The Chelsea Board of Selectmen voted unanimously Wednesday night to send a proposed settlement with a former contractor to voters next month.

Residents will be asked at a special meeting, probably sometime in early April, if they want to approve paying former contractor Frank Monroe $20,000 to settle a suit he filed against the town in 2011 about a plowing contract, Town Manager Scott Tilton said.

Tilton said around 10 residents attended Wednesday’s Board of Selectmen meeting at Chelsea Elementary School.

“Most were opposed to making an offer, but the selectmen felt inclined to leave it up for the citizens to decide,” he said.

Monroe sued the town in 2011 for more than $100,000 in damages, claiming the town had extended his plowing contract that ended in 2010 another two years, and then that the town denied it later. The town countered that the contract wasn’t signed by the board, so it wasn’t valid.

The contract dispute came about during a criminal investigation of the town’s contracting methods and of a former board chairwoman, Carole Swan. Swan was convicted last year of extorting money from Monroe in exchange for the town’s plowing contract, defrauding the federal workers’ compensation program and filing five years’ worth of fraudulent tax returns, along with other charges. Her husband, Marshall Swan, was convicted of filing false tax returns.

Both are scheduled to be sentenced on separate dates in June.

Tilton said the town would save money in the long run if it settled for $20,000 instead of going to court. If residents reject the settlement at the special town meeting, the town will have to increase the request for legal fees for next year’s budget at the regular Town Meeting in June, Tilton said.

The town could end up paying $50,000 if it went to court, according to its attorney, Stephen Langsdorf, of the Preti Flaherty law firm. He said there’s also no guarantee that the town would win, although he thinks the town would have a strong case.

Monroe went to the Kennebec County Sheriff’s Office in 2011, complaining that Carole Swan had told him to inflate his bill for the winter sand delivery and kick back $10,000 to her. He testified in her trial last September that he previously had paid Swan $3,000 and $7,000 for her renewing his contracts without going out to bid.

Police never charged Monroe in connection with the case.

Monroe’s attorney, Michelle Allott, of Farris Law, said both the town of Chelsea and Monroe were victims of Carole Swan’s misconduct.

Allott said the parties learned from the U.S. Attorney’s Office that Carole Swan had the board sign a separate contract that didn’t include the two-year extension, and she said Monroe relied on the belief that he had the two-year extension when buying new equipment.

Paul Koenig — 621-5663 pkoenig@centralmaine.com Twitter: @paul_koenig

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