Missoula’s mayor and City Council angrily defended the transparency of the city’s takeover of Mountain Water Co. Monday night against a councilman’s continued allegations that legal costs are being hidden.
Mayor John Engen said the city’s legal bills for the successful – but protracted – court fight total $9.1 million, and reminded Councilman Jesse Ramos that each of those invoices has been approved in public by the full council.
Yes, the total has far exceeded the original estimate, Engen said, but that’s because of “a remarkably adversarial opponent who, it turned out, lost in court” but along the way “did everything possible to make the cost of acquisition as expensive as possible.”
Ramos, however, wants the individual, line-item charges released to the public – documents that include details of the legal team’s ongoing strategy and are protected by attorney-client privilege under the city’s interpretation.
Until the attorneys’ hourly rates and a detailed accounting of their fees for specific tasks are made public, Ramos has pledged to vote “no” on paying every invoice from Boone Karlberg law firm. On Monday, he also reiterated his unhappiness that the law firm’s attorneys and their spouses and staff “donated tremendous amounts of money” to the mayor’s 2017 reelection campaign.
On Tuesday, Ramos repeated his assertions, albeit in a slightly more conciliatory tone.
“Sometimes when questioning power, it is easy to offend,” Ramos said. “That is not my intention. My intention is to answer the calls of my constituents who are asking to see these bills and to uphold Section 2, Article 9 of the Montana Constitution, which I swore an oath to preserve, protect and defend.
“I am looking forward to further discussions as to why these detailed legal expenditures don’t fall under the Constitution.”
The ongoing attack, which began last year during Ramos’ run for City Council, drew sharp rebukes during the portion of Monday night’s meeting reserved for council members’ comments.
The mayor said he would prefer that the full content of the lawyers’ bills be made public, “but there is a long tradition around privilege and there are some very compelling legal reasons why some of that information isn’t available today.”
However, the dollar amounts paid to the city’s attorneys have never been a secret, Engen said, and have been read aloud, published online and approved by City Council members at Monday night meetings dating back to 2014.
“At some point, Mr. Ramos, you are welcome to have a direct conversation with me about the legal bills,” the mayor chided, rather than engaging in email exchanges, Facebook chats and smack-downs during public meetings. “I’m readily available.”
Ward 5 Councilwoman Stacie Anderson said Ramos’ ongoing allegations are troubling in that they seek to erode the public’s confidence in local government and call into question the honesty and ethics of council members like herself who took an oath of office to uphold the Constitution.
“I ran for office because I still believe, despite everything, that public service is a noble endeavor,” Anderson said. “I am troubled that so many people showed up to this meeting tonight believing there was some malfeasance happening with public funds and that myself and 10 other council members are letting this happen. I am troubled that there are those who are willing to mislead the public for personal vendetta and political gain.”
Anderson repeatedly emphasized that “there is no conspiracy afoot” and that there are “no sides” to the issue. “There are simply facts and reason,” she said.
Missoula residents’ property taxes do not pay the legal bills associated with the city’s eminent domain case against Mountain Water and subsequent takeover of the utility.
Those costs are paid out of an “enterprise account” which is fed by local water bills, Anderson said and other council members reiterated. The city has not raised water bills since taking over the company and has pledged not to do so for at least three years.
In fact, Anderson said, Missoula Water has embarked on an aggressive campaign to upgrade the water system after years of neglect by Mountain Water.
“Let me assure you, there is nothing fishy going on here,” she said. “There is ongoing litigation and we do not want to jeopardize that litigation.”
Mountain Water is still contesting some of the legal issues. For example, the former utility has asked District Court to order the Montana Department of Revenue to refund more than $5.2 million in property taxes paid by the company after 2014, and to cover all attorney fees incurred in its lawsuit with the state. The city is fighting that request along the DOR.
Council president Bryan Von Lossberg said he and Ward 2 Councilman Jordan Hess have been on the council since the earliest days of the effort to make Missoula’s water system public. Since Sept. 5, 2014, the council has been updated on the effort – by the mayor, attorneys and city staff members – at least every other week. And every Monday night, the City Council approves the payment of all city bills, with dollar figures attached to each charge.
“Those meetings, the review of those expenditures, that is the literal definition of accountability,” Von Lossberg said. “To insinuate that we have not been doing that would be irresponsible, is the kindest way I could describe it, and I take it very personally.”
“There has been nothing hidden about those costs,” he said. “I have zero problem looking any citizen in this community in the eye and being completely confident about the city and the council’s role and accountability and transparency.”
Ward 3 Councilwoman Gwen Jones, an attorney, tried to explain why legal invoices are covered under the attorney-client privilege. Those invoices, she said, list in detail what each lawyer did and include specifics of research, interviews, the exploration of various legal theories, research into various possible motions, exploratory calls and the like.
“Litigation is built on strategy and information, and all that is revealed on your bill,” Jones said. “There is no way that will ever be made public, in that sense. The nature of litigation is you don’t show your cards.”
Jones also reminded the audience and Ramos’ supporters that “we won.” Mountain Water is now Missoula Water, and the city is no longer the only major Montana municipality that doesn’t own its public water system.
“Boone Karlberg did a great job,” she said. “They broke new legal ground here in Montana. We won.”
Four Ramos supporters attended Monday night’s council meeting and made brief remarks during the public comment portion of the agenda, all calling for release of the detailed invoices associated with the condemnation case.
Susan Reneau asked the City Council and mayor to “release all information about the goings-on of the legal case and the cost of the legal case with Mountain Water,” saying the public deserves to know “how much it cost.”
“As a taxpayer living in the city of Missoula, I also would like to know the cost of anything that goes on in the city,” she said. “As a property owner, I just want complete transparency. I don’t want anything left as a secret. I would also like to have a balanced budget, and I would like to know where the money goes.”
Missoula Republican Party leader Vondene Kopetski told Engen and council members that they “owe it to the taxpayers to be transparent.”
“I’m at a loss to understand why that information is not forthcoming,” she said. “If you don’t have anything to hide, why hide it?”
The full cost of litigating the Mountain Water takeover has been publicly available throughout the last three years. As of Monday night, by the mayor’s report, those legal costs total $9,163,724.54.
“All the legal bills were approved by the City Council over the last three years,” the mayor said, lamenting the fact that the critics left the meeting before the designated time for mayoral and council comments. “The totals of those bills have been on the claims report at every council meeting. And all are available online, as are all expenses incurred by the city of Missoula.”
Any citizen who needs help finding those charges and expenditures need only ask city staff members for help and the information will be provided, Engen said.
State Rep. Mike Hopkins, the Republican representative from House District 92, also asked why the detailed information isn’t being provided, particularly to Ramos. Hopkins said he always receives “every piece of information” before deciding how to vote on issues that come before the Legislature.
Again, the mayor said that, as a council member, Ramos has been offered the opportunity to scrutinize the detailed legal invoices and to meet with Engen and/or the legal team to go over the bills.
But Ramos also has been asked to sign a non-disclosure agreement before viewing the documents, so that the attorney-client privilege is not violated. He has refused to sign.
At Monday’s meeting, Ramos confirmed that he has been offered a chance to see the bills. But he said that he has asked to meet with Engen and went to meet with Boone Karlberg’s attorneys “and was given the run-around.”
“It feels like a Michael Cohen situation, having to sign an NDA,” Ramos said.
On Tuesday, Ramos said he does want to work with the mayor “to get this issue resolved in a timely manner, as I have been working on this issue since January, when I was sworn into office.”
He said he is “on the side of the city in the litigation” and doesn’t want the city “to have to pay out addition monies to the Carlyle Group. I am simply doing what I believe is right and it’s not always easy. But I wasn’t elected to an easy position and I cannot vote on approving public funds for expenditures that I don’t have a full detail of, such as an hourly rate and why the work they are performing is necessary to the public good.”