Palo Alto Unified school board member Todd Collins slammed district staff this week for spending more than had been budgeted on legal services without securing board approval, which he said amounted to a "failure of financial control."
Staff asked the school board on Tuesday to approve a $435,000 increase for contracts with two law firms for this school year -- the third such request staff have made this year to address rising legal costs, mainly related to compliance with federal civil-rights law Title IX and special education. Last June, the board unanimously approved a $640,000 increase for legal services ($290,000 of which were one-time costs) and two months later, an additional $400,000.
The board ultimately approved the latest budget increase, with Collins dissenting.
"We have committed and used services above the authorized purchase order level," Collins said. "While I understand this is an extraordinary situation — we used more lawyers than I hope we ever use again. ... I think from a process point of view we fell down, and we should never, ever be in a situation where we are requesting budget allocations for items that if the answer for the board is 'no,' then we'll be in default on bills for services already rendered."
Chief Business Officer Cathy Mak responded that legal expenses are driven by need and "when we have an unforeseen need we need to seek legal advice on a timely basis."
Interim Superintendent Karen Hendricks added that staff have "worked extremely hard to try to narrow the scope" of legal spending, including by absorbing some of the work through the Title IX office and special-education department.
The increases cover $175,000 for Atkinson, Andelson, Loya, Ruud and Romo, brought on in 2016 to assist primarily in special-education matters; $125,000 to Cozen O'Connor, a national firm the board brought in last year to investigate the district's handling of a student sexual assault reported at Palo Alto High School; and $135,000 for outside investigators.
In an interview, Collins said he doesn't believe district staff routinely spend beyond what the board has authorized; rather, it is "unique to law firms and maybe even especially unique to law firms this year."
The district spent just under $2 million on legal services this year. Staff attribute the sharp increase -- up from $997,000 spent last year and $386,000 the year before that -- to an increase in special-education litigation, a resolution agreement with the U.S. Department of Education's Office for Civil Rights and Title IX investigations.
The largest amount this year, about $955,500 through this March, went to Cozen O'Connor. What was originally a $50,000 budget last spring with the firm steadily grew in the ensuing months.
The district paid Atkinson, Andelson, Loya, Ruud and Romo $790,870 through April. An attorney from the firm also assisted the district with revisions to sexual-misconduct and discrimination policy required by the Office for Civil Rights resolution agreement.
Board members again expressed interest in hiring a general counsel for the district, a position that has been proposed numerous times in recent years by board members who hope it would help the district save on legal expenses. The district listed a job posting for the position in May; Hendricks said it was done at the direction of the board to see what the applicant pool is like. The general counsel would advise the board, superintendent and administration; attend all board meetings; evaluate cases and conduct legal trainings for staff, among other job responsibilities. Hendricks said the district has not yet interviewed any candidates.
Staff have not produced an estimate of the potential cost savings that would come from hiring a general counsel. Board President Ken Dauber suggested the district hire one temporarily for a year and then evaluate the effectiveness.
"We have been talking about general counsel for almost the entire time I've been on the board," he said. "It shouldn't be that difficult for us to take that step. ... We're spending money that we don't need to spend potentially."
On Tuesday, the board unanimously approved contracts with three firms -- Atkinson, Andelson, Loya, Ruud and Romo; Lozano Smith (which advises on open real property and personnel matters) and Dannis Woliver Kelley (which works on human resources, business, curriculum, facilities and other matters) -- for the 2018-19 school year.
The district estimates next year's total legal costs at about $1.2 million.