HomeMy WebLinkAbout05.F- Global Union Settlement with San Bernardino Professional Firefighters Union 5.F i
RESOLUTION (ID # 4269) DOC ID: 4269 A
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Agreement
From: Jolena E. Grider M/CC Meeting Date: 02/01/2016
Prepared by: Jolena E. Grider, (909) 384-
5355
Dept: City Attorney Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing
the Mayor to Execute a Global Settlement Agreement with the San Bernardino
Professional Firefighters Union. (#4269)
Current Business Registration Certificate: Not Applicable
Financial Impact:
Account Budgeted Amount: <<Insert Amount>>
Account No. <<Insert Account No.>>
Account Description: <<Insert Account Description>>
Balance as of: <<Insert Date>>
Balance after approval of this item: <<Insert Amount>>
Please note this balance does not indicate available funding. It does not include non-
encumbered reoccurring expenses or expenses incurred, but not yet processed.
Motion: Adopt the Resolution.
Background:
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This item is to approve a global settlement between the City and the San Bernardino
City Professional Firefighters (SBCPF) union, which settlement includes a resolution of
all pre and post -bankruptcy litigation claims and disputes which total in excess of$50
million.
The global settlement will bring a close to nearly nine years of legal disputes filed
against the City including: seven charges filed before the Public Employment Relation
Board; five lawsuits filed between 2007 and 2011; two lawsuits filed after the
bankruptcy; three claims filed in the bankruptcy; objection to the City's proposed plan of
adjustment; and opposition to the City's plan for annexation into the County Fire District.
It will also prevent future litigation, disputes and appeals of court decisions already
rendered. This will save the City substantial legal costs which would otherwise be
incurred.
Key components of the agreement include:
Updated: 1/27/2016 by Jolena E. Grider A Packet Pg.225
5.F
4269
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SBCPF support for annexation into the San Bernardino County Fire Protection
District (SBCFPD).
Resolution of claims concerning the City imposition of employee pension cost
sharing above the 9% statutory rate.
Payment of approximately $1.1 million for settlement of all post-petition
lawsuits.Payment of two salary comparability payments of approximately $1.5
million each, one in 2016 and one in 2017, to mitigate the impact on employees
moving to lower salary schedules with SBCFPD.
In exchange for the comparability payments the City will be released from any
claims arising from implementation of annexation including for any wage or
benefit claims.
Payment to the County so transitioning firefighters will begin County service after
annexation with sick leave and vacation time.
The union consents to its treatment as an unsecured creditor to receive a
proposed 1% on its $14 million claim under the City's chapter 9 bankruptcy plan.
The SBCPF will accept and support confirmation of the City's chapter 9
OWN bankruptcy plan.
Other provisions, as provided in the Annexation Plan of Service, relating to the
smooth transition of annexation into SBCFPD and for preservation of historical
items related to the City fire department.
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Annexation to the SBCFPD is continuing to progress and this agreement will eliminate
union opposition to this transition. The joint City/County annexation plan was reviewed
and adopted by the Local Agency Formation Commission for San Bernardino County
(LAFCO) at its January 27, 2016 meeting . As part of its determination, the LAFCO
Board confirmed, among other things, that the annexation plan provided sustainable
fire suppression and emergency medical response service delivery, finances and
governance.
City Attorney Review:
Supporting Documents:
Resolution Authorizing the Execution of a Gobal Settlement Agreement with SBCPFF
(DOC)
Fire Union Signed Settlement Agreement (PDF)
Updated: 1/27/2016 by Jolena E. Grider A Packet Pg. 226
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RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN c
BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE A GLOBAL E
3 SETTLEMENT AGREEMENT WITH THE SAN BERNARDINO PROFESSIONAL ID
4 FIREFIGHTERS UNION. in
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6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS: U`
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SECTION 1. The Mayor is hereby authorized to execute on behalf of the City the
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9 Global Settlement Agreement between the City of San Bernardino and the San Bernardino a.
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lo Professional Firefighters Union, attached hereto as Exhibit"A" and incorporated herein. Y
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE A GLOBAL
2 SETTLEMENT AGREEMENT WITH THE SAN BERNARDINO PROFESSIONAL
3 FIREFIGHTERS UNION. E
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4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and o
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5 Common Council of the City of San Bernardino at a meeting thereof, held on the D
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day of , 2016,by the following vote, to wit:
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Council Members: AYES NAYS ABSTAIN ABSENT 7
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9 MARQUEZ U
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10 BARRIOS r
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VALDIVIA
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14 NICKEL
15 JOHNSON in
16 MULVIHILL o
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18 Georgeann Hanna, City Clerk r o
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The foregoing Resolution is hereby approved this day of 92016. w
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22 R. Carey Davis, Mayor o
City of San Bernardino 5
23 Approved as to form: Q
24 Gary D. Saenz, City Attorney o
25 By: v0i
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Packe pg.228
CONFIDENTIAL SETTLEMENT DOCUMENr
SETTLEMENT AGREEMENT AND RELEASE
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This Settlement Agreement and Release (the, Agreement„)is effective as of the Effective
Date which is defined below, and is made and entered into by and among: the City of San
Bernardino, California(the"City");the San Bernardino City Professional Firefighters, Local 891
(the"SBCPF") for itself and current and former SBCPF members who are or were represented
by the SBCPF in collective bargaining and other administrative and judicial matters, except as
explained below; current and former SBCPF members Gregory Parker, Sam Bashaw, Chris
Nigg, Thomas Jeff English,Richard Lentine, Steve Tracy, and Kenneth Konior(together with
SBCPF,the "Case No. 1119 Plaintiffs"); current and former SBCPF members Richard Scott
Moss, Gregory Parker,Brian Crowell,Eric Chappell, Stephen Lopez,Michael Bush, Gerald L.
Mohney,James F. McMullen, and Leslie Pompa(the"Case No. 1027 Plaintiffs"); current and E
former SBCPF members Bryan Crowell and Byron Kuhn'(the "Case No. 1012967 Plaintiffs"); a)
and current SBCPF member Richard Scott Moss (the"Case No. 1102415 Plaintiff'). The c
SBCPF,the Case No. 1119 Plaintiffs,the Case No. 1027 Plaintiffs,the Case No. 1012967 •_
Plaintiffs and the-Case No. 1102415 Plaintiff are sometimes referred to herein individually or
collectively, as the context requires, as the "Plaintiffs." All of the individual Plaintiffs (meaning .
not including the SBCPF) are sometimes referred to collectively as the"Individual Plaintiffs."
The City,the SBCPF and all of the Individual Plaintiffs are referred to collectively, as the N
"Parties." Some current and former union members are listed more than once as Parties only
because they are Plaintiffs in more than one lawsuit.
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The SBCPF's entry into and execution of this Settlement Agreement on behalf of its L
former members is only with respect to claims of former SBCPF members that arose while the Q
SBCPF was the bargaining agent for those members and the members were employed as Fire
Safety employees by the City; specifically, the SBCPF is not in this Agreement representing any E
former SBCPF members that are current or were City employees and represented by other City
bargaining units, including,without limitation,the San Bernardino Fire Management in
Association. Any post-petition claims or liabilities by said former members are not included, in
any way, in this Agreement and is specifically excluded from the terms and conditions of this a�
Agreement. N
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This Agreement is not intended to and shall not impair the rights of City employees and �
retirees contained in any other agreement entered into by the City in connection with L
confirmation of the City's Chapter 9 Plan(defined below), including, without limitation, any
agreement entered into by the City with the Official Committee of Retired Employees or the San a
Bernardino Fire Management Association in connection with the confirmation of the City's E
Chapter 9 Plan.
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Recitals
A. The Bankruptcy. The City commenced its chapter 9 bankruptcy case (the
"Bankruptcy Case") on August 1, 2012 (the"Petition Date") in the U.S. Bankruptcy Court for
the Central District of California(the"Bankruptcy Court"). On November 25, 2015 the City
filed its First Amended Plan for the Adjustment of Debts of the City of San Bernardino,
California(as it may be amended from time to time,the"Chapter 9 Plan").
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CONFIDENTIAL SETTLEMENT DOCUME
B. Prepetition and Post-petition Litigation. The City is a defendant, debtor or
charged party and the SBCPF and/or one or more of the other Plaintiffs are a plaintiff, claimant
or charging party, in the matters set forth in this recital and described in 1-14 below, which
matters are collectively referred to as the"Fire Union Claims." The matters described in 1-9
were commenced or filed prior to the Petition Date or relate to prepetition claims(and are
collectively referred to as the"Prepetition Litigation") and the matters described in 10-15 were
commenced or filed after the Petition Date or relate to post-petition claims or requests for
payment of expenses (and are collectively referred to as the "Post-petition Litigation").
1. An action filed on or about August 15, 2007, which is entitled Richard Scott Moss
v. City of San Bernardino, et al., which is pending in the United States District
Court for the Central District of California(District Court), Case No. Case No. E
a)
EDCV 07-1027-JTM. The complaint alleges that the City violated the Fair Labor d
Standards Act("FLSA"), 29 U.S.C. § 201 et seq., by failing to calculate and pay c
overtime correctly(the"Prepetition FLSA Claims"). The District Court, after
summary judgment proceedings and a bifurcated trial, entered judgment in favor
of the plaintiffs on liability, but damages were not determined because the U_
Bankruptcy Case stayed the Prepetition FLSA Claims.
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2. A petition for writ of mandate filed on or about June 3, 2010,which is entitled !T_
SBCPF v. City of San Bernardino, et al.,which is pending in the San Bernardino a
Superior Court, Case No. 1007708. This petition seeks declaratory relief related E
to layoff procedures as they relate to the City Charter. L
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3. A petition for writ of mandate filed on or about June 3,2010,which is entitled c
SBCPF v. City of San Bernardino, et al.,which is pending in the San Bernardino E
Superior Court, Case No. CIVDS 1007709. This petition seeks declaratory relief
and wages owed related to the City's implementation of an 8.7% salary reduction. in
4. An action filed on or about September 15,2010, which is entitled SBCPF a,
Firefighters Brian Crowell and Byron Kuhn v. City of San Bernardino, San
Bernardino City Civil Service Board, San Bernardino Fire Department and Fire c
Chief Michael Conrad et al which is e nd m in the San Bernardino Su p erior
Court, Case No. 1012967. This action alleges violations of the Public Safety L
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Officers Procedural Bill of Rights Act(Government Code §3300 et seq.) and
violations of Civil Rights.under 42 U.S.C. § 1983.
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5. A petition.for writ of mandate filed on or about February 23,2011,which is
entitled SBCPF and Richard Scott Moss v. City of San Bernardino and the
Common Council, et al., San Bernardino Superior Court, Case No. 1102415. This
petition alleges violations of the San Bernardino City Charter, California Labor
Code, the Peace Officers Procedural Bill of Rights Act and the Firefighters
Procedural Bill of Rights Act based on the City's unilateral implementation of
salary reductions to cover general fund expenses of the City. The Court entered
judgment against the City, and the City appealed,which is pending in the
California Court of Appeal. The Bankruptcy Case stayed farther proceedings.
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CONFIDENTIAL SETTLEMENT DOCUMENJ
6. A 2011 Public Employees Relations Board("PERB')Unfair Practice Charge,
Charge No. LA-CE-714-M,which alleges claims related to those referenced in
Recitals B.(3) and B.(5). The SBCPF alleged a number of violations based on
imposed concessions, including,but not limited to,wrongfully imposing an
involuntary salary reduction; unlawful implementation of a provision wherein
new employees would pay 9% of their EPMC cost; implementation of an
unlawful two-tier PERS retirement benefit; implementation of unlawful changes
regarding sell back of vacation and holiday; implementation of provisions
regarding accrual of sick leave; and unlawful changes to the manner in which
overtime was calculated and paid. PERB issued a formal complaint against the
City,but the action has been stayed pending the Bankruptcy Case.
7. A 2012 PERB Unfair Practice Charge, Charge No. LA-CE-777-M,which alleges N
unilateral changes to past"union time off'practices.
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8. A 2012 PERB Unfair Practice Charge, Charge No. LA-CE-778-M,which alleges D
unilateral action by the City to contract out fire services and other services
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provided by SBCPF members.
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9. The SBCPF filed these three proofs of claim: (1) a proof of claim for SBCPF
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members (Claim No. 313-1); (2) a proof of claim for former SBCPF members (as
defined above) (Claim No. 312-1); and(3) a proof of claim for the SBCPF (Claim E
No. 314-1). They are collectively referred to herein as the"Proofs of Claim." L
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10. A 2012 PERB Unfair Practice Charge, Charge No. LA-CE-792-M, which alleges =
that the City unilaterally amended Rule 511 of the Civil Service Rules and E
Regulations for the Classified Civil Service and that the City unilaterally
suspended payouts for employees' accrued leave time, sell-backs and cash outs.
11. A 2012 PERB Unfair Practice Charge, Charge No. LA-CE-807-M,which alleges
LM the City unilaterally imposed changes to the terms and conditions of Cn
employment as part of the City's Pre-Pendency Plan. c
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12. PERB Unfair Practice Charge, Charge No. LA-CE-f 1-M, which alleges that 2
the City unilaterally changed and/or modified retirement benefits without meet LL
and conferring.
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13. An adversary proceeding filed on or about April 9,2015,which is entitled SBCPF
v. City of San Bernardino, which is pending in the Bankruptcy, Case No. 6:15-ap- Y
01116-MJ("AP 16"). The plaintiffs allege, among other things,that the City Q
failed to comply with state law meet and confer requirements in connection with
the City's modifications to the terms and conditions of employment of SBCPF
members during the Bankruptcy Case. The Bankruptcy Court entered an
injunction prohibiting the City from contracting out the jobs of SBCPF members
until further order of the Court(the"Injunction").
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14. An adversary proceeding filed on or about April 10, 2015, entitled SBCPF, et al.
v. City of San Bernardino, et al., and pending in the Bankruptcy Case as Case No.
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CONFIDENTIAL SETTLEMENT DOCUMEN
6:15-ap-0 11 19-MJ("AP 19"). The plaintiffs seek damages and equitable relief
arising from, among other things, alleged: violations by the City of the Fair Labor
Standards Act(the"Post-petition FLSA Claims"),taking of property by the City
in violation of the plaintiffs' federal civil rights (42 U.S.C. §1983),and City
violations of the City Charter's overtime provisions and other state statutory laws.
This matter is pending in the Bankruptcy Court.
15. The SBCPF filed a request for allowance of administrative expenses (the
"Administrative Expense Claim").
The brief descriptions of the matters set forth above in this Recital B are used solely to identify
the matters and are not intended to be comprehensive. The City denies the allegations made
against it in the Fire Union Claims.
C. Annexation. The City and the San Bernardino County Fire Protection District .0
("County Fire District") have filed a joint application to the San Bernardino County Local
Agency Formation Commission("LAFCO")to annex the City into the County Fire District and i
its Valley Service Zone and Service Zone FP-5 so that the County Fire Department("County
Fire")will provide fire suppression and emergency medical services to the City's residents, N
replacing the current City Fire Department("Annexation"). The Annexation proposal
contemplated that, among other things:
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1. County Fire will offer employment to all current Fire Safety employees that are L
SBCPF members subject to such members passing, at the sole determination of Q
County Fire,the following: background check consisting of Life Scan, DMV; _
review of City personnel files, including review of training records and applicable E
certificates; for suppression personnel with 2 or less years of service,previous
employers will be contacted and there may be additional background including in
interviews with neighbors; and pre-employment physicals including drug tests.
2. All SBCPF members offered employment will maintain their City service dates co
for the following purposes only: (i)the County Fire District's retirement o
employee contribution, with the rate to be determined by the San Bernardino D
County Employee's Retirement Association("SBCERA"), recognizing that the
reciprocal retirement contribution rate only applies if the employee does not elect
retirement from City's retirement plan and takes all actions necessary to establish
reciprocity; (ii)participation and the level of District contribution to the Retiree E
Medical trust; and(iii)vacation accrual rates.
3. All SBCPF members offered employment by the County Fire District upon or
shortly after the Annexation Date will be offered comparable assignments at a
base salary(without incentives) and step, as effective March 1, 2016, that is
closest in pay to the City fire department salary for that position, except in
circumstances where the City salary is higher than the County Fire District's top
step for the position offered, in which case the County Fire District's top step will
( apply.
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5.F.b
CONFIDENTIAL SETTLEMENT DOCUMEN
4. On or before the completion of the (annexation)reorganization,the City may
transfer to the County Fire District the cash value of up 96 hours of sick leave and
up to 96 hours of vacation leave for each SBCPF member's accrued vacation and
sick leave balances to the extent owing, of each of the hired employees.
D. Ca1PERS Benefits. On June 9, 2014, U.S. Bankruptcy Judge Gregg Zive issued
his Mediator's Order, which contained the Interim Agreement between the City and CalPERS
regarding the City's continued participation in the CalPERS pension benefit system (the
"CalPERS Interim Agreement"). Among other things, the City agreed to ratify in full the City's
relationship with CalPERS, (b)not impair the City's obligations to CalPERS, and(c)not reject
the City's relationship with CalPERS. The Interim Agreement also provides that the City shall
repay the deferred amount owed to CalPERS in full, with interest,in 24 equal installments
as
beginning on July 1, 2014, and ending.on the earlier of June 1, 2016 or a chapter 9 plan effective
date. co
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E. The Parties wish to settle and fully and finally resolve, on the terms set forth
herein,the Fire Union Claims, including without limitation,the Prepetition Litigation,the Post-
petition Litigation,the Proofs of Claim,the Administrative Expense Claim,the Prepetition FLSA LL
Claims,the Post-petition FLSA Claims,the claims involving the City's implementation of 50-50 N
cost sharing for the member's share of the normal cost of the CalPERS pension benefit,AP 16,
AP 19,meet and confer obligations and any and all claims arising from or related to Annexation.
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NOW, THEREFORE,in consideration of the foregoing and other mutual consideration, L
the receipt and sufficiency of which are hereby acknowledged by the Parties, and intending to be a
legally bound,the City,the SBCPF and each of the other Plaintiffs hereby agree as follows: c
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1. Each of the Recitals stated above is incorporated into and made a part of this
Agreement. d
2. This Agreement shall become effective upon its execution and delivery by all of �,
the Parties hereto (such date being the"Effective Date" of this Agreement). Except with respect in
to the signature of the SBCPF,which shall be required,the City may, in its sole and absolute o
discretion, and upon written notice to the SBCPF,waive the requirement that the Agreement be D
executed by any particular Individual Plaintiff. In the event of such waiver,the Agreement shall 2
be fully enforceable as to all other signatory Parties and those persons they represent. L
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3. The terms and conditions of this Agreement, including all payments to the SBCPF E
and its present and former members contemplated herein, are contingent upon approval and
implementation of Annexation and the support of the SBCPF(and non-opposition of the
Individual Plaintiffs) in getting to Annexation. If Annexation is not implemented,this a
Agreement shall be null and void and of no effect. Assuming Annexation is implemented,the
settlements contained herein are not conditioned upon confirmation of the Chapter 9 Plan,with
the exception of distributions on the $14 million Fire Union General Unsecured Claim described
and defined below. The amount,treatment and distributions upon the Fire Union General
Unsecured Claim pursuant to this Agreement are entirely conditioned upon confirmation of the
City's Chapter 9 Plan. If the City's Bankruptcy Case is dismissed prior to the confirmation and
implementation of the Chapter 9 Plan,the agreements contained herein regarding the amount,
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5.F.b
CONFIDENTIAL SETTLEMENT DOCUMEN
treatment and distributions upon the Fire Union General Unsecured Claim shall not be effective
and shall be null and void, none of the provisions of this Agreement regarding the Fire Union
General Unsecured Claim shall be deemed admissions by any party hereto.
4. On the Effective Date,the SBCPF and the City shall execute a stipulation to lift
the Injunction in AP 16, in the form attached as Exhibit A, so that the City may implement
Annexation.
5. With the sole exception of workers compensation claims and disability claims
made by members of SBCPF against the City, the SBCPF represents that,to the best of its
knowledge,there are no matters(1)related to the terms and conditions of employment of SBCPF
members pending in any state court or any federal court, (2)unfair practice charges pending at aD
the PERB brought by the SBCPF or any SBCPF member or(3) claims by the SBCPF or any
SBCPF member against the City pending at any state agency, federal agency or other
administrative or adjudicative body, except those set forth in Recital B. °
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6. Support of Annexation and Chapter 9 Plan
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a. Upon the Effective Date of this Agreement, (a)the SBCPF agrees to publicly o
support annexation and the Individual Plaintiffs agree to not oppose Annexation,
and (b)the SBCPF and the Case No. 1119 Plaintiffs agree to (and the other
Individuals Plaintiffs agree not to oppose) a stay and standstill of all of their E
pending opposition to Annexation including, without limitation, any opposition to L
Annexation based upon meet and confer or other labor law requirements, other
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state or federal law,the City Charter, Municipal Code or Civil Service Rules =
(except that the Parties' agreement to lift the Injunction and seek Bankruptcy E
Court approval of the settlement of the Post-petition FLSA Claims shall not be
stayed or be subject to the standstill). If there is an election called under the
provisions of the Cortese-Knox-Hertzberg Local Government Reorganization.Act
of 2000 (as amended)related to the joint annexation application of the City and LM
the County of San Bernardino to LAFCO,the SBCPF agrees to campaign for(and N
the Individual Plaintiffs agree not to oppose)the approval of Annexation in the c
election.
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b. The SBCPF and all of the Individual Plaintiffs agree to support confirmation of
the City's Chapter 9 Plan and vote to accept the Chapter 9 Plan as long as the
Chapter 9 Plan is consistent with this Agreement and the City has not breached E
this Agreement. Any remaining hours of Union Time available to the SBCPF
may be utilized by designated SBCPF members prior to their employment with a
the County Fire District for the purposes of implementing this Agreement and
assisting with the transition of SBCPF members to employment with the County
Fire District. However,there will be no cash out of Union Time hours.
C. Upon annexation, if the SBCPF is able to obtain an agreement with the County
Fire District for the transfer of Union Time to the County Fire Union for use only
by recognized SBCPF Board of Directors, the City shall transfer all remaining
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CONFIDENTIAL SETTLEMENT DOCUMEN
Union Time, as remain at the time of annexation,to the County Fire District at
Fire Captain wage levels.
7. Treatment of Accrued Leave.
a. Within two business days after the effective date of Annexation(which is
expected to be July 1, 20.16) (the Annexation Date"), for employees currently
represented by the SBCPF and hired by the City prior to August 1, 2012,the City
shall cash out and pay to the employee any and all post-petition leave bank hours
accrued for vacation, sick and/or holiday leave,but the employee will be given
the option of transferring up to 48 hours of sick leave and up to 48 hours of
vacation leave(in addition to the 48/48 hours listed in subsection"b."below)to E
leave banks at the County Fire District.
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b. Within two business days after the effective date of Annexation, for employees o
represented by the SBCPF and hired by the City prior to August 1, 2012, in M
addition to the time referenced in subsection"a,"above,the City shall fund and
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transfer to the County Fire District 48 hours of sick time and 48 hours of vacation
time per employee. All leave time transferred to the County Fire District will be o
at the base rate of pay of the employee's position with the County Fire District.
C. Within two business days after the effective date of Annexation, for employees E
hired by the City after August 1, 2012, each employee represented by the SBCPF L
shall be given the option of(1) cashing out and being paid for all accrued sick
time and vacation time, (2)having their vacation and/or sick time accruals, up to a =
as
maximum of 96 hours of sick time and 96 hours of vacation time,transferred to E
the County Fire District, or(3)combining the cash-out and transfers options (with
the transfer option being up to the limits stated in option(2)). rn
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d. On February 1, 2016, and going forward until the date of annexation,the City will
maintain two time accrual banks. co
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i. The first bank will include all post-petition vacation, sick time and holiday
accruals(including any holiday leave that was frozen or unusable during
the three years prior to this Agreement). All subsequent accruals of E
vacation, sick time, and holiday accruals shall be placed in this bank. This c
bank shall be subject to subsection"a." above. E
ii. The City will create a second time bank for each employee represented by
the SBCPF, and hired b y City the Ci prior to Au a
p � gust 1, 2012, entitled
"concession leave bank."The City, will upon creation of the concession
leave bank, deposit in said bank forty-eight(48)hours of concession leave
time, but only to extent there is available leave time in the employee's
prepetition leave banks(sick and/or vacation leave). Prior to annexation,
concession leave may be used for any purpose, including but not limited to
vacation, sick leave, or family medical care issues. Concession leave time
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CONFIDENTIAL SETTLEMENT DOCUMEN
shall not be subject to subsection"a"above, and upon annexation shall
have no cash value.
Upon the creation and filling of the concession leave bank,the employees'
ability to use prepetition leave accruals shall be terminated. All prepetition
vacation and sick leave accruals that have not been used as of February 1,
2016,will be treated as General Unsecured Claims under the City's
Chapter 9 Plan. .
I 8. Within two business days after the Annexation Date, and in accordance with the
payment methodology procedures contained in paragraph 13 below,the City shall transfer to the
Trust Account(as defined in paragraph 13 below), a payment in the aggregate amount of d
$1,562,187.00 for payments to SBCPF members who were employed by the City as Fire Safety
employees on and after the Petition Date, in full settlement of the cost-sharing and other pension
related claims of the SBCPF,the other Plaintiffs and the SBCPF's current and former members, 2
as discussed above, for the period of time post-petition that such employees were employed as Z)
Fire Safety personnel. Upon the Effective Date of this Agreement,the City will reduce the
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current SBCPF's members' share of the normal cost of the CalPERS benefit to the statutory 9%
rate, effective January 1, 2016. c
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9. Within two business days after the later of the Annexation Date or December 31, c
2016, and in accordance with the payment methodology procedures contained in paragraph 13 E
below, the City shall transfer to the Trust Account a payment in the aggregate amount of a
$1,142,000.00, for payments to SBCPF members who were employed by the City as Fire Safety a
employees on and after the Petition Date, in full settlement of all claims arising in or related to
the Post-Petition Litigation(other than arising in connection with pension cost sharing, which is d
addressed in Paragraph 8, and Annexation, which is addressed in Paragraphs 7 and 10) including
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the Post-Petition FLSA Claims and the civil rights claims, and the request for payment of the Cn
Administrative Expense Claim. This settlement payment is conditioned upon the Bankruptcy
Court entering a final order approving the settlement of the Post-petition FLSA Claims. The a�
City will file a motion with the Bankruptcy Court to approve the settlement of the Post-petition c
FLSA Claims no later than 30 days after the Effective Date of this Agreement. c
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10. The City shall make two "salary comparability"payments to the Trust Account in -
accordance with the payment methodology procedures contained in paragraph 13 below, one
payment to be made within two days after the Annexation Date, and the second payment to be d
made on the first anniversary of the Annexation Date, for payments to SBCPF members who
were employed by the City as Fire Safety employees on the date of annexation. The City shall v
pay one lump sum of$1,491,000.00 for the first payment and one lump sum of$1,491,000.00 for
the second payment. The two payments shall be in full settlement of all claims of Fire Safety
employees who are SBCPF members arising in connection with the implementation of
Annexation, including,without limitation, any wage or benefit claims asserting that County Fire
pay and benefits are not comparable to that currently paid or provided by the City.
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5:F.b
CONFIDENTIAL SETTLEMENT DOCUMEN
11. General Unsecured Claim and Chapter 9 Plan.
a. The SBCPF and its current and former members shall have an aggregate allowed
General Unsecured Claim(as defined in the City's Chapter 9 Plan) in the amount
of$14 million on account of the Prepetition Litigation,the Proofs of Claim and
all other claims of the SBCPF and its current and former members,not paid in
accordance with paragraphs 7 through 10 above, including without limitation all
claims and expenses of the SBCPF and its members with respect to wages,
pensions (including implementation of cost sharing and elimination of the EPMC
benefit and certain retiree health care benefits), and other benefits and other terms
and conditions of employment that arose (or are deemed to have arisen)prior to
the Petition Date, including,without limitation, all claims arising from the City's 2
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changes to the terms and conditions of employment and the rejection of the prior N
Memorandum of Understanding(collectively,the"Fire Union General Unsecured c
Claim").
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b. The procedures for voting on the Chapter 9 Plan shall provide that the SBCPF
U.
will vote the entirety of the $14 million Fire Union General Unsecured Claim for
itself and its current and former members, subject to the approval of the N
Bankruptcy Court. The SBCPF agrees to vote the $14 million Fire Union General
Unsecured Claim to accept the Chapter 9 Plan(and this Agreement is not
intended to be a solicitation of votes to accept the Chapter 9 Plan prior to such E
Bankruptcy Court approval of the Disclosure Statement). The SBCPF shall
(i) expressly support approval of the City's Disclosure Statement and 4
confirmation of the Chapter 9 Plan as long as they are consistent with this
Agreement, and (ii) not knowingly take any actions to support efforts of other E
creditors opposing approval of the Disclosure Statement and confirmation of the
Chapter 9 Plan. This paragraph 1 Lb. is not intended to be a solicitation of votes N
for acceptance of the Chapter 9 Plan.
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C. The City shall have the discretion to include the Fire Union General Unsecured N
Claim in the class for General Unsecured Claims(currently Class 15 in the
Chapter 9 Plan) or to separately classify the Fire Union General Unsecured.Claim. D
In either event,the distribution on the Fire Union General Unsecured Claim shall
U.
be the greater of(i)the distribution on General Unsecured Claims,or(ii) one
percent(1%). The Plan currently estimates that the distribution on General a
Unsecured Claims will be approximately I%. Distributions on the Fire General
Unsecured Claim shall be paid to the Trust Account in accordance with the Y
payment methodology procedures contained in paragraph 13 below unless the a
Bankruptcy Court requires otherwise.
d. If a Chapter 9 Plan for the City is not confirmed and the City's Bankruptcy Case
is dismissed,the City's liability, if any, on account of the claims that comprise the
Fire Union General Unsecured Claim shall revive as if the Bankruptcy Case had
not been filed.
12. Reserved.
9
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5.F.b
CONFIDENTIAL SETTLEMENT DOCUMEN
13. Methodology for Payment. The methodology for payment by the City of all
funds provided for in paragraphs 8 through 11 above, shall be as follows: All such payments
shall be transferred and paid by the City to the SBCPF and placed in a Trust Account established
by the SBCPF (the"Trust Account"). The SBCPF and its board members, officers and agents
(the"SBCPF Parties") shall determine the allocation amounts and the distributions to current and
former SBCPF members from the funds in the Trust Account. The City shall provide the SBCPF
with all necessary accountings and other information in the City's possession(subject to any
privacy rights of employees or similar requirements)needed to determine the allocation and
make the distributions. The City shall not be liable to the SBCPF or its current and former
I members for the distribution of funds out of the Trust Account. The SBCPF shall indemnify and
hold the City harmless from any and all claims, demands, suits, orders,judgments or other forms
of liability that may arise out of or by reason of the actions or omissions taken by any of the
SBCPF Parties as a result of the SBCPF Parties' administration of the payments to current and
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former SBCPF members described in this paragraph(the"Indemnity"), and the SBCPF's o
members entitled to such payments hereby release the City from any claims regarding any acts or
omissions of the SBCPF Parties in respect of such payments. The City has the discretion to d
require the SBCPF to obtain or show evidence of a bond acceptable to the City in the amount of u
at least$6 million to cover the indemnity provided for in this paragraph. If the City exercises
this discretion,the City shall pay to the SBCPF a payment of$50,000.00 for the bond and N
administration of this paragraph. --
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14. Additional Working Conditions Agreements E
a. The application process for employment with the County Fire District may begin Q
as soon as February 2016. SBCPF members shall be provided a web link for
County Fire District employment applications. Training records may be reviewed d
by the County in February or March 2016 for purposes of determining special
pay. Backgrounds and physicals will likely begin only after the statutory protest
period for Annexation approval by LAFCO is concluded, which is estimated to be
in April 2016.
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b. The pre-employment physical requirement for employment with the County Fire °-
District shall not include a physical agility test. D
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C. Time employed by the City fire department, and the rank with the City fire dept., U.
shall be counted for promotions. If the SBCPF reaches an agreement with the
County Fire District, seniority based on time employed by the City fire E
department shall be used for seniority based selections and assignments after the
initial transition/annexation assignments by the County Fire District. Q
d. Retirement contributions to be paid by SBCPF members hired by the County Fire
District will be determined on an annual basis by SBCERA. The beginning rates
may range from 9%to 15.22%.
e. Personnel files. Within fifteen(15) days after the Effective Date of the
Agreement, and/or prior to any review by the County Fire District, all disciplinary
actions imposed on or before January 31,2014 and all performance evaluations
10
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5JF b
CONFIDENTIAL SETTLEMENT DOCUMEN
given on or before 2011 will be purged from the personnel files. Each SBCPF
member will be provided a copy of his/her personnel file that will be forwarded to
the County Fire District.
f. The City agrees that in the event any SBCPF member is not hired by the County
as a result of the failure to pass a physical examination, with the exception of a
drug test,the City shall apply to CalPERS on the member's behalf for a disability
retirement. Any certification for either a non-industrial or industrial disability
retirement must be consistent with the requirements of the Public Employees'
Retirement Law Government Code § 21150 et seq. (("PERL"), shall be based
upon competent medical evidence, and, any industrial causation issues may be
submitted to the Workers' Compensation Appeals Board for determination in as
accordance with the PERL. The City reserves the right to contest employee in
applications for disability retirement that are not compliant with the PERL. If any c
employee is not hired by the County Fire District,this Agreement in no waives or 'c
releases said employee's rights related to that hiring decision. D
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g. Historical Items. The City agrees to transfer certain historical items to the SBCPF
for the sole purpose of preserving and maintain the historical significance of the
San Bernardino City Fire Department. As conditions to such transfer,the City and
the SBCPF shall inventory the items transferred and any transfer must be E
completed in compliance with applicable laws for the transfer of public property.
The SBCPF agrees to work with the County Fire District to display the items.
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h. Provisions for addressing employees who are on temporary disability leave E
(Labor Code § 4850 time) and the responsibility for pre-existing medical
conditions have been addressed by the City and the County Fire District in the cn
Plan of Service.
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15. Upon the occurrence of the Annexation Date, members of the SBCPF shall be Cn
I allowed to keep: 1)their SBFD Badge, 2)their SBFD Helmet and Shield, and 3) SBFD Turnout c
Jacket.
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16. The City will make the CaIPERS Interim Agreement part of its Chapter 9 Plan LL
and perform its obligations thereunder, including obligations due in respect of unfunded
liabilities. £
17. Except for the rights and obligations under this Agreement, on the date that the Q
City makes the last payment, and the funds become available for distribution,required under
paragraphs 8 through 11 hereof(the"Last Payment Date"), the SBCPF for itself and its current
and former members (with respect to its members to the fullest extent permitted under applicable
law), and each of the Individual Plaintiffs, for good and valuable consideration,the receipt and
sufficiency of which are hereby acknowledged, do hereby fully, finally and forever release the
City and its current and former officers, agents,management personnel, consultants, advisors,
insurers,reinsurers, attorneys, accountants and other representatives (including without
limitation, Mayor Carey Davis,the Common Council,Allen Parker, Stradling Yocca Carlson&
Packetpg.239.,
CONFIDENTIAL SETTLEMENT DOCUMEN
Rauth,P.C., Law Office of Linda L. Daube and Linda Daube, Management Partners and Urban
Futures), from any and all claims, actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds,bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages,judgments, setoffs,recoupments, attorney's fees,
awards, executions, and demands whatsoever, whether based on federal, state, local, statutory or
common law or any other law,rule or regulation, including both known and unknown claims,
that have been or could have been asserted in any forum by or on behalf of the SBCPF,the
SBCPF's current and former members, and the Individual Plaintiffs arising from or relating to
the subject matter of the Fire Union Claims,the Fire Union General Unsecured Claim,the
Prepetition Litigation,the Post-petition Litigation,the Proofs of Claim, and the Administrative
Expense Claim, the Prepetition FLSA Claims,the Post-petition FLSA Claims, the claims E
involving the City's implementation of 50-50 cost sharing for the member's share of the normal ;
cost of the CalPERS pension benefit,AP 16,AP 19, and any and all claims arising from or in
related to Annexation,whether in law or in equity, upon or by reason of any matter, cause or o
thing whatsoever from the beginning of time through the Last Payment Date(individually and .r_
collectively the "Released Claims"). The SBCPF further agrees that it will not initiate any new
litigation, charges or complaints based on past or current claims that may be in existence as of U_
the effective date of this Agreement.
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18. With respect to the release of the Released Claims provided for in paragraph 17
immediately above,the releasing parties stipulate and agree that upon the Last Payment Date,
they shall have expressly waived the provisions, rights, and benefits of California Civil Code E
Section 1542, or any other similar state law, federal law, or principle of common law, which may
have the effect of limiting the releases set forth above. Section 1542 of the California Civil Code Q
provides: c
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR co
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR a
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR. Cn
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19. Notwithstanding anything to the contrary in the Agreement,the Released Claims
shall not include a claim for enforcement of this Agreement. In addition,the release of claims
provided for in the Agreement, including in paragraphs 17 and 18 above, shall not apply to any Y
SBCPF member's workers compensation or disability claim against the City.
20. The Parties agree to a general standstill and continuing stay of all Pre-petition and
Post-Petition Litigation until the Last Payment Date(except with respect to the lifting of the
Injunction and approval of the Post-petition FLSA Claims settlement) and shall so inform the
Bankruptcy Court;provided, however,that AP 16 shall be dismissed with prejudice upon the
Annexation Date. Within two weeks after the Last Payment Date,the Plaintiffs,including the
SBCPF and the Individual Plaintiffs, as applicable, shall file with the respective state and federal
courts and the PERB and other regulatory and administrative bodies in which the Fire Union
Claims are pending, executed dismissals, stipulations of dismissal or requests for dismissal as the
applicable rules may require, in each case with prejudice. From the Effective Date through the
Last Payment Date,the SBCPF (for itself and its current members) and the other Plaintiffs
12
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CONFIDENTIAL SETTLEMENT DOCUMEN
hereby covenant not to sue to enforce any of the claims included in the definition of Released
Claims,provided,however, that such covenant not to sue shall not diminish the right of the
SBCPF to sue to enforce this Agreement.
21. Each Party to the Agreement represents and warrants that it has the power and
authority to enter into the Agreement and to carry out its obligations hereunder. Each Party to
the Agreement further represents and warrants that he/it has not assigned, encumbered,
hypothecated, or transferred any of the claims released by such Party hereunder.
22. Each Party to the Agreement represents and warrants that prior to executing the
Agreement,he/it has made such inquiries, consulted such persons, and reviewed such documents
as it deemed appropriate to enter into this Agreement and to consummate the transactions
contemplated herein.
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23. Each Party acknowledges that he/it has been represented by counsel and has °-
received independent legal advice regarding the negotiation and execution of the Agreement. D
Each Party agrees that any rule of interpretation or construction to the effect that ambiguities are
to be resolved against the drafting party shall not be employed in the interpretation, construction
or enforcement of the Agreement.
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24. The interpretation, construction, and performance of this Agreement, and the
rights and remedies of the Parties hereunder, shall be governed by the provisions of the E
Bankruptcy Code and,where not inconsistent, the laws of the State of California,without regard L
to principles of conflicts of laws.
25. Each Party hereto consents to the exclusive jurisdiction of the Bankruptcy Court
as to any litigation or dispute that arises from or relates to the Agreement or any breach thereof.
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26. Nothing in the Agreement or any negotiations or proceedings in connection
therewith shall constitute or be deemed or claimed to be evidence of an admission of any liability
by any Party, or of the merit or lack of merit of any claim or defense of any Party. All is
communications(whether oral or in writing) between and/or among the Parties,their counsel o
and/or their respective representatives relating to, concerning or in connection with this C
Agreement, or the matters covered herein, shall be governed and protected in accordance with
Federal Rule of Evidence 408 to the fullest extent permitted by law. U_
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27. Each Party agrees to cooperate fully and execute any and all necessary E
supplementary documents and to take all additional steps or actions that may be necessary or
appropriate in order to give full force and effect to the terms and intent of the Agreement. a
28. The headings contained in the Agreement are inserted for convenience only and
shall not affect the interpretation of the Agreement.
29. The Agreement may be executed in one or more counterparts, each of which shall
be deemed an original,but which together shall constitute one and the same instrument.
Facsimile signatures and e-mail shall be treated in all manner and respects as original signatures.
13
Packet Pg_241
S.F.b
CONFIDENTIAL SETTLEMENT DOCUMEN
30. Right to Seek Reasonable Attorney's Fees and Costs. Each of the Parties shall
bear their own costs associated with the negotiation, implementation and enforcement of this
Agreement,provided,however,that in the event that the SBCPF or the City brings an action to
enforce this Agreement,then the prevailing Party in any such enforcement action shall be
entitled to seek reasonable attorney's fees and related costs;provided further,however,that if the
City or SBCPF brings an enforcement action, it shall not be entitled to prevailing party attorney's
fees unless it gave the other party 30-days prior written notice of its intent to bring the action and
an opportunity to cure during that 30-day notice period before bringing the action.
I 31. The Agreement sets forth the entire agreement between the Parties regarding the c
subject matter covered herein, and supersedes any and all prior oral or written communications d
between the Parties regarding the subject matter covered herein. The Agreement may not be
modified or amended except in writing signed by each Party.
32. The Agreement shall be binding upon, and inure to the benefit of all Parties and °-
their respective successors and assigns. The Agreement is not intended, and shall not be
construed,to create rights in or confer benefits on any other persons or entities and there shall LL
not be any third-party beneficiaries hereto except as expressly provided hereby.
33. All demands, notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent via facsimile (with
confirmation), sent by electronic mail,mailed by registered or certified mail (return receipt E
requested) or delivered by an express courier(with confirmation)to the following addresses or L
such other addresses as the Parties may designate in accordance herewith:
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If to the City:
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Gary D. Saenz, City Attorney N
300 North"D" STREET, Sixth Floor
San Bernardino, CA 92418
Telephone: (909) 384-5355 y
Facsimile: (909) 384-5238 c
E-mail: saenz_ga@sbcity.org
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Paul R.Glassman, Esq.
Fred Neufeld,Esq.
Stradling Yocca Carlson& Rauth, P.C.
100 Wilshire Blvd., 4th Floor
Santa Monica, CA 90401
Telephone: (424)214-7000
Facsimile: (424)214-7010
E-mail:pglassman@sycr.com
fneufeld @sycr.com
and
14
Packet Pg.242
S.F.b
CONFIDENTIAL SETTLEMENT DOCUMENt
Linda Daube, Esq.
LAW OFFICE OF LINDA L. DAUBE
438 First Street,4th Floor
Santa Rosa, California 95401
Office: (707) 578-9530
Business Cell: (707)249-0189
Facsimile: (707) 578-9534
Email: Idaube@daubelaw.com
If to the SBCPF and other Plaintiffs:
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Corey W. Glave
Attorney at Law N
1042 2nd Street c
Hermosa Beach, California 90254 D
Telephone: 323.547-0472
SBCPFattomey @gmail.com
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and
David M. Goodrich
SulmeyerKupetz
A Professional Corporation
333 South Hope Street, Thirty-Fifth Floor r
Los Angeles, CA 90071
Voice: 213.626.2311
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Fax: 213.629.4520 N
E-Mail: doodrich @sulmeyerlaw.com -_
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34. After Annexation is implemented,the City will continue to recognize the SBCPF c
as the bargaining agent for the former City employees that are or were SBCPF members,but D
solely for the purpose of implementation and enforcement of this Agreement. °_'
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35. The City shall not reject this Agreement in the Bankruptcy Case or any
subsequent bankruptcy case, and the City's obligations hereunder may not be discharged E
pursuant to the claims discharge provisions of the Bankruptcy Code.
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Packet Pg:243
CONFIDENTIAL SETTLEMENT DOCUMEN 5.F.b
IN WITNESS THEREOF, the Parties hereto have caused this Agreement to be duly executed.
Dated: January 2016 City of San Bernardino
By:
Mayor of City of San Bernardino
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Dated: January 2016 San Bernardino City Professional Firefighters, Local 891
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Dated: January 2016 By:
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CONFIDENTIAL SETTLEMENT DOCUMEN
Dated: January U, 2016 By:
Richard L 'ne
Dated: January 2016 By:
Steve Tracy ^`
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Dated: Januarys 2016 By: °" E
Kenneth Konior z
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Dated: January_, 2016 By:
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Dated: January_, 2016 By:
Michael Bush
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Dated: January 2016 By: E
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Dated: January ',2016 By:_
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' Dated: January_,2016 By:
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Dated. January___, 2016 By;
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