Two “good government” activists will be paid nearly $500,000 — and Councilman David Ward will resign his seat on the council — in exchange for dropping their public records lawsuit against the city of Bainbridge Island.

The city council approved the settlement agreement at its meeting Tuesday.

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

The pair filed a 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.

Paulson and Fortner 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 in May, and harshly criticized Ward and Bonkowski for deleting public records from their email accounts.

Settlement follows loss

The settlement follows a ruling late last month, in which Kitsap County Superior Court Judge Jeannette Dalton said the city must cover most of Paulson and Fortner’s legal fees — an amount totaling $109,345.

Financial penalties against the city were expected to come after a sanctions hearing later this month.

Dalton also said the court would consider an order that would make Ward and Bonkowski turn over their personal computers so missing public records could be found.

That won’t happen now, however.

As part of the deal, Bonkowski will not have to turn over his personal computer for inspection or give access to his personal email account so the city can find any missing public records.

Ward also agreed to resign immediately after the settlement was approved.

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

Paulson and Fortner said they hoped the lawsuit and settlement would be a learning experience for elected officials.

“I’m grateful to the city attorney and the city manager for working so hard with us to settle this case,” Paulson said.

“This is an important result. The Public Records Act is a crucial tool our state Legislature has given to citizens as a check on government power,” she said.

Wasn’t about money

“We didn’t bring this lawsuit because of the acts of anyone on city staff, or because we didn’t like a particular vote that the city council took. We brought it for one reason: A few council members were doing government business on their personal emails and refused to produce those public records when they were asked,” Paulson explained. “Unfortunately, as council members, they are representatives of the city, and the law holds the city accountable for their behavior.”

“We brought this lawsuit not just for ourselves, but as members of the community, and we plan to give serious thought to how some of the proceeds of the settlement could be used to benefit the community,” Paulson added.

“This case revealed the systematic illegal deletion and destruction of public records by city council members Steve Bonkowski and David Ward,” Fortner added. “We hope the penalty agreed to by the city for these actions becomes a widely recognized deterrent to violation of the Public Records Act.”

The settlement was reached after both parties met with mediator Paris Kallas of the Seattle-based firm of Judicial Dispute Resolution on Dec. 1.

It was the second attempt at a settlement. Paulson and Fortner had offered to settle the case soon after it was filed in September 2013, but the city refused.

City officials, however, suggested mediation just after the Court of Appeals declined to review Judge Dalton’s May decision against the city.

Expensive fight

The case has been costly for the city. According to city billing records, the city had spent more than $225,300 in legal fees on the case through October.

The city spent another $20,487 on legal costs on the case in November.

This week’s settlement also brought another surprise in the case.

At the start of the mediation talks, Kathleen Haggard, an attorney for the city, acknowledged that Ward had not provided correct testimony during the court case.

Ward had earlier said under oath that after the public records request for his email had been received and he was asked by City Manager Doug Schulze to look for emails in his deleted file, Ward said emails deleted from his personal account were no longer accessible because he did not have a “deleted” file in his Comcast account.

In an email last week to the mediator, Haggard said Ward was wrong to say that.

Ward said that he had done research on his Comcast email account in late November, and found that emails he deleted were actually sent to a “trash” folder that he could access.

In her email, the city’s attorney recounted Ward’s recent discovery:

“In November 2014, in further investigating the properties of my Comcast account, I learned for the first time that e-mails which I delete are briefly captured in a folder called ‘Trash’ to which I have access.  Based on my observation now, the deleted e-mails remain in the ‘Trash’ folder for only five days. To determine this, on the evening of November 20th I deleted an e-mail having nothing whatsoever to do with the city of Bainbridge Island from my Comcast ‘In Box.’ It immediately was visible in my Comcast ‘Trash’ folder. I checked the ‘Trash’ folder each day thereafter until November 26. By the morning of November 26, the test e-mail I had deleted was no longer available to me in my Comcast ‘Trash’ folder.”

In her email to the mediator, Haggard said the city was making the disclosure “out of a desire to operate within the highest of ethical standards, and to demonstrate the city’s commitment to transparency and open government.”

Council OKs deal

The council retreated to a closed-door executive session devoted to “current litigation” at the start of Tuesday’s meeting.

The vote on the settlement came near the end of the meeting. Mayor Anne Blair said the council had talked about the direction they wanted to take on the matter during the executive session, but did not make a decision during the closed-door session.

Ward was not at the meeting, and the settlement was approved on 4-1 vote by Councilman Val Tollefson, Councilman Wayne Roth, Blair and Bonkowski. Councilwoman Sarah Blossom voted against the settlement, and Councilman Roger Townsend was absent.

There was no discussion of the settlement by the council during the public session of Tuesday’s meeting.

Schulze, the city manager, said he couldn’t talk about the agreement and would not answer questions about Ward’s impending resignation.

“We don’t have a settlement agreement signed yet,” Schulze said.

“We don’t have the agreement drawn up yet. Until we have the ink dry on an agreement, I don’t want to make comments,” he said.

“I’m not trying to be silly about it. There were some items discussed [in executive session] that I need to have a discussion with the plaintiffs about,” Schulze said. “That’s why I really don’t want to say much about it.”

The city’s spokeswoman said late Wednesday that a resignation letter had not been received. According to the agreement, Ward must resign when the settlement is signed and finalized, and the agreement states it must be approved by the council by the end of the business day on Friday, Dec. 5.

Ward will not be asked to turn over his personal computer that he used for city business because the laptop has been wiped clean.

Dan Mallove, the attorney for Paulson and Fortner, said he was told by the mediator that Ward’s computer was owned by the company he worked for, and when Ward retired last year, he gave back the computer.

Mallove also said he didn’t know exactly when the computer was turned back in.

The late revelation on the computer’s status was a surprise.

“We were told that Mr. Ward attempted to retain it but the employer would not allow it,” Mallove said.

“I don’t know whether that’s true or not,” he added. “But what we do know that is true is that Mr. Ward never disclosed that to his attorneys, the attorneys for the city, or to us.”

Mallove said the loss of the computer appeared to happen around the same time the court ordered Ward to turn over his computer for a forensic inspection.

“It’s highly, highly inappropriate for a party to dispose of material evidence in a lawsuit,” Mallove said, and added that the law was clear that if a public official deletes public records after a request has been made for those records.

“It’s a Class B felony. It’s a criminal act,” he said.

Ward and Blossom did not return calls for comment.

Blair, the mayor, declined to talk at length about the settlement. She said the city went into the mediation process with the expectation of reaching a settlement.

“You don’t go into a mediation unless you can go in trusting the people who are doing the negotiation for you,” she said.

When asked if the fight over public records was worth more than $700,000 in costs, Blair said the judicial system worked as it was supposed to do.

“It makes me very, very sad on every single level,” she added.

No apologies

Bonkowski said the terms of the settlement were agreed upon by himself and Ward, who took part in the mediation process.

Bonkowski also said he allowed the city’s tech manager to look through his personal email account for missing records.

He said allowing a search of his hard drive would have been an invasion of privacy, a claim that had been repeatedly made by his attorney.

“That is clearly something that is a constitutional issue that I feel very strongly about,” Bonkowski said.

He also said he had followed the city’s Governance Manual, which he said had inconsistencies about what should be retained as a public record.

Bonkowski said he relied on the advice of the city attorney at the time, and when a new city attorney gave different advice about emails and public records, he changed course on how he preserved emails and looked for ones that he had deleted.

“My actions have changed based on guidance that I received from the city attorney,” he said.

Mallove said the lawsuit wasn’t something they wanted to file. The city gave them no choice.

“We thought when we filed it they would come to their senses and do the right thing. And they didn’t,” Mallove said.

“The case was about good government and the case was about making sure that our elected officials follow the Governance Manual and engage in open and transparent government. I think we accomplished that.”

Mallove said the court’s multiple decisions in their favor, and the settlement, shows that Bonkowski was in the wrong.

“His stubbornness and arrogance has cost the city over $750,000,” Mallove said.

“And despite his unwillingness to own up to it, I think the voters of Bainbridge Island will have the final say on Mr. Bonkowski if he decides to run for re-election.”