A News-Sentinel review of hundreds of pages of Lodi Unified School District legal invoices over the past six months showed hundreds of thousands of dollars spent on litigation, consulting, mediation and other labor group services.
- In January alone, the district paid Folsom-based Kingsley, Bogard, Thompson $21,719 for contract-related negotiations with the classified union.
- Two months later, $300,000 went to help prepare teacher layoff notices, with one-third of that going to the Kingsley attorneys. Another $100,000 was set aside by the school board as a retainer for the firm's services in February.
- And since June 30, the main firm handling litigation against contractors who built McNair High School — Thurbon and McHaney, LP, of Gold River — has charged the district a staggering $760,000 for litigation and expert construction consultant services, according to the invoices.
The district has also hired various attorneys to review a handful of charter school petitions and handle ongoing personnel-related litigation.
New trustees have questioned the money the district is spending on legal costs at the same time it's laying off hundreds of employees, cutting electives and other programs, and disregarding class-size reductions for the third straight year. The board is meeting today to prioritize further cuts for the 2011-12 school year.
The district spends roughly $1.9 million annually on attorney and other legal-related expenses.
Some trustees are looking at breaking tradition by refusing to pay $200-an-hour attorneys to sit at every bargaining table discussion with district unions.
The issue was discussed in closed session Tuesday, but no public report was given.
However, board president George Neely, who requested the expense be scrutinized, is pushing to talk about the topic in open session.
"Whether I think it should or not is almost irrelevant. It's whether we can," he said Friday.
One costly lawsuit
The district's attorney costs vary widely, from $185 to $250 per hour. For example, $1,314 was paid to Atkinson, Andelson, Loya, Ruud and Romo for an attorney to attend an entire December school board meeting to address one agenda item. Another $300 went to the same firm to analyze newspaper articles and prepare notes related to the proposed D-MAND charter school.
Between August and December, the district paid the same attorneys $18,607 to handle the issue.
Another firm — Anwyl, Scoffield and Stepp — charged $192 for one trip from Sacramento to the district office and $375 for 1,500 photocopies for an undisclosed insurance case, while the Walnut Creek Law Offices of Stubbs and Leone charged $52.50 per half-hour to read and respond to emails regarding another insurance case.
And McCormick and Barstow, LLP, charged $735 for travel between its Fresno office and French Camp to represent the district in yet another insurance-related case.
In the past three years, attorney costs have gone up, in part because of accelerating personnel costs related to layoffs and negotiations, according to Chief Business Officer Tim Hern, who blames a portion of the quarter of a million dollars spent on the McNair issue on the tort system.
It lays out a complex contractual duty to the one who files suit. Some of the money expended may have gone toward settlement payments or paying firms to oversee work that needed to be re-done, he said.
"Ultimately, it's the taxpayer that has to pay for it," Hern said.
In general, the litigation issues at McNair stem from a combination of workmanship and project administration concerns that caused the project to be far less efficient in construction than would have been expected, Assistant Superintendent Art Hand said.
"It has been so costly because of the number of trade contractors involved — 52 total construction contracts — and the complexities of resolving all the issues associated with the interaction of their work, and that of our contract administration team," he said.
The case has yet to be settled.
Hand expects ongoing negotiations and litigation over the course of the next 12 to 18 months.
"This was very complex project, hence the resolution of its problems are following suit," he said.
Charges for travel, photocopies
Other attorney charges are billed for the district administrator seeking legal advice. In February, for example, Hand and former Chief Business Officer Doug Barge racked up more than $20,000 combined for various issues.
Kingsley, Bogard, Thompson, which handles the bulk of the district's bargaining issues, charges as much as $250 an hour, according to the invoices.
They show that the bulk of the firm's December charges were for issues related to ongoing negotiations with the local California School Employees Association. The parties were at an impasse and when they met, attorneys were often included.
The following month, $27,719 was charged for meetings related to the tentative agreement with the classified union.
The firm has also been called on to prepare documents related to pink-slip notices distributed last month. Districts must ensure that they are following strict guidelines on how the notices are issued and to whom based on seniority, according to Michael McKilligan, the district's assistant superintendent of personnel.
Legal invoices are sent first to the superintendent's office, then routed to and signed off by specific cabinet members. The school board does not approve every invoice, and instead authorizes an open purchase order that acts as an account that is drawn on as the bills come in.
"Everything has to be signed off by the administrator who authorizes it," Hern said.
Neely said more can be done to hold the line.
"I do everything I can to minimize our legal expenses," he said. "I don't call lawyers. Since I've been on the board, I've only done that once. It's $185 an hour."
He said the district should be looking for ways to reduce those costs anyway.
"That could include calling attorneys instead of having them come to us, because they bill (office to office)," he said.
Jeff Johnston, the Lodi Education Association president, was surprised by the high cost paid to attorneys related to bargaining issues, and has questioned the expenses.
The California Teachers Association picks up the tab for the teachers' union's attorney fees, but his are under $15,000, he said at a recent school board meeting.
"My Kingsley attends every bargaining meeting at a high price, apparently. Two-hundred thousand is a lot of money and several teachers," he said.
At issue is whether the district requires attorneys to be present at each union discussion.
McKilligan has said that it is mandated so long as the state reimburses the cost. But it is not currently doing so.
Neely said the state cannot enforce something it cannot fund.
"Could this board determine we don't need legal counsel at these meetings?" he said.
To do so would break direction received from previous boards since the 1970s, according to McKilligan.
"But we can definitely go to the table unrepresented," he said. "That is a choice."
It's not clear when that discussion will be heard. Although Nichols-Washer indicated last month that the discussion could be part of a study session in early May, she said this week because the attorney item is related to labor negotiations, it can be discussed privately.
"I was assuming it would be in open session, but that's a fact," Neely said of the superintendent's reasoning.
$61 per student
Neely and fellow new trustee Ron Heberle have already been exploring the possibility of hiring in-house legal counsel. Since the board voted in January to create a committee to look into the matter, the pair has begun to research how legal services are handled in other school districts, but their efforts have been delayed by other budget-related issues.
"We've got to get back to that. I'd love to have an attorney on staff," Neely said, adding that he understands there are times when lawyers are required due to the complexity of the education code.
"We absolutely do have to seek legal advice because we're trying to do things the right way. We've got to protect the assets of this district against claims," he said. "Any money we spend on those takes away from the kids."
On average, Lodi Unified spends $61.41 per student per year on legal fees. That's compared to $24.26 in the Galt Joint Union Elementary School District and $58.84 for Galt Joint Union High School District.
Contact reporter Jennifer Bonnett at firstname.lastname@example.org.