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September 22, 2019

9/12/2019 7:29:00 AM
Council learns budget transfer will be needed to pay legal bill
Guild survives another vote to suspend

Heather Schaefer
Associate Editor

The Rhinelander Common Council on Monday tabled payment of a $42,735 bill from the von Briesen & Roper law firm after acting city attorney Hector de la Mora of von Briesen explained that a budget transfer will be required before the bill can be paid.

"Members of the council, I learned this afternoon that your budget for legal expenditures for this year may not be adequate to cover the most current invoice from our firm," de la Mora said. "Under Wisconsin State Stat. 65.90 (5) (A) you should not proceed with this item until you have considered a budget amendment. So I recommend you table this matter."

After hearing de la Mora's explanation, alderman Steve Sauer immediately made a motion to table the payment of the bill.

During discussion on the motion, alderperson Dawn Rog suggested two other von Briesen bills, one for approximately $33,000 and another in the amount of approximately $2,500 should come back to council as part of the budget amendment.

"All three of those bills (the invoices for $42,732, $33,000 and $2,500) will have to be brough back to council so Wendi (Bixby, city finance director) can properly put together an amendment for a budget transfer," she said.

Rog then asked Bixby if the money to cover the von Briesen bills will have to come from the city's general fund.

"I would think so," Bixby responded.

Bixby went on to explain that she has prepared a check payable to von Briesen to cover the $33,000 invoice but has not mailed it out, pending resolution of the funding issue. That check could be voided, if necessary, she added.

In response to additional questions, Bixby explained that a total of $30,000 was budgeted for common council legal fees in 2019, up from approximately $18,000 in 2018. However, as of Monday's meeting, "with the $33,000 that I have sitting locked up, the year to date, if that were to be processed, the year to date is $63,000. So we are already over budget by $33,652 if I issue that check."

This prompted even more questions, starting with Sauer who wanted to know if the $33,000 bill (which was for von Briesen's investigation of multiple personnel investigations including allegations of a hostile work environment in public works and a declaration of no confidence in the city administrator) would have to come out of the council's legal budget.

"All of that would not necessarily come out of the council budget, would it?" he asked.

Bixby responded with a question.

"Where would it come out of?" she asked.

At that point, Sauer suggested the funds could potentially come out of the water budget.

"They have legal fees set aside," he said. "Is that, is that, is that, I guess I'm just curious, as this was an employment issue, why would it be coming out of council and council alone."

"I guess I don't know who initiated the investigation," Bixby responded. "I didn't look at it as is being water or a utility or a wastewater expense."

In the run-up to the council's decision to hire von Briesen to handle the personnel investigations, some council members questioned how the city would pay the firm's fees, given the amount budgeted for the year. Those concerns were largely dismissed by the majority of the council.

It is unclear from which area of the budget the council will get the money to cover the existing von Briesen bills, as well as any additional legal fees accumulated through the end of the year. The city is actively searching for a new city attorney. In a special meeting ahead of the regular meeting, the council met with a city attorney candidate but no action was taken.

The von Briesen firm has been serving as acting city attorney since the council terminated its relationship with former city attorney Carrie Miljevich at the end of May.

Ultimately, wherever the money comes from, as Rog explained it, the council will have to tell the public, in the form of the budget amendment, how it will cover these costs.

"This is state statute, we cannot spend money we did not budget for," Rog explained. "Can we pay this bill? We can pay this bill. But the problem is, by state statute, we have to have a budget transfer to tell the public how we're spending money..."

Frederickson ended the discussion with this statement.

"Quite often things come up out of budget and you have to look for other possibilities. So that's the next job is to look for a budget amendment where it would come from based on our policies of how we pay for things," he said. "To make sure it's clear for our gallery, for our people, our constituents, we need to be as transparent as possible when it comes to taking care of these issues."

The budget amendment is expected to be discussed at a future meeting.

On a related note, de la Mora advised the council that the city's insurance carrier, Cities and Villages Mutual Insurance Company (CIVMIC) will defend the city with respect to a walking quorum lawsuit filed in July. The mayor and the four aldermen sued in that matter are to await notification of assignment of counsel, de la Mora said.

"Perhaps at some point in future, the council has a whole may want to meet with the attorney assigned by the insurance carrier," he added.

The attorney offered the update while the council was considering an agenda item recommending the removal of the walking quorum charges from city costs.

(The River News has alleged that a Jan. 30 letter - signed by aldermen David Holt, Ryan Rossing, Steve Sauer and Andrew Larson and mayor Chris Frederickson - constituted an illegal walking quorum, and Heather Holmes of The Times has filed a verified complaint to that effect in circuit court.)

The letter was prompted by city council president George Kirby's refusal to participate in the Jan. 28 council meeting in an attempt to call attention to city administrator Daniel Guild's purchase of $13,000 in office equipment.

After de la Mora finished speaking, Holt made a motion to table the agenda item indefinitely on the grounds it would be "incredibly irresponsible" for the council to continue to discuss the lawsuit in open session.

"I feel continued discussion in open session about this raises the risk of liability to the city," Holt said. Despite his concerns about open discussion of the lawsuit, as the debate continued Holt decided to delve into his personal motives in signing the letter at the heart of the controversy.

"The oath I took was to protect the city through my service on the city council which was precisely my motive when I signed that letter and hand-delivered it to George (Kirby)," Holt said. "I was trying to establish a level of professionalism and dignity to this council by not adjudicating our dirty laundry in the press."

Holt's motion failed after Rossing abstained. A motion to table a particular item "indefinitely" requires five affirmative votes. Holt, Sauer and Larson, all of whom are parties to the walking quorum lawsuit, voted to table indefinitely. Alderpersons Lee Emmer and Tom Kelly joined Rog and Kirby in voting no. Rossing's abstention, which came after he admitted he wasn't sure how to vote on the matter, denied the mayor, who is also a party to the lawsuit, an opportunity to break the tie.

Guild survives suspension vote

The council spent just under one hour in closed session Monday. A performance evaluation of Guild was on the agenda for the closed portion of the meeting, however it's unclear if an evaluation took place. At certain points during the closed session, loud voices coming from the council's private chambers could be heard in the gallery. When the group returned to open session, Rog announced she had made a motion to suspend Guild with pay.

The motion failed as the council broke on familiar lines. As they did when an identical motion was made in March, alderpersons Sauer, Holt, Rossing and Larson stood behind Guild. Rog, Emmer, Kirby and Kelly repeated their votes from March in favor of suspension. Once again, Frederickson broke the tie and the motion failed.

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