Former Basalt manager Scanlon files notice that he will seek at least $500,000 from town

Mike Scanlon
Aspen Times file photo |

The gloves are off in the fight between the town of Basalt and former Town Manager Mike Scanlon.

The feud has expanded beyond the size of the severance package being demanded by Scanlon, who terminated his contract and quit Aug. 19. He now claims the town has defamed him, intentionally interfered with a contract and intentionally interfered with a “prospective business advantage.”

“Mr. Scanlon’s monetary damages in this matter include damages for lost wages and benefits, and attorney’s fees and costs,” said a notice of claim served on town officials by Scanlon’s attorney. “Total damages may exceed $500,000.”

A notice of claim is legally required through the Colorado Governmental Immunity Act when a person or entity intends to file a lawsuit against a local government. The Basalt Town Council is scheduled to meet with its attorneys in an executive session tonight to discuss Scanlon’s impending lawsuit.

Steve Dawes, a contract attorney working on various matters for the town, disclosed Scanlon’s notice last week during a civil court hearing on the propriety of the town’s executive sessions and retention of public records. Dawes declined further comment on the notice when approached by a reporter outside of the hearing.

Town officials provided a copy of the notice Monday when The Aspen Times requested it.

Scanlon claims retaliation

Scanlon, through Denver attorney Adam Ray, claimed town officials have targeted him for retaliation on several occasions. The latest alleged incident came after Scanlon publicly disclosed he was consulting for midvalley landowner Ace Lane and his Woody Ventures LLC, a company that has applied to develop a substantial commercial and residential project in the El Jebel area. Eagle County is reviewing the project, which is outside of Basalt’s boundaries.

Scanlon lobbied against the project when he was Basalt town manager. Now he is lobbying for approval by Eagle County.

The Basalt Town Council held an executive session with its attorneys on Nov. 21 to get legal advice about the consulting contract between Scanlon and Woody Ventures LLC. After resuming the public session that night, the council passed a motion that said his employment “may or may not constitute a violation of town ethics rules per his contract and we don’t waive our right to recognize that.”

Scanlon contends the town offered more information than it typically does about the reason for the closed session.

“While on the surface this looks harmless, the practical reality is that Mr. Scanlon’s name and his new contract was specifically identified to retaliate against his and affect his current employment along with future employment opportunities,” Scanlon’s notice of claim said.

“The fact that the specific topic for the legal advice was mentioned is evidence of the town’s retaliatory motive,” the notice claimed.

Relations soured

The notice contends that relations between Scanlon and the seven-member council soured after three board positions turned over in the April election.

Scanlon offered his resignation in a nod to a possible “transformation” of the community direction, the notice said. The council gave him a 7-0 vote of confidence and “encouraged Scanlon to purchase a home in Basalt to become more of a fixture in the community,” the notice claimed.

But all was not well, especially between Scanlon and Mayor Jacque Whitsitt, according to the document. The Eagle County District Attorney’s Office, acting on a citizen complaint, investigated a possible Colorado Open Records Act violation by Whitsitt for deleting texts pertaining to town business. Scanlon was questioned as part of the investigation.

“Scanlon opined that Mayor Whitsitt’s violations were intentional because he has discussed the topic with her on multiple occasions but she continued to act illegally,” the notice said.

The DA decided charges weren’t warranted against Whitsitt or the town. Scanlon claimed Whitsitt told him he “threw her under the bus” with comments to the DA that were reported by The Aspen Times on Aug. 3.

“Following years of constant text message communication between Mr. Scanlon and Mayor Whitsitt, Whitsitt sent Scanlon a one word text on the day the article (was) published saying only ‘Unbelievable.’ Communication between the two then ceased.”

The tension wasn’t limited to Scanlon and Whitsitt. The notice claimed that Whitsitt and council members Bernie Grauer and Katie Schwoerer, while meeting Aug. 3 as the town finance committee, were critical of Scanlon’s ability to communicate and his spending approval related to the effort to start an arts center in Willits.

Scanlon claimed the discussion amounted to a public review of his performance by the council — something forbidden in his employment contract.

The last straw

The last incident between the town government and Scanlon came on Aug. 4 when a dispute erupted over Scanlon’s use of $35,000 from the Town’s Reimbursable Employee Housing Trust Fund. He had the check written to use as down payment on a home. Council members were disturbed that they weren’t alerted before the check was written.

Scanlon notified the town Aug. 19 that he was terminating his contract due to his performance being reviewed. He demanded 12 months of severance pay. The town has refused the request and contends that Scanlon resigned, the notice said.

“After Mr. Scanlon terminated his employment agreement, the retaliation by the town persisted,” Scanlon contended in the notice. Grauer “besmirched Mr. Scanlon’s reputation” by claiming Scanlon allowed the town’s reserve funds to go too low without alerting the council. Scanlon countered that he repeatedly informed the council of the town’s budget strategy.

The notice doesn’t set a deadline on when Scanlon, a resident of Overland Park, Kansas, intends to file his lawsuit.