Tupelo city legal costs difficult to compare

Tupelo StockANALYSIS

By Robbie Ward
Daily Journal

TUPELO – The precise cost impact of Mayor Jason Shelton’s proposal to create an in-house city attorney position to replace the current contract with a law firm to handle legal services remains unclear.

The first-term mayor, an attorney, says using an in-house legal counsel could save city taxpayers $100,000 annually. However, a Daily Journal analysis of the associated costs shows no clear way to determine the amount of savings, if any, over what is paid the city’s current law firm.

But the recent discussions related to the city transitioning away from using the firm of Mitchell McNutt & Sams have led to the firm proposing a flat fee for services, a change from the current fee per hour charged.

Data provided by the city clerk’s office, letters from the Mitchell McNutt & Sams sent to Shelton and the City Council, cost comparisons between legal services currently paid to the outside law firm and what the mayor proposes don’t provide easy cost comparisons.

Beyond what the city pays the law firm through contracted services, Tupelo also pays for legal insurance to cover lawsuits against the city. Each time the city is sued, it must pay a $5,000 insurance payment for the firm to represent the city. In employment lawsuit cases, the payment jumps to $75,000. These payments are included in annual bills the city paid to MM&S, according to city data provided, making an exact comparison hard to determine.

“…It is difficult, if not impossible, to get an apples-to-apples comparison of costs associated with an in-house attorney and secretarial assistance with costs otherwise associated with providing legal services to the City,” MM&S managing partner John Hill wrote in a letter to the mayor and City Council.

Included in fees to the firm is defense of lawsuits against the city. Tupelo taxpayers have paid an average of $277,328 annually to MM&S from 2002-2012. the highest payment was $433,620 in 2007 and the lowest $103,368 in 2010. These amounts do not include costs paid the law firm for the lengthy annexation court battle that ended in 2012 or bond costs from 2011-2013.

Shelton’s proposed fiscal year 2014 budget the City Council will vote on Tuesday keeps most city departments’ funding at roughly status quo compared to the current year. The only major policy change reflected in the proposed budget is Shelton’s request to create the in-house attorney.

“I campaigned on being a good steward of the taxpayer’s money,” Shelton said Saturday after the city retreat that focused on goal-setting. “As a person with experience as a municipal attorney and practicing law, I’m convinced that’s a place to save money.”

A law firm has contracted with the city for legal services for at least 40 years. No documents were immediately available to show when, if ever, the city has operated with an in-house attorney.

Even if the City Council rejects the in-house attorney idea, Shelton will have succeeded in changing how the firm charges the city.

On July 26, Hill proposed a flat fee for city legal services of $240,000 annually and then lowered the fee to $210,000 in a letter dated Aug. 23. Flat fees by MM&S do not include representing the city in litigation.

However, Shelton has made clear intentions to reject any effort by the City Council to require MM&S as the primary legal services provider to the city.

Based on Shelton’s proposal to the City Council for the cost of legal services, the mayor’s plan would roughly equal the legal costs proposed by MM&S. Shelton’s plan calls for hiring of an attorney, estimated to cost $112,500 for a $90,000 salary and benefits, contract with an outside law firm for a fixed amount of $60,000 to assist the new attorney and transfer a current employee that costs $35,761 in salary and benefits, all totaling $208,261. This doesn’t include office equipment and professional subscriptions the attorney position would require.

The employee transferred to assist the attorney would not be an additional cost to the city, however, since the position is already in the budget, and Shelton said other costs associated with the office would be paid out of the existing mayor’s budget. That could potentially lead to an overall savings for the city, but several council members have their doubts.

A majority of City Council members oppose Shelton’s proposal, each of the four opposing giving different reasons. Markel Whittington of Ward 1 said his primary concern involves overall personnel costs to the city. Currently, the city budget’s salaries for personnel equal more than 60 percent of the overall budget.

Whittington said he would agree to the city adding an on-staff attorney if Shelton found a way to reduce 5 percent in overall city costs.

In the month since Shelton announced the in-house city attorney position, no proposed job description has been created. Shelton says he has no specific attorney in mind to fill the position. However, he said it could be filled by the end of the month.

As Shelton and City Council members continue to debate hiring an in-house city attorney, the current contract with Mitchell McNutt & Sams ends in three weeks. If no city attorney is hired by then and no new contract is agreed on, the city will have no legal counsel representing it when the new fiscal year begins.

If a council majority approve a city budget without the in-house attorney, it’s unclear how the city will operate with legal services such as providing counsel for the city acquiring right-of-way in annexed areas as it works to provide services to those areas.

Shelton has said he will veto any City Council action that forces the city to use the current law firm. He said he will propose a compromise to the council to wait 90 days before the city hires a city attorney. However, how the city’s legal services will be handled in the meantime is unclear.

“That’s just something we’d have to look at,” Shelton said.

robbie.ward@journalinc.com

The Proposals

MAYOR JASON SHELTON
Position Cost
In-house attorney $90,000

Assistant* $28,609

Fringe benefits for both $29,652

Contract outside attorney $60,000

Total $208,261

* Transfer of existing position in budget. Other costs to be paid out of existing mayor’s office budget.

MITCHELL MCNUTT & SAMS
Flat fee proposal – $210,000 annually, not including defending lawsuits filed against the city.

  • Lied-To

    Ridiculous. I was lied to…again by voting for Jason. He doesn’t have the best interests of Tupelo in mind, he has HIS interests and his legal buddies in town’s interests in mind. I wish he would quit saying “we shouldn’t put the interests of one law firm over the interests of a community”, no one has said that Jason, you keep making that up. Great lawyer tactic. He’s smooth. And his adamant point to demand he will “veto any budget that has Mitchell McNutt & Sams in it” tells his true colors. Sounds like HE is putting HIS interests over everyone else. This is like a light bulb manufacturing specialist being mayor and
    coming in and demanding all light bulbs be changed to HIS opinion. Sounds like a personal vendetta against Mitchell McNutt & Sams. I wish he would just come out and say why he hates that law firm so much.

  • ConwayTwitter

    It’s time to compromise on this thing. MM&S has come down on their price and essentially matched the in-house cost. MM&S also has the incalculable value of institutional knowledge of the city’s legal history. It would take a new attorney or a new firm months, if not years, to catch up.

    If MM&S has done the city wrong, then let’s hear about it, for that would be a justification for moving to another firm or an in-house lawyer. If not, then the wise thing to do is to renew the MM&S contract, avoid loading the city with additional personnel costs, and move on to more important matters.

    Well done, Daily Journal, in revealing the truth about the costs.