South Lake Tahoe City Council and City Manager Nancy Kerry have agreed to part ways exactly one month after Kerry was placed on paid leave.

The news came after City Council emerged from closed session Tuesday, March 6. Mayor Wendy David announced that City Council had accepted Kerry’s conditional letter of resignation, which hinged on council’s acceptance of a settlement agreement.

The settlement signed by Kerry and David agrees to pay Kerry the amount of $176,321 — the equivalent of nine months of Kerry’s salary. The city also agreed to cash out 339 hours of vacation time and 520 hours of sick leave.

They agreed to a non-disparagement clause — preventing both parties from writing “negative defamatory or critical of the other party.”

The city and Kerry are responsible for their own attorney fees. Both parties had the opportunity to participate in writing the agreement.

Kerry was originally placed on indefinite leave Feb. 6. Citing a personnel matter, members of City Council refused to discuss why Kerry was placed on leave.

Her performance evaluation had been on the agenda for two consecutive meetings, including the Feb. 6 meeting, the Tribune previously reported. It was discussed in closed session.

In October, less than four months after Kerry received a pay raise and positive review from City Council, the city entered into an agreement with Municipal Resource Group, LLC, for an “assessment of the City leadership effectiveness, the culture of the senior management team, succession planning status and related issues.”

The Tribune could not confirm what initiated the most recent review, however, some current and former members of council stated that using an outside firm for evaluating a city manager was not in line with normal protocol.

This story will be updated.