Move to contract legal services paying off for city of Glenwood
It appears the city of Glenwood Springs will indeed save money in the long run from a decision last year to eliminate its staff attorney and paralegal positions in favor of contracting for legal services, though costs did come in somewhat higher for the transition year.
An inspection of legal costs for the city over the past year prepared by Glenwood Finance Director Charles Kelty at the request of the Post Independent shows the city is expected to spend $294,558 for all legal services combined this year.
That’s compared to the original 2015 budget of $377,744, which had included the $117,000 salary plus benefits for former city attorney Jan Shute, as well as personnel costs associated with retaining a legal assistant in that department.
City Council, in one of its first major decisions following the election of a new, more conservative council majority in spring of 2015, agreed to eliminate the staff attorney in favor of contracting with the Glenwood Springs law firm of Karp Neu Hanlon for legal services.
Since that time, Karl Hanlon has served as lead legal counsel for the city. The city also spends $44,558 per year for the services of prosecuting attorney John C. Collins. Shute has since been hired by Garfield County as a deputy staff attorney.
The move away from an in-house legal department represented a major policy shift for the city of Glenwood, which for many years had retained a full-time staff attorney, including Hanlon for a period of time in the early 2000s before Shute was hired in 2006.
It’s actually more typical in smaller municipalities to contract for legal representation. Each of the other five towns and cities in Garfield County handle legal services in that manner.
Mayor Mike Gamba indicated at the time the decision was made that potential cost savings was one of the factors driving the decision.
That appears to be the case, if the projected costs for this year and going forward hold. However, the cost to get to that point has been significant for the city, according to the expense analysis.
That analysis shows that, in addition to paying $158,279 for Hanlon’s firm and other legal services that were already built into the budget, the city also had to pay six months’ severance on Shute’s salary, according to the terms of her employment contract.
Combined, the city spent $495,821 on legal services for 2015, more than $118,000 higher than had originally budgeted. Still, that was about $88,900 less than was projected for budget purposes when the decision was made to let Shute go and contract for legal services, Kelty’s analysis shows.
“When you look at it purely as the cost going forward, had we not made the decision we did we would have been spending more,” Gamba said of the numbers. “In fact, we’re expecting to see that cost decrease dramatically.”
Cost wasn’t the only factor, though, he said. There are also certain efficiencies associated with contracting out for legal expertise, instead of relying on one person for that expertise, Gamba said.
“We have always had outside legal services as a cost component of the budget,” he said. Indeed, the cost breakdown provided by Kelty shows the city had already planned to spend $94,240 for extra legal services last year beyond what it was paying a staff attorney.
The wildcard in handling legal services via contract rather than having a paid in-house attorney comes when there’s an unexpected increase in need for legal services. But the period of time from May 2015 to present probably represents the high end of that, Gamba also noted.
“There probably hasn’t been more going on in Glenwood Springs (requiring legal work) in its entire history than right now,” he said, pointing to various legal agreements with both public and private entities associated with the Grand Avenue bridge project and setting things in motion to build the Eighth Street connection.
“It is possible that cost from year to year is going to fluctuate, but I think we’ll find that 2015-16 represents the high end of that fluctuation,” Gamba said. “If it does fluctuate after this year, it very likely will fluctuate down.”
If the numbers hold, the city will spend $201,264 less on legal services this year than it did in 2015, according to the analysis.
Not included in the cost breakdown is an additional $300,000 budgeted in the city’s Acquisitions and Improvements Fund for legal services associated with the city’s application for recreational in-stream water rights to build a whitewater park at one of three locations along the Colorado River between Glenwood Springs and No Name.
Even that figure is a placeholder, Kelty said. Through April of this year, the city has spent $49,165 to the law firm of Holland and Hart to represent it in state water court on that case.
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