It was confirmed Friday that interim Town Manager Bob Panek has resigned.
According to sources from the Town, while Panek was allowed to resign, he would have been terminated otherwise. Panek attempted to give a 30-day notice, but that was rejected. The town told him his resignation was immediate.
Town sources told the Mirror that, while there were other factors, the resignation was due to a case of basic insubordination.
In May, Panek, who was acting as town manager after the resignation of Brent Manuel, brought a proposal from the Bay Creek fitness club that would have allowed town employees to join the club for a mere $90 per month. Panek apparently negotiated the deal on his own. The town would have to budget and pay the club $5000 for employees to use this benefit.
Panek next had the proposal put on the agenda for the next Town Council Regular Meeting. Panek presented the proposal at the meeting, however, no motion was made to approve it, and it died there.
Town sources told the Mirror that they found the idea ludicrous, given that they were still having trouble balancing the budget.
Town sources told the Mirror that Panek next went back to the fitness club and gave them the $5000 anyway, presumably so he could join himself. The Mayor and other members of council were furious and brought Panek in to explain himself. He resigned soon after. Town sources told the Mirror that in an attempt to keep his job, Panek listed a litany of things ‘he has done for the town’, which sources say elicited a series of laughs.
This is not the first time Panek has found himself embroiled in controversy. A Defense Week article from 2002 found that Panek was actively involved in a scam to bilk the Navy retirement system which allowed for some to retire before their time and start collecting pensions. The story was based on a 2000 Navy Inspector General (IG) report on the “manipulation of the federal retirement system.” The report called the scam a case of senior Navy executives “taking care of their own.”
RAFT Committee Questions
At Wednesday’s Wetlands and Dunes Board’s work session, members of the ad-hoc local “RAFT” committee injected themselves into the conversation. Member Karen Jolly Davis noted that money earmarked for the Cape Charles Community Trail could be leveraged using a ‘landscaping’ clause—the money could be diverted to beach management. Davis also noted that Interim Town Manager Bob Panek is part of the RAFT committee, and is also the lead for the trail project and that in terms of diverting the funds, he would be the person to see. This raised a few eyebrows and calls into question what the so-called committee has really been up to. Committee member Hank Mayer also made a cryptic comment that he had been working deals with people across the bay. Since the committee is ad-hoc, they can meet in secret without much oversight from the town. Sources for the town told the Mirror they were surprised at Panek’s involvement, and the proposal to divert grant funds. Whether the committee will be dissolved and an investigation launched into its activities has yet to be determined.
Historical Context of the Resignation
A citizen spoke to the Mirror on Friday, “Why did it take so long for the council to do this? I mean, you look back at the wastewater plant, what was that? He had no idea, and then, of the three places to put it, he picks the worst one…and there have been what, over $500,000 in fines for it?”
Given current circumstances, the citizen has a point. When the town was engaged in its efforts to replace the old wastewater station, then Town Manager Joe Vaccaro was told by council to stay out of it, that Panek would have the reins. This seemed odd at the time—no one had much experience here, however, Vaccaro had as much or more than Panek. Why was Vaccaro told to stand down?
This question historically leads back to the Annexation Agreement. At one point, former Mayor Dora Sullivan, leveraging Assistant Town Manager Bob Panek engaged in a luke-warm effort to get the developer of Bay Creek to pay its fair share of the wastewater plant’s cost. After letters, and a bit of back and forth, the initiative was dropped, and the full cost of the plant was born by the taxpayers. What happened that led the town to drop this effort, and instead incur a debt? Sullivan and Panek not pursuing the obligations of the developer also opened the door for the construction of the $11 million dollar connector road, which was supposed to paid for by the developer, but instead was foisted upon the taxpayer.
The Old School
The town siding with developers over local citizens reached its apex with the old school backroom deal. Beginning in August of 2012, the town began meeting in secret with developer Echelon Resources to unload the Cape Charles High School building, which at the time was valued over $900,000, for a mere $10. The lead for this deal was Assistant Town Manager Bob Panek.
At Town Council meetings, citizens learned that the Town had violated Freedom of Information Act requirements by rejecting proposals from the Old School group without a public vote. The Town also ignored FOIA law by keeping secret the subject of their closed-door sessions about negotiations with Echelon Resources, Inc.
According to Virginia law, an elected body must specifically state the subject of a closed-door meeting.
By the time Town Council dropped water and sewer hookup fees 50 percent, and then another 50 percent, citizens were becoming informed. They learned that the Town forfeited $18,000 insurance proceeds by selling the school and that it agreed to give the developers another $41,000 in insurance money to repair the north wall’s damage after the earthquake (the eventual cost to repair the wall was only $1200).
The Town’s attorney was paid thousands of dollars to review the sales contract with the developer, and that Town Council then ignored the attorney’s advice to require a performance bond and buyback option.
Absurdly, Town officials claimed that the original “open space” zoning for the school had been a mistake and therefore had to be changed to residential; this turned out to be wrong and led to the original application being thrown out by the Historic District Review Board.
Later, we learned that Mr. Panek strategized with Echelon developers Edwin Gaskin and J. David McCormack to delay signing a sales contract until after the May election. In a private email to Echelon revealed in a FOIA request, Assistant Town Manager Bob Panek wrote, “We are trying to avoid possible electoral consequences of contract approval just before the May 1 election.”
The “consequences” were of course that incumbents might not be re-elected.
Then, when three new members were elected to Town Council, the ousted council voted to sell the school only days before their terms ended.
This led to almost a year of rancor, lawsuits, appeals—the town eventually paid over $100,000 to give the building away for $10. In the process, the oldest stage on the Eastern Shore was chopped up, the kids lost both indoor and outdoor basketball courts and an anchor structure that could accommodate events like the Crabby Blues Festival in case of inclement weather is no longer available.
The Town has told the Mirror that, even as Mr. Panek has tendered his resignation as interim town manager/assistant town manager, he will continue working with the town as a contractor managing capital projects.