Long-simmering hostility at Edmonds City Hall erupts in a resignation, a firing and a state audit.

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The state auditor is looking into payroll records in the city of Edmonds after receiving an anonymous tip complaining that an employee had been paid for hours not actually worked, said Mindy Chambers, spokeswoman for the agency.

Meanwhile, the employee was offered a handsome severance package that was subsequently withdrawn.

The anonymous tip came a few days before Kimberly Cole, executive assistant to the mayor, resigned. That was Sept. 22, the same day Mayor Mike Cooper fired human-resources director Debi Humann.

Cooper said he fired Humann because, “Over time there had been a series of events that just led to a breakdown in trust, and she couldn’t work effectively as part of my team.”

The two departures were the culmination of over a year of tension in Edmonds City Hall, where Humann had worked for 12 years.

Cole said on Wednesday that shortly after she was employed by the city as Cooper’s assistant, she found information about a protection order she obtained against a former boyfriend was shared among employees.

They began to keep surveillance over her work hours and activities, even though she was answerable only to the mayor and worked on salary.

Cole said Humann began to increasingly complain about her to Cooper.

Cooper confirmed that the state auditor was told in the tip to look at Cole’s time sheets for work she was paid for but didn’t do.

Humann’s firing has been construed by some as penalizing a whistle-blower, Cooper said, adding, “This is not a whistle-blower situation at all.”

Humann could not be reached for comment.

Cole, 32, who graduated from Seattle University Law School six months ago and is also a city councilwoman for Lynnwood, was Cooper’s assistant on the Snohomish County Council and his campaign manager and aide when he was the 21st District representative.

It’s common to bring an assistant with you to a new elected position, Cooper said.

Cole resigned by mutual agreement. “Her resignation was not for disciplinary reasons in any way.” Cole came with Cooper to Edmonds in summer 2010, when he was appointed as mayor.

According to her attorney, James W. Spencer, Cole is claiming there was “a hostile work environment created by certain employees of the City of Edmonds.”

When she resigned on Sept. 22, City Councilman D.J. Wilson brokered an agreement between Cole and the city, offering her a severance package of $65,000.

Then she was called by one of the city attorneys the next day, and the agreement was amended, increasing the settlement to $84,000 (her annual $79,000 salary and benefits) provided she’d agree not to sue the city. She agreed.

Cooper said he entered into the severance package with Cole because he felt he was doing the right thing for the city, based on advice from the city attorney.

The city attorney also advised the City Council, but Tuesday, after a two-hour executive session, the council rejected the settlement, saying the mayor didn’t have the authority to make a “gift of public funds.”

The action mystified Cole’s attorneys, and it leaves Cole, a single mother of a 7-year-old, without a job after having resigned, believing she was doing so with a settlement.

Cooper faces a tough challenge in his bid for re-election this year, and the difficult thing is not being able to openly discuss the resignation and firing because there may end up being a lawsuit against the city.

Chambers said audits like that of Edmonds’ payroll records aren’t uncommon, and all employees’ records would be considered. She said the audit will not be complete until the end of November.

Nancy Bartley: 206-464-8522 or nbartley@seattletimes.com