The details of the settlement were released after the City Council approved the agreement in closed session Tuesday night.
The city’s insurance carriers will pay Sgt. Neil Harvey in exchange for releasing any legal claims against the city, including a $2-million amended judgment in the case, according to the agreement.
Newport Beach will pay Harvey $950,000 in cash and $500,000 in a structured settlement, according to documents released Tuesday night.
As part of the settlement, Harvey and the city have settled personnel issues related to the lawsuit in a confidential agreement, the details of which will not be disclosed.
At trial, witnesses testified false rumors swirled within the Newport Beach Police Department that Harvey was gay and HIV positive.
Harvey won a $1.2-million judgment against the city in March, and was later awarded legal fees.
A 27-year veteran of the department, Harvey, 49, continues to work as a Newport Beach police officer.
In other business, the council on Tuesday night took the first steps toward raising water rates for the first time in four years.
Under the proposed plan, Newport Beach residents would see the cost of 100 cubic feet of water increase $1 over the next five years, or from $2.08 to $3.08 in 2014.
Notices will be sent out to all of the city’s water customers, who will have 45 days to protest the rate increases.
Under state law, at least 51% of the city’s water customers would have to protest to stop Newport Beach from raising the price of water.
