Fresno city officials agreed Thursday to pay $1.3 million to the family of an unarmed man killed by police in October 2009 as well as make key changes to department policies involving officer-involved shootings.

The agreement ends a legal battle with the family of Steven Anthony Vargas, who was killed by Sgt. Mike Palomino. A federal jury last month found that Palomino used excessive and unreasonable force in the incident.

"This is hard for our family to go through, and we're thankful that it's over," Julia Enriquez, Vargas' widow, 32, said at a City Hall news conference.

Fresno Police Chief Jerry Dyer, who spoke at the same news conference, said, "I do respect the verdict of the jury. That is the system in which we live by."

A six-man, two-woman jury deliberated for the better part of two days before unanimously finding that the city was liable for Vargas' death. He was shot eight times by Palomino as Vargas sat in an SUV after crashing it into a van parked in an East McKinley Avenue driveway.

The same jury, however, cleared Dyer of any responsibility in the Vargas shooting.

Jurors also were unable to reach any verdict on a wrongful-death claim against Dyer, Palomino and the city.

The cash-strapped city is self-insured. The $1.3 million Vargas settlement -- which was approved Thursday in closed session by the Fresno City Council -- will come from that self-insurance pool.

If the two sides had been unable to reach a settlement, jurors were scheduled to return Jan. 18 to hear more testimony during a second phase of the trial, which would have decided how much money the Vargas family should receive.

It is unclear exactly how the $1.3 million settlement will be divided, and court documents give conflicting information.

One suggests that Vargas' widow, Julia Enriquez, and his mother, Jane Vargas, will each receive $375,000 from the settlement, though in another Arturo Gonzalez -- who represented the Vargas family -- says Enriquez will get $250,000.

Other court documents indicate Enriquez's five children will receive a total of $262,500. As part of the agreement, the money will be placed in trust funds.

During a morning hearing in federal court, U.S District Judge Anthony W. Ishii also agreed to allow Enriquez to take $250 per child per year for school clothes and supplies.

Based on court documents filed by Gonzalez, legal fees will total $375,000. Gonzalez wrote that he could have sought more than $1 million, but asked for less "so that our clients can receive compensation for the loss of their loved one."

Gonzalez could not be reached late Thursday to discuss the court documents. At the Thursday news conference, he focused on the policy changes coming to the police department.

Before the trial started, Gonzalez had vowed "to put the entire police department on trial." During testimony, he brought up several incidents to prove his contention that Fresno police had engaged in a pattern of unjustified shootings.

"We thought that there were just too many shootings in Fresno," Gonzalez said at the news conference. "We're hopeful that these policy changes will help change that."

Under the policy changes, Fresno police will make a "good-faith effort" to complete all officer-involved shooting investigations within one year. If the investigation is not finished within six months, a high-ranking Fresno officer will personally give a status update to the family of the person shot by police.

Dyer said he would do a better job of giving feedback to officers involved in a shooting, and vowed to continue "critically important" training efforts so officers "do not under react or overreact, but react appropriately."

Dyer also said the city is committed to having a police auditor. The Office of Independent Review was closed last summer in a budget-cutting move, but City Manager Mark Scott has said that he and Mayor Ashley Swearengin plan to restore the office in the next budget.

Neither Scott nor Swearengin were at Thursday's news conference.

Dyer, who was the only city official to speak, made a point of backing his department.

"I am not aware of a single police officer that has the desire to take the life of a human being, nor do I believe that Sgt. Palomino had the desire to take the life of Mr. Vargas," he said.

"Having said that, though, there were some very valuable lessons to be learned from this trial, and I want to make a promise to members of this community and to the department that we will put those lessons to good use within our department."

Dyer had requested to meet privately with Enriquez and Jane Vargas, and that happened after the news conference.

Said Dyer: "There were a lot of tears shed -- on both sides."