Wednesday, April 10, 2013

City settles three lawsuits, paying out $9 million

Posted by on Wed, Apr 10, 2013 at 4:32 PM

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  • 401(K) 2013

The city of Colorado Springs has coughed up over $9 million to settle lawsuits in the last few weeks. Here are the city's news releases, in order of value, most expensive to least expensive:

$8 million for transit workers:

After over three years of litigation, the City of Colorado Springs and First Fleet/First Transit have reached a tentative settlement agreement over the City's decision in November 2009, to terminate a 2006 contract with First Fleet/First Transit services. A prior City Manager and City Council had determined it was in the City's best financial interests to terminate the contract. Such termination resulted in general fund savings but also resulted in several claims being filed against the City.

Today, the City Attorney's office advised Mayor Bach and City Council that it was in the best interest of the City to settle Transit litigation claims in state and federal court in order to avoid the risks inherent in the litigation and to further preserve the General Fund balance. The Office also advised Council that the funds for settlement needed to be approved by emergency ordinance in order to allow a settlement to be quickly reached.

City Council deemed it appropriate that this emergency ordinance be published and available for inspection and acquisition in the office of the City Clerk. The emergency appropriation association involves negotiation of the settlement of an ongoing legal dispute, which will be incorporated into a definitive settlement agreement.

City Staff cannot further comment on the merits of the claims or the settlement until a final agreement is reached.

Mayor Steve Bach said, “This $8,000,000 loss out of our reserves is a painful example of why we must continue to transform City government.”

$995,000 for Memorial bondholders:

The City of Colorado Springs has reached a settlement agreement with the former bond holders of the Memorial Hospital bonds, which were defeased in October 2012. The parties agreed to resolve this matter without any admission of liability or wrongdoing by either party.

“We are pleased with this result and gratified that defeasance of these bonds in 2012 resulted in savings of over $19,000,000 - for the City and Memorial Hospital,” said City Attorney Chris Melcher.

The City agreed to provide final partial bond payments of $995,000 as a final resolution into this matter.

$250,000 for former finance director Terri Velasquez:

The City of Colorado Springs and former City employee Terri Velasquez have reached a final agreement to resolve all claims the parties may have against one another. Today the federal court granted a motion filed by Velasquez seeking final and permanent dismissal of the lawsuit brought by Velasquez against the City in 2011, and the City has agreed to provide payments to Velasquez totaling $250,000 to address outstanding disputes over back-pay, attorney’s fees, her termination from employment with the City, and related transition issues. The parties mutually agreed that a final settlement would be in the best interest of both parties allowing them to move forward along separate paths. There was no admission of any wrongdoing or liability on the part of the City.

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