There are so many perils in dealing with claims against local governments. The law is against you from the start by cutting the statute of limitations and in the end by often limiting the amount of your recovery. Then there is the pain that comes from dealing with claims adjusters for the state who often seem to have no interest in what the trial value of a case may be.
This case highlights a final concern: getting approval from the local municipality, or whoever else, for settlement authority. It is like dealing with an insurance company times 1,000. Here, everyone agrees the case should settle… except the municipality.