Portola Valley: Town manager resigns after three years

Staff forbidden to talk by clause added to contract in December.

This is an expanded version of an earlier story.

With the "involuntary resignation" of Portola Valley Town Manager Nick Pegueros after three years on the job, the Town Council now has a job of its own ahead: finding a new town manager.

Nick Pegueros
Recruiting is set to begin Aug. 26, Mayor Jeff Aalfs said at the Aug.12 council meeting. The council had just met in private for the third time in four weeks on the subject of the town manager's performance.

The meeting concluded with the announcement of Mr. Pegueros' immediate resignation. During the search for a new manager, Planning Director Debbie Pedro will be the acting town manager, Mr. Aalfs said.

In a prepared statement, the council said that "at the request of Nick Pegueros" the council "requested the involuntary resignation of the Town Manager and the Manager resigned, effective immediately."

By resigning as opposed to being fired, Mr. Pegueros receives a severance package that includes six months of his base annual salary, now at about $199,000, accrued vacation pay, and unused benefits such as pension contributions, according to the contract.

There was an element of suspense as the development unfolded. On the Aug. 12 agenda, a closed session was scheduled to discuss the "discipline, dismissal or release" of a public employee," although the employee's name was not included.

Mr. Pergueros had been out of the office for about three weeks prior to the Aug. 12 meeting, and since July 22, the council had evaluated his performance twice before that night.

The council met in public session at 7 p.m. that night and discussed minor business before adjourning to closed session at 7:20. Except for a few words spoken sotto voce to Town Attorney Leigh Prince, Mr. Pegueros remained silent.

Normally a party to closed sessions, he left the meeting hall and headed to his parked car.

Shortly before 7:30, Councilman John Richards retrieved Mr. Pegueros. At 7:50, Mr. Pegueros emerged alone, his laptop bag on his shoulder, his head slightly down. Normally an energetic walker, he moved slowly but deliberately to his white BMW wagon, got in and drove off.

Shortly after, the mayor read the statement agreed to by the council and Mr. Pegueros, announcing the involuntary resignation. The vote had been 4-0 to accept the resignation, Ms. Prince said. Councilman Craig Hughes did not attend the meeting.

In its statement, the council thanked Mr. Pegueros for "his diligent and loyal service to the Town, his considerable financial acumen, and his rapport with the public."

"As always," the statement continued, "service to the residents of Portola Valley is the Town Council's top priority. The Council will keep the public informed regarding next steps and looks forward to introducing a new Town Manager in the near future."

Council members are bound to say no more than what is in the statement, according to Mr. Pegueros' contract.

Mr. Pegueros came to Portola Valley in May 2012 from Los Altos Hills, where he was administrative service director, according to his LinkedIn biography. Before that, he was an assistant finance director in San Bruno.

Mr. Pegueros' original contract was for one year; a second contract was also for one year, then a three-year contract was signed in December, Mr. Aalfs said. The council reviewed his performance in April and gave him a 3 percent raise, Mr. Aalfs said.

During the three weeks Mr. Pegueros had been out of the office before the Aug. 12 meeting, he was working at home on projects important to the council, Ms. Prince told the Almanac.

Staff silenced

A clause added to Mr. Pergueros' contract last December forbids town staff from talking with "the public, the press, or any Town employee concerning the termination of this Agreement" -- a provision of questionable enforceability.

Asked to comment on whether this clause abridges employee rights to free speech, California Newspaper Publishers Association attorney Nikki Moore said that to be bound to a contract, you must be a party to it, so a staff member could not be sued for talking.

But the presence of the clause probably obligates managers -- in this case, the council -- to "instruct staff not to speak about information subject to the agreement," Ms. Moore said.

An employee could then be fired for speaking on the record, but would not be legally liable, she said.

Town Attorney Prince did not disagree with Ms. Moore's interpretation.

The contract also forbids termination within 90 days of an election involving one or more council members, but Mr. Pegueros was not terminated. He resigned.

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11 people like this
Posted by WTF
a resident of Portola Valley: Central Portola Valley
on Aug 13, 2015 at 12:26 pm

Ok, WHAT? They convened three meetings to discuss his performance, and he asked to be fired? Am I understanding this correctly? Because paying him $200,000 plus a car allowance and vacation pay for being fired, that doesn't seem right.

He got a raise in April.

Have to say, I sure am not impressed with our Town Council these days.

8 people like this
Posted by Nancy
a resident of Portola Valley: Ladera
on Aug 13, 2015 at 12:44 pm

I agree WTF, I smell a rat. After that last embezzlement fiasco, can we take a hard look at where our money is going, and clean up the politics in Portola Valley? Sheesh!

3 people like this
Posted by Chance
a resident of Menlo Park: Park Forest
on Aug 13, 2015 at 12:45 pm

Not a very complimentary photo of him, to say the least.

8 people like this
Posted by pogo
a resident of Woodside: other
on Aug 13, 2015 at 1:22 pm

pogo is a registered user.

I presume he is resigning by mutual agreement to avoid a lawsuit. Regardless of merit, these lawsuits are incredibly expensive.

I suspect the Council did the right thing. Pay him his $100k severance (half of what he was entitled to previously) and move on.

2 people like this
Posted by Nancy
a resident of Portola Valley: Ladera
on Aug 13, 2015 at 1:28 pm

How is Portola Valley choosing these not so scrupulous characters anyway? I don't recall hearing anything about him before this.

8 people like this
Posted by Member
a resident of Portola Valley: Central Portola Valley
on Aug 13, 2015 at 1:30 pm

Our volunteer Town Council works very hard to balance interests in the Town.
Criticizing them invites unnecessary conflict when the facts are confidential.
This obviously wasn't a situation they wanted to review or act on. I'd rather give them a well earned round of applause.

Like this comment
Posted by SteveC
a resident of Menlo Park: Downtown
on Aug 13, 2015 at 5:10 pm

SteveC is a registered user.

volunteer Town Council? They are paid $0 for meetings, etc.? Interesting.

8 people like this
Posted by Charles
a resident of Portola Valley: other
on Aug 13, 2015 at 9:23 pm

PV residents should diligently work to make sure the town council, volunteer or otherwise, never ever enters into a contract that forbids transparency of any sort. That includes the PVSD too. We paid that 200k and are not allowed to know why he was fired? I smell a huge rat here.

10 people like this
Posted by Angela Hey
a resident of Portola Valley: Brookside Park
on Aug 14, 2015 at 2:19 pm

The town council revealed the settlement terms of Nick Pegueros' resignation. I believe the citizens of Portola Valley deserve more than the terse announcement by the council.

It is useful to know what factors in a person's performance caused the termination so the next town manager doesn't have to leave involuntarily. This (and I am not suggesting Nick Pegueros shows any of these traits just they are typical reasons people get removed from their jobs) could range from personal appearance - see Wall Street Journal of Friday August 14th 2015 that suggests that people's looks affect their performance - to communications style with council members or town staff, to hiring style, to ways info is shared or not shared, to abusing privileges, to committing offences, to failure to meet goals, to failure to have goals, stepping beyond one's job description etc.

Usual reason for termination is not getting on with someone - so what traits or behaviors alienated Nick Pegueros from the town council? In a town that values transparency, citizens deserve a better answer.

3 people like this
Posted by Member citizen
a resident of Portola Valley: Portola Valley Ranch
on Aug 15, 2015 at 8:37 pm

Hiring and firing are restricted by many laws and regulations, as are communications about such actions. This protects privacy of both sides and often permits free action without the threat of lawsuits.
As a hiring manager for many years, I was often relieved that these restrictions existed, for the good of my company and of the individuals involved.
It is too easy to sit outside a situation and make judgements with incomplete information. Our Town Council is indeed a group of volunteers, doing their best and sacrificing a lot for the Town. Note the comment from Menlo Park resident, who was surprised they are volunteers. And they are at least as competent as so called professional council members in other communities.
Let's give them the benefit of the doubt and move on.

3 people like this
Posted by Nancy
a resident of Portola Valley: Ladera
on Aug 16, 2015 at 12:41 pm

The key issue here is the lack of transparency, and not being provided with any facts. I'm not saying anyone did not do their job, I'm just saying as citizens we should be able to ask what happened and get a straight answer. If anything illegal took place, we certainly need to know. Saying let's just move on is like sticking our heads in the sand.

Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Aug 16, 2015 at 3:29 pm

Menlo Voter is a registered user.


sometimes the law doesn't allow for "transparency", especially when it involves employees.

2 people like this
Posted by Nancy
a resident of Portola Valley: Ladera
on Aug 17, 2015 at 11:09 am

Is there a loophole that would not allow citizens to know if a city employee committed some crime while in office, or let's say a background check turned up a child molester? Not saying any of the above apply, but I feel uneasy not knowing in general terms.

3 people like this
Posted by Interesting
a resident of Portola Valley: Ladera
on Aug 17, 2015 at 12:29 pm

Interesting to me that in today's at-will employment environment a job such as small town town manager can garner a contract that 1) pays that much and 2) provides half a year's salary severance for what appears to be a fancy term for termination. Is the job market competitive in these city management roles?

Like this comment
Posted by Stan the man
a resident of Portola Valley: Los Trancos Woods/Vista Verde
on Aug 17, 2015 at 2:38 pm

Insert the following question onto the photo of the man.....

Did you do that?

Like this comment
Posted by pogo
a resident of Woodside: other
on Aug 18, 2015 at 8:44 am

pogo is a registered user.

Attorneys for the parties usually require confidentiality as one of the settlement terms. The parties ultimately have to decide if "airing" their dispute in a messy and expensive lawsuit is more important than a settlement where each party quietly goes away with partial satisfaction.

Settlements can be unsatisfying to those with the luxury of hindsight observing from the sidelines. I would ask them if they are willing to pay hundreds of thousands of dollars in legal and other costs in a lawsuit with the risk that your town could lose even more just to find out those messy details.

7 people like this
Posted by Seriously???
a resident of Menlo Park: Central Menlo Park
on Aug 25, 2015 at 11:09 pm

City Manager Alex D. McIntyre just appointed Nick Pegueros as the interim administrative services director for Menlo Park. Web Link

3 people like this
Posted by pogo
a resident of Woodside: other
on Aug 26, 2015 at 7:10 am

pogo is a registered user.

Well done, Menlo Park. Your citizens deserve the government they tolerate.

2 people like this
Posted by Menlo Voter
a resident of Menlo Park: other
on Aug 26, 2015 at 8:11 am

Menlo Voter is a registered user.

Brilliant. Let's hope interim doesn't become permanent.

Sorry, but further commenting on this topic has been closed.

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