Former Crestwood City Administrator Petree Eastman will receive seven months’ salary under the terms of a settlement agreement approved by the Board of Aldermen.

Eastman, who worked for the city from Oct. 17 through March 9, also has the option of Crestwood continuing to pay her health insurance benefits for 12 months, or through March 31, 2013, according to the settlement agreement.

Aldermen voted in late September to name Eastman city administrator and adopted an ordinance Oct. 17 formally hiring her at an annual salary of $98,000.

The May 3 settlement agreement, which the Call obtained through a public records request, states Eastman will “be entitled to payment, in a lump sum, of an amount equal to seven months’ salary at employee’s rate of pay as of the separation date.”

Eastman told the Call she and city officials are “bound on confidentiality” in regard to the circumstances of her departure and the settlement agreement.

“There was a statement that was attached to the agreement,” she said. “That’s pretty much all I can say about this … (That is) the statement position the board and I are taking to discuss (my departure from the city).”

The settlement agreement states Eastman “will respond only that she is no longer employed by the city and that she has no further comment beyond what is contained” in a joint statement.

After conducting closed sessions to discuss issues related to Eastman’s “job duties and responsibilities” and consulting with City Attorney Rob Golterman, the Board of Aldermen issued a “list of directives” to Eastman in a March 5 memo.

Eastman responded in a March 9 memo in which she “expressed her belief that certain of the directives represented material changes to her authority and duties and that, according to her terms of employment with the city, she concluded that such action by the board constituted a termination without cause,” according to the joint statement.

“She further asserted that, as a result of this termination, she was due her severance and other benefits per the employment terms,” according to the joint statement.

After discussion and consultation with Golterman, the Board of Aldermen “while not in agreement with Ms. Eastman’s assertions and believing it had acted in accordance with its powers, has nevertheless chosen to enter into a separation agreement with Ms. Eastman rather than incur the expenses and risk of an adverse outcome associated with a potential lawsuit,” according to the joint statement.

As part of the agreement, Eastman “releases the city from any and all claims relating to her employment.”

A public records request by the Call for the March 5 and March 9 memos was denied by the city because they “pertain to personnel records of an employee,” according to a letter from City Clerk Tina Flowers.

The agreement includes a “confidentiality and non-disparagement” clause, which states, “Employee and city agree to keep confidential and not to discuss employee’s employment with the city, the circumstances surrounding employee’s separation from the city or the facts and circumstances leading to the execution of this agreement.”

The clause prohibits Eastman from disparaging city officials.

It also states, “The current mayor, members of the Board of Aldermen, the incoming members of the Board of Aldermen who are elected April 3, 2012, and the current city administrator will not disparage employee or encourage others to disparage employee, either orally or in writing, to any third party, including but not limited to the media or prospective employers.”

Votes to award Eastman seven months’ salary and to approve the separation agreement were not unanimous.

In a 5-2 closed-session vote on March 16, the board authorized the payment of seven months’ salary and 12 months of health insurance benefits to Eastman.

Then-Ward 4 Alderman Deborah Beezley made the motion, which then-Ward 2 Alderman Steve Knarr seconded.

Aldermen Paul Duchild of Ward 3 and Darryl Wallach of Ward 1 voted against the motion. Ward 4 Alderman John Foote was absent.

On April 24, the board voted 5-2 in closed session to approve the separation agreement, waiver and release between the city and Eastman.

Then-Ward 2 Alderman Chris Pickel made the motion, which Beezley seconded. Duchild and Wallach opposed. Foote was absent.

Duchild declined to comment on his “no” votes.

“I can’t comment on the topic other than what the statement says in the settlement,” Duchild told the Call.

Wallach told the Call he felt his “no” vote was in the best interest of Crestwood.

“I’m glad that the issue is now over and now we can move forward,” Wallach said.

Eastman’s contract with the city states severance is “payable in a lump sum upon termination without cause.”

Her contract defines termination without cause as: “Change in structure of government, material changes to authority or duties of the city administrator; or reduction in base salary or other financial benefits of employee.”

The settlement agreement also states Eastman’s last day with the city was March 9. However, a list of all current city employees as of March 15, obtained through a public records request that was submitted March 15, included Eastman.

Eastman was not present at the board’s March 13 meeting, though an executive summary was prepared for the board by Eastman.

When contacted about the settlement agreement, Mayor Jeff Schlink told the Call terms of the settlement prevent him from commenting.

If elected officials are contacted regarding Eastman or her employment status, they are, according to the settlement agreement, allowed to provide her dates of employment — Oct. 17, 2011, to March 9, 2012.

If members of the media contact elected officials, they can only respond “that Ms. Eastman is no longer employed by the city and that he or she has no further comment beyond what is contained in the (joint) statement.”

Eastman’s settlement agreement mentions Mary Anne Sedey and her firm, Sedey Harper, P.C., in the “attorneys’ fees” part of the agreement, which states, “Mary Anne Sedey … acknowledges and agrees that any claim for attorneys’ fees from the city is waived …”

Two calls to Sedey’s firm last Friday were not returned. However, Sedey responded to an email sent the same day, asking for confirmation of her role as Eastman’s attorney, by stating, “I don’t have any comment. Thank you for your inquiry.”

Eastman confirmed Sedey is her attorney.

In a March 16 closed-session vote, aldermen unanimously voted to name Fire Chief Karl Kestler as acting city administrator due to Eastman’s departure — a position he has held in the past.

Aldermen also voted unanimously during a March 27 closed session to approve $1,500 per month in additional compensation for Kestler while he serves in the city administrator position.