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Mayor James C. Galie and ousted Corporation Counsel Robert P. Merino have reached a settlement to end the lawsuit Merino filed against Galie after his July 31 termination.

Merino said he signed the agreement Tuesday. It was delivered to acting Corporation Counsel Timothy J. Bax, who said Galie was to sign it today. Merino, Bax and William F. Savino of Damon & Morey, who is representing Galie, refused to disclose the terms of the agreement. Savino said as in any settlement, neither side is completely happy.

Sources said under the agreement Galie would drop all of his charges against Merino and the two would admit that they didn't get along. Merino would receive a financial settlement worth about $60,000 including full pay through the end of this month, retirement and health benefits through the end of 1999, full severance pay, payment for 67 accumulated vacation and sick days and $10,000, some of which would be used to pay his legal fees.

The agreement is subject to City Council approval and it to be placed on the agenda for Monday's City Council meeting.

Some Council members said they would have preferred it if the case had been heard.

"It still leaves a lot of things unresolved," Councilman Frank A. Soda said.

"This leaves more questions than answers," Chairman Vince V. Anello agreed.

"I suspect at this point both parties must be looking for the least painful method of separation to satisfy both of their interests," Soda said. "I don't know what purpose was served on behalf of the city in this whole episode."

Soda and Anello said the ruling by Justice Jacqueline M. Koshian raises questions about the Council's relationship to the corporation counsel, controller and city clerk. According to the City Charter the mayor needs the Council's agreement to hire or fire all three. Galie fired Merino after the Council tabled his request for dismissal, claiming he didn't need Council approval to fire Merino "for cause." Justice Koshian agreed and set a hearing to ascertain whether cause existed. The hearing was to start a week ago, but was postponed and the parties, instead, reopened the negotiations that led to the settlement.

Councilman John G. Accardo questioned why Galie suddenly was willing to settle the case rather than have his reasons for firing Merino heard. Accardo said he believed it was a result of about 15 subpoenas served by Merino summoning some current and former department heads, City Council members and payroll records of some members of the administration.

He and Soda asked why Galie didn't give the Council his reasons for wanting to dismiss Merino when he asked for Council approval in June. "The tragedy of the whole situation is that all of this could have been avoided if the mayor had sat down with the Council from the beginning," Accardo said. "The Council has to vote on this but the Council has been left out of this continually."

Citing the cost of the settlement and legal fees to the taxpayers, Accardo said, "For what? Because (Galie) couldn't get along with (Merino)?"

Savino said he couldn't say exactly what his legal fees are, but said they are "in the low five figures."

One of the unresolved questions is "How do we go about establishing cause," Soda said. He said Justice Koshian's ruling changes the City Charter to make the three department heads "at will" employees of the mayor's and leaves the Council out.

"What relief is there for the Council if they lose confidence in the corporation counsel," Anello asked. "This cuts into the objectivity in the relationship between the corporation counsel, city controller and city clerk and the City Council because they have no protection."

Galie could not be reached to comment.

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