In late October, the town reached a settlement with Pilar Ortiz-Buckley, a now-retired Atherton police officer, said her attorney John Bonagofsky. The $230,000 settlement ends the sexual harassment and disability discrimination lawsuit Ms. Ortiz-Buckley filed against the town and Atherton public works supervisor Troy Henderson.
While the settlement deal was finalized Nov. 19, information about it didn't become public until nearly a month later, when Mr. Bonagofsky posted information about it on attorney-rating Web site Avvo.com.
City Attorney Wynne Furth told The Almanac that the town is required only to respond to inquiries about multi-party settlements but is under no legal obligation to announce it.
"We have a new city manager, and a new city attorney and we simply need to give them instructions on what the council wants in the future," said Councilman Charles Marsala. "I think they did the right thing by following the letter of the law, but that's the minimum standard and our residents and our council expect things to be more transparent. I don't think it was anything malicious on their parts, but I think we can do better."
Peter Carpenter, the president of the Atherton Civic Interest League, said he was outraged at how the settlement was handled, and pointed out that it represents about 20 percent of Atherton's annual parcel tax revenue.
"Frankly, I think the town was morally derelict in the way that they have handled this," he said in an e-mail to The Almanac.
Mr. Marsala requested that the council discuss creating a policy on disclosure of information at next week's study session on the town's priorities for the coming year. The meeting is set for 9 a.m. Monday, Jan. 11.
"In hindsight, if you want to analyze it, obviously a press release should have been issued immediately from the city attorney or city manager," said Councilwoman Elizabeth Lewis. "It was certainly not something that was an attempt to hide anything."
Councilman Jim Dobbie said the council should have made the announcement. "I think it was a mistake not to announce it," he said.
Council members were instructed not to discuss the settlement until it was finalized, but the council members reached for this story said they did not know precisely when that occurred.
Ms. Ortiz-Buckley and her attorney were first to sign the settlement, on Nov. 4, and Mr. Henderson was the last, on Nov. 19. City Manager Jerry Gruber signed on behalf of the town on Nov. 16.
Ms. Furth said she and the city manager executed the settlement as instructed and did not report back to the council when it was finalized.
Mr. Gruber said he didn't want to second-guess why Ms. Furth didn't inform the council when the settlement was finalized but said he was committed to making sure the council is kept informed in the future.
"I think we can do a better job of communicating with the public regarding settlements, absolutely," he said. "There's a commitment from my office that we will make every effort to make sure we're transparent at city hall."
The case was on a City Council closed session agenda on Oct. 19, just a few weeks before Atherton voters were asked to renew the town's special parcel tax in the Nov. 3 election. At that meeting, the council voted unanimously to authorize settlement negotiations, Ms. Furth told The Almanac on Jan. 4.
The $230,000 payment comes out of Atherton's general fund, and isn't covered by insurance, according to Mr. Gruber. The sum represents a sizable chunk of the town's annual revenue. In February, Atherton faced a $2 million revenue shortfall in its $10.6 million adopted budget and had to make a series of mid-year cuts.
Atherton now has employee practices liability insurance that would have covered the lawsuit settlement — after a $100,000 deductible — but apparently the town didn't elect to get that coverage in the past, said Assistant City Manager Eileen Wilkerson.
"It's a lot of money, and the only reason for the amount of money is that we believed it would cost even more money if (the lawsuit) went ahead," Mr. Dobbie said. "There's not any great guilt there, but legal fees are so high that if you keep going to court, it can get up to that amount of money very quickly."
Attorney Jim Ewert of the California Newspaper Publishers Association, an expert on California's open meeting law known as the Brown Act, said that by staying quiet about the settlement, the town followed the letter of the law, but it's questionable whether officials had the spirit of the law in mind.
"The pending litigation exemption in the Brown Act is to permit agencies to discuss the merits and weaknesses of pending or existing litigation without having to reveal to the other litigants what the town's strategy is. Since the (Atherton) litigants were already involved in the settlement, everyone knows what's going on except for the public," Mr. Ewert said. "There really is no public benefit to sitting on it, other than not looking bad."
In her lawsuit, Ms. Ortiz-Buckley charged that public works supervisor Mr. Henderson subjected her to ongoing verbal sexual harassment. She filed a lawsuit against Mr. Henderson and the town in April 2009, alleging that Mr. Henderson's supervisors did nothing to curb his behavior, and that when she complained, she faced retaliation and was forced out of the police department.
A June 2008 incident in which Mr. Henderson allegedly lunged at her exacerbated her existing back injury, and the town failed to accommodate her disability, she said.
Mr. Henderson was prosecuted for misdemeanor assault and battery stemming from the June 2008 incident, but a jury found him not guilty in July 2009.