Council eyes more cuts; considers outside legal services for labor negotiations

The Hillsboro City Council Finance Committee agreed on an additional $35,000 in proposed cuts to the 2012 budget, and a 2-1 vote was passed to recommend the city continue its contract with the law firm of Blaugrund, Herbert, Kessler, Miller, Myers and Postalakis.

During its Aug. 13 meeting, the finance committee met at the Hillsboro Firehouse before the regularly scheduled council meeting to reconsider Hillsboro Law Director Fred Beery's recommendation to hire a labor attorney and revisions to the city's 2012 budget.

The finance committee first considered the recommendation to hire labor counsel.

Beery explained his position, stating that his position as law director puts him at a conflict of interest as he "deals with [the unions] on a personal level."

"This is beyond the scope of what I do as law director," Beery said.

Beery said the current situation is "somewhat urgent" as first, the city needs legal counsel to begin "working into the contract the concessions that were offered to council by the employees [of the Hillsboro Fire Department] over a period of time," and second, the AFSCME (American Federation of State, County and Municipal Employees) and police union contracts would need to be negotiated in the near future.

Beery ranked his top three choices for council to hire, in order: "The best and cheapest, I felt, was the guide that had brought them to that point to make the concessions, and that was the Blaugrund firm. My second choice would be to get Downes and Associates, who negotiated our original agreement. The third choice would be to rely on Ms. [Kathryn] Hapner and her law firm to pursue the concessions because she helped negotiate the immediate past contract.

"I think the lowest cost for the same service would be in that order."

Beery added that he recommended hiring counsel "that has some experience with initial contracts."

Hillsboro Safety and Service Director Richard Giroux reported that the city's "current expenditure with the Blaugrund firm is just shy of $31,000" and said he agreed with Beery.

"Having used Blaugrund to this point, we've already set the groundwork to enter in negotiations," Giroux said.

Giroux said that his office had spoken with the Blaugrund firm, who had agreed to negotiate "a better hourly rate" should the city decide to contract with them.

"We are reaching a point where we need to construct a 2013 budget," Giroux said. "I think part of the process to know exactly how much money we'll have for 2013 is directly related to what contractual concessions we'll get from the IAFF during this process. Once we understand that, we're in a position to actually construct a viable 2013 budget.

"In addition to what the IAFF has allegedly offered in concessions, we have also realized that when we're getting into the IAFF negotiation package on contract, is that we're looking a deficit next year of approximately $1.1 million. Even though my office is already beginning the process of looking at what cuts we can make for the balance of the city, to fill that deficit hole, our projections are that we're probably still going to have to go $300,000 to $400,000 deep in the Fire Department in order to actually make that work."

Finance committee chairman Pete Pence asked Beery when he expected the police union and AFSCME contract negotiations to begin.

"It's really critical," Beery said.

"I know the IAFF is," Pence said.

"It is, and the others are, too," Beery said. "It's the same issues that will have to be raised in those negotiations, and the sooner we tell everybody this is what we're looking at, the better."

Giroux said that his office has received correspondence from AFSCME within the past two weeks and that their negotiations "are now pending."

Finance committee member Bill Alexander asked Beery to confirm whether he thought that using the same counsel to negotiate all three union contracts "would be a savings in the long run."

Beery said that while he believed that some of the negotiations for the police and AFSCME contracts "could be done in-house," it would be safer to hire one firm for the complete negotiation process to avoid having to "reinvent the wheel" by having firms start from scratch.

"It's not because I have extraordinary faith in the first pick, it's not because they're smarter than the next guy, it's simply because we've already spent the money on back and it has value because they've done the work," Beery said. "It has no value if the next guy shows up and does the work. If you pick the next guy, I'll be perfectly happy, but they'll be more expensive, I think."

"Do you have any idea how much more money would be involved?" Alexander asked.

Beery said that much of the over $30,000 spent with Blaugrund was on "inventing the wheel," and estimated that although a different law firm might try to make a deal with the city, they would most likely charge approximately half of the $30,000 figure.

"So this could be another $10,000 $15,000 (or) $18,000?" Alexander asked.

"It's quite possible," Beery said.

"I think a good estimate would probably be $20,000," Giroux said.

Finance committee member Dave Shoemaker then questioned Giroux on the July 9 resolution considered and rejected by Hillsboro City Council regarding outstanding invoices for the Blaugrund firm and Dublin Management.

Shoemaker asked why Giroux only asked permission to pay $5,500 of the nearly $31,000 in invoices.

"It must've been for the May bill if it's $5,500," Giroux said. "I can't think of what else that would be."

"Why wouldn't you ask for all of it?" Shoemaker asked.

"Because we're basically paying on a month-to-month basis," Giroux said.

Giroux offered to consult with Hillsboro City Auditor Gary Lewis and get a breakdown of Blaugrund's invoices for further clarification.

"What kinds of services is it that we have received [from Blaugrund and Dublin Management]?" Alexander asked.

Giroux said that Dublin Management Group "provided a wage rate study, where what they do is they take into consideration contractual or IAFF/Firefighter/EMS wages around the state.

"They make a statewide comparison of cities that are similarly situated to Hillsboro to get an accurate assessment as to whether we're paying our firefighters either too much, too little, what kind of range we're actually paying," Giroux said. "The Dublin Management study was conducted before beginning negotiations with the IAFF."

Alexander asked what services the Blaugrund firm had provided. Giroux said that the fees for the Blaugrund firm, which have been paid in full, include meetings between the firm and Hillsboro Mayor Drew Hastings' office, "strategy sessions," negotiation costs and consultation fees.

Alexander asked Giroux if he knew how much it would cost to contract with Blaugrund for the negotiation of all three contracts. Giroux said that he would prefer to focus on getting the IAFF contract settled first, and that he has negotiated 13 three-year contracts himself, so he hoped that the Blaugrund firm would serve primarily as legal adviser.

"In the event we give approval to this, are we opening ourselves up to an unlimited expenditure, or are there limits?" Alexander asked.

"I don't think it's going to be open-ended," Giroux said. "If we only have a finite amount of money we can use, we have to make that work."

"What is that finite amount? Is that the administrative budget?" Alexander asked.

Giroux said that he believed so.

Alexander stated that he trusted Beery and agreed with his advice to remain with Blaugrund. Pence said he would second that. Giroux offered to give the council progress reports based on his meetings with labor counsel. Pence made a motion to recommend the city stay with the Blaugrund firm.

Pence and Alexander voted to approve the motion, while Shoemaker voted no.

At the full council meeting later Monday, council did not have sufficient votes to move forward on the motion as an emergency measure.

The finance committee then considered cuts to the 2012 budget. As previously reported in The Highland County Press, the committee unanimously voted last week to propose a $40,000 cut to the economic development fund, after making $164,000 in proposed cuts at an earlier meeting.

Pence presented a breakdown of new potential cuts that he and Lewis compiled that would bring them to "the number [Lewis] feels comfortable with, which is about $234,000 worth of cuts."

The figure includes finance committee's $164,000 from phase-one cuts; the $40,000 from the economic development fund; and an additional $30,000 in suggested cuts in the list determined by Pence.

"Yes, we are going to have a carryover going into 2013, but that's not the problem," Pence said. "The problem is at the end of 2013, going into 2014.

"Any possible concessions from the union would certainly lessen the extent that we cut departments, so I think it's important that we move forward with that, but we will be aggressive. I'm not going to take a 'wait and see' approach because with the numbers we're talking about, we don't have that luxury."

Giroux added that he and Lewis hoped to draft a budget for 2013 within the next six to seven weeks.

Pence proposed to "cut the $12,000 that was cut from the fire department's service and supply line item; an additional $8,000 out of street construction; $5,000 from the police budget; and $5,000 from the administration budget."

Pence said that he recommended cutting generally from the police and administration budgets in order to allow those departments to determine which line items to cut or reduce.

"Pete, Lee had put into the council budget $5,000 for education or something like that. Can we do something with that?" Shoemaker asked.

"Well, let's pull that, too," Pence said.

"Can we take $3,000 out of street and $5,000 out of council?" Shoemaker asked.

"I'd rather just take it," Pence said.

Shoemaker said that he felt that the street department had been cut enough. Pence responded that the street department's projects "are going to be shut down anyway."

Pence said that the proposed cuts would give them enough of a cushion to continue into the first quarter of the new fiscal year.

Pence made a motion to make his original proposed cuts as well as the $5,000 from the council education line item. Shoemaker seconded the proposal. The motion was approved, 3-0.