City officials for years have been overspending by tens of thousands of dollars on a suburban St. Louis law firm representing Urbana in a controversial lawsuit that began last year.
How spending has been balanced out with other city business is a mystery that will be solved, mayor says
URBANA — City officials for years have been overspending by tens of thousands of dollars on a suburban St. Louis law firm representing Urbana in a controversial lawsuit that began last year.
City records show Urbana has already spent at least $51,660.47 on special attorneys to defend its case against a former employee, and that number will continue to rise as the lawsuit drags on.
The Lowenbaum Partnership has already been paid $137,671.97 in the first six months of this fiscal year, far exceeding the $8,780 the city had budgeted for the entire year for "special counsel."
"This is a mystery that we're trying to unravel," Mayor Laurel Prussing said.
The firm represents the city in collective-bargaining matters, and it is defending the city after former employee Liz Walden filed a complaint in Champaign County Circuit Court that she was wrongfully dismissed from her job by Prussing.
The mayor said that 2013 was a "very intense year" with three labor contracts up for negotiation.
But the overdrawn budget line has gone under the radar for several years, and Prussing is now looking to "change the system" of how money goes out. She said the spending has always been balanced out by other budget savings, and the auditors who pore over the budget each year have never commented on the discrepancy.
"We've been trying to figure it out: How did it get balanced out?" Prussing said.
The Lowenbaum Partnership is a private firm based in Clayton, Mo., whose lawyers are supplementary to those who work for the city. Prussing said she chose the firm to represent the city in employment matters based on successes it had in Peoria and its history of not being too heavy-handed with unions.
"I chose Lowenbaum based on their record," she said. "They were very successful in a labor negotiation in Peoria. Both sides were happy, so we figured that was a good thing."
Prussing said "the city has always used outside attorneys" to represent it in employment matters, and she switched over to Lowenbaum from a Chicago firm in 2007.
Despite the overdrawn budget line, Prussing said she is still spending less money in her department than in the past.
"It costs money to defend the taxpayers of Urbana," she said. "To not defend them would be more expensive."
The six-figure number paid to the Lowenbaum Partnership for the first half of this budget year does not include a December court appearance, and the city's attorneys are facing a Jan. 13 deadline to file a new pleading in the case. They'll likely be due for another court appearance after that.
Walden wants to return to her old job as accounting supervisor with full backpay and benefits after she was not reappointed to the position in June. Walden was one of about 30 "at-will" employees who must be reappointed to their jobs annually by the mayor. Prussing did not submit Walden's name for reappointment this year.
The mayor's move drew criticism from other elected officials, and the city's former comptroller resigned in protest.
In her complaint, Walden cites the political affiliations of herself and her husband, Bruce Walden, whom Prussing did not allow to return as the city's chief administrative officer in 2007. The Waldens are Republicans, according to Liz Walden's lawsuit, and Prussing is a Democrat.
Aldermen Diane Marlin, D-Ward 7, and Eric Jakobsson, D-Ward 2, have led an effort to change the city's at-will employment system in the wake of the Walden dismissal. Marlin said she expected the charges for "special counsel" to be higher than the $8,780 budget — particularly with the Walden lawsuit proceeding — but she was surprised to hear how high the totals were.
The $50,000 the city has spent on the lawsuit alone is unnecessary, Marlin said.
"It's an expenditure that could have been avoided entirely," she said.
Otherwise, Marlin said she thinks it is beneficial to hire outside attorneys with more expertise than staff attorneys to represent the city in employment matters. She has just never been informed of how much it cost.
"The last round of contracts, we were facing going to binding arbitration and we ended up going to more of a negotiated settlement," Marlin said. "I think the mayor believes that's worth going to outside counsel. We've never been told what the charges have been."
Marlin and Jakobsson are holding off on their proposal to change the city's at-will employment system until the lawsuit is resolved. When it is, they "absolutely" plan to push forward, Marlin said.
Last month, The News-Gazette asked the city for records of recent payments to the Lowenbaum Partnership via the Freedom of Information Act. The city instructed the newspaper that the information was contained in the 2012 and 2013 check registers — 2,822 pages that log every payment the city issued to every vendor in the last year and a half.
The payments to the Lowenbaum partnership were contained within four pages of those ledgers. Among those, the three payments related to the Walden lawsuit totaled $24,685 in September and $15,029.13 and $11,946.34 in November.
The city refused to produce invoices it has received from the Lowenbaum Partnership, saying it was covered under a rule in the Freedom of Information Act that public bodies are not required to turn over some documents between itself and its attorneys. The News-Gazette has asked the Illinois Attorney General to review the denial.
'Special counsel' spending
In recent years, Urbana has spent money on "special counsel" when it needed extra legal expertise to represent the city in certain matters. It has far exceeded the amount it budgeted, and since 2007, $430,058.76 has gone to a suburban St. Louis law firm called the Lowenbaum Partnership.
|* Each fiscal year runs from July to June.|
|** Through December 2013.|
|Source: City of Urbana|