City trying to cancel $7M fire-fee deal
By MICHAEL VASQUEZ
MIAMI, Fla. — For the city of Miami, an embarrassing $3.5 million bill came due Monday. But City Manager Joe Arriola says he’s not paying.
Arriola says he won’t write the check because he’s looking out for the ''people’s money.’' But some taxpayers are less than grateful. They’re furious Miami ever incurred the expense.
Monday’s $3.5 million bill is the second half of a legal settlement Miami agreed to last year. The settlement was a response to a class-action lawsuit filed in 1998 on behalf of Miami’s roughly 80,000 property owners. The suit alleged Miami’s fire-rescue fee -- begun that same year -- was unconstitutional. The Florida Supreme Court in 2002 ruled that fees like Miami’s were illegal because property doesn’t benefit from ambulance services -- in effect, you can’t give CPR to a building. So last year, knowing they would likely lose in court, Miami leaders decided to settle for $7 million, in two installments. Had the city not settled, it potentially could have been forced to refund property owners as much as $100 million, according to attorneys and city leaders involved with the case.
The first $3.5 million has already been paid.
The $7 million deal saved the city a lot of cash -- but also gave nothing to the vast majority of property owners who had already paid an unconstitutional fee. The annual fee ranged from less than $100 for some single-family homes to several thousand dollars for the largest commercial businesses. A reduced fee -- which is being challenged in court -- is still being charged by the city, with the bill based on the number of inhabited units for residential properties and square footage for commercial properties.
Only seven individuals -- plus their attorneys -- split the settlement money.
''Gross, gross, injustice,’' said Miami property owner Monique Taylor. Taylor helped raise money to pay for the initial court battle, telling donors that if the city lost, they would be reimbursed. That, along with refund checks to property owners, still hasn’t happened.
''Somebody screwed up big-time,’' admits City Commissioner Johnny Winton, who voted for the settlement but insists he was misled by the city’s former legal staff to believe the money would be spread citywide.
EX-ATTORNEYS BLAMED
Arriola -- who was involved in the settlement talks -- specifically faulted former City Attorney Alejandro Vilarello and former Assistant City Attorney Charles Mays. Vilarello did not return calls from The Herald. Mays declined to comment.
Miami is now in court trying to recoup the $3.5 million it already paid, while hoping to convince a judge it should no longer be liable for the second payment originally due Monday because the city didn’t realize what it was doing. Although Miami Mayor Manny Diaz -- an attorney himself -- was involved in crafting the settlement, the city’s argument is that Diaz, too, was duped. Diaz and City Attorney Jorge Fernandez declined to comment. Whether the city wriggles out of the $7 million deal may be determined at a Dec. 16 court hearing.
Attorney Richard Williams, who is suing to get Miami to refund money to all property owners, doesn’t buy what he calls the city’s ''gross incompetence’’ argument.
In court documents, Williams accuses Miami of striking a ''devil’s bargain’’ -- the plan, he says, was to settle with the handful of folks named in the class-action lawsuit, then keep the payout a secret until it became too late for other citizens to get a refund.
The seven individuals were able to take all the money themselves because the class that had filed suit -- in this case every Miami property owner -- had yet to be certified by a judge at the time the city and the plaintiff’s attorneys agreed to the settlement.
Adorno & Yoss, the plaintiffs’ law firm at that time, received a $2 million fee from the settlement, while the seven individuals each netted hundreds of thousands of dollars each, far more than they had ever paid in fire fees.
Certain facts support Williams’ claim. The plaintiffs who struck a deal with Miami agreed to a confidentiality clause barring them from discussing the terms. A previously confidential Nov. 16, 2004, memo written by City Attorney Fernandez and addressed to Miami’s mayor and commissioners says the settlement would only go to the named plaintiffs and that ``because of the passage of time, no other property owner will be able to maintain a refund action against the city.’'
A fax-transmission record from the same day appears to show the memo having been sent to the office of all five city commissioners. The settlement was approved two days later. Two commissioners, Winton and Tomás Regalado, nevertheless insisted to The Herald that they had never seen the memo. Williams’ entry into the case creates the possibility -- according to attorneys familiar with it -- that Miami will end up paying twice -- one payment to the small group promised the $7 million and another payment to all property owners, now represented by Williams.
‘LEADERS KNEW’
Attorney Lewis Brown -- who represents the small group of individuals as well as the Adorno & Yoss law firm who together were promised the $7 million -- says Miami leaders ''absolutely’’ knew where the money was going and can’t back out now.
''They flat-out owed the citizens of the city of Miami a very large number that they had to pay them,’' Brown said. ‘The question was, `How do we get out of that?’ ''
Brown defended the $2 million legal fee earned by Adorno & Yoss, calling it ``entirely a reasonable percentage.’'
Miami earlier could have settled with the same small group of people -- for far less money. In 2002, their previous attorney, Eric Lee, offered to settle with the city for roughly $34,000 -- plus the amount they actually paid in fire fees, likely several thousand more.
WAITING FOR ANSWER
Four months after making the offer, Lee wrote to the city: ``I have still not heard from you with regard to our prior settlement offer . . . my clients have been extremely patient in waiting for your response. However, the longer they wait, the less they desire to resolve this matter.’'
Lee left the Atlas Pearlman law firm soon after writing the second letter.
''I don’t think I got a response,’' he told The Herald recently.
Other South Florida cities, including Pembroke Pines and Tamarac, have had their own court battles over fire-rescue fees. Pembroke Pines resident Phil McConaghey successfully struck down his city’s EMS-related fee in court, but the city got lucky -- McConaghey never asked for a full citywide refund, which would have cost millions.
''I was concerned that if the city had to pay that they were just going to raise taxes to pay for it,’' McConaghey said. ``People were going to lose anyway.’'
Tamarac may end up paying a full refund to everyone, McConaghey said, though he added that a final court ruling is pending on the matter.
Watchdog Report publisher Daniel A. Ricker contributed to this report.