02/11/1981 Meeting - Laserfiche WebLink

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-- e - Ms. Wooten asked if the County is subject to the same regulations. Stan Long responded that they are. Gary Long responded that the City is working with the County and other agencies to try to find a common solution to the problem throughout the State of Oregon. Mr. Obie noted that the problem revolves around the City's ability to lend its credit. Stan Long stated that if CETA subcon- tractors misuse funds, then the Prime Sponsor is ultimately responSible for the debt. Mr. Obie asked who is the responsible agency. Stan Long responded that the Federal government position is that both are responsible, with the City being ultimately responsible. Mr. Gleason stated that at this point the City is not legally in compliance with the State Constitution. Situations like this are normally handled through Risk Management, but this situation could involve civil matters and affect City Councilors. Mr. Obie asked if the change would mean that contractors would be employees of the City. Gary Long responded that this would be the least difficult change that could be made at this time and is the most manageable option. Current contract employees would not become direct employees of the City under the agent option. Stan Long stated that the principal is responsible for acts of the agent and that is the responsibility the City would take on. That is how the Federal government sees the City now. Mr. Obie asked if this would increase the City's liability. Stan Long responded that the present CETA program is not only illegal, but its further operation exposes the members of the council, the Mayor, and other City officials to claims of personal financial liability. Although this proposed solution increas- es the City's ordinary tort liability, the risks would seem to be manageable for a short period of time. Also, there is no unreasonable risk of personal liability in connection with the proposed changes as short-term measures. Mr. Gleason added that the City would be able, through its Risk Management program, to manage that as an expense of the program and pass it along as administrative cost so that the officials would have indemnification. This would create a very small liability. The situation will have to be monitored. Mr. Obie asked if the City would be picking up other liabilities of the agents. Mr. Long responded that that is correct. Mr. Obie said that it is a major change and not just a mere change in wording. Gary Long stated that it appears this is the only option that is workable and has the fewest encumbrances at practically no cost to the City. There is very stringent liability language within the con- tracts already. Mr. Obie asked if there will be a requirement regarding indemni- fication. Gary Long responded that that is already built into the program but will have to be redone to some degree. Mr. Obie asked how this change reduces the personal liability of the council. Stan Long stated that at present, actions contrary to the State Constitution by a councilor could cause him or her to bear the responSibility for the illegal use of funds. If this program is changed, it will be the City's responsibility, not a personal liability of its elected officials. Mr. Obie asked if this will remove all liability from the council. Stan Long stated that he could not make such a general statement. Mr. Obie asked what would happen in cases of fraud by an agent. Stan Long stated that the City is responsible to the Federal government, but the agent is respon- sible to the City and the Federal government. Mr. Obie asked if that creates MINUTES--Eugene City Council February 11, 1981 Page 5