$1.5 million WCPS attorney failed to prevent repeated policy violations

Despite all the money local taxpayers have coughed up to a firm that specializes in education law, a recent review of its stint in Wayne County has left us with one conclusion: It’s time for the Wayne County Board of Education to send Schwartz & Shaw back to Raleigh.

Read that again.

The school board needs to find another legal team — preferably a local one.

Let us explain.

It’s bad enough that the firm has charged the district more than $1.5 million since September 2017 — that in October 2018, it billed WCPS a whopping $102,268.84, which, when you do the math, represents 584 billable hours at the contractually-guaranteed $170/hour rate or, nearly 19 hours a day.

But you needn’t look beyond the last few months to wonder what that insane amount of money got us.

It got us an interim superintendent who was hired in violation of the school board’s own policy that prohibits the board from taking action at a special meeting “unless the notice of the meeting indicates the Board will take action at the meeting on one or more items to be discussed and/or considered.”

It got us a discussion of hiring School Operations Specialists to help get the district’s financial house in order behind closed doors — a move the North Carolina Press Association’s lead counsel said was a blatant violation of Open Meetings Law.

It got us a vote to reopen the district under the state’s Plan B model that also violated board Policy Code 2300.

Oh, and most recently, it got us the decision to select the North Carolina School Boards Association to lead the district’s superintendent search — again, in violation of the board’s OWN policy.

All of those decisions were made on the fly at special called meetings, without providing notice to the public that action items would be added to the agenda.

And while N.C. General Statute presents a gray area in which the board can navigate during such a meeting — state law simply requires that the board state its “purpose” in advance of a special session — board policy goes further in defining what is acceptable.

But don’t take our word for it. Here’s the policy:

So how on Earth did board attorney Richard Schwartz let this go? 

Why, with all his expertise and the piles of money he and his firm have collected from WCPS, did he ho-hum these blatant violations and act as though changing meeting agendas in defiance of Wayne County Board of Education policy was acceptable?

Well, now that WCPS and the school board have gone full state-run media on us — publishing their own “news stories” on the district website and ordering Central Office staff to write “summaries” of board meetings that are hardly complete or transparent — we doubt we’ll ever know the answers to those questions.

And for the record, the district is refusing interview requests from several media outlets lately, not just the New Old North.

But we know how Schwartz — and the board — aim to make those questions go away.

In light of these violations — and repeated coverage of the board’s defiance of Open Meetings Law — the board is scheduled to vote on a revision to Policy Code 2300 during its meeting Monday. The change would remove the aforementioned “official item” section from the policy altogether.

Again, don’t take our word for it. Here is the recommended change:

So, it’s pretty clear that now that somebody is watching — requesting public documents, calling out violations of state sunshine laws, etc. — there is some shuffling going on.

But if, as is the case, the district spent more than $1.5 million on legal fees while the Wayne County Public Schools general fund was hemorrhaging money — in part, auditors said, because of excessive spending on “contract services” — board members should expect, at the very least, to be protected from looking as foolish as these blatant violations of their own policy make them look.

The legal fees, alone, should be another concern — particularly from a board run by a majority that loves to talk about fiscal responsibility and safeguarding taxpayer dollars when campaign season rolls around.

What about spending $1.5 million on a lawyer for a school district this size is even close to responsible spending?

And based on minutes from board and committee meetings, at least one former board member, the late Rick Pridgen, seemed to agree that something was afoul.

In fact, during a budget work session held April 17, 2019, Pridgen requested a line-by-line accounting of expenditures — and was particularly interested in what the district was paying Schwartz & Shaw.

Board chairman Chris West told Pridgen he had “already requested and received that information,” and, while he did not provide a total, revealed that phone calls to the firm from board members had cost the district $83,000 and an additional $146,000 was spent to “save Carver Heights Elementary.” 

West also said that “a large amount has been paid for vetting policies and a tremendous amount of time related to the county commissioners” and added that the board “knew there would be a spike in legal costs this year.” 

But according to the firm’s contract with the district, WCPS pays Schwartz & Shaw a $3,000 per month retainer that includes “the availability of the firm for telephone and office consultation with the Board of Education” and “policy review and drafting services.”

So why the $83,000 — we repeat, $83,000 — for phone calls?

Kind of makes you wonder what the retainer actually covers, doesn’t it?

And it also should make you just as curious about why West is so defensive when it comes to Schwartz & Shaw.

These are questions worth asking as WCPS begins to dig itself out of its well-documented financial crisis. That is, if we are really going to trim the fat and ensure this type of mismanagement of funds doesn’t happen again.

According to audit documents, the district finished the 2016-17 fiscal year with a deficit of $778,223 and a fund balance of $6,280,314. The 2017-18 audit presented to, and approved by, the board during that March 25, 2019, meeting revealed the district ended the year with a deficit of $3,491,395 — a deficit uptick of 349 percent — and a fund balance of $2,755,873 — a decrease of more than $3.5 million from the previous year. 

The auditor who dropped the budget bombshell back in June seemed to suggest there had been some overspending in certain areas, like contract services. So did School Operations Specialists — even if the firm was hired in violation of state law.

And no, the county doesn’t give WCPS nearly enough money. And yes, WCPS did hire more teachers than the state allotment covered. 

But gross mismanagement and reckless spending — from hundreds of thousands of dollars on consultants to astronomical bills for legal services — are absolutely a factor.

We didn’t say it. The auditor did. And so, too, did former Durham Public Schools chief financial officer Aaron Beaulieu — you know, the latest consultant brought on to clean up this mess.

Still not convinced we need a new attorney — one that fits our budget and maybe, just maybe, is local and has a vested interest in the success of WCPS?

The following is a month by month breakdown of what the district has paid Schwartz & Shaw since September 2017.

Once you see it, go ask a lawyer what he or she thinks. 

Just make sure they don’t have any food or water in their mouth.

And if they do, stand back. Way back.

Oh, and by the way, the newest spin on this continuing soap opera that is the Wayne County Board of Education is that: A) There is no deficit, that the New Old North is just biased and spinning numbers to make it look like the district was spending irresponsibly; and B) That if there was excessive spending, it was because the board wanted to hire more teachers and the big, bad superintendent and finance officer told them the money was there.

Now, before we address those gems, a warning: If you try to talk about the second justification with a teacher, school administrator or even WCPS’ pricey new interim superintendent and his cabinet, get ready. They are likely to have plenty to say about that one.

We would normally just giggle to ourselves about the first spin. But in the interest of addressing the continuing whoppers that are coming out of the mouths of West and his cohorts, we are only going to point to this one fact — when West became board chairman, he inherited a $7 million district fund balance. He and his “fiscally responsible” colleagues then rubber-stamped enough spending and consultant hiring to whittle that fund balance down to a negative and “knew nothing about” a $3 million loan taken from the Food Services Fund that WCPS still has to pay back. Oh, and they apparently spent more than $80,000 on phone calls to Raleigh.

The deficit would have been even worse this past school year had COVID-19 not intervened, which saved the district thousands of dollars and brought in some federal and state funds it would not have otherwise received.

So, yes, the board members were not just bad stewards of taxpayer dollars. Some of them still are deluding themselves about what actually went down.

Those are the facts, no matter what you say Mr. Chairman.

Note: This year — the district still has not provided the amount it paid Schwartz & Shaw for June — WCPS has paid $487,439.67 for legal services. One could reasonably assume that services surrounding former Superintendent Dr. Michael Dunsmore’s resignation, and the hiring of Dr. James Merrill as WCPS’ interim superintendent, were pricey.

Here is a month-by-month review. Hint: Watch what happens after the firm’s first year in the county:

• October 2017: $3,470.96 (20.42 hours or .66 hours a day)

• November 2017: $14,857.16 (87.4 hours or 2.82 hours a day)

• December 2017: $9,685.48 (56.97 hours or 1.84 hours a day)

• January 2018: $28,425.12 (167.21 hours or 5.39 hours a day)

• February 2018: $14,259.19 (83.88 hours or 2.99 hours a day)

• March 2018: $16,502.14 (97.07 hours or 3.13 hours a day)

• April 2018: $25,179.51 (148.11 hours or 4.94 hours a day)

• May 2018: $37,163.34 (218.61 hours or 7.05 hours a day)

• June 2018: $72,290.38 (425.24 hours or 14.17 hours a day)

• July 2018: $47,791.85 (281.13 hours or 9.07 hours a day)

• August 2018: $26,503.16 (155.9 hours or 5.03 hours a day)

• September 2018: $35,796.74 (210.57 hours or 7.02 hours a day)

• October 2018: $102,268.84 (601.58 hours or 19.40 hours a day)

• November 2018: $89,224.44 (524.85 hours or 16.93 hours a day)

• December 2018: $83,797.93 (492.92 hours or 15.9 hours a day)

• January 2019: $81,182.60 (477.54 hours or 15.4 hours a day)

• February 2019: $61,291.92 (360.54 hours or 12.88 hours a day)

• March 2019: $66,009.34 (388.29 hours or 12.52 hours a day)

• April 2019: $58,511.49 (344.18 hours or 11.47 hours a day)

• May 2019: $74,679.57 (439.29 hours or 14.17 hours a day)

• June 2019: $75,664.38 (445.08 hours or 14.84 hours a day)

• July 2019: $49,215.96 (289.51 hours or 9.33 hours a day)

• August 2019: $54,379.80 (319.88 hours or 10.32 hours a day)

• September 2019: $27,175.96 (159.85 hours or 5.33 hours a day)

• October 2019: $66,933.35 (393.72 hours or 12.7 hours a day)

• November 2019: $46,774.41 (275.14 hours or 9.17 hours a day)

• December 2019: $32,934.49 (193.73 hours or 6.25 hours a day)

• January 2020: $39,489.18 (232.29 hours or 7.49 hours a day)

• February 2020: $41,359.40 (243.29 hours or 8.69 hours a day)

• March 2020: $50,545.64 (297.32 hours or 9.59 hours a day)

• April 2020: $35,669.97 (209.82 hours or 6.99 hours a day)

• May 2020: $42,961.51 (252.7 hours or 8.4 hours a day)

TOTAL: $1,516,995.21 (8,923.5 hours or 9.17 hours a day)

According to records provided to the New Old North by the Wayne County government, it pays its three-person legal team — staff positions that include salaries and benefits for Borden Parker of Baddour, Parker, Hine & Hale, a staff attorney and a paralegal — between $250,000 and $300,000 per year.

Total.

So why hasn’t the district replaced Schwartz & Shaw with a staff attorney — or even a team akin to what its counterparts who run the whole county have in place — that would save significant funds?

That’s the $1.5 million question.