Keller may be asked to resign

Frontiersman

WASILLA — City Council will meet in a special session Monday to decide how to react to a damaging report from an independent law firm accusing Wasilla Mayor Dianne M. Keller and other city staff of acting inappropriately in their dealings with a private developer.

Included in the meeting will be a motion for council to ask for Keller to resign from office, Councilwoman Dianne Woodruff said.

Whether the mayor resigns or not is up to Keller since the council has no power to force an ouster, Woodruff said, adding she hope spressure from Wasilla residents will force Keller’s hand.

“We are going to have to rely on the public to put pressure on her to resign,” Woodruff said.

Monday’s meeting begins at 7 p.m. at city hall. Public comment will be taken as part of the meeting.

The report, compiled by Denali Law Group, came about after outcries from local business owners sparked suspicion among city council members. Among council’s concerns was an Aug. 24, 2007, letter signed by Keller that the report calls a veiled threat of eminent domain.

The city was working with Anchorage-based Meritage Development Group to develop two parcels of land near the Parks Highway when the letters went out, Denali’s report says. Holding up the development were a few local businesses refusing to cooperate with a city plan to realign the East Sun Mountain Avenue and Hermon Road intersection, an area Keller has called a safety hazard.

One sentence in Keller’s Aug. 24, letter raised particular concerns.

“We are confident that you are aware we are well within our purview to pursue more aggressive means for this public purpose,” the letter says.

During a break in last week’s regular council meeting, Keller wouldn’t say whether she was right or wrong in sending the letters. She focused on the safety of the intersection.

“I think that particular section of the city has been a safety issue,” Keller said.

Council hired Denali Law Group for more than $23,000 to investigate the city’s dealings with Meritage and at last week’s meeting Denali Law Group lawyer Richard Payne said the Keller letter is not the only disturbing finding in the report. He said other city administrators who knew about the letter were wrong for not questioning it or attempting to stop it from being sent.

One of those administrators, Public Works Director Archie Giddings, said he’s done nothing wrong.

“I suggested they needed a reason and that’s what the attorney said,” Giddings said when asked if he challenged the letters before they were sent to property owners.

According to Denali Law Group’s report, Giddings was among a handful of city administrators to receive an e-mail from Wasilla Economic Development Planner Casey Reynolds telling Keller that a commercial broker with Meritage Realty USA had been informed the letters were about to be sent to business owners.

The e-mails were sent Aug. 14, 2007, 10 days before Keller’s letters were sent to businesses.

Two e-mails sent nine-minutes apart indicate Reynolds called James Wood, a commercial broker for Meritage Realty USA, to tell him the letters were going to be sent. In one e-mail, Reynolds tells Keller he spoke to Wood to inform him “Lithia-esc” letters were going to be sent. Lithia-esque refers to similar letters sent to Lithia Motors threatening eminent domain.

Wood did not return calls seeking comment.

Giddings wouldn’t comment about the report’s revelation of what appears to be collusion between Meritage and some city staff.

“I haven’t even thought about it. That’s not my position to decide all that,” Giddings said. “I’m way too busy doing other things.”

Reynolds, who has become a major player in the build-up to the letters after Payne pointed out the e-mails, said he will speak at Monday’s meeting. He said he doesn’t wish to comment before that meeting, but said there was no malicious intent meant by the letters.

“There was no intention to scare anybody,” Reynolds said.

When asked if he thought he did anything wrong by notifying Wood of the letters, Reynolds declined to comment.

“It’s probably best that we talk after the meeting on Monday,” he said.

Hearing of Reynolds’ claim of never intending to scare anyone with the letters, City Councilman Marty Metiva said he is curious that, if there was no intention to scare anyone with possible eminent domain, why were the letters sent out?

“I don’t write a letter if there is no intent to do something,” Metiva said.

The list of names who knew about the letters extends beyond Wasilla’s government to neighboring Palmer.

Former Wasilla Deputy Administrator Sandra Garley, who now works as Palmer’s director of community development, also received word Reynolds told Wood about the letters, the report says. She held her position in Wasilla at that time.

Speaking from her office in Palmer Friday, Garley said she hasn’t read the report and said Denali Law Group told her it would give her a copy when it was finished.

Garley said the interview she had with Denali Law when it was performing the investigation was “comprehensive. They had lots of questions.”

Derek Casanovas contributed to this report. Contact Michael Rovito at michael.rovito@frontiersman.com or 352-2252.