Westcott explains BOk bailout vote: "We had no authority"

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Tulsa City Councilor Rick Westcott sent his District 2 constituents an explanation of the legal situation in which the councilors found themselves Thursday night, when they voted to appropriate money from the sinking fund to pay the settlement in the Tulsa Industrial Authority / Tulsa Airport Improvements Trust lawsuit (money that will ultimately go to the Bank of Oklahoma):

There's some misunderstanding about the Council's vote regarding the settlement of the Great Plains lawsuit. We probably should have made it more clear at the meeting.

The City Council did not vote to approve the settlement. We had no authority to either approve or reject the settlement. It had already been done and it was totally out of our hands. The Mayor had already approved the settlement and, on Thursday, it was submitted to the Judge and he approved it. On Thursday afternoon the settlement was filed as a judgment against the City of Tulsa. All of that was done by the Mayor, under her authority as chief administrative officer of the City. The settlement was approved and entered as a judgment before the Council even met on Thursday evening.

The only thing which we did on Thursday was state whether there is sufficient money in the Sinking Fund to pay the settlement. The Finance Department informed us that there is and, based upon that, we had to vote to say, "yes, there is sufficient money."

Legally, we had no choice but to vote 'yes'.

After the Finance Department informed us that there is sufficient money in the Sinking Fund to pay the judgment, if we had voted 'no', we would have been sued, just for voting 'no'.

We had no vote, no say whatsoever, regarding the settlement. The Mayor entered into the settlement agreement without Council approval and it was approved by the Judge before the Council met last night.

The article in the Tulsa World is a little bit confusing. But, the subject is a little confusing.

It says that the Council voted to "have property taxpayers pay the BOK." That's more or less accurate, but it doesn't tell the whole story.

The City's Sinking Fund is used to pay judgments against the City. Once the settlement was filed as a judgment, then, by law, the Sinking Fund had to be used to pay the judgment Money is paid into the Sinking Fund from the City's portion of property taxes. So, it's true that property taxpayers' money will be used to pay the settlement. But, that's because the settlement was filed as a judgment against the City, and the Sinking Fund has to be used to pay judgments, and property taxes are used to put money into the Sinking Fund.

The article also says that the Council voted on "whether to appropriate the money from the sinking fund." Again, that's more or less accurate, but it doesn't tell the whole story, either. By law, the Council had to vote on whether there is sufficient money in the Sinking Fund to pay the judgment. At the meeting on Thursday, the City Finance Department informed the Council that there is enough money in the Sinking Fund. Once the Finance Department told us that, we had no choice but to vote, "yes" and approve paying the judgment out of the Sinking Fund. We had no choice in whether to 'appropriate money from the sinking fund.'

We didn't vote on whether to use money from the Sinking Fund to pay the judgment. By law, that's where the money has to come from. All we did was say that there is enough money in the Sinking Fund to pay it.

If we had voted "no", then the Bank of Oklahoma, or the Tulsa Airports Improvement Trust, or one of the other parties to the lawsuit, would have filed a separate law suit against the City Council, seeking a Write of Mandamus. That's an Order from the Couettlert which commands a public body or a public officer to do something that they have a legal duty to do. In this case, they would have won and the City would also have had to pay their attorney fees which they incurred in pursuing a Writ of Mandamus.

Last night, I explained my misgivings about the settlement. I am against the settlement at this point in time.

As I said, naming the City of Tulsa as a defendant in the lawsuit was just an expedience to put the City in a position where we could legally settle the lawsuit. Previously, when the City wasn't a defendant, there were attempts to persuade City officials to pay for the settlement. That would have been illegal, because we weren't a defendant. Naming the City as a defendant was just a method to put the City in a position to pay for the settlement.

But setting that aside and just looking at it as a straight-up lawsuit, settlement at this time is far, far premature.

I don't think the lawsuit and the claim of "unjust enrichment" against the City had any merit. I would never advise a client to settle immediately after being named in a lawsuit. I'd have gone through the discovery phase and, hopefully, reduced the settlement amount by showing that my client had the stronger case.

But, we weren't given that opportunity.

I hope this explanation helps. If you still have questions, please give me a call or send me an e-mail.

RDW

I appreciate Councilor Westcott's perspective and am glad to know he opposes the settlement. The question now is whether he and the other councilors will do anything to halt the settlement or, failing that, to impose some penalty on Mayor Kathy Taylor for her rash action against the best interests of Tulsa's taxpayers.

The council should also seek full public disclosure of the decision-making process -- why the rush, who stood to suffer if the June 30 deadline wasn't met, who met with whom? And the financial and contractual arrangements between the parties should be fully disclosed as well. Why was a BOk attorney acting as the attorney for the Tulsa Industrial Authority in this lawsuit? Has TIA already repaid BOk, or will they now repay the bank? Was there legal action by BOk against TIA?

In the long run, we probably need a charter change to require council approval on legal settlements or contracts above a certain dollar value. No one should be committing that much city money unilaterally.

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8 Comments

XonOFF said:

The attorney question can surely be answered by the fact Mr. Stanley Lybarger is President & CEO of BOK, as well as COB of the Metro Chamber. TIA is a Chamber-driven operation.

This is the reason I feel TIA has already settled with BOK, probably some time ago since a bank can't let things like this ride for four years.

The bailout by Tulsans, then, would appear to be helping TIA with its cash flow, credit rating, etc. and not BOK.

There's been no action by BOK against anyone involved here. It's TIA v TAIT!

XonOFF said:

Just looked it up, Title 39, Chapter 10 - Tulsa Industrial Authority....TRUSTOR is Tulsa Metro Chamber of Commerce, who PAYS each Trustee $1 to contract.

Here's the link:
http://www.cityoftulsa.org/ourcity/ordinances/Title39-10.asp

APPENDIX I
(search on first use of "Chamber")

Paul said:

I agree with you that we need a charter change requiring Council approval on matters above a certain dollar value. But regardless of dollar amounts, I don't care for these types of ministerial acts in which the Councilors have no discretion. Talk about "rubber stamping"...

David V Author Profile Page said:

Rick is my councilman, but I'm not satisfied with his explanation, yet.

Nothing is said about his 2nd vote: the one that suspends the law which requires 30 days before money is dispersed. Its known as an "Emergency Clause". It should used when an emergency requires fast action.

The 30 days allows for some "light of day" to be shed on our government's actions.

Rick also voted to prevent the required 30 days of light.

No judge or jury would have held a councilman personally negligent solely for determining that "this is not an emergency". On the contrary, the councilmen do expose themselves to liability when they inappropriately declare an emergency. But then, a lot of politicians would call any unpopular action as "a political emergency".

When the emergency clause is used to evade public scrutiny, leaders who conspire to do so are not trusted anymore.

I'll give Mr. Wescott a few more days to fully respond. Then I'll work to find a leader with a greater concern for proper order in government.

Councilman Wescott has disappointed me greatly.

webworm Author Profile Page said:

What this city needs is a City Council whose members have enough guts to stand up to the Mayor and the "Technicians" at City Hall.

sbtulsa Author Profile Page said:

Dennis Troyer is my councilor and I'm proud he voted no.

That said, I have to say that all city government took a huge drop in prestige in my eyes. Did the mayor negotitate at all with BOK? Did she start at a position of protecting the taxpayers interests? Or did she just answer the phone and say "yes George"? This mayor campaigned on a promise that she would add 200 cops. She just gae a way 7.1 mill before she even began to act on that promise. Did anyone downtown try to disuade her from this deal?

Here's an irony. Mayor Taylor is hell bent on getting everyone to go downtown. But shie is not providing parking or police protection for those people who heed her pleas. What must she think of us the citizens given the above two paragraphs?

S. Lee Author Profile Page said:

"What must she think of us the citizens given the above two paragraphs?"

http://t-recs.net/pics/people/taylor_fudd.jpg

David OConnor said:

I believe that the 7.1 million dollars has already been given and that the BOK had to cover that receipt of money by June 30th for reporting period or how would they explain that much money with no accountability?

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This page contains a single entry by Michael Bates published on June 28, 2008 7:27 PM.

BOk bailout: Other voices was the previous entry in this blog.

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