Commissioners Approve Separation Agreement with Colburn, Eye Next Steps for City Manager Replacement

Traverse City commissioners unanimously approved a separation agreement with City Manager Marty Colburn Monday – though several commissioners expressed disappointment with the process leading up to the vote, saying it was hasty and lacked transparency. Few reasons were given publicly for Colburn’s departure, with multiple city department heads and former city leaders praising Colburn’s leadership and Mayor Richard Lewis emphasizing the city manager had done nothing “immoral, unethical, or illegal.” Commissioners will now need to select an interim city manager and then begin a longer process – which could take six to nine months – of hiring Colburn’s permanent replacement.

Commissioners and Colburn both approved a separation agreement that ended the city manager’s tenure with the city effective midnight Monday. Colburn, who has served in his role since 2015, leaves with contractual payouts – including earned leave time – totaling $97,038.49. The separation agreement, which was first announced in a city press release Thursday, also includes standard liability waivers and non-disparagement clauses.

Colburn called the separation agreement “mutual” in brief public remarks Monday, but otherwise did not address the circumstances surrounding his departure. “I've served in local government for 33 years,” Colburn said. “It's truly been an honor and a privilege to serve in this particular role in Traverse City...I'm thrilled to have been a part of that.” Colburn also highlighted his appreciation for city staff. “They’re great people to work with,” he said. “They’re dedicated to this community.”

Internal documents obtained by The Ticker  indicate that at least some commissioners may have been unhappy with Colburn’s performance, and that Colburn faced a potentially negative upcoming review. Commissioners went into closed session on March 20 without Colburn to discuss his employment, and Colburn emailed the board saying he knew they were having “early deliberations” about his performance and tenure with the city. Colburn asked for more time to finish key city projects, saying he intended to retire in two or three years but didn’t want to leave sooner. He worried that any “abrupt or hasty action” by commissioners to end his employment could “disrupt the significant positive momentum for these projects” and “have sizable negative impacts for Traverse City.”

Commissioners agreed to publicly release an attorney-client privileged memo Monday that they discussed at their March 20 closed session. The memo indicates one or more commissioners asked City Attorney Lauren Trible-Laucht for legal advice on the city manager’s employment, including the city commission’s “rights and responsibilities” related to his contract. Trible-Laucht told commissioners in the memo that Colburn is an at-will employee and outlined the legal options under which he could be removed from his role, including termination, resignation, or “through an agreement negotiated separately and containing terms agreed upon by the parties.” In the last scenario – the one ultimately approved by commissioners – Trible-Laucht advised “that the terms of separation include a release and waiver by all parties.” She also noted that “if the city manager leaves or is removed, the city commission has a responsibility to designate a properly qualified person to execute the functions of that office until the vacancy is filled.”

Outside of the memo, commissioners noted they couldn’t publicly share what was discussed in closed session – and thus exactly what had precipitated Colburn’s departure. Several acknowledged the process appeared rushed and lacked public transparency. City Commissioner Tim Werner called the proceedings “opaque,” but said he didn’t see any way to “turn back” or for Colburn to now be able to stay on and manage effectively. Commissioner Mi Stanley said she’d be “surprised if anyone were happy with how this process has unfolded...it’s certainly not a pretty situation given all of the feedback that we’ve heard.” Commissioner Mitch Treadwell said the process had “not necessarily been respectful to all parties,” and that he wished “we could have had a more seamless transition from one leadership to the next.”

Commissioner Linda Koebert agreed. “It’s with regret that I will vote yes (on the separation agreement),” she said. “I think mistakes were made. Certainly, we need to promise the community that we will work with more transparency going forward.” Multiple current and former city leaders – including Assistant City Manager Penny Hill, City Director of Municipal Utilities Art Krueger, City Director of Public Services Frank Dituri, and former commissioners Gary Howe and Roger Putman – voiced support for Colburn during public comment and thanked him for his service. “You were hired on during a very chaotic period...you came in and provided a very steady voice in leadership,” Howe said. Hill said Colburn “built bridges among people, and I think that's the most important thing as a city manager that he could do.”

Commissioners discussed next steps Monday for replacing Colburn. Hill will immediately take over as interim city manager, but said her current responsibilities won’t allow her to hold that position for long. As the result of the commission’s closed session discussion about Colburn’s employment, Lewis said he’d already begun investigating possible interim city managers. Former City Manager Ben Bifoss initially agreed to consider the role, but withdrew from consideration shortly before Monday’s meeting. After learning of Colburn’s pending separation agreement, City Clerk Benjamin Marentette met with Lewis and Mayor Pro Tem Amy Shamroe and offered to serve in the interim role, noting that he plans to apply for the position of city manager either way. George Korthauer, the former city manager of Petoskey, was also willing to serve as interim, Lewis said.

Commissioners agreed that Hill should spearhead the effort to identify potential interim candidates – including looking at a wider pool, such as candidates available through the Michigan Municipal League – with the commission to ultimately make the selection. Lewis suggested a number of options commissioners could consider, including having a special meeting on April 10 to make a selection without interviews, to interview candidates, to appoint an ad hoc committee to interview candidates, or to discuss other possible next steps. Commissioners at some point will also need to decide on a process for finding Colburn’s permanent replacement, which could include hiring an outside firm to help lead a national search. The search process could take at least six to nine months to complete, Werner pointed out.

Colburn’s sudden departure could make for a bumpy road ahead for commissioners. In addition to completing the city budget, which must be approved each June and is typically prepared and presented by the city manager, Werner noted the city police chief is retiring, the city engineer is considering retiring, and the city treasurer position is open. Werner said he was uncomfortable with an interim city manager making any of those key hires. If other commissioners agree, the hiring processes for those roles could be delayed or altered in the coming weeks as the commission determines how best to proceed.