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SR 07-13-2021 7A City Council Report City Council Meeting: July 13, 2021 Agenda Item: 7.A 1 of 2 To: Mayor and City Council From: George Cardona, Interim City Attorney, City Attorney's Office, Municipal Law Subject: Second Reading And Adoption Of An Ordinance Of The City Council Of The City Of Santa Monica Amending Santa Monica Municipal Code Section 2.44.050 To Authorize The City Attorney And The Risk Manager To Settle Liability Claims Up To $95,000, Authorize The Risk Manager To Settle Worker’s Compensation Claims Up To $25,000, And Authorize The City Manager To Approve Worker’s Compensation Claims In Excess Of $25,000 Recommended Action Staff recommends that City Council waive reading in full and adopt the attached Ordinance. Summary At its meeting on June 22, 2021, the City Council introduced for first reading an ordinance amending Santa Monica Municipal Code Section 2.44.050 to increase the settlement authority of the City Attorney and Risk Manager for liability claims from $15,000 to $95,000 and increase the Risk Manager’s settlement authority for worker’s compensation claims from $15,000 to $25,000. The ordinance also deletes two outdated, inconsistent, and unnecessary provisions relating to settlement authority, namely, Santa Monica Municipal Code Sections 2.44.060 and 2.44.070. The ordinance is now presented to City Council for adoption. 7.A Packet Pg. 2138 2 of 2 Prepared By: Bradley Michaud, Legal Operations Coordinator Approved Forwarded to Council Attachments: A. Risk-Ord-Settlement Authority-2d-20210713 7.A Packet Pg. 2139   1    City Council Meeting: July 13, 2021 Santa Monica, California ORDINANCE NUMBER ____ (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTION 2.44.050 TO AUTHORIZE THE CITY ATTORNEY AND THE RISK MANAGER TO SETTLE LIABILITY CLAIMS UP TO $95,000, AUTHORIZE THE RISK MANAGER TO SETTLE WORKER’S COMPENSATION CLAIMS UP TO $25,000, AND AUTHORIZE THE CITY MANAGER TO APPROVE WORKER’S COMPENSATION CLAIMS IN EXCESS OF $25,000 WHEREAS, pursuant to requirements of state law, the City of Santa Monica participates in California’s Worker’s Compensation program; and WHEREAS, the Worker’s Compensation program establishes the sole remedy for employees injured in the course of their employment and operates as a compulsory scheme of employer liability, irrespective of fault, for injuries arising out of and in the course of employment; and WHEREAS, the City’s participation in the Worker’s Compensation program is administered by the Risk Management Division of the City Manager’s Office; and WHEREAS, Section 2.44.050 of the Santa Monica Municipal Code authorizes the City Attorney, or designee, and the Risk Manager to settle liability claims up to $15,000 without City Council approval (the “Staff Liability Settlement Authority”); and WHEREAS, the Staff Liability Settlement Authority has not been updated or increased for inflation in several decades; and 7.A.a Packet Pg. 2140 Attachment: Risk-Ord-Settlement Authority-2d-20210713 (4649 : 2nd Reading - Settlement Authority)   2    WHEREAS, increasing the Staff Liability Settlement Authority to $95,000 aligns with existing staff authority to enter into professional service agreements and contractual services agreements without City Council approval; and WHEREAS, increasing the Staff Liability Settlement Authority would provide greater efficiency in operations by reducing the need for settlement recommendation memoranda, settlement summaries, and reduce the number of closed session items for the City Council to hear, discuss, and approve; and WHEREAS, Section 2.44.050 authorizes the Risk Manager to settle worker’s compensation claims up to $15,000 (the “Risk Manager’s Worker’s Compensation Settlement Authority”); and WHEREAS, Section 2.44.050 authorizes the City Manager to approve the payment of worker’s compensation settlements in excess of the Risk Manager’s Worker’s Compensation Settlement Authority” by providing notice of such settlements to the City Council; and WHEREAS, the majority of worker’s compensation settlements exceed the Risk Manager’s Worker’s Compensation Settlement Authority; and WHEREAS, increasing the Risk Manager’s Worker’s Compensation Settlement Authority to $25,000 would provide greater efficiency in operations by reducing the time for staff and the City Manager to discuss routine worker’s compensation settlements; and WHEREAS, increasing the Risk Manager’s Worker’s Compensation Settlement Authority to $25,000 would also align with existing staff authority to enter into purchases for convenience as provided in Chapter 2.24; and 7.A.a Packet Pg. 2141 Attachment: Risk-Ord-Settlement Authority-2d-20210713 (4649 : 2nd Reading - Settlement Authority)   3    WHEREAS, Section 2.44.060, titled “City Attorney Settlement Authority -- Power,” was adopted in 1955; does not appear to have since been modified; limits to $750 the authority of the City Attorney, without City Council approval, to retain medical doctors, appraisers, accountants, engineers or other professional services necessary to the defense of any action; and as a result appears inconsistent with Section 2.24.080, titled “City Attorney Authority,” which was adopted in 2019 and provides the City Attorney, without a fixed monetary limit, authority to enter into contracts for legal services, including, but not limited to, services provided by outside legal counsel, investigators, consultants or experts in conjunction with claims against the City, pending or anticipated litigation, or administrative or other legal proceedings; and WHEREAS, Section 2.44.070 provides the City Attorney with specific settlement authority to resolve specific matters arising from the risks identified in Section 2.44.020; and WHEREAS, the specific settlement authority provided in Section 2.44.070 is unnecessary given the general settlement authority authorized in Section 2.44.050 as modified by this Ordinance. /// /// 7.A.a Packet Pg. 2142 Attachment: Risk-Ord-Settlement Authority-2d-20210713 (4649 : 2nd Reading - Settlement Authority)   4    NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Santa Monica Municipal Code Section 2.44.050 is hereby amended to read as follows: 2.44.050 Settlement and payment authority. The City Attorney, or his or her duly authorized assistant or deputy, and the Risk Manager are hereby authorized to settle or compromise any liability of the City, whether a claim has been filed as provided by law or not, in all cases, other than worker’s compensation claims, where the amount necessary to be expended in order to settle or compromise such claim does not exceed ninety-five thousand dollars ($95,000), without the necessity of first receiving the approval of the City Council, and said City Attorney and Risk Manager in such event are authorized to request the Director of Finance to draw a demand directly upon the appropriate self-insurance fund for the payment of such sum. The Risk Manger is authorized to approve the payment of worker’s compensation settlements up to twenty-five thousand dollars ($25,000) without City Council approval. Additionally, the City Manager is authorized to approve the payment of worker’s compensation settlements in excess of twenty-five thousand dollars ($25,000), and he or she shall notify the City Council of such settlements. The Director of Finance is authorized to make payments consistent with the authorization provided in this Section. 7.A.a Packet Pg. 2143 Attachment: Risk-Ord-Settlement Authority-2d-20210713 (4649 : 2nd Reading - Settlement Authority)   5    SECTION 2. Santa Monica Municipal Code Sections 2.44.060 and 2.44.070 are hereby deleted in their entirety. SECTION 3. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. APPROVED AS TO FORM: _______________________ GEORGE S. CARDONA Interim City Attorney 7.A.a Packet Pg. 2144 Attachment: Risk-Ord-Settlement Authority-2d-20210713 (4649 : 2nd Reading - Settlement Authority)