Tuesday, November 22, 2011

Richmond schools spend most in region on legal costs

Teacher Maggie Vallejos (center) works with a class atRichmond Community High. The $15.24 the city spent per student on legal costs last year is rising to $16.63.

The Richmond school system spends significantly more per student on legal fees than the other three large school districts in central Virginia, and the cost is rising again this year, according to a Richmond Times-Dispatch analysis.

The city spent $15.24 per student in the year that ended June 30, and the cost is increasing to at least $16.63 this year, based on a contract the system has with the law firm that provides the bulk of the system's legal work. And the total is likely to rise based on office expenses and filing fees.

Henrico County spent $4.27 for the last fiscal year and Chesterfield County $4.83. In Hanover County, the cost was $11.41 per student.

The city School Board, unlike its suburban peers, is alone in using retainer-based counsel for all its legal work. The Chesterfield school system has a staff lawyer, while the systems in Hanover and Henrico rely mostly on lawyers employed by their county attorney offices - an option school leaders say is not feasible in a city where educators aren't always in step with City Hall.

The other three districts also use fee-based outside counsel, but not for routine services. Typically, the outside lawyers handle special-education issues that require specific expertise.

"I think we've explored every possible way to do this," said School Board Chairwoman Kim Bridges. "(The cost) is always one of the questions that comes up at budget time."

In an interview in the School Board offices and again in a follow-up email, Bridges said it wasn't fair to compare Richmond with other localities.

"Our friends in the counties have a lot on their plates, too, but our board utilizes a lot of work that goes beyond what's done by other school board attorneys," Bridges said in an email she sent two days after the in-person interview. "From our legal services, we ask for training, policy analysis and consideration of a wide breadth of topics that other school systems haven't had to consider.

"We're the only ones in the region navigating a systemwide (handicap-accessibility) settlement with hundreds of projects, overseeing a charter school and implementing best authorizing practices, proposing improvements to the state charter law, examining the use of historic tax credits for school renovations, or determining the use of per-pupil funds for the charter's construction loans, just to name a few examples," she said. "These are not issues facing Henrico, Hanover or Chesterfield, so I wouldn't expect them to spend time or money figuring them out."

Bridges said the school system called on its lawyers for about 266 hours of service a month in the past year. The work has ranged from the routine to the highly specialized, from reviewing contracts to trying to make sure school leaders stay in compliance with federal regulations.

In the past three years, much of that work has been in revamping the board's policy manual.

"That was one of the priorities of the board," Bridges said of the group that was elected three years ago. The old manual, she said, had sections dating back more than three decades. She said that since the lawyers ultimately would have to review the manual to make sure it complied with state code, it was a natural to let them write it.

While the idea of rewriting the policy manual came up in better economic times, Bridges and Dawn Page, the vice chairwoman of the board, said they weren't aware of any talk about shelving the priority.

"I don't think there's been any board discussion on that," Bridges said.

The idea of paying nearly $400,000 a year - the city is contractually obligated to spend a minimum of $32,500 a month this year - in retainers doesn't sit well with everyone.

"With all of the difficult decisions we've had to make in the last three years, that reflects really poorly on our judgment," said Kim Gray, who won a seat on the board about three months after the current legal services contract was signed in 2008. "Our teachers, our staff, they haven't had a raise, and that makes this impossible to justify."

Under the latest incarnation of a contract originally signed in 1990 with the Wilder Gregory law firm - partners L. Douglas Wilder, a former governor and Richmond mayor, and Roger Gregory, now a federal judge, later sold the firm - the Richmond School Board has been paying the firm, now known as Harrell & Chambliss, a monthly fee of $32,500. That comes to $390,000 a year.

Under an Aug. 13, 2008, contract addendum, the fee jumped to $20,000 that September and has increased each July 1 since. The contract runs through June 30, though it can be terminated by either party at any time with 30 days' notice.

Talk of raising the rate began six months earlier in a meeting of the School Board's since-disbanded Finance, Budget and Audit Committee. Then-interim finance chief Jim Damm presented the board with an overview of how surrounding jurisdictions handled legal services.

The contract covers 13 specific services. It excludes other potentially costly services such as litigation - in fiscal 2009 alone, the city spent $131,953.93 on legal work over faulty roofs - and help with federal programs, and no additional work has been added to the deal since it was written more than 20 years ago. But, Bridges said, the contract is open-ended and does not cap the number of hours the school system can require from the lawyers.

Carol A.O. Wolf, who was on the board and, like Bridges, was one of three members of the finance committee when the contract was signed, said there wasn't a pressing need at the time to amend the contract and that she didn't remember any discussion of fees.

"Now that's something I would certainly remember," Wolf said. "Even at $12,100, that was a lot of money. The current fee is unbelievable."

In addition to payments to Harrell & Chambliss, the city school system since July 1, 2008, has paid an additional $221,802.81 to 10 other lawyers or law firms, mostly for work related to faulty roofs at several schools the city built in the late 1990s and for special-education issues.

For the fiscal year that ended June 30, Richmond Public Schools spent $357,344.24 in legal fees, according to documents the school system provided under a Freedom of Information Act request. Of that, $347,608.88 went to Harrell & Chambliss. The Hirschler Fleischer law firm was paid $4,361.98 for work on the roof litigation. Four other lawyers earned a combined $5,373.38 for work on special-education cases.

During the same period, Chesterfield County Public Schools, which has more than twice as many students as Richmond, spent $287,746.45. Chesterfield spent $107,621.83 on its staff lawyer and $180,124.62 for outside counsel for some services, particularly in regard to special education.

In Henrico, a member of the county attorney's staff is assigned to school issues. She earns $79,008.82 per year. The school system also spent $132,157.63 on outside legal services, mostly on special-education issues.

Like Henrico, Hanover also uses a county lawyer for school system issues and estimated the value of that work at about $168,000 for the fiscal year that ended June 30. Hanover also farms some school system legal work to outside counsel, for which it paid an additional $39,587.50 in legal fees and $5,044.95 in costs in the 2011 fiscal year.

Bridges said that using a city attorney, particularly without direct cost to the school system, was not realistic.

"You have to remember, at that time, there wasn't great cooperation," she said, noting that a year before the current contract was signed, then-Mayor Wilder attempted to kick the school system out of City Hall. "We would have had to have hired outside lawyers anyway."

Chesterfield switched from outside counsel to having an in-house lawyer five years ago. School Board member Marshall W. Trammell Jr. said it happened for two reasons: access to the lawyer and money.

"It got to the point, especially with personnel cases, that it just seemed it would be a whole lot easier if we had someone here," he said.

Source: http://www2.timesdispatch.com

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