Lawyering up: One district’s expensive year

Blaine County School District officials expect to save $9.5 million over 25 years, thanks to a series of building upgrades.

But in the short term, the savings didn’t come cheap. In 2013-14, the district coughed up $558,674 in legal fees to settle a 17-month legal battle with McKinstry Essention, the Seattle contractor that completed the project.

Blaine energy retrofits
An energy retrofit contract in the Blaine County School District prompted a $6.5 million lawsuit — and, in 2013-14, more than $558,000 in legal fees for the district and its patrons. (Blaine County School District photo.)

All told, Blaine County wound up paying $623,520 in legal fees in 2013-14 — making the district an unenviable outlier among the state’s school districts and charters. Under the public records law, Idaho Education News requested 2013-14 legal fees from each of the state’s school districts and charters. This covers the budget year ending June 30, 2014, the most recent data available.

Among the key findings: Only one other school district reported spending more than $100,000 in attorney’s fees — Coeur d’Alene’s paid out $135,697, barely a fifth of Blaine County’s legal bill. Based on 2013-14 enrollment, Blaine County’s legal bill came to $187.58 per student; by contrast, West Ada paid $2.30 per student, and Idaho Falls $1.56 per student. Middleton, a district roughly Blaine County’s size, paid 55 cents per student.

Blaine County business manager Mike Chatterton says unusual circumstances led to an unusual spike in legal fees.

Two big issues

McKinstry sued Blaine County in May 2012, seeking $6.5 million in damages. The parties settled in October 2013. McKinstry agreed to drop its $6.5 million claim, but the district agreed to pay $665,000 for retrofit work completed by the company.

The parties also agreed to divvy up the district’s legal fees. McKinstry agreed to pay $800,000 toward the district’s attorney’s fees, so the district wouldn’t have to dip into property tax levies to pay the difference.

The bulk of the money Blaine County paid out went to Kring and Chung, the Irvine, Calif.-based firm that represented the district in the McKinstry dispute. The district was able to scrape together its money from plant facilities and bond funds and unanticipated interest earnings, Chatterton said, and did not have to delay any maintenance work.

While the district was working out a settlement with McKinstry, it was also negotiating with Lonnie Barber. Trustees and the superintendent agreed to part ways in September, with nearly three years remaining on his contract. The district paid Barber a $600,000 settlement, and paid about $20,000 in attorney’s fees in crafting a settlement.

There aren’t many takeaway lessons for district officials, Chatterton said. School trustees decided to part ways with Barber, and McKinstry initiated the legal battle over the building work. “I don’t think any district could have avoided that, with what they tried to do.”

A budgetary wild card

Elsewhere in Idaho, schools ran up high legal fees because of specific issues — or just as a matter of daily operations.

The Coeur d’Alene district’s legal fees, translating to $13.19 per student, stem from a variety of matters, such as building contracts associated with a 2012 bond issue and judicial confirmation for a lease agreement with the local Boys and Girls Club. Other legal fees run the gamut from public records requests to contracts to special education accommodations.

“We are a high profile district in a community that is very engaged,” spokeswoman Laura Rumpler said. “Often this requires us to strategically involve our legal counsel in the initial stages through the resolution of many issues.”

For the Sage International School, its legal fees all stem from its new lease of a converted shopping mall in Southeast Boise, administrator Don Keller said. The charter school’s legal bills totaled $36,844, or $67.23 per student.

In the Blaine County district, meanwhile, the trendline has taken a sharp turn in 2014-15.

The district pays its legal counsel on an hourly rate. So far, with scarcely a month to go in the 2014-15 budget year, bills have totaled about $12,230, Chatterton said Tuesday.

Idaho Education News data analyst Randy Schrader compiled records for this report.

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