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Strapped City - Oakdale’s Excessive Legal Fees A Financial Burden

POSTED May 1, 2012 10:23 p.m.

With city coffers being slashed and worker lay-offs on the horizon, the City of Oakdale finds itself using much needed funds to pay legal fees by outside legal firms hired to defend the city.

These costs are in addition to the annual salary of City Attorney Tom Hallinan.

In a breakdown of 2010 and 2011 legal costs to the city The Leader obtained through the city manager’s office, the City of Oakdale paid over $350,000 to two different law firms it retained during the two-year period.

The majority of the billings, $247,501, were for disputes and actions brought though the public works department. Next highest was the police department whose 2-year invoices were only $60,000 – less than a quarter of the public works liability.

According to Interim City Manager Gregory Wellman, these figures do not include any payouts or settlements from the actions brought against the city.

Wellman said that from his experience, generally it’s the police department of a city that has the highest percentage of legal expenses.

This would be due to the nature of the work and the likelihood of claims for use of force issues, false arrest claims, emergency responses, damage to property, and administrative issues because of the greater number of employees.

Only three lawsuits were listed on the summary of legal costs by outside firms. All three were due to city employee-filed actions against Oakdale.

One action was filed by a police officer for a legal cost to the city of approximately $16,000 and one other was filed by a building inspector at a cost of $25,000 for attorney services.

The biggest billing matter was over $180,000 due to a lawsuit filed by former public works employee William Moffit.
Moffit was an African American public works employee who sued the city claiming constructive discharge after having been threatened with guns in the workplace and subject to racial slurs, even by supervisors.

The case was settled without going to trial. According to those within the city, the settlement amount paid to Moffit was in the mid six-figure range.

Other significant billing matters include EEOC complaints, hostile work environment claims, and other “personnel matters” within the community development and public works departments.

Wellman sees the high outside legal expenses diminishing with increased oversight and accountability by the directors of the departments.

Wellman indicated that the city is without any insurance coverage and basically is “self-insured” when it comes to legal matters.

“That (self-insured) is the last place you want to be,” said Wellman.

Wellman, who has been guiding governmental agencies in some capacity since 1976, suggested the city look into a pooled liability through agencies such as the Central San Joaquin Valley Risk Management Authority or California Delete - Merge UpAffiliated Risk Management Authorities.

These organizations have cities of less than 75,000 population pool funds for cost-effective self-insurance, risk sharing and risk management programs.

“I want to point out that I’m only here until July,” Wellman said. “Whoever comes in will have to continue to watch these things.”

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