Bainbridge Island will need to tap budget three times to pay for lawsuit settlement

Published 1:05 pm Thursday, January 8, 2015

Bainbridge Island will need to tap three different parts of the budget — including the city council’s contingency fund — to pay the $488,000 in settlement costs to end a public records lawsuit against the city.

Deputy City Manager Morgan Smith told the council at its Tuesday meeting that the settlement money was not budgeted, and funds from three separate funds would be used to make the payment.

The city council approved the settlement agreement in early December.

Under the terms of the agreement, reached after an 11-hour marathon session with a mediator in Seattle, Althea Paulson and Bob Fortner will be paid $487,790 for abandoning their lawsuit against the city.

Paulson and Fortner filed suit against the city in September 2013 that claimed the city and Councilman Steve Bonkowski, Ward and then-councilwoman Debbi Lester failed to turn over public records that had been requested under the state’s Public Records Act. The pair of “good government” activists had sought emails that the council members had sent and received on their personal email accounts to fellow council members and others, which Paulson and Fortner noted was a violation of the city’s Governance Manual. The manual requires council members to use their city provided email accounts, and to forward any city related emails sent to them privately to the city for retention.

A Superior Court judge ruled in favor of Paulson and Fortner last May, and harshly criticized Ward and Bonkowski for deleting public records from their email accounts.

As part of the settlement, Ward agreed to resign from the city council. The council is expected to appoint a replacement at a special meeting Jan. 15.

During this week’s council meeting, Smith told the council the lawsuit settlement would mean less money for council projects that are paid for through the council’s contingency fund.

A total of $200,000 would be taken from the council contingency fund, which would reduce the fund from $800,000 to $600,000 for the 2015-16 biennial budget.

Another $100,000 would be pulled from the city’s legal contingency budget, which would leave some funding available for unanticipated lawyer bills and outside legal advice, Smith said.

Another $200,000 would come from the fund balance from the 2015-16 biennial budget.

“Rolling this together gets you to $500,000,” Smith said.

Smith said the city was in the process of making the settlement payment, but the mechanics of the payout would come via the upcoming first quarter budget adjustment package, which will come to the council for approval later this year.

Council members agreed with the settlement payment plan.

“Seems like a reasonable way to go,” said Mayor Anne Blair.

The settlement includes a $350,000 payment to Paulson and Fortner, plus $137,790 in attorney fees and costs.

City spokeswoman Kellie Stickney said the city planned to make the severance payment Wednesday.