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06-03-91 agendaCITY OF RICHFIELD, MINNESOTA Study Session Letter No. 33 Agenda June 3, 1991 CONFIOENTIAL Issue Statement: Review of North •Star Risk Services recommendation regarding Westrick vs. Richfield case. Background: North Star •Risk Services provides claims processing services for the City of Richfield. They are currently reviewing the Westrick vs. Quam/Richfield case. North Star has reviewed the claim and has provided an initial analysis of the claim. The analysis is attached for Council review. North Star is indicating that they will proceed with settlement discussions unless otherwise directed by the City of Richfield. The basis of their recommendation is that the cost of defense is likely to exceed, by several times, the amount in dispute. The Richfield Sun Current issue of May 29 included an article regarding this lawsuit. The article appears to contain some misleading information. A draft press release correcting misinformation is attached for Council consideration. Recommended Motion: 1. Review the North Star letter and determine if North Star • should be advised not to proceed with settlement discussions. 2. Review draft press release correcting Sun Current information an decide whether press release should be issued. Basis for Recommendation: 1. North Star has provided an analysis of the case. 2. Correct Sun Current information. Alternative Recommendation: This item could be deferred for discussion to a later date. Discussion/Decision Mode: This matter will be presented for discussion at the City Council Study Session on Monday, June 3, 1991. Since this matter relates to pending litigation, it is subject to attorney-client privilege and may be discussed in closed session. The Council should invoke this right if desired. Respectfully submitted, Prosser JaV..anager CiJDP:ds Attachments RESPONSE TO MAY 29 RICHFIELD SUN ARTICLE The May 29, 1991, edition of the Richfield Sun contained an article by Lynn Fleming entitled "Attorney sues City for payment of fees." We feel it is appropriate to respond to two points made in the story. First, any meeting between two of the Council Members and a Hennepin County Commission would be entirely legal and would in no way constitute a violation of the open meeting law. However, the meeting referred to in the article did not take place. Although the article does not specifically indicate that such a 0 meeting had been alleged to constitute such a violation, the location of that material in the text of the story creates that implication. We hope that was unintentional. Second, there is no allegation in the complaint that three Council Members held an unscheduled meeting on November 30, 1990. Moreover, the complaint contains no claim of any violation of the open meeting law. The plaintiff's request for admission simply asks the City to admit or deny that such a meeting took place. However, because the story suggests that such an allegation was contained in the complaint, we feel compelled to state that such a meeting absolutely did not take place. The only meeting of Council Members on November 30 was a duly noticed special meeting of the Council. Mayor Quam was present at that meeting; in fact, 0 the meeting was called by him. • Dealing with the series of events which began with Edwina Garcia's resignation has been difficult for the City. While we do not ordinarily feel the need to respond to stories in your paper, we have done so in this case in order to correct any possible misimpressions which your readers may have gotten from reading the article. 0 • • i Attorne sues cit or-.-.payment - of -fees a ?1 s By Lynn Fleming Attorney John Westr &, _- ;ho represented former ":Mayor Repercussions from the re-, •.Steve Quam in his suit, against cent appointment of tw`feuocil members last members to the Richfield City Novenar, ;:filed suit against Council just seem to get more Quain aM -the, city last week and more messy. seeking payment of $4,829.75 in The latest lawsuit, filed fees related to the case ;. against the city last week, Moreover, Westrick is asking charges council members with _ the court toz require the city to engaging in behind-the-scenes pay costs of going to court to col- negotiations and violating the states open meeting law. -SUIT: To page 9A From page IA lect his fees. Westrick's suit also calls for a "Request of Admissions". asking Quam and the city to respond to several statements, including one that cites violation of the open meeting law. Quam and the city must admit or deny the 11 statements listed. on the request. According to the complaint, Council Members Ivan Ludeman and Martin Kirsch met with Hennepin County Com- missioner Randy Johnson in Johnson's office - in the midst of the appointment process - to discuss the question of adopting a resolution declaring a vacancy on the council following the resignation of Edwina Garcia. The complaint also says that on Nov. 30, Council Members Kirsch, Ludeman and Michael Sandahl met to review the order issued by a Hennepin County judge, which upheld Quam's suit and ordered Kirsch and Ludeman to declare Garcia's seat vacant. Quam, according to _ the suit, was not told about the Nov. 30 meeting. Notice of the meeting of the three council members was neither posted nor published and violated the open meeting law, according to the request. As required by the state open meeting law, whenever a ma- jority of City Council members meet to discuss city issues, public notice must be given. Because Edwina Garcia had resigned from her council seat, the five-member council was down to four. City Attorney John Dean said the suit is being reviewed by the city's insurance carrier to deter- mine if the city is insured against'the suit. Quam's suit charged Kirsch and Ludeman with violating the charter by not delaring a vacan- cy on the council following Gar- cia's resignation. Quam said he brought the suit as mayor of Richfield to uphold the city charter, which called for declaring a vacancy immediately. Westrick said he is entitled to payment from the city because he was hired by the mayor to uphold the city charter. The city has 20 days to res- pond to the suit and 45 days to deny or accept the request for admissions statements. •9 2 Q-J • Full 1 1? RECEIVED MAY 3 1 1991 ? North Star Risk SeMaes, Inc. May 30, 1991 City of Richfield VIA FACSIMILE 6700 Portland Avenue Richfield, MN -55423 ATTN: Mr. James Prosser, City Manager RE: Our File No.: 101 L 2894 Trust Member: City of Richfield Claimant: John G. Westrick Date of Occurrence: February 11, 1991 Claims Made Date: May 14. 1991 Dear Mr. Prosser: On behalf of the League of Minnesota Cities Insurance Trust (LMCIT), this letter will formally acknowledge receipt of the Summons and Complaint entitled, "John G. Westrick, Plaintiff, vs. Steven J. Quam, in his former capacity as Mayor of the City of Richfield, and the City of Richfield, Defendants". By copymail, you should have received a copy of my May 24, 1991 letter to the plaintiff's attorney. Notwithstanding the issues of proper service of process, I solicited a limited extension (through July 3, 1991) for Mr. Quam and the city to provide a timely Answer. The plaintiff's attorney has not responded, in writing. Therefore, in my opinion, he has granted the requested extension. Accordingly, it is not urgently necessary to make any decisions with respect to retaining defense counsel. If and when those decisions are made, I will communicate those decisions to you and Mr. Quam in a timely manner. Please be advised that any investigation made or action taken by representatives of the LMCIT on this litigation is done with a reservation of the IMCIT's rights under Covenant No. CMC11072 effective July 1, 1990 to July 1, 1991. Any investigation, adjustment, or defense of the claim or any action whatsoever by representatives of the LMCIT will not constitute a waiver of any rights the LMCIT might have under the covenant. It is, of course, understood that your city does not waive any of its rights under the covenant. 1401 West 76th Street, Suite 500 ¦ Minneapolis, Minnesota 55423 ¦ (612) 861-8600 ¦ FAX (612) 861-8643 A Member of Berkley Risk Management Services Group • City of Richfield May 30, 1991 Page Two MSR File #101 L 2894 In general terms, this lawsuit is predicated upon five separate causes of 'action. The first two causes of action. are claims against Mr. Quam for attorneys' -fees ($4;829.75) for services rendered by the plaintiff in representing Mr. Quam,in a lawsuit that the plaintiff commenced on Mr. Quam's behalf against three ether Richfield counci.lmembers. The final, three causes of action allege claims against the city. The thi'.rd cause of action alleges I.hat the city has benefited by the legal services provided by the plaintiff on behalf of Mr. Quam. In the fourth cause of action, the plaintiff alleges that the city has an obligation to defend and indemnify Mr. Quam for the attorneys' fees incurred by him. In the fifth cause of action, the plaintiff contends that the city, in refusing to pay the plaintiff's attorneys' fees, has deprived the plaintiff of his constitutional rights in violation of 42 U.S.C. 1983. Relative to the LMCIT's duty to defend and/or indemnify Mr. • Quam or the city pursuant to the above-mentioned covenant, in my opinion, it is abundantly clear that Mr. Quam and the city could not be represented by the same defense attorney because of the conflict between Mr. Quam and the city over whether Mr. Quam was acting in his capacity as mayor when he brought the original lawsuit. Clearly, if the LMCIT decides to provide separate defense counsel for Mr. Quam and the city, the cost of defense will greatly exceed the amount of the plaintiff's claim. I would project the cost of defense to be approximately two to four times the amount of the plaintiff's claim. As you know, the applicable LMCIT covenant includes Endorsement ME030 which states that the city has a $50,000 per occurrence deduct-ible which includes defense c_-s+*s. Therefore, the entire defense costs would ultimately be borne by the city. Under Coverage D. Errors or Omissions Liability (Claims Made Basis), please note that coverage does not apply:... d. to amounts due under the terms of any contractual obligation... Also, lease note that the LMCIT's duty to pay on behalf of or to indemnify Mr. Quam will not apply to any act, error or omission for which the "city" is not authorized to indemnify him by statute. 0 City.of Richfield May 30, 1991 Page Three NSRS File #101 L 2894 It is my, opinion that the claims against the-, city itself are not well founded ` because the city had no contrasteal obligation with the plaintiff and because the city did not authorie'Mr. Quam to initiate the lawsuit. While .the city itself may be ultimately successful in defending the claim, the plaintiff will in all likelihood. be awarded relief against Mr. Quam. If, in fact, relief is awa ded aga.intmit Mr. Quam, the LMIC T :' most l:ikelv would not indemnify Mr. ' Quam because of the `exclusion with respect to amounts due under the terms of any contractual obligation. However, that decision by the LMCIT would not change the fact that defense costs alone would far exceed the plaintiff's claim. For the above-stated reasons and because, in my opinion, there is no significant public policy issue at stake that could -affect future LMCIT cases, I believe that this case is one that should be settled and settled before decisions with respect to retaining two defense attorneys are necessary. • Accordingly, please be advised that I intend to contact the plaintiff's attorney to discuss a possible resolution of this case. Unless I hear from you within ten days to the contrary, I will assume that the city has no objection to the LMCIT settling this claim. Should you have any questions or should you wish to discuss this matter further, please feel free to contact me. Thank you. Very truly yours, ?Robert A. Weisbrod Assistant Vice President Claims RAW: jcc City of Richfield May 30, 199 Page Four NSRS File #101 L 2894 cc: Mr. James J. Thomson, Jr., Esq. Holmes & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 Mr. Doug Gronli GAB, Inc. 9531 W. 78th St., Suite 320 Eden Prairie, MN 155344 (GAB File #7) 0 0 r, RECEIVED MAY 2 8 1991 16 } Mayor Adm. Svc, _kz Council Conn. Dev, Nor h Star R1Sk SerVrCeS, Inc. Cm y comm. s`?€;. ...,?,,,..v.. May 24, 1991 ? Liti. Dir. Clerk Puri. Safety -,.,.,... Bannigan and Kelly, P.A. Attorneys at Law 409 Midwest Federal Building 5th and Cedar St. Paul, MN 55101 ATTN: Mr. James J. Hanton, Esq. RE: Our File No.: 101 L 2894 Trust Member: City of Richfield Your Client: John G. Westrick Dear Mr. Hanton: VIA FACSIMILE Hopefully, by the time you receive this correspondence, we will have already discussed the above-captioned matter by telephone. If not, I would appreciate it if you would give 0 me a call to discuss this matter further. I function in the capacity as claims manager for the League of Minnesota Cities Insurance Trust (LMCIT) property/casualty self-insurance program. I would assume that you are familiar with the LMCIT, in some respects, since your law firm acts as city attorney for the City of Maplewood which is also a trust member. In any case, the City of Richfield and their former mayor, Mr. Steven J. Quam, recently tendered to the LMCIT your Summons and Complaint and Request for Admissions relative to the above-captioned matter. As I understand it, personal service of process was made upon Mr. Quam on May 13, 1991. However, the pleadings that the LMCIT received from Mr. Quam did not include Exhibits A, B, C, D and E which are referred to in the Complaint. Therefore, it would appear there will be a question of proper service with respect to Mr. Quam. Additionally, I have been informed that roper service has never been perfected with respect to the city of Richfield. If you dispute the above statements, I would appreciate it if you would call me, immediately. My intent, herein, is to protect the immediate interests of Mr. Quam and the City of Richfield. 1401 West 76th Street, Suite 500 ¦ Minneapolis, Minnesota 55423 ¦ (612) 861-8600 ¦ FAX (612) 861-8643 A Member of Berkley Risk Management Services Group Bannigan and Kelly, P.A. s May 24, 1991 Page Two NSRS File #101 L 2894 If your file reflects that proper service has been perfected upon both Mr. Quam and the. City of Richfield, I would appreciate it if you would provide each of those parties, with a 30-day extension to file a timely Answer. This requested extension would provide the LMCIT with additional time to investigate the background of this matter. It would also allow the LMCIT to makc a more informed decision with respect to its duty to defend and/or indemnify both named defendants with respect to this case. I will assume that you are agreeable to providing an extension for both Mr. Quam and the City of Richfield through July ,3, 1991 unless you inform me, in writing, to the contrary no later than May 29, 1991. Lastly, by return mail or by facsimile, could you please provide me with copies of Exhibits A through E as noted in your Complaint? • I thank you in advance for your anticipated cooperation, I remain. Very truly yours, 1?jjull? Robert A. Weisbrod Assistant Vice President Claims RAW: j cc 0 i • Bannigan and Kelly, P.A. May 24, 1991 Page Three NSRS File #101 L 2894 cc: City of Richfield 6700 Portland Ave. So. Richfield, MN 55423 ATTN: Mr. James Prosser, City Manager Mr. Steven J. Quam, Esq. 6421 James Ave. So. Minneapolis, MN 55423 Mr. Doug Gronli GAB, Inc. 9531 W. 78th St., Suite 320 Eden'Prairie, MN 55344 (GAB File #?) Mr. James J. Thomson, Jr., Esq. Holmes & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 0 RECEIVE D-1 1 X991 A? • STEVEN J. QUAM ATTORNEY AT LAW 6421 JAMES AVENUE SOUTH MINNEAPOLIS, MINNESOTA 55423 TELEPHONE (612) 561-2601 Mr. James Prosser City Manager City of Richfield 6700 Portland Ave. So. Richfield, MN SM23 Dear Mr. Prosser. May 13,1991 I have received a letter from attorney John G. Westrick dated May 4,1991 by which he officially withdraws,, as of that date, from his representation of me for the matter in which he represented me in my capacity as Mayor in November, 199( In view of his stated intention to bring a legal action for his fees, he states that "it would be an irreconcilable ©onfiict-of-interest for me to continue as attorney • of record in the original matter, which is complete! His final paragraph states "For the sake of clarity, I reiterate that I will be filing suit against you, solely in your past official capacity, soon. You should obtain competent legal cotmcll" It seems to me that the City of Richfield would acquire an exposure for Mr. WestrWs legal fees were this impending suit not to be defended. I also under- stand that the city has a statutory obligation to provide me with a defense in this instance. Therefore I am requesting competent legal council, at the City's expense in this matter. As a client, I will be concerned about any conflict of in- terest issues that may arise among attorneys or firms involved in the original action, so I also therefore request the opportunity to be fully advised and con- sulted in the selection of the attorney provided for this defense. Yours very hutys 4t ? 2L 12 lkl?' 0 STEVEN J. QUAM ATTORNEY AT LAW 6421 JAMES AVENUE SOUTH MINNEAPOLIS, MINNESOTA 55423 TELEPHONE (612) 861-2601 May 14,1991 LJ Mr. James Prosser City Manager City of Richfield 6700 Portland Ave. So. Richfield, MN 55423 Dear Mr. Prosser. HAND DELIVERED last night I was served with the enclosed lawsuit by attorney John G. Westrick Please see that it is provided to appropriate legal counsel to be provided for my defense. Please advise me at your earliest convenience who the city recommends for my representation. I reserve the right not to waive any conflicts of interest inher- ent in the selection of an attorney. BANNIGAN & KELLY, P.A. ATTORNEYS AT LAW 409 MIDWEST FEDERAL BUILDING 5TH AND CEDAR SAINT PAUL, MINNESOTA 55101 (612) 224-3781 JOHN F. BANNIGAN, JR. FAX (612) 223-8019 PATRICK J. KELLY JAMES J. HANTON JANET M. WILEBSKI JOHN W. QUARNSTROM May 10, 1991 Mr. Steven J. Quam 6421 James Avenue South Richfield, MN 55423 RE: Westrzck v. Quam et al Dear Mr. Quam: Enclosed herewith and served upon you find the following: 1. Summons; • 2. Complaint; 3. Request for Admissions. Sincerely, BANNIGAN & KELLY, P.A. James J. Hanton JJH:d ?-' Enclosures U STATE OF MINNESOTA COUNTY OF HENNEPIN Case Type: Contract DISTRICT COURT FOURTH JUDICIAL DISTRICT COURT FILE NO. JOHN G. WESTRICK, an attorney at law, Plaintiff, vs. SUMMONS STEVEN J. QUAM, in his former capacity as Mayor of the City of Richfield, and the City of Richfield, a municipal corporation, Defendants. • State of Minnesota to the above-named Defendants: You are hereby summoned and required to serve upon Plaintiffs attorney an Answer to the Complaint which is herewith served upon you within 20 days after service of this Summons upon you exclusive of the day of service. If you fail to do so judgment by default will be taken against you for the relief demanded in the Complaint. P A7 t rney v?5717 BANNIG & ..KELLY, P.A. 409 Mid e Federal Building 50 East fthi Street St. Pau MN 55101 (612) 224=3781 Attorneys for Plaintiff 0 STATE OF MINNESOTA COUNTY OF HENNEPIN JOHN G. WESTRICK, an attorney at law, Plaintiff, vs. STEVEN J. QUAM, in his former capacity as Mayor of the City of Richfield, and the City of Richfield, a municipal corporation, Defendants. COMPLAINT • The Plaintiff complains of the Defendants and alleges: 1. That Plaintiff at the times mentioned herein was and still is an attorney at law licensed to practice law in Minnesota. 2. That at all times relevant herein, Defendant Steven J. Quam (hereinafter "Quam") was the duly elected Mayor of the City of Richfield. 3. That at all times relevant herein, Quam represented that he was acting in his legal capacity as the Mayor of Richfield in furtherance of his legal duties and responsibilities as Mayor. 4. That Defendant City of Richfield (hereinafter "Richfield") is a municipal corporation organ ized under the laws of the State of Minnesota. 5. That the Richfield city charter provides that the city council shall be composed of a mayor and four council members. Case Type: Contract DISTRICT COURT FOURTH JUDICIAL DISTRICT COURT FILE NO. 19 6. That on November 7, 1990, the Richfield city council consisted of Mayor Steven • J. Quam, and councilmembers Edwina Garcia, Martin Kirsch, Michael Sandahl, and Ivan Ludeman. 7. That on November 7, 1990, council member Edwina Garcia was elected to the Minnesota House of Representatives. 8. That consistent with state law, the Richfield city attorney advised the Richfield city manager, in a letter dated November 14, 1990, that the Richfield city council had a mandatory obligation to accept the resignation of any member of the city council and to declare a vacancy upon such resignation. (See Exhibit A). 9. That the Richfield city attorney, in that same letter dated November 14, 1990, advised the Richfield city manager that the mayor had a mandatory duty to appoint a person to fill the vacant council seat in the event that the city council was unable to agree on a • replacement within 30 days. 10. That the Richfield city charter, Section 2.05, governs the existence of vacancies on the city council. 11. That consistent with the city charter and the recommendation of the city attorney, the Richfield city manager advised the Richfield city council in a written memorandum of said requirement and recommended that the city council approve a resolution declaring a vacancy if any member of the council tendered a resignation. (See Exhibit B). 12. That at a regular meeting of the Richfield city council on November 26, 1990, Council member Garcia submitted her resignation and withdrew from the city council. The motion was made to declare a vacancy pursuant to the terms of the Richfield city charter Section 2.05. That motion failed on a split vote of 2-2. 13. That on November 27, 1990, Defendant Quam contacted the Plaintiff. is 14. Defendant Quam advised the Plaintiff that as Mayor of the City of Richfield, 0 Quam had a mandatory legal obligation to comply with the provisions of the city charter. Quam further advised the Plaintiff that Quam was unable to fulfill those legal obligations because the city council was politically deadlocked. 15. Acting in his capacity as Mayor, Quam retained the Plaintiff for the sole purpose of seeking judicial enforcement of the terms of the Richfield city charter on behalf of the office of Mayor. 16. That at the specific request and direction of the Richfield Mayor, Plaintiff prepared and filed an action entitled State of Minnesota ex rel Steven J. Quam, Mayor of the City of Richfield, and Gordon A. Anderson, Petitioners, v. Martin Kirsch, Michael Sandahl, and Ivin Ludeman, individually, and as members of the city council of the City of Richfield, Respondents. Court File No. 90-21949. • 17. That the City of Richfield appeared in opposition to the aforementioned petition for mandamus, however, the City of Richfield did not prepare or submit any written answer or response to said petition. 18. That on December 4, 1990, the Honorable Kevin Burke, Judge of District Court, ruled in favor of the petitioners, as represented by the Plaintiff. 19. That in his supporting memorandum, Judge Burke stated that "the remaining political factions have done a disservice to their constituents by not rising above their own partisan interest in deciding to instead serve the people by finding a suitable candidate to replace Ms. Garcia". (See Exhibit Q. Judge Burke further stated that "there is no rational basis for respondents, Kirsch and Ludeman, to not recognize a vacancy exists and declare so pursuant to the terms of the charter, other than to attempt to gain some partisan advantage." (See Exhibit C). is 20. That at the direction of Mayor Quam, the Plaintiff submitted his itemized • billing statement directly to the Richfield city manager on December 5, 1990. (See Exhibit D). That billing statement, including costs and services, totalled $4,829.75. 21. That said billing statement was submitted in compliance with Minn. Stat. §412.271. 22. That Plaintiff again submitted that billing statement to the Richfield city manager on January 18, 1991. (See Exhibit E). 23. That the City of Richfield has refused to pay any of the fees submitted by the Plaintiff incurred at the direction of former Mayor Quam. 24. That at a regular meeting of the Richfield city council on January 28, 1991, the Richfield city attorney advised the city council that the city attorney was not able to represent Mayor Quam in the aforementioned petition for mandamus. • 25. That a public purpose, specifically enforcement of the Richfield charter, was clearly served as a result of the aforementioned litigation for which the Plaintiff provided services. 26. That on January 28, 1991, Defendant Quam stated at a regular meeting of the Richfield city council that the aforementioned litigation was necessary in order to allow the Mayor to carry out those responsibilities and duties as provided by the city charter. 27. That on February 11, 1991, at a regular meeting of the Richfield city council, Council member Sandahl stated the Plaintiffs bill should be paid "because I think it is a reasonable financial stewardship of the city's money to pay that bill." 28. That on February 11, 1991, Council member Sandahl made a motion that the city council pay the Plaintiffs bill at that time. That motion failed on a vote of 2-3. r1 U FIRST CAUSE OF ACTION 0 29. Plaintiff incorporates herein by reference Paragraphs 1-28 as though set forth in their entirety. 30. That former Mayor Quam is indebted to the Plaintiff in the sum of $4,829.75 for services rendered by the Plaintiff for the office of the Mayor, at the Mayor's request, as an attorney at law, between November 27, 1990, and December 1, 1990, and for monies paid in advance by the Plaintiff for the benefit of the Defendant. 31. No part thereof has been paid. SECOND CAUSE OF ACTION 32. Plaintiff incorporates herein by reference Paragraphs 1-31 as though set forth in their entirety herein. 33. That between November 27, 1990, and December 1, 1990, the Plaintiff rendered • services for the Mayor of Richfield, at the Mayor's request, as an attorney at law. 33. That said services, including monies advanced, were reasonably worth $4,829.75. 34. No part thereof has been paid. THIRD CAUSE OF ACTION 35. Plaintiff incorporates herein by reference Paragraphs 1-34 as though set forth in their entirety. 36. That a public purpose and the public welfare of the City of Richfield benefitted from the services rendered by the Plaintiffs. 37. That the reasonable value of that benefit was the amount of $4,829.75. 38. That the City of Richfield and its residents have been unjustly enriched as a result of Plaintiffs efforts and services. FOURTH CAUSE OF ACTION i 39. Plaintiff incorporates herein by reference Paragraphs 1-38 as though set forth in their entirety. 40. That Mayor Quam retained the services of Plaintiff in good faith and for the purpose of legally enforcing the duties and obligations of the office of Mayor. 41. That the City of Richfield as a mandatory obligation to defend and indemnify Mayor Quam for the expense of those services pursuant to Minn. Stat. §466.07. FIFTH CAUSE OF ACTION 42. Plaintiff incorporates herein by reference Paragraphs 1-41 as though set forth in their entirety. 43. That the services rendered by the Plaintiff constituted property of the Plaintiff. 44. That the fees earned by the Plaintiff in consideration for services rendered • constitute the property of the Plaintiff. 45. That the City of Richfield has refused to pay for Plaintiffs services in the amount of $4,829.75. 46. That the action of the Richfield city council in refusing to pay Plaintiffs fees in taken under color of state law. 47. That Plaintiff has been deprived of his constitutional property rights as provided under the Fifth and Fourteenth Amendments to the Constitution. 48. That said deprivation of Plaintiffs constitutional rights by the City of Richfield under color of state law constitutes a violation of 42 U.S.C. Section 1983. WHEREFORE, Plaintiff demands judgment against Defendants for: 1. $4,829.75; 2. Pre-verdict interest as provided by statute; 0 3. Reasonable attorneys' fees as provided by state and federal law; 4. Reasonable costs and disbursements; 5. Such other relief as the court deems just and equitable. - BAI NIGAN KELI; , P -yam- - ?. ? ---! James-J. YN'. n Attorney 5717 BANNIG KELLY, P.A. 409 Mid est Federal Building 50 Eas fifth Street St. Paull, MN 55101 (612) 2?4-3781 Attorneys for Plaintiff I• ? 40 STATE OF MINNESOTA COUNTY OF HENNEPIN JOHN G. WESTRICK, an attorney at law, Plaintiff, vs. STEVEN J. QUAM, in his former capacity as Mayor of the City of Richfield, and the City of Richfield, a municipal corporation, Defendants. Case Type: Contract DISTRICT COURT FOURTH JUDICIAL DISTRICT COURT FILE NO. REQUEST FOR ADMISSIONS TO: Defendant Steven J. Quam, and Defendant, City of Richfield. Plaintiff, John G. Westrick (hereinafter "Westrick") requests defendants within 45 days after service of this request to make the following admissions for the purpose of this action only and subject to all pertinent objections to admissibility which may be interposed at the trial. Pursuant to MRCP 36.01, objections to these requests on the basis that the request presents a genuine issue for trial is insufficient grounds for objection. Please admit/deny that the following statements are true: 1. That on or before November 26, 1990, Councilmember Martin Kirsch, and Councilmember Ivan Ludeman met in the offices of Hennepin County Commissioner Randy Johnson. 2. That at the aforementioned meeting on or about November 26, 1990,Councilmember Kirsch and Councilmember Ludeman discussed with County Commissioner Johnson the question of adopting a resolution declaring a vacancy on the city 0 council. 3. That the Richfield city clerk and the Richfield city manager were advised in a letter dated March 19, 1990, by the Richfield city attorney that "if a city council vacancy occurs due to resignation by a councilmember, the city council must follow the following procedure: 1) Adopt a resolution declaring a vacancy ..." 4. That the Richfield city council had been repeatedly advised by its city attorney prior to November 26, 1990 of the city council's legal obligation to declare a vacancy in the event of a resignation by a member of the city council. 5. That the City of Richfield failed to perform a mandatory legal duty as determined by the Honorable Kevin S. Burke in his Order dated November 30, 1990. 6. That the City of Richfield has paid for legal services incurred in its defense of the aforementioned lawsuit arising out of the city's breach of its legal duty. • 7. That on or before November 30, 1990, Defendant Steven J. Quam was advised by the Richfield city attorney that the office of the city attorney could not provide legal representation to the Mayor with respect to the aforementioned litigation. 8. That the City of Richfield did not make any other legal representation available to the Mayor with respect to the aforementioned litigation. 9. That on November 30, 1990, Councilmembers Martin Kirsch, Michael Sandahl and Ivan Ludeman met to review the order issued by Judge Burke. 10. That the aforementioned meeting on November 30, 1990, was held without published or posted notice. 11. That Mayor Quam was not advised that a meeting of a majority of the city council was being conducted on November 30, 1990. DATED: 1991. KELLY, P.A. TM'west -'5717 / eral Building eet 101 (612) 224-3781 Atto rneys for Plaintiff 0 is • CITY OF RICHFIELD, MINNESOTA Study Session Letter No. 32 Agenda June 3, 1991 Issue Statement: Discussion regarding student service on Boards and Commissions. Background: Mayor Kirsch has requested an opportunity to discuss with Council, concepts to encourage greater participation of students on various Boards and Commissions. Presently there are two student members on the Human Rights Commission, two on the Sister City Commission, two on the Advisory Board of Health and two on the Community Services Commission. Recommended Motion: Discuss the concepts to increase student participation on Boards and Commissions. Basis for Recommendation: The Mayor requested that this item be discussed at the Study Session. Alternative Recommendation: This matter may be deferred for discussion at a later date. • Discussion/Decision Mode: This matter will be presented for discussion at the City Council Study Session on June 3, 1991. Respectful submitted, ,Ay James Prosser City M ager JDP:ds 0 • Human Rights Commission 2 students: Susie Vanden Burg Stevem McKinney One year terms Have voting rights High school age Sister City Commission 2 students: Jeannine Pluhar Edgar Oliveria One year terms High school age Advisory Board of Health 2 students: Jill Pearson Kelly Stokes • One year terms No voting rights High school age Liaison to School District Community Services Commission 2 students: Kevin Hoemke Greg Allers Three year terms Voting rights Can continue to serve beyond high school CITY OF RICHFIELD, MINNESOTA Study Session Letter No. 33 ?CONFIDENTIAL Agenda June 3, 1991 Issue Statement: Review of North •Star Risk Services recommendation regarding Westrick vs. Richfield case. (Left blank intentionally.) CITY OF RICHFIELD, MINNESOTA • Study Session Letter No. 31 Agenda June 3, 1991 Issue Statement: Discussion of Information and Referral (I and R) services for senior citizens. Background: In July, 1989, following several years of study by the Human Services Commission, the City Council directed the Commission to study, with South Hennepin Human Services Council (SHHSC), ways to provide services. At its July, 1990 meeting, the Human Services Commission voted to urge Council financial support of the Senior Citizen and Referral Hub being established by Senior Resources through a start up grant from the Metropolitan Council Task Force on Aging. The one year grant was to provide funding for a coordinator (Julie Bentz), data base and marketing for a model or pilot service designated for senior citizens. Senior Resources is a Minneapolis based agency which provides a variety of human services for senior citizens. Senior Resources was coordinating with SHHSC since determining the South Hennepin area was the best place to begin a pilot project based on the history of cooperation among the four cities of Richfield, Bloomington, Edina and Eden Prairie. Senior • Resources requested proposals from 90 agencies which may have been interested in providing the I and R services. The only agency to respond was Bloomington's Office of Senior Services. However, Bloomington was not willing to underwrite the full cost of a program designed to serve four South Hennepin communities. In August, 1990, Richfield's Mayor and staff met with SHHSC members and staff and with Ms. Bentz to discuss the City's position. Richfield discussed Local Government Aid reductions and stated Richfield's share of the program could only be funded by the City if some other service were reduced or eliminated. Ms. Bentz indicated she was pursuing alternative funding sources. This background was reviewed and discussed by the City Council and Human Services Commission on October 1, 1990. At that time, the I and R program had not been discussed with the cities of Edina and Eden Prairie because a formal proposal from the City of Bloomington to operate a Senior position had not yet been submitted to the SHHSC. The newly established information position for SHHSC was not to duplicate any of the services being offered by the Bloomington proposed Senior I and R position. On November 28, 1990 the Council voted 3-1 "to authorize $10,000 in the 1991 budget be available for a Senior Outreach Information and Referral Program (SSHC)." As a result, the adopted 1991 • budget includes $10,000 in the Community Center budget for the I and R program. To provide this allocation, other budgeted expenditures were reduced. • At the May, 1991 meeting of the Human Services Commission, Mayor Kirsch briefly reviewed the status of the I and R program. Edina and Eden Prairie will not be participating at this time. Bloomington and Richfield are the only cities still expressing any interest in participating. The proposed Bloomington/Richfield I and R program would have support staff located in Bloomington. It would extend to Richfield the same service now offered in Bloomington. Richfield's first year costs would be between $450 and $500 a month for 25% of the coordinator's time, 1% clerical time, related personnel benefits, supplies and materials including promotional flyers. There would be a one time, first year capital cost of $1,200 - $2,000 for computer and telephone. There is consideration in the second year of hiring a second half time person to work with the program. Richfield's cost share for the additional personnel is unknown. Although second year costs, and subsequent year costs, are not known at this time, they would undoubtedly include some inflationary cost impact for personnel, supplies and materials. Recommended Motion: Discussion of Richfield's position related to interest in and/or funding of an Information and Referral Service for Seniors. • Basis of Recommendation: 1. Edina and Eden Prairie have decided NOT to participate in the proposed I and Rpprogram. 2. Staff is in the budget preparation process. It would be most helpful to have Council direction as to whether or not the City should continue interest in and/or funding of an Information and Referral Service for Senior Citizens. Alternative Recommendation: None. Discussion/Decision Mode: This discussion will be of great assistance to staff during budget preparation. Res ec lly submitted, JD. Prosser Ci Manager JDP:ds 0 CITY OF RICHFIELD, MINNESOTA Study Session Letter No. 30 Agenda June 3, 1991 0 Issue Statement: Discussion of 1.6% General Fund budget reduction and implications of 1991 tax bill. Background: The legislature passed two important bills which significantly impact upon the City's Local Government Aid (LGA). The first bill, passed early in 1991 provides for a $200,000 cut in Richfield LGA in July, 1991. That bill also provides for an additional $240,000 cut in LGA to Richfield in 1992. The final tax bill, which was recently passed by the legislature and signed by the Governor, provides for a further cut of $155,000 in LGA to Richfield in December, 1991 and another $155,000 cut in 1992. The latter bill also addresses the issue of levy limits and a one-half cent optional sales tax increase. This Study Session letter will address these issues. July, 1991 $200,000 LGA Reduction City staff has assembled budget adjustments which cover the approximately $200,000 loss of LGA which the City will experience in July, 1991. The specific cuts by Division with a brief explanation of some of the more significant individual reductions are as follows: Division • City Manager Airport Mayor/Council Personnel $6,050 expenditure Cancel contract with AMM reduction Labor Relations Service, reduce REAP (tuition reimbursement program) Assessing $3,040 expenditure Eliminate special reduction assessment computer program project Adjustment $8,140 expenditure reduction $1,100 expenditure reduction $1,390 expenditure reduction Comments Reduction in staff, one part-time clerk typist- reclassification Eliminate meals Out-of-state travel for Council Members eliminated City Clerk $1,150 expenditure Deputy registrar office reduction-$2,500 opens until 5:00 p.m., increased revenue Tuesday-Friday, with no extra staff hours 0 Finance RYES/Home Service $2,550 expenditure reduction $280 expenditure reduction Reduction of part-time hours, overtime, and supplies Reduction of part-time hours 0 • Administration $1,700 expenditure Reduced personal services reduction cost Com. Dev. Admin. $4,640 expenditure Reductions in personal Planning & Zoning reduction services costs HRD Police $35,424 expenditure One patrol officer position reduction unfilled; one patrol officer on leave of absence Fire $31,100 expenditure Delay replacement of Engine reduction 88 and cut overtime, supplies and equipment Admin. Support $5,945 expenditure Reduction of CSO hours; Services reduction Richfield to do HVAC inspections, previously contracted with Bloomington Public Safety Revenue Increase $15,600 in revenue Use CSO's for writing non- moving violation; one time refund of accreditation fee Police Ancillary Services Emergency Services Engineering LHN Maintenance Government Buildings $8,400 expenditure reduction $8,700 expenditure reduction $3,000 expenditure reduction $200 expenditure reduction $5,160 expenditure reduction Delay microfilming, equipment Purchase reconditioned sirens rather than new ones Old transit repaired not replaced Charges to maintenance assessment project Labor credits for water slide not previously included in budget Community Services $7,830 expenditure Personal services Administration reduction reductions; transportation engineering now budgeted for 77th Street study by Byron Wallace Nature Center $7,480 expenditure Personal services savings reduction due to Manager resignation Swimming Pool $30,000 income Additional revenues due to revenue water slide feature Ice Arena $3,000 expenditure Use current fuel oil tanker reduction instead of purchasing for '91 Recreation $10,180 expenditure Personal services savings reduction due to Recreation Supv. vacancy and reclass. All cuts will be incorporated into the 1991 Revised Budget. • December 1991 $154,000 LGA Reduction In addition to the cuts listed above, it is now known that the City will lose an additional $154,000 in December 1991 under the new tax bill. Each Department will be requested to go back and find another 1.25% of the present 1991 Budget which will have to be cut. It is very apparent that these additions will result in cuts in service levels and some reductions in personnel. The specific cuts will be prepared and incorporated into the 1991 Revised Budget which will be presented to the City Council in late August. 1992 LGA Cut Reductions - 1992 Levy Additional LGA cuts to the City of Richfield for 1992 will total roughly $400,000. Cuts of that magnitude would mean severe reductions in service levels and reductions in personnel. However, the new tax bill provides cities with the authority to levy taxes for the amounts of LGA that will be lost for 1992. Thus, the funding could be recovered through property taxes. This is very similar to what happened to the City in 1989 when $872,000 of LGA was taken from the City and shifted to the City's base property tax levy. It is also important to note that except for the ability to levy for lost LGA, the City's 1992 base property tax levy will be frozen at the 1991 level. That means no growth in the base levy, not even the 3% generally built into the base levy each year. . With those restrictions, the General Fund revenue available to the City for 1992 would be, at best, equal to General Fund revenue for 1991 after all reductions are in place. The reduced 1991 General Fund revenues, in turn, would be virtually level with revenues for 1990: In preparing the Revised 1991 Budget/1992 Proposed Budget, City staff will proceed in a direction of building in all of the necessary 1991 LGA reductions. Staff will also proceed with a 1992 Proposed Budget which assumes a base levy which recovers the lost LGA for 1992. Such a levy would represent a 6.2% increase over the 1991 total levy if you exclude any potential increase in special levies for debt service and unfunded pension liability. Local Optional Sales Tax The new tax bill provides for an additional one-half cent additional sales tax to be adopted on the local level by counties or, in some instances, by the cities and townships within the county if the county fails to adopt the optional sales tax. In turn, the one-half cent and an additional one and one-half cent portion of the existing sales tax will go into a local government trust fund. The two cent total for the trust fund is estimated to yield $699 million in fiscal 1992 and $786 million in fiscal 1993. Those funds would be used to provide total funding for non-school local aids including LGA, HACA, Disparity Reduction Aid and several other smaller aid • programs. The extra one-half cent sales tax will be mandatory from 7-1-91 to 12-31-91. County boards may vote to adopt the one-half cent tax by 7-1-91 for sales starting January 1, 1992. If a county fails to adopt the one-half cent tax, the sales tax in the county does not drop to four and one-half percent, it stays at six percent. Yet, all aids within the county (LGA, HACA, etc.) are eliminated and the difference between the four and one-half cent and six cent sales tax • goes into the Local Government Trust Fund as a windfall distribution for all local governments in the other counties which approve the local one-half cent sales tax. Thus, this local sales tax is extremely critical to Richfield and Hennepin County. Approval of the one-half cent sales tax by the Hennepin County Board is not certain. The AMM is recommending that cities approve a resolution in support of County approval of the tax. Recommended Motion: Discuss the present budget situation including 1.6% reductions, the additional 1.24$ reduction for 1991 and the 1992 budget, potential levy and local optional sales tax. Discuss consideration of the resolution in urging Hennepin County to adopt the sales tax option. Basis for Recommendation: 1. The City has already lost $200,000 of LGA for 1991 which represents 1.6% of the General Fund Budget. 2. City staff is now aware that Richfield will lose another $154,000 in LGA for 1991 and an additional $400,000 in LGA for 1992. 3. The City staff must proceed with the budget process now to meet the truth-in-taxation timetable for this year. • 4. A number of cities appear to be in support of Hennepin County adoption of the sales tax increase. Failure to adopt the sales tax increase would increase local property taxes an estimated 30% overall. Alternative Recommendation: 1. Postpone discussion of this item to a future City Council Study Session. 2. Consider this item at a regular City Council Meeting. Discussion/Decision Mode: Discussion must take place on this item as soon as possible, preferably at the June 3rd Study Session to enable staff to prepare a budget in a timely fashion. If authorized by the Council Resolution in support of the sales tax increase will be placed on the June 10, 1991 Council agenda. Respec;,fVlly submitted, 1] Jams. Prosser Cit naaer JDP:ds RESOLUTION NO. • A RESOLUTION SUPPORTING THE CREATION OF A DEDICATED TWO-CENT REVENUE STREAM CALLED THE LOCAL GOVERNMENT TRUST FUND WHEREAS, the 1991 Legislature establish a one-half cent optional sales tax that may be adopted by counties or cities within counties to augment local government property tax relief and create a dedicated two-cent revenue stream called the Local Government Trust Fund; and, WHEREAS, if counties fail to adopt the optional sales tax, the sales tax for that county will remain at six percent, and the county's 1.5-cent share of the revenue stream will be distributed to other cities and counties; and, WHEREAS, counties and cities within counties failing to adopt the optional tax lose all of their Local Government Aid and Homestead and Agricultural Credit Aid; and, WHEREAS, counties and cities within counties may make up for the lost LGA and HACA funds by raising property taxes or cutting services, or a combination of both, NOW, THEREFORE, BE IT • of Richfield does support Commissioners of Hennepin cent sales tax by July 1, Chapter 291. RESOLVED the City Council of the City and request that the County Board of County do adopt the optional one-half 1991, as stipulated in Session Laws Adopted by the City Council of the City of Richfield, Minnesota this 10th day of June, 1991. Martin J. Kirsch, Mayor ATTEST: Thomas P. Ferber, City Clerk LJ City of Richfield, Minnesota • Study Session Letter No. 29 Agenda, June 3, 1991 Issue Statement: Policy and Strategy Recommendations for Airport Related Issues. Background: Recent developments regarding the airport include the following: • Richfield Planning Commission Airport Meetings The Planning Commission held a public information meeting regarding the status of airport issues for New Ford Town and Rich Acres residents on May 28, 1991. Approximately 60 residents attended the meeting. Staff presented and discussed the following issues: 1. Current status of planning for expansion of MSP airport. This included an overview of the six runway and terminal alternatives currently under consideration and the effects of each concept on Richfield. Staff gave the City's policy on each alternative. 2. FAR Part 150 Program. Staff summarized the current efforts underway by the MAC to implement the Part 150 Program including the meetings and development of a City core group. 3. Property Acquisition in New Ford Town and Rich Acres. Staff gave an overview of the a resolution directing the MAC staff to meet with City staff authorizing the joint feasibility study of a New Ford Town/Rich Acres buyout, relocation and redevelopment. Staff emphasized that the City is taking this action because the residents previously stated a desire for their homes to be purchased and relocated due to airport noise and the uncertain future of the area resulting from proposed airport expansion plans. Also, the MAC staff has indicated a desire to assist the City in redeveloping New Ford Town and Rich Acres. However, the MAC has not pursued any redevelopment proposal with the City. As a result, the City has initiated the process. The audience stated a number of concerns regarding the effects of future airport plans on their lives and neighborhoods. Residents stated they want action taken now by the City and the MAC regarding the future of New Ford Town and Rich Acres. They expressed a desire for a complete buyout of the properties because of the negative environmental impacts of airport operations and adjacent roadway traffic. Also, the proposed airport expansion plans has created uncertainty in the future of their neighborhoods. As in the past, a few residents expressed a desire to "leave things alone." . In regard to the Part 150 Program, residents stated that soundproofing projects will not improve the overall environment of their homes. This mitigation measure would require the residents to install air conditioning systems in their homes. They do not want to invest in these systems because soundproofing will not alleviate the noise outside their homes and they will not be able to enjoy being outside in their yards without the disruption of airplane noise. They stated that the best solution was for the MAC is to buyout their properties with these funds. Residents raised concerns about the time frame for the City and MAC staff to complete the feasibility study of the New Ford Town and Rich Acres buyout, relocation and redevelopment plan. Staff assured the residents that the City and MAC staff will complete this study and have a New Ford Town/Rich Acres package plan prepared and ready for the City Council to approve in six months. On June 11, the MAC will conduct a public information meeting hosted by the Planning Commission for all city residents at Richfield Senior High School at 7:30 p.m. The purpose of the meeting is to provide information regarding MAC's proposed Long Term Comprehensive Plan for MSP airport. Residents were informed of the meeting with notice published in the Richfield Sun Current and Our Town newsletter. • • MSP Intergovernmental Planning Group Mayor Martin Kirsch and Bill Weaver, City Planner, continue to attend meetings with this group. The attached "Airport Notes" summarizes the meetings held in May 1991. • MAC Part 150 Program Bill Weaver was appointed as the City's representative on the MSP Land Use Policy Advisory Committee developed by the MAC staff. The committee will monitor and make recommendations on the development of the land use implementation plan (Part 150 Program). The Policy Advisory Committee (PAC) will hold its second meeting on June 5. The attached "Airport Notes" lists the meeting agenda. The MAC requested the City to develop a core group that will work with MAC staff to review the Part 150 Program implementation process and provide technical assistance relative to the City's concerns. The MAC recommended that the core group be composed of the following: 1. 2. 3. 4. . 5. Richfield Policy Advisory Representative (Leader) Bill Weaver has been designated. Technical Representative Planning Representative Community Relations Representative Administration Representative The MAC will hold an educational open house on June 5 at 2:30 p.m. for the core groups representing the communities surrounding MSP. The attached "Airport Notes" gives the agenda for the open house. At the end of June, the City's core group will host an educational open house for Richfield residents that will provide information about the Part 150 Program. At the end of September, the City core group will hold a public forum for Richfield residents. The purpose of this meeting is to receive input from the community of acceptable noise mitigation measures. The core group will consolidate these comments and prepare a summary report listing the City's noise mitigation project priorities. This report will be submitted by Bill Weaver at a PAC meeting that will be used by the MAC to develop the overall Part 150 implementation design for the communities surrounding MSP airport. Recommended Motion: With this background information, the following recommendations are provided to address these issues: • Richfield Planning Commission Airport Meetings A summary report of the June 11, 1991 public information meeting will be provided to the City Council. o MSP Intergovernmental Planning Group Staff will continue to participate in this group and keep the Council informed of the topics covered and the tasks accomplished at these meetings. • s MAC Part 150 Program The Council should designate representatives to serve on the Part 150 Implementation Core Group. 1. Technical Representative 2. Planning Representative 3. Community Relations Representative 4. Administration Representative Staff will continue to provide summary reports to the Council of the MSP Land Use Policy Advisory Committee and City core group meetings. Alternative Recommendations: A variety of alternative recommendations may be discussed at the June 3, 1991 Study Session. Discussion/Decision Mode: These matters will be discussed at the June 3, 1991 Study Session. Respectfully submitted, Jame . Prosser City nager JDP:ds Attachments • 1 .A INTERGOVERNMENTAL PLANNING GROUP The IPG met May 22, and 29, 1991 to continue their review of the draft Long Term Comprehensive Pan for MSP airport. The plan is being prepared by Howard Needles Tammen and Bergendoff (HNTB) with input from local communities surrounding MSP. Community input includes review and comment on drafts of the plan together with preparation of community impact sections. 0 Richfield staff is currently preparing text for sections describing Runway/taxiway development 1.Tax impacts related to acquisition of land for runway protection zones (RPZ). 2.Disruption to the community as a result of RPZ acquisition. 3.1990 population impacted by noise generated from each runway option. 4.1-and use compatibility relative to FAA land use guidelines. 5. Identification of all sensitive noise receptors by type and the extent each is effected by the runway alternatives. 6. Changes in growth patterns attributable to noise. 7. Tax impacts of noise, e.g. net loss in tax capacity as a result of noise exposure. 0 ARPRTNTS.DOT • Terminal/ landside development 1.Traffic impacts to local streets attributable to each terminal or facility development, e.g. west terminal, remote parking. 2.Induced development attributable to terminal related improvements. A work program identifying tasks and assignments has been prepared by Planning staff in order to meet the June 12, 1991 deadline for submission of our analysis. POLICY ADVISORY COMMITTEE (PART 150) The Policy Advisory Committee (PAC), established to advise MAC on Part 150 implementation, will hold its second meeting June 5, 1991. the purpose of the meeting will be to 1.Finalize the members of each city's core team, 2. Review the project flow chart, 3.Clarify the project study area boundaries 4.Preview the educational open house slated for core teams and media immediately following the PAC. An educational open house will follow the PAC meeting at 2:30 p.m. The open house will provide information on the following subjects: 1. Basics of noise and noise contours 2. General overview of the FAA Part 150 program 3. Land Use Implementation Design project review, (the meat of the PAC's role) 4. Land use mitigation options 5. Residential sound proofing methods and noise attenuation 6. Funding tools 0 ARPRTNTS.DOT