Issue 90-August 2019
Risk Management Educational Forum: 2019 Capstone Award Finalists Selected The Good, The Bad, and The Ugly of Risk Management Chief Executive Separation Payment California JPIA Staff Gives Back with Community Service Project California JPIA Holds Annual Public Works Academy Join Social Media Conversations with the Authority California JPIA Recognizes Employees’ Five-Year Anniversaries Trial Court Properly
Risk Management Educational Forum: 2019 Capstone Award Finalists Selected
The 2019 Capstone Award finalists have been selected and will be recognized at the Authority’s 24th Annual Risk Management Educational Forum in Indian Wells. The Capstone Award is presented each year to an individual that best exemplifies the practice of risk management in the public sector.
Nominations for the Capstone Award were received from across the Authority membership, and finalists for the award were determined based on the following key criteria:
- Works to support traditional or enterprise risk management efforts for the member agency
- Develops, implements, and administers loss prevention and loss control programs to mitigate risk exposures for the member agency
- Coordinates support systems that serve the member’s risk management goals and needs
- Influences others in developing quality risk management programs for the member agency
The Authority is pleased to announce this year’s finalists:
- Arabo Parseghian (Division Manager, City of La Cañada Flintridge)
- Shannon Buckley (Assistant Administrative Services Director, City of Lake Elsinore)
- Stephen Y. Aryan (Risk Manager, City of Palm Desert)
- Todd Mitchell (HR/Risk Manager, City of Goleta)
One of these finalists will be honored as the Capstone Award recipient during a ceremony at the Forum on Thursday, October 10, 2019.
The Good, The Bad, and The Ugly of Risk Management
Every year, nearly 200 public officials and employees from more than 70 Authority members come together to gain insight, information, and guidance from experts and each other at the premier risk management educational event for California public entities.
Registering is easy and there is no registration fee for members of the California JPIA. Registration for non-members is $475, and is limited to public agency officials and employees, and the Authority’s business partners. Registration closes September 11.
This year’s keynote speaker, Mac Anderson, founder of both Simple Truths and Successories, Inc., is the leader in designing and marketing products for motivation and recognition. His professional accomplishments provide insight into his passion when speaking about leadership, motivation, and team building.
For two and one-half days, our professional educators, including attorneys, management experts, claim experts, city managers, and others, will expound on topics such as Extinguishing Public Entity Liability After a Fire, Effective Management of Bicycle and Scooter Rideshare Services, Social Media Use for Elected Officials, Best Approaches for Encounters with the Homeless, and more. We promise you’ll go home smarter about helping your agency manage risk.
Lodging is not included in your Forum registration and must be arranged separately. The Authority’s room block is nearly sold out, so make your hotel reservations now.
For information or to register, click here. Download the California JPIA Forum app from your device’s app store to see the whole shebang.
For questions, email us at email@example.com
Chief Executive Separation Payment
The California JPIA has always sought to provide broad coverage for its members. Public agencies are constantly confronted with a broad range of risk management exposures. One exposure that public agencies face is a potential employment practices claim when a chief executive is involuntarily separated from employment by their governing body.
Although the Authority advocates for healthy council-manager relations and the well-being of city managers to ensure stable and successful communities, it recognizes that governing bodies may elect to terminate the employment relationship with a chief executive.
To protect members from potential wrongful termination claims from an involuntarily separated chief executive, the Authority provides coverage known as the Chief Executive Separation Payment provided under the Authority’s Memorandum of Coverage—Primary Liability and Memorandum of Coverage—Excess Liability Program.
From coverage years 2013-14 through 2017-18, the pool-wide average severity for an employment practices liability wrongful termination claim was $229,161, while the average Chief Executive Separation Payment claim for the past five coverage periods was $56,248.
The city management profession is a challenging mix of fiscal management, politics, legal issues, and public relations. In the 1980s, the tenure of California city managers began to dramatically shrink, from typically over ten years in the 1960s and 1970s to terms as short as just a few years, with the average term quickly dropping into the five-year range.
In 1995, the Authority’s Managers Committee formed a subcommittee to gauge interest in providing some form of income security for a limited period for chief executives involuntarily separated from employment by their governing board.
The subcommittee conducted a survey of all member agencies of the Authority and learned that 11 chief executive positions of the 77 member agencies surveyed were involuntarily separated from employment in the preceding three years. Several of the terminated chief executives filed wrongful termination claims against their agencies, and the pool paid out significant settlements to resolve the cases.
The subcommittee also found from the California City Management Foundation, that the job search of terminated chief executives was commonly taking nine to twelve months before securing new employment.
After considering the average severance agreements provided to the terminated executives, the length of time it was taking to secure new employment, the desire of the members to avoid wrongful termination and employment-related claims, and the overall needs of the terminated executives, the subcommittee recommended a proposal for unemployment-like protection to the terminated chief executives.
Following approval by the Managers Committee, it was reviewed and adopted by the Executive Committee and included in the Memorandum of Coverage—Primary Liability effective July 1, 1996. The coverage was also added to the Memorandum of Coverage—Excess Liability effective July 1, 2018.
Explanation of the Coverage
Upon receipt of a waiver and release, and following a waiting period of at least six months, the California JPIA will pay an involuntarily separated chief executive (city manager, chief administrative officer, general manager or other title designating the highest appointed official of the governmental entity) a monthly amount equal to the salary he or she was receiving as chief executive.
If the separation is recognized as a “forced” resignation, it will not jeopardize the coverage.
It is paid monthly, in arrears, for up to six months with monthly certifications from the chief executive as to any other income that he or she might have received from consulting, other employment or retirement benefits. If the income exceeds the amount paid as chief executive, there is no payment from the California JPIA. If it is less, then the payment is the difference between the chief executive’s salary, and the income earned during the preceding month.
The coverage does not apply if made by a separated interim or acting chief executive; or if the chief executive is terminated for cause, as defined in the Memoranda of Coverage.
The Chief Executive Separation Payment can only be waived by the chief executive if it is specifically noted, by name, within any separation or employment agreement entered into with the member. Additionally, the definition of “waiver” is a form provided by the Authority and that it is separate and apart from any waiver that may be given directly to the member during the separation process.
The Chief Executive Separation Payment is not considered “unemployment insurance”, nor is it considered a “severance” payment.
The Chief Executive Separation Payment coverage is available in both the primary and excess liability programs, with the member retained limit being waived in the latter.
For cost-sharing purposes, the payment made to the terminated executive is treated as an Employment Practices Liability claim.
Benefits of the Coverage
As with most involuntary separations, emotions on both sides run high when a governing body terminates a chief executive’s employment. The risk of wrongful termination and employment-related claims and lawsuits exists, and the litigation strategy often determines that settling these types of claims, versus the uncertainty and cost of going to trial, is the more prudent business decision.
While member agency councils and boards are sometimes dismayed or averse to the Authority providing the “salary continuation” to their terminated chief executive, the benefits of the coverage are considerable. The Chief Executive Separation Payment is beneficial to the member, the terminated chief executive, and to the pool:
- Member Agency
- It can be included in the executive’s employment contract and as part of the severance arrangement.
- It avoids lawsuits upon termination which are disruptive to the agency operations.
- Terminated Chief Executive
- It provides additional coverage to the commonly negotiated six-month severance package.
- It provides economic security during the nine-to-twelve months it may take to secure new employment.
- Authority Pool
- It will reduce claims against the member for wrongful termination and the
associated defense and indemnity costs.
- It turns unknown exposures into known, limited exposures, and thereby reduces risk for the pool.
California JPIA Staff Gives Back with Community Service Project
All of us at the California JPIA consider community service and civic responsibility a key part of who we are as an organization. We encourage community service and civic participation by supporting organizations and programs that deliver measurable outcomes and have a lasting impact on communities.
This summer, the Authority selected Long Beach-based Comprehensive Child Development Services (CCDS) as the beneficiary of its 2019 staff community service project.
CCDS was founded in 1984 to provide high-quality Early Care and Education and care to some of the most disadvantaged families in Long Beach, San Pedro, and Wilmington. Today CCDS operates five childcare facilities, supports 20 family childcare homes, and oversees close to 700 nutrition programs throughout Greater Los Angeles. They serve 8,000 children daily and are one of the largest nonprofits serving the Los Angeles Harbor Community. The families they serve are homeless, unemployed, low-income, or student families in desperate need of resources. CCDS provides high-quality childcare and support parents growth to help create self-sustaining families and healthy homes.
“I am proud that the Authority’s staff chose an organization whose care is positively impacting children and their families,” said Chief Executive Officer Jon Shull.
Accounting Specialist Habib Ali and Office Assistant Lilian Salcedo led the Authority’s three-week donation drive benefitting the Cabrillo Child Development Center in Long Beach. Authority staff collected over 1,000 items including laundry detergent, hand soap, facial tissue, toilet paper, diapers, baby wipes, Band-Aids, and sunscreen.
Office Assistant, Maria Daniels joined Salcedo and Ali to deliver the donated items to the Cabrillo Center. The group was by welcomed by Executive Director, Dora Jacildo.
Salcedo, Ali, and Daniels spent the morning with Jacildo learning more about the educational programs and support services that CCDS provides. “I am grateful to my co-workers for their willingness to help these children and families in need,” said Salcedo.
Visit the Comprehensive Child Development Services website to learn more about the outreach programs they provide.
California JPIA Holds Annual Public Works Academy
“My perception and understanding of risk exposures in public works have been broadened,” said City of Norwalk Public Works Manager Juan Martinez about the Authority’s Public Works Academy, held in June.
Martinez was one of 24 public works supervisors and managers representing 19 member agencies that traveled to Westlake Village to learn about risk management in public works throughout the two-day academy.
“The speakers were experienced subject matter experts, yet they presented information that was engaging and simple-to-understand,“ Martinez continued.
The Public Works Academy is offered at no cost to members. It is designed to educate public works staff about best practices in managing risk exposure. Sessions covered included: Investigating Claims and Preserving Evidence, Risk Management for Public Works, Harassment and Bullying in Public Works, Lessons Learned from Public Works Exposures, and ADA Litigation in Public Works.
“Public works, by nature, has large exposures,” Chief Executive Officer Jon Shull noted. “Education on everything from contractual risk transfer to design immunity is essential to the success of our member agencies and their communities.”
“This was a productive and informative academy, said City of San Marcos Public Works Manager Samantha Byfield. “I would highly recommend it for government professionals.”
The Authority’s next multi-day training, the Management Academy, will take place September 23-26 in Indian Wells. For more information about the Authority’s academies, please visit https://cjpia.org/risk-management/training or contact Michelle Aguayo, Training Coordinator.
Photo caption: Scott Grossberg presenting at the Public Works Academy
Join Social Media Conversations with the Authority
In order to better connect with current members and reach potential new members, the Authority has an active presence on social media. Members can find information on various topics on the social media channels listed below.
Connect with our latest topics:
“California JPIA staff members Lyndsie Buskirk, Jim Gross and Paul Zeglovitch enjoyed networking with local leaders and learning about priority issues at the Municipal Management Association of Southern California’s Summer Session. #EngageEducateEmpower #MMASC” Like, comment and share:
“Cal/OSHA’s emergency regulation to protect #OutdoorWorkers from #WildfireSmoke is now in effect through January 20, 2020, with two possible extensions. Learn more about this regulation in California’s Department of Industrial Relations news release. bit.ly/2LSC69V #CalOSHA #Wildfires” Follow us, comment and share about risk management:
“Last month, California JPIA member @Gateway_COG received awards from @APA_LosAngeles for outstanding neighborhood, green community, & transportation planning. Congratulations to Gateway COG on a job well done! http://apalosangeles.org/about/awards/”
For information on how to join these sites or participate in discussions, please contact Courtney Morrison, Administrative Analyst, by email or by phone at (562) 467-8779.
California JPIA Recognizes Employees’ Five-Year Anniversaries
Longtime employees who possess institutional knowledge and industry experience are a powerful asset for the California JPIA. Two such employees, Administrative Assistant Denise Covell and Administrative Analyst Courtney Morrison, are celebrating milestone anniversaries—five years—this month.
“Both Denise and Courtney are outstanding professionals who go above and beyond every day to strengthen our team and better serve our members,” said Chief Executive Officer Jon Shull.
Covell and Morrison leveraged temporary assignments into rewarding career opportunities at the California JPIA.
Previously a client service representative with Automatic Data Processing (ADP), Covell accepted a short-term position and soon engaged on a permanent basis, drawn in by collegial co-workers and a nurturing management team.
“I really like the culture of personal growth and development,” said Covell, a La Palma resident. “All employees are encouraged to be their best.”
Covell offers an organized, detail-oriented approach to multiple support assignments for the member services team, including assisting with projects for the Authority’s risk managers and helping manage instructors for the training division.
As her exposure to the various operations of the Authority has increased, so has her pride in being part of the team: “We work hard and we work long, but we absolutely have fun together,” she said. “Titles don’t matter, positions don’t matter; everyone rallies around to support the team. That’s what makes us special.”
Like Covell, Morrison, who holds a bachelor’s degree in marine biology from Brown University and a master’s degree in television and film production from the S.I. Newhouse School of Public Communications at Syracuse University, was first exposed to the Authority through a temporary assignment. Morrison’s interim role transitioned to a full-time position as a result of her project management and communications acumen, and she quickly established herself as the staff’s “go-to grammar girl,” she said.
Her current responsibilities include managing website resources and content, directing social media and related resources, and coordinating external communication.
Morrison also said that she appreciates the opportunity to work with nice people and help others.
“The Authority helps to protect people, to prevent people from falling and hurting themselves, and to enable people with disabilities to participate in society,” she said. “We make communities better for people.”
The Authority congratulates both Denise and Courtney on their five-year anniversaries.
The Court Report
Trial Court Properly Granted Conditional New Trial/Remittitur when Size of Verdict indicates Jury Punished Public Entity Employer
By Daniel P. Barer, Partner, Pollak, Vida & Barer
In Pearl v. City of Los Angeles, published June 18, 2019, the Second District Court of Appeal, Division 7 affirmed a trial court’s grant of conditional new trial.
Plaintiff James Pearl worked for the Department of Public Works of the City of Los Angeles. Pearl was falsely perceived to be homosexual by his supervisors and, as a result, suffered repeated instances of harassment by his supervisors. This included verbal abuse, hazing and a bullying campaign in which his portrait was photo-shopped to show him in a same-sex relationship with a co-worker. The photo-shopped images showed Pearl and a male subordinate embracing on a jet ski. The images were circulated among city employees.
Pearl experienced chest pains and fainted at work allegedly in response to harassment based upon his perceived sexual orientation. Following that incident, Pearl was placed on medical leave and never returned to work. The city denied any misconduct.
Pearl sued the city under Fair Employment Housing Act for harassment and failure to prevent harassment.
The jury instructions did not include CACI No. 3924 (a jury instruction admonishing the jury not to include in its award any damages intended to punish or make an example of the city). The city’s attorney agreed the instructions given were complete. Pearl’s counsel’s argument included comments asking the jury to “make change” at the city through its verdict. The city did not object to those comments. At the conclusion of the trial, the jury awarded $450,053 in past economic loss; $1.9 million in future economic loss; $10 million in past noneconomic loss (i.e., emotional distress damages); and $5 million in future noneconomic loss.
The city moved for new trial. It argued the damages were excessive. The new trial motion did not challenge the absence of an instruction against punitive damages. The trial court concluded that the evidence did not support $10 million in past noneconomic damages. It found that the jurors intended to punish the city, based on the jury’s reaction to what the court concluded was perjury from the defense witnesses as well as the Pearl’s counsel’s argument. The trial judge conditionally granted the city’s new trial motion unless Pearl accepted a reduction by $5 million of the $10 million past economic loss component of the verdict. Pearl accepted the remittitur. The city appealed, contending that a completely new trial should have been granted.
The appellate court rejected the city’s argument that the trial court could not grant remittitur because the error was not excessive damages. The city contended that the error was a defective verdict, based on an improper award of punitive damages. In granting remittitur, the trial court did not speculate as to the amount of damages that consisted of punitive damages. Nor did it attempt to address an issue apart from damages, such as reapportioning fault. Instead, it exercised its discretion as a trier of fact to determine the amount of reasonable damages for the past noneconomic loss.
The court also rejected the arguments that the improper closing and absence of an instruction against punishing the jury required an entire new trial. The city waived those arguments by failing to object to the closing and certifying the jury instructions as complete. Further, the trial court considered the punishment and improper argument in ruling that remittitur was the proper remedy.
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