The town of Atherton and former finance director John Johns are poised to sign an agreement awarding him about $225,000 to settle a lawsuit he filed over his firing by the town in October 2007.

Mr. Johns today confirmed rumors that have been buzzing through the town's rumor mill that the settlement agreement includes a provision that the town would rehire Mr. Johns, who would then resign. The town would also write him a letter of recommendation, he confirmed.

Mr. Johns was fired after being put on administrative leave for two months while a private attorney hired by the town conducted an investigation into complaints against him. The hostile workplace charges were not substantiated, but the investigator's report painted Mr. Johns as a bully who may have improperly done outside work while on the town's time.

Mr. Johns maintains that he was targeted for blowing the whistle on fiscal improprieties in Atherton's building and other departments. He has called the report from the investigation flawed and inaccurate.

In July 2008, following an investigation, the San Mateo County District Attorney's office declined to prosecute Mr. Johns on allegations that he used town computers or time that should have been spent working for the town to pursue outside jobs, actions that could constitute a theft or misuse of public funds.

Regarding the as-yet unsigned settlement agreement, Mr. Johns said in an e-mail that he is "grateful for the official recognition by the town for the good work that I did. I am in private practice now. The skills I acquired and the lessons I learned as Atherton's finance director have proven invaluable to me in this new life."

He also praised friends, supporters -- even his wife -- for standing by him throughout a painful ordeal. Among those he named is Mayor Kathy McKeithen, who, he said, "exercised moral courage, who risked her own political career by issuing a sworn declaration in support of my challenge to the validity of the investigative report" on him.

The settlement is the second large pay-out to a former employee the town has made in the last four and a half months. In November, the town signed a $230,000 settlement agreement with former police officer Pilar Ortiz-Buckley, who sued Atherton for sexual harassment by a town employee and for alleged retaliation for her complaining about the employee's alleged behavior.

Mr. Johns served as the town's top financial officer from November 2001 until he was fired in October 2007 by Atherton's interim city manager, Wende Protzman.

His public profile rose during the 2006 audits of the Atherton Building Department and the concurrent investigation by the San Mateo County Civil Grand Jury.

Staff writer Andrea Gemmet contributed to this report.