Payments to St. Louis law firm well over legal budget for Urbana
URBANA — The city made $124,078.22 more in payments to a suburban St. Louis law firm through this Monday, putting it even farther over budget on outside attorneys than it already had been.
The new payments were revealed in documents recently turned over to The News-Gazette after a request the newspaper made last month under the Freedom of Information Act.
Nearly $44,000 of the most recent payments were for the Lowenbaum Partnership's representation of the city in an ongoing employment dispute that began last summer.
The city wrote checks largely for the attorneys' conferences, reviews and preparations for legal proceedings, according to the invoices.
The city paid Lowenbaum staff anywhere between $75 and $355 per hour for their work, including $180 per hour and $265 per hour for the two attorneys who did the bulk of the work on most Urbana cases.
The payments in the 2014 calendar year bring the city's "special counsel" costs — as of Monday — to about $326,000 this fiscal year, which runs from July through June.
The city had budgeted $8,780 for that line item, and it's the fourth fiscal year in a row which the city has overspent by at least $42,000.
When The News-Gazette in January first reported the discrepancies between the budgeted amounts and the actual spending, Mayor Laurel Prussing said it was "a mystery we're trying to unravel." The city's overall budget always balanced out in the end, she said.
She said on Monday that the budgeted amount was wrong. The city's financial officers had a way of balancing the numbers, but it was not reflected in that line item.
"They shouldn't have done that," Prussing said. "We will do an overall amendment to the budget after we get all the numbers."
That goes for other budget line items, too. A rough winter had the city spending more in the past few months than it expected.
"We're overdrawn on snow removal, we're overdrawn on potholes, we're overdrawn on a lot of things," but the numbers will come together at the close of the fiscal year, Prussing said.
Of this year's spending on outside legal counsel, $261,750.19 has gone to the Lowenbaum Partnership in the first nine months of the 2013-2014 fiscal year. The city has paid $554,136.48 to the firm since 2007.
Spending on proceedings specifically related to a lawsuit filed against the city by former city accounting supervisor Liz Walden has grown to at least $105,357.32 through Monday. Walden is suing to get her job back, with full back pay and benefits, following Prussing's decision to not reappoint her as accounting supervisor last summer after 24 years on the job.
Walden was one of about 30 "at-will" employees who must be reappointed to their jobs annually by the mayor. The mayor's move drew criticism from other elected officials, and the city's former comptroller resigned in protest.
Alderman Eric Jakobsson, D-Ward 2, was one of those who had concerns about the controversial Walden dismissal, and he said Monday that it extends to what the city is spending on the case. He said he understands that sometimes the city will overrun its budget, but this is "a little bit off scale."
"I have understood and I have accepted the need for some special expertise in the labor negotiations," Jakobsson said. "We don't have anybody in house who's experienced in that particular aspect."
On the other hand, he said, the accounting needs to be more transparent.
"I am concerned about the other expenditures that we're incurring because they aren't things that we had planned for," Jakobsson said. "I think that we're going to have to address this as an item in next year's budget. It's just way too big not to be a separate item and not to be something where we can project what the costs are, allow for it and, frankly, decide whether that's an expenditure that we want to continue to incur."
The Lowenbaum Partnership specializes in labor law, and the city has always used outside legal counsel in union negotiations and labor disputes, Prussing said. The 2013-14 fiscal year has presented a particularly heavy workload with all the city's union contracts expiring and the Walden lawsuit, Prussing said.
The invoices turned over to The News-Gazette also include receipts for $4,970 in work the firm did on a "health insurances renewal grievance."
Prussing expects the spending will not be so extreme in the immediate future.
"We have to defend ourselves against a lawsuit, so I can't tell you who's going to sue us," Prussing said.
The city's next fiscal year begins July 1. The city council will need to review and likely pass a budget sometime within the next two months.
"We've got to pass a budget soon, so we'll definitely be discussing it in public when we pass a budget," Jakobsson said.
The city last week turned over to The News-Gazette a total of 143 pages, which included invoices, receipts and general descriptions of services provided to the city by the Lowenbaum Partnership. Citing attorney-client privilege among other exemptions in the Freedom of Information Act, the city had previously declined to make that information public.
The newspaper appealed that denial to the Illinois attorney general, who ruled last month that the city incorrectly withheld those documents in their entirety. The city gave the invoices to the newspaper last week with privileged information redacted.