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$327,000 legal settlement goes unreported by Santa Rosa officials

Santa Rosa quietly paid more than $327,000 earlier this year to the law firm that successfully challenged a special city tax on new developments.

And it did so without ever telling the public.

The case illustrates how public agencies can use provisions in the state's public records act to limit publicity about legal matters and sidestep the very transparency the state law was meant to foster.

In mid-January, the city learned that it lost its appeal of the fees awarded to the lawyers who sued the city on behalf of the Home Builders Association of Northern California.

The lawsuit challenged the city's 2008 tax surcharge on most new home construction, contending the law required property owners to give up their voting rights on annexation in exchange for the right to develop their properties.

Sonoma County Superior Court Judge Mark Tansil agreed, striking down the law and awarding $244,000 in legal fees to the Pacific Legal Foundation, the Sacramento public interest law firm that handled the case. Tansil found the lawsuit had "vindicated important constitutional rights that affect the public interest."

The city appealed the fee award as excessive, especially in light of the "extreme dire financial condition" of the city. In January, the state Court of Appeal in San Francisco disagreed, leaving all but $1,800 of the fee award intact.

On Feb 12, City Attorney Caroline Fowler, who handled the case, went into closed session with the City Council to discuss the city's options.

The Pacific Legal Foundation on Feb. 1 had presented the city with a formal settlement offer updating its fee demand, according to foundation attorney Paul Beard.

It is unknown exactly what happened in that closed-door meeting. Fowler and council members declined to discuss those deliberations. But when the City Council returned to the public portion of its meeting, Fowler said "there is no action to report at this time" regarding the case.

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