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City paid $25,000 deductible to insurance company in Maria Ohl case

Maria Ohl, dressed in red, sits with her sister at a hearing in September of 2011. Mason City Police Chief Michael Lashbrook sits to their right.

MASON CITY – The true cost of the Maria Ohl settlement to Mason City taxpayers is fuzzy, but the city did not come out of the case unscathed, as a city official seemed to portray in a recent press release.

On Friday, November 10th, just before 5 PM, Perry Buffington, Mason City’s Director of Human Resources, sent a press release which stated that a $95,000 settlement paid by the city’s insurance carrier to former Mason City police officer Maria Ohl “does not represent any taxpayer money.”

While this statement is true, it may have lead some people to believe that the city did not take a financial loss over the case.

“That statement is bullsh**,” a former city official told NorthIowaToday.com. “We paid big for this.”

After some fact-finding, NorthIowaToday.com has discovered that the city paid a $25,000 deductible to its insurance carrier in order for legal representation to commence.  According to City Finance Director Kevin Jacobson, the city “already has paid $25,000 for attorney fees for the Ohl case. It comes from the Tort Liability fund.”

Jacobson continued, saying that “The tort has it’s own levy for taxes. It is a separate fund that money is held in to pay insurance and any deductibles for cases we are found liable that we need to pay. The deductible pays any fees associated with the case. In this case, we paid the first $25,000 for attorney fees.”

City Administrator Brent Trout confirmed the deductible payment, saying “We paid $25,000 for our deductible responsibilities for legal representation expenses prior to the settlement.”

According to Trout, under the city’s previous insurance carrier, everytime the city was sued it could have been on the hook for at least $25,000.

“Each lawsuit has a separate $25,000 deductible requirement, Trout explained.  “When Maria Ohl filed the lawsuit against the City of Mason City our insurance carrier (at the time of the Ohl lawsuit), Traveler’s Insurance Company, hired a lawyer to defend our case.  As the attorney worked on the case he created bills for his time.  The City is responsible to cover the first dollar of these expenses until the bill reaches $25,000. After the expenses go over $25,000 the insurance company pays for the cost. They also pay for any cost of a settlement or judgment if it had gone to trial over the $25,000. The other example though would have been that if the cost of the attorney in a case was $5,000 and the case was settled for $10,000 then the City would have paid all of the cost ($15,000) as our deductible expense and the insurance company would not have paid any of the expense.”

Trout said the city’s new insurance carrier operates differently.

“Our current insurance company, Iowa Communities Assurance Pool (ICAP), does not do business the way listed above that Traveler’s does,” Trout explained. “They pay all of the legal defense costs from the first dollar expense on. Our deductible is still $25,000 but the deductible only comes in to play now in the event of a settlement or judgment. The Maria Ohl federal case was covered by Traveler’s Insurance and the Civil Service Commission Termination case was covered by ICAP.”

A former city official also said that “the clock started the day Maria Ohl was placed on administrative leave.  We paid her wages while another officer covered her shift, or overtime was paid to cover it.  She wasn’t working but we paid.”

The former city official also said that wages were paid, for example, to Police Chief Michael Lashbrook while he attended the Ohl hearings and other legal interviews.

“That’s a waste of police time and expense.  Tell that to the man who’s daughter was raped.  That’s one less officer working that case.  What about staff time and expense to use the library?  it all comes to bear.”

——

September 13th, 2011: Maria Ohl was fired due to alleged rule violations and evaluation by psychologist .

September 16th, 2011: Ohl denied her job back

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