In favor of the cop!
One thing we know about mediators. They usually find in favor of the company they work for. The reason for this is not hard to discern. If they don't find in favor of the company writing the check, 9.99 and 9/10 % of the time, they won't be asked to mediate again. This applies to any dispute you care to mention. And it is especially true when dealing with City Hall.
Here is one of the best features of the Occupy movement. The general citizenry is no longer content to sit back and let the "authorities" do whatever they like --- as long as everybody smiles for the camera.
So a large group of outraged citizens showed up at City Hall to protest the mediator's extremely unfortunate decision. Now City Hall has to grin and try to maintain its authority in the face genuinely righteous anger. The news media can try to slant this so as to make the demonstrators look like kooks, and they will do. But I, for one, am happy to see the public get involved in what is very apparently a corrupt decision.