Kevin Valine

Kevin Valine: Modesto pays $8.5 million for claims, lawsuits since 2010

Modesto officials’ big focus is on being transparent, especially when it comes to the city budget. But there is one area of the budget that gets little attention: the liability insurance fund, which is part of the human resources budget.

But it should.

The city paid nearly $8.5 million from this account from July 1, 2010, through Nov. 9 of this year for lawsuits and claims filed against it. That amount includes defense costs, such as paying a law firm to represent the city. The account does not pay for cases involving breach-of-contract disputes between the city and a contractor and eminent domain, which involves a government using the courts to buy private property from an unwilling seller for a public good.

The nearly $8.5 million did not come from insurance but from the city. The city funds the account by assessing a charge against its departments. The charge is based primarily on how much a department has cost the city over five years in lawsuits and claims. The city pays as much as $1 million for each incident, and insurance covers any amounts above that.

The lawsuits and claims were for a range of incidents, from city tree limbs smashing into homes and parked cars, police officers rear-ending cars, city employees alleging discrimination in the workplace to officers being accused of excessive force and people breaking bones from tripping and falling on uneven sidewalks.

Here are three lawsuits the city settled involving the police:

The city recently paid $105,000 to Armando Olvera after he was bitten by a police dog while sleeping in an abandoned building in 2009. Officers thought Olvera was a suspect they were chasing and was pretending to be asleep. The lawsuit alleges officers did not do enough to wake Olvera before sending in the dog. The city also paid $68,815 in defense costs in the lawsuit.

This month, the city paid $165,000 to settle a lawsuit filed against it that alleged two police officers beat and kicked Jack Allen Smith while he was on the ground and handcuffed, breaking his jaw and causing other injuries. The incident took place in January 2013. The city also paid $64,476 in defense costs.

And in 2011, the city paid $495,000 to Randi Fisher and her attorneys to settle her lawsuit that claimed then-Officer Horacio Ruiz broke the teenager’s wrist after handcuffing her at Vintage Faire Mall in 2009. The lawsuit accused Ruiz of assault, making an arrest without probable cause and false arrest. Police officials would later say Ruiz had been “separated from employment” without giving any details. The city also spent more than $16,500 in defense costs.

The city also can get lots of claims and lawsuits for relatively small amounts.

One example: In the first three quarters of this year – Jan. 1 through Sept. 30 – the city paid more than $87,000 for about two dozen traffic accidents involving city drivers. About half of the accidents involved police officers.

Officials with any city are reluctant to talk publicly about how much their cities pay for claims and lawsuits. It’s embarrassing. But it’s a public discussion Modesto officials need to have as part of their annual budget workshops in the spring. They need to talk about whether there are trends and what can be done to reverse them. If the city pays less for claims and lawsuits, then that means more money for parks, streets and other city services.

Modesto officials do talk about this in private, but public discussions bring greater accountability.

I tried to determine how Modesto compares with other cities regarding costs for lawsuits and claims, but my phone calls and emails to the Public Agency Risk Management Association and Public Risk Management Association were not returned by deadline.

Interim Deputy City Manager Joe Lopez said Modesto is in the process of benchmarking what it pays for claims and lawsuits against what similar cities pay. He said this is part of a larger effort by the city of figuring out how it measures up against its peers. He said the information it develops will be public.

That is good news for the city’s taxpayers.

Kevin Valine: 209-578-2316

At a glance

What Modesto paid for lawsuits and claims:

Fiscal Year Payouts

2010-11 $1,339,851

2011-12 $1,991,044

2012-13 $1,618,383

2013-14 $1,017,399

2014-15 $1,839,590

2015-16 $683,001

Total $8,489,268

A fiscal year is July 1 through June 30. The 2015-16 total is through Nov. 9.

Source: City of Modesto