City Settles With Fired Engineering Head Williams Gets $135,000 Plus Fees In Dispute Over 1997 Dismissal

The city of Spokane has settled a lawsuit with former city engineering director Phil Williams for $135,000, City Manager Bill Pupo announced Thursday.

The settlement also provides $40,000 in attorney fees and up to five years of medical and dental coverage.

Williams was fired in November 1997. Pupo said he had lost confidence in the 12-year employee after The Spokesman-Review reported he was having an intimate relationship with a scientist who conducted a study of the city’s incinerator.

As part of his $82,270-a-year job, Williams oversaw the incinerator operation.

Williams filed a $2 million federal lawsuit against the city, claiming his civil rights were violated when he was fired. He claimed, in part, that his rights were denied when the city failed to offer him a pre-dismissal hearing.

Such a hearing gives employees an opportunity to tell their side of the story before being disciplined or fired.

The settlement was reached after two days - almost 20 hours - of mediation.

“This brings closure to this matter. It was a business decision,” said Pupo, adding he is prevented by a court order from giving further details.

Williams later said he’s happy to have the lawsuit behind him.

“The main reason there was one was to make the point that the city handled this whole matter poorly and never provided an opportunity for these issues to be discussed,” he said.

“Between the senior city management and The Spokesman-Review, there was never a chance for a fair discussion of the issues,” he said. “The Spokesman-Review created a hysterical climate, and the city responded in a knee-jerk reaction.”

“I think the city’s willingness to enter into this settlement speaks for itself,” he added. “Rather than take the time to sort through the issues and find out what the truth was, senior management took the speediest approach, and it turned out to be a costly one for them.”

Councilwoman Cherie Rodgers said she wasn’t surprised by the settlement.

“Phil was right, he found a loophole in city policy,” Rodgers said. “We were told from day one that you can fire these employees for any reason. They all assured me everything was in order, that they did everything by the book. But he had them.”

Councilman Jeff Colliton said while he hated to see citizens paying anything for lawsuits, an extended lawsuit might have ended up costing the city more.

“Based on the suit that was filed, asking for $2 million, it might have cost a lot more than the $175,000 to fight this in court. Although the settlement seems hefty, it seems fair,” Colliton said.

It was the second time in a week that Pupo announced a settlement in a dispute with a former top city employee.

Last week, the city agreed to pay former Police Chief Alan Chertok $65,000 upon his resignation. As a condition of that settlement, Chertok agreed not to sue the city.

The city was represented by an outside attorney, James Kalamon, in both negotiations.

Kalamon’s bill for the Williams case was about $75,000, said Laurie DeVarney, the city’s communications director. She added she didn’t know what the city’s legal bill was in the Chertok case.

The legal issue in the Williams case centered on a city policy that outlines procedures for dismissing an employee. It includes a provision for a predisciplinary hearing.

Williams was an at-will employee, subject to being fired at any time for any reason by the city manager.

The policy is aimed at employees represented by bargaining groups. However, its first sentence says it “applies to all employees except uniformed police and fire.”

While police and fire are specifically exempted, it doesn’t specifically exempt at-will employees.

The Human Resources Department is responsible for administering the policy.

Jim Smith, human resources director, said he has no doubt that the policy doesn’t apply to confidential-exempt employees, such as Williams. Smith said the head of the department where the person works is responsible for setting up the hearing.

“In Phil Williams’ case, there was not a person who needed to do that, he was an exempt-confidential employee and the hearing was unnecessary.”

Smith said Williams even signed an employee handbook that said the Human Resources Department was free to make a decision about holding a hearing.

“Don’t ask me why they paid him, I didn’t agree to do that,” Smith said.

The city is working to clarify the personnel policy, Pupo said.

Williams’ relationship with Kathryn Kelly, who was in the middle of a $300,000 study of the waste-to-energy plant, was seen as a clear conflict of interest to some people at City Hall, including some City Council members.

The study by Kelly was submitted three years late and was ultimately rejected by the state Department of Ecology, which concluded that it failed to answer basic scientific questions about potential health risks from plant emissions in a 50-kilometer radius.

The health risk study was a condition of a $60 million state grant to build the West Plains trash burner and close Spokane’s leaking landfills. The city has set aside $100,000 for more work on the study.

The settlement with Williams will be paid out of the city’s risk management fund. For the most part, the city is self-insured. Each city department contributes part of its budget, depending on its liability risk.