From the Outer Banks Sentinel (8/5/09): Asking questions about issues raised by notations on legal bills paid by the Town of Kill Devil Hills has netted few answers.
In preparation for a story to be written at a future date, on July 15 the Sentinel requested that each town provide copies of the contracts with their respective town attorneys, legal bills for the past six months and closed session minutes for the same period of time.
Most towns supplied bills that contained routine notations about cost for such things as answering staff questions, attending meetings and researching legal issues; however, Kill Devil Hills’ legal bills and closed session minutes aren’t so routine.
Questions regarding the documents were sent to town staff, who forwarded them to Town Attorney Dan Merrell so that he could provide responses.
On July 22, attorney Neil Scarborough, an associate of Merrell’s, responded by email to say that Merrell had forwarded them to him and he would attempt to provide answers.
The bills include two notations of conference call meetings of the full board with Merrell. The telephone meetings are noted as being held on April 30 and May 28, the latter just one day after a regular board meeting held at town hall. There appear to be no minutes from either telephone meeting, nor was there proper notice given of the meetings.
Scarborough said he couldn’t comment on those meetings because he wasn’t part of either of them.
The notation on the bill for the phone meeting held April 30 states that the purpose was to discuss a closed-session meeting planned to be held during the board’s regularly held meeting on May 11.
The approved open-meeting minutes of May 11 state the purpose of the closed session as cited by Mayor Ray Sturza was attorney-client privilege authorized under 143-318.11 (a)(3). And under Town Attorney’s Agenda, the closed session is noted as the same, however, on a copy of the approved minutes, “Personnel matter – minutes closed” is hand-written in red ink under the attorney’s agenda. The minutes were not provided for this closed session.
Asked who made the notation and why, Scarborough responded: “Although I am not aware of who made the hand-written notation that you refer to, it may very well have been me. In any case, the purpose of the closed session, as stated, was to allow the council to consult with its attorneys on a personnel matter in which a claim had been threatened against the Town. Accordingly, the minutes of that session unfortunately cannot be made available for inspection, pursuant to N.C. Gen. Stat. 160A-168. As you are probably aware, there is an Attorney General’s opinion on point to which the Town must adhere.”
General Statute 160A-168 does not apply to claims against the town nor subsequent settlement agreements.
The purpose of the May 28 telephone meeting has been redacted from the legal bills.
But other notations on the bills and in meeting minutes offer clues to the purposes of the two telephone meetings and the closed session on May 11.
On April 30, in addition to the phone meeting of the board, a phone conference was held between Merrell and attorney Robin Davis, who specializes in employment law. The notation states that the conversation was about “claims against the Town of KDH and mediation scheduled for May 15, 2009 at Battle Winslow in Rocky Mount and 5-11-09 BOC meeting closed session.” The name of the claimant has been redacted from the bill.
Also on April 30 is a charge for Merrell discussing the May 11 closed session meeting with Scarborough who attended the meeting.
There are several charges on the bills for discussions with an employee about a subpoena.
And on May 11, the day of the board meeting, there is a charge for “Review of Robin Davis’s case assessment, pre-litigation, pre-mediation report and attached documents to Dave Robertson and Steve Lee with the NC League of Municipalities and phone call with Robin Davis regarding 5/11 closed session with the KDH Boad [sic] of Commissioners…”
Dave Robertson and Steve Lee work for the town’s errors and ommissions insurance carrier, which is under the League of Municipalities.
A second notation on that day is for another phone conference with Robin Davis, Dave Robertson and Steve Lee, “pre-closed session regarding – claimant name redacted – Town of KDH and authorization to proceed.”
In response to questions about a nondisclosed settlement, Scarborough responded, “…I understand that the settlement you reference has not been concluded. Except to the extent the settlement materials include information that is confidential, copies would be made available to you once the settlement is concluded.”
On May 27, Merrell charged the town to research GS 132-1.3 and 132-9, and 143-318.11(a)(3). The first two are open records statutes and the latter is in reference to open meetings.
General Statute 132-1.3 addresses settlements made by or on behalf of public agencies, public officials, or public employees and the fact that all settlements, with the exception of medical malpractice settlements, are public records.
The statute states that no agency of state government or its subdivisions, nor any counsel, insurance company or other representative acting on behalf of such agency, shall approve, accept or enter into any settlement of any such suit, arbitration or proceeding if the settlement provides that its terms and conditions shall be confidential, except in an action for medical malpractice against a hospital facility.
The term “settlement documents” includes all documents which reflect, or which are made or utilized in connection with, the terms and conditions upon which any proceedings described in this section are compromised, settled, terminated or dismissed, including but not limited to correspondence, settlement agreements, consent orders, checks, and bank drafts.
General Statute 132-9 lays out the judicial process available to any person who is denied access to public records.
And General Statute 143-318.11 stipulates the permittable circumstances to hold a closed session. In part, the statute states that the public body may consider and give instructions to an attorney concerning the handling or settlement of a claim, judicial action, mediation, arbitration, or administrative procedure. If the public body has approved or considered a settlement, other than a malpractice settlement by or on behalf of a hospital, in closed session, the terms of that settlement shall be reported to the public body and entered into its minutes as soon as possible within a reasonable time after the settlement is concluded.
On June 24, although not on the original agenda, a budget amendment was approved in the amount of $67,500 “to appropriate funds for the May deductible billing – claim 3070039122.” The supporting documentation in the laser fiche files show the funds were to be paid the town’s “general insurance” carrier.
Asked if the appropriation was to reimburse the insurance company for a paid settlement, Scarborough responded, “I can’t answer that either, Ms. Semans. I apologize. I know nothing about the Town budget. I will forward the question to Mr. Merrell, who will get back to you promptly, I’m sure.”
As of presstime, neither Merrell, who was contacted on July 20, nor Mayor Ray Sturza, who was left a message mid-day on Monday, have returned calls or provided information.
by Sandy Semans, Sentinel Staff Writer