Grand jury says Atascadero needs more transparency

June 24, 2011

Atascadero’s handling of its $126,000 settlement with former Chief of Police James F. Mulhall “led to public confusion and complaints” about lack of transparency, according to a report released Thursday by the San Luis Obispo County grand jury.

“There was no violation of law or other improper action” by City Manager Wade McKinney in negotiating and signing a mutual agreement to terminate Mulhall’s employment, wrote the grand jury.

The report —“What was the deal between the City of Atascadero and the Former Chief of Police?”— found no illegal activity in the negotiations but said city officials could have avoided confusion in the community by being more transparent.

Mulhall resigned unexpectedly Jan. 7 “to spend more time with his family” after signing a mutual termination agreement with McKinney. At the time, no mention was made of the settlement payment.

Questions were raised about whether Mulhall had resigned or was fired. Additionally, complaints were made that the city manager might be paying too much to settle with former employees.

Neither the city nor Mulhall would disclose details. Complaints were made about improprieties regarding settlement payments to former city employees.

Responding to inquiries from the media and public, Atascadero officials eventually released a copy of the settlement agreement about two weeks after Mulhall’s resignation, which says that he would not sue the city in exchange for $126,000, and the city promised not to fire him with cause. It wasn’t clear whether Mulhall’s settlement includes $35,000 in unused paid administrative and vacation leave.

The city’s “partial and sequential disclosure” in the termination of Mulhall’s service, says the grand jury report, “exposed the city to media and community complaints about the lack of transparency.”

The grand jury suggested that Atascadero “review and consider an appropriate revision to the process by which its personnel decisions are disclosed to the public.”

It also noted the disparity between the city’s employment agreement requiring annual written performance reviews of its employees and the actual number of reviews made. Mulhall had received one review in his time with the city.