GALVESTON
A “series of unfortunate events” allowed a law firm to blow past a legally mandated spending cap and prompted Park Board trustees on Tuesday to order a tightened policy to prevent the same from happening again.
A Wednesday article about that meeting, which was based on one interview conducted after the meeting, incorrectly reported the board’s discussion about procurement policies had been delayed and would be conducted at a future meeting.
In fact, trustees discussed at length how a bill for services from law firm Hunton Andrews Kurth ballooned to $60,000 from an expected amount of no more than $10,000 without legally required approval and instructed Chief Financial Officer Bryson Frazier to draft a new policy about contracting for legal services.
Hunton Andrews Kurth billed the Park Board for 73 hours of work in crafting a legal opinion arguing the park board and city’s arrangement of collecting and depositing millions of dollars in hotel occupancy taxes weren’t in violation of city charter and state law.
Trustee Jason Worthen had requested a review of procurement policies because of that bill, which a majority of the board voted Jan. 12 to pay.
“This manual is in place, but it happened,” Worthen said, referring to the board’s procurement manual. “So how do we prevent it from happening again?”
“I think this is just a series of unfortunate events that caused this,” Frazier said Tuesday.
“It bothers me just much as it bothers you, just as much as it might bother anyone else in the public,” Frazier said.
“And to prevent it from happening again I’m going to recommend that we put in an engagement letter provision for professional services in our procurement code and make sure it gets followed.”
Frazier was expected to return to the board with a recommended policy sometime in February, CEO Kelly de Schaun told The Daily News on Wednesday
Park Board leaders last week acknowledged Hunton Andrews Kurth’s bill for legal services was a problem because it exceeded de Schaun’s $10,000 limit in procuring legal services without approval from the trustees who govern the park board.
There was no written agreement, but Park Board attorney Carla Cotropia, who has since resigned for what officials say were personal reasons, stated clearly to the law firm it couldn’t exceed the $10,000 cap, de Schaun has said.
“Hunton Andrews Kurth were made aware of the Park Board’s spending limits and the need for board approval to surpass the $10,000 threshold,” de Schaun said. “The park Board became aware that they had surpassed the approved amount when billing was solicited in December.”
The law firm has yet to respond to requests for interview or statements.
De Schaun said she didn’t know why work continued past the $10,000 limit and why it wasn’t communicated until two months after the work had been completed.
It was the first time in her 11 years on the job that the board had ever overspent, de Schaun said.
During Tuesday’s deliberation, Frazier said he would have the board’s finance department review the policies.
“I’m more than happy to revisit the procurement policy and bring that up through finance,” Frazier said.
“What I would recommend is that for any professional service, we make sure that there are provisions in the procurement code. That those would be handled through contract or an engagement letter.”
The contract or an engagement letter must have terms and parameters, and anytime there’s a deviation of more than $10,000 dollars it should be brought up the board, Frazier said.
Under Hunton Andrews Kurth’s billing schedule, a partner can command from $850 to $890 an hour and associates $490 to $500.
(14) comments
To fix a problem, one must be given an accurate account of the issue. In this attorney vendor hire, the PB management violated the $10,000 cap TWICE as the documentation clearly illustrates.
Trustees aren’t given documentation to verify the account from management. Too bad as the documentation and story don’t match up.
The HAK bills are up to $121,000 with December through January bills still not seen for the 3 projects - two of which DO NOT have engagement letters or parameters.
The clock is still ticking and bills piling up. Stating that the PB is not continuing the hire for one of the three projects actually COMPLETED is NOT accountability. It’s the joke.
One must wonder how this abuse of funds is helping our city put heads in beds.
[thumbup]
"It was her first time in 11 years on the job that the board had ever overspent, de Schaun said". Yeah, it was the first time you sued your employer as well. You can't make this up, it is unbelievable these people still have jobs. 72 hours of legal, anyone that thought or believed that amount of legal service from any law firm would be under $10,000 shouldn't be in any position of management. The Park Board attorney resigned after the defeat and before the outside attorney's bill arrived, I bet she did. Frazier and Fluke didn't know they had exceeded $10K, too funny to believe. They thought they were going to win, pure arrogance at it's finest. How's the East End Lagoon floating fishing pier coming along? How is the re-construction of the West End pocket parks coming along? I see dump trucks of sand in their annual migration to the Seawall beaches again this winter, this time to the tune of $8.3 Million, yes Eight point Three Million Dollars. Brian and Don, I know you are reading this, just go ahead and start getting the ducks in a row to ultimately fix the monster the Parks Board has become. Both of you remember the Unified Road Dept and how it came to existence, now it's time for a bigger merger, much bigger. It's easier than you think, almost as easy as crashing a hundred drones into the rock groins in front of a hundred thousand or so people. Time to roll your sleeves up and get busy, call me if you need any help, you know who has my #. rs
As a Mainlander who has been watching this slow motion train wreck, I remain amazed at the arrogance of de Schaun and her board of enablers. Anyone who has dealt with high end law firms knows that $10,000 doesn’t get you much; especially in an ongoing, contentious issue like this.
What I don’t understand is who is the Island constituency supporting the Park Board in this? There must be a powerful but quiet base of support for them here. Is it the hospitality industry?
Definitely unfortunate. Especially given the massive raise De Schaun received in the past.
Galveston is heavily dependent on tourism and vital to the economy. So it has a strong tourism and hotel lobby. The problem in Galveston is sometime we have major melodrama. If you want improvement and criticize one area …. It becomes a “war on tourism” instead of a legitimate request to receive and understand statistical data to see why we have idle funds and how best to use them. Sometimes it’s like wrestling a greased pig ….. Slippery and messy.
Charlotte you know what they do with fat pigs ?
From my country origins, the faster they grow, the faster slaughtered. Is there another answer?
Correct. Pigs get fed, hogs get slaughtered. Not too many would argue the Parks Board has been fed enough that it is no longer a fat pig. It's a big 'ol $$ Hog.
Charlotte, I agree with most everything you said except for your "sometimes' comment. I believe melodrama is the normal thing for our city. Melodrama is the norm here, and it's a shame.
Lol. I stand corrected.
Gary a retainer for anything starts at $2500. How long did this saga, ongoing, go on? I'm with you in wondering who's the backbone.
Rusty, I agree. I was recently involved in a matter in another state where the retainer with a lesser priced firm was $15k.
The below is from the PB bylaws. I’ve always interpreted this to mean the PB Trustees hire and fire attorneys as well as the others on the list regardless of price. So I would hope this will be clarified as well as why the contract states HAK billing will be every month and the bill for September didn't come till December 16th. December’s bill should already be in PB hands. I would also add policy to prevent distribution of attorneys opinions for action without a full board meeting, discussion and decision as to action that should occur. I thought the other CFO recommendations were spot on.
ARTICLE XV. AGENTS AND EMPLOYEES
The Park Board of Trustees shall employ an Independent Auditor, Attorney, Chief Financial Officer (CFO), and Chief Executive Office (CEO). The Park Board of Trustees retains the full authority to hire and terminate the Independent Auditor, Attorney, CFO, and CEO. The Independent Auditor, CFO, Attorney, and CEO shall report directly to the Park Board of Trustees. The CFO will have a strong working relationship with the CEO.
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