Embattled South Portland official slated to return to work Thursday; city likely to pay legal fees

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SOUTH PORTLAND — The director of public works and cultural services is scheduled to returned to work at the Community Center on Thursday, July 16.

City Manager Jim Gailey said in a press release on Tuesday that his decision to reinstate Dana Anderson, who has been on paid administrative leave since May 8, stemmed from a recent investigation into the financial controls and dealings of his department. That investigation, prompted by a lawsuit unrelated to Anderson’s work with the city, found no major financial discrepancies.  

“Taking into account the external review performed and the internal work completed, City Administration believes that it has acted appropriately under the circumstances and that no further departmental reviews are warranted at this time,” Gailey said.  

Anderson, however, will no longer be in charge of the public libraries, a department he took over more than a year ago. A $4,000-a-year stipend increase that came with the added responsibility has been taken away, Gailey said, and the library director will now report directly to the city manager.

Gailey held two meetings in recent weeks with Gregg Frame, a Portland labor attorney representing Anderson. The two were working out the details of Anderson’s return to work. 

At a press conference Wednesday, Gailey said the city may have to pay a portion of Anderson’s legal bills, which he estimated to be around $5,000.

“We really have to apply what’s in the city ordinance,” Gailey said. “We
haven’t really entered too deep into that side, but we really need to
differentiate some of the issues.”

The ordinance requires the city to provide “competent legal counsel” to city employees who are threatened with legal action.

So far, the city has spent nearly $9,500 for investigations related to Anderson: $2,500 for the financial controls and $7,000 into personnel complaints made by a former employee. Meanwhile, the city has paid Anderson, who makes $100,000 a year, more than $19,000 for the 10 weeks he was on leave.

Gailey defended the city’s actions, saying the expense was necessary. 

“We needed to make sure we provided the right protocol to handle the situation,” Gailey said Wednesday. “At the end of the day, we can feel comfortable that all stones have been overturned and we’ve explored every possible avenue.”

Gailey said he met with employees on Tuesday in the library, public works, parks and recreations departments to announce his decision.

“I think it’s fair to say that the majority of (Anderson’s) employees welcome him back,” he said.  

Anderson’s return to work comes about five months after five veteran city employees were abruptly laid off, an action that sparked criticism in the community and on the City Council. 

Last week, the council held an open discussion about Anderson’s status at the beginning of its meeting, an unusual move since there was no related agenda item and the open discussion typically takes place at the end of the meeting. A variety of views were expressed, from defense of the city’s action to calls for councilors to apologize to Anderson. No apology was issued. 

Shortly after the five employees – four of whom worked for Anderson – were laid off, it was revealed that Anderson had settled a lawsuit accusing him of embezzling $37,500 from a nonprofit organization of basketball officials. Frame said the $900 settlement was of nuisance value, and that Anderson maintained his innocence. Criminal charges were not filed following an investigation of the claim by Maine State Police.

Anderson was placed on paid leave May 8 so the city could investigate his handling of the largest consolidated city department, which has a combined budget of nearly $9 million. A micro-audit by MacDonald Page, which cost the city $2,500, said there
were no discrepancies found in the departments. It also said Anderson
has limited involvement in monetary transactions.

Gailey said either Anderson, or another Community Center employee, drops off sealed deposit bags at City Hall on a daily basis with money from the Community Center, Transfer Station, Municipal Golf Course and Wainwright Fields, all of which were investigated by MacDonald Page. Although the report was limited in scope, the city’s books are fully audited on an annual basis, he said, and no significant discrepancies have been found.   

Meanwhile, Anderson has faced public criticism about his management style from employees, residents and some City Councilors. A former employee, Deb Smith, filed a formal complaint after she was laid off. Both the complaint and a subsequent investigation by human resource specialist Michael Wing are considered confidential documents.

Although the personnel document has not been released to the public, Frame said that investigation, like the financial controls report, exonerates Anderson. Gailey said that if there were significant issues, Anderson would not be returning to work. 

Smith, however, said she was “not impressed” with the findings.

Gailey’s press release noted Anderson’s many accomplishments during his more than 30-year career with the city, including the vision and oversight for developing the Greenbelt Walkway, Spring Point Shoreway, Wainwright Recreation Complex, Hinckley Park, Bug Light Park and the Community Center. 

“Mr. Anderson looks forward to returning to work at the City of South Portland and continuing the good work that has been the hallmark of his 30-plus years of service to the City of South Portland,” Frame said in a press release Tuesday. “And he does so expecting the full support of the City Council, which has fully and completely investigated Mr. Anderson, at great expense to the City of South Portland.”

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net