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Council votes to hire law firms taken in private raise concerns: Editorial

Posted 5/23/18

On March 13, 2017, Middletown Borough Council went into executive session to “discuss potential litigation and no action was taken.”

That is according to the official minutes of the …

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Council votes to hire law firms taken in private raise concerns: Editorial

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On March 13, 2017, Middletown Borough Council went into executive session to “discuss potential litigation and no action was taken.”

That is according to the official minutes of the March 21, 2017 meeting, posted on the borough website.

And it is wrong. The council did take action. They hired the law firm Katten Muchin Rosenman LLP to provide “advice” on issues the council has with the 50-year lease of the borough’s water and sewer systems to Suez and Middletown Water Joint Venture LLC.

That action was done in executive session, which runs afoul of Pennsylvania’s Sunshine Act. But we know that it happened because on April 17, 2018 — almost 13 months later — the borough decided to retroactively ratify hiring Katten. The borough paid Katten $11,915.74 for legal services rendered through April 30, 2017.

Hiring a law firm in executive session was not a one-time thing.

Also during the April 17 meeting, council publicly ratified hiring Dilworth Paxson, another law firm related to the water and sewer lease issue. Council had “unanimously concurred” to hire the firm during a March 6 closed-door executive session, according to Borough Manager Ken Klinepeter.

The meeting minutes of March 14, the next meeting following the vote, include a report on the March 6 executive session: “Council President [Damon] Suglia noted the executive session held on March 6, 2018 was held to discuss potential litigation and personnel with no action being taken.”

Again, that is incorrect, and the hiring was not proper.

“The Sunshine Act allows private deliberation about pending or threatened litigation, but the law never allows official action, such as votes, to take place outside a public meeting,” Melissa Melewsky, media law counsel for the Pennsylvania NewsMedia Association, told the Press & Journal. 

When asked about the Dilworth Paxson vote, Klinepeter said: “We were in a crunch — we had to get somebody on board. We had like three or four weeks to answer the statement. We had to get this group up to speed fast, so the engagement preceded the vote. It isn’t normally how you would do it.”

That might be the case, but his argument loses merit when that is exactly how the council did it a year before in the Katten Muchin Rosenman hiring.

And a time crunch does not exempt a government entity from working within the Sunshine Act.

We are disappointed the council handled these hirings in this manner, in an apparent effort to keep the Suez concerns from becoming public. In March 2017, there were no hints that a little more than a year later, the borough would be in litigation with Suez. The borough on April 16 sued the joint venture, which includes Suez, in Dauphin County Court, seeking to block Suez from imposing an 11.5 percent surcharge being added to water and sewer bills, because the company said water sales fell below a target during the first three years of the lease. The suit was transferred to federal court, where a hearing on the borough’s request to block the surcharge was scheduled for Tuesday, after the Press & Journal’s deadline.

There are two issues here: the lack of transparency in hiring law firms and spending borough money, and the secrecy in which the issues with Suez were handled.

Let’s briefly discuss the Suez issue: The borough had problems with the lease in early 2017 but did not divulge those opinions to the public. The issue was never discussed during a public session of the council. But those concerns were so deep-rooted that it hired a law firm to seek advice. The public didn’t know that until a year later.

While we respect that negotiations sometimes are better done in private, what good did it do borough residents for council to keep it quiet until only days before Suez announced it planned to impose a 11.5 percent surcharge on water and sewer bills? Were they simply trying to avoid the headache that could arise when residents found out about the higher water and sewer bills?

With regard to the improper hiring of two law firms in executive session, these are only two instances that the Press & Journal learned about. We don’t yet know if there are more. We hope it is not the case. We urge the current council to bring any other past instances to light and make them right.

Klinepeter took the blame for the March 6 vote because he was out of the office on a personal matter. But it is each council member’s obligation to be aware that a vote such as this should not be taken in executive session. It’s not solely Klinepeter’s responsibility to raise that issue.

Courts have allowed government agencies to “cure” a suspected Sunshine Act violation by doing it right the second time around, Melewsky told us, and it is not likely that a court would find a violation and impose a penalty for a one-time issue. But this has happened twice, and a remedy should be a one-time thing, not a regular occurrence, she said.

Melewsky said any agency undertaking a “cure” should make the facts clear to the public and “pledge better compliance in the future to restore and maintain the public trust.” We don’t think council has done that.

In more extreme cases, Melewsky said, the Sunshine Act allows a judge to impose criminal and civil penalties if a violation occurred, and a court could invalidate action found to violate the law. The court can impose injunctions on the agency to ensure future compliance, and level penalties in the form of attorney fees. From a criminal perspective, it is a crime to intentionally violate the law, with a first offense punishable with up to a $1,000 fine plus court costs.

“There is no oversight agency that polices Sunshine Act compliance; the law is citizen enforced, so it falls to the public to keep watch and seek redress for suspected violations,” she said.

So it’s possible a resident of the borough could take legal action over what potentially could be two violations of the Sunshine Act.

Our bottom line is this: The borough council should not let this happen again, and it should strive to be transparent in all matters.

We hope to chalk this up as a lesson learned.

However, if more such issues from the past come to light, legal steps might need to be taken.