Attorneys in a litigation between the Belfair Water District in Washington and a former employee have agreed to a contract mediation set to precede the trial. This mediation was mandated by the Mason County Superior Court in an attempt to resolve the dispute before a trial date is set on September 6, 2012. The dispute is regarding the District's attempt to annul Dave Tipton's contract.

Why Civil Mediation Was Invoked In this Case

In the event that Tipton was fired, his contract required the district to pay him three-years' severance pay. If he quit, the district would have to pay him two years' severance. Tipton's yearly salary was about $72,000. So the district would have to pay him $216,000 if they fired him, and $144,000 if he quit.

According to Brian Sonntag, the Washington State Auditor, this severance would put the district at risk of inoperability if he chose to leave or if he was fired. Tipton was fired on March 30, 2012, and so is at this point entitled to $216,000 in severance. However, this issue is entirely negotiable, should both sides be willing to make concessions in mediation.

The Difficulty for the District in Mediation Services

At the moment, the Belfair Water District's financial records are in extreme disarray. There is also not an organized record of why certain connections have different surcharges than others, or even what these surcharges are being spent on. The district hired financial consultant David W. Finlay from the FCS Group to help organize their records.

This disorganization, if unattended, could seriously damage the district's position in the mediation. Accounting for everything can strengthen their position and enable negotiations to allow for more wiggle room in the contract mediation.