WATERVILLE — The City Council voted quickly Wednesday night to pay former City Manager Steve Daly four months’ salary and a health insurance reimbursement in a lump sum.

The council formally accepted Daly’s resignation and as part of its 5-0 vote waived a stipulation in Daly’s contract requiring he give a 90-day notice of his resignation. Daly instead gave a one-day notice when he announced his resignation last week.

Former Waterville City Manager Steve Daly. Photo courtesy of Steve Daly

Councilors Thomas Klepach, D-Ward 3, and Tom McCormick, an independent candidate representing Ward 7, were absent from the meeting, which was held by Zoom.

Councilors did not discuss Daly’s resignation at the special meeting, held for the sole purpose of considering the resignation.

Daly notified the city Dec. 22 of his resignation, citing urgent personal circumstances.

Contacted earlier this week about his resignation, several councilors declined to comment publicly on the reason.

Daly did not return a message Tuesday seeking comment. He also did not return a message left just after Wednesday’s special meeting.

After councilors approved the resignation Wednesday, they voted 5-0 to go into executive session to discuss “legal rights and duties with legal counsel,” according to Chairwoman Rebecca Green, D-Ward 4.

No action was taken after councilors emerged from executive session.

City Solicitor William A. Lee III was present for the council meeting, as was Assistant City Manager Bill Post. Councilors are scheduled Tuesday to consider appointing Post as interim city manager until the city launches a search for a new manager and hires one.

Daly, 75, was nearly two years into a three-year contract when he resigned. He came to Waterville two years ago 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.

Lee said Thursday the payout approved by the council amounts to more than $45,000 — with four months’ salary coming to about $43,000, and the health insurance reimbursement totaling about $2,400.

He said Daly did not use the city’s insurance policy — he had his own — so the city agreed to reimburse him the amount.

Lee also said the council’s decision to waive the 90-day notice requirement was not unusual. Similar waiver language has been included in city manager contracts in Waterville for at least 20 years, he said.

City Councilor Claude Francke, D-Ward 6, said Tuesday he could not comment beyond what he had told the Morning Sentinel last week, which was that a payment covering four months of work is “more or less standard.” He also said he and other councilors wished Daly well, and Francke applauded Daly for his oversight of recent projects, including the newly opened Paul J. Schupf Art Center at 93 Main St. in downtown Waterville.

Mayor Jay Coelho said Tuesday he believes a rule in the city charter requiring city managers to live in Waterville makes it difficult to find candidates. To make an amendment to the charter in that regard, 30% of voters who voted in the last gubernatorial election must decide. Such a change could not be made in Waterville until at least November, he said.

Rien Finch, secretary of the city’s former charter commission, said earlier Wednesday a discussion about city manager residency arose when the commission was in session the past few years, and members decided it is important a city manager live in Waterville.

“Given the amount of power the city manager has, a city manager who lives outside of the city would have great influence over an area they do not reside in, and due to not residing in, may not have any connections to the local community,” Finch wrote in an email. “Understanding the community is a key component of governing; that’s why city councilors must live in the ward they represent. The same ought to be true of the city manager.”

Living in Waterville should not be seen as a burden for the city manager, according to Finch.

“How far away is acceptable for a city manager?” he said. “Does the city want someone out of state making major decisions for our city? What about Portland? Should a Winslow resident have the executive authority to oversee their neighbor? What if there’s a conflicting policy passed by the council, where is the loyalty of the city manager, to their residential town or to Waterville?”