WATERVILLE — The unexplained and abrupt departure of City Manager Steve Daly in December remains shrouded in mystery even after the city has released new documents from a public records request.

Former Waterville City Manager Steve Daly abruptly resigned in December, and city officials are not discussing the reasons surrounding his departure. Courtesy photo

Daly notified the City Council Dec. 22 via email that he planned to resign the next day, but the documents obtained by the Morning Sentinel show that city councilors were discussing Daly’s exit at least several days before he resigned. In his resignation letter, Daly asked that the council waive a requirement in his contract that he give a 90-day notice of departure.

Daly, 75, was nearly two years into the three-year contract when he resigned, citing “urgent and personal circumstances.” He came to Waterville from North Reading, Massachusetts, earning a salary of $125,000 in the first year of his contract in Waterville and $130,000 in the second year.

The city agreed to waive the 90-day requirement and give him $43,333 — which is four months of his salary and health insurance — in a lump sum payment. In the release agreement, all parties promised not to disclose anything about his departure and the document says Daly may discuss it only with his spouse, attorneys and financial advisors. The parties, it says, may disclose information to the extent required by law, including providing information in compliance with state Freedom of Access Act requirements.

Despite the documents’ release, though, the public won’t be privy to information about the specific reasons why Daly left and what options councilors discussed in private just prior to Daly’s resignation. A West Coast-based municipal expert told the Morning Sentinel that without knowing the facts in the case, it is difficult to determine whether the public has a right to know what is going on and how their money is being spent on the matter.

Mark Moses, author of “The Municipal Financial Crisis, A Framework for Understanding and Fixing Government Budgeting,” said in an interview it is the job of the city attorney (also called the city solicitor) to protect the city from legal claims. So if there were some kind of legal action that Daly or someone else could take if information about his departure were released, the city attorney would admonish councilors and other officials that they shouldn’t talk about it because the city could be sued or otherwise damaged, according to Moses.


“In this age of litigious activity, it would be good to keep it closed so as to not invite legal action,” said Moses, who has consulted California municipal governments in the areas of finance and administration for the past 12 years. “There’s a certain reasonableness to the public’s wanting to know, but we don’t know what other legal considerations have been given weight here.”

Typically when city managers resign or retire, they talk publicly about their reasons for leaving and often discuss their tenure and what they feel they accomplished during that time. But Daly did not respond to repeated calls and emails by the Morning Sentinel in recent months seeking comment on his departure, though he consistently returned calls and emails during his time at City Hall.

When he arrived for the top city job in 2021, Daly succeeded Michael Roy, who was city manager more than 16 years and gave the City Council more than a year’s notice of his intent to leave.

Daly saw the bulk of the city’s revitalization efforts be completed during his tenure, including a change to two-way traffic on Main and Front streets in downtown. He often spoke of enjoying his job as city manager and purchasing a home in Waterville that he loved.


In an effort to learn more about Daly’s sudden departure, the Morning Sentinel cited the state’s Freedom of Access Act in requesting any and all emails between Daly, city councilors, Mayor Jay Coelho, acting City Manager Bill Post and City Solicitor William A. Lee III, between the dates of Dec. 15 and Jan. 5.


The Freedom of Access Act requires certain information be made public and asserts that an executive session would only protect discussion to the extent that “public discussion could be reasonably expected to cause damage to the individual’s reputation or the individual’s right to privacy would be violated.” Only that sort of personal information should be redacted from the emails the newspaper requested from the city, according to the state law.

The city released 16 pages of documents to the newspaper, including Daly’s severance agreement and the requested emails, most of which were redacted or blacked out to protect the information considered confidential under state law. The city denied the release of four relevant emails created for an executive session, even with redactions.

The back-and -forth email discussions about Daly had started by at least Thursday, Dec. 15, a week before Daly emailed the city to say he planned to resign. Lee sent an email to four councilors with “Manager update” in the subject line. The entire content of that email was redacted. Lee then sent another email, “Confidential Memo for Executive Session,” to the entire council the next day, Friday, Dec. 16, the contents of which were also fully redacted for release to the Sentinel.

When Lee emailed out the confidential memo, Councilor Michael Morris, D-Ward 5, responded, “Thanks, Bill, I appreciate you laying out all the options for us to consider.” Lee responded that “it should be quite a discussion” when they gathered to discuss the matter in executive session.

Lee then realized on Monday, Dec. 19, that he had forgotten to copy Mayor Coelho on the confidential memo and sent it to him, too.

Councilors met to discuss the issue in executive session on the night of Tuesday, Dec. 20; however, it is not clear how long they spent discussing the issue because a video broadcast of the meeting cut off after they voted to discuss the matter in private. Coelho said no votes would be taken in public, prompting the television broadcaster to stop the video recording.


Contacted recently about the length of that discussion, City Clerk Patti Dubois said she did not know how long it lasted because she left the meeting when the council went into executive session. She confirmed that no council votes were taken in public afterward.

Next, Assistant City Manager Bill Post, who is now the acting city manager, emailed Lee on Dec. 22 to say that Daly “told me about this resignation this morning,” and that Coelho would call for a special council meeting the following week to accept the resignation.

Daly’s resignation letter is dated Thursday, Dec. 22, and says it takes effect the following day on Friday, Dec. 23. The brief, two-paragraph letter says only that “personal and urgent circumstances have led to this decision.”

In discussing when the council should hold a special meeting to accept Daly’s resignation, officials ultimately settled on Wednesday, Dec. 28. The emails show councilors all agreeing to that date, with Councilor Thomas Klepach, D-Ward 3, responding: “Yeah, let’s get this over with.”


Daly’s Linkedin page currently indicates he is open to working as an interim manager, interim CEO, project specialist or project manager. Linkedin, which is a business and employment-related social media platform, also lists his employment history as including his two-year stint as Waterville’s city manager, “managing a workforce of 100+ and partnering with a mayor and city council to build momentum behind a burgeoning downtown revitalization effort.”


Daly also frequently comments on municipal-related stories on Linkedin, including earlier this month on an article about a jury awarding a $12.5 million settlement to a former city manager in a racial discrimination lawsuit. “Good for him? Bad for the rest of us? It seems to me that exorbitant awards like this have a recoil affect that causes other cities to pull back on separation terms,” Daly wrote. “Regardless of the reasons for the award, councils will tighten up on contract terms.”

Prior to his arrival in Waterville, Daly served as town manager in Bedford, New Hampshire, as well as Salem, New Hampshire. He also was town administrator in Bedford, Massachusetts, from 1980 to 1984, and in North Reading from 1989 to 1995. His extensive resume says he has served as a regional and statewide Homeland Security program administrator, multi-state government collective procurement entrepreneur, management consultant and motorsports entrepreneur, and municipal management contractor.

In Waterville, Daly had two job evaluations, one several months after he was hired and another one just before he resigned. Council Chairwoman Rebecca Green, D-Ward 4, served on the city manager evaluation committee along with Klepach and Councilor Claude Francke, D-Ward 6.

Contacted this week, Post released Daly’s employment contract at the Morning Sentinel’s request, but said his evaluation documents are confidential. Lee, the city solicitor, directed the Sentinel to Daly, when asked why he left.

“That’s probably all I can really say which is not a lot, I admit,” Lee said.

Coelho, the mayor, also declined to comment on the reasons. “I think there’s an agreement between the city and Steve so, as far as I am concerned, there’s no comment,” he said. “It’s Steve’s story to tell. There’s nothing I can say about it.”


City councilors likewise declined to comment for the same reasons.

Councilors voted 5-0 on Wednesday, Dec. 28, to accept Daly’s resignation and waive the 90-day notice. Klepach and Councilor Tom McCormick, who is unenrolled and represents Ward 7, were absent from the meeting that was held in the holiday week between Christmas and New Year’s Day.

Moses, the municipal expert, said it is difficult to diagnose what happened with Daly’s departure. But after reviewing the section of his employment contract regarding termination, Moses said if the city manager had waited for the council to terminate his contract without cause, the city would have had to provide six months’ salary and health insurance, not the four months’ that Daly received.

Moses speculated that either Daly didn’t want his employment to be terminated without cause or that the council had reason to fire him with cause, “and that would have left him with no severance.”

None of the material obtained by the Morning Sentinel indicated that a termination was in the offing, although councilor Morris’ reply to Lee’s confidential memo on Dec. 16 thanked the city attorney for “laying out all the options for us to consider.”

A release agreement often is no more than the severance terms already agreed upon in the employment contract, plus a release of claims and mutual nondisparagement, according to Moses, who said one must compare a manager’s employment contract to the severance agreement to know for sure.

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