Nebraska City Settles With Former Clerk For $325,000

NEBRASKA CITY – Nebraska City commissioners approved a $325,000 legal settlement with a former city clerk that claimed he was fired after casting doubt on the city’s handling of a public utilities account.

The city will pay $23,087 for the money Arnold Ehlers would have contributed to his retirement fund if still employed, $75,000 for back wages and $141,912 in compensatory damages.

City Administrator Grayson Path told commissioners Monday that the city will pay $50,000 from its general fund immediately. He said the remaining settlement amount will come from other sources.


The settlement comes after a district judge ruled that Ehlers was protected by “whistle blower” laws when he contacted the state auditor’s office and ruled that a successful appointment vote is not needed for a city clerk job that is not vacant.

The city had claimed that commissioners Jim Stark and Jeff Crunk did not vote in favor of  Ehler’s re-appointment in 2014 for reasons independent of the state auditor’s review. Former mayor Jack Hobbie’s motion to re-appoint Ehlers failed due to a lack of a second.

The council then asked Ehlers to leave the meeting and held a 74-minute closed session.
Following the closed session, Hobbie and Finance Commissioner Mindy Briley voted in favor of re-appointment, but the motion failed on no votes from Stark and Crunk and an abstention by Vic Johns.

Ehlers contended that the closed meeting was improper because he was not given the opportunity to defend himself and have a hearing in public session.

Although it was the first meeting following the election for Briley and Johns, court records say the district judge does not believe the city’s claim that commissioners were not aware that Ehlers had contacted state officials about the handling of the account.

Despite the failed re-appointment vote, Ehlers was asked to stay on as city clerk until a replacement was found three months later.

Hobbie, Briley and Stark later resigned, as did the deputy city clerk and city administrator Joe Johnson. City officials said the public properties director retired.

Shortly before Ehler’s employment ended, the state Auditor’s Office issued a letter saying payments from the combined utilities warrant fund from 2012 to 2015 do not appear to have been made in accordance to state law. The auditor says the signature of the city clerk is needed, which was the core of the issue raised by Ehlers.

Two days after the auditor’s letter, city commissioners appointed a new city clerk.