City approves manager’s contract extension

Grace says city’s current insurance only covers general liability, not professional liability


WEST BRANCH — The West Branch City Council voted unanimously to approve a one-year contract extension for City Manager Heather Grace at its April 17 regular meeting.

The contract was up for approval at the city’s last meeting; however, the decision was postponed so the city could look at costs for getting legal malpractice insurance for Grace for incidental work she might do for the city in addition to her duties as city manager.

However, that part of the contract was not approved April 17, because Grace had not received enough options for pricing for insurance. The motion, which was made by Joanne Bennett, states that the city will revisit the insurance issue within 45 days and potentially make a decision on it.

Grace reported that the only proposal she received was from MainStreet Legal Malpractice Insurance, and the costs were higher than what she originally expected they would be.

Three options were presented by Grace. The first option would cover the city for $100,000 per claim limit with a $300,000 aggregate and would cost $3,126.25 annually. Option two would cover $250,000 per claim limit with a $500,000 aggregate for $3,638.75 annually, with the last option covering $500,000 per claim limit with a $1 million aggregate for $4,151.25 annually.

The costs were higher than the $1,000 estimate Grace previously presented to the council based on her past career as an attorney.

“Why is there so much more liability if it’s not your main thing to do anymore?” asked Councilman Tim Schaiberger. “You might have to deal with one or two legal things a year, maybe.”

Grace said she was told the cost could possibly go down after she filled out her full application, but the price given was the preliminary price.

Grace told the Herald when asked during public comment that her legal duties with the city mostly revolve around small tasks that are simply easier to have the city manager handle than having to call the attorney every time.

“When I review contracts or when drafting legislation for the city like ordinances and resolutions and that sort of stuff,” Grace said. “Stuff that we used to have the city attorney do all the time.”

“I believe if you go back, I think all ordinances and resolutions in the past have been drafted by the city attorney at either our monthly rate or hourly rate,” Councilman Rusty Showalter said. “To be able to do it in house, ultimately with as many resolutions as we pass in a year, it could be very cost-efficient.”

Grace told the Herald Wednesday that she had been performing those duties up to this point as city manager. The city has not been covered for malpractice issues resulting from her performing those duties, according to Grace, who responded to questions from Bennett on the issue during the meeting.

“So if the city would have been sued, the city would have been sued under our insurance?” Bennett asked Grace.

“That’s the thing, the insurance for the city only covers general liability, not professional liability,” Grace responded.

“So you had your own personal insurance is what you’re saying?” Bennett asked.

“Back when I practiced as a full-time attorney,” Grace said.

Bennett asked if that meant she no longer had that insurance, which Heather confirmed was accurate.

“So we’re wide open?” Bennett asked.

“Potentially,” responded Grace.

Grace said she had at least two other insurance agencies she was expecting to hear back from, but because of the Easter holiday she suspected responses might be delayed.

Her state bar dues, which would cost $285 annually, were approved as part of the motion Monday night.

As previously reported, the approved contract does not include a raise for Grace, who received a $9,469 raise in January as part of almost $100,000 in raises given to city employees after several years of pay freezes. Grace will continue to earn an annual salary of $72,719.

The contract renewal is effective as of April 20, which was when her previous contract would have expired.


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