Fear Rising Legal Fees
In what East Hampton school officials say would be the worst-case scenario in connection with the ongoing Sandpebble Builders lawsuit, they are considering an increase of about 47 percent, or $100,000, in next year’s budget for legal fees. The current figure, $213,000 — which, as always, must cover all legal expenses, not just the Sandpebble affair — would rise to $313,000.
East Hampton’s budget workshop on Tuesday was the first of the 2016-17 process. The administration has not yet released a complete draft of next year’s budget nor announced any specific dollar decisions.
The good news at the workshop was that because about 20 teachers and staff members are planning to retire, the district will save nearly $422,000 on salaries, a decrease of about 1.3 percent. It will bring the regular payroll to about $32.17 million, which accounts for the bulk of the district’s tax levy.
Richard Burns, the district superintendent, and Isabel Madison, the assistant superintendent for business, said following Tuesday’s workshop the proposed increase in legal fees was based on the possibility that the pending lawsuit with Sandpebble could cost more than anticipated. The district has to be prepared, they said.
Sandpebble, which is based in Southampton, is suing the district for $3.75 million following a 2006 disagreement involving what the builder alleges was wrongful termination of its contract. East Hampton argues that it hired a different builder after the scope of the construction increased.
Legal fees in the dispute with Sandpebble had escalated to about to about $2.3 million by February of 2012, and yesterday, the district released an updated figure: approximately $2.8 million.
During the Jan. 19 school board meeting Mr. Burns said a trial date in State Supreme Court had not been set. Jury selection has been postponed twice, including once when a new judge was assigned to the case last May. In November, that judge adjourned the case to December or January pending the outcome of several subpoenas and other factors.
“The court is still making a decision on some motions,” Mr. Burns told the school board in January. He did not have more to say this week.
In addition to reporting on the effect on the budget of retiring employees, Ms. Madison discussed other contractual costs, some of which are scheduled to decrease. For example, the amount the district contributes to the state’s teacher and employee retirement systems is expected to decrease by 7 percent. But stipends and overtime are projected to increase by about 16 percent, to about $2.34 million.
The cost of health benefits is expected to rise by 6 percent, a jump that could have been bigger but was offset by an increase in the contributions from employees and retirees. The district is anticipating spending more than $7.73 million on health benefits next year.
The cost of insurance for potential student accidents or injuries during sports or other activities will rise almost 12 percent to about $386,000. The district is, however, projected to spend less on auditing services and administrative fees for the Board of Cooperative Educational Services.
The school board’s next budget work session is scheduled for Feb. 23 at 6 p.m. in the high school technology room.