Josh Dulaney, Staff Writer
Posted: 07/10/2011 07:03:03 AM PDT

SAN BERNARDINO – The city should fork over a chunk of money to a private investigator who said he was shortchanged after he billed the city for his efforts to sniff out allegations of police misconduct, an arbitrator has determined.

Private investigator William Schneid ought to be paid $18,875 on top of the $22,000 the city already paid him for his work, according to the arbitrator’s nonbinding ruling in San Bernardino Superior Court, documents obtained by The Sun.

The work included looking into allegations that a police sergeant illegally detained suspects and theft of Police Department funds.

Schneid filed a lawsuit last year alleging the city breached an oral contract and owed him nearly $39,000 for his services.

Police Chief Keith Kilmer hired Schneid in June 2009 to examine problems in the Police Department. The hire came one month after Kilmer started his job as the city’s top cop, and when police personnel alerted Kilmer to their concerns about how prior internal investigations had been conducted.

There was no written contract between Schneid and Kilmer, and the City Council did not authorize payment for Schneid’s investigation.

However, the arbitrator found that there was indeed an oral contract between Schneid and the city.

The city has said Kilmer revised Schneid’s invoice before submitting it, and that Schneid agreed to remove items from his bill.

San Bernardino policy requires council approval on expenditures of $25,000 or more.

The City Attorney’s Office has said department heads do not have the authority to enter into a contract for more than $25,000 without approval by the council, and anyone who contracts with the city is charged with knowledge of the limitation of authority of its officers and agents.

The city doesn’t accept the arbitrator’s ruling, and has filed a motion to go to trial over the matter, said City Attorney James F. Penman.

“You can’t have someone come along to do a job, then extort the city for more money,” Penman said.

He said the city can’t afford to get a reputation for settling disputes to avoid trials, because that would encourage more people to file lawsuits.

According to the arbitrator’s findings, the problem occurred when “Kilmer approached Schneid and being friends, they did not discuss scope of work and fees.”

The arbitrator found that “politics and media” also were factors in the handling of the matter, and combined with Kilmer’s failure to disclose the limit of his spending authority to $25,000, led Schneid “into believing that Kilmer had the authority to hire him for the investigation.”

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