LEGAL FEES ON RISE IN AGOURA HILLS\Annual bill could reach $500,000 if cases go to trial, officials\say.

Byline: R.A. Hutchinson Daily News Staff Writer

With a half-dozen pending lawsuits headed for court this year, city legal costs could climb to their highest level in three years.

City officials have budgeted $411,000 in attorneys' fees for the 1995-96 fiscal year, but City Manager David Adams said last week that number could reach half a million dollars because several longstanding cases are expected to go to trial soon.

"The city has taken steps to control the costs, but about half the cases are going to be decided within the year," Adams said.

Roundly criticized for the amount of money they've spent on litigation, city officials say they have tried to curb the rising wave of attorneys' fees since these costs peaked in 1992-93 at $634,455. Since then, the amount of money paid to the city's Los Angeles law firm, Richards Watson and Gershon, dropped to $387,267 in 1993-94, then edged higher to $391,000 in 1994-95.

"It's the single largest expense that gets the most attention. It's the one that causes the greatest concern," Adams said. "But ultimately, we can't control who sues us or who doesn't."

Currently the city has 19 active cases pending, including a new lawsuit filed last week by residents upset about city-approved expansion plans for the Ultramar service station at the corner of Canwood Street and Reyes Adobe Road.

Of the remaining cases, 12 are businesses suing the city over its 1985 pole-sign ordinance that prohibits the tall signs. Those complaints have been lumped together as one case for trial purposes. One of the businesses has since settled with the city but remains on court documents.

Three other cases have resulted from the city's expansion of Canwood Street: Berniece Yellin disputes the amount of money the city owes her for her property; Harold Halsey argues that the project ruined access to his business; and Ron Semler claims that the city has unfairly turned down proposals to develop his land after city officials struck an agreement to use part of his property for a right-of-way to expand Canwood.

The remaining cases include an ongoing environmental dispute in which the city is one of several parties accused of discharging hazardous material into water supplies, an appeal filed after Citizens Against New Local Taxes sued the city over its handling of recall petitions, and a claim from the State Board of Equalization over the distribution of sales-tax revenue for a business whose headquarters is in Northern California.

"The city really doesn't have that much litigation against it," said City Attorney Greg Stepanicich. "Compared with other cities of similar size, I'd say Agoura Hills is average."

In nearby Calabasas, which has a population of 17,700 compared with Agoura's 21,000, legal fees also are expected to hit half a million dollars for 1995-96, according to accountant Kathy Broker. She said the city budgeted $340,000 for legal fees this year but became embroiled in the Ahmanson Ranch development dispute, which is driving up costs.

"Everyone is suit-happy," she said.

The year before, in fiscal 1994-95, Calabasas spent about $175,000 on attorneys' fees.

Adams, who joined the Agoura Hills staff in June 1995, said after seeing the high costs in 1992-93, officials took several measures to cap legal fees in the city, starting with renegotiating the hourly fee paid to Richards, Watson and Gershon.

In addition, Adams said the city placed restrictions on who calls the city attorney. Adams, Finance Director Elaine Graves and City Clerk Pat Manning all have clearance.

Adams said this "gate-keeping" technique prevents several people from contacting Stepanicich on the same subject, which would mean separate charges for the same case.

The city also negotiated a flat fee of $10,000 for its appeal of the pole-sign case.

"The amount of time spent on cases is going down," Stepanicich said. "But some cases, like Yellin and the pole signs, are very time consuming."

Despite city efforts to trim the legal budget, critics say more can be done.

Barbara Murphy, who founded Citizens Against New Local Taxes in 1994 after the city imposed a utilities tax to cover a $695,000 budget deficit, said members of community budget advisory committees in 1993 and 1994 urged the city to hire an in-house attorney who would receive a salary rather than the hourly rates charged by the outside law firm.

"It was a major topic of conversation for both committees. There was a major push . . . to get an in-house attorney," said Murphy, who served on both committees.

Her anti-tax group's recall effort is involved in one of the lawsuits the city must pay to defend.

"It's not ironic at all. It's our city's actions that force people to file suit to protect their rights," Murphy said. "Their actions were in error as the Superior Court decision proved. Rather than accept that, they've chosen to continue to fight it."

A judge ruled that the anti-tax group, which targeted all five City Council members in a recall petition drive, had collected sufficient signatures to request a special election for Fran Pavley. The city's appeal of that decision is pending.

Moorpark attorney Jeff Allen, who represents three of the pole-sign plaintiffs, Halsey and the Ultramar opponents, said he's been involved with several other cases against the city in the past few years.

"They have a propensity to be unyielding," he said.

Adams, however, says the city has little choice but to defend itself.

CAPTION(S):

CHART

Chart (1) ONGOING LAWSUITS (2) PAYING FOR THE DEFENSE