Legal Fees Decreased

Published 5:02 pm Thursday, April 14, 2011

CUMBERLAND – When it came time for the Board of Supervisors to adopt the County's 2011-2012 fiscal year budget on Tuesday night and after a motion was already on the floor to approve it as presented, Supervisor Tim Kennell, District Two, spoke up and said, “I disapprove of approving this budget because of one line item involving the County Attorney.” Supervisor Kennell was referring to the County's yearly total outlined for legal services.

Kennell then proceeded to make a substitute motion, after receiving procedural assistance from the County Attorney, Howard Estes, to reduce the legal services line item by $100,000 and adopt the budget as presented with the change proposed. That substitute motion then passed on a three to two vote.

Kennell, Supervisor Elbert Womack, District Four, and Supervisor Bobby Oertel, District Five, voted in favor of the reduction. Chairman Van Petty, District Three, and Supervisor Bill Osl, District One, voted against the substitute motion.

To begin, the Board had been in open session for less than an hour and took care of several business items before taking up the discussion and approval of the 2011-2012 fiscal year budget, the Board voted to go into closed session under Virginia Code Section 2.2-3711, A-1, personnel.

The closed session had been added to the agenda at the beginning of the meeting.

Supervisor Womack addressed the fact that in Cumberland it's an election year and that he had started going door-to-door speaking with citizens and receiving signatures.

“I've already gone out and gotten my signatures from the voters,” he said. “…In my travels around, the citizens are bombarding me that you people are paying too much for your attorney. I was bombarded face-to-face and phone calls to my house and bombarded with all types of people. They didn't have a solution to it but they just said you are paying too much money. Tonight, as you people are aware, we reduced that budget by $100,000 this coming year-this budget cycle… It's not to say that our attorney isn't doing a magnificent job, which he is. I'd be the first to say that. These are tight times and people are struggling out here…”

Later, Kennell noted that the reduction in the legal services contract would also result in a reduction in services.

“With that is a reduction in services and citizens need to be prepared…,” he said. “We've been getting a lot of action and a lot of appearances and if you cut the bill down you get what you pay for but I think it's the right decision.”

Afterwards, Supervisor Osl addressed his opposition to the substitute motion that was made and said, “We entered into a five-year agreement and we…apparently have to go back to the way we were doing business before because we don't have a plan for what we are going to do. There is no plan for how we are going to accomplish that and I don't look forward to it…”

Finally, Chairman Petty addressed the issue of the County breeching its contract for legal services and his disagreement with the decision.

According to Petty, he enters into contracts based “on good faith” and wanting to “honor your handshakes and legal documents.”

“I know in 2009 when we entered into this contract we were looking for a way to save money on legal fees because prior to years before that it was running $400,000-something and then we went to a contract with a firm and we were paying hourly rates and the hourly rates were outpacing our budget and we had to keep pulling money and adding to it. It got to be very frustrating to budget for it from year to year and we, as a Board, said we needed to have a more fixed set cost on legal fees…”

Petty continued to explain, that the Board's decision was to enter into a contract at a fixed-fee where the County could begin to see a cost-savings in the area of legal services.

“All five of us looked at the contract and we were saving money,” remembered Petty from 2009. “We were looking at $60,000-something a year savings at that time…I haven't done what Mr. Womack has done yet. I haven't knocked on 170 doors and I'm not sure what the reaction will be but I know I've been talking with people.”

The Chairman continued to explain that he was an “old fashioned kind of person” when it comes to entering into a contract.

“When you enter into a contract, you honor your contract and you do what your word says and we'll leave it at that,” said Chairman Petty.

Matthews Provides Clarification

On Wednesday morning, The Herald contacted Cumberland's Assistant County Administrator of Finance, Jill Matthews, to obtain clarification on where the County would be going from here now that the Board has adopted a budget with a $100,000 reduction in the legal services line item and the message was clear: there is no plan in place.

According to Ms. Matthews, although the budget was adopted with the decrease, there was no plan determined on how to proceed with legal services for the County and that the future is yet to be determined.

“Are we talking about reducing $100,000 off of the contract amount or $100,000 off of the line item itself or $100,000 what the reduced contract fee is after the five percent deferred was offered,” said Ms. Matthews to The Herald about the language used in the substitute motion put on the floor by Supervisor Kennell.

The substitute motion was worded so that the $100,000 would be reduced from the legal services line item in the proposed 2011-2012 fiscal year budget, which totaled to $293,312.

“That's the way it was worded,” she continued because the budget has already been adopted. “So I want to get clarification from them because at this point that's the way they worded it and that's the way they voted on it-because if they intended on leaving more in there they would have to appropriate it.”

By the way the motion was worded, the new legal services total would amount to $193,312, she said.

As far as what type of services would be available in the new total, according to Ms. Matthews, none of that was decided in the closed session that lasted well over an hour and there was also no action taken afterwards when the Board resumed in open session and County staff is still unsure on how to proceed.

A plan is “yet to be decided,” she offered.

“A few ideas were thrown out in closed session but nothing was decided on,” she added. “And no action was taken. So how to proceed from here? I don't know. The only public comment that was made is that services will have to be reduced and that's, honestly…all I knew as to where we are going to go from here.”

The County's contract with Estes & Associates was enacted in 2009 as a way to cap legal fees for the County and as it stands right now, with the County's proposition to reduce the amount being paid for services, there is no game plan as to how those services will continue, she offered.

“There is no definite plan as to how we are going to proceed with legal services,” continued Ms. Matthews. “As to how it will be structured.”

As to Cumberland's County Attorney agreeing to the proposed fee schedule, the Assistant Administrator also noted that he didn't have to agree to what was adopted in the County's budget.

“Absolutely, he has that option because it's essentially a breach of the contract,” she offered. “So, absolutely he has that option. We cannot force him to change his contract for us… And that's not been handled at this point. Right now, there is no game plan. It hasn't been finalized as to how we will proceed with our legal services.”

Ms. Matthews later noted that she hopes the intention is for the County's Supervisors to schedule a meeting with the County Attorney and staff in order to discuss the details related to legal services and how to proceed.

“We haven't received any instructions as far as how to proceed,” she concluded.

Cumberland's legal services line item includes services that are provided to the different departments, boards, and commissions-not just the Board of Supervisors or the County Attorney's salary. For instance, legal services are also provided to such groups as the Wireless Authority, the Planning Commission, and the County's Industrial Development Authority, to name a few.

Budget Adoption

The County's budget for the fiscal year starting on July 1 was adopted as presented during the public hearing, aside from the change in the legal services line item.

According to information provided, the budget did include increases because of the health insurance fund; capital improvements fund; school fund; and public safety.

The information provided explains that the recording and tracking process of the transactions for the health insurance fund resulted in an overall budget increase because the County is self-funded. This process does not reflect an actual additional expense to the County.

Related to the capital improvements fund, there are several utilities related projects that needed tending to because of them being vital to the continued operation of the County's public water and sewer system.

The additional school fund reflects an increase of $382,713 in local funds over the last fiscal year in order to assist with the increase of VRS costs, increased participation by employees in health and dental plan and to continue with groundskeeping services. The remaining $532,640 increase over last year is due to the school receiving additional state and federal funding.

The public safety line item in the budget increased this fiscal year due to tracking private security services provided by the Sheriff's Office and additional personnel costs for upcoming trial and the conversion in the dispatch center to fixed shifts-there is also an increase in additional expenditures and revenue for an increase in selective enforcement.