Traverse City commissioners voted Monday to use their own attorney to defend the city against a developer's lawsuit appeal over Proposal 3, citing concerns over rapidly escalating costs related to using outside counsel in the case.

Developer Tom McIntyre filed an appeal last week against a July 26 decision by Judge Thomas Power to dismiss his case from Thirteenth Circuit Court. McIntyre, who is planning to build a 100-foot building next to the Park Place Hotel on State Street, had been seeking to have the courts declare Proposal 3 illegal. In his decision to dismiss the case, Power ruled McIntyre needed to move further through the city’s permitting process before he could argue he was suffering real and not hypothetical harm under Proposal 3, the city charter amendment requiring a public vote on buildings over 60 feet tall.

City commissioners previously hired outside attorneys James G. Young and Doug Van Essen to represent them in defending Proposal 3 against McIntyre’s lawsuit after members of the public questioned whether City Attorney Lauren Trible-Laucht could objectively handle the case. Trible-Laucht has publicly stated she believes Proposal 3 is illegal. At Monday’s meeting, City Manager Marty Colburn told commissioners Young & Van Essen had accumulated nearly $55,000 in legal fees to date representing the city, nearing the commission’s approved cap of $60,000. Defending an appeal will likely cost the city another $15,000, Colburn said, adding that if the commissioners wanted to proceed he “would request the financial means to do so.”

The request sharply divided commissioners, several of whom expressed unhappiness with how rapidly Young and Van Essen’s fees had accumulated and what they believed was poor communication from the attorneys in explaining billing expenses.

“I was surprised by the cost of (the defense) when I reviewed their contract,” said Commissioner Michele Howard. “I just feel like it’s an exorbitant amount of money, and I have faith in our city attorney that she can do just as good of a job…without us spending additional money.”

Commissioners including Gary Howe, Brian Haas and Richard Lewis said the city was stuck “between a rock and a hard place” and should continue down the path of using outside counsel, despite the expense and the fact an appeal could take up to 18 months. Lewis added he wanted Trible-Laucht to be able to focus on her “day-to-day” responsibilities of overseeing a multitude of city legal tasks. But when a motion was made to continue using Young & Van Essen to represent the city against McIntyre's appeal, Lewis reversed course and joined a majority of other commissioners in voting down the proposal. “It came down to the money,” Lewis told The Ticker after the vote. “I just couldn’t justify spending that.” Commissioners instead unanimously supported a second motion to have Trible-Laucht handle the appeal response in court.

Several commissioners including Lewis stated after the meeting they believed it was still an option to use outside counsel again at some point down the road, but that Trible-Laucht should at least handle the initial filings and briefings to get the appeal process underway. Trible-Laucht acknowledged the appeal “could be a lengthy process.”

“It’s just like anything else – things come and go on my desk on a daily basis, and I just have to prioritize those, so that’s what I’ll do,” she said regarding her workload. Trible-Laucht acknowledged concerns from some residents would likely surface again over her objectivity in the case. “I think it is a perception issue,” she said. “I don’t think it’s a reality that I’m not able to represent the city.”

As for how McIntyre’s appeal is likely to proceed, Trible-Laucht told commissioners she believes the lawsuit will eventually end up back in Circuit Court after going through the Court of Appeals. “In the meantime, what we don't know is if other lawsuits will also crop up. It's possible other property owners could file lawsuits as well; there's nothing that insulates the city from that,” she said. “I think the unfortunate reality is the possibility of litigation will remain until an answer comes on the actual merits of (Proposal 3).”

Also at Monday’s meeting….
> Commissioners discussed the possibility of seeking voter approval to extend the use of Brown Bridge Trust dollars to improve city parks. A total of $1.57 million is in the Brown Bridge Trust Parks Improvement Fund as of June 30, with the city committed to $1.88 million in park improvements to date. After voters approved capping the city’s Brown Bridge Trust Fund at $12 million and using excess principal to pay for parks projects, dollars beyond the $12 million will continue to flow into the Parks Improvement Fund until December 2019. Commissioners indicated their desire to have Parks and Recreation commissioners begin studying the possibility of a ballot initiative to extend or expand the voter authorization, as well as to identify potential parks projects in need of funding.

> Commissioners reviewed a list of uncompleted capital improvement projects in the city, and expressed support for using an ad hoc committee to create a policy for determining an appropriate fund balance for the city. Commissioners have expressed conflicting opinions on how the city’s fund balance should be calculated and at what percentage it should be maintained, from 10-15 percent on the low end up to 25 percent or more on the high end. Howe expressed interesting in creating a “flexible policy” that would establish a fund balance “range” that could fluctuate over time, noting “different commissions at different times (will have) different tolerance levels” for the city’s financial status. Commissioners are set to vote on establishing the ad hoc committee and the members who will serve on it at their next meeting.