The Kenai Peninsula Borough Assembly on Tuesday June 20th, made changes to Borough code that will strengthen protections for borough employees and define how public officials can be held accountable for inappropriate behavior.
Recent events have revealed a need to update and consolidate code provisions concerning surety bonds, defense and indemnification, protections from certain conduct, and liability for certain conduct.
Borough Mayor Peter Micciche spoke on the ordinance 2023-12;
“If you remember when we brought the harassment, bullying and discrimination ordinance to you well, I’m sorry, the new policy was not an ordinance, it was an internal policy. We told you that there were some gaps, those gaps would come forward in ordinance, this is that ordinance.”
Kenai Peninsula Borough Attorney Sean Kelly described the changes to the ordinance;
“So, sections one through five of the ordinance repeal current code and KB Chapter 234 related to sections that are five different sections regarding indemnity and when an employee’s conduct would be indemnified and when conduct may not be indemnified. And so one thing with this ordinance was we moved that to under our personnel code because it seemed to fit better there and made it into just one section of Borough code. And that is section 11 of the ordinance which would add a new section of Borough code which is KPB 304235. Overarching theme is that an employee that performs their duties, performs acts or conduct that are within the scope and course of their duties, then those acts and that conduct would be covered by the borough for any potential losses that may arise from that and the borough would indemnify those losses and hold harmless employer public official and take up their defense in any financial court actions that arose from such actions. And then, the other side of that coin is that for an employee that acts outside of the scope and course of their duties, then that conduct would not be covered by the borough. Indemnifying, holding harmless or defending their employee, and in fact the employee may be subject to personal liability for conduct that is outside the scope and course of their employment duties or for a public official is outside the course and scope of a public officials duties.”
This ordinance which was approved unanimously by the borough assembly, includes a new section of code, similar to a provision in Alaska Statutes, providing protection to employees from certain conduct.
Borough or school district officials or employees who act outside the course or scope of their official duties and powers, or intentionally commit illegal acts, may be subject to personal liability.
The changes, deletions, or additions to Borough Code make it clear that the Borough will have a duty to defend, indemnify, and hold harmless officials or employees acting within the course or scope of their official duties and powers.
This ordinance amends Borough Code as follows;
Section 1 through Section 5 of the Ordinance repeals five sections of KPB Chapter 2.34 relating• to defense and indemnification.
Intent: The repealed language is reworked into a single defense and indemnification section, as set forth in Section 11 of the Ordinance, and moved under KPB Chapter 3.04 relating to personnel. The coverage of Borough and School District employees remains the same; the Borough will defend, indemnify; and hold harmless acts or omissions that are within a public official or employee’s scope or course of duties. Acts that are not within an. individual’s course or scope of duties will not be indemnified.
Section 6 of the Ordinance adds new section of Borough Code relating to Surety Bonds.
Intent: These changes will require bonds for the faithful performance of the principal’s (the elected official or employee) official duties. The list of bonded employees will be subject to annual approval by the Assembly.
Section 7 of the Ordinance repeals KPB 2.34.170 relating to Public Official’s and employee dishonest bonds.
Intent: A claim against the Public Official’s Bond for Mayor Pierce was denied by the surety due to their determination that Borough Code only required a fidelity bond and that was the intent of the bond that was issued. While the Borough disagrees with this determination and intends to appeal the decision, the changes to Borough Code relating to bonding are meant to address this conflict and will plainly state that bonds for the mayor and other elected officials or employees as designated by the Assembly will obligate the faithful performance of official duties.
Section 8 of the Ordinance repeals and replaces KPB 3.04.040 relating to Equal Opportunity employment and nondiscrimination.
Intent: This section repeals the current code section title “Nondiscrimination” and replaces it with an updated equal opportunity employer section to better mirror requirements under federal law. The section codifies current employment practices and will ensure continued compliance with requirements related to federal grant funds.
Section 9 of the Ordinance adds a new section of Borough Code, at KPB 3.04.225, relating to protection against certain conduct.
Intent: This section is derived from AS 39.26.010 relating to “State employees protection against certain conduct”. This section differs slightly from the State statue in that it includes protection from unlawful harassment, threatening or retaliatory behavior or initiating unwanted physical contact. It also includes protection from such behavior from members of the public or a Borough contractor while conducting business on borough contracts, or within or using Borough facilities.
Section 10 of the Ordinance repeals and replaces KPB 3.04.230 relating to “Legal Liability-Conduct.”
Intent: Current code only provides that an employee acting “outside of the scope of employment or working within the scope of employment but acting in a grossly negligent manner” may be denied legal support. The new code language addresses when an elected or appointed official, former or current employee’s conduct may subject the individual to personal liability. An individual who acts outside the scope of employment, commits an intentional tort, or is grossly negligent may be help personally liable for such conduct.
Section 11 of the Ordinance adds a new section of Borough Code, KPB 3.04.235, relating to defense and indemnification of elected or appointed officials and former or current employees.
Intent: Generally, acts or omissions within the course or scope of duties are covered and acts or omissions outside the course or scope of duties may not be covered. The section enumerates six situations where Brough would not have a duty to defend, indemnify or hold harmless. This section provides a clear criterion for requesting indemnification and a decision-making process. This section provides that the Borough has the sole authority to handle and settle a claim where the borough is indemnifying an official or employee and that individual will incur no personal liability. This section also clarifies that a duty to defend or indemnify does not waive governmental immunity defenses and does not waive potential subrogation claims. It is also noted that State statute provides a specific indemnification section for school district personnel. This section should not conflict with State Statute but to the extent it does, State law will control.