The city of Seaside and on-leave Police Chief Steve Cercone have reached a settlement agreement that effectively ends the months-long saga that began in August, when City Manager Ray Corpuz placed Cercone on paid administrative leave.

The City Council-approved settlement, reached Dec. 18, states that Cercone "has honorably served as Chief of Police and has chosen not to seek renewal of his contract agreement." The language is conciliatory, considering the city's November letter to Cercone informing him that his contract will not be renewed when it expires in May.

A press release from the city, attached as an exhibit to the settlement, states that the severance is effective Jan. 1, 2010, and that the decision to settle is amicable.

"The parties have agreed that Chief of Police Stephen M. Cercone did not commit any wrong-doing in connection to his being placed on administrative leave in August of 2009," the city states. "No violation of policy or of the law occurred on the part of Chief Cercone or the city."

The settlement awards Cercone more than $287,400. Cercone, for his part, agrees not the sue the city in relation to his employment or severance, or to seek future employment with the city.

"As I stated several months ago when I was put on leave, I had done nothing wrong," Cercone says. "I am truly grateful for the tremendous public support that I received over the last few months. I don't know what I would have done without it. I am very thankful to the people of Seaside for having such faith in me."

Cercone says he's not ready to retire and will likely continue in law enforcement. If he does retire, however, the city agrees to provide him with the Chief of Police retirement badge. The city also agrees to limit comments to prospective employers inquiring about Cercone to a brief statement noting the "amicable separation."

The settlement is signed by Cercone and his attorney, Michael Stamp; Corpuz and city attorney Don Freeman, and Richard Harray of Kennedy, Archer and Harray. Freeman could not be reached for comment. City offices are closed until Jan. 4.