City Council members are questioning the role of the mayor’s legal counsel after she asked them to hire another firm for a job they thought he was doing.
And, the firm is not just any firm.
It is Walter Haverfield LLP, where Ken Stumphauzer is a non-equity partner, raising the question of whether it’s appropriate to use a firm with such a strong tie to an attorney who draws a salary from the city.
Stumphauzer, a well-known local attorney who has represented both Elyria and Lorain schools as well as served as the Amherst law director, was picked by Mayor Holly Brinda as her administrative legal counsel in 2012. He makes roughly $42,000 a year.
It wasn’t long thereafter the city dropped Clemans and Nelson, an Akron-based firm that specializes in labor relations and human resources, as its contract negotiator, and hired law firms with ties to Stumphauzer.
“We made a decision not to keep Clemans and Nelson because they were not attorneys. That did not sit well with us because we were dealing with some very thorny issues,” said Safety Service Director Mary Siwierka.
Contract matters first were handed off to the law firm of Stumphauzer O’Toole, where Stumphauzer was the founding partner, and then to Walter Haverfield, Stumphauzer’s new law firm.
These revelations did not sit well with Council.
“I thought Mr. Stumphauzer was negotiating on the city’s behalf and the work was paid through his salary,” said Council President Mike Lotko, D-at large. “If that is not the case, then we need to determine what the scope of work is we expect for that salary.”
Law Director Scott Serazin said in recent months, he discovered the city never entered into a contract with either firm for services because Brinda did not bring such an agreement to him or Council. Monday was the first time a request was made for a professional services contact with the law firm.
“It took me reading a fact-finders’ report for this to come out,” he said during Monday’s meeting, which grew heated at times with Brinda interrupting Serazin and Serazin asking Lotko to intervene. “I know it’s been set up like I orchestrated this to ambush someone, but the person who brings something to your attention is not your enemy. That person is trying to save you from a bigger problem down the line.”
Serazin said the lack of a contract for professional services could cause issues for the city if an auditor discovers it. A purchase agreement alone would not spell out the scope of the work and what would be included in the hourly rate.
In a memo to Serazin dated Feb. 3, Stumphauzer said their lack of a formal contract is not improper from a legal standpoint.
“To my knowledge, there is no requirement that a professional services agreement with a law firm be in writing,” he wrote. “Nonetheless, as you are aware, it is standard protocol for law firms, including this law firm, to enter into engagement letters outlining the terms of the legal representation, fees, etc. In this case, there is an understanding with the Mayor regarding the scope of services provided by Walter Haverfield LLP with respect to labor negotiations and other labor related matters.”
Stumphauzer attended the meeting with attorney Susan Keating Anderson, who has done limited work for the city in recent months.
Contract late in the making
With questions about what Stumphauzer’s role as administrative legal counsel should be and how much work his firms have done for the city in recent years unknown to other elected officials, the Finance Committee did not vote to approve a professional services contract with Walter Haverfield.
After more than an hour of discussion, with multiple references to the City Charter and Ohio Revised Code muddying the dialogue with legalese, Lotko decided to table the issue to the next Finance Committee meeting. He said a report should be made to Council outlining what Stumphauzer would do and what his firm would contribute.
“This is not personal to Mr. Stumphauzer, but it doesn’t look good and our law director has an issue with it, so this can’t be ignored,” he said.
Serazin said if Stumphauzer needed outside assistance — similar to the prior administrative legal counsel Tom Smith using the services of Clemans and Nelson — he should have come to Council so parameters including not-to-exceed figures could be set.
“You come to Council and you ask Council to appoint someone to do the work,” he said.
The absence of the contract was an error Brinda said was made on her administration’s end.
“We didn’t have a contract, but we did have a purchase agreement for services that Council did approve through the budget process,” she said. “I am now trying to get a contract in place that satisfies every thing Mr. Serazin wants.”
Serazin contends he did not know the city was using Walter Haverfield until the fact-finder’s report for the Elyria Police Patrolman’s Association was in the works and he noticed a different attorney name on the documentation. Initially, he thought using the firm was illegal because he was under the impression Stumphazuer was a partner with equity shares. The City Charter and Ohio Revised Code state that a city employee can not have a financial interest in a company that has a contract with the city.
He said he even took to the matter to the Ohio Ethics Commission, which opined because Stumphauzer was not a full partner or benefited financially from his firm doing the work. The commission said it would be legal to use Walter Haverfield, if the city chooses to go that route.
Stumphauzer reiterated Monday that he has no financial gain in the city’s use of his firm.
“I get no financial benefit from anything the law firm bills or does not bill the city,” he said.
Still, as a reassurance to the city, Serazin wants a stipulation in any future Walter Haverfield contract that Stumphauzer will not handle negotiations.
Brinda said the caveat is unnecessary and gives the impression Stumphauzer and Walter Haverfield are in some way trying to game the system. She said Serazin’s innuendos of impropriety were more personal than professional.
“Mr. Serazin is a former employee of Stumphauzer O’Toole, and there are some clear differences based on that relationship that I thought were worked out,” she said. “I’m completely taken aback by this conversation and I feel sorry for Mr. Stumphauzer and his associate. Had I known this was going to transpire, I would have never asked them to attend this meeting.”
The theatrics of the evening including a memo Serazin sent to Council earlier in the day giving advice that a legal contract between the city and the law firm is not necessary because Serazin was not as in the dark as he purports, Brinda said.
She said she went to Serazin when she first decided to change who the city uses for collective bargaining, and no issues were raised. At that time, Tom Smith, who stayed on from the days of former Mayor Bill Grace, was still being used as the administrative legal counsel and his law firm, Wickens, Herzer and Panza, was up for consideration.
“He could have easily raised the same issue then, but did not,” she said. “I went with Stumphauzer O’Toole because of their reputation and when I switched to Walter Haverfield I did so not because of any personal relationship with Mr. Stumphauzer, but because I had a prior relationship with the law firm from the time when I worked in Cleveland, and I trusted them.”
If Council hires Walter Haverfield, Serazin has suggested Stumphauzer file an affidavit stating his non-partner status, with the first verbiage in the contract spelling out the city cannot be billed for work that should be handed by the administrative legal council; that Stumphauzer cannot generate fees in the performance of the contract; and there should be a clear not-to-exceed amount.
The cost of negotiating
With the number of collective bargaining units in the city, it’s no wonder the city spends a lot of money hammering out employee contracts. For many years, the work went to Clemans and Nelson. It’s not a law firm, although it is highly regarded in Northern Ohio.
In 2011, the firm helped the city negotiate six union contracts as well as helped on a number of employee grievances — it was the year the local firefighters union and the city were in a fierce battle over demotions — and was paid $80,665 for its services. It was the last year they were substantially used.
In 2012, Clemans and Nelson was paid $26,121 by the city, and in 2013 the amount was just $7,792.
Wickens, Herzer and Panza received no funds in 2011. In 2012 and 2013, when Smith was put on an hourly stipend, the costs to the city were $10,935 and $9,778, respectively.
Stumphauzer O’Toole was paid $203 in 2011, $3,847 in 2012 and $68,821 in 2013, which includes work done by Stumphauzer in additional to other attorneys in the firm.
Walter Haverfield was paid just $1,397 in 2013.
Brinda said historically the city has spent between $80,000 and $100,000 on collective bargaining. To that regard, it was she who elected to go with Stumphauzer O’Toole and then Walter Haverfield.
“I’ve appointed the legal firm, not Mr. Stumphauzer,” she said. “I have no problem with this line of questioning because we always want to do what is best for the city. But this is nothing new. The city has always called on experts to negotiate our best interest in contract negotiations.”
The job of administrative legal counsel
With the election of Brinda more than three years ago, many knew she would bring on her own team, including administrative legal counsel.
Where former Mayor Bill Grace used attorneys Terry Robinson followed by Tom Smith, Brinda has elected to use Stumphauzer.
According to the city charter’s sections 9.01 and 9.02, the administrative legal counsel serves at the pleasure of the mayor and represents the city’s boards, commissions, departments and divisions. The attorney in question does not represent Council, Clerk of Council, the Finance Director, Law Director or Civil Service Commission.
The job includes offering legal opinions and as put by Serazin, who served as the administrative legal counsel under former Mayor Mike Keys for 15 years, “just about anything else the mayor asks for.”
“You do what the mayor tells you to do and if you don’t like it, you quit,” Serazin said. “You don’t get to say I’m not doing this unless you pay me, which is what clearly Mr. Stumphauzer wants.”
Serazin believes Stumphauzer should handle contact negotiations because he is the administrative legal counsel. Stumphauzer said he interpreted the City Charter to determine he does not do that work. He used that reasoning to support why the city could use Walter Haverfield for contract work and why when he was a founding partner in Stumphauzer and O’Toole the firm billed the city for work above and beyond his salary.
“The scope of those negotiations takes many, many hours,” he said. “It’s just not economically feasible to do that. Whoever takes on the job of administrative legal counsel would be working for the city full time.”
Councilman Mark Craig, I-4th Ward, questioned if prior administrative legal counsels followed the same logic of deciding work was not in the scope of their city duties then securing the work through their private law firm and billing the city for the work on the back end.
“I certainly know there is precedent for the city hiring an outside party to be at the table and that party did not receive a salary from the city,” he said. “And the administrative legal counsel has participated in those talks and not billed the city for the work.”