Grand jury mulls Atascadero police chief resignation

James Mulhall taking the oath of office as Atascadero’s police chief Jan. 31, 2008.
James Mulhall taking the oath of office as Atascadero’s police chief Jan. 31, 2008. The Tribune

After investigating the city of Atascadero’s refusal to explain why its former police chief was paid $126,000 when he resigned earlier this year, a civil grand jury Thursday concluded that city officials should review and revise the way they announce personnel decisions to the public.

In a report titled “What was the deal between the city of Atascadero and the former chief of police?” the grand jury found no illegal activity. But it questioned whether former police chief James Mulhall’s case was a true resignation or a “disguised termination for cause.”

Mulhall unexpectedly resigned Jan. 7 to “spend more time with his family,” according to a statement from the city at the time. But about two weeks later, in response to a public information request, the city released a termination agreement that it had signed with Mulhall.

The city should have released that agreement with the initial statement about Mulhall’s family, the grand jury found.

Additionally, under the terms of Mulhall’s employment agreement, if he had truly resigned, he would have been paid only for his accrued unused benefits, the report found. He would not have been entitled to a settlement payment.

Instead, he was paid $126,000. According to his termination agreement, Mulhall promised not to sue the city in exchange for that money. The city also promised it would not pursue its right to fire him with cause.

Neither Mulhall nor city officials would disclose more information at the time.

Contacted Thursday for a response to the grand jury report, City Manager Wade McKinney said, “Hindsight is always great. How we balance transparency with the employees’ rights — we look at that each time, and we could do it better.”

In its report, the grand jury noted that the city’s lack of transparency at the time exposed it to criticism.

Grand jury members interviewed city staff and the City Council, reviewed employee agreements and other documents and consulted with the county attorney, among other actions, in preparing their report.

According to the report, Mulhall and McKinney began resignation talks “sometime in late 2010.”

The city initially offered a settlement payment of $106,000 in exchange for the mutual termination agreement, according to the grand jury report. The sum equaled six months’ salary and benefits. His base annual salary for fiscal year 2010 was about $132,800.

The eventual $126,000 settlement included an approximate cash-out value of Mulhall’s unused paid administrative and vacation leave.

The reasons behind Mulhall’s departure are still not known publicly.

Besides recommending that the city revise its process by which personnel decisions are disclosed to the public, the grand jury encouraged the city to review the possible risk of not conducting annual evaluations called for by employment agreements.

Mulhall was entitled to a written summary of his performance, but, the grand jury found, there was only one written review, conducted at the end of 2009.

Civil grand jury reports are not legally binding and only act to inform the public and government of the issues they highlight.

Grand jury report on Atascadero Police Chief Jim Mulhall's resignation