WILLMAR -- The Willmar Municipal Utilities Commission and the Willmar City Council have reached an agreement to resolve the lawsuit initiated by Bruce Gomm, the former utility general manager who was fired by the commission Feb. 27.
Gomm was terminated following a formal independent investigation that found a number of deficiencies in utility management.
Following his termination, Gomm filed a lawsuit March 2 against the commission alleging discrimination and breach of contract and seeking damages and reinstatement.
A trial had been scheduled for Jan. 15, 2013, in Kandiyohi County District Court in Willmar.
In exchange for Gomm ending his lawsuit and dropping all claims against the commission and city, the commission agrees to a $200,000 payment to Gomm, said Paul Reuvers of Bloomington, the commission's attorney.
The cost of the settlement will be shared by the commission and its insurance carrier, the League of Minnesota Cities Insurance Trust, he said.
Reuvers discussed the settlement with commission and council members and Mayor Frank Yanish during a closed joint session Monday afternoon at the utility building auditorium. The council has overriding power over the commission, according to the city charter.
After about 30 minutes, the joint meeting was reopened and Reuvers recommended the commission and council approve the agreement. Approval by both bodies was unanimous.
Reuvers said the settlement was reached during a June 29 mediation session in New Ulm where mediator Dan Gislason has his office. Those involved in the session were Gomm and his wife, council and commission representatives and Bob Bonawitz, a friend of Gomm's.
Reuvers said the commission will pay $90,000 and the Insurance Trust will pay $110,000. As part of the settlement, Reuvers said, Gomm is withdrawing his unemployment claim, which Reuvers said was valued at about $15,000.
"So when you look at the true cost to the commission, it is effectively $75,000,'' Reuvers said. "Prior to the suit when we were in the middle of the investigation, we put together a package of $80,000. The cost to the commission is less.''
Reuvers said the Insurance Trust realized that this case was going to be expensive to litigate, "and we expected to prevail. But to spend more than $100,000 getting there made sense to put together a package like this and allow the parties to move on, allow Mr. Gomm to move on, and the utilities with new leadership. So that's why we're here.''
Reuvers said the commission attempted to resolve this case from the beginning and continued to look for settlement opportunities.
"It was our recommendation to try to put the case into an early mediation because of the cost not only in cost to lawyers but the cost to the utilities operations, people's time and the time and stress of litigation,'' said Reuvers.
"Let's spend money on resolving the case, not on the lawyers. And keep in mind he has to pay his lawyer. He's got to pay taxes on that. That should be taken into consideration as well,'' said Reuvers.
In an interview, Gomm said Reuvers' statement is wrong that he (Gomm) was forfeiting all $15,000 of his unemployment benefit.
Gomm said he applied for unemployment in March. He said the state unemployment office investigated his case, took statements from both him and the utility, "and determined that I was released without cause and awarded unemployment.''
Gomm said he has been receiving unemployment since the first or second week of April. As part of the settlement, Gomm said he agreed that once he had the $200,000 payment in hand that he would stop his unemployment claim, which will mean that he will have received more than half of his benefit.
"I am entitled to my unemployment that I received and will continue to receive up until I have a payment in my hand from this settlement, if I agree to accept this settlement at this point,'' Gomm said.
Gomm also said he understood that the commission and council would consider the agreement at their regular meetings and not at a joint special meeting.
"I had stipulated that this all needed to be open session and had to be publically announced,'' he said. "I think that all along it's been a goal of mine that the truth get out to the citizens of the community.''