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Milton School District racks up legal fees during challenging year

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MILTON

As it grappled with a variety of legal issues, including questions about stipends paid to several employees, the Milton School District in the first six months of 2019 racked up more legal fees than it did in some entire years.

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The Madison law firm Strang, Patteson, Renning, Lewis and Lacy charged the district $72,620 between Jan. 1 and June 30, according to documents obtained by The Gazette through the Wisconsin open records law.

That’s more than what the district paid to all its attorneys in 2017 and in 2018. Legal fees totaled $42,624 and $70,658 in 2017 and 2018 respectively, according to documents.

Payments to the law firm in the 2018-19 budget year, which ended June 30, totaled $92,261.

Of that amount, the district’s insurance carrier, EMC Insurance, covered $34,791, Superintendent Rich Dahman said in an email.

That left $57,469 in charges to the district from Strang, Patteson, Renning, Lewis and Lacy in 2018-19 paid by taxpayers.

The firm employs district legal counsel Shana Lewis who was present at many school board meetings this year.

This year has included a slew of challenges for the school district including:

  • An investigation into employee compensation and the release of open records.
  • A capital referendum that passed in April after years of friction about how to address the district’s ailing facilities.
  • The resignations of Superintendent Tim Schigur and Director of Administrative Operations Jerry Schuetz.
  • An audit from Baker Tilly into the district’s use of stipends.
  • Lack of trust in district officials and school board members from community members.

EMC Insurance paid $421,385 in claims for the school district in 2018-19 related to the investigation and resignations of Schuetz and Schigur.

The budget

The district budgeted $76,450 for legal costs in the 2018-19 budget, which ran from July 1, 2018, to June 30, 2019, Dahman said in an email to The Gazette.

The district spent more than budgeted on legal fees in 2018-19, but that was offset by lower spending in other areas of the budget, Dahman said.

Invoices show the district was charged $108,202 by all its attorneys in 2018-19, but it is unclear how much of that was paid by insurance before the end of the 2018-19 school year.

The school district has budgeted the following amounts in the last four school years:

  • 2015-16: $84,365
  • 2016-17: $52,525
  • 2017-18: $66,500
  • 2018-19: $76,450

Invoices obtained by The Gazette show the district spent less than budgeted in 2016-17 and 2017-18.

The district has budgeted $78,500 for legal fees in 2019-20, Dahman said.

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Milton Superintendent Tim Schigur, left, and Director of Administrative Operations Jerry Schuetz, right, stand at the front of a meeting where their voluntary resignations were announced.

Resignation agreements

When Schuetz and Schigur announced their resignations in April, the district said its insurance carrier would pay most of the cost for the duo’s resignation agreements, leaving the district to pick up less than $80,000 of the $447,000 bill.

Payments made by the district’s insurance carrier prove that to be true, according to documents.

The district was left to cover $77,500 of the $447,000 guaranteed to the former administrators by their resignation agreements, according to insurance payments.

EMC Insurance paid the entirety of Schuetz’s and Schigur’s compensatory damages and attorney fees, which totaled $223,500, according to the agreements.

The insurance company paid $73,000 to each of the men for severance pay.

The district’s general fund will cover the remaining $75,500 for Schigur and $2,000 for Schuetz, Dahman said.

Schuetz’s agreement was paid for in the 2018-19 fiscal year, and Schigur’s is budgeted for in the 2019-20 school year, Dahman said.

In exchange for the payments, Schigur and Schuetz agreed to waive any legal claims against the district and school board, with the exception of claims made against board member Brian Kvapil in a March 21 cease-and-desist letter from Schuetz’s attorney.

The Gazette after multiple interviews and open records requests was not able to determine what legal claims Schigur and Schuetz might have been able to make against the district.

The district has no record of any legal claims filed between Jan. 1 and June 6, 2019, according to a Sept. 19 letter from Human Resources Director Chris Tukiendorf.

Rising costs

In June, school board President Joe Martin said the district had racked up $16,000 in legal bills related to open records requests since Jan. 1.

Martin said records requests were becoming a burden to staff and were a considerable cost to the district.

Lewis said in June a government entity can be sued if records are disclosed without following procedures and that other districts involve legal counsel for complex requests.

The Gazette was unable to discern how much the district spent on legal fees for open records requests because invoices reviewed by The Gazette were outlined by hourly pay with multiple topics being covered in the same line items.

Invoices reviewed by The Gazette show the district frequently relies on its attorneys to review open records requests.

Investigation costs

Lewis told the community in February that EMC Insurance would cover the costs of the investigation into employee compensation and the release of public records.

Between Jan. 1 and July 18, 2019, Axley Attorneys, the law firm that led the investigation, billed the insurance company $13,653.

The insurance carrier paid $13,439 to Axley Attorneys, Dahman said.

The district will not know how its insurance rates might be affected by the claims filed this year until it renews its policy. The district is part of a multidistrict pool for insurance, Dahman said.

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