Fort Smith Board pulls agenda items related to law firm review

story by Ryan Saylor

Fort Smith City Directors were true to their straw poll from Tuesday (June 10) and have withdrawn two resolutions that would have directed the city to hire an auditor to look into legal billings by the Daily and Woods Law Firm to the city, as well as establish a commission to review how the city receives legal counsel.

According to City Clerk Sherri Gard, she was contacted by City Director Mike Lorenz regarding the removal of both items from the June 17 regular meeting agenda even though the two items received a motion and a second by City Directors Philip Merry and Pam Weber, respectively.

Gard quoted Fort smith Municipal Code Section 2-31(4) as allowing any director to request removal of items from the agenda.

"Any item of business may be denied a place on or removed from the agenda by notice of four (4) directors to the city clerk prior to the date of the meeting of the proposed consideration. The city clerk shall immediately notify the city administrator, the mayor, the directors and other interested persons of such action."

Merry had requested the review at the June 3 regular meeting, which was tabled by the mayor as an improper motion until the June 10 study session. The request by Merry came after a series of posts by attorney Matt Campbell on the Blue Hog Report blog questioned billing practices by the Daily and Woods firm to the city, alleging the firm had over-billed for some services and billed for others that never occurred, such as phone calls to Campbell as part of a set of lawsuits against the city in which he serves as legal counsel.

City Attorney Jerry Canfield and City Administrator Ray Gosack have both said the billings were above board, with Canfield providing some documentation to Gosack showing a sampling of phone calls he said were made to Campbell.

Merry's motion regarding a review of billings by Daily and Woods would have contracted a firm to audit the billings for the last three and a half years. His motion for the commission would have appointed an attorney, a CPA and three members of the business community to review whether the city should still contract with Daily and Woods like it has since 1967 or whether it should hire in-house counsel and support staff to handle its legal billings.

Voting to remove the audit from the agenda were Lorenz, City Directors Keith Lau, André Good, George Catsavis and Vice Mayor Kevin Settle. Merry and Weber were the only two who wanted to keep the item on the agenda were Merry and Weber.

Voting to remove the commission proposal was Lorenz, Lau, Catsavis and Settle, while Good, Merry and Weber were in favor of keeping it on the agenda.

In an e-mail to The City Wire, Campbell said he was disappointed by the move, saying it lacked transparency for Fort Smith citizens.

"This should give the citizens of Fort Smith a great deal of concern. This is twice now that a procedural maneuver has been used to keep these issues away from a meeting where members of the public could make their opinions known.  I can only assume they are doing this because they, like I, have seen that the overwhelming response from the public is in support of both an audit and a review of the contractual relationship with Daily & Woods."


Campell also called Gosack and Canfield to task for Canfield's response to the allegations made by Campbell.

"It's also troubling to me that the city administrator and others continue to pretend like Jerry Canfield's response to the phone-records issue was anything but absurd. He addressed five phone calls, out of twenty-three, then gave such a transparent 'explanation' for the remaining eighteen calls that anyone who has ever looked at a phone bill should have known it was a lie."

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Legal charges by Daily and Woods increased 42%..

..after Ray Gossacks first year on the job. 2011...$285,122 2012...$406,380 2013...$404,285. Directors Settle, Lau, Lorenz, Catsavis, we have capable law firms all over the city and you absolutely insist on paying one of them 42% more without asking one question or even giving the others a chance to bid on the job?

This is unfortunate for our City

If any wrongdoing occurred, odds are that both Gosack and Canfield were complicit in the scandal. D&W was only being paid $137/hour. While that may seem like a lot of money, their normal billing rates are more like $225/hour. D&W couldn’t charge more per hour because that would open the contract up to another firm to get the work. So, to maintain the status quo, all D&W has to do is keep a low hourly rate, but bill as if it took a little longer to get some things done. In the end, their hourly rate is nothing but a façade because they’re making their normal hourly rate through overbilling practices and hiding it with block billing. And, since Gosack was their boss, he was most assuredly “in the know.” One could put it like this: either Gosack was in the know or he was too stupid to see the scam. Neither is acceptable, but both show D&W and Gosack need to be investigated by a third-party. The fact that our Board lacks the resolve to look out for the City’s best interests in this situation is astounding. A serious allegation has been made, one backed by evidence, involving the City Administrator and City Attorney. Yet, our Board feels justified looking the other way because the two men complicit in the scandal have said nothing was wrong. The Board's decision, above all else, is unjustified.

Pam & Phil Trying To Raise The Bar of Trust & Integrity

One has to appreciate Pam & Phil, standing alone and for trying to raise the bar in Fort Smith. The allegations made by the Little Rock attorney on his blog, are very serious allegations. Allegations of not only overbilling, but over paying and the allegation that city attorney Jerry Canfield lied about this billing is very serious indeed. Both Phil & Pam understand the seriousness of their fiduciary responsibility to the taxpayers of Fort Smith. Restoring the trust and integrity to the people of Fort Smith should be paramount over a few dollars spent for a independent audit, especially when city hall allows for waste in so many other areas.

After The Audits

The puppet BOD cannot stop the coming audits of city hall expenses and after the job is complete, we may need to build a bigger jail! There really may be enough money in the city budget to give police and fire a raise without an increase in property taxes.

Looking at the even bigger picture..

..say a couple of decades, it appears that city directors of the past if they could, would have hand picked everyone that is allowed within their circle. They once even tried to turn a police chief into a city administrator in order to try and keep things in the fold. With Ray Gosack, qualified or not, it looks like he was basically installed there after they pretended to give that outsider a chance but only after wasting around $3400 of our money on the charade. Directors that live out of town..directors too ill to ever show up have been kept on the roll and my guess which is what I have to do from out here in the opaque is it's because of the fear of who might replace them. What if almost all the Directors were 100% right in the way they voted? What if something is very wrong but it's not Jerry Canfield? How much would he be wrong if his contractor told him to bill things that way so they wouldn't end up with someone new to deal with? Is there someone who has been up there long enough to become 'keeper of the fire' so to speak for the real power in this town that's really the problem? What would he try to get the others to do?

Lots Of Great Questions Conan

but the questions are never answered and a well managed city does not have one fiasco after another without some explanations to the people of the city. Something appears to be very wrong and out of control like a ship without a captain. Strange stuff-------