Legal Expenses Throw Town Budget Over Projection

Although Town Manager Kevin Smith implemented a department-wide spending freeze last week, he said he thinks the Town is in a better financial position than it was in February last year.

“The spending freeze is more about getting the budget in line with where it should be going in the last few months,” he said. “Knowing the trends over the last few years and the projections of the larger departments, I’m not overly concerned.”

Smith said last year the Town was over-expended more when a spending freeze was implemented in February than it is now, and revenues weren’t running nearly as high as they are this year.

“Last year I think the situation was worse than this year. That’s not necessarily to mean we were in a bad position last year, but I feel better about this year,” he said.

Perhaps the most significant over-expenditure detailed in a report Smith presented to the Town Council last week, as reported by the Londonderry Times, are the Town’s legal expenses. Of the $174,500 budgeted for legal expenses, the Town has spent $174,877, or 100.22 percent of the budget.

Smith said legal issues keep arising, and costs were incurred due to the need for counsel on impact fee lawsuits, the Murray’s junkyard lawsuit, and a lawsuit brought against the Town by firefighter Patricia Hamann alleging harassment and a hostile work environment.

“We also had legal fees related to workforce housing and getting legal clarification on that,” Smith said. “We think we get pretty sound legal advice from Attorney (Mike) Ramsdell, and we would rather incur some fees up front than not get advice up front and have to pay a lot down the road.”

For labor and personnel matters, the Town has been counseled by Attorney Mark Broth.

Smith said the Town Council is in the process of hiring a new labor attorney, and said Broth will continue to manage personnel matters he has already taken on, such as Hamann’s case.

Smith said it wasn’t the Town’s intent to go to court with Murray’s Auto Recycling this year, but the Town was put in a situation where it had exercised all other options.

Most of the legal fees incurred from the lawsuit with Hamann have been covered under the Town’s insurance policy, but some weren’t covered, according to Smith.

And Smith anticipates the issue of impact fees will be resolved this summer, “so hopefully anything with impact fees will be taken off the table.”

When asked if there is anything the Town can or is trying to do to avoid future legal issues, Smith said “the way we have been operating is we like to err on the side of caution before we go forward to make sure we’re not in hot water down the road on something.”

With regard to other over-expenditures noted last week, Smith said most are not substantial.

For example, the miscellaneous expense line in the Town Council’s budget is overspent by a couple hundred dollars, according to Smith.

“The Council gives money towards the breakfast for veterans on Veterans Day, and the costs were slightly more than last year. It’s not very much. The expense for that is taken out of the Town Council budget line, and it’s shared with the school department,” he said.

The miscellaneous expense line in the Council’s budget is additionally used to pay for plaques and awards.

The overtime and printing in the Zoning Board budget is also overspent, with $38,299 of the $47,256 expended to date.

Smith said the over-expenditure in that line isn’t substantial, either; and that the department won’t be spending much more of the budget between now and the end of the Fiscal Year.

“There are certain lines within the larger department lines that are overspent, but in terms of the bottom line budget, I’m not concerned about it,” Smith said.

Newsletter Updates

Enter your email address below to subscribe to our newsletter