Teaneck’s Township attorney requests – and gets – a Legal Services budget line 32% higher than what that budget line cost the Township last year. Then, in the midst of the pandemic that is cratering every public budget in the country, the attorney has rewritten the firm’s 2020-2021 contract so that it now calls for double digit increases in his firm’s hourly rates. And to top it off, the proposed contract shifts a major expense item (OPRA litigation) from the firm’s already generous annual retainer so it will now be billed as an hourly expense. Action on the resolution approving this new contract is tucked into the “consent agenda” for passage without discussion at tonight’s Township July 1 reorganization meeting – unless a member of the new Council pulls it for discussion.

Are Teaneck’s Council members aware of these facts that could well spell huge increases in its attorney’s costs as this Town –  the poster child of Covid-19 cases and deaths for much of the Spring – struggles to match reduced revenues with costs including evolving pandemic-related services?

As the Covid-19 pandemic continues to ravage America and send public budgets at every level reeling, the responsibilities of local governing boards rigorously to assess appropriations and contractual commitments becomes critical. “In every single case I know of”, Chuck Powers, President of Bergen Grassroots a local Bergen County watchdog group said today, “the chief administrative officer of every public agency has promised to scour expense commitments and scale them back to try to link expenses to expected shortfalls in revenues and to meeting new, desperate pandemic-generated needs. Bergen County has torn-down and recreated its recently-introduced budget three times this Spring to address these issues.

As public officials struggle with these financial challenges, it clearly is critical that the processes by which new public contracts are both written and evaluated is done with care, transparency and full disclosure.  The saga of Teaneck’s attorney’s new contract and how the pieces evolved deserves telling in greater detail.

The 7/1 Council resolution to approve re-appointment of the Teaneck Township attorney (Res. 109-2020) would appear on its face to be simply an innocuous continuance of the Township’s current non-competitive appointment process. Included with this routine resolution is the language of the newly-proposed 2020 attorney’s contract. It again for the 7th time calls for the same quite generous $237,000 annual retainer (to be paid monthly) to the attorney’s firm – a contract that – as the code requires – apparently has been drawn up by the Township attorney.

But, in fact there are two changes from the 7 prior contracts, changes to which no attention is drawn anywhere in Council’s meeting agenda.  The changes can be identified only by doing (as Teaneck Transparency has done) a line-by-line comparison between all 7 of the contracts first approved in and since 2014 (whose financials have to-date been unchanged) and the new 2020 version. These two changes, however, combine to promise significant increases in the attorney’s firm’s take home.  First. the contract at pp.11-14 click here) raises the hourly rate to be charged by the firm’s attorneys when billing for legal work (most notably litigation) that is not covered by the retainer.  The increase is 10% (from $150 to $165 per hour) but for the work of attorneys working on labor issues, the increase is 14+%. The increase for the time to be billed on non-retainer issues by paralegals at the firm is nearly 18%.
For starters, we would challenge anyone reading this release to find current increases even remotely as large as these for any other public employees or public contactor employees or staffs anywhere. Those personnel not facing furloughs are more generally seeing pay cuts.

But the second “change” buried in the proposed Teaneck attorney’s contract is equally significant: a switch in what legal matters are now to lie outside the retainer and be billed at these hourly rates. The prior attorney contracts since 2014 all called for the retainer to cover all costs (specifically including litigation) associated with OPRA (the Open Public Records Act) unless that litigation arose in relation to where the Town’s clerk had failed to inform or follow instructions from the town attorneys.  In fact,  Teaneck has recently had a series of attorney-expensive but failed OPRA litigation, particularly in relation to litigation in which the town either contested OPRA claims or initiated OPRA litigation itself. Without any fanfare or notice, the Township in the contract proposed for approval tonight, however, would suddenly be paying hourly rates for ALL OPRA related litigation work.
What is extraordinary about this change is that the Township had been advised by its attorneys to initiate and the town was then then was billed for – and paid for – OPRA litigation that the Town lost at every level (state superior court, appeals court and supreme court). Citizens questions about this billing have received no clarifying response.

So how is the new contract going to clear this “OPRA litigation” matter up? Why by simply lifting all such OPRA litigation out of what is now to be covered by the retainer.

In sum, the two changes buried (and not in any way indicated as changes in the new contract) increase the scope of legal work that is billable on an hourly basis and dramatically increase the per hour billing rate for all such work.

Let’s look one step deeper into this financial morass. The Township’s own adopted budget for 2020 is – in sharp contrast to most other public budgets approved this Spring – unchanged so as to in any way respond to the financial impact of the  pandemic. The budget proposed by the Manager and CFO at the beginning of March was simply adopted word-for-word in May.
What happened with the legal services line of that adopted 2020 budget? The amount found on the Legal Services line – $1,020,000 –  is identical to the request for that Legal Service line made by attorney John Shahdanian at the required November 2019 public Manager’s departmental budget hearing.
Is that what is actually needed to cover costs anticipated for that budget line? Well, let’s take a look at the actual expenditures on the Legal Services line for 2019. The budget reports expenditures for that Legal Services line of just $770,000 for 2019, despite the nearly $80K spent on the failed OPRA litigation.
Put simply, the budget line for legal services in 2020 is 32%+ more than what was spent in 2019.
No public explanation has ever been offered as to what additional legal work will be required in the 2020 budget year. So while Teaneck – like the County and all other NJ municipalities – struggles to meet the severe challenges created by meeting Covid-19 needs, the attorney has authored a contract that – even if the workload remains stable – will deliver a significant increase to his firm’s take home. He may – with the new contract – be able to spend that full $1,020,000 budget line.

Alan Sohn, the former Teaneck Township Council Member who negotiated the original version of the retainer agreement in 2014, points out that “at the Teaneck reorganization meeting, councilmembers should not be acting in ignorance – or failing to actively question – this resolution even on their first day of office by granting the Township Attorney many, many extra thousands in legal billing over the life of the agreement helped by the adjusted retainer fee and new hourlies on OPRA litigation. Shouldn’t Council at least seek an explanation?”