "Use of City-issued credit cards for personal benefit."

- "Misrepresentation of paid time off."

- "Approval of fraudulent timecards of certain 'special employees,' thereby allowing these 'special employees' to receive benefits(s) to which they were otherwise not entitled.'

- "Creation of a hostile work environment by misusing positions of authority."

- "Failure to comply with the anti-nepotism statutes, ordinances and/or rules which were in effect and were to be abided by individuals employed by the City."

"Mrs. Frostenson communicated in good faith the suspected illegal conduct and waste to (former) Mayor (Wayne) Willich on or about October 5, 2011, and to the City Council on or about November 11, 2011. Following the communication, Mayor Willich forwarded a certain Notice of Advice Regarding Investigation to Mrs. Frostenson, which provided that 'should you believe that any action or conduct by co-workers or supervisors is in any way intimidating or retaliatory to you as a result of your involvement with any employment investigation you are to notify your supervisor or the City's outside counsel. ... '"

Nevertheless, the claim stated, Hammer and Willich "retaliated against Mrs. Frostenson by placing her on unpaid leave, by subjecting Mrs. Frostenson to offensive behavior and words, and by disparaging Mrs. Frostenson to fellow employees."


In an interview, Willich said he had not seen the tort claim notice, but denied Frostenson's accusations of inappropriate conduct on his part.

"I totally reject the idea," he said. "I have no idea what's in her mind."

Hammer could not be reached for comment.

In April, Sun Valley contracted with a Seattle-based accounting firm to help the city investigate its accounting practices and financial transactions over the past several years.

"I believe that the majority of both [tort] claims will be substantiated by the forensic audit," Briscoe said.

The audit was originally scheduled to be completed by June 30, but Briscoe said "they keep running into new things" and he expects it to be completed in mid- to late July.

In her tort claim, Frostenson states that she "continues to be victimized with on-the-job hostility from City employees who were led to believe by Ms. Hammer, Mayor Willich and/or others that Mrs. Frostenson was a disloyal employee and had committed dereliction of her duties."

Asked whether Frostenson is currently being treated with hostility by some city employees, Briscoe said, "I know that for a fact. The staff is kind of divided up between Sharon Hammer/Willich supporters and those on Kelly Ek's and Michelle Frostenson's side. The hostility that the people loyal to Hammer and Willich have is pretty demonstrable."

However, he said, tensions have subsided with Ek's and Frostenson's resignations.

Briscoe said that since he took office in January, he's held several meetings with staff members and told them they need to change work attitudes, including accurately reporting time off and not using city credit cards or vehicles for personal use, and treat whistle-blowers with respect. He said some employees had been skipping work on Fridays.

"I think we've set a pretty good esprit de corps in the past two months," he said.

However, he said, that doesn't mean all employees are in the clear. He said he will take any punitive actions warranted pursuant to the forensic audit.

Briscoe said he misses the services of Ek and Frostenson, whom he called "dedicated long-term employees."

"It's unfortunate that they as whistle-blowers have to bear the burden of this," he said.

The complete draft tort claim notice is available on the city of Sun Valley's website at

Greg Moore:

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