The MSB’s hidden (and very high) costs of hiring outside counsel

Hired Gun

In 2016, the Matanuska-Susitna Borough Assembly amended the Borough Code with regard to the power and duties of the MSB Attorney.

MSB Ordinance 16-045 Attorney

Important changes included:  Making it clear that the MSB Attorney will not perform any legal work for the Mat-Su Borough School District (the MSBSD now officially has to use its own resources; the MSBSD generally contracts with a law firm in Anchorage – so just FYI in case folks thought that the MSB Legal Budget also included the costs of defending the School District in cases – it does NOT – and defending Special Ed and Liability lawsuits is expensive!); and GIVING THE MSB ATTORNEY the power to hire and manage outside counsel (and negotiate these private attorney and law firms’ contracts/fees) as he deems necessary without having to seek the Assembly’s approval (so long as the total costs fit within the already appropriated budget – more on the ballooning budget in a minute.)

These changes to the Code have made it so that what the MSB pays out in outside legal fees is now secret or hidden.  These issues no longer have to come up in a public Assembly meeting. Before, the MSB Assembly had to approve all outside legal contracts.

At the same time, the MSB’s budget for the legal dept started to skyrocket.  Look below – tucked into the Law Division’s budget are now hundreds of thousands of dollars for “Legal” and “Professional fees.”

The MSB Attorney’s office has four attorneys and support staff and we already have budgeted a LOT of money for their salaries and benefits, etc.

These “other” Legal and Professional fees expenses are separate from what we are paying our MSB legal staff.  These are the fees we are paying for hired guns.  And the MSB tends to hire very expensive contract attorneys.

Scan_20180107

The MSB Atty hires “outside counsel” for almost all big cases the MSB is involved in.  This is costing us a fortune.

Here are some examples:

The EMS/PERS cases – Richey v. MSB and Evanston Insurance Co. v. MSB:

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Richey v. MSB: This is the case that a group of MSB EMS and Firefighters filed against the MSB re: not being allowed to participate in the PERS retirement system.  The MSB hired the big law firm Perkins Coie to represent them.  The case started out in State court but moved to federal court.  The MSB ended up settling the case and paying 160K to the Plaintiffs.  The MSB also paid the plaintiffs’ attorney fees of 89K. The MSB has not released how much we paid for our attorney’s fees but if the other side’s fees were 89K, ours were at least that much too and probably more.  

Evanston Ins. Co. v. MSB:  The MSB incurred $195,713.75 in (additional) legal fees in this related case.  It is the insurance case related to the Richey case.  It was filed in Anchorage federal District Court in 2014 and concluded in 2016.  Perkins Coie also represented the MSB in this case. The case settled (the parties stipulated to a dismissal) and the MSB filed a motion for (a portion of our) attorney’s fees from Evanston. The court denied the MSB’s request. So, the MSB was stuck paying Perkin Coie the almost 200K.  

So, all told, for this mess of litigation, the MSB paid out at least 500K and maybe closer to 600K.  $160K was the settlement money and the rest was for attorney’s fees. 

Below are pages from the MSB’s motion for atty’s fees which discloses that Perkins Coie was paid almost 200K by the MSB.

Cook Inlet Keeper case (the Environmental groups vs. the Army Corps of Engineers and the MSB re: whether we could build the Rail Spur to the Port:

Atty Fees Main N.S.

The MSB ultimately prevailed and we were given permission to built the rail spur. (Well, it is not quite finished! At all. WE are just $120 million short but that is another story.)

In the above document, the MSB Attorney explains why he is seeking attorney fees from the Plaintiff Cook InletKeeper.

Important Note:  See paragraph 3 “Although the Borough and Alaska Railroad Corporation were jointly represented in this matter, we agreed that the Borough would pay all attorney’s fees.”

Now, the MSB was only seeking a portion of their attorney’s fees.  (Our motion was denied so we ended up paying all of our own attorney fees in the end anyhow.)

Let’s analyze what our attorney fees were:

Exhibit A shows we spent $49,764.50 on one issue – the Opposition to Plaintiffs’ Prelim injunction motion and the oral argument.

Exhibit B shows we spent an additional $32,458.80 for our work Opposing the Plaintiffs’ Motion for Summary Judgment.

So, add these two figures up and the total is $83,223.30.

Important Note:  Look at the hourly rates for the contracted attorneys!

But I do not think this represents the total legal fees the MSB spent on this case.  Why? The case dragged on for a couple of years and if you analyze the legal bills below, they only cover a few months’ time. So, I theorize that our total legal bills for this case were a lot more. Hopefully, the MSB will respond to my Public Records requests and we will find out.

Atty Exhibit A

Atty Exhibit B

Atty fees opposition

Federal Transit Administration – Ferry Fiasco Negotiation:

The MSB hired the very expensive Wash DC law firm Venable LLP to help them beg the FTA not to make us pay back the ferry $$$.

How much are we paying Venable LLP?  The MSB has not disclosed this.

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Other (pending) State cases:

3PA-17-1009 CI is an Estate vs. the Mat Su medical Center and the MSB EMS. So this is our case but the MSB hired atty Peter Gamache out of Anchorage to represent us.

3PA-15-00090 CI involves the MSB v. Charles Aldenan and Alaska Guest Tours and 3.08 acres. MSB is the plaintiff but we hired Bruce Falconer to represent us. Mr. Falconer is the managing partner of the Anchorage law firm Boyd, Chandler and Falconer.

We have also hired Bruce Falconer to represent us in other cases including: 3PA-15-01623 CI; 3PA-15-1453 CI; and 3PA-12-01305 CI…I have not finished searching.  He specializes in real estate and condemnation and ROW cases…Why can’t our in house attorneys handle these types of cases???

Bruce Falconer apparently is representing us in all of the land condemnation litigation for the Rail Spur project.

Complaint for Condemnation

Interesting – we deposited 10K and then another 310K (as our estimated “just compensation” to reimburse the land owners) with the court as part of the case.

Condemnation Case Notice of Supplemental Deposit

How much are we paying attorneys Peter Gamache and Bruce Falconer?

The MSB has not disclosed this.

We hire outside counsel to help us with other legal matters too.

Union Contract negotiations:

The MSB hired the very expensive Anchorage law firm Perkins Coie to handle the current Union Contract Negotiations. Perkin Coie Attorney Daniele Ryman assisted at a Special closed door meeting on Dec 19th. (This was just to discuss strategy; I am sure we are paying her to handle the actual negotiations too. How much? The MSB has not disclosed this.)

 

We are hiring a consultant to help re-write the Zoning Code:

18-061P: TITLE 17 ZONING CODE REORGANIZATION
Issue Date:
November 13, 2017 12:00 pm

Sealed Proposal Due:
December 12, 2017 04:00 pm
Proposal Description: The Matanuska-Susitna Borough (MSB) is requesting proposals from qualified firms for the reorganization of the Borough Zoning Code (Title 17). The MSB Title 17 is currently undergoing a reorganization update. This project will produce a reorganized MSB Title 17 (Proposed MSB Title 30) for better integration of land use regulations as the MSB continues to grow. It is the intent of this RFP to acquire Subject Matter Expert(s) (SME) in land use code regulations to assist the MSB Planning & Land Use Director to complete a draft of Proposed MSB Title 30 for review and recommended adoption by the MSB Assembly.
18-061P Solicitation Document (pdf 595.77 KB) | 16 hits

We are hiring Real Estate expert to help us draft Real Estate Documents:

17-006P: Real Estate Acquisition Services
Issue Date:
June 20, 2016 08:10 am

Sealed Proposal Due:
July 12, 2016 02:15 pm

Proposal Description: The Matanuska-Susitna Borough is soliciting proposals for inspection, negotiation, document preparation and closing assistance of property the Matanuska-Susitna Borough intends to acquire rights to or purchase.
17-006P, RFP Documents (pdf 161.93 KB) | 2 hits

 

 

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