Bulletin file photoFormer Prineville Police Chief Eric Bush

The city of Prineville will pay former Police Chief Eric Bush $666,701 plus attorney’s fees and other costs to drop the lawsuit he filed against the city after he was fired in July.

Bush was hired as an officer with the Prineville department in 1990 and appointed chief in 2003. In September 2013, Bush was put on paid administrative leave, and after a 10-month investigation by an outside group hired by the city to look into alleged misconduct, he was fired July 15.

Hours after the announcement of his termination, Bush filed a suit seeking $2.5 million from the city, then-interim chief Capt. Michael Boyd and the Local Government Personnel Institute, the group hired by the city to investigate the allegations against Bush.

With Wednesday’s settlement, Bush will drop all legal action involving the city and Boyd, who retired from the city just more than a month after the suit was filed. Bush’s attorney, Roxanne Farra, of Bend, said the settlement is the maximum under state law that a city government can be required to pay in such a suit.

Farra said Bush will continue to pursue the suit against the Local Government Personnel Institute.

The suit against LGPI will continue in Crook County Circuit Court, she said, with a judge from an outside county presiding.

The investigative report released by the city after Bush’s termination indicated city officials suspected Bush of falsifying his hours worked and misusing office computers for personal matters and tasks related to his duties as a brigadier general with the Oregon Army National Guard.

The suit filed by Bush claimed inconsistencies in his working hours could be easily explained and suggested Bush had been targeted for termination because of his service with the Guard, as referred to in a statement issued by Farra on Thursday.

“No amount of money will be able to compensate Mr. Bush and his family for the personal and professional upheaval the City of Prineville has caused, particularly in light of his decades long service to the City, and the fact that the City’s unlawful actions were taken because of his service to our Country,” read Farra’s statement.

Prineville City Manager Steve Forrester did not return a call seeking comment on the settlement Thursday morning, but the city issued a news release early Thursday afternoon.

The release, unsigned but emailed by city recorder Lisa Morgan to The Bulletin and other news outlets, stated that the city’s insurance company and attorneys hired by the insurance company recommended the settlement. The insurance company will pay the full amount of the settlement.

“The City was prepared to defend itself and its position in a court of law, but the City had little choice but to follow the recommendation of the City’s insurance carrier and agree to this course of action,” read the release.

“On the advice of our attorneys, we are not going to comment on Mr. Bush, the investigation into his conduct, the termination of his employment as police chief, or the now resolved litigation.”

Prineville paid Bush nearly $128,000 in wages and benefits while he was on leave and spent nearly $50,000 conducting the investigation with LGPI. Since terminating Bush, Prineville has hired former Deschutes County Sheriff Les Stiles to serve as interim chief.

A separate investigation into Bush undertaken by the Oregon Department of Justice was dropped in August for lack of evidence.

Bush did not return a call seeking comment on Thursday.

— Reporter: 541-383-0387, shammers@bendbulletin.com