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Agenda Item 8BAGENDA ITEM # 813 APRIL 25, 2011 CITY COMMISSION MEETING STAFF REPORT AGENDA ITEM: Procedure for Reporting on Suits Against the City SUBMITTED BY: Jim DATE: April 12, 11 BACKGROUND: The Atlantic Beach City Charter Section 61 "Suits" reads as follows; "Upon receiving notice of any suit, the City Manager shall diligently investigate the matter and file a written report with the City Clerk to be presented to the City Commission at its next meeting. The City Clerk shall determine if a special meeting should be scheduled to deal with an emergency situation. Upon receipt of a written claim for damages by an injured parry the City Commission may, by ordinance, make a settlement of the claim." This Charter section is a holdover from an earlier time before the City had insurance for most suits as it does now. It requires the City Manager to perform an investigation of each claim and have it completed in time to file a written report for the next City Commission meeting. Such a report would have to be thorough enough to determine the validity of the claim and to make a recommendation as to whether to go to court or offer to settle. The City now has insurance for most claims, and it is the insurance company's responsibility to perform the investigations which often take several months and the resolution can often take years. Even if a complete investigation could be made by staff in that short time span, it would be inappropriate for the City Commission to take any action that might undermine a case being prepared by an insurance company on the City's behalf. Also, the settlement of claims is usually handled by the City's insurance company. The normal deductible kept by the City for most claims is $10,000. The insurance company's legal expenses to investigate a claim and bring it to court or settlement usually exceed that amount. Consequently, the choice to settle a claim is mostly in the hands of our insurance companies, requiring only the concurrence of the City. City Attorney Alan Jensen has reported that the City has not strictly followed Charter Section 61 since at least 1975 because of insurance coverage. Instead, the suits have been referred to the insurance companies and, on some occasions, the Commission has held a Shade Meeting to discuss the suit. In recent years, receipt of the suits has been conveyed to the Commission in two forms. The first is through the City Attorney's Monthly Report and the AGENDA ITEM # 813 APRIL 25, 2011 second is by individual reporting from the City Manager to the elected officials. This doesn't happen often because the City receives approximately one suit involving liability per year. This section of the City Charter is clearly outdated and probably should be eliminated. However, that would take either an act of the State Legislature or a vote of the public to change it. Until that happens, staff proposes to change the way that suits are reported to the Commission to better match the language of the charter by providing a written report, but no investigation, in the regular City Manager's Report whenever notice of a suit is received. It will probably be best not to have much public discussion during a public meeting because it may compromise pending litigation. Specific questions from the City Commission would be better referred to the City Attorney or the City Manager outside of the regular meetings. Following is a list of ongoing suits involving liability to the City; - Dubberly, Bobby v. City of Atlantic Beach Date of incident 5/7/07; Notice received 4/13/10; Mr. Dubberly's claim is that the City police excessively tightened some handcuffs during an arrest which led to bodily injury, suffering and disability. - Dukes, Lawrence v. City of Atlantic Beach Date of incident 4/29/09; Notice received 7/16/09; Mr. Dukes claims police lacked proper cause to arrest him for driving under the influence. - RCBS v. Estates of Atlantic Beach, City of Atlantic Beach and the City of Jacksonville Notice of intent was received on the suit February 15, 2010. This suit involves land use, deed restrictions and ownership of property being used by the City of Atlantic Beach for a sewer pipeline. McNair, John v. City of Atlantic Beach Initial complaint filed 3/14/09; EEOC complaints of suspension, discrimination, hostile work environment, retaliation and termination. There are also some suits filed against the City because of the City having liens against property owners who are facing foreclosures. While the City is named as a party, there is no liability to the City. The outstanding suits of this type are summarized as follows; - US Bank National Association vs. Alex Himmelberg; City lien filed for failure to animal control citation. Mercantile Bank vs. RK Properties; City lien filed for failure to pay water and sewer charges. AGENDA ITEM # 813 APRIL 25, 2011 - Bank of America vs. Rey Franqui; City lien filed for failure to pay animal control citation. BUDGET: There are no budget issues related to this report. RECOMIVVIENDATION: Consider the recommendation on how to meet City Charter Section 61 dealing with suits and either approve the recommended process (through the City Manager's written reports) or advise how it should be done differently.