Money magazine calls Manhattan Beach, population 33,800, the fourth most-expensive town in America, but the Great Recession has washed over the small burg, wiping out the treasury and leaving a record $4 million deficit. So a lot of residents are outraged over a mysterious $195,000 parting gift of public funds to powerful City Manager Geoff Dolan, who suddenly resigned without explanation after 15 years, skipping the obligatory thanks-and-good-bye ceremony given any well-known leader, and failing to give even a couple weeks' notice.

The Manhattan Beach City Council's five elected members refuse to explain why they handed the money to Dolan, and none would say why he left so abruptly. Manhattan Beach City Attorney Robert Wadden insists that a hastily crafted “separation agreement” spelling out the terms of the fat payment is a secret document — not public record.

The few facts to emerge triggered outrage among residents because Dolan's contract clearly states that he is entitled to severance pay only if fired. But none of the politicians on the City Council will admit that they fired Dolan, the most powerful government leader in Manhattan Beach, where the job of mayor is largely ceremonial and the city manager runs things much like a CEO.

City Hall officials have grudgingly provided some details, and the emerging story has triggered further taxpayer anger. City Council members claim they are sorry about all their secrecy but insist they are staying mum on the advice of City Attorney Wadden. The silence has, in turn, fueled a growing demand for answers.

“Giving him this 195 grand is like pouring salt on an open wound,” says Manhattan Beach activist Jon Chaykowski. “If Dolan is really resigning, he's not entitled to a cent. If he's being fired, the city should tell us why he was fired and why they are giving him all this money.”

Although he never ran for office, many residents say the 56-year-old Dolan was the best politician this affluent beach town has seen in the last quarter century. Why would he voluntarily resign from a plum $257,000-a-year job overseeing a small municipality with few urban troubles — a staggering salary that is higher than that of Los Angeles Mayor Antonio Villaraigosa, the highest-paid mayor in the United States at about $230,000 a year?

“We're all shocked Dolan left. Everybody's talking about it, but nobody knows the real story,” says lifelong Manhattan Beach resident Bob Perkins. “The people who know aren't talking.”

Dolan was lured from a similar job in Longmont, Colorado, in 1995, paid a then-whopping $100,000 salary and provided a $430,000 low-interest house loan. His reputation since has been that of a smooth operator who avoids public controversy.

By 2006, his services were so valued that on January 1 of that year the City Council handed him a new contract that gave him financial incentives designed to keep him in place through 2016, with an automatic renewal every January 1.

Soft-spoken in public and a schmoozer, Dolan was popular enough to have been elected mayor — if Manhattan Beach had a mayoral system. Instead, it has a city-manager system in which the five City Council members each rotate through a nine-month term as mayor, performing the post's mostly ceremonial duties, including talking to the press.

In the aftermath of Dolan's departure, Mayor Mitch Ward stuck to P.R. platitudes about privacy and personnel issues to avoid comment. “I don't want to get into the specifics of how we came to our decision,” he says. “I think it's a personnel matter.”

But when L.A. Weekly filed several Freedom of Information Act requests to find out what had really happened, suddenly city officials released the 2006 contract Dolan was awarded, revealing his until-then secret $195,000 severance payout.

However, neither the contract nor the severance papers tell the public what it really wants to know: Was Dolan fired, in which case it's likely that the city is legally bound to cough up a severance, or did he simply resign, in which case Manhattan Beach residents probably owe him nothing?

City Attorney Wadden told the City Council that an apparently hastily prepared separation agreement could be kept secret, and the council has cited that advice in order to justify its silence. Then, last week, Wadden denied the Weekly's FOIA request for a copy of the separation agreement.

Independent legal experts say Manhattan Beach officials are playing games with the public and taxpayers — that the separation agreement is clearly a public document of legitimate interest to Manhattan Beach residents. The Weekly has obtained a detailed analysis from the California First Amendment Coalition, which cites established case law that the separation agreement is public record because it is an extension of the terms of Dolan's lucrative 2006 contract.

Under those 2006 terms, Dolan was to be paid a severance of six months' salary and benefits in the event of an involuntary separation, or firing. That's what the city's taxpayers ended up paying him: six months' salary and benefits.

Mayor Ward, who is running for the Democratic nomination for the reliably Democratic 53rd state Assembly seat being vacated by Ted Lieu, refused to explain why city leaders chose to pay Dolan a hefty severance. “The entire City Council is satisfied with the terms of Geoff's departure,” Ward tells the Weekly. “The community is moving on.”

But the community is not moving on: This week's local paper, the Beach Reporter, is filled with letters demanding the council come clean. Many residents point to the city's $4 million deficit this year, its largest ever, which led to deep cuts in the Community Police Program and city Employee Wellness Program, as well as the axing of some popular family programs that give the city its charm, including the taxpayer-sponsored Pumpkin Races and Halloween Carnival.

“Everybody wants to know why he is being paid all this money at a time of very painful budget cuts and staff reductions,” says longtime resident Beverly Morse. “And they aren't telling us why they fired him. What the hell happened?”

“I can't tell you what happened with Geoff, but I can tell you that our next city manager will understand the City Council is their boss,” Councilman Richard Montgomery tells the Weekly. “Understanding that relationship is critical for any candidate.”

Hired in 1995, Dolan was a micromanager who saw every memo, flowchart and e-mail. But under his management the city eventually won a AAA bond rating and he enjoyed tremendous power over the council, which often agreed with his plans without challenge. “At council meetings the words staff recommendation were the surest way to get the council to vote yes,” Morse says. “And who controlled the staff? Dolan.”

But Dolan clashed with Ward, who began communicating directly with city department heads and challenging Dolan's dominance. Says one City Hall source, “Geoff hated that.”

Councilwoman Portia Cohen, a lawyer originally from New Jersey, also began to object to Dolan's control. “I admit that Portia is a classic New Jersey lawyer with a strong point of view,” Montgomery says. “She did push back.”

So the fed-up council members forced Dolan out, insiders say. According to Councilman Wayne Powell, City Attorney Wadden told the council that Dolan could sue — and taxpayers could be on the hook — unless Dolan got the six months' severance mentioned in his contract.

“We didn't want any litigation,” Powell tells the Weekly. “We were told it could end up costing us much more than $195,000, so. …”

So Dolan got $195,000, and the political cover of saying he'd resigned. And the council got rid of Dolan. Everybody got what they wanted, critics say, except taxpayers. They wanted an honest answer about where their money went and why.

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