This comes after the Oklahoma State Auditor released an audit report on the theatre earlier this year.
The findings caused members of the Miami Downtown Redevelopment Authority to reorganize and Director Barbara Smith was put on paid administrative leave as of August 30th.
City Manager Jeff Bishop tells us the audit showed the theatre's trust was acting too independently, making it hard to determine how money was being spent or if money was missing.
That prompted city leaders to amend the trust indenture, changing who is in charge of the trust.
The city manager was appointed to handle the accounting, which automatically dropped Barbara Smith from the responsibilities.
During a meeting last night, she was formally asked to either stay on paid leave until November 13th or to immediately agree to voluntarily resign and accept six weeks of severance pay.
Late this afternoon, Smith told us nothing was wrong with the audit and the MDRA just needed to make operational changes.
Smith tell us she hasn't come to an agreement with the city.
She is currently working with an attorney to review a consulting contract with the MDRA.
In a resolution, the MDRA states "We express profound appreciation and gratitude to Smith for many years of service."
Smith has been the theatre's executive director since 2009.