The Kentlands Citizens’ Assembly (KCA) budgeted $27,500 for legal expenses in 2011. However, according to documentation provided by management company Community Management Corporation to Town Courier publisher and Kentlands resident Diane Dorney, the KCA spent $69,625.53 in 2011 in the category of legal expenses.
Including a bill for more than $8,000 that came in early 2012 but was applied to the 2011 budget, the total KCA outlay for legal expenses in 2011 exceeded the projected budget by $52,125.53.
In a telephone interview with The Town Courier, KCA Chair Alex Kleinman acknowledged that the KCA spent more than anticipated in legal fees last year but explained that such outlays for an organization like the KCA — or, he said, a business — are fluid in that they are dependent upon specific issues or events, often unexpected, that can arise in the course of exercising the board’s duties. Deciding when outside legal expertise is needed is among the board’s duties, he said.
When Treasurer Tim Clarke resigned from the KCA Board June 1, he included the payment of excessive legal fees and poor management of legal resources among his criticisms of the board.
We asked Kleinman why there were differences between budgeted funds for legal fees and actual outlays.
By way of background, Kleinman explained that there are two budget items involving lawyers: general legal expenses and collections (for which the KCA has Linowes and Blocher on retainer).
The budget figures researched by The Town Courier show $13,000 was the budgeted amount for 2011 for general legal expenses, and approximately $39,000 was spent (this includes the $8,000 late allocation mentioned above). For the collections legal category, $14,500 was budgeted and $30,943.61 was the final outlay.
Kleinman said consultations in the general legal expenses category concerned work on a trademark for Kentlands. He also mentioned legal advice on the disposition of the firehouse.
Regarding the expense of collections, Kleinman said the board was “continuing to look at the collections policy” and could consider changing “vendors [if] we find things can be more efficient.”
When Tim Clarke raised these issues (as a board member), Kleinman said, “We were in general pretty receptive.”
He likened the emergence of legal issues in KCA business to snow: “Unpredictable.”
“If an issue comes before the board where we feel like we need legal advice, we have to seek it. As a board, we cannot predict when legal issues will arise,” he said. “At the end of the day, it’s a judgment call.
Regarding the application of a legal bill for $8,374 received in early 2012 to the 2011 budget, Kleinman said the work was performed in 2011 and that it is a generally accepted accounting practice to match the bill to the budget in the period the work took place. He said he did not know why the bill for more than $8,000 came late.
Kleinman added that added that legal expenses in both categories are running under-budget thus far in 2012.