An "increasing amount of concerns" over the past year prompted First Selectman Michael Tetreau to replace Paul Hiller as the town's chief fiscal officer, Tetreau told the Board of Finance on Tuesday night.

Tetreau, however, wouldn't elaborate on those "concerns" as finance board members spent more than two hours grilling the first selectman and labor lawyer Floyd Dugas over the mechanics, legality and financial implications of the decision to force Hiller from the post he held for about 13 years.

But for many in the audience, comments on the controversy at the end of the evening by finance Chairman Thomas Flynn appeared to sum up their sentiments as they responded with applause.

"It's kind of a sad situation," Flynn said, adding that something his father told him seemed appropriate: "Because something is legal, does not make it right," he said. "Any way you cut it, this process was bungled and resulted in unintended consequences."

Hiller, who was at the meeting but did not comment on his departure from the job last month, was put on administrative leave for two weeks in July, with no explanation forthcoming from the Tetreau administration. The first selectman then issued a press release announcing Hiller's decision to "resign." That announcement came the day before Tetreau left on vacation and the details of the settlement agreement between Hiller and the town was released the morning that the first selectman left the country.

Under the agreement, Hiller will take on the new title of manager of financial services, and is required to put in a minimum of two days of work per week in that post. He will continue to paid based on his annual salary of $135,591 through Dec. 31. For the period of January through June 30, 2013, Hiller's pay will be based on an annual salary of $110,000. His final salary for pension calculations will be bumped up to $158,000, and he will also receive 13 weeks of severance pay and paid for 60 days of unused vacation.

In a subsequent statement on Hiller's ouster from the job, Tetreau -- while providing few details -- admitted Hiller's departure could have been better handled. The first selectman also no longer called Hiller's exit a "resignation."

Flynn said the way Hiller's departure was handled had a negative impact on the morale of town employees, several of whom were in the audience.

"Why didn't we just go to the Board of Selectmen with this?" asked finance member Ken Brachfeld.

"We followed the process outlined by legal counsel," Tetreau replied.

While discussing whether Tetreau had the authority under the charter to negotiate and sign the departure agreement with Hiller, Dugas admitted that it appeared that Tetreau did not have the power to force Hiller to resign from his position as clerk of the Board of Finance.

"We weren't party to that" discussion," Flynn said. "How can you broker away his services for us?" Dugas pointed out, however, that Hiller agreed to step down.

Finance board member James Walsh, until recently a member of the Board of Selectmen, continued to hammer away at his interpretation that the town charter requires all contracts be brought to the selectmen for approval and didn't agree with Dugas that Tetreau had the authority to force Hiller to leave.

In response to questions about the benefits Hiller will receive, Tetreau said those benefits are based on a document that he was given when he became first selectman that outline benefits for department heads. Walsh and others said they never saw that document before Tuesday's meeting. Tetreau, who was on the finance board and the RTM, said he was not aware of its existence either until he took office.

"I think the taxpayers should know what the cost of this is to the penny," Walsh said. "These are costs that are going to add up."

Vice Chairman Robert Bellitto said what really bothered him was that he had not heard a good reason why Hiller should be replaced. And despite promises by Tetreau when elected last November, "This has been anything but transparent," Bellitto said. "It's still not the right way to do things."

But finance board member Robert Stone said the panel could spend the whole night discussing the issue of competing legal opinions regarding Tetreau's authority. "The whole problem is with the charter," he said. "Paul has served this town for many years and done a very good job. Mr. Tetreau came into power and wanted to make a change ... These shouldn't be appointments for life. They should have a beginning and an end."