OPS reduces legal fees, looks for further trims - Omaha.com
Published Tuesday, July 2, 2013 at 1:00 am / Updated at 10:19 am
OPS reduces legal fees, looks for further trims

The Omaha school district is on track to spend fewer dollars on legal services than it has in more than a decade.

District officials also expect that spending to fall even lower in the near future.

Not since the 2001-02 school year has Nebraska's largest school district spent less on legal fees than the $1.4 million projected for this fiscal year, which ends Aug. 31.

In fact, the Omaha Public Schools expect to spend less this year than the Lincoln Public Schools did in 2011-12, even though Lincoln has far fewer students. But OPS still spends nearly twice as much for legal services, on a per-student basis, as Denver's school district.

OPS legal costs have gone down for several reasons, said David Kramer, the district's main attorney at Baird Holm, OPS's longtime law firm:

The district is no longer leading major lawsuits.

OPS has trained more of its employees on when to seek legal advice and when to handle the matters on their own.

OPS signed a new retainer agreement with Baird Holm effective last December that set a monthly cost limit on routine services, with the goal of holding down costs.

District officials say a smaller legal bill should be the new norm for OPS, as long as the district avoids lengthy and costly lawsuits.

A smaller bill, however, will not mean less scrutiny. The new OPS board still plans to consider hiring an on-staff attorney and seeking new bids for the district's legal services, said Justin Wayne, the board's president.

“We just have to have that discussion and make informed decisions,” he said.

In Denver, the 84,000-student district relies on five on-staff attorneys and three assistants for most of its legal services, but it also hires some outside lawyers. Denver expects to spend $1.17 million during its current fiscal year, which ended Sunday. That works out to about $14 per student in legal services.

By comparison, spending by OPS — which has about 50,000 students — this year will be about $28 per student.

Legal fees now account for about three-tenths of 1 percent of the OPS general fund budget of $484.2 million.

Meanwhile, Lincoln spent nearly $1.5 million on lawyers during the 2011-12 fiscal year. That's about $40 per student.

Lincoln officials say legal spending spiked because of the May 2011 fire, set by a former teacher, that destroyed the school district's headquarters. If not for fire-related legal costs, officials say, spending would have been much lower — below the $1.1 million that Lincoln spent the previous year.

But even at the lower 2010-11 level, Lincoln's legal spending works out to about $30 per student.

In OPS, the latest batch of legal bills is approaching 2001-02 spending levels, when the district's lawyers were paid $1.19 million.

Legal spending by OPS, 2000 to present

In millions of dollars. Numbers are rounded.

YearAmount
'00-'01$1.04
'01-'02 $1.19
'02-'03 $1.55
'03-'04$2.18
'04-'05 $2.56
'05-'06 $4.38
'06-'07$4.19
'07-'08$3.80
'08-'09$2.11
'09-'10$2.03
'10-'11$2.12
'11-'12$1.95
'12-'13* $1.40

*projected

Legal costs grew rapidly after that. During the 2005-06 school year, for example, OPS spent about $4.38 million.

At the time, the district was mired in two controversial legal issues, both at least partly initiated by OPS.

In 2003, OPS and three other districts challenged the constitutionality of the state's school finance system. That lawsuit ended in April 2008, when the state revised its school funding system.

Under the revision to the state's system, districts such as OPS, with large numbers of students from low-income families, have received millions of dollars in extra help.

The other issue was completely OPS's doing.

In 2005, the district tried to take over schools and land from the Millard, Ralston and Elkhorn districts. That divisive effort eventually resulted in the current Learning Community law, which requires the 11 school districts in Sarpy and Douglas Counties to share property taxes.

Baird Holm lawyers working on Learning Community issues alone racked up about $331,000 in 2009, $660,000 in 2010 and $668,000 in 2011, Kramer said.

Those legal matters are now years old, he said, and lawyers continue to spend less and less time on them. Attorneys now tweak sections of Learning Community contracts and agreements, he said, instead of starting with a blank page.

With three months left in this fiscal year, he said, Baird Holm lawyers have billed OPS $2,079 on Learning Community issues.

OPS isn't suing anyone, although it was the defendant in 52 ongoing lawsuits in May.

OPS also is spending less because of changes made administratively.

As interim superintendent, Virginia Moon asked department heads to review their legal fees monthly and make sure proper procedures were being followed for when to seek legal advice.

Only OPS assistant superintendents and a couple of department directors can ask Baird Holm for help, and unless the subject was routine, they were also to notify Moon.

Moon had expected costs to continue dropping because this fiscal year has included rare events that increased the district's legal costs, such as the state law that shrank the board and a superintendent search.

OPS has trained its employees about routine issues that previously might have resulted in a call to Baird Holm but now are mostly handled without picking up the phone.

For example, Kramer said, when a parent comes to school and wants to see his or her child but doesn't have visitation rights that day, administrators have been trained to abide by the court order.

The retainer agreement with Baird Holm also has helped lower costs.

Under the agreement, OPS pays the firm $11,500 a month for all work related to attending board meetings, reviewing legislation and current laws and regulations, phone calls about day-to-day school law issues, advice on general school matters and drafting or reviewing simple contracts.

Other issues are billed on an hourly rate. The district previously paid an hourly rate for everything.

From January through May, had the district still been operating without the agreement, OPS would have spent an additional $73,000.

Wayne, the OPS board president, said the district will always have legal bills; OPS can't control who sues the district.

But he thinks the district could trim further.

Almost all OPS board members have contacted Wayne about discussing the district's legal services, which could include what legal services the district requires. The board plans to have that discussion by early August, he said.

There also has been discussion, Wayne said, about using a future staff vacancy to hire an in-house attorney.

World-Herald staff writer Paul Goodsell contributed to this report.

Contact the writer: Jonathon Braden

jonathon.braden@owh.com    |   402-444-1074    |  

Jonathon writes about education, mostly the Omaha Public Schools, Nebraska's largest district.

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