The problem is your source of information, which is misleading and meant to inflame - to get more clicks. You got duped. Makes me suspect you'd vote for Trump?
What really happened is the city council received an expert opinion from their city lawyer to accept a settlement offer (for "nuisance" value), which their insurer was urging the city to accept. The issue was that once the insurer tells the city to accept a settlement offer, if they refuse to accept and lose the law suit, then the city will be on the hook potentially for the whole amount.
Do you want your elected officials to rely upon the legal advice they receive from their paid lawyer - or to ignore his advice, take the risk and just proceed with the lawsuit? If they win that lawsuit, that's great, but, what if they lose? Now you have an elected official who ignored expert opinion which recommended to settle a law suit for $75,000 and instead the city is on the hook for $5 million. I think that would cause more outrage (and bankrupt the city) then the real story here, which is that city officials settled a law suit as advised to do so by their legal counsel. But who would click on that headline?