Taxpayers Still On The Hook For Costs As Financial Impact Of Complaint Continues

An oversized card to Medicine Hat Mayor Linnsie Clark marks the rounds at city hall chambers following a King’s Bench justice reinstating her authority following dismissal of council sanctions against her last year. (File Photo)

Apologies might be free but when it comes to Medicine Hat City Hall, the financial cost of atonement could be expensive as council gets set to debate further expenditures from an altercation between the mayor and city manager.

Councillors are expected to debate Tuesday whether Mayor Linnsie Clark’s $75,000 in legal expenses should be reimbursed following her successful appeal of sanctions placed against her a year ago.

That issue comes as a freedom of information request is apparently revealing the city spent $12,000 on a legal opinion on whether to reimburse city manager Ann Mitchell’s $6,500 in lawyer fees.

Both issues stem from a tiff during an August 2023 incident during a city council meeting.

During that meeting, Mayor Clark produced a legal opinion which she had personally obtained questioning Mitchell’s actions regarding a reorganization. Mitchell’s actions required a council vote before being implemented which the legal opinion confirmed. But the manner in which Clark questioned Mitchell’s actions – or lack thereof – sparked a code of conduct complaint by Coun. Shila Sharps. That lead to an investigation by Kingsgate Legal and, while that was being conducted, Mitchell launched her own legal action claiming Clark defamed her.

A freedom of information request launched by vocal council critic Nicole Frey seeking details is shedding some light into Mitchell’s actions. Notably, that Mitchell began to incur legal expenses prior to receiving informal support from council. It also showed those legal expenses continued to be accumulated and the city paid more than $12,000 to outside counsel seeking an opinion on Mitchell’s claim for reimbursement. As the Medicine Hat Owl reported in October 2024, “Council Flouts Own Policy In Paying CAO’s Legal Fees,” Mitchell’s actions appear to have run afoul of the municipality’s indemnity guidelines.

According to Frey’s document release, Mitchell provided a $1,050 retainer to Floden & Co. on Nov. 17, 2023. Four days later, the city manager sought and received informal approval to threaten legal action against the mayor in a manner which appears inconsistent with the city’s own indemnity policy.

Mayor Linnsie Clark during her announcement in the spring of 2024 to supporters that she intends to challenge council’s sanctions against her. (File Photo)

In a letter from Floden & Co. dated Nov. 21, Mitchell’s counsel alleged the mayor had defamed the city manager.

The city’s indemnity policy requires an outside legal opinion on the viability of launching a defamation legal action.

While that legal opinion appears to have been obtained by city solicitor Ben Bullock, the document titled “Refusal Notice” is entirely redacted. However, an invoice from Field Law for more than $12,000 was sent to Bullock on March 31, 2024.

According to city policy, “if the independent lawyer is of the opinion that an Indemnity should be granted, the City Solicitor shall approve the Indemnity. If the independent lawyer is of the opinion that the Indemnity should be denied, the City Solicitor shall deny the Indemnity.”

The policy goes on to state in the case an indemnity request, “does not constitute the basis of a Viable Claim, the City Solicitor shall provide the Permitted Applicant with a Refusal Notice.”

Regardless of the outside counsel’s opinion, city council is not required to vote on an indemnity request, according to the policy.

But on Oct. 16, 2024, that’s what they did, voting to approve reimbursing Mitchell’s legal fees with Clark and Coun. Van Dyke voting in opposition to the move.

Documents also released to Frey show the initial retainer largely covered Mitchell’s legal services provided in November 2023. The bulk of the more than $5,000 subsequently billed were for legal services provided between February and June 2024.

City Manager Ann Mitchell addresses council. (File Photo)

While the verbal dispute in August 2023 may have appeared superficial, the reaction from councillors was outsized.

Following the release of the Kingsgate Investigation in March 2024, council sanctioned the mayor by severely curtailing her ability to do her job while cutting her salary in half.

A subsequent judicial review of council’s actions resulted in a public rebuke by a King’s Bench Justice following an August 2024 decision reversing the sanctions.

That is, except for an apology.

That apology was given by Clark to Mitchell at the first council meeting following the judicial decision.

It was not received well by Mitchell who requested the mayor apologize to Hatters for her actions.

Nor did it appear to appease city councillors who subsequently voted for a provincial investigation into operations at the city.

For her part, Clark is now seeking indemnity for costs associated with the legal opinion presented during the August 2023 council meeting as well as expenses incurred relating to the judicial review.

“I just feel that it’s fair that my legal expenses be reimbursed,” said Clark in an April 9 interview with the Owl. “I don’t know how much the city or council spent on this entire process.”

In addition to Mitchell’s legal expenses being covered, the defendants in the judicial review, Medicine Hat City Council, also had costs associated with the action covered. However, the cost of council’s indemnity have not been released.

Clark stated the current indemnity policy is, “woefully insufficient.

“It does not provide sufficient protections for individuals who are carrying out their duties as either an employee or member of council acting in good faith carrying out those duties.”

Council will be debating Clark’s request for reimbursement of her legal expenses which also include those dealing with Mitchell’s defamation allegation during Tuesday’s council meeting.