East Ridge City Manager William Whitson's resignation was announced by Mayor Mike Steele and approved by the City Council on Monday at a special called meeting.
The resignation comes on the heels of mounting public pressure related to a $657,000 shortfall during the 2009-10 fiscal year.
"Some are glad to see this happen; others are sad to see this happen," Steele said in front of roughly 100 residents at East Ridge City Hall. "The chapter has turned in his life. He's going to move a different direction (and) we're going to move a different direction."
Whitson's contract calls for a seven-month severance pay out, which totals $62,500 including health insurance, Steele said. Whitson's annual salary is $112,000, city records show.
Though Whitson's resignation officially takes effect Friday, Steele said he would not be doing "anymore business."
"(The next few days) give him an opportunity to come in and clean out his office," he said.
Eddie Phillips, East Ridge's deputy city manager and public safety director, will take over as interim city manager in accordance with the city's charter. He said he expects to hold that position until after the November elections.
"(The council) hasn't really said, but I assume that's how it's going to be," he said.
Whitson did not attend the meeting, and Phillips took his place next to Steele.
The ousted city manager previously said the budget shortfall was due to repairs from East Ridge's flood in 2009 and weak economic conditions.
"We've never had outside, economic events align the way they have," Whitson said late last week.
To partially cope with the budget shortfall, which equals 6.5 percent of the city's budget, Steele said the city would be dipping into a "very healthy reserve balance" of $4.1 million.
"Over the years, we've had those misses (in the budget) before," he said. "It's not the first time."
This is the ninth time in 19 years that East Ridge's budget has been busted, but it's easily the largest margin in that span, city documents show.
All councilmen interviewed last week said raising taxes to help ease the shortfall was not an option, but several said they've already accomplished all the "easy cuts."
Steele, who will not be running for re-election, said he would suggest that the next council do away with the city manager position. He said he was on the City Council when East Ridge switched from a commission form of government to one with a city manager.
"I have some real questions as whether it's worked," he said after the meeting. "We've just run through a number of (city managers)."
Steele estimated that over the past 18 years, the city has had 12 city managers.
"It's a tough position," he said, noting the difficulty for city managers to maintain relationships with council members.
A motion made by Councilman Brent Lambert to cancel Thursday's public meeting was unanimously approved so Lambert could further analyze more ways to adjust the budget. The motion included a postponement of the second reading of the city's budget.
Lambert said he would like to organize another workshop to discuss the budget, but an exact time and place for that meeting was not agreed upon by the council at Monday's meeting.
Staff writer Chris Carroll contributed to this story.
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