OTTAWA COUNTY — Ottawa Impact plans to settle Health Officer Adeline Hambley’s lawsuit against the county for $4.1 million next week — but it's only the latest in a series of added costs to taxpayers since the new commissioners took office.
In fact, the county is on track to spend more than $5 million in unplanned costs since the beginning of the calendar year.
The lion’s share of those costs are numerous lawsuits filed against the OI-led board, beginning in February, plus severance payouts for positions eliminated in January and added or expanded positions and departments, according to county financial records.
Ottawa Impact is a far-right fundamentalist group created by now-Board Chair Joe Moss and Vice Chair Sylvia Rhodea after they unsuccessfully challenged the previous board and county health officer over COVID-19 mitigation mandates in 2020 and 2021.
At least one commissioner, Jacob Bonnema (District 4), called the settlement offer for Hambley an "abuse of the taxpayers."
In a statement to WZZM-13 on Thursday, Bonnema said the decision to payout "goes against every principle of good governance and fiscal conservatism."
"We were given reasonable options, but they would not consider anything less than a guaranteed outcome," he told the outlet about the OI majority.
Bonnema, a former OI member, has been a frequent critic of the board's majority since leaving the group in March after multiple lawsuits, a six-week investigation made earlier this year by the Michigan Attorney General's Office, and an independent investigation into the new OI-backed county administrator’s conduct.
Severances
In January, the OI majority pushed through a series of sweeping changes, including firing the former county administrator and corporation counsel and eliminating the county’s Department of Diversity, Equity and Inclusion.
In total, the county paid out $235,000 in severance pay, not including benefits for the higher-level employees affected. Then the lawsuits began, beginning with Hambley’s in February.
Costly lawsuits
Litigation costs are billed through the county’s insurance authority and aren't part of the annual budget allocated to legal expenses.
In her lawsuit, Hambley claimed the attempt by OI commissioners to demote her was unlawful and alleged the majority has repeatedly interfered with her state-authorized health duties.
On Monday, the county agreed to pay Hambley $4 million to step down, rather than follow through on a vote to fire her after a two-day termination hearing. The deal also includes the resignation of Deputy Health Officer Marcia Mansaray, after a term of paid administrative leave through the end of January. She'll receive one year's pay at $125,000, plus the benefits she currently receives.
In total, the settlement exceeds $4.1 million — the largest settlement in the county's history and nearly the exact amount the board cut from the public health department's budget this year, a move championed by the OI majority.
The funds will come directly out of the insurance authority’s fund balance, which currently has about $23 million.
The litigation in the Hambley case has been costly, reaching $82,687.68 between the months of February and July, the most recent documentation available. Those costs don't reflect a hearing before the Michigan Court of Appeals, a hearing in Muskegon County’s 14th Circuit Court and the two-day termination hearing, all of which took place in October.
Including the settlement amount, the Hambley case alone is expected to cost the county about $4.3 million.
A second lawsuit has cost the county $22,009.20 for the months of March through July. In March, four residents sued the board, claiming OI commissioners violated Michigan's Open Meetings Act when they made several controversial decisions during their first meeting — including the vote to "demote" Hambley.
That case is awaiting oral arguments before the Michigan Court of Appeals after the residents appealed a lower court's ruling granting the board's request to dismiss the lawsuit. Briefs for arguments are due to the COA by Nov. 13, meaning additional costs will be accrued.
Also not yet accounted for are costs accrued from two other lawsuits, both filed in October:
- On Oct. 3, a Grand Haven pastor sued in federal court, claiming religious discrimination by Moss. Rev. Jared Cramer of St. John’s Episcopal Church said Moss is using his position to "endorse a particular set of religious beliefs and exclude a particular set of religious beliefs" and therefore "is discriminating against certain religious beliefs," which is a violation of the Establishment Clause of the First Amendment.
- On Oct. 24, a finalist for an executive aide position to County Administrator John Gibbs sued in Ottawa County's 20th Circuit Court, alleging age discrimination by Gibbs when he hired a younger candidate with fewer qualifications than the county required. That case has been assigned to Kent County’s 17th Circuit Court
Increases in legal fees
The cost of day-to-day legal expenses has also increased, according to financial documents and county records.
On July 25, commissioners approved a budget adjustment of $110,000 to be transferred from the county’s contingency fund to cover expenses for Kallman Legal Group, whom the board hired in January after firing previous longtime corporate counsel Doug Van Essen.
Moss has said the spike in costs was largely due to an increase in Freedom of Information Act requests — he later backtracked that statement — and the lawsuits, although the litigation was billed to the insurance authority.
When the transfer was approved, KLG was billing an average of $34,000 in monthly legal expenses to the county. With the $110,000 from the contingency fund, KLG had the ability to bill for $38,000 per month.
Financial records show KLG billed an average of $34,200 from January to April, then costs increased:
- May: $39,802.50
- June: $39,645
- July: $42,345
- August: $47,475
- September: $65,070
In August, the board again upped the budget for legal fees, with Moss backing an increase in the fiscal year 2024 budget, which began Oct. 1.
During budget discussions, Moss said the county has seen a higher need for legal services and the budget needed to “increase to match the current need.”
KLG estimated 35 hours a week of services for the “foreseeable future.” KLG’s hourly rate will increase from $225 per hour to $240 per hour Jan. 1, 2024, per its contract with the county.
Those rates at 35 hours per week will total $430,500 for the fiscal year, which is $55,300 higher than the amount presented in initial budget discussions in early August.
OI commissioners also pushed through a change to KLG’s contract in February, extending the agreement to three years — one year beyond all the current commissioners’ terms — and changed the terms and conditions under which the board can fire KLG.
In the original agreement, either party could terminate by providing written notice 90 days in advance. Now, the contract states either party “may terminate the contract only for just cause.” It defines just cause as “gross negligence or misconduct of the firm in the performance of its duties to the county.”
Expanded positions, departments
Meanwhile, the OI-led board has pushed through a series of job expansions, beginning in March with upgrading an executive assistant position to executive aide, an additional cost of $37,349.08.
In June, Gibbs asked the board to expand an existing communications position to a communications director role. The $20,000 upgrade would enable the county to share more information through mediums like podcasts and have staff assist with photography and videography.
However, the move also came with a communications policy that required most departments to obtain approval prior to communicating with the public — including the health department.
The county has not published any podcasts nor videos on its YouTube channel since the upgrade was adopted.
In September, the board’s OI majority also championed the expansion of the county’s veterans affairs department to the tune of $242,872, despite heavy criticism from other commissioners and county contracted staff that the move was unnecessary.
"There's not a service provided in another county that isn't provided in Ottawa County," Veteran Counselor Loren Snippe told county Bonnema in a YouTube video posted this week.
— Sarah Leach is executive editor for The Holland Sentinel. Contact her at sarah.leach@hollandsentinel.com. Follow her on Twitter@SentinelLeach.
COSTS$4 million: Settlement for Hambley litigation*$125,000: Severance for deputy health director (not including one year of continued benefits)*$82,687.68: Cost of Hambley litigation through insurance authority (February-July)**$22,009.20 Cost of Armstrong (et al) litigation through insurance authority (March-July)**$235,000: Severance payouts (not including benefits)$300,221.08: Added or expanded positions in calendar 2023$110,000: One-time legal fees transfer$55,300: Increased legal costs FY24 over FY23$37,349.08: Executive aide upgraded position$20,000: Communications director upgraded position$242,872: Veterans affairs department (expansion and added director)*Not yet fully approved.**Not accounting for litigation costs after July.***Two additional lawsuits filed in October are not yet calculated into current total costs.
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