New London — The City Council on Monday signed off on a settlement agreement that ends a long-running lawsuit against the city by retired former police Chief Margaret Ackley.

Ackley will receive $50,000 from the city, $8,000 of which is earmarked for her attorney, Peter Goselin. Ackley has agreed to withdraw her suit and any other complaints she may have had with the city. The total cost to the city, including legal fees, is an estimated $75,000.

A trial was slated to begin this summer.

The lawsuit dates to 2013 when Ackley claimed former Mayor Daryl Justin Finizio and city attorney Brian Estep intentionally violated the terms of a contract signed in 2012.

The three-year contract with Ackley was signed by Finizio in part to keep her from retiring, something she had contemplated doing in 2011. In addition to her $110,725 salary, Ackley would have received about $60,000 in accumulated compensation under the contract. She was also promised $25,000 in exchange for not pursuing a legal claim against the city over alleged harassment by a former city councilor.

The agreements were later rejected by the City Council.

Attorney David Monastersky, who represented the city, said he believed the city was on solid footing if the case had gone to trial. In a motion for summary judgment filed last year, Monastersky argued that Finizio had no authority to sign the contract without City Council approval and that any financial appropriation needed council approval. Finizio, in a court deposition, said he believed that under the new powers granted to him as an elected mayor he had the power to execute the agreement.

Finizio and Estep were removed as defendants from the case during the legal wrangling.

Goselin, Ackley’s attorney since last year, said it was unfortunate the case could not be resolved earlier, especially considering Ackley’s long service to the community. Ackley served 30 years with the police department, her last eight as chief.

Ackley, 55, retired in January 2017 and is receiving disability pension through the Connecticut’s Municipal Employees Retirement System due to injuries sustained on the job.

“Ms. Ackley is glad to finally be at the end of a very long road in getting the matter resolved,” Goselin said.

Ackley’s appointment by city manager Martin Berliner as the city’s first female chief in 2009 was celebrated, but also challenged by some city councilors and set off what was to be a tumultuous relationship with the local police union.

And while they started as allies, even Ackley’s relationship with Finizio soured during her tenure. In 2014, Ackley filed a request for an injunction against Finizio, asking a judge to halt his alleged interference in her duties.

Finizio placed Ackley on paid administrative leave pending the outcome of an investigation into her conduct. Ackley was out for 10 months before an independent investigator ruled there was no merit to Finizio’s allegations — undermining union contract negotiations, misrepresenting financial information and deliberately increasing overtime spending.

The agreement authorized Monday by the council was unanimously passed without comment from the council. The city is expected to split the cost of the $50,000 settlement with its insurer, the Connecticut Interlocal Risk Management Agency.

The city had also paid CIRMA a $50,000 deductible for legal costs while the case was pending, a deductible that has since risen to $500,000 for such cases.

g.smith@theday.com