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$86,000 and Counting: Cost of Centre County Courthouse Crises Continues to Compound

by on September 08, 2015 6:00 AM

September marks the ninth month that various Centre County officials have found themselves in a whirlwind of lawsuits and controversies, and no one is really sure when the dust might settle.

But as the legal battles become more and more drawn out, the associated costs and legal expenses incurred by the county continue to grow.

Direct Taxpayer Expense

As things stand right now, the county has spent $86,863 on legal fees since January, according to Centre County Administrator Tim Boyde. Although that money was not planned for in the county’s current budget, those fees are currently covered by a $150,000 contingency fund.

For comparison, Centre County’s total budget is in excess of $82 million. Although Boyde maintains that he “doesn’t want to minimize” the impact of the county’s legal costs, they make up a “comparatively small” amount of the county’s budget.

That $86,863 can be broken down into two general categories – costs related to the investigating grand jury that cleared Centre County District Attorney Stacy Parks Miller’s name of forgery allegations, and costs related to the separate controversy surrounding Right to Know requests for the phone records of judges and prosecutors.

The county has paid $20,306 to the law firm of Abom and Kutulakis for representation for the three county commissioners during the grand jury process. The county has also paid $10,705 to the Fetterhoff and Zilli law firm for providing counsel to Centre County Solicitor Louis Glantz throughout the grand jury process.

In total, representation for county officials throughout the grand jury process cost $31,011 in funds directly from the taxpayers.

Unlike the grand jury process, the Right to Know dispute is ongoing and takes up “the lion’s share” of the county’s recent legal expenses, Boyde says. In total, the county has spent $56,122 so far to attorney Craig Staudenmaier for advice on how to properly handled the requests for disputed documents that continue to show up.

Indirect Taxpayer Expense

A significant portion of the county’s legal expenses are not directly paid with taxpayer funds in the county’s’ contingency fund, but are instead covered through the county’s insurance program.

Attorney Mary Lou Maierhofer represents the county in the Right to Know lawsuits being brought against the county by DA Parks Miller and Judges Jonathan Grine and Kelley Gillette-Walker, as well as Parks Miller’s more recent defamation suit. She is paid through an insurance program run by the County Commissioners Association of Pennsylvania.

John Sallade, insurance program manager with the county commissioners association, declined to reveal exactly how much Maierhofer has been paid through the program, citing a policy the prevents him from commenting on ongoing litigation.

Boyde says the county pays a yearly premium of $237,418 into the insurance program, which has been in existence since 1987 and serves 49 of Pennsylvania’s 67 counties. Each year, the county also receives money back through rebates and dividends in the neighborhood of $50,000 to $60,000, which offsets the cost of the annual premium.

Sallade says that each insurance claim also costs the county a $2,500 deductible. The three Right to Know lawsuits were accepted as one claim, and Parks Miller’s civil suit was accepted as a separate claim, for a total of $5,000 in deductibles. Boyde says this money comes from the same contingency fund that paid for legal expenses not covered by insurance.

“Centre County has been a very good member of this program,” Sallade says, explaining that they receive discounts for various steps they take to reduce risk of accidents and liability.

“What’s important to understand is that this is a very claims-sensitive program,” Sallade says. “Over the last couple years, the overall cost has been pretty flat, but that can vary lot from member to member. Up to half of what we charge is based on claims experience.”

Sallade says that, because Centre County has submitted multiple claims, its annual premium is essentially guaranteed to increase and the money paid back to the county will decrease. The exact amount of the increase has yet to be determined because it depends on the final cost to the insurance program, which will depend on how the various lawsuits resolve and whether the county has to pay damages.

“That’s better than having this one huge expense that wasn’t anticipated or budgeted,” Sallade says. “If you have spend lots of money all at once, that’s a big budget buster.”

Potential Expenses

Boyde acknowledges that civil litigation can move through the courts rather slowly, and says that Centre County will budget funds specifically for legal expenses in the 2016-2017 budget.

The budget process has recently begun, and an exact figure to budget on legal fees has not been determined. Boyde was also unable to speculate how much Centre County might be able to comfortably pay out-of-pocket without impacting the services it provides.

Bruce Castor, an attorney for Stacy Parks Miller, says he expects the final total to be “several multiples” of the county’s current expenses and may “easily reach into the hundreds of thousands of dollars.”

In the event that Parks Miller wins her defamation suit, Castor says the county will also have to pay damages and attorney’s fees. Parks Miller’s suit sets a $50,000 minimum limit to enter arbitration, but Castor expects potential damages to be “significantly more.”

Castor is also technically working for the county as a specially-appointed Assistant District Attorney to deal with cases where defense attorneys want to recuse Parks Miller. Although he hasn’t billed the county for this work yet, Castor says he plans to and adds that his hourly rate is “significant.”

He says that Parks Miller is paying for his service out of pocket, but says he believes Centre County will end up covering her attorney’s fees.

“The cost can become so staggering as to increase [the county’s] insurance premiums and, in a small place like Centre County, maybe even increase taxes,” Castor says.

Castor places the blame on the county commissioners, saying that he sent the commissioners a letter back in January before these conflicts started to warn them of the potential costs of what he describes as attacking and defaming the district attorney.

Mary Lou Maierhofer has repeatedly defended the county’s actions, arguing the commissioners have only fulfilled their legal and moral obligations to their constituents. “We’re not the ones that have filed a lawsuit,” she has said.

“Frankly, the county has been sued, and the citizens of Centre County have been sued, and the county needs to defends itself,” Boyde says. “As long as the suits continues, the need for the continue to defend itself will continue.”



Michael Martin Garrett is a reporter and editor for StateCollege.com who covers local government, the courts, the arts and writes the Keeping the Faith column. He's a Penn State alumnus, a published poet and the bassist in a local indie rock band.
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