By Maxine Bernstein
oregonlive.com
ST. HELENS, Ore. — The insurer for embattled Columbia River Fire & Rescue won’t cover future worker-related claims against the fire district due to a “significant increase in the frequency and severity” of claims already filed.
The rare step is the latest setback for the St. Helens-based district beset with financial turmoil and labor-management strife. The district is now scrambling to find private employment practice liability insurance, which is expected to cost more.
The fire district already faces a whistleblower and wrongful termination suit from its recently ousted fire chief, a sexual harassment and hostile work environment suit from three former employees and other hostile work environment claims.
[RELATED: Fired Ore. fire chief files $20M whistleblower lawsuit]
Special District Insurance Services will continue liability coverage for those cases, with some exceptions.
But the insurer will cease covering new employment claims after Dec. 31, according to Jimmy Sanchez, the fire district’s division chief of finance, logistics and administration.
The fire district is a special local government jurisdiction created to provide a specific service, in this case fire protection for a 200-square-mile swath of Columbia County on the edge of the Portland metro area. It’s part of the Special Districts Association of Oregon, which offers legislative advocacy and administrative support and resources to its members.
The increase in claims against the fire district “raises serious concerns about Columbia River Fire & Rescue’s ability or willingness to protect itself” from future claims, underwriting manager Chris Hill said in a letter to the district. Those include breach of employee contracts or other adverse employment action, Hill said.
The Special Districts Association in 1985 created an insurance services trust to help members control insurance costs by pooling resources for liability coverage and other self-insurance, according to Troy DeYoung, a senior risk management consultant for the association.
The trust is governed by a board of trustees. Its goal is to provide “stable rates and broad coverage to Oregon public entities,” unlike an insurance company that distributes profits to shareholders, DeYoung said in an information webinar on the group’s website.
Columbia River Fire & Rescue provides firefighting and emergency medical care to over 27,000 people with about 35 full-time paid firefighters, 12 volunteers and five non-firefighter paramedics. It has another eight administrative and supervisory employees. They’re spread out among seven stations, including in the county seat of St. Helens, Columbia City, Warren, Prescott and Rainier.
The fire department has faced an ongoing criminal inquiry into former and current employees for improper pension benefits and unchecked credit card spending. Joel Medina, the fire chief who reported the alleged misconduct, was then fired by the district’s newly elected board in August without prior public notice and in violation of the chief’s contract.
[RELATED: Criminal inquiry into FD finances leads to firing of Ore. fire chief]
The board named an interim chief that same night to take the helm, but he resigned three days later, saying he had been “threatened, chastised” and was “overwhelmed and underprepared.”
The Special Districts Insurance Services trust will pay for a lawyer to represent the district in the $20 million retaliation suit filed by Medina, but the coverage won’t apply to all liability, according to Frank Stratton, the Special Districts Association’s executive director.
That includes liability arising “from a wrongful act,” from “oral or written publication” of knowingly false material by or at the direction of a district member, for any “dishonest, fraudulent, criminal, bad faith or malicious act” by a district member or for any severance or back pay owed to a district member, according to the letter. A district member includes employees and board members.
The fire district also will be responsible for the first $25,000 of any damages paid for claims resulting from an adverse termination of an employee, such as the chief, or suspension without pay or benefits of an employee.
“In the meantime, we will be in discussions with the district about possible options to continue their employment practices coverage going forward,” Stratton said.
Attorney Atkin Blitz, who represents the district, said the department will work to identify alternative insurers through its insurance broker.
He said he anticipates that the alternative will cost the district more because it won’t have the insurance pool to lower premiums. The fire district now pays $104,047 annually to Special District Insurance Services, which includes all its current liability coverage.
The fire district is also in a heated dispute with the firefighters’ union on its contract, awaiting an arbitrator’s ruling that also could cost the district more money.
The district board this month also voted to investigate Sanchez and Deputy Chief Eric Smythe after the union issued votes of no confidence for each, which may lead to future suits.
This is not the first time a Columbia River entity has faced a similar fate.
At the end of 2015, Special Districts Insurance Services alerted the Columbia River Public Utility District that it wouldn’t provide liability coverage to the utility district starting Jan. 1, 2016.
That move followed several management changes and amid management terminations at the district. Years later, as of Jan. 1, 2022, Special Districts resumed coverage of the utility district, according to Heidi Ralls, a spokesperson. The utility district covers more than 20,000 customers in Columbia County, she said.Embattled Columbia River Fire & Rescue loses future insurance coverage for worker-related liability claim
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