A ‘legal’ way to rein in spending

LocalSource continues to examine how towns spend taxdollars on legal counsel

UNION COUNTY —  If you live in Union County there is a good chance your town is spending a considerable amount of tax dollars on legal representation. Although some municipalities have airtight contracts with attorneys, many are open-ended, leaving the door wide open for additional charges to mount up.

For example, in Clark, taxpayers could assume the contracted municipal attorney earns $60,000 a year because that is what the township indicated in a resolution approved by the governing body. However, last year Joseph Triarsi of Triarsi Betancourt & Wukovits pulled in an additional $62,349.94, which more than doubled the $60,000 contracted. The contract never referred to the hourly fee Triarsi would receive for any additional legal services, merely referring to the $60,000 as a “base cost.” However, it is not against the law for a town to draft a contract for legal services and omit specific information regarding the scope of work, hourly fees and duties involved.

Part of the problem is that New Jersey Public Contracts Law views contracting with attorneys as a professional service, which is exempt from the public advertising required of other municipal contracts.

The New Jersey Office of Comptroller recognized that local towns could end up with excessive legal costs so they provided a guideline called “Best Practices for Engaging and Managing Legal Counsel.” This was targeted at increasing legal transparency, gaining control of savings and improving legal contract management. The problem is that while some local towns follow these guidelines, others do not. In fact, several towns have contracts that do little more than engage an attorney for open-ended legal services.

LocalSource looked into how Union County towns handle their legal representation using the Open Public Records Act to obtain records and documents from 13 towns for 2011, 2012 and 2013, but only 10 towns responded to the request. By law, municipalities must respond to an OPRA request within seven business days or request an extension. Roselle Park, Kenilworth and Elizabeth never responded to the OPRA request nor asked for an extension.

LocalSource found that overall, whether a town had a salaried township attorney or outside legal firm performing the municipal attorney duties, charges above and beyond the contracted amount usually were not clearly outlined. More often than not, most municipalities failed to include in their contracts exactly what was expected of the municipal attorney or what services would be considered outside this venue.

In some cases, such as Hillside, Rahway, Cranford and Summit, legal services performed by the township attorney were clearly identified in contracts. These towns also required that detailed documentation be submitted for all legal work performed, including those outside routine municipal attorney duties.

All towns contracted with one or more legal firms for other labor negotiations, bond counsel and tax appeals. However, although contracts were drafted with these firms, most were open ended, failing to clearly define, or in some cases, even address the parameters.
Some attorneys provided municipal legal services for one or more towns, while others provided legal support to municipalities just for bond counsel, tax appeals and redevelopment issues. This is not unusual or against local or state law. Hillside had the most outside legal representation in these areas, but other towns, such as Rahway, contracted with multiple firms to cover tax appeals or labor negotiations.

Towns using outside firms for additional legal services paid rates ranging from $125 to $170 per hour, with many towns setting a cap, or limit, on what they would expend in a year.

New Jersey State Law requires, at a minimum, that legal billing invoices include the issue, date of service, attorney’s name, hourly rate, total charge for each billing entry, detailed description of the services provided, amount of time spent on each particular service or task, and an itemized list of expenses or disbursements. This is particularly important because without this information local officials cannot determine whether these legal services, and the fees, were reasonable or not.

Rahway has a contract with DeCotiis Fitzpatrick & Cole, using attorney Louis N. Rainone as municipal attorney for general legal services. This municipality clearly outlined the legal services included as general legal services, noting Rainone is to be paid $155 per hour for general municipal attorney services. Rahway also included in their contract that any paralegal or law clerk legal work would be paid at $80 per hour, as the state’s best practices recommended. This municipality was the only town to do so.

The city also required that Rainone’s legal firm provide monthly vouchers with a detailed explanation of all services performed. DeCotiis submitted hundreds of detailed bills over a two-year period, each including time spent, attorneys handling the issue, and cost and explanation of what was done, as suggested by the state’s best practices.

The city also contracted with several other legal firms in 2013, including Wilentz Goldman & Spitzer for bond counsel and Inglesino, Pearlman, Wyciskala and Taylor for labor issues. In the last several years Rahway has used other firms to handle various other legal issues. Because of the volume of billing submitted, LocalSource had to rely on a vendor printout that summarized the amount the city paid for each of the legal firms representing Rahway.

In 2011 the city paid a total of $246,049.55 for all legal services, with $241,031.67 of that going to DeCotiis. In 2012 DeCotiis received $357,043.51 with the final tally for all legal representation that year coming to $379,714.91.

In 2013 Cranford contracted with Daniel McCarthy, a partner with Rogut McCarthy, when political control shifted to the Democrats. Rogut McCarthy also provides redevelopment legal services for Hillside, which is capped at $50,000 a year and as bond counsel for this same town with a cap at $15,000. In addition, McCarthy serves as one of three assistant municipal attorneys in Linden for a fee that was not provided to LocalSource and as public defender in Rahway.

Under McCarthy’s agreement with Cranford, this attorney is paid $145 per hour, with the maximum not to exceed $100,000 a year for “routine activities of a municipal attorney.” Included, without limitation, was attendance at all township committee meetings, preparation of all ordinances and resolutions, consultations and conferences, legal research, legal advice and bid specifications and contracts.

Legal services, in addition to these regular duties, were also outlined, which would add additional legal costs beyond the $100,000 annual cap. This included all litigation, all tax appeals, all real estate matters, meetings other than township meetings, all redevelopment legal work, major revision of the municipal code and any other legal services the township may required. Although not all billing from McCarthy was submitted, it appeared that in 2011 McCarthy had $79,888.89 in additional legal charges, bringing the amount he made for that year to nearly $180,000.

There all also confusing issues involving attorney Philip Morin, who served as municipal attorney in 2012 in Cranford. In 2011 the township contracted with Morin for township attorney services and while it remains unclear from the bills presented what this work covered, the total amount for 2011 and 2012 came to $246,651.08. This legal work was only described in billing as either “legal, outside professional expense,” litigation fees, or matters relating to township issues and litigation.

In 2013 in Springfield, after power on the governing body switched to the Democrats, the township contracted with Neil Dworkin as municipal attorney. His agreement with the township pays an hourly fee of $150 for regular municipal attorney services, with a $125,000 cap annually. This attorney also receives a stipend of $6,500, but documents submitted did not clearly indicate what the attorney does to receive this additional funding. There were no bills or vouchers submitted by the township for 2013 as requested by LocalSource. Nor did the township submit a contract for Dworkin.

In 2011 and 2012 under Republican control of the township committee, Bruce Bergen of Krevsky, Silber & Bergen was under contract to provide municipal attorney services. Although Bergen also was under a similar contract at $150 per hour with a cap set at $125,000, calculating what this attorney billed in excess of this was difficult at best. In fact, due to the sheer volume of bills and vouchers submitted, it was impossible to tell what services were included under the township attorney hat and that of “additional legal duties.

This attorney did submit detailed bills, including the amount of time, subject matter and what was done, which followed the guidelines of the state’s best practices for legal contracts. In general, it appeared that Bergen charged monthly for regular township attorney work, with additional legal services, such as tax appeals, averaging around $2,000. The average amount for regular legal services ranged between $5,500 and $8,000 a month.

In Union no information was obtained using the OPRA law, as noted in the first part of this series. According to township Clerk Eileen Birch, because the township attorney, Daniel Antonelli, is an employee of the township making $82,447 with health benefits, there were no documents that applied.

It is unknown what the scope of the township attorney position includes because this information was not able to be obtained either. According to Township Administrator Ron Manzella, the township contracts with two outside firms for additional legal work. Included was Apreuzzese, McDermott, Mastro & Murphy which handles labor negotiations for the township and Palumbo and Renaud, which addresses tax appeals.

No additional information was able to be obtained to determine how much these firms are paid per hour, or if there is any annual cap on billing.

Summit, on the other hand, provided not only documents requested but also the response the city received when a request for proposals was sent out for a “city solicitor,” or municipal attorney.

In 2011 and 2012 the city contracted with attorney Barry Osmun for a $36,000 a year retainer to cover “routine” municipal attorney duties, with a cap of $100,000. This included attending common council meetings, preparation of resolutions and ordinances as well as telephone and email communications. All other non-retainer legal work was contracted at $170 per hour, including litigation, special research projects and attendance at special meetings.

In 2011 Osmun billed the city a total of $69,530.36 but in 2012 the city brought aboard Thomas P. Scivo of McElroy, Deutsch, Mulvaney & Carpenter, as city solicitor, who billed the city $135,658.58 within the same contract parameters as Osmun.

Mountainside did not provide a contract for the firm of Post, Polak, Goodsell, MacNeill & Strauchler, as per the OPRA request. While there was no contract to refer to, billing submitted by this municipality indicated this legal firm has an annual retainer of $28,440, but total charges far exceed this amount.

For example, in 2011 the city was charged a total of $159,946.71 in additional legal expenses over and above the retainer. In 2012 charges for additional legal services tallied $158,302.82 while in 2013 these same charges amounted to $15,393.37 for just January, the only billing available for this year.

Billing submitted by this firm did follow the state’s best practices standards, including not only a description of what legal work was performed but also the time spent and identification number of the case.

Because the borough did not submit a contract for this firm, there was no way to know how much per hour they had to pay for this additional legal work or what the parameters were for routine municipal attorney services.