Unintentional damage to citizens can cost local governments big money


City of Dayton moral obligation claims

2010: 130 claims filed, $85,495.30

2011: 159 claims filed, $85,440.21

2012: 115 claims filed, $223,741.03

Total: 404 claims filed, $394,676.54

Source: City of Dayton

Cleveland’s moral claim commission

Cleveland is believed to be the only city in Ohio that has a moral claim commission, Cleveland and state officials said. The five-member commission meets three times a year and reviews about 100 cases annually. The cases are solely where the city would not be held legally responsible, city law director Barbara Langhenry said.

“The city serves the community, and you certainly want the community to feel a fairness in the process,” she said. “It keeps people’s trust in the government and creates a certain fairness in how the city deals with people.”

The commission approves or denies each claim by majority vote and makes a recommendation to city council. City council approves the claims by ordinance. In 2012, the city paid out $33,354.40 total in moral claims.

“The commission is helpful because it brings five perspectives to an established process,” Langhenry said.

Dayton spokesman Tom Biedenharn said the city has not looked into forming a moral claim commission.

Local governments conducting everyday business sometimes cause unintentional health issues for citizens or damage to private property.

And when that happens, the governments sometimes have to pay up to correct the damage.

The money paid out to citizens — called moral obligation claims — can add up quickly, especially in larger cities like Dayton. Dayton has a procedure in place, but for smaller cities in the region, they handle it on a case-by-case basis.

The city of Dayton has received on average about 135 moral obligation claims per year during the past three years and paid out nearly $400,000 to settle approved claims. According to the city, the majority are related to car accidents — for example collisions with parked cars and waste collection trucks bumping into private property.

Ninety-nine percent of the moral claims filed are citizen-initiated, Dayton spokesman Tom Biedenharn said. In 2012, 48 out of the 115 claims that the city of Dayton received were approved. No additional action was taken by any of the claimants who had their claims denied, Biedenharn said.

The law director decides on claims less than $2,500, the city manager decides on claims between $2,500 and $10,000, and any claim more than $10,000 requires city commission approval.

Dayton budgets $500,000 annually — money that comes from the general fund — in its judgment trust fund that is used for moral obligations and lawsuits.

“We’re a bigger city with more geographic area, more employees, more equipment,” Biedenharn said. “We think it fits the size of our operations. How our city compares to other local governments is the difference in our size I believe.”

Kent Scarrett, spokesman for the Ohio Municipal League, said larger cities are more likely to deal with moral obligation claims because there is a larger influx of people who come and go on a daily basis.

Scarrett said there is “no hard and fast rule” how municipalities should handle moral obligation claims, but they do fall under local control.

Municipalities are exposed to these kinds of issues because of their everyday involvement with citizens, and such claims should be dealt with case-by-case, he said.

“It’s along the lines of good, constituent service and positive relations,” Scarrett said. “Municipalities should try to solve situations amicably and satisfy both parties.”

Ohio Attorney General spokesman Dan Tierney said his office would advise municipalities to consult their own legal counsel if they asked the state for guidance.

“We’re not a regulator of that type of thing,” Tierney said. “That falls under home rule.”

Cities pool together to minimize risk

Miami Valley Risk Management Association — which services 20 cities in Southwest Ohio — is a self-insured, tax-supported municipal risk pool that was formed in 1988. Member cities include Beavercreek, Kettering, Vandalia, Miamisburg and Englewood.

The total amount MVRMA will collect this year is $4.2 million, or roughly $200,000 per city.

A city’s figure is determined on pool contribution factors — population, full-time police officers and employees, numbered of titled vehicles, insurable property values, net operating expenses and average annual adjusted losses.

Craig Blair, claims manager for MVRMA, said the company rules strictly if the city was negligent or would be held liable. MVRMA investigates about 400 first- and third-party claims a year. Blair did not know how many claims MVRMA denies and accepts per year.

“Cities have to deal with people all the time, so anything that leads to a third-party liability would be reported to me for evaluation,” Blair said. “It doesn’t mean we accept or deny. We get the facts and then make a decision.”

Executive director Tom Judy said MVRMA has historically refunded more than 40 percent back to its member cities at the end of the year, based on the proportion of their contribution.

“If neither criteria (negligence or legally liable) has been met, we have no authority to pay that claim,” Judy said. “A city may decide they’re not liable in any way but pay as a goodwill gesture. That can happen, and we wouldn’t be involved.”

Dayton pays out $100K to couple

At 3:45 p.m. Oct. 20, 2011, Terri Lockhart and her fiance James Stratenberger Jr., were turning left into their driveway on Old Troy Pike when a city of Dayton trash truck rear-ended them. The crash totaled their 2002 LeSabre and sent them both to Miami Valley Hospital in serious condition.

They were given $100,000 combined by Dayton — Lockhart $32,500, Stratenberger $67,500 — in May of 2012, which accounts for nearly half of what the city paid out in moral claims last year.

After medical expenses and attorney fees, Lockhart and Stratenberger took home $30,000, which they spent on a 2002 Sebring, new furniture and remodeling their house.

Stratenberger eventually lost his job at Reiter Dairy in Springfield because of recurring dizziness, and has just started to look for another job. He still has dizzy spells from time to time, while Lockhart still deals with pain from the fractured chest plate she suffered in the crash, she said.

Lockhart said filing a lawsuit never crossed their mind.

“We were never told there was any other route,” she said. “I’m just glad it’s done with.”

Claims rare in smaller communities

Suburban areas — Huber Heights, Beavercreek, Springboro and others — rarely deal with circumstances that result in citizens being reimbursed for damages brought upon by the local government.

In Huber Heights, the city passed a resolution in December to settle a moral claim stemming from a September police pursuit.

Cheryl Kiser, a Huber Heights resident, drove over spikes on Interstate 70 that were intended for a suspect who was wanted for burglary and aggravated burglary warrants.

Kiser’s black Chrysler 300 suffered two flat tires and had to be towed back to her residence on Mariner Drive. The cost to repair her car was $575, and the city agreed to pay Miami Valley Towing $155 and Gallagher Auto Service $420 for those services out of the city’s legal fund.

Huber Heights has not encountered incidents similar to this one in the four years Robert Schommer has been police chief, he said. Schommer said the city initiated the moral claim because “it was the right thing to do.”

“There are some unintentional and unfortunate things that occur in the nature of doing business,” Schommer said. “If it does occur, we like to take care of what we’re legally allowed. It’s neighborly. It’s one of the costs in doing good business.”

Oakwood city attorney Robert Jacques said the city handles a “handful of cases” annually that totals $500 to $700. Jacques cited examples such as a public works vehicle clips the mirror of a parked car or a fence gets damaged during a chase. Oakwood handles the claims on a case-by-case basis.

“In some instances, the city isn’t obligated to pay,” Jacques said. “But it just seems like the right thing to do, and so we do, whether or not there’s negligence involved.”

In March 2011, Vandalia reimbursed a woman $140 to have her carpet cleaned after an officer investigating a burglary accidentally knocked over a can of fingerprint powder onto her white carpet.

“When it’s clearly our doing, we try to do the right thing,” said Julie Trick, assistant to the city manager. “That’s our theme with everything we do — it’s all about doing the right thing.”

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