City attorneys are seeking an additional $2 million because judgments and settlements are coming in higher than expected this year. City seeks more
money for lawsuitsOfficials say that the settlements
are higher than they predictedBy Gordon Y.K. Pang
gpang@starbulletin.comOf $2.8 million appropriated for judgments and settlements for fiscal year 2002, $2.5 million has been expended, Corporation Counsel David Arakawa told the City Council Budget Committee yesterday.
The increase is necessary because of the comparatively larger number of settlements this year from major cases, some of which had been pending since 1992, Arakawa said. From July 1 to last Friday, the city has approved payments of $4.2 million.
Among them was a $612,500 settlement reached with police outreach worker Sharon Black and her attorneys. Black charged that she was sexually harassed by a supervisor and that other superiors, including former Chief Michael Nakamura, failed to respond properly to her complaints.
Additionally, the city is in court or in negotiations with other parties that could mean as much as an additional $3.7 million that will need to be paid from city coffers, Arakawa said. But that amount represents only a "worst-case scenario," he said. Some of those lawsuits may end up being in the city's favor, while others involving payment could be deferred until next year.
"Judgments and losses are very hard to predict; it's not an exact science," he said. "It depends on the number of cases, the various twists and turns that occur within a given time, and finally the amount the parties and the court agree to settle for."
He noted that the judgment and losses account always maintained a solid balance at the end of the year when it received appropriations of between $4.7 million and $5 million annually from 1996 to 2000. Only when the annual appropriation was reduced to $2.8 million, last year and this year, did the account start running close to or into the red, he said.
The administration is proposing a $3.8 million appropriation for fiscal year 2003, which begins July 1.
"This request, in my opinion, is justified," said Council Policy Chairman John Henry Felix. Felix said his only concern is that the administration is not budgeting enough annually for judgments and settlements.
The $2 million being sought by Arakawa in a supplemental budget request for the current fiscal year 2001-02 is to come from the city salary adjustment and vacation account. Budget officials said that transferring funds from that account was not a problem.
City & County of Honolulu
