Did Ontario officials ignore key legal advice?

By Andy Gates - Argus Observer
Sunday, August 12, 2007 2:49 AM PDT

ONTARIO - A print shop owner elected last November as mayor of Ontario gave the city some legal advice before he palmed the gavel.

The city, however, apparently ignored state laws cited by Joe Dominick — the man who later became mayor — and a lawsuit administered by local developers Jackson Fox and Larry Tuttle regarding System Development Charges, or SDCs, eventually cost the public more than $25,000.

The city’s former attorney from Yturri Rose, Greg Embry, also shared some legal advice with the city before it was sued by Tuttle and Fox.

At least some of that advice, though, was apparently ignored.

Tuttle and Fox also provided some legal advice before they filed their lawsuit.

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Laws they cited were not followed by the city, they asserted in their lawsuit.

And Ontario City Councilman Dan Cummings also expressed some concern about legal advice months before the city was sued.

City staff did not bring Cummings’ concerns to an attorney — even though that was what they were directed to do.

In the end, taxpayers paid the bill for the city to settle the lawsuit, which one plaintiff said could have been avoided.

“The city could have avoided a lawsuit if the city had taken their good legal advice (from Yturri Rose LLP),” Fox said Monday during a City Council meeting.

City officials, however, asserted they could have continued to litigate the matter.

“The city has consulted with our attorney and understands that, while we could continue to litigate this matter, it would only cost our taxpayers more and would not gain the city more than a moral/legal victory, at best,” Ontario City Manager Scott Trainor said in a Dec. 19, 2006 letter to Tuttle and Fox.

And the city is not liable for any assertions of law-breaking in the lawsuit — at least according to the terms of the March 30, 2007 settlement agreement between the city, Tuttle and Fox.

SDCs take centerstage

The lawsuit filed by Tuttle and Fox concerned Ontario’s implementation last year of System Development Charges.

SDCs are fees charged to new residential, commercial and industrial development to fund capital improvements needed to accommodate growth. Those improvements could otherwise be billed to public coffers.

The state has laws about how cities can implement SDCs.

Fox and Tuttle sued the city Sept. 13, because they argued the city did not follow state laws in implementing SDCs, and denied them their rights under Oregon law.

Before the lawsuit was filed the city was forwarded specific state laws regarding the matter on at least four different occasions — by Dominick, Tuttle, Fox and Embry.

For example, a state law on the books — ORS 223.304(6) — stipulates that any local government proposing to establish or modify an SDC shall maintain a list of people who have made written requests for notification, prior to adopting or amending an SDC methodology.

Dominick, Tuttle and Fox all wrote letters last year on July 5, July 7 and July 10 to the city and they specifically cited that law and requested notification from the city.

Embry also wrote a letter to the city dated July 17, 2006, which cited that law. The Argus Observer obtained a copy of the letter and the current City Council recently refused to authorize Embry’s law firm, Yturri Rose LLP, to answer questions about its dealings with the city on the SDC issue.

Yturri Rose LLP and the city broke ties in April for undisclosed reasons.

However, the former City Council, along with Ontario City Manager Scott Trainor and Ontario Public Works Director Steve Gaschler, proceeded forward with the SDC mandates.

Rather then send Dominick, Tuttle and Fox notification, the city apparently disregarded their letters and the law they cited. And on July 17, 2006, the City Council passed an SDC resolution adopting an apparently new SDC methodology.

That move by the city broke another law, according to the lawsuit filed by Tuttle and Fox.

Oregon law — ORS 223.304(7a) — stipulates that written notice must be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify an SDC, and the methodology supporting the SDC must be available at least 60 days prior to the first hearing.

Trainor received Dominick’s letter, which said Dominick should be put on the city’s notification list, according to a July 10, 2006 e-mail from Trainor to Dominick.

But the city never sent letters to Tuttle, Fox or Dominick, as required by law, according to Tuttle and Fox’s lawsuit.

Trainor apologized to Tuttle and Fox for the city’s “oversight” in not responding to, or acknowledging, their letters regarding written notice.

“As the city manager I take the responsibility for this and have taken steps to ensure that staff understands that in the future any such correspondence of this nature or similar nature must be directed and/or forwarded to me,” Trainor wrote to Fox and Tuttle in a Dec. 19, 2006 letter.

Before that, in March 2006, Gaschler and Trainor did not obtain legal advice regarding public hearings for the SDC mandates — even though the former City Council directed them to.

The city did not hold public hearings last year at three crucial City Council meetings — between June 29 and Aug. 7 — when SDC mandates were approved by the City Council, Tuttle and Fox’s lawsuit shows.

Dominick cited four state laws in his July 7, 2006 letter to the city, in support of holding public hearings on the SDC matter.

“Something as important as these SDCs are to the community, not only for improvement, but for the impact on the growth, should automatically have a public hearing,” Dominick said in his letter.

Ontario City Councilman Dan Cummings also told the city on March 6, 2006 during a regular meeting that he was concerned about not holding public hearings, and he cited a law, ORS 294.160.

That law says a city shall provide an opportunity for people to comment on the enactment of an ordinance or resolution prescribing a new fee or a fee increase or an increase in the rate or other manner in which the amount of a fee is determined or calculated.

Dominick also cited that law in his letter.

The former City Council told Trainor and Gaschler in March 2006 to speak with a lawyer about Cummings’ concerns.

“Absolutely,” Trainor said at the March 6, 2006 City Council meeting.

Gaschler reported back to the City Council at its next meeting and confirmed he had not spoken to a lawyer.

“An issue was brought up as far as notice requirements ... council had actually directed us to go to our legal council to look at it, but ah, we brought the ordinance up and read it completely through — myself, and I had Scott look at it, and it was very clear in there that there are no additional notice requirements in this other than what council chooses to do,” Gaschler told the city’s elected leaders.

The former City Council accepted that, though, and proceeded forward passing SDC mandates . And, according to Tuttle and Fox’s lawsuit, the city broke state laws.

Ontario City Councilman John Gaskill recently said the city acted on legal advice throughout the SDC process.

“The council took legal advice that indicated there was no hearing needed when the council passed the (SDC) ordinance. Later, as a result of the lawsuit, a second legal opinion said that they probably did, on at least part of it, need a hearing. So the council accepted the second (legal) opinion in order to put it back before the public works committee in order to stop the lawsuit,” according to Gaskill’s comments from Ontario City Council Meeting Minutes dated July 16.

Trainor also said the city acted on legal advice, but he said, for complex issues like SDCs, the city relies on consultants or specialized attorneys.

“Once we received requests from Mr. Dominick, Mr. Tuttle, and Mr. Fox to be notified of changes in the SDC in July (2006), we again consulted with the consultant and attorney. Both gave their input that no public hearings were necessary for an amendment to the earlier ordinance adopted by council, this is what we were sued over ... Oftentimes, our local attorney will not have the depth of experience to deal with specific, complex issues like an SDC. In these instances, we will go to outside consultants or attorneys who specialize in these areas to give us advice,” Trainor said in a July 19 e-mail.

Monday, Fox asked the council two questions.

“Who gave the bad legal advice?” Fox asked.

And, Fox questioned, “Why did the city take the bad legal advice instead of the good legal advice?”

Fox said Friday the city has not provided him with answers to his questions.

Trainor sent Fox a letter dated Tuesday, which did not answer his questions — but instead asked Fox questions.

“Could you provide information on those occasions when a city staff member had stated that the city had received bad legal advice?” Trainor said in the letter to Fox dated Aug. 7, 2007.

Gaskill, at least, said he did not specifically say the city received bad legal advice, according to a Wednesday e-mail obtained by the Argus Observer from Gaskill to the City Council.

“I don’t think I ever said we got bad advice, per se,” Gaskill’s said in the e-mail.