WMC suit, new ordinance top agenda

The progression of a court case against former Wrangell Medical Center administrator Noel Rea and six former members of the WMC Board of Directors was a main topic discussed this week during the regularly scheduled Borough Assembly meeting on Tuesday, Nov. 27.

After coming out of executive session, Mayor Don McConachie informed the public that the Assembly had directed Borough Manager Tim Rooney and Borough Attorney Bob Blasco to continue in negotiations to settle the matter.

The offer would call for the return of $250,000 to the City and Borough of Wrangell and dismissal of the lawsuit and Rea’s counterclaim entirely with prejudice, meaning the Borough and WMC could not seek further return of monies from Rea and the recalled board members and Rea cannot seek any further payments from the Wrangell Medical Center.

Settlement talks appeared to change tone and tempo late last week, however, when Rea’s attorney, David Shoupe, sent a letter to Blasco expressing a level of frustration not previously seen in the case.

“Earlier today, I received your latest draft of the Protocol we have been discussing that would govern the deletions of personal material from the laptop at Digital Securus and the iPad in Noel's possession,” Shoupe’s letter begins. “Unfortunately, we do not appear to be making much progress. This is frustrating because the parties have agreed on all terms of the settlement of this case with the exception of how Noel's personal communications will be deleted from these two devices.”

The letter continues to make a threat of pursuing the case in court, rather than following the terms of the settlement.

“In your cover email you state that you have no further authority to negotiate the terms of the Protocol. In other words, you have decided that rather than continuing to work out these terms it's got to be your way or the highway,” Shoupe states. “That's too bad because if your latest draft really is a take-it-or-leave-it document, then we might as well inform the Court that the settlement is off. In that case, I will seek enforcement of Noel's employment agreement and an award of the other roughly $520,000 that your client will owe him under that agreement as of next June.”

According to Shoupe’s estimation, a prolonged court battle could cost the Borough heavily.

“If I am successful in this regard, then rather than your client receiving $250,000 now and getting out of what is likely to be another quarter-million dollars in litigation costs, you would leave the $250,000 settlement on the table, bear the cost of the litigation, and risk losing another half-million dollars,” Shoupe added. “Apparently it is worth $1,000,000 to your client in costs and litigation risk to search through Noel's email. It would appear there is something in those emails that you think would be that valuable. I wonder if the people of Wrangell would agree.”

Documents obtained from Rooney’s office show that the city, as of Nov. 12 has paid $50,756.49 to the firm Hoffman & Blasco, LLC, for work related to the employment contract of Rea. An outstanding balance of $11,563.50 was also noted as the balance due to the firm for a total of $62,319.99 billed during the four-month period.

Although Rooney provided financial data regarding the case, neither his office nor Blasco would comment further on the issue.

Rooney’s report to the Assembly spells out one view of the current status of the case in relation to the city.

“A status conference was conducted on Monday, November 19, 2012,” Rooney stated in his report. “At the conference, Mr. Blasco advised the Court that all but one defendant had approved the Settlement Agreement and Release, and that upon confirmation by all defendants of approval of the agreement, the Assembly would review the Settlement Agreement and Release.”

Shoupe’s letter, however, is asking for disposal of the laptop and iPad and a number of changes to the protocol agreement covering the return of documents and files on the units before settling.

“Let me reiterate an offer I have made numerous times,” Shoupe began. “We could agree to have Digital Securus make copies of all WMC documents and get those to you immediately, and then destroy the laptop and iPad. That would ensure the WMC would have complete files and at the same time would eliminate my concerns about your client trying to access Noel's private and privileged information. As an alternative, because you are the one insisting on an email search, you should provide a list of email contacts beyond those we have suggested. This would narrow the scope to those emails reasonably calculated to be business-related.”

The changes Shoupe is asking for are numerous and include language contained in the protocol plan.

“The language about (the city) and WMC telling its employees and so on not to attempt to access deleted information is good as far as it goes, but it does not go far enough,” Shoupe states. “As I have told you, we want language that says they won't do it, not that they will be told not to do it. Since you are insisting on getting the devices back, and not just the WMC-related records, you will need to come up with a procedure to ensure that no one will get into Noel's private communications. This could be accomplished by isolating the devices in a place where, once you have taken the business-related materials from them, no one could access them. The devices also could be destroyed by you.”

Shoupe doesn’t stop there, however, and essentially asks that the devices never be used again.

“Moreover, we want language that says the devices will not be sold or given to anyone, and not merely, as you have written, that CBW and WMC will not provide the devices to anyone for the purpose of accessing deleted information. Obviously, this opens the door to selling the devices to someone not under your control, and having that person search the deleted materials with software sufficient to do this. Let me say it one more time: we are not going to agree to any mechanism that allows for the access of personal and privileged information.”

The courts have set another status conference hearing for Dec. 6.

According to Rooney’s report, another item – the construction of the new hospital on Wood Street, adjacent to the nearly complete Alaska Island Community Services clinic – is temporarily at a standstill.

“Discussions regarding the Hospital Replacement Project have been placed on hold to afford an opportunity for Mr. Keith Perkins with USDA an opportunity to review the USDA's file relating to the project,” Rooney’s memo to the Assembly states. “Staff was notified on Monday, November 19, 2012 via email, that the file had been sent to Mr. Perkins.”

The Marine Service Center, which has recently undergone a spate of renovation and development, was also a part of Rooney’s report to the Assembly.

“Following the return of the 35 percent level plan review design submittal for The Marine Service Center Paving Phase 2, staff is expecting receipt of PND Engineer's 65 percent level plan review design submittal by the end of November 2012,” he states. “The final engineering design is scheduled to be complete by March 2013, after which the construction bidding phase will follow. Staff is preparing a solicitation for utility extensions and site grading in preparation for the setting of the new pre-manufactured restroom/office building for the Marine Service Center.”

An ordinance to amend city code allowing the Assembly liaison attending executive session credentialing meetings with the Wrangell Medical Center Board of Directors was also part of the agenda.

“Ordinance No. 865, passed and approved unanimously by the Borough Assembly on August 28, 2012, incorporated several changes to the Wrangell Municipal Code relating to the Wrangell Medical Center,” Rooney stated. “At the time of its approval, the Borough Assembly pledged to review several of the items of concern expressed by citizens regarding the ordinance. Specifically, citizen concerns centered on the legality of the mandated WMC Board liaison participating in Executive Sessions and conflict between the personnel manuals.”

During a public hearing on the matter before the regular meeting, a number of people offered comment both in favor and against the plan. Former Assembly member Billie Younce spoke up first.

“The ordinance wasn’t meant to micromanage the board but, in my opinion, it was to strengthen the relationship between the city and the WMC board,” she said. “Not only that, I feel it was established to protect the (board) and the City and Borough of Wrangell. It was meant to provide guidance. It’s my opinion that by removing the WMC liaison from the executive sessions, in essence, it’s going to put us right back to square one.”

WMC board member Bernie Massin spoke later, asking the purpose of a liaison in the executive session discussions.

“I don’t really care if you guys put one in there or not,” Massin said. “But, how are you going to report back to everyone else? It’s not recorded; you can’t write anything down, how are you going to tell anybody? Are you going to come back and go into your own executive session and report to each other? What is this person going to be able to do? Is he going to able to say ‘no, you can’t vote like that’ and make us vote another way?”

After discussion by the Assembly, the new ordinance passed, with member David Jack voting against the change.

A report by D. Hittle and Associates, which was commissioned by the Southeast Alaska Power Agency, calling for the cancellation of the partnership agreement between TBPA and SEAPA for the operation of Tyee Lake Hydroelectric Plant, was discussed – with the Assembly voting against supporting such a plan at this time and directed SEAPA board members to develop a long-term look at the operation and management of the hydroelectric facility.

Assembly member Pam McCloskey was not present at the meeting.

The next regularly scheduled meeting of the Assembly is scheduled for Dec. 11 at 7 p.m. at City Hall.