City to Give Julian Severance, Forgive Debts

The City Council on Tuesday agreed to give former City Manager Stephen B. Julian $166,575 in severance pay and to release him from about $26,000 in loans he owes the city.

Julian, 51, was terminated on Sept. 28 after controversy over a lawsuit brought by a residents’ group that alleged some of Julian’s benefits constituted abuse of public funds.

The suit was dismissed, but it had undermined Julian’s authority and effectiveness, city officials said.

Julian at first had been asked to resign but had refused, thereby forcing the council’s hand. That termination triggered clauses in Julian’s contract that provide him with a year’s salary--$125,646--plus a series of other benefits, all of which had to be negotiated by city officials and Julian’s attorneys.

Also under terms of Julian’s contract, which was renegotiated in 1990, Julian could be excused from some personal debts that he owes the city if he is terminated for anything other than misconduct.

“I think basically he had us over the barrel,” Councilman Jeff Vasquez said Tuesday. “The city spent three quarters of a million dollars defending this agreement, and the judge said in a preliminary statement that the agreement is valid.”

It was Julian’s new contract, negotiated with two years still remaining on the old contract, that touched off the controversy and subsequent lawsuit involving Julian. The debt-forgiveness clause was unusual, said James Hendrickson, a longtime city manager who did a study of municipal executive salary packages for the California City Management Foundation.

The city gave Julian a $250,000 home loan in 1981, and allowed him to borrow cash against accrued vacation and sick leave.

A local attorney, Carlos Negrete, filed a lawsuit against seven city officials, including Julian, alleging misuse of public funds.

A Superior Court judge dismissed the lawsuit in August, however, saying he found no evidence of illegal expenditures, waste, misuse of public funds or fraud.