Poulsbo dipping into reserve to cover legal costs

POULSBO — A large number of legal issues this year caused the City of Poulsbo's legal reserve fund to dwindle from nearly $500,000 to below $300,000.

“We have been doing everything right, we just ran into some rough luck this year with legal matters that we could not have foreseen,” Poulsbo Mayor Becky Erickson said.

About $31,000 went to cover a two-year bargaining session between the city and the Poulsbo Police Officers Association. An arbitrator settled the issue of wages for officers after the city and union could not come to agreement in contract negotiations.

The city spent $63,000 in 2010 to defend an appeal made by North Kitsap residents Jan Wold and Molly Lee after they challenged the city's 2009 Comprehensive Plan update. The Growth Management Hearings Board sided with the city, saying the city did not violate state law when drafting sections of the plan.

Most recently, the city paid $17,000 to defend themselves against an appeal filed by the same women. Wold and Lee appealed a recent annexation into the city, stating a lack of date on a signature made the document invalid. A Pierce County Superior Court judge agreed with them and ruled the petition invalid.

In total, the city spent $80,000 defending against suits filed by Wold and Lee as well as responding to their records request.

“This was such a huge devastation to our reserves and the main problem for us,” Erickson said. “We had to hire attorneys to avoid trouble and we just didn't have a choice.”

Legal reserve funds were also spent on typical legal expenses, such as individual land-use appeals, contract reviews and retainer fees.

Councilman Ed Stern said the legal reserve is not a part of and does not affect the general operation of the government.

“These funds do not impact our staff, programs or economic plans,” he said. “Its money we intentionally set aside for legal issues that may come. There isn't much we can do when legal matters come up. It's like complaining about the rain in Washington — it's probably going to happen.”

The city's Finance Committee meets June 15, 5 p.m. at City Hall to review the legal budget and ensure there's enough in the reserve to cover potential expenses for the remainder of the year.

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