Nearly $200,000 in city legal bills remain unpaid after the Rhinelander Common Council on Monday rejected city administrator Daniel Guild's recommendations for payment and processing of the outstanding invoices.
A motion to follow Guild's suggestions for clearing the outstanding bills failed on a 4-3 vote.
According to the resolution outlining the recommendations, the city has accumulated several outstanding invoices from the law firm of von Briesen & Roper S.C. as well as an invoice from another law firm, Kasdorf, Lewis & Swietlik S.C., related to work regarding a claim made by former public works director Tim Kingman against the city. The council fired Kingman on June 24.
According to the council's agenda, the unpaid bills total $199,140.01.
In the resolution, Guild outlined a proposed "course of action" regarding paying off the bills and balancing the budget.
The proposal included the following four bullet points:
Pay attorney expenses for Von Briesen for Invoice #29447 for $33,904.82, Invoice #294152 for $42,735, Invoice #294153 for $2,597.50, Invoice #297587 for $456.70, Invoice #297588 for $24,505.01, Invoice #297589 for $3,602.50, Invoice #297590 for $78,269.54, Invoice #297591 for $5,050.84, for a grand total of $114,482.09 and authorize an additional $50,000 in anticipated expenses.
Pay legal expenses for Kasdorf (Attorney Tom Cabush) services for work regarding Kingman v. City of Rhinelander Claim No PRO00103831 in the amount of $8,018.10 and authorize the administrator to continue to make payment on these claims until the $17,500 CIVMIC deductible is met.
Endorse City Administrator plans to account for these extra expenses with the following strategy, redirecting unspent revenues related to staffing vacancies resulting from the City's separations (Ashlea Olson, Lukas Linzmeyer (sic), Amanda Young, Stephanie Rajnicek, Tim Kingman, Bill Keast, Aaron Domokos, Don Oettinger, Mike Belgram, Brad Vick and Josh Paetow), applying extra revenues from the collection of Cable Franchise Fees, direct 1/2 of the Salary of the Administrator to the Water/Sewer utility budgets due to extra work in these areas resulting from staff vacancies, potentially applying extra monies from the Worker's Compensation Fund.
In conjunction with the Finance Director, present a FY2019 budget amendment, revising the budget and rebalancing departments which exceeded their initial and preliminary to enable to close out the City with a balanced FY2019 budget, which preserves FY2020 expenditure restraint compliance, subject to Common Council approval, no later than the scheduled Council meeting of December 9, 2019.
As the discussion began, alderman Lee Emmer requested a clarification.
"First of all, I want to clarify what this actually is a vehicle to do," he said. "Is this document supposed to be paying the legal fees right now and then do an amendment to the budget later? Is that what we're trying to do here?"
Mayor Chris Frederickson turned to Guild who answered in the affirmative.
"There are multiple categories and funds which the legal bills could be assigned to, given the various topics that they touch on that are relevant to those various departments," Guild explained. "Before we go through and spend the time to put all those things together, we think it's advantageous to first get the blessing of the council, since there's been a number of questions about billing, that we can go ahead and pay the bills and then we'd like to then respond by showing the various allocations into the various departments and we think this will enable us to look at how the year is ending, look at unspent funds, unspent revenues that were anticipated in 2019 and use those as part of the plan that's laid out in the resolution towards completing the payment."
Emmer expressed concerns about the amount of "unspent revenues related to staffing vacancies" noting that earlier in the meeting Rhinelander Police Chief Lloyd Gauthier announced that new officers had been hired to replace officers Linsmeyer and Young. He also questioned whether the city will have extra revenues from the collection of the cable franchise fee.
"To me this looks like, to quote something (fire chief) Terry (Williams) said a few weeks ago, this looks like the city budget equivalent of putting your furniture out on the curb and hoping it magically disappears," Emmer said.
Alderperson Dawn Rog had reservations about paying invoices the council has not seen.
"We have invoices on here that have never been presented to the council," she said, asserting that for a number of the invoices on the list the council received only an invoice number and an amount due but no detail as to the work done.
"I think this is poorly done," she said.
Guild explained that some staff vacancies were intentionally left unfilled and that the city has seen greater than expected revenue in certain areas. As a result, there are funds that can be reassigned to cover the bills.
"There's a way to pay for these bills," he said. "The city has the money on hand. There's several different ways this could go. We're really not sure how to proceed until we have some direction from the council. Because neither Wendi (Bixby, city finance director) or I, or anybody, wants to just sit there and spin their wheels on something when it's really not about achieving the solution but perhaps perpetuating the problem. That's my statement."
Emmer continued to push for a specific plan, rather than a list of potential options of where the money could come from, and suggested proceeding with a budget amendment rather than the resolution.
"I think this thing's a wish and prayer right now," he said. "There's too many things that are just nebulous on here and I agree with Dawn, we haven't seen (the bills). All you're telling us is that you have these invoices for this amount of money and I, for one, don't know what they're for and they're big (bills)."
Alderman Steve Sauer spoke in support of the resolution.
"I think, quite honestly, reading this resolution, it would be irresponsible of us to kick this can down the road," he said. "It lays out guidelines for where the administrator and finance director plan on looking for the money and where they plan on making the budget amendment. It does not say they have permission to make the amendment. It has a date laid out of when the budget amendment will be made. It has a road map to get to that budget amendment."
The council then engaged in a back and forth with new city attorney Steve Sorenson over the question of whether a two-thirds vote, as well as a Class I legal notice, would be required.
"The question is are you changing your budget or are you simply reallocating funds in your budget," Sorenson explained.
Alderman David Holt interjected to say he believes this action would constitute a reallocation, as the tax levy would not be affected, however Rog continued to express reservations.
"I wouldn't want these bills to be paid only to find out later that that was not legal to do," she said.
Later in the discussion she added, "We don't pay the bills first. We don't send the checks out and then figure out how to pay the bills."
"David (Holt) says he thinks it's a reallocation," Emmer noted. "That's exactly what he said. He thinks but he doesn't know for sure. What I say is let's know for sure before we get in a spot..."
As the debate continued, alderman Ryan Rossing asked Bixby for input.
"Is there a way to do this without this resolution?" he asked the finance director.
"I recommend doing a budget amendment and then paying the bills, but I don't have complete control over the timing of getting the budget amendment to you," she responded.
When the question was called, Rossing joined Rog, Emmer and Tom Kelly in voting no. Sauer, Holt and alderman Andrew Larson voted in favor. Council president George Kirby was absent.
The von Briesen firm served as acting city attorney from June 1 until Sept. 24, when the council hired Sorenson as its new city attorney. The firm stepped in to provide temporary legal services after the council terminated its relationship with former city attorney Carrie Miljevich at the end of May.
Heather Schaefer may be reached at email@example.com.
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