The cost of conflict: Lawsuit over annexation is adding up

March 09--BEMIDJI -- However right a fight may feel, there are always unintended costs to those that surround it.

In the case of the two-year lawsuit between Bemidji Township and the city of Bemidji, those costs can be measured in money that used to belong to the taxpayers -- money spent on what the judge in the case recently called "a clash of personalities."

The clash erupted in the summer of 2012 when the township took issue with how the city was annexing land into the city limits. Since, there have been a flurry of court dates, mediation and tense joint meetings -- and they all cost money, especially if attorneys are present.

The city of Bemidji doesn't directly pay for its attorney, Jim Thomson of Kennedy and Graven in Minneapolis. Instead, the costs of defending the city are almost entirely covered by municipal liability insurance from the League of Minnesota Cities Insurance Trust.

But this isn't free money. The city's premium for the yearlong liability coverage term from 2012-3013 was $72,435. From 2013 to 2014, that premium increased to $89,441. There's also a deductible of $5,000 for the case. In return for those payments, the league has paid about $130,600 so far in defense costs for the two years of the case. Although the premium went up more than $17,000 since the city first became involved in the lawsuit, LMCIT Claims Manager Darin Richardson said it's unclear what effect if any the lawsuit has had on perceived risk to insurers.

"It's hard to factor in what the true effect of just this one case has," he said.

According to court records, to date, the city has paid about $1,200 in court fees. Bemidji Township has paid about $1,400 in fees.

In response to a request to disclose how much money Bemidji Township had paid its attorney, John Steffenhagen of Hellmuth and Johnson in Edina, Steffenhagen said that information was protected under Minnesota Government Data Practices Act and attorney/client privilege. However he also said that the township was compiling documents related to the question for him to review to see if they were suitable for release. He will review the documents in the "very near future" he said.

Relationships impacted, too

There's also a potential cost that can't be immediately measured in dollars: the toll on relations between the two communities and the people who govern them. Will the city and the township be able to patch things up or will they prove right the old proverb that good fences make good neighbors?

Although Thomson was hesitant to predict what would actually happen in the future relationship between the city and the township, he said he hoped for the best.

"I'd like to think that however the lawsuit comes out, they'd be able to work out any differences they have," he said. "Sometimes lawsuits (cause) long-term relationship issues, sometimes they don't. It's just so unique to each set of facts."

Bemidji City Manager John Chattin likewise expressed hope the two governments would get back together while shying away from predicting what he thought would actually happen.

"The jury's out -- who knows what relations are going to be like going forward?" he said. "From the city's perspective, we would certainly hope to reestablish good relations with Bemidji Township."

As the administrator for the Greater Bemidji Joint Planning Board, Mayana Rice is standing on both sides of the chasm that's opened up between the factions. The board, which is ideally supposed to consist of Northern Township, Bemidji Township and the city of Bemidji working together to govern development in the area, is linked heavily to the lawsuit. A motion by Bemidji Township's attorney may add the JPB as a defendant in the lawsuit if it's granted by the judge.

Rice was unsure what effect the lawsuit would have on the relationship between board members, Northern Township and the city of Bemidji on one side and Bemidji Township on the other.

"It's hard to say," she said.

She said the two Bemidji Township members who are still technically part of the board have not been attending meetings.

"It is awkward," she said. "The JPB still exists, but Bemidji Township is no longer participating in it."

A court injunction prohibits the JPB from undertaking any action that affects Bemidji Township. However, Rice said the board has been acting on issues pertaining to the city of Bemidji and Northern Township as it has in the past with no interference from the lawsuit.

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