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By Shawn Raymundo

The city council last month voted to approve a $360,000 settlement agreement with James Makshanoff, the city’s former chief executive, who lobbed a series of accusations against the city over the summer.

During the council’s Nov. 17 meeting, City Attorney Scott Smith reported out of closed session that the council voted, 3-1, to approve the settlement, with Councilmember Laura Ferguson dissenting.

According to the settlement that San Clemente Times obtained through a public records request, Makshanoff will receive $216,000 through the California Joint Powers Insurance Authority (CJPIA), the city’s insurance pool, while the remaining $144,000 will be paid to Makshanoff’s legal counsel, the Law Office of Lawrence J. Lennemann.

Makshanoff’s attorney this past August sent a letter to the city, threatening a lawsuit, as the former head of the city raised claims of breach of contract, wrongful termination and retaliation. Lennemann had sought to meet with the city’s legal team in order to settle the issue without going to court.

The settlement, which did not provide details relating to Makshanoff’s claims and accusations, stipulated that he not file any complaint, charge or lawsuit against the city to any court or any other government agency.

“Employee (Makshanoff) further agrees and acknowledges that by executing this Agreement, he is irrevocably and unequivocally dismissing all grievances, administrative appeals, arbitration demands, and/or civil claims he has or may have against the Employer (city),” the settlement stated.

Asked if he could elaborate on Makshanoff’s claims and what instances or incidents the former city manager pointed to, Smith responded via email that the “risk pool assumed full responsibility for the evaluation, assessment, details, and settlement of the claim, so there’s no additional detail available on it, other than the agreement itself.”

Ferguson on Wednesday, Dec. 30, said she voted against the settlement, believing Makshanoff should have been required to present facts and evidence to back up his claims.

“Personally and professionally, as a councilmember, as an elected official, I’m just against seeing claims being settled when a person didn’t have to present facts to their claims,” she said, later adding: “It’s one thing to say something, but prove it with instances … that didn’t happen because the settlement happened.”

According to Ferguson, details around Makshanoff’s claims were presented to the council, but only “very, very vaguely.”

She added that because those discussions took place in closed session, she couldn’t offer any more substance to the matter, other than to note that it was Elizabeth Kessel with the CJPIA who presented the details, not Makshanoff’s attorney.

As of this posting, Lennemann had not returned SC Times’ request seeking comment, and Kessel was not immediately available to respond.

“Insurance companies, they weigh what they believe the cost of the trial with settlements,” Ferguson acknowledged, referring to the CJPIA’s role in the dispute. “That’s business for them, but I’m in a different position as an elected official.”

The agreement came just about a year after Makshanoff had announced he would be resigning as city manager, as he had accepted a similar role with the city of Pomona beginning this past January.

“Mr. Makshanoff, who was our city manager for five years, he resigned; wrote a glowing resignation letter,” Ferguson said. “The city of Pomona had hired him and unbelievably gave him a raise. I voted no. My conscience wouldn’t allow me to vote otherwise.”

In his resignation letter, Makshanoff, who started with the city in September 2014, said he was “grateful to San Clemente for the opportunity given (to) me” and that stepping down “was not an easy decision for me.”

SR_1Shawn Raymundo
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.

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comments (1)

  • This is disappointing. The City manager had received way too much money in the first place (as salary and benefits !) What a [seemingly] disaster; I wish the facts were out because I would like to know what his grievances were and with whom; or just a gold digger. He was the manager so the city employees reported to him, that would suggest no grievances there. Were there grievances with the Council/Mayor? So what? City Manager works for the Council/Mayor not the other way around; though, it does appears that perhaps the City Managers, or Acting City Managers of San Clemente feel the council/Mayor works for them.

    So sad this clown was paid so much and so sad truth withheld.

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