The City of Nanaimo spent nearly $900,000 on legal fees last year.
According to Laura Mercer, the city’s acting chief financial officer, the city spent $890,230 on legal expenses last year, which is 70 per cent over the budgeted amount for 2017.
Councillors had budgeted $523,050 for legal expenses last year, according to Mercer. She said the city spent $532,808 on legal expenses in 2016 and that the amount spent in 2017 was higher than normal.
“It’s higher than our previous years,” she said.
Although Mercer said she couldn’t provide a specific breakdown on what types of legal services the city paid for last year because an analysis would need to be done, she did say that the city has legal expenses across its departments.
“It is all over the city. It could be development-related issues. It could be human resources-related issues, it could be bylaw issues,” she said. “It’s a real mix of everything.”
For development-related legal issues, Mercer said the city sometimes receives reimbursements on those legal fees through fees that are collected by the city.
“It’s a small portion,” she said, explaining that it is around $50,000 and is considered revenue.
The issue of legal expenses was raised a number of times Wednesday morning at a finance and audit committee meeting, where it was revealed that the city has budgeted, but not approved, $487,000 for legal expenses for 2018, which includes an in-house solicitor position that has not yet been filled.
Throughout Wednesday’s meeting, councillors expressed concerns about last year’s legal expenses. As a result, Nanaimo Mayor Bill McKay ended up making a motion that called on councillors to cap the city’s legal expense budget at $500,000. McKay told councillors he tried to make similar motions to cap legal expenses in the past, but had been ignored.
“I tried to bring a motion forward when we were making decisions on hiring legal firms to cap it at $500,000 … and the only way we go over [$500,000] is if it comes back to council for approval,” he said.
Coun. Diane Brennan said council needs to be “far more” involved in monitoring expenses, particularly legal expenses. She said a cap would be an effective way to monitor staff legal expenses.
“I am really in favour of that because I think what happened this past year was not something I’ve ever seen, not since 2002. I’ve never seen anything like that,” she said.
Coun. Bill Yoachim said he had no issue with a cap, but felt there was “political posturing” from certain members of council about why legal expenses were so high. He said he wants a report that has a breakdown on why legal expenses were so high, adding that councillors know exactly why legal fees were as high as they were last year.
“I look forward to having … more time on this debate, I have got no issue. The people in-camera know why there were so many lawyers involved. I can’t wait for the public to know,” he said, adding that it is because of “nonsense” at the council table.
Coun. Jerry Hong said he couldn’t support the motion because he has concerns about capping a legal budget when issues could arise that need to be dealt with immediately. He said a situation could arise in which staff need to complete a real estate transaction or get a notary, but can’t because doing so would result push the city over a capped legal budget.
“I think this is ill-thought out. I think we can come up with this discussion any time. I don’t think this affects the budget at this point,” he said, adding he doesn’t think this type of a decision should be made on the fly.
In the end, councillors voted to defer McKay’s motion to a later date.