Crow Wing County Board: Board to hire lawyer in budget lawsuit

The Crow Wing County Board will hire an outside attorney to represent its interests in a lawsuit it faces from Crow Wing County Attorney Don Ryan.

The board Friday met in emergency session to pass a resolution authorizing the expenditure. County Administrator Tim Houle said the session was necessary due to the time limit within which the county board must respond to the lawsuit.

Ryan, who was elected county attorney in 1994, is suing the board over his 2017 budget proposal, alleging funds the board approved are not reasonable for the duties required of his office.

Ryan's budget submission would have resulted in a budget increase for the county attorney's office of $189,410. Assuming no other changes were made to the county's budget, this would have been a .38 percent increase in the county's overall property tax levy over 2016. Instead, the county board passed a property tax levy with reductions for the seventh straight year.

The value of Ryan's budget request that was not approved amounts to .21 percent of the county's $83.27 million budget.

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Video from Crow Wing County Board of Commissioners Emergency Meeting

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Attorney, legal fees discussed

Houle on Friday asked the resolution be broad and not name a specific attorney, although he said he'd spoken with attorney Scott Anderson of Rupp, Anderson, Squires and Waldspurger P.A. in Minneapolis. A biography of Anderson on the firm's website notes Anderson is a senior litigator with 28 years of experience, and his primary client base is counties.

"He has direct experience in this field and has a decent track record, I think, of producing results," Houle said. "I think we know him to be a professional and aggressive, straight-shooting kind of an attorney. I think he would be a good fit for us."

Houle said Anderson has been involved with 20 cases of this nature. Of those, 16 were settled outside the courtroom, and Anderson won three of the four that went to trial, Houle said.

Houle said Anderson's rate is $185 per hour and the cost of defending the county would depend on how long the litigation takes. In past cases, cases settled cost between $10,000 and $15,000, Houle said, and if it goes to trial, the county could expect an additional $10,000 to $15,000 in legal fees. This does not count the legal fees associated with Ryan's legal representation, for which the county will also be responsible.

The legal cost associated with the appeal was one reason Ryan cited for seeking a resolution with the board, prior to involving outside counsel.

"I do not believe it is in the best interest of the citizens of Crow Wing County to incur such costs," Ryan wrote in a Dec. 27 letter to the board. "Consequently, I am available if the board of commissioners are interested in negotiating an amicable resolution prior to incurring outside counsel expenses."

In a Jan. 3 letter signed by Chairman Doug Houge responding to Ryan's appeal and letter, Houge said the board was "greatly disappointed" in Ryan's decision.

"What we are in agreement about is that it is an unnecessary expense for the general public to bear the costs of attorney fees to resolve this issue; we regret that you have placed us in the position of needing to do so," the letter stated. "We will, of course, vigorously defend the sound basis for the decision we rendered."

Commissioners opine on appeal

Four of the five county commissioners used Friday's meeting to share their views on the lawsuit they face, which comes on the heels of the seventh straight year of reductions to the property tax levy. This accomplishment was possible, commissioners said, because of the work of county departments to find efficiencies and reduce budget expenditures.

"I'm elected by the people and we're all elected by the people to be in charge of the purse strings for the county and make those decisions," said Commissioner Paul Koering. "He's actually suing all the citizens of Crow Wing County, and what a sad day that is when that happens. If it gets to the point where a judge makes the decision on how the county tax dollars are spent, that truly is a sad day, because that's why people go and vote."

Koering said as a "farm boy from down by St. Mathias," he had to look up the meanings of the words "arbitrary" and "capricious." Ryan's appeal alleged the board's actions were "arbitrary, capricious, oppressive or in unreasonable disregard for the responsibilities and duties of the office of the county attorney, and the county attorney's experience, qualifications and performance."

"It means when you've made the wrong decision," Koering said. "I know that I haven't made the wrong decision. We've asked all the other departments in this organization called the county-the highway department, land services, community services-we've asked them all to chip in to try to be more efficient on government, to try to do a better job. And everybody has come forward except this one office. And then when you don't get your way, now I'm going to sue. And unfortunately that's the way society has gotten."

The department with the largest budget decrease this year was the highway department, reducing its levy by $1.2 million. This reduction was offset in part by the passage of a local option sales tax by the county board in late 2015. Revenues collected by the countywide half-cent tax fund county road and bridge improvements.

The sales tax revenue was expected to chip away at a funding gap the county experiences each year in the highway department, reported County Engineer Tim Bray when the tax was under consideration. That gap, Bray said, led to the annual maintenance deferment of nearly 160 miles of paved county roads, and 15 percent of those roads are in poor or very poor condition according to internal measures.

With the $1.2 million reduction in 2017, the department still faces a shortfall of about $1.4 million annually in funding compared to the needs of the system, Bray's calculations presented in March 2016 showed.

Bray said with an estimated $10,000-$15,000 spent each year on taxable items, a household could expect to spend an additional $50-$75 annually through the sales tax.

During Friday's meeting, Franzen also focused on the "arbitrary and capricious" characterization with her comments.

"I don't think that this is at all arbitrary," Franzen said. "It is supported by logic. We gave it a lot of thought. We have been on a path for the last seven years of reduced levy and trying to pay off the debt of Crow Wing County. This is what we're asking everyone to do, and I just believe we are doing the right thing."

The language used by Ryan in his appeal is not his own-the phrase was lifted directly from the state statute governing Ryan's right to sue the board as an elected official himself. Appointed department heads, such as those in the highway and community services departments, do not have that option.

Koering said county residents on fixed incomes depended on the board to be responsible in its taxing authority, referencing Commissioner Rosemary Franzen's mother, who is 93 years old and continues to live in her home.

"If we don't try as a body to try to hold taxes down and hold the size of government, these people are the ones that are hurting," Koering said. "So she's 93 years old, does she go and get a job now? To help and pay her property taxes because people don't want to control the size of government? ... Sometimes you've just got to stand up for what's right, and I know in my heart that I'm doing the right thing. And I'm going to make damn sure that I talk to almost every one of my constituents down there and let them know what's going on in this building."

Commissioner Paul Thiede said he agreed with most everything Koering said, although he wanted to also applaud the five judges of Crow Wing County for recusing themselves from the case. Recusals are typically completed because of a prior relationship with parties involved, although judges are not required to list a reason for recusing themselves. Thiede said he did not want to give the impression the board did not trust the judiciary system.

"I think people, and I'm not one of them, but people are suspicious that because it goes to the judiciary, and this is a lawyer who is taking it to the judiciary, and the judiciary is made up of lawyers, therefore they're biased against us," Thiede said. "I don't believe that to be the case. ... I don't want to in any way give the public impression that we're distrustful of the decision that will be rendered, but we all operate in a very political environment and I think it's important for us to remember that."

Commissioner Rachel Reabe Nystrom said she did not take the lawsuit lightly while considering the board's relationship with Ryan.

"We have served alongside our county attorney for 10 years," Nystrom said. "He is a colleague and he is a friend and I respect him. But we have asked all of our departments in Crow Wing County to figure out to produce quality work with less. And they have done it. Each one of them. And I could just go through every single department, and it has been creative, and it has hurt. It wasn't easy for them, either."

Ryan's view of his budget submission differed from Nystrom's characterization-he used the word "creative" to describe his proposal.

"I am unable to continue to cut, or flat line, my budget and still continue to provide fair, effective and efficient prosecution and other legal services," Ryan wrote in the letter that accompanied his 2016 and 2017 budget proposals. "The demands on my staff and office have in many ways increased with changing state directives and cost shifting. ... I hope you will recognize our attempt to provide a thoughtful and creative budget submission."

Nystrom said having one department stating it is unable to meet expectations set by the board is likely frustrating for the other departments.

"This is a sad day in Crow Wing County," Nystrom said. "Even the letters to the editor are already ratcheting up. Our citizens are watching us. Are we going to hold the line, or are we going to cave? I don't want to hire an attorney who is going to represent us for $150 an hour. We don't want that. But what are our alternatives? I think we have to respond."

The idea of a legal challenge regarding the county's budgets isn't a unique one for the county board in recent years.

In 2015, Sheriff Todd Dahl asked for a more than $625,000 increase to his budget, citing equipment and personnel needs. Dahl, as an elected official, also has the authority to sue the board over his budget, and Koering worried aloud at the prospect at a Sept. 8, 2015, county board meeting.

Ultimately, the board allowed the sheriff to sign a housing contract with the Minnesota Department of Corrections, opening an otherwise vacant housing unit at the county jail to house state prisoners. The move increased the potential revenue for the sheriff's office and offset his budget request by more than $350,000.

Background

Ryan offered a budget proposal in August and an alternative drafted in November. The proposals requested adding staff to Ryan's office, which he said was necessary due to the workload expected of his employees. Both were rejected by the county's budget committee. Instead, a modest increase in Ryan's budget to account for cost increases of sexual assault exams and costs expensed to his office for the county's new initiatives was approved by the county board.

Ryan's authority to seek legal remedy if dissatisfied with his office's budget is written into state statute. The statute governing Ryan's budget appeal requires county attorneys to appeal within 15 days of passage of the resolution. The court can order the county attorney and the county board to submit briefs and other memoranda. If the court finds against the county board, the matter is remanded to the board for further action consistent with the court's finding.

This is not the first time Ryan has raised concerns with his office's budget. In September 2015, Ryan told the board continued cuts to his office's budget were not possible in his view. He asked for a similar increase in staff for the 2016 budget, requesting to replace two outgoing attorneys with three entry-level attorneys and adding a half-time legal assistant.

This year, Ryan said Crow Wing County experiences caseloads disproportionate to its population, and noted the state judiciary's transition to e-filing placed "an enormous burden" on the county attorney's office. An adoption petition, for example, once took five minutes to file when it was done by paper, he said. The process now takes a legal assistant one hour.

"The time drain has significantly reduced our efficiencies," Ryan wrote. "By way of example, we use (sic) to get initial criminal discovery out on average with a week or less. We are now looking at four weeks. This has caused delays in the criminal justice system and caused hearings to be continued, thus delaying justice and creating inefficiencies."

In the board's Jan. 3 response letter, it indicated it would prefer the conversation over changes to Ryan's budget be looked at for 2018.

"We would propose the 2017 budget allocation to stand as approved and that we revisit the conversation more thoroughly during the 2018 budget discussion," the letter stated. "At that time, you may have additional information along the lines around which we inquired to better advance our ongoing dialogue."

Thursday, the case was assigned to Cass County Judge David Harrington. A scheduling conference is set for 11 a.m. Jan. 18.