Issue date: September 15, 1999

Atherton's embattled city manager resigns in a negotiated settlement

After much deliberation, the council on Saturday said it would accept Mr. Guluzzy's resignation effective December 31. Under terms of his agreement, Mr. Guluzzy must also vacate his Holbrook-Palmer Park home, which the town of Atherton provides, by January 31.

That date will change to 30 days after his resignation if Mr. Guluzzy decides to leave his post before December 31. The town will start the process of hiring a new city manager with a vote at its September 29 regular meeting.

In a written statement, Councilwoman Dianne "Didi" Fisher said the recruitment process would move forward "with particular care for residents' input," and that she and the council would "earnestly solicit the residents' constructive advice and views." She also said McKinsey & Company, a private management consulting firm, had offered to provide a management study with recommendations.

The agreement is a "negotiated resignation," according to Councilman Alan Carlson, and is the result of several discussions he had with Mr. Guluzzy, with the council's authority, about the possibility of Mr. Guluzzy resigning his post in the weeks leading up to last Saturday's meeting. According to Councilman Carlson, Mr. Guluzzy, who was hired in 1995, had finally agreed to resign.

The negotiated resignation allows the city manager to collect a $59,000 severance package despite an employment agreement that would have barred Mr. Guluzzy from collecting a severance if he voluntarily resigned. However, according to Councilman Carlson, the agreement was the best solution for both the city manager and the town because it allows Mr. Guluzzy to receive a severance, and the town to avoid costly and time-consuming dismissal hearings and possible litigation in the future. Mr. Guluzzy could not be reached for comment at press time.

However, Councilman Dudley said that Saturday's decision will cost the town more in the long run and that he is not comfortable that the council had done everything it could to ensure that all the needs of both the town and the city manager were being met.

"I think it's going to make it more difficult to hire a new manager because of our history of frequent loss," he said. "I think it will be difficult to attract new city managers with that history and to hire will cost more money than we have been paying. We must be competitive to get good people. So it's part of a bigger picture."

In the past six years, Atherton has lost three city managers, its police chief, its finance director, its public works director and its city clerk.

But Mayor Nan Chapman, who voted in favor of accepting Mr. Guluzzy's resignation, said it was time for a change.

Mr. Guluzzy "has been under intense fire recently and I think that those circumstances make it impossible for anyone to do a really good job," she said. "And I think that whether that criticism was rightly or wrongly directed, we all agreed that it was the best for the city and best for (Mr. Guluzzy) to make a change at this time."

Not enough evidence

The city manager's resignation last Saturday comes on the heels of several highly publicized missteps on the part of Don Guluzzy, including litigation settlements, personnel matters and town spending that have also called into question the City Council's handling of those events.

The latest controversy to hit the town centered on Police Chief Steve Cader's alleged misuse of the police department's database and the city manager's inaction in alerting the council.

After lengthy interviews last Saturday with Mr. Cader, Don Guluzzy and independent town counsel Paul Coble, the council said it found no evidence showing that Mr. Cader inappropriately used the police department's CLETS database, a state-directed system that includes criminal, driving and other information about California residents.

"I'm gratified for the council's continued faith and support," said Chief Cader. "I was confident that if anyone looked at the facts, that they would see that there was no inappropriate activity. I'm confident when the district attorney completes looking at the facts, that they will arrive at the same conclusion."

The decision, which did not address allegations made by former police officer Richard Ponce during an arbitration hearing on Mr. Ponce's firing, did address accusations by residents that the town was ignoring the issue.

At a recent community roundtable meeting, several residents said they were upset about the negative press surrounding these allegations, and demanded that the council address them. Mayor Chapman said, however, the council could not address the allegations against the police chief at that meeting because it was not on the agenda. When Ms. Chapman told residents that the council would hold a special session to address those allegations on Saturday, she was met with a chorus of objections.

Residents accused the council of purposely planning the meeting on a day when Councilman Bill Conwell, the sole council member to ask for decisive action regarding both the city manager and the police chief, would not be able to attend.

Mayor Chapman defended the date, saying several council members would be out of town in the following weeks. In a telephone interview later, Councilman Carlson added that because the council planned to discuss the city manager's conduct as well as that of the police chief, the council needed to find a day when Don Guluzzy would be present. Mr. Guluzzy was among those who would be out of town in the following week, according to Councilman Carlson.

Councilman Conwell was still out of town at press time and could not be reached for comment.

The council's decision on Saturday does not entirely decide Mr. Cader's fate. Instead, according to Councilman Carlson, the decision is contingent upon whether the district attorney's office finds any additional information.

The council is also awaiting a final report from the independent arbitration panel that will make a recommendation on the appeal by former officer Ponce to be rehired.

"With respect to Mr. Cader, (the council's decision) was simply to review the information that was available with respect to the CLETS computer usage, and in a city manager form of government, which we have, the council does not have the power to suspend Mr. Cader, only the city manager has," said Councilman Carlson. "And it's probably not appropriate for the council to order the city manager to do something ... but the council is free to look at the actions of the chief and express an opinion of conduct. And I think that was appropriate."

Mr. Ponce was fired last month for allegedly using the database for personal reasons. Mr. Ponce later charged that his firing was unfair because others in the department, including Police Chief Cader, had used the database themselves for unofficial purposes.

"I hope at this point given all the controversy, all the residents can come together around this and we can move forward," said Councilman Carlson. "There has been some criticism that the council has not taken action, and the council has taken action and now it's time to move in a new direction." 

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