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HomeMy WebLinkAbout05-19-2003 Item VIII-A-2AF AGENDA BILL APPROVAL FORM WMIIINGTON Agenda Subject Date: Ordinance No. 5757 May 7, 2003 Department: Attachments: Budget Impact: Legal, Human Resources Ordinance No. 5757 Administrative Recommendation: City Council introduce and adopt Ordinance No. 5757. Background Summary: Ordinance No. 5757 amends Auburn City Code Chapter 2.90 regarding the City's indemnification of City officials, employees and volunteers when they are involved in legal action stemming from their services to the City. Some years ago, the Washington State Legislature enacted laws which were designed to provided for uniform procedures for bringing claims against local governmental entities. Included in the governmental enactments were provisions which imposed liability on the local government for damages arising out of tortious conduct of officers and employees of the local governmental entity who were performing duties of their official office. That law was later changed to specify with greater clarity that the duty of the local governmental entity to indemnify officers and employees, as well as volunteers who are performing acts in good faith on behalf of the governmental entity. It was in that vein that the City of Auburn promulgated its Ordinance No. 5264, creating a new Chapter 2.90 of the Auburn City Code City providing officials, employees and volunteers with indemnification protection against lawsuits stemming from actions taken as part of their official duties. The stated purpose of that Ordinance was to provide indemnification for city officials and city employees and city volunteers. Unfortunately, in the language of the codified provisions of the Ordinance, the application of this protection for volunteers was not as clearly stated as it was for officials and employees. This Ordinance therefore seeks to more clearly specify that the intended indemnification protections apply to City volunteers, as they do to City officials and employees. A0519-1 A3.11.1.5 Reviewed by Council & Committees: Reviewed by Departments & Divisions: ❑ Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O ❑ Airport ® Finance ❑ Cemetery ® Mayor ❑ Hearing Examiner ❑ Municipal Serv. ❑ Finance ❑ Parks ❑ Human Services ❑ Planning & CD ❑ Fire ❑ Planning ❑ Park Board ❑Public Works ® Legal ❑ Police ❑ Planning Comm. ❑ Other ❑ Public Works ® Human Resources Action: Committee Approval: ❑Yes ❑No Council Approval: ❑Yes ❑No Call for Public Hearing Referred to Until Tabled Until Councilmember: Poe Staff: Heid, Heineman Meeting Date: May 19, 2003 1 Item Number: VIII.A.2 AU MORE THAN YOU IMAGINED ORDINANCE NO. 5 7 5 7 AN ORDINANCE OF THE CITY OF AUBURN, WASHINGTON, AMENDING CHAPTER 2.90 OF THE AUBURN CITY CODE RELATING TO INDEMNIFICATION FOR CITY OFFICIALS, CITY EMPLOYEES AND CITY VOLUNTEERS WHEREAS, in Ordinance No. 5264, the Auburn City Council created a new Chapter 2.90 of the Auburn City Code City providing officials, employees and volunteers with protection against lawsuits stemming from actions taken as part of their official duties; and WHEREAS, the stated purpose of the Ordinance was to provide indemnification for city officials and city employees and city volunteers (Section 1 of Ordinance 5264); and WHEREAS, in the language of the codified provisions of that Ordinance, the application of this protection for volunteers was not as clear as it was for officials and employees; and WHEREAS, it is appropriate to amend the language of Chapter 2.90 of the Auburn City Code to more clearly specify that the intended protection applies to City volunteers, as well as City officials and employees. NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN as follows: SECTION ONE. That Chapter 2.90 of the Auburn City Code is amended to read as follows: Chapter 2.90 INDEMNIFICATION FOR CITY OFFICIALS, CITY EMPLOYEES AND CITY VOLUNTEERS Ordinance No. 5757 April 17, 2003 Page 1 Sections: 2.90.010 Definitions. 2.90.020 Legal representation. 2.90.030 Exclusions. 2.90.040 Determination of exclusion. 2.90.050 Representation and payment of claims — Conditions. 2.90.060 Effect of compliance with conditions. 2.90.070 Failure to comply with conditions. 2.90.080 Reimbursement of incurred expenses. 2.90.090 Conflict with provisions of insurance policies. 2.90.100 Pending claims. 2.90.010 Definitions. Unless the context indicates otherwise, the words and phases used in this chapter shall have the following meanings: A. "Official" means any person who is serving or has served as an elected city official, and any person who is serving or has served as an appointed member of any city board, commission, committee or other appointed position with the city. B. "Employee" means any person who is or has been employed by the city of Auburn. C. "Volunteer" means any person who, without monetary compensation, serves or has served the city of Auburn under the explicit authorization and direction of a city department. (Ord. 5264 § 2, 1999.) 2.90.020 Legal representation. A. As a condition of service or employment the city shall provide to an official -or--,, employee or volunteer, and any spouse of an official-Gr1 employee or volunteer to the extent the marital community is implicated, subject to the conditions and requirements of this chapter, and notwithstanding the fact that such official -Gr -1 employee or volunteer may have concluded service or employment with the city, such legal representations as may be reasonably necessary to defend a claim or law suit filed against such official -or- employee or volunteer resulting from any conduct, act or omission of such official -or-= employee or volunteer performed or omitted on behalf of the city in their capacity as a city official -Gr -z employee or volunteer, which act or omission is within the scope of their service or employment with the city. B. The legal services shall be provided by the office of the city attorney unless: 1. Any provision of an applicable policy of insurance provides otherwise; or 2. A conflict of interest or ethical bar exists with respect to said representation; or 3. The city attorney appoints outside legal counsel to the case;. 4 --In the event that outside counsel is retained under subsection (13)(1), (2), or (3) of this section, the city shall indemnify the official, employee or volunteer from the reasonable costs of defense paid by the official employee or volunteer; provided, that in no event shall the offiser-officialer-1 employee or volunteer be indemnified for attorneys' fees paid in excess of the hourly rates established by the city's contract with the ---------------------------- Ordinance No. 5757 April 17, 2003 Page 2 attorney selected by the city. The offic�official, employee or volunteer shall be liable for all hourly charges in excess of said rate. (Ord. 5264 § 2, 1999.) 2.90.030 Exclusions. A. In no event shall protection be offered under this chapter by the city to: 1. Any dishonest, fraudulent, criminal, willful, intentional or malicious act or course of conduct of an official-ef, employee or volunteer; 2. Any act or course of conduct of an official-ef, employee or volunteer which is not performed on behalf of the city; 3. Any act or course of conduct which is outside the scope of any official's-ef, employee's or volunteer's service or employment with the city; and/or 4. Any lawsuit brought against an official -8f, employee or volunteer by or on behalf of the city. B. Nothing herein shall be construed to waive or impair the right of the city council to institute suit or counterclaim against any official -eft employee or volunteer nor to limit its ability to discipline or terminate an employee or terminate the services of a volunteer. C. The provisions of this chapter shall have no force or effect with respect to any accident, occurrence or circumstance for which the city or the official -oft employee or volunteer is insured against loss or damages under the terms of any valid insurance policy; provided, that this chapter shall provide protection, subject to its terms and limitations, above any loss limit of such policy. The provisions of this chapter are intended to be secondary to any contract or policy of insurance owned or applicable to any official -of, employee or volunteer. The city shall have the right to require an official, employee or volunteer to utilize any such policy protection prior to requesting the protection afforded by this chapter. (Ord. 5264 § 2, 1999.) 2.90.040 Determination of exclusion. The determination of whether an official -a employee or volunteer shall be afforded a defense by the city under the terms of this chapter shall be made by the city council on the recommendation of the mayor. The decision of the city council shall be final as a legislative determination and shall be based upon a finding that the claim or suit against an official -e -r, employee or volunteer meets or does not meet the criteria of this chapter. Nothing herein shall preclude the city from undertaking an official's -of, employee's or volunteer's defense under a reservation of rights. The determination as to whether to furnish a defense as provided under this chapter to a member or members of the city council shall be made without the vote of such member or members of the city council unless the inclusion of such member or members is required for a quorum; provided, that if a claim or lawsuit affects a quorum or greater number of the members of the city council, all such affected members shall retain their voting privileges under this section. lRdividuals—The affected official employee or volunteer will be notified by registered mail, return receipt, of council's determination within five business days. Denial of a request for representation or indemnification may be reviewed only by an Ordinance No. 5757 April 17, 2003 Page 3 action in the King County superior court filed within 30 days of the denial by city council. (Ord. 5264 § 2, 1999.) 2.90.050 Representation and payment of claims - Conditions. The provisions of this chapter shall apply only when the following conditions are met: A. In the event of any incident or course of conduct potentially giving rise to a claim for damage, or the commencement of a suit, the official-er employee or volunteer involved shall, as soon as practicable, give the city attorney written notice thereof, identifying the official --e employee or volunteer involved, all information known to the official—erl employee or volunteer with respect to the date, time, place and circumstances surrounding the incident or conduct giving rise to the claim or law suit, as well as the names and addresses of all persons allegedly injured or otherwise damaged thereby, and the names and addresses of all witnesses. B. Upon receipt thereof, the official-G�1 employee or volunteer shall forthwith deliver any claim, demand, notice or summons or other process relating to any such incident or conduct to the city attorney, and shall cooperate with the city attorney, or an attorney designated by the city attorney, and, upon request, assist in making settlement of *any suit and enforcing any claim for any right of subrogation against any persons or organizations that may be liable to the city because of any damage or claim of loss arising from said incident or course of conduct, including but not limited to rights of recovery for costs and attorneys' fees arising out of state or federal statute upon a determination that the suit brought is frivolous in nature. C. Such official-erl employee or volunteer shall attend interviews, depositions, hearings and trials and shall assist in securing and giving evidence and obtaining attendance of witnesses all without any additional compensation to the official --or= employee or volunteer and, in the event that an official employee or volunteer has left the employ or service of the city, no fee or compensation shall be provided. D. Such official-G�, employee or volunteer shall not accept nor voluntarily make any payment, assume any obligation, or incur any expense relating to said claim or suit, other than for first aid to others at the time of any incident or course of conduct giving rise to any such, claim, loss, or damage. (Ord. 5264 § 2, 1999.) 2.90.060 Effect of compliance with conditions. If legal representation of an official -est employee or volunteer is undertaken by the city attorney or by outside legal counsel designated under this chapter, all of the conditions of representation are met, and a judgment is entered against the official-e-�1 employee or volunteer, or a settlement made, the city shall pay such judgment or settlement not otherwise covered by insurance in the same manner as a judgment or settlement against the city, except any portion of the judgment which is for punitive damages. The city council may, by separate resolution, authorize payment of a judgment for punitive damages against a person who has been represented by the city attorney or outside counsel designated under this chapter. (Ord. 5264 § 2, 1999.) Ordinance No. 5757 April 17, 2003 Page 4 2.90.070 Failure to comply with conditions. In the event that any official -or, employee or volunteer fails or refuses to comply with any of the conditions of this chapter or elects to provide his/her own representation with respect to any such claim or litigation, then all the provisions of this chapter shall be inapplicable, and have no force or effect with respect to any such claim or litigation. (Ord. 5264 § 2, 1999.) 2.90.080 Reimbursement of incurred expenses. A. If the city determines that an official er, employee or volunteer does not come within the provisions of this chapter, and a court of competent jurisdiction later determines that such claim does come within the provisions of this chapter, then the city shall pay any judgment rendered against the official-er1 employee or volunteer and reasonable attorneys' fees incurred in obtaining the determination that such claim is covered by the provisions of this chapter. B. If the city determines that a claim against a city official -e employee or volunteer does come within the provisions of this chapter, and a court of competent jurisdiction later finds that such claim does not come within the provisions of this chapter, then the city shall be reimbursed for costs or expenses incurred in obtaining the determination that such claim is not covered by the provisions of this chapter. (Ord. 5264 § 2, 1999.) 2.90.090 Conflict with provisions of insurance policies. Nothing contained in this chapter shall be construed to modify or amend any provision of any policy of insurance where any city official-orl employee or volunteer thereof is the named insured. In the event of any conflict between this chapter and the provisions of any such policy of insurance, the policy provisions shall be controlling; provided, however, that nothing contained in this section shall be deemed to limit or restrict any employee's --or, official's or volunteer's right to full coverage pursuant to this chapter, it being the intent of this chapter and section to provide the coverage detailed in this chapter outside and beyond insurance policies which may be in effect, while not compromising the terms and conditions of such policies by any conflicting provision contained in this chapter. (Ord. 5264 § 2, 1999.) 2.90.100 Pending claims. The provisions of this chapter shall apply to any pending claim or lawsuit against an official-eri employee or volunteer, or any such claim or lawsuit hereafter filed, irrespective to the date of the events or circumstances which are the basis of such claim or lawsuit. (Ord. 5264 § 2, 1999.) SECTION TWO. GENERAL SEVERABILITY. That if any provision of this Ordinance or the application thereof to any person or circumstance is held to be invalid, the remainder of such code, ordinance or regulation or the application thereof to other person or circumstances shall not be affected. ---------------------------- Ordinance No. 5757 April 17, 2003 Page 5 SECTION THREE. IMPLEMENTATION. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directives of this legislation. SECTION FOUR. EFFECTIVE DATE. That this Ordinance shall be in full force and effect five (5) days after publication of the Ordinance Summary. INTRODUCED: PASSED: APPROVED: PETER B. LEWIS, MAYOR ATTEST: Danielle E. Daskam, City Clerk APPR VED TO FORM: Daniel B. Heid, City A torney PUBLISHED: ---------------------------- Ordinance No. 5757 April 17, 2003 Page 6