Auburn Councilmembers agreed Monday to settle a lawsuit the City filed last spring against an Auburn company over a $37,485 bill it had wracked up for off-duty police services in 2008.

“We’ll be settling for $25,000 on this bill,” Councilmember Nancy Backus said of the agreement between the City and Glacier Water, LLC.

Backus said the settlement allows the company to make a $15,000 initial payment and two $5,000 payments. But if Glacier should default, Backus said, the City could take it to court and collect the full amount.

The City of Auburn allows police officers to perform extra off-duty work courtesy of an agreement with the Police Officers Guild, charging a predetermined rate agreed on between it and the guild. The rate covers the officer’s hourly rate benefits and a small administrative charge to the City for billing.

Councilmember Virginia Haugen cast the lone no vote against the settlement.

“Generally, we discuss lawsuits in (closed door) executive session,” Haugen said. “Was there ever an executive session to discuss this with Councilmembers?”

“No, there was not on this one here,” responded City Attorney Dan Heid. “This was a settlement proposal that they had actually offered to the City.”

Haugen then took aim at the contract, which in accordance with procedures in place at the time was oral, not written.

“I have a little problem that these guys were allowed to run up almost a $37,500 bill without any kind of a legal contract,” Haugen said. “I recognize after speaking with the City attorney earlier that we have changed that now, and absolutely our police officers do have a legal contract with the people that we provide services for. But I am astounded that this happened. And I am concerned that if we have to go to court, we’ll lose.”

“That’s not a very good comment to make in the interest of the City,” said Mayor Pete Lewis. “However, since there is case law, we know we are standing on firm ground. But the problem was found, it was corrected, procedures have been put into place and checks have been put in place to ensure that it will not happen again.”

Glacier LLC contacted the City in the summer of 2008 to hire off-duty police officers to provide security at its 15th Street, facility. Glacier paid the first billed amount, $742.50 on Aug. 8 2008, then stopped paying altogether. The City notified the company numerous times and finally stopped services on Oct. 24, 2008.

The City filed suit on March 15, 2010.