The city of Colorado Springs will pay out about $9.2 million in settlements surrounding three unrelated lawsuits that, coincidentally, are being resolved around the same time.

The biggest settlement, $8 million, stems from lawsuits the city’s former transit operator filed in 2010 over the termination of a contract. On Tuesday, Colorado Springs City Council OK’d an emergency ordinance to approve the expenditure to settle the suit with First Fleet/First Transit.

The trial was scheduled to begin Tuesday, City Attorney Chris Melcher said, but the court gave a one-day continuance so council could act. The settlement is tentative, and needs approval from the court, he said.

“Well, I’m not overly excited about passing an emergency ordinance to the tune of $8 million, but from my understanding it is our best option,” said City Councilwoman Brandy Williams.

Melcher said the case goes back to 2006, when the city manager and council approved a contract with First Fleet/First Transit to operate the municipal bus service and hire its drivers. But in 2009, when the city fell on hard financial times and a ballot issue to increase taxes failed, council didn’t appropriate funds to pay for the contract, and ended up terminating it.

Almost immediately, First Fleet/First Transit filed four lawsuits against the city in state and federal courts. One, involving vacation and sick leave for the bus drivers, was settled several months ago for $227,000, Melcher said. The $8 million settlement, if approved, would resolve most of the other disputed claims, he said.

The city has denied it has an obligation in the matter, Melcher said. But officials believed it was in the city’s best interest to settle “to avoid the risks inherent in the litigation and to further preserve the general fund balance,” according to a news release from the city.

In the other cases:

• With a payment of $995,000, the city will settle a case brought by former Memorial Hospital bondholders who sued because the city paid off the tax-exempt bonds seven years early.

Three of four Memorial bonds were paid off in October, using proceeds from the lease of Memorial Hospital to University of Colorado Health. Wells Fargo and eight mutual funds argued that the city didn’t have the right to pay off the bonds early, and argued that they were owed $14 million in interest that would have been due between October and Dec. 15, 2019.

Both parties agreed to settle without any admission of liability or wrongdoing, and the suit was dismissed, Melcher said.

Even with the early payoff, the city still comes out ahead, Melcher said. The early payoff saved the city $20 million, and the settlement will eat up only about $1 million.

• The city settled a federal civil rights lawsuit filed by fired city employee Terri Velasquez for $250,000.

“The parties mutually agreed that a final settlement would be in the best interest of both parties allowing them to move forward along separate paths,” the city said Tuesday in a news release. “There was no admission of any wrongdoing or liability on the part of the City.”

The city refused to provide a copy of the settlement agreement with Velasquez, who alleged gender and age discrimination, among other allegations.

“The City Attorney’s Office is reviewing your request, and will determine whether CORA permits release of the agreement,” City Attorney Chris Melcher said in an email, referring to the Colorado Open Records Act.

“At this time, the preliminary determination is that the document is confidential, concerns a personnel matter, and may not be released under CORA. We will have a more detailed response tomorrow,” he said.

Velasquez’s attorney, Bill Finger, said he couldn’t discuss the settlement terms.

“My client signed off on the document in mid-March, and the city finally signed off on the document on April 1,” Finger said.

Velasquez is now working as deputy finance director for the city of Aurora, he said.

“Terri is glad to have the matter resolved and move forward with her life,” Finger said. “She has another job, likes what she’s doing and enjoys the people she works for. She’s appreciated.”

Colorado Springs City Hall Photo by The Gazette file