Claremont Insider: Nice Work If You Can Get It

Saturday, August 21, 2010

Nice Work If You Can Get It

Update--Sunday, August 22. See end of post in red.

In June, when the Claremont Unified School District was still negotiating with the Claremont Faculty Association, Wes Woods II had an article in the Daily Bulletin about the heated nature of the contract talks.

One interesting point that came out in Woods' article was the amount CUSD spent on the law firm that represents the district:

The school district's Los Angeles-based law firm, O'Melveny & Myers, also has been an issue for the union. Tonan said the firm spent about $149,000 in reduction in force hearings in 2008-09, while the union's firm spent about $28,000.

A union flier was shared with the media, union officials and the school district that indicated Claremont Unified's attorney Framroze M. Virjee (image nearby) was paid $765 an hour for every hour he was at the bargaining table. Virjee's law firm, O'Melveny & Myers, was paid more than $535,000 in 2008- 09 and more than $365,000 in 2009-10 by Claremont Unified.

That's right. CUSD spent $900,000 on legal expenses in the past two years. That's almost 1 percent of the district's November Measure CL bond, and you can bet that some of the money the bond generates will somehow end up compensating the district for their legal expenses.

As we're discovering, there's real profit (or cost to taxpayers) to be found in the education business, at least in consulting and contracting work. In return for those expenses, administrators and teachers alike avoid the level of sacrifice they ask property owners - the ones footing the bill - to make, and the elected school board officials get to continue to play their self-indulgent fiscal games. The trade off is that schools are more expensive to run but are in no substantial way better than they were last year or the year before that.

It's a little like the inverse of Moore's Law. CUSD's costs relative to performance are falling. Or maybe it's just a manifestation of Baumol's cost disease.

* * * * *

A couple quick comments:
  • Since Woods' article in late-June, CUSD and the CFA have agreed to a contract that calls for the union to accept larger class sizes in the middle and high school grads and to concede $1.58 million in health and welfare benefits over the next two fiscal years. In exchange, the union has agreed to support the November Measure CL bond with the understanding that they will get their former benefits back if the bond passes - an arrangement that allows both parties to circumvent the law requiring such school bonds to not be used for administrative or teacher salaries - at least, that's what CUSD officials have said.

  • O'Melveny & Myers is a true legal heavyweight. The firm, which is the 19th largest in the world, has for partners such luminaries as former Reagan White House Counsel Arthur B. Culvahouse, Jr., and former Clinton Administration Secretary of State Warren Christopher.

    Claremont is more than a little familiar with O'Melveny & Myers. Former CMC trustee Louis Caldera, who served as U.S. Secretary of the Army from 1998 to 2001 and who lost his most recent White House job in 2009 after a PR flap, is an O'Melveny alumnus. And CMC retained O'Melveny to conduct an investigation into the Nazi stolen art controversy involving CMC history professor Jonathan Petropoulos a few years ago.
Update, Sunday:

Saturday's Claremont Courier touched on this issue. On page 5, The Courier describes an offer at last Thursday's School Board meeting by Marcie Gardner, a Chaparral parent, to help look for a cheaper law firm. As an aside, that ought not to be too hard.

Gardner is quoted, "One area that seems out of control within the district is legal fees, and I say that because I'm a lawyer and I have quite a bit of experience with things related to education. The hourly rate that is being paid by the district for an attorney is double and sometimes triple the going rate of what these services would cost in the open market." [emphasis added]

We also received a cryptic email from a reader on this general topic, and we can't help but read it as also casting aspersions on the ol' Insider:

The reader writes:

900,000 is a lot but how much of that 900,000 was tied to defending Tonan's personal lawsuit against the district? How much was tied to the negotiations that were dragged out to ridiculous lengths only to be settled after Tonan's lawsuit was settled? A settlement, mind you, that could have been reached 6 months ago if it were not for Tonan's conflict of interest.

There is more out there that you are ignoring. I'm wondering if it's intentional.

--Outside Claremont

We asked for additional info, and the reader was good enough to give us one specific that appeared on page 6 of the 2010-2011 Claremont Courier Almanac, sent with the paper a week or so ago (our reader refers to the personal lawsuit between the Tonan family and the district):

Settled for 75k I heard. Settlement between the union, that Tonan heads, and CUSD came immediately afterwards.

One view is the Tonan dragged this out, at great cost, until the issue with his wife was settled...

--Outside Claremont

Notice the walk-back from the main point: "One view is..." Our reader isn't even saying that's what he believes. We hold no brief for Joe Tonan or the merits of his case. The fact is, we never understood nor were given a cogent story on the Cynthia Estep-Tonan dismissal. It seemed both sides were scurrying for cover and obfuscation in that one. (to readers who don't know what we're talking about, we don't blame you. You'll have to look at back numbers of the Claremont Courier from Spring 2010 to see articles on the brouhaha accompanying Ms. Estep-Tonan's dismissal as a school nurse by CUSD.)

Anyway, the reader makes a valid point by inference. Total district legal cost equals average hourly rate times number of billed hours. Ms. Gardner says the average hourly rate is too high; our reader implies that the number of billed hours is higher than necessary.

Both are easily within the control of the School Board: Hilary LaConte, Jeff Stark, Mary Caenepeel, Beth Bingham, and Steven Llanusa. Get a less stratospheric attorney and don't get involved in labor disputes where you are having some one like good old Fram (see above) bill you north of $700 per hour and then have to write a check to your employee for $75K.

Our daddy always told us that the party that had to write the check was the party in the wrong.