HomeMy WebLinkAbout02/03/2015 00 Misc Distributed at the Meeting Distributed att the
Meeting •
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of February 3, 2015
ITEM TITLE: Resolution authorizing the City Manager of the City of Yakima to consent to a
settlement entered into by the City of Yakima ( "City ") and Cities Insurance
Association of Washington ( "CIAW ") to resolve and settle the damage claim
brought by James S. Brown
SUBMITTED BY: Helen A. Harvey, Senior Assistant City Attorney
SUMMARY EXPLANATION:
This matter is on for consideration of a Resolution authorizing the City Manager to consent to a
settlement entered into by the City of Yakima and CIAW to resolve and settle a damage claim filed
by James Steve Brown on July 30, 2014, and to settle all claims by the claimant. The damage
claim filed by James Steve Brown alleged $1,561,930 in damages.
The claim against the City of Yakima was settled by the City and CIAW, subject to the
presentation of the settlement before the Yakima City Council. A copy of the Release of All
Claims is attached. The amount of the settlement is $150,000, of which the City will pay
approximately $64,050. The remaining settlement amount of approximately $85,950 is to be paid
by CIAW and the City's insurance risk pool CIAW
Resolution X Ordinance Contract Other (Specify)
Contract Contract term: Start date: End Date or
Upon Completion: Mail to (name and address):
Phone: Financial Impact/Item Budgeted: Yes X No
Amount: Funding Source /Fiscal Impact: Risk Management
Insurance required:
Strategic Priority (choose only one): economic development , public safety
improve the built environment , public trust and accountability X , partnership
development
STAFF RECOMMENDATION:
Adopt Resolution
RESOLUTION NO. R -2015-
A RESOLUTION authorizing the City Manager of the City of Yakima to consent to a
settlement entered into by the City of Yakima ( "City ") and Cities
Insurance Association of Washington ( "CIAW ") to resolve and settle the
damage claim filed by James S. Brown
WHEREAS, on July 30, 2014, a damage claim was filed by James Steve Brown with
the City of Yakima Clerk's Office; and
WHEREAS, through negotiations, a settlement was reached by the City of Yakima
and CIAW and the claimant to resolve and conclude all claims in the matter; and
WHEREAS, in the settlement agreement, liability for all such claims is denied by the
entities being released; and
WHEREAS, the amount of the settlement is $150,000, of which the City will pay
approximately $64,050, and the remaining settlement amount of approximately $85,950 is to
be paid by CIAW and the City's insurance risk pool CIAW; and
WHEREAS, the City Council of the City of Yakima deems it to be in the interest of the
City to authorize the City Manager to consent to a settlement entered into by the City of
Yakima and CIAW and the claimant to resolve and conclude the damage claim; now,
therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is authorized to consent to the settlement
entered into by City of Yakima and CIAW to resolve and settle the damage claim filed by
James Steve Brown, which settlement will be paid by the City of Yakima and CIAW
ADOPTED BY THE CITY COUNCIL this day of February, 2015.
Micah Cawley, Mayor
ATTEST
City Clerk
SETTLEMENT AGREEMENT
1. Release
For the consideration recited below, James `Steve" Brown and Angie Brown, husband
and wife, and the marital community composed thereof, and their representatives,
beneficiaries, heirs, children, grandchildren, executors, administrators, successors and
assigns (hereinafter "Releasing Parties "), forever release the City of Yakima, Cities
Insurance Association of Washington ("CIAW "), and all their respective past, present,
and future agents, employees, officers, directors, elected and appointed officials, assigns,
successors, attorneys and related entities (hereinafter "Released Parties ") from all claims,
rights and causes of action, which may ever be asserted by the Releasing Parties, whether
presently known or unknown, presently asserted or unasserted, presently vested or
contingent, which in any way arise out of or are related to any incidents, acts or omis-
sions between the Releasing Parties and the City of Yakima and its past. present or
future elected or appointed officials, officers, employees, and agents, including but not
limited to (1) all matters arising from or related to James `Steve" Brown's employment
with the City of Yakima, his termination from employment with the City of Yakima, or
his reinstatement of employment with the City of Yakima, (2) all those matters which are
or could have been asserted as a claim by Angie Brown; (3) all those matters which are or
could have been the subject of the Claim for Damages filed by James Brown on or about
July 30, 2014, (4) all matters which are or could have been the subject of Equal Employ-
ment Opportunity Commission Charge Number 551-2014-01511, and (5) any other
incidents, acts or omissions involving the Releasing Parties and the Released Parties
occurring through the date this Settlement Agreement is signed.
This release includes all claims, rights and causes of action under federal, state, or local
law, including, but not limited to. whether based in statute, regulation, code, ordinance,
tort, contract, equity or otherwise, and specifically including by way of illustration, but
not limited to, all claims under the United States Constitution, the Washington State
Constitution, Age Discrimination and Employment Act, Title VIT of the Civil Rights Act
of 1964 (as amended by the Civil Rights Act of 1991), Older Workers Benefit Protection
Act, and the Washington Law Against Discrimination (RCW Chapter 49.60).
This release covers any and all past, present and future injuries, damages or losses known
or not known to the Releasing Parties, but which may later develop or be discovered in
connection with the above referenced matters. including, but not limited to, all claims of
Settlement Agreement - 1 of 4
the type set forth above, for violation of civil rights, for retaliation, for personal injuries,
for loss of income, for attorney's fees, for costs, and for loss of consortium.
2. Consideration
The consideration for the aforementioned settlement and the release contained in
paragraph 1 above includes the following
1) Payment by CIAW to the Trust Account of the Law Office of Hector
Leal the sum of One Hundred Fifty Thousand Dollars ($150,000),
payable for the benefit of the Releasing Parties;
2) Restoration of 649 75 hours of leave in one of two ways at the op-
tion of the Releasing Parties.
A) Sick Leave: Use the hours as sick leave at full
hours (649 75) which can be used for scheduled pre-
ventative health and dental appointments, unscheduled
personal /family illness, or long -term illness or injury;
or
B) Paid Time Off Convert 649 75 hours to paid
time off (PTO) at the rate of 70% which totals 453.83
hours. Paid time off is a leave program for nonrepre-
sented City employees which combines sick leave, va-
cation, and personal holidays into one leave bank.
3) Tax liability, if any, on the proceeds of the settlement sum shall be
paid by the Releasing Parties, and the Releasing Parties agree to hold
the City of Yakima and CIAW harmless and to indemnify them from
any tax consequences of this settlement. The duty to indemnify and
hold harmless the City of Yakima and CIAW includes, but is not
limited to, any required employer contribution or payment if any of
the settlement proceeds are determined to be taxable income as to
the Releasing Parties or their law firms.
4) Employer shall not discriminate, intimidate, harass, threaten, retali-
ate or take any adverse employment action against Employee be-
cause he exercised his right to submit a tort claim, EEOC charge or
otherwise complained about the facts and circumstances of his sepa-
ration from employment with the City in November of 2013 Any
Settlement Agreement - 2 of 4
such prohibited retaliation includes adverse actions independent of
the workplace. Examples of kind of conduct that may be considered
retaliatory under this Agreement includes denial of promotion as
well as material changes in the terms and conditions of employment
such as work assignments. An employee who retaliates against Em-
ployee may be subject to discipline up to and including termination
of employment.
5) Settlement is contingent on City Council approval at its next meeting
on Tuesday, February 3, 2015 If City Council approval of the set-
tlement is denied, the Released Parties hereby agree to not contend
the lawsuit filed by the Releasing Parties on or after February 5,
2015, is untimely
3. Indemnification for Subrogation and Lien Claims, and Hold Harmless
The Releasing Parties represent that all Reliable expenses, and all subrogation claims, and
all claims of any other persons or entities legally entitled to share in the proceeds of this
settlement have been paid. or will be paid or otherwise resolved from the proceeds of this
settlement.
The Releasing Parties agree to defend, indemnify and hold harmless the Released Parties
from and against all lien and subrogation claims, if any, including all costs and attorney's
fees incurred in the defense of such claims.
4. Warranty of Capacity to Execute Agreement
All signatories to this Settlement Agreement certify and warrant that they are fully
authorized to enter into this agreement and bind themselves and the parties thereto
5. Governing Law
This Settlement Agreement shall be construed and interpreted according to the laws of
the State of Washington. The venue of any action necessary under this Settlement
Agreement shall solely be in Yakima County, Washington.
6. Denial of Liability
This Settlement Agreement expresses the full and complete settlement of all claims. It is
expressly agreed that liability for all such claims is denied by the Released Parties as is
any fault relating to the matters described. It is agreed and understood that this settlement
Settlement Agreement - 3 of 4
is a compromise of disputed claims. Regardless of the adequacy of the above considera-
tion, acceptance of this release shall not operate as an admission of liability on the part of
the Released Parties.
7. Consultation With Counsel
All signatories to this Settlement Agreement have read this Settlement Agreement and
fully understand the terms. They have had an opportunity to seek independent legal
counsel regarding the legal implications of this Settlement Agreement.
J 0 •/ Dated. February 3 . 2015
Janes "Steve" Brown, Releasing Party
JP"( "N_ Dated. February 3 , 2015
Angie Brown, "leasing Party
Dated. February , 2015
Tony O'Rourke, City Manager, on
Behalf of the City of Yakima
Settlement Agreement - 4 of 4
Distributed at the
Meeting
MEMORANDUM
To Honorable Mayor and Members of the Yakima City Council
From. Tony O'Rourke, City Manager
Date February 3, 2015
RE. 2013 State Auditor's Accountability Audit
The staff takes seriously its role in ensuring compliance and adequate safeguarding of
the City's $208 million operations from fraud, loss, or abuse.
To that end, we work closely with the State Auditor to cooperate and comply with the
State Auditor's Office on professional standards and state, federal, and local laws.
To ensure independence and objectivity, City Council members are directly notified and
invited by the State Auditor to its annual entrance conference. The 2013 accountability
audit conference was held on October 8, 2014 More importantly, City Council
members are notified and invited to attend the State Auditor's exit conference to review
and discuss the results of the audit by the State Auditor Finally, a complete copy of the
audit is sent to City Council members by the State Auditor In this case, the results
were electronically transmitted to the City Council members on January 23, 2015
Due to these proactive measures to ensure transparency, I was surprised to read in
today's Yakima Herald Republic that a council member wants to "know why he's just
now finding out about (audit) problems first identified in 2012, and why they have not
been fixed "
First, all council members have been provided the State Auditor's findings prior to today
Second, the State Auditor reported, "In most areas we audited, City operations complied
with applicable requirements and provided adequate safeguarding of public resources.
The City also complied with state laws and regulations and our policies and procedures
in the areas we examined "
However, the State Auditor identified two areas in which the City could make
improvements.
Police Department
1 Better documentation and supervisor approval of voided cash receipts This was
also a finding in 2013 The 31 voided cash receipts out of 4,875 represents 0 6%
of all receipts or $578 based on the average cash receipt of $18 67 While this
matter should have been properly addressed in 2013, the Police Department
Records Division was completely focused on the planning and implementation of
a new records system to comply with state and federal reporting requirements.
Compounding this situation was the necessary turnover of the records division
management staff to improve operational efficiency, staff productivity, and
morale.
2. Proper police department retention of 15,595 traffic and criminal citations and
required monthly audits. The original copies of all traffic and criminal citations
are sent to the Municipal Court for processing, however, the police department
should retain its copies. Unfortunately, the destruction of the 2013 citations was
done in error, without knowledge or approval of the City's records management
officer in the City Clerk's office The monthly audits have not been conducted
since 2010, when it was first brought to the City's attention This is not
acceptable and we have hired a new police services division manager with an
accounting and MBA background to ensure these issues are complied with going
forward.
Transit
1 The State Auditor identified in 2013 and 2014 the necessity for better internal
controls to ensure bus passes sold at 16 locations are properly received and
accounted for. The City is aware of its responsibility to maintain proper internal
controls over bus pass inventory The State Auditor believed we were only
performing the correct reconciliation at nine of the 16 bus pass sale locations.
Because this had been an issue in the last audit, Yakima Transit began the
following process in early 2014 at the seven locations that the State Auditor had
concerns about.
a. Every quarter Yakima Transit counts out the passes and tickets to
each location (vendor) At the time they are counting the passes out to
distribute to each of the vendors, Yakima Transit enters those numbers
in a spreadsheet to confirm the exact count and it is documented in the
vendor's paperwork. Each vendor confirms the amount of passes and
tickets received equals the amount distributed from Yakima Transit.
b Once the new passes are sold, Yakima Transit takes the vendor's
paperwork and counts each pass sold and collects the revenue
received and owed to Yakima Transit. The vendors are given a
receipt, which they verify by signing, that confirms the transaction.
Yakima Transit keeps a copy on file as well.
c. After returning to transit with returned passes and revenue from each
vendor, Yakima Transit puts all of this information into a spreadsheet
to accurately track. The revenue and paperwork are placed in
envelopes of the respective vendor
d Each separate vendor envelope is then submitted to finance to avoid
confusion and to specifically keep track of each vendor containing all
revenue and informational sheets as to where the tickets /passes were
sold, how many were sold, and at what rate (youth, adult, school
district, and senior citizen).
For the first eight months of 2014, the City had collected $273,215 or $6,087
more than total bus passes sold
While we have no reported bus pass revenue losses, we recognize the
importance of maintaining adequate internal controls. To that end, we will add
additional remedial measures, which would more quickly identify potential losses.
We recognize the importance of maintaining adequate internal controls, and appreciate
the input from the State Auditor to assist us in better safeguarding public assets. While
we do not believe we have had, or are having a loss of bus pass revenue, we recognize
that the remedial measure we identified will more quickly identify a potential loss.
Additional recommendations by the State Auditor, not considered significant enough to
include in a finding in the accountability report included
• City -wide fuel use
• Fire Department fuel use
• Gifting public funds /conflict of interest
We worked with the State Auditor on strengthening internal controls to monitor both
City -wide and fire department fuel use, but object to the issue of conflict of interest. Our
objection to the State Auditor on this matter is attached
In summary, we take our fiduciary responsibility seriously We will resolve the matters
identified by the State Auditor, however, we do not want the public to believe the City
Council did not have disclosure of these matters, or that the City's overall safeguards
from fraud, loss, or abuse is lax. It is in fact compliant with state, federal and local
requirements, with the exception of two minor areas in the police department and
transit. We will correct these two deficiencies this year
Encl. January 30, 2015 letter to State Auditor
i
14 ``+ 'as LEGAL DEPARTMENT
,, l r'; , 200 South Third Street
1 10 .F %x "' �� Yakima, Washington 98901 -2830
b
1 1, \ \ RCo N „.:. t
January 30, 2015
Ivan Dansereau
State Auditor's Office
Landmark Bldg., Rm. 204
230 S Second Street
Yakima, WA 98901
Re: City of Yakima Management Letter for 2013 4th of July Assistance
Dear Mr Dansereau.
I was asked by the City Manager to provide a written response to the concerns expressed in a
Management Letter provided to the City following the 2013 annual audit process. Specifically, the letter
addressed concerns regarding the gifting of public funds and conflict of interest.
The City appreciates you taking the time to meet with us following the audit completion to discuss this
particular concern. As was indicated during that process, the City certainly does not dispute the fact that
the contribution the City made to the 2013 Fourth of July event should have been provided through a
proper contract for services. The City has regularly utilized the contract process for its support of the
Fourth of July Committee, as well as numerous other service providers the City has associated with in
the past for provision of publicly beneficial services. Unfortunately, in 2013 the City found itself being
asked to support the 4th of July celebration at the very time when the fireworks deposit had to be paid in
order to insure the Committee would receive them in time for the celebration. For that reason the
Council acted immediately to approve the support to the Committee but inadvertently no formal contract
was reviewed and approved. I want to assure the State Auditor's Office that the City is aware of the
proper protocol for providing funds to public service organizations that support a public purpose and that
in the future we will continue to follow the City's standard protocol of contracting for services prior to
extending fmancial support to service providers.
With regard to the concern expressed that the Mayor's participation on the 4th of July Committee may
have conflicted his ability to consider and vote on the decision to support the committee financially, I do
not believe that under the circumstances that existed there was a violation of RCW 42.23 030 That
statute provides, in relevant part:
No municipal officer shall be beneficially interested, directly or indirectly, in any contract
which may be made by, through, or under the supervision of such officer, in whole or in
part, or which may be made for the benefit of his office, or accept, directly or indirectly,
Yakima
lizard
r ill Civil Division (509) 575 -6030 • Prosecution Division (509) 575 -6033 • Fax (509) 575 -6160 rill'_'
199]
Mr Ivan Dansereau
January 30, 2015
Page 2
any compensation, gratuity or reward in connection with such contract from any other
person beneficially interested therein.
An essential element of a violation of the provisions of the cited statute addressing prohibitions against
private interests in public contracts is the existence of a personal financial benefit to a public officer who
has a role in the establishment of a contract interest on behalf of an entity that is contracting with a
government agency In the instant case, Mayor Cawley was acting as the Mayor of the City, elected by
the members of the City Council, when the vote to provide funds to the committee occurred. He was
also a member of the 4th of July Committee.
All of that being the case, be assured that Mayor Cawley gained no financial benefit whatsoever from the
decision of the Council to financially support the Committee's efforts to put on a 4th of July fireworks
display for the benefit of the City's citizens. He did participate in the vote to offer City support, but in
no way took any action to coerce other members of the Council to vote in support of providing funding.
That aside, the real issue is that there was no benefit to the Mayor at all in the decision of the Council to
provide support to the event. The City is very careful to avoid any perception that a financial conflict
exists or may have been violated by an action of one of the Council members. In this case the Mayor
served the Committee without compensation and gained nothing personally as a result of the Council's
action or the Committee's receipt of funds. For that reason I am very confident that his participation on
the Committee and the Council, as well as his part in the decision of the Council to provide support to
the Committee, did not violate the statute cited above.
hi the course of their service to the City all of the Council Members participate on committees and
conunissions that provide service and input to the City Council and provide services for the benefit of
the citizens. These positions are not compensated and the Council members serving thereon are not
benefitted financially from this service, whether the particular committee may receive financial
assistance for services to be provided to the City's citizens or not.
Therefore, with regard to your expressed concern that the Mayor's actions may have violated RCW
42.23 030, I absolutely appreciate your concern in this regard, but am completely confident that no such
violation has occurred in the past or will be permitted to occur in the future.
Sincerely,
eff Cutter
City Attorney
cc: Tony O'Rourke, City Manager
Cindy Epperson, Finance Director