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City finalizes $40M settlement

City finalizes $40M settlement agreement

DIXON – The ink was flowing Tuesday at City Hall.

Mayor Jim Burke put his signature to a number of copies of a document finalizing the $40 million out-of-court settlement with its former auditors CliftonLarsonAllen and Janis Card and Associates, as well as its former financial institution, Fifth Third Bank.

Those entities were blamed in the city’s lawsuit for former Comptroller Rita Crundwell’s theft of nearly $54 million in city funds.

The next step is for the civil case against the three entities to be dismissed in Lee County court.

Some members of the public attended Tuesday, but no comments were made during the meeting that lasted about 10 minutes.

The agreement had been placed on file for the past 7 days for public review, and city commissioners did not discuss it any further Tuesday, before giving their approval. Attorney Devon Bruce, who represented the city, was in attendance to answer any possible questions from the council.

“This is an iron-clad agreement,” the mayor said.

Of the $40 million, $35.15 million was paid by CliftonLarsonAllen, the city’s auditor until 2005, $3.85 million by Fifth Third Bank, which handled the city’s checking accounts, and $1 million by Janis Card and Associates of Sterling, which took over the city’s audits in 2005 from Clifton until Crundwell’s arrest.

As part of the agreement, the city will file no further lawsuits against the defendants or their representatives.

Payments are expected to be made in full to the city by Dec. 1. The city will pay $10.35 million of the settlement for legal fees.

Officials will be allowed to answer questions about the Crundwell theft, if they wish, once the case is dismissed.

Burke, at Thursday’s town hall meeting to discuss the settlement money, said that the City Council has been under disclosure restraints regarding the Crundwell incident.

Questions will not be addressed until everything is “signed, sealed and delivered” involving all parties, he said.

No discussion took place about budgeting the settlement money. That is expected to take place during the city’s strategic planning sessions, once an administrator is hired.

Also, the City Council met in executive session to discuss the possible employment of a job candidate.

The city is expected to announce the name of its final candidate for city administrator by Oct. 25, after a full background check is conducted, said Police Chief Danny Langloss, a special assistant to the council.

A meet and greet could be scheduled for Oct. 30 or Oct. 31 for the candidate to take questions from the public.

The City Council will vote on the candidate recommendation at its Nov. 4 meeting. Commissioners must approve the hire for it to be final.

A final candidate was selected in the city’s pursuit to hire a city administrator by a committee led by Langloss, in which commissioners Jeff Kuhn and Dennis Considine participated. The candidate met with city staff last week.

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