Anchorage Assembly rejects $550,000 settlement in claims against Bronson administration by fired city manager

The Anchorage Assembly on Tuesday rejected a proposal to pay $550,000 to settle legal claims against Mayor Dave Bronson’s administration by former Municipal Manager Amy Demboski.

The mayor fired Demboski in December. She then sent the city a demand letter accusing Bronson of firing her in retaliation for whistleblowing and making numerous other accusations against the mayor and some of his officials. Demboski claimed they violated city laws, acted unethically, discriminated against women and created and tolerated a hostile work environment.

After a lengthy debate, members voted down the settlement proposed by the administration in an 8-4 vote. Demboski’s lawyer, Scott Kendall, said in a statement that they were “extremely disappointed” by the action.

During a lengthy debate, Assembly members weighed concerns about what agreeing to or rejecting the settlement would mean for taxpayers, accountability of the administration and of Demboski for her actions under Bronson.

[It was good to be friends with Anchorage’s mayor. Then the investigations began.]

“What is in the public interest? Certainly, protecting taxpayer money is in the public interest,” Assembly member Daniel Volland said. “However, government accountability, transparency and the public’s right to know is also in the public interest. So how do we weigh those factors?”

Members on Tuesday unanimously voted to pay another settlement — of $277,500 to Heather MacAlpine, former director of the city Office of Equal Opportunity.

She accused Bronson of firing her in retaliation for investigating claims against his then-appointed library director. MacAlpine’s firing came as she began looking into multiple complaints from library employees that Bronson’s pick, Judy Eledge, had made racist statements and other derogatory comments, the lawsuits say.

MacAlpine had accused the administration of wrongful termination in two lawsuits against the city — one in state court and one in federal court. MacAlpine is now required to drop those suits, according to the agreement.

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The proposed settlement with Demboski would have required the former city manager to relinquish all legal claims against the city and Bronson. Separate from the settlement, Bronson and Demboski have entered into a nondisparagement agreement, according to the proposed agreement.

With the settlement rejected by the Assembly, Demboski is free to sue Bronson and the municipality. Many Assembly members said a lawsuit is the city’s best chance at getting real answers about her claims.

Debate among members hinged largely on the cost that a lawsuit could burden taxpayers with.

“The cost is a factor. It’s an important factor. But the cost is only one factor. What is the price of the truth? How do we get to the truth?” Assembly Chair Christopher Constant said.

Bronson has repeatedly refused to publicly address Demboski’s claims, saying city attorneys advised him not to comment on “potential litigation” or personnel matters.

An Assembly investigation “will always be seen as political,” Constant said, also saying that the administration has stonewalled previous Assembly investigations and records requests. It refused to turn over to the Assembly its records in an investigation into the hiring of the former Health Department director, and the matter is now headed to court.

Assembly Vice Chair Meg Zaletel voted in favor of settling with Demboski, along with members Kevin Cross, Randy Sulte and Scott Myers.

Zaletel, who is an attorney, said litigation would likely end up costing taxpayers far more while giving the public few answers.

“Lawsuits do not produce the truth. Lawsuits produce carefully crafted narratives meant to win or defend cases,” she said.

The Assembly should continue to pursue finding out the truth of the claims, she said.

“It’s a matter of calculated risks. And it’s a balancing act. I absolutely abhor that we are in this position right now. It is ridiculous that we have to even be having this conversation. But here we are. And so I want to be really clear where I’m coming from, which is it’s not to push this aside. It’s not to let it drop,” Zaletel said.

Other members fervently argued against settling. They called for answers and accountability from the Bronson administration, which has been embroiled in a series of controversies, including numerous complaints of a hostile work environment. Since Bronson took office in 2021, more than two dozen top officials have resigned or been fired, and the departure of city staff has left some departments with crippling vacancy rates.

[From Mayor Bronson’s first day in office, a domestic violence case loomed over Anchorage City Hall]

Cross, who favored settling, noted that the Assembly has also faced lawsuits. Cross said the settlement would be “a way out,” giving the city a chance to move forward and fix the problems “so this doesn’t happen again.”

Assembly member Kameron Perez-Verdia disagreed, saying it’s clear that “this is the tip of the iceberg.”

“There is massive, massive toxicity. There is poor decision-making. There is an environment that has been awful from the very beginning. And we are just now learning about a lot of them. And so I don’t think it’s a good idea to approve this. I think that we need to allow this to move forward. We need to know the truth,” he said.

Kendall, in a statement Wednesday morning, said Assembly members who voted against the settlement “seemed to be operating out of a misunderstanding of how the legal system actually works. Strong claims are routinely settled based on demand letters because that’s the best way to resolve an issue early, and for the lowest cost to taxpayers.”

“Ms. Demboski’s whistleblower allegations can still be resolved in court, but only after many months of delay and dispute, resulting in costs and damages the Municipality will have to pay that dwarf the proposed settlement,” Kendall said. “This is not how fiduciaries should manage the people’s money. Perhaps the worst element of the Assembly’s action is the message it sends to the next whistleblower who comes from inside an administration. The Assembly’s rejection tells future whistleblowers they will be hung out to dry. Almost surely, fewer will come forward — rather they will keep their heads down so they’re not victimized by both sides.”

Unlike the proposal to settle with Demboski, members broadly supported paying the MacAlpine settlement.

Assembly member George Martinez noted that MacAlpine had filed lawsuits, while Demboski sent the city a demand letter.

In the federal filing, MacAlpine asserted that the city’s human resources department “received instructions from Mayor Bronson, or someone acting on his behalf,” not to investigate Eledge or take any disciplinary action against her. MacAlpine has also asserted that a T-shirt worn by former human resources director Niki Tshibaka to a board meeting after her dismissal backs up her wrongful firing claim. (Tshibaka wore a black T-shirt that said “I’m with Judy” in bold text, referencing Eledge.)

MacAlpine was summarily fired for trying to do her job, Zaletel said.

“That is an abuse of power. That is the type of situation where I would love to see the mayor held personally responsible, but that’s not the case that was brought. That is not the settlement that’s before us. So let’s honor Miss MacAlpine’s bravery and her perseverance, and let her be done,” Zaletel said.

Two other former city employees have also claimed they were wrongfully fired by the mayor: Former chief equity officer Clifford Armstrong III sued the city and later accepted a settlement in the amount of $125,000, according to his attorney. Former real estate director Christina Hendrickson has sued the city, claiming she was fired in retaliation after filing a whistleblower’s complaint. That case is currently awaiting trial.

Earlier this month, a former Anchorage library and fire department employee filed a lawsuit accusing the municipality of discrimination and retaliation. That lawsuit is related to MacAlpine’s cases — the library employee is one of the workers who complained about Eledge. On the same day the suit was filed, the mayor’s office announced Eledge would resign as the library’s deputy director.

“It just really makes me profoundly sad how much this administration has cost the municipality,” Assembly member Anna Brawley said. “There’s dollar costs. There’s personnel costs. There’s certainly emotional costs — I especially feel for the employees who have gone through this, everything that’s been alleged here. And it feels like this cost is just never going to end.”