The legal bills for the San Lorenzo Valley Water District’s conflict-of-interest case keep growing, likely reaching nearly $240,000 this week.
The water district board had an opportunity this week to avoid a continuing escalation of legal fees, but its lawyer on Tuesday filed a Notice of Appeal to the Sixth District Court of Appeal.
This ensures another two years of legal bills to paid by district ratepayers, unless the board changes its mind.
The district has already paid nearly $110,000 in legal fees through January to Atkinson Farasyn of Los Altos and Colantuono, Highsmith and Whatley of Pasadena and Grass Valley for the legal defense of former director Terry Vierra, according to records and statements supplied by the district. Vierra was judged in December to be in violation of California conflict-of-interest laws while on the water district board in 2010.
The most recent payments were approved by the water district board of directors last week.
At the March 16 water district board meeting, several ratepayers complained about the bills, and requested a specific accounting of the costs of paying Vierra’s legal bills.
The water board voted unanimously to ask the district staff to prepare a report on legal bills for the April 20 meeting, but district counsel Marc Hynes warned them about being too specific.
“We could certainly put together a ledger of what’s already been expended,” Ratcliffe said at the meeting.
“You can’t itemize it,” said Hynes.
Costs of taking that appeal to the next level likely will double the district’s legal tab.
In two meetings this year, in February and just last Thursday, March 16, on the eve of its latest court defeat, the water district board of directors paid $18,052 to Atkinson et.al. and $42,620 to Colantuono et.al. for the Vierra case.
Those payments do not count any legal fees to be billed by the Atkinson firm after Feb. 9, or by Colantuono firm after Jan. 31, estimated at $50,000, based on the $36,000 January bill. The fees pay for the legal representation of the former director for actions he took in 2010. He did not seek reelection in 2014.
In addition to that $170,000 total, a motion expected to be filed this week by the lawyer for the winning plaintiff in the Vierra case, Bruce Holloway of Boulder Creek, seeking payment of his legal bills is expected to be in the $70,000 range. In such cases, defendants on the losing end of judicial decisions generally pay the legal costs of the plaintiff.
Holloway’s attorney, Gary Redenbacher of Scotts Valley, said in court documents filed in August that Holloway’s legal bills up to that point were about $49,000. The filing expected this week would add additional money for legal bills for the remainder of 2016 leading up to the Dec. 13 hearing, plus the first three months of 2017, in preparation for the district’s appeal.
The water district also continues to pay $3,500 per month to the Atkinson for district counsel Marc Hynes.
Water district manager Brian Lee told the Press Banner in December that the district’s legal fees had already exceeded $59,000.
The Colantuono firm was added to the district’s legal team specifically to convince courts to overturn the Dec. 13 decision that former director Terry Vierra and his wife pocketed $12,006 in real estate commissions as a result of Vierra’s participation in water district decisions.
All of the motions presented by attorney Michael Colantuono at the March 17 Superior Court hearing were rejected by Judge John Gallagher. The district had asked Gallagher to vacate his earlier ruling and order a new trial with new evidence.
The water district board voted 4-1 in January to seek a new trial and reaffirmed its commitment to paying all of Vierra’s legal bills and the $9,000 in fines imposed by Gallagher.
In response to numerous ratepayer complaints, Lee and board president Gene Ratcliffe have consistently placed responsibility for the soaring legal bills not on Vierra or board decisions, but on Holloway. They contend the district has a legal obligation to pay Vierra’s legal bills.
“Holloway’s decision to sue over a small mistake has resulted in tens of thousands of dollars in legal expenses the district has paid,” Lee wrote to the Press Banner in December.
