The city’s insurance claim in the case against its former parks and recreation director, Jim Ash, is for $213,214.
During its Feb. 21 meeting, the Common Council voted 8-0 to process that claim with Liberty Mutual Insurance, the city’s carrier. Aldermen Jim Boyer and Paul Lehman were absent.
Since the city has a $1,000 deductible, the check it receives from Liberty Mutual will be for $212,214.
On Monday, Feb. 27, City Administrator Henry Veleker said Mayor Brian Smith will sign the paperwork this week. It will then be mailed, with the city expecting to receive the check in about 30 days.
Ash was Waupaca’s parks and recreation director for 20 years. He resigned from the position in May 2010.
On April 21, 2011, he entered a plea of no contest to felony theft after being accused of stealing almost $150,000 from the city, from April 15, 2005 until his resignation a little more than five years later.
Last June, he was sentenced to three years in prison.
The funds were channeled through the Waupaca Recreation Association Participants account, which was not a city account.
For purposes of the insurance claim, the city looked at 10 year’s worth of records – from 2000 to 2010.
Veleker said the city chose that amount of time, because it wanted to go back far enough to maximize the coverage limit of its insurance, which is $250,000.
The city hoped to receive $250,000 from the insurance claim.
In the months city officials worked with the insurance company, the fraud amount the company accepted as the amount Ash stole during that 10-year period was $287.760, City Treasurer Jean Peterson said.
However, there was a limit on the coverage, she said.
During that 10-year time period, the city had two different insurance policies.
The first policy, which ran through June 30, 2006, had a $100,000 fraud policy.
From then on, the city’s policy has been with Liberty Mutual Insurance, and the fraud policy with that carrier is for $250,000.
Veleker said that when Liberty Mutual Insurance began covering the city, it absorbed responsibility for the claims from that earlier time period.
The incidents of fraud that happened prior to 2006 thus fell under the previous fraud policy of $100,000.
Smith said, “For those years, they gave us the $100,000 maximum.”
Liberty Mutual Insurance Company’s offer for 2006 to 2010 was $113,214. The current $250,000 fraud policy applies to that amount.
Because the city had hoped for a $250,000 settlement, the 2012 city budget that the Common Council approved last fall included $125,000 from the expected insurance settlement.
The mayor said $125,000 of the $212,214 the city is set to receive will go into this year’s city budget. The remainder – $87,214.30 – will be for the city’s 2013 budget.
Veleker said Liberty Mutual brought in a third-party forensics accountant to analyze the data.
“They helped in trying to maximize what the city could get on the claim,” he said.
Detailed transactions had to be provided.
“We had to give them everything,” Peterson said.
For each written check, the forensics accountant wanted to see both the front and the back of it.
Some of the data was on microfiche, and in cases when writing could not be read, those documents were not allowed for the purposes of the claim, Veleker said.