Ozaukee school board blows $167,000 over $8,000 drainage fix

FREDONIA (WITI) -- Down the drain. Taxpayers in the Northern Ozaukee School District have already spent more than $167,000 in legal fees in a lawsuit over an $8,300 stormwater drainage fix that board members blame on the district's next door neighbor.

Now, three years after filing the suit, the district is dropping its own case.

But the defendant, a farmer named Kendall Thistle, says... not so fast.

"You can't imagine the amount of stress that gets put on a family for this lasting for so long," Thistle said.

30 miles north of Milwaukee, Thistle owns a farm in Fredonia. He says he's spent more than $70,000 defending that farm from a lawsuit filed by his neighbor over a pond of water.

"We had a potential hazard for students," Paul Krause, Northern Ozaukee School Board President, said.

Kendall Thistle says he's spent $70,000 defending his farm from a lawsuit filed by his neighbor, the Northern Ozaukee School District.

The Northern Ozaukee School District has spent far more than Thistle on the case.

"Certainly, it's gone on longer than we would like and cost much more than we would like," Stacie Stark, school board vice president, said.

Only they're doing it with taxpayers money.

"I deeply regret those children getting that money taken away from them to be paid to lawyers," Thistle said.

It all started back in 2006, when the developers of a brand new Fredonia neighborhood agreed to swap some land with the school.

In exchange, the school agreed to let stormwater from the neighborhood run across school property and onto Thistle's farm.

"I have somebody wanting to run stormwater through my property, destroy my property, harm my family, for something they got paid to take?" Thistle said.

So Thistle built a massive berm to protect his property.

"The problem is his protection put the district in a real bind," Krause said.

School board president Paul Krause says that berm pushed the water back onto the school's land, creating a one acre, 7-foot deep pond.

"So the board had to wrestle with some very difficult decisions whether or not to pursue a lawsuit," Krause said.

School officials worried that the pond could be a health hazard for students. So they dug a ditch to drain it at a cost of roughly $7,300. The question facing the board was should they sue the Thistles to recover the money? Back then, even Krause thought it was a waste.

Click here to listen to the 2009 school board meeting during which the decision was made to file a lawsuit.

Click here to read the transcript of that meeting.

"That seems like throwing good money after bad," he said, during a closed door session of the school board. "Because we're going to spend $20,000 to get a $7,000 bill paid? I don't know how we win on that one."

Despite his own reservations, Krause pressed his colleagues to file a lawsuit anyway to ensure that if any issues arose in the future, the district would not be liable.

School Board President Paul Krause said back in 2009 that suing Thistle would be "throwing good money after bad." He pursued the lawsuit anyway.

"One goal is drain the pond, and the second goal is not to be at fault," Krause said.

School officials now say they had no idea how much it would cost.

"I think anyone going into a lawsuit doesn't expect it to cost much," Stark said.

"Our hope was that this would be remedied fairly quickly after filing," said Blake Peuse, district superintendent.

"Quite frankly, we didn't know what the cost was going to be when you get into these things," Krause said.

If they didn't know, they should have. Prior to filing suit, the district's own lawyers warned them that the cost of litigation could exceed $35,000. That's roughly five times the amount they were hoping to recover.

"Where's their common sense, you know?" Thistle asked.

The suit filed in February of 2011 seeks $7,300 dollars for excavation of the ditch and about another thousand dollars for legal fees and easement costs, for a total project cost of $8,343. As expected, Thistle fought at every turn. And as the months dragged on the legal bills started climbing.

"You have to continually look at that cost-benefit analysis," Peuse said.

"Did they decide at $20,000, no, we can still go on?" Thistle asked.

And climbing.

"Did they decide at $60-thousand we can go on? 80 thousand? 100-thousand?" Thistle asked.

"I don't know that there was a magic number," Peuse said.

And climbing.

"Well, we've spent 150-some thousand dollars. Well, now maybe we`ve had enough?" Thistle asked.

Three years later, the school district's legal tab for this case is now a whopping $167,444. That's about 20 times the amount they were seeking to recover.

Thistle said a land swap between the school and a nearby developer caused flooding on his farm.

Fredonia homeowner and taxpayer Carol Murphy said it makes no sense.

"They should just drop it," she said. "I mean, how many times do you hit a wall with your head before you decide it hurts, I'm gonna stop it?"

Superintendent Peuse said board members have repeatedly asked themselves, "Is this prudent for us to continue?"

And in May, the district finally asked the judge for permission to dismiss its own case.

"It simply doesn't make any sense anymore," Krause said.

Krause says the lawsuit was never just about money. It was about removing the berm and restoring what he calls the 'natural' flow of water. But by walking away now they guarantee the berm is here to stay.

"So what have you gotten for that money?" FOX 6 Investigator Bryan Polcyn asked of Stark.

"We have looked at making sure that that risk is mitigated for us," Stark replied.

"But have you mitigated that risk?" Polcyn asked.

"It's an ongoing, you know, litigation," Stark said.

"What the taxpayers have received is notification that the district is very serious about making sure that their students are safe," Peuse said.

"They know they have leadership that is willing to make tough choices," Krause said. "And quite frankly, maybe one of the tougher choices is to know when to walk away."

Thistle built a berm on his property to protect his farm from flooding. The district calls it a "public nuisance" that caused flooding on school property.

"What did the children of the district get for that money?" Polcyn asked Thistle.
"They got nothing. They got a big goose egg," he replied.

For the past three years, Thistle has been a vocal critic of the board for wasting money on the lawsuit. But when the district tried to drop the case, he objected.

"We just wanted our day in court. That`s all we wanted," Thistle said.

He and his wife are now asking the court to award them more than $70,000 dollars in attorneys fees.

"You should pay our costs for dragging us through this," Thistle said.

If the judge were to award the full amount Thistle is requesting, the total bill for taxpayers could top $237,000.

"At some point, the elected officials... need to be held accountable for their actions," Thistle said.

In a verbal smackdown from the bench, Ozaukee County Judge Paul Malloy agreed. He said the case was "imprudently brought" by the district; that it "never should have gotten this far;" and that board members will "need to answer to their electorate."

"That's pretty severe when he says that," Thistle said.

The judge said he suspects it only got this far because of hard feelings between the board president and the defendant. You see, Kendall Thistle is not just the school's next door neighbor, he's also a member of the board.

"It's a complicated matter, yes it is," Thistle said.

Both men insist it's nothing personal. You might say, it's just water under the bridge.

When the judge dismissed the case back in May, he said he believes it is appropriate to award attorney fees to Thistle, even though that means transferring more taxpayer dollars to do it. The question is, how much? The judge is expected to make a decision in the next two weeks.