Atascadero settlements costing taxpayers

April 26, 2011

By KAREN VELIE

An impending $1.9 million budget shortfall has several former Atascadero officials questioning the city’s alleged mismanagement of its police department which has resulted in more than a half million dollars in controversial personnel settlements.

“Its clear that the city manager, the city clerk and the city attorney are trying to obfuscate the issues surrounding the expenditure of thousands of tax dollars toward employee settlements, but I believe and am resolved in demanding that they answer to the public,” said former Atascadero mayor Mike Brennler.

The city of about 27,000 people has paid more than $550,000 in settlements to four former city law enforcement officers because of an array of controversial situations which have largely been hidden from the public, according to city settlement agreements and financial records.

In addition, Atascadero has also paid more than $100,000 for paid administrative leave while these city and law enforcement disputes were being addressed.

In January, City Manager Wade McKinney asked former Atascadero Police Chief Jim Mulhall to resign or face termination. Mulhall’s inside knowledge of the inner workings of the city apparently saved him from being fired without compensation.

As part of Mulhall’s 2007 employment agreement, if fired for cause Mulhall would not be entitled to any severance pay or compensation. If terminated without cause, the city would be required to pay him severance pay equal to six months pay and benefits, approximately $99,000.

In the end, both sides agreed on a settlement contract that said the parties wished to amicably sever Mulhall’s employment with both parties agreeing not to “disparage” the other verbally or in writing unless forced to do so by a court order. The agreement also says the city is to pay Mulhall $126,000 within five business days, according to city documents.

However, the city paid Mulhall $161,000 for agreeing to its privacy demands and his promise not to sue in the future. The payout included settlement, vacation time, unused holidays and administrative leave.

When asked how the city came to the $161,000 severance, Marcia Torgerson, city clerk and assistant to the city manager, said that it was a personnel matter and refused to explain.

In another contentious settlement agreement in 2009, the city agreed to pay Lt. Carole Robinson $262,894 following a reverse discrimination claim that embroiled the department in controversy for almost a year.

In 2008, a group of white male officers alleged Robinson promoted her live-in police officer girlfriend while passing over more qualified men on the force. Robinson, with more than 20 years under her belt, was the department’s longest-serving officer and had maintained an unblemished record.

When McKinney hired new Police Chief Mulhall in early 2008, Mulhall was instructed to start an immediate internal investigation into the matter. Mulhall eventually ordered one of the two officers, labeled lesbians, to resign.

Neither complied and Robinson retained San Luis Obispo based attorney Jeffrey Stulberg to represent her while the two officers remained on paid administrative leave for nearly six months.

At a November 11 mediation to discuss Robinson’s situation, the city was rebuked for its behavior and told to fork out the sizeable sum to Robinson.

A few months later, Police Sergeant Brian Dana filed a grievance after he wasn’t promoted to Robinson’s former police lieutenant position. City officials placed Dana on paid administrative leave in May 2009 after asking him to resign.

In the end, the city agreed to pay Dana $65,000 for pain and suffering and accrued sick and vacation time under a severance agreement. Again, in order to receive a settlement the employee would have to keep quiet about problems in the department.

Another controversial settlement is the city’s 2004 resignation agreement with former chief of police Dennis Hegwood following allegations of rape, of which he was subsequently cleared. It was later determined he had consensual sex with a business acquaintance’s wife while on city time.

After first asking him to stay, city officials determined Hegwood should resign because ‘he had lost his moral authority,” and agreed to support Hegwood’s plan to apply for industrial disability, according to the resignation agreement.

In addition, Hegwood’s sick day payout is inconsistent with the city’s own resolution which states that after five years of continuous service, employees are eligible for 50 percent of non-used sick leave.

However, when Hegwood left the city paid him for every available sick day since his date of hire which amounted to $30,000. His total payout for health benefits, sick and vacation leave was $64,650.

When asked to explain why the city went against its own resolution and paid Hegwood for 100 percent of his possible sick days, Torgerson said it was a personnel issue and the city is not required to divulge how it came to the amount.

“In a time when the city is faced with a huge deficit these payouts are very painful and the public has a right to question why the city manager has authorized the payouts,” Brennler said. “Certainly his management style should come under public scrutiny.”