Attorney asks city to pay $130K after city’s loss in public records lawsuit
Published 4:33 pm Friday, September 12, 2014
The message Monday from attorney Dan Mallove was blunt but clear: Bainbridge Island city officials broke the law, and they should pay.
Mallove was joined by attorneys defending the city against a lawsuit over public records in Kitsap County Superior Court on Aug. 25. It was the first time the two sides had been in the same courtroom since Judge Jeanette Dalton issued a blistering ruling in late May that found the city of Bainbridge Island had violated the state’s Public Records Act by conducting a shoddy search for emails from council members that were requested by two “good government” watchdogs on Bainbridge Island.
Dalton called out the two council members still named in the lawsuit — Councilman Steven Bonkowski and David Ward — and slammed the pair for destroying emails that were public records and for ignoring city policies that preserve public records.
“As elected officials, Mr. Bonkowski and Mr. Ward owed a duty of candor to the public,” Dalton wrote in her 32-page decision.
“The council members knew well what the Governance Manual requires, and any hesitation by them in turning over such responsive emails is a grave concern for the people of Bainbridge Island,” the judge wrote.
City wants review
The city has asked a Court of Appeals to review Dalton’s decision, which also ordered the city to search the hard drives on the personal computers of Bonkowski and Ward for emails that had not been turned over in response to public records requests by Althea Paulson, a Bainbridge Island blogger who writes about city politics, and Bob Fortner, a leader in the successful 2009 campaign to change the city’s form of government.
While both sides wait to see if the Court of Appeals will indeed take up the unfinished court case, the legal sparring continued this week in Kitsap County Superior Court for a hearing on how the city should pay Mallove to cover his legal fees for representing Paulson, his wife, and Fortner.
Mallove said during the Aug. 25 hearing the city should reimburse him for his time spent on the case, at $400 an hour, and also for work spent on the lawsuit by his legal assistant, at a rate of $150 an hour.
All told, Mallove asked the court to approve a payment of approximately $130,000.
“Basically half of what the city’s lawyers have cost the city [on the lawsuit].”
Mallove also noted he had spent roughy half as much time on the case, about 258 hours, than the city’s legal team had devoted to fighting the lawsuit.
Mallove estimated the city’s time on the case totaled well more than 550 hours, and he also noted the great expense that the city had incurred in the battle over the release of public records.
By Mallove’s estimate, the city has spent more than $200,000 on the case so far. (An estimate by Bainbridge officials, through the end of March, put the city’s attorney costs at more than $165,000.)
He said the city had fought the lawsuit every step of the way, and added that Bainbridge’s attorneys had since tried to push the case into the Court of Appeals before it had been finalized in Superior Court.
He said he expected that the legal scuffle would go all the way to the Washington State Supreme Court.
“They are going to fight until the cows come home,” Mallove said.
Other parts of the case have yet to be finalized in court, such as the judge’s order that would compel Bonkowski and Ward to turn over their personal computers so the search for missing public records could continue.
There is also the matter of penalties, and how much the city should pay for the violations of the state’s Public Records Act.
Mallove asked Judge Dalton to consider holding a hearing on how much the city should pay in penalties.
Kathleen Haggard, the attorney representing the city, downplayed the findings of Dalton’s decision and asked the judge to pare off the amount to be awarded to Mallove’s legal team.
Haggard said Paulson and Fortner only prevailed in court on secondary claims — she argued that the city violated their right to get a response on a public records request, but that no records were withheld — and asked the judge to trim the amount of hours that the pair’s attorney could submit for reimbursement.
“We’re not asking for anything other than what the case law pretty clearly states,” Haggard said.
She also questioned the qualifications of Mallove’s legal assistant.
The claim that the city had withheld records drew a testy response from Mallove.
He recalled that Paulson had requested Bonkowski’s notes from his presentation on a water utility outsourcing contract at a council meeting in June 2013 — an event that spurred Paulson’s scrutiny of Bonkowski and others on the council — but those notes had never been turned over by the city.
“They have no defense. It’s on videotape,” he said of the city and the meeting where Bonkowski had the sought-after records in his hands.
Dalton, however, told both sides she would make a decision on the attorney fees within a few weeks.
She hedged, however, and indicated she might wait to see if the Court of Appeals takes up a review of the case so far.
Slow grind in court
The lawsuit passed its one-year anniversary in August.
Paulson and Fortner filed the lawsuit after the city failed to release emails that showed the council members were discussing city business on their personal email accounts.
In their lawsuit, Paulson and Fortner repeatedly pointed out that city policy forbids council members from using their personal emails for city business, and the pair said that Bonkowski and Ward refused to release emails that should have been disclosed after Paulson and Fortner requested the documents. Bonkowski had also admitted deleting emails from his account that may have been public records.
Attorneys for the city had argued that the city had already conducted extensive searches for records, and an inspection of the council members’ computers and email accounts would be an invasion of privacy.
At the heart of the lawsuit are those two public records requests.
The first, made on June 28, 2013 by Paulson, sought council emails and records involving the city’s Utility Advisory Committee that covered a two-month span that started May 1.
The second request, made on July 22, 2013 by Fortner, was for emails from the city and personal accounts of council members Ward, Debbi Lester, Sarah Blossom and Bonkowski.
City seeks review
Attorneys for the city of Bainbridge, and the lawyer representing Ward and Bonkowski as individuals, asked the Court of Appeals on June 16 to review the judge’s May 29 decision.
Jessica Goldman, an attorney from Summit Law Group in Seattle, was hired by the city in late August 2013 to represent Ward, Lester and Bonkowski at the rate of $355 an hour.
Goldman called the judge’s decision “an epic departure from governing law.”
In Goldman’s request for a review by the Court of Appeals, Goldman continued her previous claim that the court’s ruling to have council members’ personal computer hard drives searched for public records was an invasion of their privacy.
Judge Dalton had “issued an unprecedented ruling that elected officials have no constitutional right to privacy in their personal email accounts and their personal computers,” Goldman wrote, and she asked the Court of Appeals to reverse the ruling that council members had broken the law.
Goldman said Bonkowski searched his Yahoo email account the week after Paulson sent her request to the city.
Bonkowski said he searched his “in” box and “sent” box, but not a “deleted” box because there wasn’t one in his Yahoo account.
Emails gone
Later, on July 4, 2013, Bonkowski contacted Yahoo to see if he could find emails that he had deleted before Paulson’s request came in, but was unable to find anything.
Goldman also said the head of the city’s IT department, Steve Miller, also helped Bonkowski search for emails but they came up empty.
On July 20, three weeks after Paulson’s request had been filed, Bonkowski did another search and found two emails he turned over to the city.
On Aug. 20, another request came in for council member emails. Brown asked council members to turn over records by Sept. 13, and three weeks later, Bonkowski again searched his Yahoo email account, and sent one email from a constituent that was found to the city.
Ward also searched his personal Comcast email account the week after the first request in early July, and sent in three emails he had found.
Ward’s search would soon be tamped down by a private attorney Ward had hired, Jeffrey Myers.
Myers told the city attorney on Aug. 13, 2013 that Ward would only surrender emails that he had “reviewed, evaluated, or referred to and [which] has an impact on the decision-making process of the agency.”
Ward also said his Comcast account did not have a “deleted” box, so a search for deleted emails was never conducted.
On Aug. 20, Ward sent the city two emails that he had found.
After later searches, he gave the city another email on Sept. 10, and seven more on Sept. 11. Ward’s attorney also noted that Comcast does not keep deleted items longer than a few days.
Ward also waited weeks before searching for emails that were requested under the second request. On Sept. 10, three days before the city-imposed deadline for turning over emails, Ward submitted five more emails he had found to the city.
Goldman warned that if Dalton’s decision would be allowed to stand, “it will result in immediate and far-reaching violations of constitutional rights. No Washington citizen will agree to pay this price for serving in public office,” she wrote.
She also said the judge was wrong by ruling the city’s search was inadequate.
She also claimed that council members had not deleted emails in their personal accounts and violated the Public Records Act because the request for public records had not yet been filed.
She also said the judge was wrong to find that Paulson and were entitled to receive duplicate copies of emails.
A right to privacy
Goldman also questioned whether the council members’ emails that were on their personal email accounts were actually public records, and said the Public Records Act only requires agencies to disclose public records.
She pointed to the Washington Constitution, which protects the privacy of personal communications, and noted a 2014 Washington State Supreme Court decision that protected the text messages on a phone that was confiscated from a man arrested for drug possession.
Goldman said the council members deserved the same consideration given those arrested for illegal drugs.
“The court held that a person who communicated with the arrested drug dealer had a right to privacy in his text messages setting up drug purchases with the drug dealer,” she wrote. “The council members — who are not accused of any crime — have a right to privacy in the communications and documents on their personal computers and email accounts.”
No question for judge
But Dalton, in her decision, noted that council members had given implied consent to the inspection of their personal email accounts and computers because they had used them for city business.
Goldman strongly disagreed with that view.
“Under this approach, any official who performs government work from his home in the evening would be deemed to have impliedly consented to a warrantless search of his home to confirm there are no public records lying about,” she wrote.
Haggard, the attorney representing the city, also called the decision “deeply flawed” and accused the judge of an “obviously biased review of the evidence” in Haggard’s July 1 request for a Court of Appeals review.
She said the city’s record officer conducted a “painstakingly thorough” search for records, and claimed that no council members had refused to turn over public records.
In her request for a Court of Appeals review, Haggard acknowledged that Bonkowski and Ward had deleted emails.
Those deleted emails, Haggard said, were messages that the pair “felt they did not use in the conduct of city business, such as emails they received from constituents that they did not read or utilize in their role as council members.”
She quoted Bonkowski: “My email practice has been to send to my city email account only those emails that I intend to respond to or involve a transaction of city business. I have deleted any other messages generally within a day of receipt.”
For Ward’s part, he said: “I periodically delete emails from my Comcast account which I don’t need, I have no intention of using, or are junk mail.”
“Neither council member deleted any emails after the requests were made,” Haggard said, and she added that council members had stopped deleting emails after the public records requests were filed.
Haggard also said the judge had not properly considered affidavits and other information provided by the city before she issued her decision.
“The city provided the trial court with good faith affidavits … and the trial court ignored them.”
Consent not given
Haggard also asked how the city could have conducted a search of council member’s computers and emails if those elected officials did not give the OK.
“The city has no legal authority to forcibly seize their computers or email passwords,” Haggard wrote.
“As a matter of public policy, agencies should not be compelled to choose between paying PRA sanctions or trying to force illegal searches upon their elected officials — especially when those officials are cooperating fully with producing public records,” she added.
The court decision relied upon a previous Washington State Supreme Court case, called O’Neill v. City of Shoreline, where an official consented to the search of her personal computer’s hard drive in a search for public records.
Haggard noted the standard for searches was set in another case, Neighborhood Alliance of Spokane County v. Spokane County, that found that public agencies must search for records in places where such records were “reasonably likely to be found.”
Because Ward and Bonkowski were using web-based email accounts, the city’s attorneys noted, it wasn’t likely that the hard drives of their personal computers would actually contain the emails that had been requested.
“It is pointless to continue this case until the errors are corrected,” Haggard concluded. “The taxpayers of Bainbridge Island deserve to have the city’s evidence considered before they are wrongfully subjected to attorney fees and per diem penalties.”
Attorneys for the two Bainbridge residents who sought the council’s emails, Mallove and now Kenneth Masters, a Bainbridge-based attorney who has offered to help fight the move to have the decision taken up by the Court of Appeals, have asked the court to deny the request for a review.
Masters said the city’s efforts to find the emails “were too little too late.”
Masters also said the case wasn’t ripe for review, and noted that the trial court had not issued an actual ruling that ordered a search of the council members’ hard drives, nor had it yet ruled on fees and penalties.
He also noted that fees and penalties should be awarded in the case.
“The trial court found that the city denied [Paulson and Fortner] both the right to inspect or copy responsive documents (by deleting them) and the right to receive a timely response (too little too late).This is sufficient for a fee award and for penalties,” Masters wrote.
“The city, like the council members, seems to suggest that, if it can get public servants to delete public records in the privacy of their own homes — public records that should not have been on their private computers in the first place — the city will receive a pass under the Public Records Act,” Masters added.
Getting on message
In the week before the city’s attorneys would ask the Court of Appeals to step in, city officials began to craft a message that would lay out their reasons why the city wanted to fight Judge Dalton’s decision.
Officials had briefly considered putting out a press release, but decided instead to send a “letter to the editor” to the press.
“After giving this matter additional thought and discussion at staff level and with legal counsel, we have drafted the attached letter to the editor,” City Manager Doug Schulze said in a June 13 email to the seven members of the council.
“We believe the letter to the editor is most appropriate because it will be printed in its entirety without edits,” Schulze continued. “Press releases are frequently summarized or paraphrased by the media.”
Schulze also noted the letter should be signed by those on the council — Val Tollefson, Roger Townsend and Wayne Roth — who had joined the council following last fall’s council elections.
“Furthermore, we believe the message is much stronger coming from members of the city council who were not on the city council when this lawsuit originated,” Schulze said, and added that the letter should be timed to coincide with the filing of paperwork in the Court of Appeals.
The letter, which was published in the June 20 edition of the Review, announced that the city would be seeking a Court of Appeals review.
The letter included a defense of Brown, the city’s records officer, but also noted the lawsuit came as Bainbridge was rife with political strife: “This case began at a time last year when the emotions of a number of Bainbridge Islanders, both on and off the city council, were high. To a casual observer it would have been clear that there was little trust and collegiality among some members of the council, and there were a number of Island interest groups who had little faith in some members of the council or indeed, in the council and city government as a whole,” said the letter, signed by Tollefson, Townsend and Roth.
“While the current council from time to time has divergent views on what course of action is best for the city, its members have established cordial relations, are performing their jobs and conducting public business respectfully and productively. From all corners of the community the council hears approval of our collective performance to-date.
“We don’t want to jeopardize this progress by involving ourselves in the details of this Public Records Act case,” the letter continued. “However, insofar as the trial court’s ruling deals with the performance of city staff and the basis for legal liability of the city, we believe the court has made some clear mistakes and drawn some unfair and unwarranted conclusions. We believe these errors can be corrected only by having the Court of Appeals take a fresh look at this case.”
Council closes ranks
After the letter was sent to the press, city officials told the Review that the appeal was focused on what the city did when it responded to the public records requests, and not the actions of the council members named in the lawsuit.
“This is a slippery slope; I really don’t want to go down it,” Tollefson told the Review.
“Our focus is completely on the city’s performance and we think that the appeal will clear that up. I’ve got no comment to the rest of it,” he said.
The council decided in executive session that an appeal was justified. The decision was reached via consensus, and no vote was taken.
“Our focus was on whether or not the city’s responses to the Public Record Act request was proper, and Judge Dalton was pretty strong, I think, in her condemnation of the city,” Tollefson said.
Schulze, at the time, also sought to put daylight between the call for an appeal and the actions of the council members that led to the lawsuit.
“The city’s appeal has nothing to do with the two named council members and the suit against them,” Schulze told the Review. “This appeal is directly related to a decision as it involved the city’s action and city staff.”
In particular, Schulze added, the city’s public records officer did her job according to the law.
Townsend, one of the three council members who signed the letter, had wanted the letter to include a more forceful defense of the city, and what some saw as errors in the judge’s decision.
In suggested edits he sent to other city officials, Townsend also made it clear he saw the lawsuit as political in nature, rather than an attempt, as those who brought the lawsuit said, to “require rogue officials to obey the law.”
Edits wanted
In a June 14 email, Townsend said he wanted to emphasize the cost to the city in complying with the Public Records Act, and that the decision would represent “an expansion of the obligations on the city.”
In a message to Tollefson, Townsend said he wanted the letter “framed in terms of expense to the city and the practical effect of compliance with the PRA. I think most citizens don’t understand how much time and effort goes into that today and that we are concerned that this precedent will expand that effort.”
“I also think it’s important not to further raise the ire of the judge and not call her out too explicitly,” he added.
Townsend offered changes to the draft letter that would have included “metrics” in the letter — employees, hours and costs — that the city expended in complying with public records requests.
Townsend suggested that the letter also say: “The standards imposed by the court’s ruling push the scope of the [Public Records] Act beyond existing precedent and could substantially increase the burden on the city and its employees to comply with the Act and encroach on the constitutional rights of individual city employees. We are aware that other cities have taken note of this ruling and have expressed concerns regarding the potential for expansion of their obligations. We are hopeful that the Court of Appeals will take this opportunity to issue an order that affirms prior precedent regarding the scope of the City’s obligations under the Act.”
“To the extent that this lawsuit is political in nature, we believe that the political motivation for the lawsuit has been abated,” he added.
“Insofar as the trial court’s ruling deals with the performance of City staff and the basis for legal liability of the City, we believe the court has made some clear mistakes and drawn some unfair and unwarranted conclusions. We believe these errors can be corrected only by having the Court of Appeals take a fresh look at this case,” he wrote.
Others on the council, though, felt the letter should not be amended and it was sent out without Townsend’s additions.
Paulson and Fortner, in their only extended public comments on the lawsuit, said in a response letter that the council’s letter left them “incredibly surprised and saddened.”
The council letter was “inaccurate and divisive,” they said.
“Their letter ignores the facts of this case, as determined not by us, but by Judge Dalton, after reviewing all the evidence. They have characterized our lawsuit as one that emerged from emotion and politics. It did not. We took this step reluctantly and only after watching months of flagrant violation of our City’s Governance Manual and the law, despite the objections of council colleagues and many citizens,” Paulson and Fortner wrote.
“This is a lawsuit about good government, not emotion or politics,” they added.
“We had hoped that all members of council and the city’s administration would be committed to principles of accountability and openness, but nowhere in the council members’ letter today are those principles mentioned. Instead, they completely ignore the behavior of the defendant council members and focus on outward appearances and a concern with cultivating a reputation of cohesion on the council. We regret that by issuing the letter, the council has done the very thing it sought to avoid: jeopardize the progress it has made in gaining community respect and trust.”
Pot boils over
It’s indisputable that Bainbridge Island City Hall was embroiled in political turmoil in the months leading up to the lawsuit.
The lawsuit’s roots reach back to the all-consuming debate last year on whether the city should outsource its water utility to the Kitsap Public Utility District.
The debate came to a head the night of June 5, 2013 when Schulze had planned to make a presentation on a potential contract with KPUD. But the proposed agreement was one that Schulze — who had been city manager for just seven months — wanted to tell the council was a bad idea, and should be rejected.
The verdict caught the council, and many residents, by surprise. And when it came time for Schulze to present his recommendation, Bonkowski took over the meeting and the agenda was abandoned as others on the council objected.
Bonkowski presented a slide show of the city’s water expenses and budget, and the cost of the employees that were charged to the water utilities budget. He then presented six motions for the council to consider.
Bonkowski’s unexpected takeover of the meeting drew complaints from his critics, and thanks from his supporters in the audience. Others complained about Bonkowski’s treatment of the city manager, who sat in silence and was not allowed to join in the council’s discussion of the water utility contract.
Suspicion raised
But others looked at the detail offered in Bonkowski’s presentation — coupled with the unsurprised looks from his closest colleagues on the council — and suspected that others outside the council had helped him prepare for his speech to the council that June night more than a year ago.
In court filings on the public records lawsuit, Paulson figured Bonkowski had gotten help from members of the city’s Utility Advisory Committee, and began poking around the city’s website looking for minutes of past meetings.
She found none. But when she spoke with Brown, the city’s public records officer, she discovered the Review was already looking for a link between Bonkowski and others on the doomed outsourcing contract for the city’s water system. The newspaper had requested emails between council members and the UAC in the weeks surrounding the June 5 council meeting, and Paulson asked to get copies of some of those records.
The Review discovered that a majority of the council — Bonkowski, Ward, Lester and Blossom — had been receiving emails about city issues and conducting city business from their personal email accounts, a violation of the city’s Governance Manual.
On the day that the Review published an editorial criticizing the council members for their email shenanigans — headlined “Another Blow for Open Government” — Paulson wrote a letter asking the city to hand over the emails that council members had sent and received from their personal accounts.
The lawsuit would follow in August, after the city released just a handful of emails from their personal accounts that council members had forwarded to the city.
Trouble begins
Schulze’s great opposition to the KPUD contract — which was detailed in an agenda bill sent to council members Friday, May 31, 2013 — created shock waves among some on the council over the weekend.
Bonkowski, in an email to Councilwoman Blossom, expressed dismay over $250,000 that had been added to the cost of the contract by the city manager that accounted for time spent by city employees on water utility business.
Bonkowski claimed city staff were more worried about their jobs than reducing the costs of the city’s water system, and he vowed to exert greater control over the city manager and city staff.
“To me, the various arguments that Doug makes in this agenda bill support that the city staff, not just Doug, are not interested in improving service or reducing cost, but rather support the position that the city is a jobs program for the staff,” Bonkowski wrote.
“I have not been pushing hard on Doug, trying to give him time to make changes,” Bonkowski continued.
“This agenda bill changes everything and makes me want to press the council’s authority over the city manager and city staff for the benefit of not only the customers of the city water utility, but across the board,” Bonkowski wrote.
Indeed, Schulze’s arrival as city manager had some on the council, and the Utility Advisory Committee, convinced that he would shake up the ranks at city hall.
In a message to Schulze just before he came aboard as city manager, sent to his email account with the city of Normandy Park, UAC member Eric Turloff congratulated Schulze on his new job.
“You did it!!! Great job,” he wrote Schulze.
“As I said over the phone yesterday, I liked your comments about cleaning house. I shared it with a few members of the council. They like it too, because we need it,” Turloff wrote.
Schulze did “clean house” after his arrival.
Just before his arrival, the employment of then police chief Jon Fehlman was terminated.
Fehlman’s second-in-command Sue Shultz, and public works director Lance Newkirk, soon followed, and left their jobs after negotiated settlements with Schulze.
The city manager’s take on the outsourcing contract seemed to be a 180-degree turn, however.
Meeting called off
Bonkowski was scheduled to meet with Schulze the following Monday morning — after the agenda packet with his alarming recommendation had been made was sent out — but Bonkowski canceled the meeting a few hours before.
“As a result of the agenda bill on the water utility there is no reason to meet,” Bonkowski told Schulze in a text message.
In the hours and days that followed, the council majority that had been pushing to outsource the city’s water utility began to dig in.
Then-councilwoman Lester reached out to Lee Walton, who had twice served as an interim city manager and city administrator for Bainbridge Island.
Lester emailed Walton a copy of Schulze’s agenda bill on the KPUD contract and asked him to review it on Monday, June 3.
“I have a very challenging city council meeting to facilitate coming up this Wednesday. It has to do with the potential contracting with KPUD to manage the city’s water utility,” Lester wrote. “This discussion has gone on for over three years and there are many issues to resolve.”
The other supporters of outsourcing the city’s water utility — Bonkowski, Ward and Blossom — also spun into action.
Bonkowski traded numerous emails with Ward and Blossom in the days before the council meeting where he would unveil a new plan. He was also in repeated contact with Turloff, a member of the city’s UAC who also supported a KPUD takeover of the city’s water system.
Turloff, an accountant, sent Bonkowski and Ward spreadsheets, year-end cost reports from 2012, charts, documents and other information that supported his take on the KPUD contract and what to do next.
In a Tuesday, June 4 email, Turloff told Bonkowski and Ward that he was also asking two of his fellow members of the city’s UAC — Arlene Buetow and Jeff Kanter — to review his work.
“Hi Steve & Dave. I am responding to your email and phone calls,” Turloff wrote. “I am copying Arlene & Jeff. I would like them to check my work as we go.”
Turloff told the group that Schulze’s approach of using city staff for work that the KPUD could do was driving up the city’s costs.
“Important note: KPUD say they will do everything including capital planning, budgeting, accounting and reporting,” Turloff wrote. “Per the agreement the city is retaining these services. If you choose that option that will drive up Doug[‘s] cost allocation.”
“This tells us we can cut rates by 45 percent,” Turloff noted.
“I realize this is a complex worksheet. We can simplify for tomorrow[’s] meeting,” he added.
Others chime in
Meanwhile, Blossom was peppering Schulze with emails about how he came up with the $250,000 added cost to the contract that was mentioned in Bonkowski’s “take charge” email to the councilwoman over the weekend.
Blossom emailed the city manager on Monday, June 3 and asked for a breakdown of the $250,000.
Schulze said the $250,000 was an estimate of the cost of city work on behalf of the water system, and those allocations included personnel costs, rent, insurance, auditing and supplies.
“The point I was trying to communicate in the agenda bill is that these costs do not disappear the moment the [KPUD contract] is approved (if it is approved),” Schulze told Blossom. “They need to be accounted for somewhere so, they are either water utility expenses or expenses to some other fund.”
Blossom then began questioning the base charge of $576,168 in the KPUD contract, but in response, Schulze noted that KPUD’s original figure was wrong because the utility district has miscalculated B&O taxes.
Still, Blossom needed convincing that the figures in Schulze’s agenda bill were correct.
Blossom continued to question the base charge of $576,168 in the KPUD contract and wondered if the numbers had been adjusted to account for the B&O mistake.
“Sorry for all the questions Doug, I just want to get them out of the way so I don’t send anyone into a tirade by asking questions at our meeting,” she wrote Schulze.
Manager frustrated
In response, an exasperated-sounding Schulze complained that the KPUD had given the city a series of faulty cost calculations during contract talks.
“At this point, I have very little confidence in the numbers provided to me by KPUD,” Schulze told Blossom in an email June 5.
“I have five versions of their cost analysis because I have identified errors in each calculation and asked them to provide corrected information,” he wrote.
“They erroneously included a 5.029 percent State Public Utility Tax so it was deducted, but then they added back in a B&O Tax of 1.5 percent. The problem with this is that the State Public Utility Tax is paid in lieu of the B&O tax and the correct rate is 5.029 percent. There is no Public Utility Tax rate of 1.5 percent. So, I’m having trouble figuring out where they came up with this rate. The closest rate is 1.9 percent, but that rate applies to railroads, rail car companies and motor transportation.”
A battle over numbers
The faulty numbers were troublesome, he added.
“I went back to the original calculations provided to the city in KPUD’s response to the RFP to sort through the cost calculations. They provided a breakdown of how their per ERU cost was calculated. The ERU cost in the original RFP was $18.78 and there is no line item for taxes shown in their costs. An additional fee of $1/connection was added for fluoridation to reach a per ERU connection fee of $19.78 per month or a water utility management fee of $48,876 or $586,517 annually.
“I do not want to criticize KPUD in a public meeting and have tried very hard to keep the conversation about the city and the costs of operating the utility. However, my experience during this process gives me great concern about contract administration, if the [contract] is approved,” he said.
Making nice in public
Bonkowski talked with the city manager on Thursday, June 6, the day after the contentious council meeting where Bonkowski unveiled his rate cut/rebate proposal.
Then, in an email to Schulze on Friday, June 7, the mayor gave Schulze the outline of what the city manager should say to show the pair were working in harmony.
Bonkowski also told him he should say his presentation was accurate and that Schulze supported most of what was said.
“Doug, you asked yesterday what you might do to convey the message that you and I work well together and that I have been supportive of you and your role as city manager,” Bonkowski wrote in the email.
“If you could include in your city manager’s update this Wednesday, something to the effect that you appreciate my looking for a compromise position in pursuit of a solution to the water discussion, that you have validated the … material I presented was accurate and that you could support and implement a majority of the recommended motions,” Bonkowski wrote.
“This might put an end to this theater. Your thoughts,” the councilman — who was then serving as mayor — concluded.
Schulze follows through
At the following Wednesday council meeting, Schulze stuck to the script.
“I felt it was important to address what happened last week and to make sure that the community understands that the relationship I have with Mayor Bonkowski is strong,” Schulze said during his manager’s update near the end of the council meeting. “And I felt that I have had support from him since I was hired.
“Although sometimes relationships get a little messy, I see no reason why what happened last week can’t be left behind us and we can move forward and work well together,” Schulze said.
