Title
Resolution to Adopt a Formal Claim Settlement Authority Policy
Purpose
PURPOSE/BACKGROUND:
A formal Resolution from City Council adopting a settlement authority policy for all types of claims against the City regardless of funding source available for payment is advisable to promote effective management of resources and efficiency in resolution of claims.
Discussion:
The City established a self-insurance program to provide liability coverage in order to protect the assets of the City at a manageable cost. At a special meeting of the Hampton City Council on February 12, 2003, City Council adopted an informal policy providing guidance to the City Attorney and Risk Manager on settlement authority for resolution of claims against the City, its employees and officers. However, City Council did not adopt a resolution formalizing this policy. This informal policy, which is still currently used, provides as follows:
1. Claims over $100,000 - City Council must authorize settlement before settlement is reached; no formal Council action is required
2. Claims up to and including $100,000 - the City Attorney and Risk Manager are authorized to settle with reporting of the claim and its settlement to Council
3. Claims over $50,000 - City Attorney and Risk Manager inform Council of settlement after the fact
4. Claims relating to appointed and elected officials - City Attorney must inform Council immediately.
This policy and the 2003 discussion at the special meeting was exclusively focused on claims where Risk Management would be involved and any settlement paid out of the Risk Management Fund. However, the City could be subject to other types of claims that would not fall under the Risk Management fund. Most notably, contract claims about which City Council has not previously given direction on authority limits. Contracts claims are not paid out of the ...
Click here for full text