Review suggests wide budget range for municipal legal services

Comparisons of legal billings among cities similar in size to Fort Smith show mixed results, with some cities spending more on legal services than the city of Fort Smith, while the city of Fayetteville spends less on an annual basis.

The cities, selected for comparison by The City Wire, have varied forms of government but similar sized populations to Fort Smith.

The review of comparative legal fees after City Directors Philip Merry and Pam Weber attempted to have an independent committee appointed to study whether the city of Fort Smith should continue hiring outside counsel to represent the city in legal matters or hire its own staff attorneys. Both times Merry placed the items on a meeting agenda — with a second from Weber — a majority of the Board directed City Clerk Sherri Gard to remove the item before a meeting was scheduled to take place.

Merry and Weber have made motions to get a vote on the committee and on hiring an outside auditing firm to review legal billings from the Daily and Woods Law Firm to the city after attorney and blogger Matt Campbell leveled accusations against the law firm of billing the city for services not performed and over billing for other services associated with a lawsuit Campbell had filed against the city. Twice the Board has used a city ordinance to have Gard remove the items from meeting agendas, which has itself now resulted in a lawsuit against the city and City Directors George Catsavis, Keith Lau, Mike Lorenz, Vice Mayor Kevin Settle and Gard for violating the Arkansas Freedom of Information Act.

The last time the city of Fort Smith researched hiring outside counsel versus employing its own staff attorneys was in 1999, in which attorneys David Vandergriff and Sherry Karber presented the following, according to a document included in a Board meeting packet from Jan. 21, 2000: "We believe the City of Fort Smith is currently receiving a good value for its legal service dollars. Nevertheless, while the city's current arrangement has been very stable during the recent past, circumstances can change in the future. If this were to happen, the city could find itself in a precarious position. We recommend that some consideration be given to planning for a transition of legal services if that eventuality presents itself."

According to billings provided by the city of Fort Smith to The City Wire, the city was charged a total of $274,230 in 2011, $396,902 in 2012 and $366,835 in 2013 for legal billings. An additional set of billings provided by Fort Smith's Finance Department Administrative Coordinator Christy Deuster for city departments ranging from utilities to the aquatics center under construction at Ben Geren Regional Park totaled $123,491 for 2013, bringing the year's total to $490,327. The total for 2013 represents a 78.8% increase from 2011's figure.

Comparisons to other cities show the latest legal billings for Fort Smith between four other cities reviewed by The City Wire on total costs. According to figures provided by each respective city, Edmond, Okla. (population 81,405 according to the 2010 census; commission-city manager form of government) budgets $400,000 for legal fees each year in addition to salaries for two full-time attorneys. The city of Lawrence, Kan. (population 87,643; city manager form of government), spent $883,561 to staff its in-house legal office of three attorneys, $235,864 of which was paid to outside law firms.

Lawrence City Attorney Toni Ramirez Wheeler told The City Wire the 2013 expenditures were higher than other years — the city attorney's office is budgeted annually at $800,000, she said — due to a variety of circumstances.

"In 2013, we had a number of special projects that our community normally doesn't have. We had a library, an $18 million library (that required legal work). We also partnered with (the University of Kansas) to build a sports facility that would be used by the city and KU. We had special legal fees for those two projects that we normally wouldn't have."

Another factor in the jump, Wheeler said, was the result of a federal lawsuit filed by a former city employee, though she said much of the cost for the city is meeting an insurance deductible for a policy that covers the city's legal expenses in the case of a lawsuit.

"We have an insurance policy that covers claims … they appointed an outside attorney to represent us. We are responsible to pay the deductible. We've been paying the outside attorney from our funds to meet that deductible."

Information provided by the city's office of finance show ups and downs in the total spending on the department, which also includes the city's prosecutor.

The city of Lawrence spent $803,333 for legal services in 2012, $689,181 in 2011 and $818,179 in 2010, meaning the 2013 total was the highest of the last four years at $883,561. The total represented an increase of 9.99% from the previous year's total.

The city of O'Fallon, Mo. (population 79,329), is the only city reviewed to have a city administrator form of government similar to Fort Smith's. Like Fort Smith, the city contracts its legal representation to an outside law firm. According to O'Fallon City Finance Director Vicki Boschert, the city budgeted $300,000 for its city attorney and budgeted another $98,200 for a personnel attorney. Included in the nearly $400,000 were fees attached to a city project, which Boschert said she was unable to separate from the overall legal budget.

Fayetteville (population 76,899 in 2012), the only Arkansas city reviewed, provided its 2013 budget which showed the elected city attorney ran his department for $283,625.57. The total included wages, materials and supplies, as well as services and charges. The city has a strong mayor form of government.

In an e-mail, City Attorney Kit Williams said the city only paid outside counsel one time during 2013 in spite of the city representing itself in appeals and other more challenging cases. He said the single use of an outside attorney was a fee was paid to the city's insurance company, which covers excessive force and other civil rights actions against the city of Fayetteville. A memo from Nov. 8, 2013, from Williams — who is running for re-election this year — to Fayetteville Mayor Lioneld Jordan claims that he has held increases below those of the overall city budget during his time in office."The budget request for my office for 2014 remains below what was budgeted for my office in 2008," Williams wrote. "Overall, as I will soon begin my 14th year of service as City Attorney, my office budget would have increased (if you approve the Administration's proposed budget) by less than 21% over those fourteen years. As a point of reference, the overall General Fund budget has increased by 68% during that period or more than three times as fast as my budget."

The memo also outlined what he said was was a rare instance where he his office had hired outside counsel in 2012.

"The last outside attorney I hired was used to gather documentation of how much Kum & Go was paying for the land on which to build its dozen plus new stores in Washington and Benton County. This investment paid big dividends as I used this information in our negotiations with Kum & Go which empowered us to obtain a much higher selling price per square foot for our Tyson property than Kum & Go's original proposal."

Salaries for the office were $212,576 last year, which included the salaries of Williams and Assistant City Attorney Jason Kelley.