The City of Mercer Island has settled the lawsuit brought by former assistant city manager, Londi Lindell for wrongful dismissal and sexual discrimination three years ago. Lindell will receive a sum of $1 million. The payment will be made by the city’s insurance company, the Washington Cities Insurance Authority, who participated in settlement talks. The settlement was finalized a week ago and officially released on July 15.

In a joint press release composed by attorneys for both sides, the parties state they have mutually agreed to a settlement that resolves all of the claims in the suit scheduled for trial last month.

The document declares that the settlement represents an agreement, not an admission — of any violation of law or failure to perform any duty — by either the defendant or the plaintiff.

The statement also says “Although the parties disagree about why certain actions were or were not taken, certain events in the past few weeks have prompted this action [to settle the case.]”

The statement continues; “Those events include decisions by the court that had yet to be acted upon that made it difficult to prepare for trial and that in any case, an appeal would be likely. Finally, after a lengthy court-ordered settlement agreement without resolution, the parties recognized that it was time to put the matter behind them.”

Many are frustrated that the case did not go to trial.

“I’m extremely disappointed the City will not get its day in court,” wrote Mayor Jim Pearman in an email. “I understand the business decision of our insurance carrier to settle due to the impossible task of presenting our case in just a few days. I continue to believe the Lindell lawsuit is without merit and would have been found so by a jury if given the chance.”

The city has also been ordered to pay a fine of more than $90,000 for violations of the Public Records Act. The city has 30 days from that decision to decide whether or not to appeal the fine. The fine will be paid from city funds. The city must also pay court-approved attorneys fees for the plaintiff regarding the records violations. Those have yet to be filed.

According to Lew Leigh of the Washington State Cities Insurance Authority, the $1 million to be paid by the city’s insurance company will probably increase the premiums (or assessment as it is called) to be paid by the city.

But a loss of that amount is not unheard of, he said.

“A $1 million dollar loss [payout] is somewhat common,” he said.

Over the last 30 years, the most paid out to one of the cities in the insurance pool [in a single payout] was $11 million, he said. But $250,000 is a more common number, he added.

The 149 cities in the insurance pool are grouped primarily by number of worker hours. That number is used as a proxy for the amount of risk each city faces.

There are 20 cities in Mercer Island’s “worker hour” group.  The city of Mercer Island falls somewhere in the upper middle in terms of its risk profile, said Leigh.

Within Mercer Island’s group, the range of 2011 annual assessments is $917,397 (per year) the highest paid by  the city of Auburn to Walla Walla that pays $242,585 the least of the group.  Mercer Island pays $688,324 per year.

The actuarial process that establishes the assessment uses the most current  five years of data as the base for its calculations. Therefore losses [or payouts] that occurred in 2005 or earlier will not be used in the assessment process for this year which will be completed in October.

A statistical  model employing several other factors, forecasts the possible losses and allocates the share to each member to ensure that the pool of funds is fully funded.

The formula anticipates that every city will have a loss at some time.

“Every city will have a ‘Wood Carver,’” he said referring to the tragedy of the shooting of the Native American wood carver by a Seattle Police officer and the recent complaint filed by the former police chief  of Medina against that city.

Mercer Island is one of the nine original cities in the insurance pool and helped set the standards for the pool, Leigh said.

The insurance group does apply sanctions and incentives to cities to reduce their risk.

Every time this happens , we encourage cities to look at how to prevent it from happening again, he said.

For more information, go to www.wciapool.org.

Lindell – Fully Executed Settlement Agreement w.exhibits

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