League of Cities may review Greenfield council issues

Editor's note: The Star Tribune has removed a user's comment posted under the user name of "jillkrout"; Greenfield Mayor Jill Krout said that she did not submit such a posting. Comments on the story are no longer being accepted.

After only a few months on the job, Jim Willis resigned in October as interim administrator for the city of Greenfield, citing policy differences with the City Council.

Days after Willis submitted his resignation, at yet another volatile City Council meeting, Greenfield Mayor Jill Krout publicly fired Willis rather than let him serve out the remaining week of his term.

"He did not support the council," said Krout, who voted to hire Willis during the summer. "It needed to be done."

At the meeting, Krout also said a council member was "stalking" her and that Willis -- who had come highly recommended by the League of Minnesota Cities -- "appeared to be dealing with me in a threatening manner."

Krout's moves drew gasps from the audience and gave her critics more ammunition in their attempts to oust her from office.

"Is this really a wise course of action?" asked Council Member Mark Erickson at the time. "The League [of Minnesota Cities] is watching."

This past summer, after months of personal and political acrimony, lawsuits and allegations of council members packing guns at meetings, the league took the extraordinary step of raising Greenfield's liability insurance deductible from $500 to $200,000.

On Nov. 4, the league is considering going beyond that to raise Greenfield's deductible to $500,000, or possibly even terminate the city's coverage, according to a staff memo sent to league trustees Oct. 19.

If the $500,000 deductible is approved by the league board, it would likely be the highest deductible in the state. It would also be about half the city's annual $1.1 million budget, meaning future litigation could have a big impact on local taxpayers.

"It's uncommon for situations to get to where Greenfield is, but it does happen," said league spokeswoman Stephanie Weiss, who couldn't recall a league city ever facing such a high insurance deductible.

Weiss said the problem is that the costs to defend or settle lawsuits involving Greenfield has far outpaced the payments the city is making. In July, the league said it had paid out more than $800,000 in claims for Greenfield during the past five years while taking in less than $100,000 in premiums from the city. As a result, the losses are passed on to the league's other 850 or so member cities that are part of the insurance group.

Among the materials presented to the board is Willis' Oct. 9 resignation letter, along with news articles about the Oct. 15 meeting at which he was fired and links to a video of the meeting that the league staff believes will help trustees get "a sense of the situation in Greenfield."

"In light of these developments," the board memo says, "the board may wish to reconsider Greenfield's coverage."

Continuing drama

The threat is but the latest twist in a drama that has played out in this city of 2,900 for more than a year now.

"It's really sad," said Doris Conzdt, a three-term Greenfield mayor during the 1980s. "I'm 76 years old and I've never seen anything like it. In a word? Insanity."

"The majority of the people who live in Greenfield don't want to say that they live in Greenfield," said Carol Beasecker, a member of the Greenfield Charter Commission, which has been working on a new charter for most of this year.

Deliberations have grown so tense that members of the Charter Commission use voice votes and don't record individual votes for fear of reprisals.

"I've already had my mailbox bashed," said Larry Plack, the commission chairman who recently saw his defamation suit against Krout and the city dismissed in Hennepin County Court. "It's bizarre."

Plack, himself a controversial former mayor whom Krout soundly defeated for the office in 2008, blames the current council majority of Krout, Howard Veldhuizen and Mark Lee for damaging Greenfield, especially in its insurance coverage with the league.

"It's a very serious predicament," Plack said. "I don't know if they would kick us out of the league, but they could refuse to cover us."

Krout said that "one suit alone against a former councilor, a former mayor and the city cost $565,053." She said the league "did not respond to increased legal costs as soon as they should have."

The league, she said, "is our insurance company. As our insurance company, they are there to support the city, and we appreciate that support. But they are 'watching us' for any action they do not like, and I believe they are egged on by political opponents anxious to make hay of this, including supporters of the former mayor..."

Krout and her allies maintain that the current attacks she's facing in Greenfield are coming from a small, vocal minority -- people Krout contends have a financial stake in dictating future planning and zoning policies in the city.

"You can't stop a motivated minority intent on trashing the city and council to further their own agendas," Krout said. "The volume is there, but the numbers are not. I do not plan to resign."

That hasn't stopped opponents from trying to oust her or circumvent Krout's council majority. A website has been started aimed primarily at Krout, and after news of the league memo got around town, it wasn't long before bloggers were blasting Krout and the council majority.

The website includes a petition to circulate for signatures asking Krout to resign. Just last week, at a Charter Commission meeting, a majority of the commission also was looking for ways to diminish the role of Krout and her council colleagues by increasing the number of City Council members from five to seven or nine.

"It would take away the majority," said Plack. "We have a majority on the council that won't listen to anybody. There's a lot of anger in Greenfield."