No Contract, No Problem?

One of the interesting things that happens when I dive into an issue is that I often find something I was not even looking for. That causes me to expand the research into other issues.

Such is the case today. When researching some things with the Crystal River City Manager issue, I found that the City Attorney, Rob Batsel, and his law firm, Gooding and Batsel, do not appear to have a valid contract with the city and some other issues related to that.

Let's take a look.

I do not think I need to go into the entire history of Crystal River's legal representation, but we will go back to a time that will be relevant to the Gooding and Batsel contract... May 2019.

At the May 28, 2019 meeting, city staff sought direction from the City Council on the contract for then city attorney Hogan Law Firm. Their contract was set to expire on August 28, 2019 and staff wanted to know what the council wanted to do.

The council decided to go to bid and directed staff to issue a RFQ for legal services. That was issued on June 2nd and allowed one month for responses. They received 7 responses. Hogan Law Firm, Waugh Law, PA, Vose Law Firm, Gray Robinson, PA, Gilligan, Gooding, Franjola and Batsel, Sniffen and Spellman, PA, Shepard, Smith, Kohlmyer and Hand, PA and Trask Daigneault LLP. None of them are local, but Hogan (Brooksville) and Gilligan, Gooding, Franjola and Batsel (Ocala) were closest to Crystal River.

Staff recommended that they score and rank the 7 firms and then prepare a list of the top 3 from which the Council would make the final decision. The Council then directed them to choose the top 4 to bring back on July 22nd.

Council held a special meeting on July 22nd to hear presentations from the 4 highest ranked firms that staff selected. Those were Gray Robinson, Gilligan, Gooding, Franjola and Batsel, Waugh Law Firm and Hogan Law firm. Each firm made their pitch and the council then ranked their preferences.

It is worth noting that during presentations, the minutes show that all law firms aside from Hogan expressed desire to open a local office for the city to have local representation, Batsel included.

Here are the minute summaries of the two presentations by Hogan and Batsel, as they were chosen #1 and #2.

Here are the final rankings.

Here are each council member's final rankings.

It is worth nothing that Meek came into the meeting wanting to hire GGFB, but changed that to Hogan after discussion. I cannot tell from the minutes, but Brown appeared to do the same thing. The only outlier then would be Cindi Guy (later Cindi Frink).

Council decided to enter into negotiations on a contract with Hogan Law Firm, who was also the current City Attorney. That contract came back for council approval on August 26th.

Without going too into the details, the City agreed to pay a monthly retainer of $4,625 which would provide the City with 25 hours of general legal services at a rate of $185 per hour. Services above the 25 hours per month would be billed at the $185 per hour rate. After 90 days, the City and Attorney would review the hours spent and could agree to adjust the monthly retainer.

The contract is for a one year term that will automatically renew for one year, unless the city provides 60 days notice to not extend it.

The city budgeted $69,000 for the FY2020 budget for legal services.

I looked through all agendas and minutes for the 90 day review, but do not see where this review happened. Maybe it was internal, but no change to the contract was made.

The fast forward to March 9, 2020.... 190 days after the contract with Hogan was signed and 114 days before the July 1, 2020 deadline to notify Hogan of the intent to cancel the contract.

Basically, then City Manager, Ken Frink, decided that the city needed new representation and suggested they cancel the contract with Hogan and move forward with the #2 option on the original list from 2019, Batsel.

At the next meeting on March 23...

Three things of note here...

1) The agenda item references the one year term, but that does not expire until September 1st and they are still 100 days or so from the deadline for the 60 day notice.

2) Council member Fitzpatrick noted that the City Manager has a role in making such decisions. That confirms that this was something led by Frink and NOT the Council.

3) During his 2019 presentation, Batsel referenced established local relationships. The city of Inverness also hired Batsel on February 6, 2020, so perhaps that is one of the reasons to bring this up at this meeting... a month after Inverness makes the hire.

Now, the minutes are summaries of the conversation, so the full details are not there. Back then, the meetings were note video recorded and saved as they are today, so no way to go back and watch them. Perhaps there was good reason on why Frink would recommend a change in the attorney. I do not know, but Council did say that he had a role in that decision.

Question... Why the rush to get them out when they still had 160 or so days of the contract?

Regardless, the 60 day letter was sent to Hogan.

Subsequently, staff asked to work on getting a new contract for TWO YEARS to Batsel. Interesting... Year to Year with Hogan, but two years for Batsel?

He also provided a contract for the Council to review. He will work for 60 days, after which, the council can appoint him as City Attorney.

Of note here... as I mentioned, two years instead of one. The renewal will be up to the city...

"Attorney may be reappointed for additional terms upon approval by the city"

The other key thing is the cost, which I will go over in a bit.

The City goes from paying $185 per hour to $235 per hour, however, no longer a monthly retainer.

At the May 11th meeting, the Council appoints Batsel as the City Attorney, officially.

October 2021, Batsel sends a letter to the City notifying them of a split at the law firm. There was not any drama or anything. Apparently Batsel represents a lot of developers and they ran into issues with the City of Ocala, as the law firm also represented the City.

So Gooding and Batsel split into their own firm, but noted at the meeting they would stay in the same building as Gilligan, Anderson and Phelan. This letter is required to be sent to clients.

The Council voted on November 8, 2021 to follow Batsel to the new firm and retain his services.

An amendment to the contract was signed, making the effective date January 1, 2022.

Of note, it would honor the terms of the original contract. Now, the question is, does this reset the contract duration? Or is it still based on the March 2020 date?

Now... the problem.

Regardless of the effective date being the March 2020 date or the new January 2022 date, I do not see where the council extended the contract. Remember, the contract states:

"Attorney may be reappointed for additional terms upon approval by the city"

I would assume that since the attorney is hired by the Council, that the Council would be the ones that need to extend the contract for additional terms. I would not think that would be the ability of the City Manager to do that, so I would assume it would require Council approval and that can only happen at a meeting.

I do not see where that approval was made. I did a public records request for the CURRENT contract and was provided the 2020 agreement and the 2021 amendment. I was not provided with any documentation of an extension nor did I see that discussed at any meeting in 2021/2022/2023. Regardless if the contract term ended in March 2022 based on the original contract or January 2024 if the date reset with the amendment, there was no extension that I could find.

That would suggest to me that Gooding and Batsel no longer have a valid contract with the city. Umm... HUGE overlook and potentially a HUGE problem.

If the attorney does not have a valid contract with the city, how can they act on behalf of the city? Are the decisions that the city makes at the recommendation of the attorney enforceable? Things like land use and everything the attorney provides help with could be subject to appeal as there is no contract, right?

Remember, a lot of stuff is happening with things like 579 and the Riverwalk project. Are the actions the attorney is taking regarding those subject to appeal due to the contract being expired with no renewal?

There is a "de facto officer" doctrine that says that even if someone is not properly installed as an "officer" their actions remain valid. So perhaps, that will avoid any issues with the lapse of the contract.

However, I do not believe Florida law allows implied contract extensions for government entities, so the council would need to address this contract issue at some point. I would imagine they would go down the RFQ route as they did initially, although state law exempts hiring lawyers from otherwise required RFQ/RFP process. They don't HAVE to bid it out if they don't want to. They did before, so I imagine they would again.

Maybe I missed the renewal and all this is a big nothing, but again, this is what was provided to me on a records request.

Now, moving on to the costs.

Remember, above, his contract states that he cannot bill more than $5,000 a month without notifying the city and getting approval prior to the next invoice?

I asked for the invoices for the last 6 months. Here are the totals.

May - $27,121
June - $12,362
July - $12,467.50
August - $16,591
September - $15,660.50
October - $19,704

Clearly, those are over $5,000 per month. I have asked around and have been told that Gooding and Batsel has never notified the city nor sought approval for those six invoices... so when did that policy change and who authorized it?

Now, these invoices include a variety of projects. Each project is billed separately. For instance, 579 issues are separate from City issues. Perhaps the argument is that the $5,000 mentioned in the contract is only related to the City Council work and NOT everything else.

Ok, here are the invoices for JUST the City Council work.

May - $10,763

June - $8,930

July - $8,389.50

August - $7,050

September - $7,426

October - $13,442

Even factoring in ONLY the work for the City Council, they are billing over $5,000 every month and have not notified the city NOR sought approval from the city for those months as the contract requires.

Again, if this policy was changed, why was it not reflected in the contract, but more importantly, when did this policy change and who authorized it? I have that question out and will bring this back once I get that answer.

Apparently, not only is the contract expired and has not been renewed, they are not following the terms of the contract by notifying the city and seeking approval for the legal expenses once they exceed $5,000.

And one last thing... remember that presentation that Batsel gave the city back in 2019? He said if awarded the contract, they intended to open a local office... maybe I missed it, but I do not recall them opening a local office. Perhaps that idea went away when they were not awarded the contract in 2019.

I have a feeling the next city council meeting is going to be interesting once word of this gets out.