Warrnambool City councillors have voted to oust chief executive officer Peter Schneider after 18 months in the top job.
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Councillors voted to terminate his contract at a meeting behind closed doors on Monday evening.
It has not been revealed how much the sacking of Mr Schneider will cost the city.
It is understood it was a 4-3 vote, with Crs Kylie Gaston, Mike Neoh, Sue Cassidy and David Owen voting for the motion and mayor Tony Herbert and Crs Peter Sycopoulis and Robert Anderson voting against.
"It will be a difficult decision for the community to understand as there has been no reason given for the termination even though his performance appraisals have been passed by council unanimously only three months ago," Cr Herbert said.
"After numerous attempts to offer mediation by me to avoid this some councillors did not avail themselves. It is with great regret that I announce Peter's departure from council."
Cr Herbert said he could not release any information on the financial cost to the council for the decision, as "the councillors who voted in support of the motion also included a gag on releasing the cost details".
"It's my view that the community has a right to know this cost, but for the time being I am prevented from disclosing this information," he said.
Cr Herbert said he believed Mr Schneider "had done an excellent job and had tackled some difficult issues, a number of them historical".
"He has also performed well during the declaration of a state of emergency brought about by the coronavirus," he said.
"Under his leadership we had just recently produced a budget that I believe was financially responsible while also extending a considerable amount of assistance."
Cr Herbert revealed the council's community development director Vikki King would stand in as acting CEO.
Mr Schneider has been contacted for comment.
Cr Kylie Gaston said it had been a "difficult decision" and she "understood people were rightfully concerned".
"This decision was taken with great seriousness and after lengthy consideration," the former mayor said.
Cr Gaston said the majority of councillors had come to the conclusion.
"I appreciate there are consequences for decisions such as this one however I also acknowledge that no action can carry heavy consequences and the price to pay can be very high, particularly for an organisation as large and as part of our community as WCC," she said.
"Despite being close to the next council election, we had a responsibility to do the right thing."
She would not divulge the reasons behind their action.
Cr Gaston said the next CEO would be decided by the new councillors after the local government elections in October.
"In the meantime I am confident we are putting in place an acting CEO who represents our values and is passionate about Warrnambool," she said.
"Someone who will support and encourage all staff and represent us well at forums at the local and state level as well as ably lead us in engaging and working with our community."
Cr David Owen said he was elected by the people of Warrnambool to make decisions "exactly like the one we made tonight".
"I knew this job would not always be an easy one and this particular decision was not made lightly," he said.
"It is, I believe, however, absolutely in the very best interests of both the businesses and our residential community of Warrnambool."
Cr Mike Neoh said the council and the community had "high expectations and we have set a high bar".
"While there may be diverse views in the community and amongst councillors potentially the one thing that will hold the city back is obsessively dwelling on the past and using the past as an excuse," he said.
"The community and staff surveys have sent a loud and clear message about the organisation's communication and engagement as being both lacking and dismissive in nature.
"These results were extremely concerning that staff culture and community engagement were raised as a priority in recent times."
Cr Sue Cassidy said: "The decision has been made, it wasn't an easy decision to make, but hopefully now council can move forward and we can be a united council until September (when the council enters caretaker mode before the election)."
Last week Crs Herbert, Sycopoulis and Anderson backed Mr Schneider.
"Our city is forging ahead as best it can through these tough financial times and any added unexpected and significant expenditure would be viewed extremely poorly by our community," Cr Herbert said last week.
Cr Sycopoulis on Friday said he was very disappointed by the actions of four councillors.
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