City Clamps Down on Claim Reports

Seeking to prevent repeats of the secret $100,000 settlement in the City Hall sex-and-hush-money case, the San Diego City Council on Monday spelled out new conditions under which top city officials must notify the council about monetary claims filed against the city.

By a unanimous vote, the council strengthened an existing policy requiring that it be notified of any claim over $20,000 and ordered the city manager and city attorney to inform it of any discrimination claim, regardless of value, involving council-appointed employees.

“This takes care of the major problems that the City Council discerned in this whole mess,” Councilwoman Judy McCarty said, referring to the now-familiar controversy over a secret $98,531 payment to former city planner Susan M. Bray stemming from her affair with then-Planning Director Robert Spaulding.

The settlement came in response to a sexual-harassment claim Bray filed against the city following the affair--a relationship that Spaulding contends was consensual but which Bray argues occurred because she feared she might lose her job if she resisted Spaulding’s advances. When the secret payment was publicized, Spaulding resigned under pressure.

The measure approved Monday closes one of the major loopholes in council policy used by then-City Manager John Lockwood last spring to keep the council in the dark about the Bray settlement. Lockwood has said he chose to keep the payment confidential partly out of a desire to protect Spaulding’s young children from public embarrassment.

To circumvent a city policy requiring the city manager to seek council approval of expenditures of more than $20,000, Lockwood structured the settlement so that Bray initially received $19,995, with nearly $80,000 to be paid over the next three years. In an additional piece of accounting legerdemain, Lockwood drew the money for the settlement from different sources, including public liability funds and long-term disability revenues.

Such financial sleight-of-hand will no longer be possible under the amended policy, which incorporates changes recommended last month by special counsel Josiah Neeper, who was appointed by the council to investigate the Bray-Spaulding controversy.

Monday’s amendment, approved by an 8-0 vote, with Councilman Bob Filner absent, specifically states that the council must accept or reject any claim over $20,000 “from one or any combination of funding sources, including the value of future payments.”

The only exception to that provision involves cases in which the city denies claims by simply not acting on them within 45 days of their filing--an administrative step that clears the way for the claimant to file a lawsuit.

In addition, Monday’s action requires that the city manager and city attorney notify the council of “any claim, litigation or discrimination complaint, regardless of value,” involving council-appointed employees when “reasonable cause exists for such charges.” Upon disposition of such charges, the council also must be notified, the policy says.

Though Lockwood orchestrated the Bray settlement, City Atty. John Witt and a handful of other top city officials were aware of at least certain provisions of the secret deal and did not inform the council, according to special counsel Neeper’s report.

“I credit Mr. Lockwood with good intentions, but they just didn’t work out,” McCarty said. “I think it’s better for the city if the council is aware of these matters.”

City Manager Jack McGrory, Lockwood’s successor, described Monday’s policy changes as a “good step,” adding that he does not view the new conditions governing when he must inform the council about claims as an infringement on his managerial discretion.

“These things are few and far between, and hopefully this will make them fewer and farther between,” McGrory said.

In an attempt to make city workers financially responsible for their own behavior, the new policy also states that employees “determined to have committed unlawful discrimination” should personally pay for their own defense and any settlement or court damages “to the extent allowed by law.”

Although the intent of that provision is to hold city officials accountable for their own misdeeds, McGrory noted that there could be cases in which courts rule that the city is at least partly responsible for any financial award stemming from its employees’ work-related behavior.

“There’s a fine line between holding our employees accountable and just throwing them to the wolves,” McCarty said. “I think this makes sure we’re on the right side of that line.”