Former Santa Ana City Manager Paul Walters’ severance payout will total $706,396.85, according to city figures released late Wednesday.

The payout includes the following, according to city figures:

  • $264,999 – Base salary for retaining his position as police commissioner, essentially regional law enforcement liaison, for one year.
  • $101,425.68 – Medical and retirement benefits for one year.
  • $164,553.90 – Two years of U.S. Air Force retirement credits purchased by the city under the state’s public employees retirement system, known as CalPERS.
  • $167,918.27 – Accrued holiday, vacation and sick pay, to be paid in four installments.
  • $7,500 – half of Walters’ attorney’s fees racked up while negotiating his severance from the city.

What such a large payout will do to the city’s still precarious financial picture is unclear. Walters a city employee for 42 years, was credited with helping the city climb out of a $30-million budget hole and narrowly avoid bankruptcy. He could not be immediately reached for comment.

Walters’ ouster was part of what Councilman Sal Tinajero dubbed the Santa Ana Spring, a movement by the council majority to disperse power away from longtime Mayor Miguel Pulido, implement greater transparency at City Hall and distribute authority among the seven-member council.

Council members appointed Walters permanent city manager in June after a yearlong period of behind-the-scenes haggling with Pulido. They at first were reluctant to install Walters, then the police chief, as city manager, but Pulido’s intensive lobbying eventually provided the necessary votes.

Walters’ appointment signaled a tenuous power sharing between the council majority and Pulido. Councilman Sal Tinajero said later that the council and Pulido were united because of the looming threat of municipal bankruptcy.

But once the bankruptcy had passed, Pulido began to renege on promises to the council majority, Tinajero said. It was clear by election time that the peace agreement had broken down when the council majority ran Councilman David Benavides against Pulido for the mayor’s seat.

Had the council majority miscalculated? “A miscalculation is the car’s running at 50 miles per hour and you think you can get across before you get hit,” Tinajero said. “But if the car speeds to 110 miles per hour, that’s not a miscalculation, someone just changed the rules on you.”

Still, the large payout has raised questions about council members’ ability to negotiate on behalf of the taxpayers.

For example, the total paid for unused time off is close to the more than $191,000 former City Attorney Joe Fletcher collected in late 2010. Fletcher had been able to accrue that much vacation, holiday and sick pay through manipulative clauses in his employment contract that allowed him to accrue time as if he had been hired 13 years prior to his actual hire date.

With a severance payout of $333,779 added to his salary and benefits, Fletcher became the second-highest paid municipal official in the state after former Bell City Manager Robert Rizzo.

Meanwhile, former City Manager Dave Ream cashed out $230,366 in unused time off when he retired in 2011.

“I’m assuming when those changes for Fletcher happened, a similar thing happened for the chief,” Tinajero said of Walters’ unused time off pay.

Counting the Walters payout, the city since 2010 has had to fork over at least $1.3 million to show top executives the door.

Only about $250,000 of Walters’ payout amount was actually negotiated in addition to the severance Walters was guaranteed in his employment contract, Tinajero said.

The bargaining chit Walters had was an option in his contract that allowed him to revert to police chief if he was fired, something council members couldn’t tolerate because of public statements by his family members, including his wife, Mary Walters, and his brother-in-law, that described the council majority as incompetent, Tinajero said.

Tinajero justified the payout as necessary.

He described Pulido as self-serving and manipulative and pointed to violations of the open meetings law known as the Brown Act. He said that Pulido obtained his seats on various regional boards merely for their salaries, and his attendance at their meetings was irregular. Pulido also peddled his influence to gain consulting fees, Tinajero said.

All were reasons Pulido had to be stripped of his power over City Hall, Tinajero said.

Over the long run, Walters’ ouster is expected to save the city money, Tinajero said, citing a planned restructuring of administrative offices. And Walters’ temporary dual role as police chief and city manager also saved the city money, he said.

Councilwoman Angelica Amezcua, who was the only other council member speaking to reporters about the issue, said that Walters’ years of public service justified the payout.

“I voted my conscience, and if people think it’s a high figure, he did work for the city for a very long time, and in that way he got compensated,” Amezcua said.

In addition to the payout, Walters’ severance agreement calls for the city’s police headquarters to be renamed the Paul M. Walters Police Administrative Building and have a plaque in the lobby praising Walters’ “service to the city.”

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