The City of Bethel could be on the hook for a lot of money. Bethel’s insurance company told the city council on Tuesday that the city is on its own if former City Manager Pete Williams files a wrongful termination lawsuit.
Barbara Thurston, the executive director of Alaska Public Entity Insurance, said the reason the city would not be covered can be seen in the insurance contract the city signed.
"It requires that members consult an attorney before terminating an employee and following the recommendations of the attorney," Thurston said.
APEI even pays for the cost of one hour of consultation.
Since the city council broke the contract when it fired former City Manager Pete Williams, doing so without consulting an attorney, the insurance company is not legally bound.
"We have the right to deny coverage for that," Thurston said. "It doesn’t mean we have to, but we have the right to do so."
This mirrors the advice given by the City Attorney Patty Burley at the previous regular city council meeting on April 23, before council decided to terminate Williams.
"The insurance company requires that an attorney sign off," Burley said. "If you’re not comfortable with me signing, you can have a different attorney."
The council chose to ignore Burley, and terminated Williams anyway in a split vote.
Williams declined to comment on whether he will pursue a wrongful termination suit against the city. Mayor Fred Watson also declined to comment
Thurston said APEI would pay for an hour of legal consultation, even after the fact, so the council could see if the termination was handled properly.
There was no discussion of taking that offer at Tuesday night's meeting, but the council could still accept it at a later date.