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HomeMy WebLinkAbout2026-04-14; City Council; 03; Settlement Authority for Liability Claims and LitigationCA Review CKM Meeting Date: April 14, 2026 To: Mayor/President/Chairperson and City Council/Board of Directors/Commission From: Geoff Patnoe, City Manager/Executive Manager/Executive Director Staff Contact: Cindie K. McMahon, City Attorney/General Counsel/Attorney attorney@carlsbadca.gov, 442-339-2470 Sarah Reiswig, Risk Manager sarah.resiwig@carlsbadca.gov, 442-339-2435 Subject: Settlement Authority for Liability Claims and Litigation Districts: All Recommended Actions 1)Adopt a resolution of the City Council of the City of Carlsbad, California, adjusting the settlement authority delegated to the City Manager and Risk Manager for liability claims and litigation by and against the city and specifying procedures for handling sewer service related liability claims and emergency expenditures; and 2)Adopt a resolution of the Board of Directors of the Carlsbad Municipal Water District adjusting the settlement authority delegated to the Executive Manager and the City of Carlsbad’s Risk Manager for liability claims and litigation by and against the district and specifying procedures for handling water service related claims and emergency expenditures; and 3)Adopt a resolution of the Board of Directors of the Carlsbad Public Financing Authority delegating settlement authority to the Executive Director and the City of Carlsbad’s Risk Manager for liability claims and litigation by and against the authority; and 4)Adopt a resolution of the Community Development Commission delegating settlement authority to the Executive Director and the City of Carlsbad’s Risk Manager for liability claims and litigation by and against the commission and the Housing Authority of the City of Carlsbad. Executive Summary Staff are recommending adjustments to the City Manager’s settlement authority for liability claims and litigation. The proposed changes are designed to increase efficiencies in resolving smaller claims and litigation more quickly, without requiring City Council action and to bring authority limits in line with current costs and limits in other local municipalities. In addition, these changes will result in role and responsibility clarifications for the way that claims are handled. of the City Council, Carlsbad Municipal Water District, Public Financing Authority and Community Development Commission April 14, 2026 Item #3 Page 1 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Staff in the City Attorney’s Office, Risk Management Department and Finance Department have reviewed the delegations of authority for processing and settling liability claims and litigation by and against the city and its subsidiary entities. Staff are now recommending adoption of the proposed resolutions adjusting the settlement authority limits of the City Manager and Risk Manager for liability claims and litigation against the city. The proposed resolution also clarifies: • The City Manager’s authority to settle claims in which the city is a plaintiff. • The City Attorney’s authority to initiate proceedings for indemnity and contribution. • The Risk Manager’s ability to reject, return and deny liability claims of any amount. The resolution additionally authorizes the City Manager to waive the city’s recovery of fees and costs in any amount in exchange for the dismissal of litigation against the city. The City Manager’s settlement authority requires the concurrence of the City Attorney. The City Manager and City Attorney will continue to inform the City Council of all settlements, and the City Council will retain its authority to oversee and approve the city’s budget, including all amounts budgeted for risk management and claims and litigation resolution. Staff are also recommending delegating the same amounts of settlement authority for claims and litigation by and against the Carlsbad Municipal Water District (CMWD), Carlsbad Public Financing Authority, Community Development Commission and the Housing Authority of the City of Carlsbad because each of these public entities could potentially be the subject of a claim or lawsuit. The proposed resolutions also clarify the Risk Manager’s role in handling claims for these entities. The changes are designed to: • Increase efficiencies in resolving smaller claims and litigation more quickly, without requiring City Council action. • Bring the authority limits in line with current costs and limits in other local cities. • Clarify the roles and responsibilities for handling claims. Adjusting the settlement authority for the city and the CMWD, and establishing settlement authority for the Carlsbad Public Financing Authority, the Community Development Commission and the Housing Authority of the City of Carlsbad, will provide consistency in handling claims and litigation across these entities. Adoption of the proposed resolutions are not expected to affect total claims and litigation spending. April 14, 2026 Item #3 Page 2 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Explanation & Analysis Proposed settlement authority limits for liability claims and litigation Liability claims and litigation by or against the city Type of claim or litigation Authority to settle Current settlement authority Proposed settlement authority Sewer or water service claims Risk Manager $2,500 or less $10,000 or less Liability claims and litigation City Manager with concurrence of City Attorney $10,000 or less $50,000 or less Sewer or water service claims and litigation City Manager with concurrence of City Attorney $25,000 or less $50,000 or less City-initiated claims and litigation City Manager with concurrence of City Attorney Not specified $50,000 or less Liability claims and litigation by or against CMWD Type of claim or litigation Authority to settle Current settlement authority Proposed settlement authority Water service claims Risk Manager Not specified $10,000 or less Liability claims and litigation Executive Manager with concurrence of General Counsel Up to $5,000 $50,000 or less CMWD-initiated claims and litigation Executive Manager with concurrence of General Counsel Not specified $50,000 or less April 14, 2026 Item #3 Page 3 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Liability claims and litigation by or against the Carlsbad Public Financing Authority Type of claim or litigation Authority to settle Current settlement authority Proposed settlement authority Liability claims and litigation Executive Director with concurrence of General Counsel None $50,000 or less Finance authority-initiated claims and litigation Executive Director with concurrence of General Counsel None $50,000 or less Liability claims and litigation by or against the Community Development Commission and Housing Authority Type of claim or litigation Authority to settle Current settlement authority Proposed settlement authority Liability claims and litigation Executive Director with concurrence of Attorney None $50,000 or less Commission-initiated claims and litigation Executive Director with concurrence of Attorney None $50,000 or less City of Carlsbad City Manager and City Attorney The City Manager’s settlement authority was set at $10,000 for liability claims against the city and $25,000 for sewer and water service claims on Oct. 22, 1996 (Resolution No. 96-345). These amounts were restated but not adjusted on June 5, 2001, when the City Council delegated settlement authority to the Risk Manager to settle sewer and water service claims and make emergency expenditures up to $2,500 (Resolution No. 2001-151). The City Manager’s authority to settle workers’ compensation claims was last adjusted in 2015 from $25,000 to $50,000 (Resolution 2015-086). Staff are not recommending any adjustment to the City Manager’s authority to settle workers’ compensation claims. For liability claims, California Government Code Section 935.4 allows the City Council to delegate settlement authority of up to $50,000 to an employee of the city. A delegation of an amount greater than $50,000 can only be authorized by a charter provision. The proposed resolution would increase the City Manager’s settlement authority to $50,000. Increasing the settlement authority of the City Manager for modest liability claims and litigation will expedite their resolution. April 14, 2026 Item #3 Page 4 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 The proposed resolution also clarifies: • The City Manager’s authority to settle claims in favor of the city. • The City Attorney’s authority to initiate actions for indemnity and contribution. • The City Manager’s authority to waive recovery of fees and costs in any amount in exchange for the dismissal of litigation against the city. The City Manager’s settlement authority requires the concurrence of the City Attorney. Risk Manager The City Council has delegated authority to the Risk Manager to settle and make emergency expenditures for sewer service claims because of the need to expedite the clean-up and remediation of sewer overflows on private property. Increasing the Risk Manager’s authority for emergency expenditures will improve the city’s ability to respond quickly to sewer overflows and could reduce the risk of more costly repairs resulting from a delay. Costs for emergency repair services and temporary housing, when necessary, have increased in the 25 years since the Risk Manager was initially delegated this authority. In addition to increasing the Risk Manager’s authority for these emergency expenditures, the proposed resolution includes procedures for the handling of these incidents. Those procedures include oversight by the City Attorney and Deputy City Manager, Administrative Services. The Carlsbad Municipal Code already includes processes and limitations for refunds of overpayments. The proposed resolution does not affect those processes or authority limits. Other cities’ settlement authorities Staff have surveyed other cities in the region to determine the level of settlement authority delegated by their city councils. The city councils of Oceanside, San Marcos, San Diego, Chula Vista, Santee, Vista, El Cajon and La Mesa have all delegated settlement authority up to $50,000 to either their City Manager, City Attorney or both. The city councils of Del Mar and Encinitas have delegated $10,000 in settlement authority to their city managers, and National City has delegated $25,000. Carlsbad Municipal Water District On June 25, 1991, six months after CMWD became a subsidiary district of the City of Carlsbad, the Board of Directors for CMWD delegated authority to the Executive Manager (the City Manager) and General Counsel (the City Attorney) to reject all claims against the district and settle all liability claims and lawsuits up to $5,000 (CMWD Board Resolution No. 742). The city and CMWD also entered into an operating agreement at that time transferring responsibilities for the district’s risk management to the city’s Risk Management Department. The operating agreement specifies that those responsibilities include, but are not limited to, safety training, loss prevention, and administration of the liability and workers’ compensation programs (CMWD Board Resolution No. 741). The proposed resolution in Exhibit 2 increases the Executive Manager’s settlement authority for claims against CMWD and provides authority to the Risk Manager consistent with the settlement authority for claims against the city. The proposed resolution also clarifies the Risk Manager’s role in handling claims against the district and provides the Risk Manager with the April 14, 2026 Item #3 Page 5 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 same authority to make emergency expenditures for and settle water service related claims as for sewer service related claims. Carlsbad Public Financing Authority On April 18, 2000, the City of Carlsbad and CMWD created the Carlsbad Public Financing Authority, a joint powers authority responsible for the financing, construction and operation of The Crossings Golf Course (City of Carlsbad Resolution No. 2000-123 and CMWD Resolution No. 1080). The City Council acts as the Board of Directors, the City Manager acts as the Executive Director and the City Attorney is the General Counsel for the authority. The Board of Directors has not delegated settlement authority for liability claims. Since liability claims and litigation related to the golf course may involve the city, the Public Financing Authority or both, staff recommend adopting the proposed resolution in Exhibit 3 delegating settlement authority to the Executive Director for claims and litigation related to the Public Financing Authority consistent with the authority delegated to the City Manager for claims and litigation related to the city. The proposed resolution also clarifies the Risk Manager’s role in handling claims on behalf of the Public Financing Authority. Community Development Commission and Housing Authority The Community Development Commission is the governing body of the Housing Authority of the City of Carlsbad. The commission has not delegated settlement authority for claims or litigation against the commission or the Housing Authority. The proposed resolution in Exhibit 4 delegates settlement authority to the Executive Director for claims or litigation against the commission and Housing Authority consistent with the authority delegated to the City Manager for claims and litigation related to the city. The proposed resolution also clarifies the Risk Manager’s role in handling claims on behalf of the commission and Housing Authority. Fiscal Analysis Increasing the settlement authority delegated, or delegating settlement authority, to the City Manager/Executive Manager/Executive Director and Risk Manager is not expected to have an overall impact on the total amount budgeted and spent in the prosecution or defense and settlement of claims and lawsuits. Increased efficiencies in expeditiously resolving modest claims and litigation at a staff level may result in some cost savings due to reductions in staff time associated with agenda preparation and attendance at closed sessions. Environmental Evaluation The proposed action to adjust the settlement and claims handling authority of, or delegate settlement and claims handling authority to, the City Manager/Executive Manager/Executive Director and Risk Manager is exempt from environmental review under California Environmental Quality Act, or CEQA, Guidelines Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no possibility the proposed action may have a significant effect on the environment. Exhibits 1. City Council resolution 2. Carlsbad Municipal Water District Board resolution 3. Carlsbad Public Financing Authority Board resolution 4. Community Development Commission resolution April 14, 2026 Item #3 Page 6 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Exhibit 1 RESOLUTION NO. 2026-071 . A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ADJUSTING THE SETTLEMENT AUTHORITY DELEGATED TO THE CITY MANAGER AND RISK MANAGER FOR LIABILITY CLAIMS AND LITIGATION BY AND AGAINST THE CITY AND SPECIFYING PROCEDURES FOR HANDLING SEWER SERVICE RELATED LIABILITY CLAIMS AND EMERGENCY EXPENDITURES WHEREAS, the effective and expedient administration of the liability self-insurance program requires that the authority to reject, return, deny and settle claims be clearly defined and established; and WHEREAS, the settlement authority of the City Manager and Risk Manager for liability claims and litigation was last reviewed by the City Council in 2001 (City Council Resolution No. 2001-151); and WHEREAS, increasing the settlement authority for the City Manager and Risk Manager for liability claims and litigation will improve efficiencies and expedite the resolution of claims and litigation for and against the city. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That an action to adjust the settlement and claims handling authority of, or delegate settlement and claims handling authority to, the City Manager and Risk Manager is exempt from environmental review under California Environmental Quality Act, or CEQA, Guidelines Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no possibility the action may have a significant effect on the environment. 3.That the City Manager with the concurrence of the City Attorney shall have the authority to settle liability claims and litigation in which the city is a defendant, respondent or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 per individual party or claimant. 4.That the City Manager with the concurrence of the City Attorney shall have the authority to settle claims and litigation in which the city is a claimant, plaintiff, petitioner or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 and when the City Manager in consultation with the City Attorney April 14, 2026 Item #3 Page 7 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 determines that the subject matter involves issues that are routine in nature and do not present sensitive issues of policy. 5.That the City Manager with the concurrence of the City Attorney shall have the authority to initiate proceedings, including filing a complaint or cross-complaint, to obtain indemnity or contribution. 6.That the City Manager with the concurrence of the City Attorney shall have the authority to waive the city’s recovery of fees and costs in any amount in exchange for the dismissal of litigation against the city. 7.That the Risk Manager shall have the authority to settle or approve emergency expenditures for liability claims related to sewer service when the amount of the settlement or expenditure does not exceed $10,000. 8.That in settling claims or approving emergency expenditures related to sewer service, the Risk Manager shall follow the procedures outlined in Attachment A. 9.That the Risk Manager shall have the authority to reject, return, and deny liability claims against the city, including claims more than $50,000. 10.That all settlement authority for liability claims and litigation not expressly granted by this resolution is reserved to the City Council. April 14, 2026 Item #3 Page 8 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 PASSED, APPROVED AND ADOPTED at a Joint Meeting of the City Council of the City of Carlsbad, the Board of Directors of Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the Community Development Commission on the 14th day of April, 2026, by the following vote, to wit: AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin. NAYS: None. ABSTAIN: None. ABSENT: None. ______________________________________ KEITH BLACKBURN, Mayor ______________________________________ SHERRY FREISINGER, City Clerk (SEAL) April 14, 2026 Item #3 Page 9 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 SEWER AND WATER OVERFLOW ON PRIVATE PROPERTY Purpose: The city may need to act quickly in response to a sewer or water overflow on private property to control costs and achieve a high level of customer service. Affected residents and property owners need assurance that their property will be cleaned and restored and may need immediate assistance with living arrangements and expenses if the residence is uninhabitable. The city may be able to reduce costs by retaining control of clean-up and restoration work. Procedure: When the city’s emergency response crew determines an overflow appears to be in a portion of the line for which the city has accepted responsibility and where the emergency response crew has not determined the cause of the overflow was due to the occupant/property owner’s actions: •The city will secure clean-up and restoration services, on an emergency basis, for the occupant/property owner. This may include temporary housing if the Risk Manager determines that the property is uninhabitable. If a resident needs assistance with living expenses during clean-up and restoration, the Risk Manager is authorized to pay up to $10,000 for these expenses. •The Risk Manager will notify the City Attorney and Deputy City Manager, Administrative Services of the incident within 24 hours and provide on-going status reports on remediation progress and cost. The Risk Manager will coordinate with the City Attorney and Deputy City Manager, Administrative Services to evaluate each case on an individual factual basis. In those situations where it is ultimately determined that the property owner is responsible for the blockage, the evaluation will include a determination as to whether the city should seek reimbursement of any expenditures. Attachment A April 14, 2026 Item #3 Page 10 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Exhibit 2 RESOLUTION NO. 1801 . A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT ADJUSTING THE SETTLEMENT AUTHORITY DELEGATED TO THE EXECUTIVE MANAGER AND THE CITY OF CARLSBAD’S RISK MANAGER FOR LIABILITY CLAIMS AND LITIGATION BY AND AGAINST THE DISTRICT AND SPECIFYING PROCEDURES FOR HANDLING WATER SERVICE RELATED LIABILITY CLAIMS AND EMERGENCY EXPENDITURES WHEREAS, the effective and expedient administration of the liability self-insurance program requires that the authority to reject, return, deny and settle claims be clearly defined and established; and WHEREAS, the settlement authority of the Executive Manager for liability claims was set by the Board of Directors in 1991 (CMWD Board Resolution No. 742) and has not been adjusted since; and WHEREAS, delegating authority to settle claims and make emergency expenditures for water overflows on private property will allow the district to expedite the clean-up and remediation of these incidents; and WHEREAS, increasing the settlement authority for the Executive Manager and delegating settlement authority to the City of Carlsbad’s Risk Manager for liability claims and litigation will improve efficiencies and expedite the resolution of claims and litigation for and against the district. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That an action to adjust the settlement and claims handling authority of, or delegate settlement and claims handling authority to, the Executive Manager and the City of Carlsbad’s Risk Manager is exempt from environmental review under California Environmental Quality Act Guidelines Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no possibility the action may have a significant effect on the environment. 3.That the Executive Manager with the concurrence of the General Counsel shall have the authority to settle liability claims and litigation in which the district is a defendant, respondent or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 per individual party or claimant. April 14, 2026 Item #3 Page 11 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 4.That the Executive Manager with the concurrence of the General Counsel shall have the authority to settle claims and litigation in which the district is a claimant, plaintiff, petitioner or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 and when the Executive Manager in consultation with the General Counsel determines that the subject matter involves issues that are routine in nature and do not present sensitive issues of policy. 5.That the Executive Manager with the concurrence of the General Counsel shall have the authority to initiate proceedings, including filing a complaint or cross-complaint, to obtain indemnity or contribution. 6.That the Executive Manager with the concurrence of the General Counsel shall have the authority to waive the recovery of fees and costs in any amount in exchange for the dismissal of litigation against the district. 7.That the City of Carlsbad’s Risk Manager shall have the authority to settle or approve emergency expenditures for liability claims related to water service when the amount of the settlement or expenditure does not exceed $10,000. 8.That in settling claims or approving emergency expenditures related to water service, the City of Carlsbad’s Risk Manager shall follow the procedures outlined in Attachment A. 9.That the City of Carlsbad’s Risk Manager shall have the authority to reject, return, and deny liability claims against the district, including claims more than $50,000. 10. That all settlement authority for liability claims and litigation not expressly granted by this resolution is reserved to the Board of Directors. April 14, 2026 Item #3 Page 12 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 PASSED, APPROVED AND ADOPTED at a Joint Meeting of the City Council of the City of Carlsbad, the Board of Directors of Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the Community Development Commission on the 14th day of April, 2026, by the following vote, to wit: AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin. NAYS: None. ABSTAIN: None. ABSENT: None. ______________________________________ KEITH BLACKBURN, President ______________________________________ SHERRY FREISINGER, Secretary (SEAL) April 14, 2026 Item #3 Page 13 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 SEWER AND WATER OVERFLOW ON PRIVATE PROPERTY Purpose: The city may need to act quickly in response to a sewer or water overflow on private property to control costs and achieve a high level of customer service. Affected residents and property owners need assurance that their property will be cleaned and restored and may need immediate assistance with living arrangements and expenses if the residence is uninhabitable. The city may be able to reduce costs by retaining control of clean-up and restoration work. Procedure: When the city’s emergency response crew determines an overflow appears to be in a portion of the line for which the city has accepted responsibility and where the emergency response crew has not determined the cause of the overflow was due to the occupant/property owner’s actions: •The city will secure clean-up and restoration services, on an emergency basis, for the occupant/property owner. This may include temporary housing if the Risk Manager determines that the property is uninhabitable. If a resident needs assistance with living expenses during clean-up and restoration, the Risk Manager is authorized to pay up to $10,000 for these expenses. •The Risk Manager will notify the City Attorney and Deputy City Manager, Administrative Services of the incident within 24 hours and provide on-going status reports on remediation progress and cost. The Risk Manager will coordinate with the City Attorney and Deputy City Manager, Administrative Services to evaluate each case on an individual factual basis. In those situations where it is ultimately determined that the property owner is responsible for the blockage, the evaluation will include a determination as to whether the city should seek reimbursement of any expenditures. Attachment A April 14, 2026 Item #3 Page 14 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Exhibit 3 RESOLUTION NO. 102 . A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC FINANCING AUTHORITY DELEGATING SETTLEMENT AUTHORITY TO THE EXECUTIVE DIRECTOR AND THE CITY OF CARLSBAD’S RISK MANAGER FOR LIABILITY CLAIMS AND LITIGATION BY AND AGAINST THE AUTHORITY WHEREAS, the effective and expedient administration of the liability self-insurance program requires that the authority to reject, return, deny and settle claims be clearly defined and established; and WHEREAS, the Board of Directors has not previously delegated any settlement authority for liability claims and litigation; and WHEREAS, delegating settlement authority to the Executive Director for liability claims and litigation will improve efficiencies and expedite the resolution of claims and litigation for and against the authority. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Public Financing Authority of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That an action to delegate settlement and claims handling authority to the Executive Director and the City of Carlsbad’s Risk Manager is exempt from environmental review under California Environmental Quality Act, or CEQA, Guidelines Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no possibility the action may have a significant effect on the environment. 3.That the Executive Director with the concurrence of the General Counsel shall have the authority to settle liability claims and litigation in which the authority is a defendant, respondent or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 per individual party or claimant. 4.That the Executive Director with the concurrence of the General Counsel shall have the authority to settle claims and litigation in which the authority is a claimant, plaintiff, petitioner or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 and when the Executive Director in consultation with the General Counsel determines that the subject matter involves issues that are routine in nature and do not present sensitive issues of policy. April 14, 2026 Item #3 Page 15 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 5.That the Executive Director with the concurrence of the General Counsel shall have the authority to initiate proceedings, including filing a complaint or cross-complaint, to obtain indemnity or contribution. 6.That the Executive Director with the concurrence of the General Counsel shall have the authority to waive the recovery of fees and costs in any amount in exchange for the dismissal of litigation against the authority. 7.That the City of Carlsbad’s Risk Manager shall have the authority to process all liability claims against the authority. 8.That the City of Carlsbad’s Risk Manager shall have the authority to reject, return, and deny liability claims against the authority, including claims more than $50,000. 9.That all settlement authority for liability claims and litigation not expressly granted by this resolution is reserved to the Board of Directors. PASSED, APPROVED AND ADOPTED at a Joint Meeting of the City Council of the City of Carlsbad, the Board of Directors of Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the Community Development Commission on the 14th day of April, 2026, by the following vote, to wit: AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin. NAYS: None. ABSTAIN: None. ABSENT: None. ______________________________________ KEITH BLACKBURN, Chairperson ______________________________________ SHERRY FREISINGER, Secretary (SEAL) April 14, 2026 Item #3 Page 16 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 Exhibit 4 RESOLUTION NO. 580 . A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION DELEGATING SETTLEMENT AUTHORITY TO THE EXECUTIVE DIRECTOR AND THE CITY OF CARLSBAD’S RISK MANAGER FOR LIABILITY CLAIMS AND LITIGATION BY AND AGAINST THE COMMISSION AND THE HOUSING AUTHORITY OF THE CITY OF CARLSBAD WHEREAS, the effective and expedient administration of the liability self-insurance program requires that the authority to reject, return, deny and settle claims be clearly defined and established; and WHEREAS, the Community Development Commission has not previously delegated any settlement authority for liability claims and litigation against the Commission or the Housing Authority of the City of Carlsbad; and WHEREAS, delegating settlement authority to the Executive Director for liability claims and litigation will improve efficiencies and expedite the resolution of claims and litigation for and against the authority. NOW, THEREFORE, BE IT RESOLVED by the Community Development Commission of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That an action to delegate settlement and claims handling authority to the Executive Director and the City of Carlsbad's Risk Manager is exempt from environmental review under California Environmental Quality Act, or CEQA, Guidelines Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no possibility the action may have a significant effect on the environment. 3.That the Executive Director with the concurrence of the Attorney shall have the authority to settle liability claims and litigation in which the Commission or the Housing Authority of the City of Carlsbad is a defendant, respondent or similarly situated party when the amount to be paid pursuant to the settlement does not exceed $50,000 per individual party or claimant. 4.That the Executive Director with the concurrence of the Attorney shall have the authority to settle claims and litigation in which the Commission or the Housing Authority of the City of Carlsbad is a claimant, plaintiff, petitioner or similarly situated April 14, 2026 Item #3 Page 17 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 party when the amount to be paid pursuant to the settlement does not exceed $50,000 and when the Executive Director in consultation with the Attorney determines that the subject matter involves issues that are routine in nature and do not present sensitive issues of policy. 5.That the Executive Director with the concurrence of the Attorney shall have the authority to initiate proceedings, including filing a complaint or cross-complaint, to obtain indemnity or contribution. 6.That the Executive Director with the concurrence of the Attorney shall have the authority to waive the recovery of fees and costs in any amount in exchange for the dismissal of litigation against the Commission and the Housing Authority of the City of Carlsbad. 7.That the City of Carlsbad’s Risk Manager shall have the authority to process all liability claims against the Commission and the Housing Authority of the City of Carlsbad. 8.That the City of Carlsbad’s Risk Manager shall have the authority to reject, return, and deny liability claims against the Commission and the Housing Authority of the City of Carlsbad, including claims more than $50,000. 9.That all settlement authority for liability claims and litigation not expressly granted by this resolution is reserved to the Community Development Commission. April 14, 2026 Item #3 Page 18 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978 PASSED, APPROVED AND ADOPTED at a Joint Meeting of the City Council of the City of Carlsbad, the Board of Directors of Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the Community Development Commission on the 14th day of April, 2026, by the following vote, to wit: AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin. NAYS: None. ABSTAIN: None. ABSENT: None. ______________________________________ KEITH BLACKBURN, Chairperson ______________________________________ GEOFF PATNOE, Secretary (SEAL) April 14, 2026 Item #3 Page 19 of 19 Docusign Envelope ID: A1731998-EBC8-4DBC-8654-E64B91CAF978