BAR HARBOR – The town has reached a $25,000 settlement with a former employee who alleged that the town manager assaulted him and discriminated against him because he is black.

Town Manager Dana Reed was cleared of all charges after an investigation by the Maine Attorney General’s Office and the Town Council in February 2000. However, Walter Seward filed another complaint last January, making the same allegations, with the U.S. Equal Employment Opportunity Commission.

Seward had alleged in January 2000 that Reed assaulted him with a roll of paper towels and in July 2000 with a wooden stake used for landscaping.

Reed denied he assaulted Seward. He said he underhanded Seward a roll of paper towels, which bounced off his chest and struck his chin. The second alleged assault resulted after Reed handed Seward a wooden stake.

Reed, Seward and attorneys for both sides met last month to resolve the new complaint. During a special meeting on June 10, the Town Council approved a proposed settlement calling for a payment to Seward of $25,000 and an agreement by Seward that he would resign from his job as ice rink attendant, effective June 1. The document included an agreement that Seward would not seek employment with the town in the future.

Seward could not be reached for comment Thursday.

In a written statement this week, Reed said the $25,000 represents the amount of money the town saved by not having to pay benefits for Seward from 1996 to 2000, when he resigned as a town employee to work as an independent contractor for the town.

The agreement also stipulates that the town denies any wrongdoing and that both the town and Seward will release each other from all claims of damage, according to documents.

“In no way should this payment be construed to be compensatory or punitive damages,” Reed wrote. “We would prefer to be vindicated in court but feel we have a fiduciary responsibility to our taxpayers, so we have made this a purely economic decision.”

Noting that the attorney’s fees could approach $50,000 to fight the complaint, Reed said, “Council does not feel that our taxpayers would be well served by spending $50,000 to save $25,000.