At the June 7, 2022, meeting, Saratoga Springs Mayor Ron Kim offered a resolution to transfer the Director of Risk and Safety from the Accounts Department to his office under the supervision of the City Attorney. The tone of Kim’s remarks (see video at the end of this piece) was heated and self-righteous while to his credit, Accounts Commissioner Moran maintained his dignity and decorum in responding to the Mayor.
Although the proposal may not be without merit, the reasoning for such a change was lost due to the Mayor’s fundamental misunderstanding of the liability insurance policy the city maintains and his inaccurate assertions about events related to an ongoing suit against the city.
The main argument Kim articulated for moving Risk and Safety to his office was based on the false assertion that the City Attorney had been left out of an April 1 meeting regarding the settlement of a lawsuit brought against the city by former city engineer Tim Wales. The attorney for the insurance carrier, John Aspland, who is handling this case for the city, asked Commissioner Moran, a witness in the case, and Marilyn Rivers, the Manager of Risk and Safety, to attend.
Mayor Kim’s Shrill Warnings
Kim misrepresented the significance of who was and who was not at this meeting when he spoke to Daily Gazette in a story published on June 8, 2022:
Kim argues the position [Manager of Risk and Safety] should be placed under the city attorney’s office to avoid situations like one in April in which the city attorney was not at a settlement meeting in an ongoing lawsuit against the city, while Moran and the city’s Risk and Safety Director Marilyn Rivers were present.Daily Gazette June 8, 2022
“I believe it is imperative that we better coordinate the activities of the city attorney and the director of Risk and Safety,” Kim said. “If we don’t, this case will continue to go forward without the involvement of the city attorney, and that is not tenable.”Daily Gazette June 8, 2022
We open the city to substantial risk as shown by the example above, where a City Council member, with the director of Risk and Safety, attempted to resolve a legal matter without involving the city attorney’s office or a member of the City Council,” Kim said Tuesday.Gazette June 8, 2022
The Role of the Insurance Carrier In Defending the City
To understand the problem with the Mayor’s assertions, it is critical to understand the terms of the agreement between the city and its insurance carrier regarding legal liability insurance.
The city maintains insurance to protect against lawsuits brought against it.
The way this works is that in the event of a lawsuit against the city, as in the Wales case, the city’s insurance carrier engages its own attorneys to defend the city against the suit. It does not use the City Attorney.
The city pays a deductible to its insurance carrier for the legal costs and possible settlement or judgment. In the current case, that deductible amounted to $25,000.00. The cost of lawyer fees in that suit has far exceeded the city’s deductible. The suit has been ongoing for over a year.
So, to be clear, the insurance company at this point is responsible for paying whatever settlement their attorneys may reach with the plaintiff or the cost of the judgment should it go to trial.
Because the insurance company is using their money, they insist on controlling the process. The contract the carrier has with the city requires the city to “cooperate” with it.
Traditionally, the Director of Risk and Safety, who works in the Accounts Department, acts as the primary contact with the insurance carrier. This is not surprising as the Accounts Department handles insurance for the city. The Director assists the insurance attorneys by providing any information they may need from the city. She also keeps the City Attorney informed as to the ongoing activity in the suit.
This has been established procedure for the roughly twenty years the current Risk and Safety Director, Marilyn Rivers, has been employed by the city.
Should the insurance company decide to settle, depending upon the language in the contract between the city and the carrier, the city may be asked to pass a resolution endorsing the settlement.
In such a case, theoretically, the city could refuse to accept the settlement. In reality, the city always agrees, and the vote is effectively a legal formality.
If the city were ever to refuse a settlement reached by the insurer’s lawyer, the insurance company could withdraw and leave the city to hire its own lawyers at its own expense as well as pay for the costs of any possible settlement.
It’s hard to imagine a scenario in which the city would take on the costs and liabilities by rejecting a settlement agreed to by the insurance company.
Mayor Kim Misunderstands the Role of the City Attorney in Insurance Claims
Mayor Kim does not seem to grasp the authority the insurer has in litigation nor how minimal a role the City Attorney plays in these cases of claims against the city.
First of all, the Mayor’s assertions that the City Attorney had been left out of the loop regarding the April 1 settlement conference is patently false. I have seen the email in which Tony Izzo was advised of the “conference.”
In Tony’s defense, he probably didn’t attend because he knew that his role would be marginal and that Ms. Rivers would inform him of what transpired.
To give context to the role of Moran and Rivers in this matter, neither of them said a word during the April 1, 2022, meeting at which the judge discussed the case with the opposing attorneys. No one could characterize them, as Mayor Kim has done, of having “…attempted to resolve a legal matter.”
So at the June 7, 2022, Council meeting, when Mayor Kim accused Commissioner Moran of circumventing the City Attorney and of trying to negotiate the case settlement without the Council’s involvement he was wrong on both counts. The City Attorney had been informed of the meeting and chose for whatever reason not to attend and neither Commissioner Moran nor Risk and Safety Manager Marilyn Rivers “attempted to resolve a legal matter without involving the city attorney’s office or a member of the City Council,” as Kim asserted to the Gazette.
Mayor Kim’s Odd Handling of the Issue at the Council Meeting
Adept elected officials do not bring resolutions to the table if they do not have the votes to pass them (unless they are trying to score some kind of political point). I am not privy to the interactions that may have occurred prior to the meeting, but it appeared clear at the June 7 Council meeting that the Mayor did not have the votes to pass his resolution. Why take up Council time for a resolution doomed to fail?
Moran understandably opposed the Mayor’s resolution, but as it turned out, so did Public Works Commissioner Jason Golub. Golub told his colleagues that he was uncomfortable with the process. He noted that there were issues involving civil service that needed to be addressed (Kim dismissed this). His key concern was the potential for future partisan abuse. He was concerned about a partisan majority from one party forcing a reorganization move on a Commissioner from another party.
Mayor Kim read an email from Public Safety Commissioner James Montagnino, who was in Europe on vacation and therefore not present to vote, strongly supporting his initiative.
Had Mayor Kim’s resolution come to a vote that night, there would have been two votes against. Even if Commissioner Sanghvi had voted with the Mayor (which wasn’t clear) his motion would have failed to pass.
So, after all this theater, the Mayor withdrew his motion.
Someone in the audience called out to the Mayor that there should be a public hearing on the question. The Mayor then tried to get his colleagues to pass a resolution setting a public hearing at the next Council meeting. Interestingly, he could not get a second even from Commissioner Minita Sanghvi, who earlier in the meeting appeared to be in support of the Mayor.
So it appears that Mayor Kim will introduce this resolution again at the next Council meeting. As Montagnino supports the Mayor in this matter, Commissioner Sanghvi will be the deciding vote.