HomeMy WebLinkAbout11- Development Department L — VELOPMENT DEPARTME .. T
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
FROM: KENNETH J. HENDERSON SUBJECT: HIRING OF OUTSIDE
Executive Director COUNSEL
DATE: March 15, 1994
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SynoDsis of Previous Commission/Council/Committee Action(s):
On March 10, 1994,the Redevelopment Committee discussed and referred hiring of outside counsel to the
Community Development Commission.
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Recommended Motion(s):
(Community Development Commission)
Councilman Hernandez's Recommendation
MOTION: That the Community Development Commission discuss the attached memorandum from
Councilman Hernandez to Kenneth J. Henderson dated March 8, 1994.
Ad inis rator KENNETH J. HE ERSON
Executive Director
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Contact Person(s): Kenneth J. Henderson Phone: 5081
Project Area(s): All Ward(s): 1-7
Supporting Data Attached: Memorandum dated March 8, 1994
FUNDING REQUIREMENTS: Amount: N/A Source: N/A
Budget Authority: N/A
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Commission/Council Notes:
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KJH:lag:03-02-Ol.cdc COMMISSION MEETING AGENDA
MEETING DATE: 03/21/1994
Agenda Item Number: �_
MAR-08-194 TUE 18:11 ID:COUNCIL OFFICE TEL NO:909 3845462 4704 P02
CITY OF SAN BERNARDINO
INTEROFFICE MEMORANDUM
TO: Tim Steinhaus, Administrator, Economic Development Agency
Ken Henderson, Executive Director, Development Department
FROM: Council Office
SUBJECT: RDA Committee Agenda
DATE: March S, 1994
COPIES:
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Please place the following subject on the Agenda for Thursday's RDA Committee
Meeting to be held Thursday, March 10, 1994: Hiring of Outside Counsel for EDA.
010/U RALPtHERZZ EZ
Counci Thi and
RH:sr
j�
I RESOLUTION NO. 4606
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO
3 DESIGNATING THE CITY ATTORNEY AS ATTORNEY
FOR THE REDEVELOPMENT AGENCY EFFECTIVE
4 MAY 1, 1984.
5 WHEREAS, the Community Development Commission of the City of
6 San Bernardino desires to have the City Attorney's Office provide
7 legal services for the Agency, and to have general charge of legal
8 services provided to the Agency, effective May 1, 1984;
9 NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE
10 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO,
11 that the City Attorney of the City of San Bernardino is hereby
12 designated as agency counsel for the Redevelopment Agency of the
13 City of San Bernardino, effective May 1, 1984.
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15 Adopted: April 16, 1984
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17 Approved as to Legal
Form and Adequacy:
18
20 Wm. A. Flor ; Agency Counsel
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CITY OF SAN 3ERNARDINO - IEMORANDUM
_�
To Hon. Mayor and Common Council and From Ralph H. Prince
Community Development Commission City Attorney
.bject Agency Counsel Date April //13 , 1984
y r 6//71
Approved Date 700.1 , 770. 9b
PROPOSED ACTION: Take appropriate action to designate City
Attorney as Agency counsel, retain William Flory on a part-
time consultant basis and authorize reimbursement to City
for expenses of attorney services.
BACKGROUND INFORMATION: The Community Development
Commission at its regular meeting of April 9, 1984 , directed
the City Attorney to submit his proposal for the providing
of attorney services to the Redevelopment Agency. The
attached document constitutes that proposal. This sheet
summarizes that proposal.
1. Designation as Agency Counsel. The City Attorney would
be designated as Agency counsel , and placed in general
charge and control of attorney services for the
Redevelopment Agency. The Assistant City Attorney will be
assigned responsibility for providing those legal services.
2. Add One Full-Time Deputy City Attorney. This office has
previously been authorized to hire a half-time Deputy City
Attorney, which has not yet been done. The providing of
services for the Redevelopment Agency would take
approximately sixteen additional hours of experienced
attorney time based on our understanding of time spent by
Mr. Flory, and the time he will spend under this proposal;
to free up sixteen hours of senior attorney time ,
approximately twenty hours of the time of a less experienced
attorney would be required. Consequently a full-time
attorney position is justified to make possible the
assignment of the Assistant City Attorney to the
Redevelopment Agency. Part of his present duties would be
divided among the Deputy City Attorneys.
3. Cost of Implementation. Cost of operation in the City
Attorney' s office would increase by the expense involved in
hiring a half-time deputy. A modern word processor has been
requested in our pending budget proposal. With this new
equipment, we believe the present secretarial staff can
assume the extra work load without immediate additional
help. We also expect that the Agency would retain the
services of Attorney William Flory on a part-time basis.
Total cost of this would be less than the present cost for
the services of Attorney Flory, only, based on fees charged
over the last three years.
CITY ON THEE VVS
Hon. Mayor and Common Council and
Community Development Commission
April 13 , 1984
Page 2
4. Benefits. Agency staff and Commission members will all
have the benefit of full-time availability of counsel; this
proposal will eventually result in savings in attorney costs
to the Agency, and would provide for better coordination of
attorney services to the Redevelopment Agency and to the
City.
5. Reimbursement to City. The City could be reimbursed by
the Redevelopment Agency for the actual cost of attorney
services.
0
./�lludi
RALPH H. PRINCE
City Attorney
RHP:lr
cc City Administrator
City Clerk
ACTION BY COMMUNITY DEVELOPMENT COMMISSION:
1. Adopt resolution designating City
Attorney as Agency counsel , effective
May 1, 1984.
2. Motion to authorize retention of
William Flory as special counsel to the
Agency at a retainer fee of $2500 per
month, beginning May 1, 1984.
3. Authorize Executive Director of
Redevelopment Agency to reimburse City
(annually) (monthly) for attorney
services provided, not to exceed
$28 ,000 for the first 12 months.
r '
Hon. Mayor and Common Council and
Community Development Commission
April 13 , 1984
Page 3
ACTION BY MAYOR AND COMMON COUNSEL.
Adopt resolution amending Resolution No. 6433 to
add an additional position of Deputy City
Attorney II to the City Attorney' s Office. (Note:
Legal Secretary II reclassification was previously
approved by Council on April 9. )
i
CITY ATTORNEY'S PROPOSAL FOR ATTORNEY SERVICES
TO REDEVELOPMENT AGENCY
The following are the significant factors involved in our
proposal that the City Attorney's Office be phased in as
Redevelopment Agency Counsel.
1. DESIGNATION AS AGENCY COUNSEL. The City Attorney would
be designated as Agency counsel , and placed in general
charge of all legal services rendered to the Redevelopment
Agency. Agency staff will continue to deal directly with
special counsel , with the City Attorney' s Office to be kept
fully informed.
The Assistant City Attorney will be assigned responsibility
for providing legal services to the Redevelopment Agency.
He will be given instructions in writing that his duties
will include attending all staff meetings of the
Redevelopment Agency and representing the Agency on agenda
matters at all meetings of the Community Development
Commission and acting as legal advisor to the Commission.
The Assistant City Attorney will have authority to sign
r legal documents requiring signature of counsel for the
Redevelopment Agency and, on City matters placed on the
Redevelopment Agency agenda, may sign for the City Attorney
as Assistant City Attorney. He will keep the City Attorney
advised of developments. One or more of the deputies would
also be generally familiar with Redevelopment Agency
activities, to fill-in during any absence of the Assistant
City Attorney.
2. ADD ONE FULL-TIME DEPUTY CITY ATTORNEY. To partially
offset the time the Assistant City Attorney is expected to
spend on Redevelopment matters, the City Attorney' s Office
would be authorized by the Mayor and Common Council to add a
full-time attorney, classified as Deputy City Attorney II ,
in lieu of the half-time attorney previously authorized , and
recruitment would take place promptly for the additional
attorney.
Various departmental responsibilities presently carried by
the Assistant City Attorney will be distributed among the
three deputies , so that all three deputies have
approximately equal assignments.
3. RETAIN CONSULTANT SERVICES. To facilitate the
transition in the providing of legal services, present
Agency counsel , William Flory, would be retained at the
suggested rate of $2500 per month, for which he would
provide not more than 40 hours of services per month. (The
Executive Director suggested $2250 per month for up to 30
hours of service. Forty hours is more realistic , being
about 10 hours per week. ) Mr. Flory has served as Agency
counsel for thirteen years, and his expertise would be
invaluable in the transition period. (You will note that in
our original proposal , we expected Mr. Flory would devote
considerably more time to Redevelopment Agency business than
here suggested, but based on review between myself,
Mr. Flory and Mr. Briggs, we are satisfied this consultant
arrangement would provide adequate availability of
Mr. Flory's experience and expertise . )
Both the City Attorney and present Agency counsel are
satisfied that this would provide the expertise and
consultation necessary to assure a smooth transition in the
provision of legal services; would enable the Agency' s
business to continue without hindrance; and provide ready
availability of Mr. Flory to both the City Attorney's Office
and to Redevelopment Agency staff.
This proposal would anticipate that the retention of these
consultant services could eventually be phased out if the
Commission so desires. The availability of Mr. Flory' s
expertise as consultant to the City Attorney and
Redevelopment Agency staff gives significant value to the
Commission and the Redevelopment Agency.
4. OTHER SPECIAL COUNSEL. Other outside counsel would
still be available upon contract or agreement with the
Community Development Commission for specialized activities,
as recommended by the Executive Director with the advice of
the City Attorney. Such services would primarily be in such
specialty areas as bonding and housing, but, when
appropriate , could be available for contract negotiations,
preparation of disposition and development agreements and
owner participation agreements involving peculiar problems,
such as the necessity for the issuance of bonds,
Redevelopment plan adoption and review, condemnation,
relocations, and the like.
5. COST TO CITY ( to be offset by reimbursement) . All costs
to the City should be fully offset by reimbursement made by
the Agency. The immediate cost to the City consists of the
expense of one-half of the salary of a Deputy City Attorney
II. (Although the City Attorney' s office will hire a full-
time attorney, only one-half the cost is considered here.
That is possible because the Council has previously
authorized employment of a half-time attorney for labor
negotiations and code enforcement. Adding the other half-
time authorization will enable us to recruit a full-time
attorney. This in turn will enable us to free the Assistant
City Attorney of enough of his present duties , so he can
handle Redevelopment Agency matters. ) No additional support
staff will be needed at this time, but the word processor
requested in the pending budget proposal would be especially
critical. The secretarial staff should be able to handle
the increased work load for the present with this upgrading
of equipment. The immediate costs to the City, which can be
offset in full by the Redevelopment Agency, would be :
One-half salary and fringes of
Deputy City Attorney II ; full
time salary, $36 ,288 ; fringes ,
$6,671; total $42 ,959 ; divided by
1/2; total cost to City for the
first twelve months $21,500
6. REIMBURSEMENT TO CITY. The Redevelopment Agency could
reimburse the City of San Bernardino for actual costs of
attorney services based upon an annual lump sum fee or a
periodic billing based on attorney time actually expended ,
or on some other appropriate basis. We contemplate
approximately sixteen additional hours per week of the
Assistant City Attorney's time will be devoted to
Redevelopment Agency matters over and above that currently
devoted. This is based largely on the amount of hours
expended by Mr. Flory on Redevelopment Agency business over
the past three years, and Mr. Flory's continuing to provide
services about ten hours a week.
The anticipated cost for the first year of this service
would be as follows:
Maximum
Cost, Least
Probable Saving
1. Probable expenses to be
incurred, and proposed
maximum, for attorney
services provided by
City Attorney's Office $21,632* $28 ,000**
2. Retainer for William
Flory $30 ,000 $30,000
$51 ,632 $58 ,000
Probable savings, based
on estimated current costs
of Mr. Flory's billings
over past three years
(averaging $62,000 yearly) $10 ,000 $ 4 ,000
* "Probable" expense is based upon anticipated 16
additional hours of Assistant City Attorney time. His
salary in 1984-1985 fiscal year will be at a rate of
$21.96/hr. , plus $4. 04 for fringe expenses (PERS ,
unemployment compensation and health coverage ) . Sixteen
hours at $26.00 equals $416/week, or $21 ,632 for the first
12 months.
** The $28 ,000 "maximum" for attorney services by the City
is based upon annual salary of the Assistant City Attorney
for the 1984-1985 fiscal year at $45 ,696 , plus $8 ,450 in
fringes, for total annual cost of $54,146 (one-half of which
would be $27,078 ) .
7. EFFECTIVE DATE. May 1 , 1984 is the suggested effective
date for the transition in the providing of legal services
to the Redevelopment Agency.
lt&�l /
RALPH H. PRINCE
City Attorney
RHP:lr
j RESOLUTION NO. 91-503
2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND
3 THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO
RELATING TO LEGAL SERVICES.
4
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
5 OF SAN BERNARDINO AS FOLLOWS:
6 SECTION 1. The Mayor is hereby authorized and directed to
7 execute on behalf of said City an Agreement between the City of
8 San Bernardino, relating to legal services.
9 I HEREBY CERTIFY that the foregoing resolution was duly
10 adopted by the Mayor and Common Council of the City of San
11 Bernardino at a Joint Regular meeting thereof, held on
12 the day of December 1991 by the following
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13 vote, to wit:
14 Council Members: AYES NAYS ABSTAIN ABSENT
15 ESTRADA X
16 REILLY X
17 HERNANDEZ X
18 MAUDSLEY X
19 MINOR X
20 POPE-LUDLAM X
21 MILLER X
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23 Cit Clerk
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DAB/js/Authorz.Res 1
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2 The foregoing resolution is hereby approved this 19th day
of December 1991. '
3
5 ZW,,C Rr: Holcomb, /Mayor---
city of/ San Bernardino
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Approved as to form
7 aid legal content:
8
�7ty 'Attorney
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DAB/js/Authorz.Res 2
.14r VL J11 LJ\LLLV• LGA• LTV• J1--JVJ l
1 A G R E E M E N T
2 THIS AGREEMENT is made and entered into effective as of the
3 _ day of December , 1991, by and between the Community
4 Development Commission of the City of San Bernardino, on behalf of
5 the Economic Development Agency of the City of San Bernardino, a
6 public agency of the State of California, hereinafter referred to
7 as the "Agency" , and the City of San Bernardino, a charter city,
8 hereinafter referred to as "City" .
9 The parties do hereby agree:
10 1. Recitals.
11 (a) Agency needs full-time attorney service to render
12 legal advice, assist in drafting documents, provide review and
13 revision of documents, agreements and resolutions, and participate
14 in negotiations with developers and others.
15 (b) City, through its City Attorney, is prepared to
16 provide services as Agency Counsel for Agency and its governing
17 body, the Community Development Commission.
18 2. Implementation.
19 (a) Services. Agency agrees to retain and City agrees
20 to provide, the services of the City Attorney, as Agency Counsel,
21 who shall perform or have performed all the necessary services in
22 connection with projects undertaken by the Agency, or being
23 considered by the Agency, and shall render in a satisfactory and
24 proper manner as determined by the Agency all legal services
25 necessary and desired, and shall confer when necessary with the
26 Agency and any state or federal agency on legal matters; shall
27 perform all work of a legal nature necessary and required by the
28 Agency with necessary legal advice for the proper conduct of all
DAB/js/Authorz.Res 3
C:) )
1 projects undertaken by the Agency. The parties contemplate that
2 the City Attorney will assign sufficient attorneys to perform the
3 foregoing legal services. Such legal services for the Agency
4 shall be given priority. Both parties contemplate continued need
5 for the Agency to utilize services of outside counsel,
6 particularly in bond-related matters. The City Attorney shall
7 determine when the services of outside counsel are required and
8 arrange for the employment of same. All outside counsel shall
9 keep the City Attorney informed of their work and provide copies
10 of any and all correspondence with Agency to City Attorney. Under
11 the general direction of the Commission, City Attorney shall be
12 responsible for directing and coordinating services performed by
13 outside counsel and shall work with outside Counsel retained. In
14 connection with providing the foregoing legal services, the City
15 Attorney' s office will also provide sufficient secretarial support
16 services.
17 (b) Data to be Furnished City. The following data
18 will be furnished by Agency at the time work assignments covered
19 by this contract are made to the City; all records and information
20 pertaining to legal requirements of the Agency, include any back-
21 up materials, applicable regulations, correspondence, preliminary
22 drafts of agreements, if any, and any other materials relating to
23 the project in the possession of the Agency.
24 (c) Time of Performance. The services of the City
25 Attorney and secretarial support are to commence as of the
26 effective date of this Agreement, and shall be undertaken and
27 completed in such sequence as to assure their expeditious
28 completion in light of the purpose of this agreement. This
DAB/js/Authorz.Res 4
l�
1 agreement shall be in effect until June 30, 1992, and thereafter
2 shall continue for consecutive periods of one year unless sooner
3 terminated by the action of either Agency or City.
4 (d) Compensation.
5 (1) Attorney Services. It is anticipated that the
6 services to be supplied by the City Attorney will constitute on
7 average an amount equal to 90% of the time of the Senior Assistant
8 City Attorney. Therefore, Agency will pay City on a monthly basis
9 at a rate of 90% of the salary of the Senior Assistant City
10 Attorney plus 90% of the cost of applicable fringe benefits plus
11 a 10% overhead charge. The rate charged shall be adjusted
12 automatically if the salary and fringe benefits of the Senior
13 Assistant City Attorney are modified by the City. City shall
14 provide the Agency an invoice for payment covering the payroll and
15 fringe benefit expenses on a regular basis, together with, if
16 required by Agency, itemization of specific services rendered, and
17 the account category representing the project or activity to which
18 services are to be charged. In addition to the compensation
19 identified herein, Agency will reimburse City for travel and
20 subsistence expenses away from the Agency's principal place of
21 business when said travel is specifically required or authorized
22 by the Agency, unless such reimbursement is paid directly to the
23 assigned attorney. Limitations on cost of transportation and
24 subsistence expenses shall be the same as those that currently
25 prevail for staff members of the Agency.
26 (2) Secretarial Services. Agency will pay City at a
27 rate representing 90% of the actual cost for the salary of a Legal
28 Secretary II for providing secretarial services, including fringe
DAB/js/Authorz.Res 5
I benefits plus a 10% overhead charge, on a regular basis. The rate
2 charged shall be adjusted automatically if the salary and fringe
3 benefits of the Legal Secretary II assigned to provide this
4 service is modified by the City. City shall provide the Agency an
5 invoice for payment covering the payroll and fringe benefits
6 expenses of the assigned Legal Secretary II on a regular basis.
7 The service shall be apportioned among projects in the same ratio
8 each month as are the services provided by the assigned Attorneys.
9 (3) Extraordinary Services. Agency will pay City for
10 the actual cost of any extraordinary services provided by the City
11 Attorney. Such services shall include, but shall not be limited
12 to, services of the City Attorney Investigator, etc.
13 (4) Litigation and Appeals. Agency will pay City for
14 the cost of litigation where Agency is either plaintiff or
15 defendant in the amount of Ninety-five Dollars ($95.00) per hour.
16 Such amount shall include all attorney, secretarial and paralegal
17 time but shall not include the cost of City Attorney Investigators
18 covered by (d) (3 ) above, the actual cost of secretarial time in
19 excess of the amount of attorney time expended, the cost of
20 secretarial overtime for such matters, the cost of paralegal
21 overtime for such matters, nor any out-of-pocket expenses such as
22 filing costs, deposition costs, outside secretarial costs, special
23 copy costs, etc. If the City is also a party to such litigation
24 such hourly charge shall be prorated between the parties
25 represented by the City Attorney based on the determination of the
26 City Attorney as to which is the primary plaintiff or defendant
27 and the degree of responsibility. Such determination may not be
28 used in any manner to determine degree of fault or division of
DAB/js/Authorz.Res 6
C.
1 damages.
2 (e) Terms and Conditions. This agreement is subject
3 to and incorporates the provisions of any and all federal
4 regulations concerning the provision of legal services to Agency.
5 (f) Conflict of Interest. In the event a conflict of
6 interest results from providing services to both Agency and City,
7 the City Attorney shall disqualify himself and his office from
8 representation of Agency, and Agency shall retain outside counsel.
9 Agency hereby waives any claim that the City Attorney should
10 generally disqualify himself from representing City, and hereby
11 consents to any such representation of City.
12 (g) Termination of Prior Contract. That certain
13 agreement between the parties hereto dated August 1, 1988,
14 relating to legal services is hereby terminated on the effective
15 date of this agreement.
16 (h) Termination. This agreement may be terminated by
17 either Agency or City upon thirty days' written notice of the
18 other.
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DAB/js/Authorz.Res 7
C/
1 IN WITNESS WHEREOF, the parties have executed this
2 agreement, which shall be effective as of the 9th day of
3 December , 1991
4 ATTEST: ECONOMIC DEVELOPM T AGENCY
OF THE CITY OF S BERNARDINO
By B L" �
6 Secretary, KENNETH HENDERSON C airman, W. Rte. -HOLCOMB
7
Approved as to form
8 and legal content:
9 AGENCY COUNSEL
10
B
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ATTEST: CITY OF SAN BERN DINO
13 ,-
14 gat-A-e-L By
Cit Clerk RL! HO'L , Mayvr
15 l
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Approved as to form
17 and legal content:
18 JAMES F. PENMAN
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20 By
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DAB/js/Authorz.Res 8
,r�
1 STATE OF CALIFORNIA )
2 COUNTY OF SAN BERNARDINO ) SS
CITY OF SAN BERNARDINO )
3 I, RACHEL KRASNEY, City Clerk in and for the City of
4 San Bernardino, DO HEREBY CERTIFY that the foregoing and
attached copy of Resolution No. 91-503 , is a full,
5 true and correct copy of that now on file in this office.
6 IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the official seal of the City of San Bernardino this
7 2nd day of January , 199-2.
8 Rachel Rrasney
9 City Clerk
10 By pu y
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l�
oAR
THE si- _rE BAR
OFFICE OF INVESTIGATIONS
r r OF CALIFORNIA
1230 WEST THIRD STREET,LOS ANGELES,CALIFORNIA 90017-1488 (213)482-8220
May 18, 1987
Jack Strickler
City Hall
300 N. "D" Street
San Bernardino, CA 02418
Re: SR 86-0206
Dear Mr. Strickler:
During our recent telephone conversation, I
advised you that the attorney does not represent
you, he represents the City of San Bernardino,
therefore the information you gave him was not
confidential. It is for this reason that your
complaint file is being closed.
If you are not satisfied with the State Bar' s
decision to close your complaint, you may request
a review of our decision. Your request, which must
be submitted in writing, will be considered by the
Complainant' s Grievance Panel.
Your written request should be directed to the
Administrative Compliance Unit, Office of Investiga-
tions, State Bar of California 1230 West Third Street,
Los Angeles, California 90017 .
Very truly yours,
Karen Ortolani
Special Investigator
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REPORT TO THE MAYOR
AND THE
CITY COUNCIL OF THE
CITY OF SAN BERNARDINO
MANAGEMENT AUDIT OF THE
CITY OF SAN BERNARDINO
OFFICE OF THE CITY ATTORNEY
Prepared by the
Harvey 1VL Rose Accountancy Corporation
December, 1993
C z)c �/
Y •
arvey
i OSe
1 AAyi S?tAVt, S�dtt 1 oa San F CA 94102 (415)&U 9292 • FAX(41 2S2
-04a1
Ar' v(a+. CA
January 13, 1994 (213)9ss-�1�a
Honorable Tom lynx.
Mayor
City of San Bernardino
300 North°9D"Street
San Bernardino, CA 92418
i
Dear Mayor Minor.
response to your in q
recommendations mad P�rtalning to the staTn and comput�'i�ation
omey's Ove, the folio manager audit report of the City
the relationship the
these a o� information is provided to clarify
recommendations.
Section 6 of the report recommends the deletion of funding paralegal Position and the addition of fun � for one vacant
Attorney Position. This action would result` ing for one vacant Deputy City
$45,000 to the City ($90 000 - a net of approximately
attorney 45,000). On an anneal
y Position would reduce the need for outside a-9* this additional
$PP�mately $215,000 resnl ' counsel services by
$45,000 from the deletion of a net benefit to the City of$125,000 plus
total savings would amount to riding ortele �l� Position. Therefore,
Section 4 _ Y $170,000 on Sao annual basis.
Ito� a discussion of the analy� and recommendations
Potential fc� made
computerization. This sec ,;nm�sed productivity through enhance
i�ormation systems master recommends the development of an
com cater a Pte, the subs acquisition of
P Qaipment and software subsequent a
I� Secretary position for a period of 12 me to � of a vacant
ditaonal Iega1 secretary oaths. The Purpose of providing
coordinate the development would be to allow an existing legal se�� to
mformzaL7on P and implementation of the new computer,
trpltzea entation
period, the le this 12 month development and
addi tional attorne secretaries would need to provide support
�n�nsion of the 12 month Position recommended in Section 6. At the
reevaluated period, the support staff needs should be
wing consideration to the then current support staff world
as a result of the benefits realized through the new computer load
Vstem- puter information s
i
Further, the City Attorney has not been able to substantiate the level of effort
provided to the EDA. as a result, invoices submitted to the EDA for services during
FY 1992-93 and FY 1993-94 are the subject of dispute.
Based upon these findings, the Mayor and City Council should:
5.1 Adopt a cost recovery policy which allows the Office of the City Attorney to
recover the cost of its operations from non-General Fund sources where
possible.
5.2 Instruct the Finance Department to assist the City Attorney in executing
this cost recovery policy and to report upon the actions that will be required
to realize the potential additional revenues identified in this Section.
By implementing a City Attorney cost recovery policy, the City's general fund
would benefit by an estimated$356,000 annually,
Section 6: Cost Effectiveness of Outside Counsel
The Office of the City Attorney and the Economic Development Agency could
realize significant savings by reducing reliance upon outside counsel to provide
legal services.
While the hourly salary and benefit cost of a Deputy City Attorney IV amounts to
$54 per hour, the cost of outside counsel ranges from $95 TO $125 per hour.
Furthermore, the City Attorney estimates that as much as 60 percent of the
litigation files referred to outside Counsel could be performed by in-house staff.
In addition the Economic Development Agency expends more than $300,000 per
year to retain legal services from outside counsel at an average cost of $140 per
hour. however, based upon documentation provided by the EDA, these costs could
be significantly reduced if the City Attorney provided these services.
Based upon these findings, the Mayor and City Council should:
6.1 Approve the following changes in the authorized staffing level of the Office
of the City Attorney:
- Delete funding for one paralegal; and,
- Add funding for one Deputy City Attorney.
6.2 Authorize the City Attorney to recruit for the new position immediately.
6.3 Reduce appropriations for outside counsel and increase budgeted revenues
from the EDA to fund the new Deputy City Attorney position, based upon the
expected utilization of the new Deputy City Attorney position.
6.4 Require that the City Attorney periodically report to the Mayor and City
Council on how the newly created Deputy City Attorney position is being
utilized.
Table 5.2
' Estimated Cost of City Attorney
Services Provided to Departments and Activities
Funded by Revenue Sources other than the General Fund
FY 1993-94
Estimated FY 1993-94
Professional Estimated
Department/Activity Hours f
City Clerk Business Licenses 403 $21,253
Cable TV 105 7,575
1/2 Cent Sales & Road Tax 2 181
Building & Safety - Development 30 2,666
Code Enforcement 3,089 263,776
Fire Paramedics 3 261
Fire Prevention 26 2,275
Animal Control 52 4,094
Real Property 19 1,703
Traffic Signals/Signage 161 13,966
Central Garage Internal Service 15 1,628
Carousel Mall 70 5,932
Parking Control 4 416
Vehicle Abatement 29 2,303
Fiscalini Field 58 5,055
Street Maintenance 241 13,373
Refuse 146 12,295
Risk Management General 33 3,537
Risk Management Liability Insurance 111 6,545
Library 14 1,139
Economic Development 1,174 106,133
Water 449 36.133
Total 6,254 512 239
Therefore, we estimate that the value of services provided to City departments
which are either partially or wholly funded by non-General Fund revenue sources,
total approximately $512,000 annually.
Estimated additional revenues ,i r ieh would result from adopting a Citv
Attorney cost recovery oA licv
As indicated previously, the City Attorney charges only one City
Agency, the Economic Development Agency, for services rendered. The rates
14
lthough we believe this distribution of costs is appropriate for estimating purposes, it may not be
fully representative of actual costs due to sampling error.
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charged and the basis for such charges are set forth in a memorandum of
understanding and are summarized as follows:
• The EDA pays a retainer fee to the Office of the City Attorney to be available
throughout the year for ongoing advice and consultation. The retainer is set
at 90 percent of the combined salary and benefit cost of one Senior Deputy
City Attorney and one legal secretary.
• Additionally, the EDA pays a rate of $95 per attorney hour for all litigation
services provided to the EDA.
Although the above rates appear reasonable, we have identified the following
problems:
• The Office of the City Attorney has not been able to document that it provides
the equivalent of 90 percent of one full time attorney to provide advice and
consultation services to the EDA. In addition, the EDA contends that,
because the Office of the City Attorney has not provided evidence of the level
of service that is implied under the memorandum of understanding, the EDA
is incurring unnecessary costs in obtaining these services from outside
counsel.
• As a result of the curr -it dispute, the EDA has withheld payment of
approximately $60,000 in payments due during FY 1992-93, in accordance
with the previously described memorandum of understanding. In addition,
the EDA has made no payments to the City for advice and consultation
services rendered during FY 1993-94.
Based upon the information compiled during our six week study period, there
appears to be support for the contention of EDA managers that they should be
receiving a higher level of service for the money paid to the Office of the City
Attorney2. Therefore, as part of an overall cost recovery policy, the Office of the City
Attorney should consider modifying the agreement with the Economic Development
Agency to provide for direct billing for all services instead of using the existing
retainer policy. Although this revision could result in lower revenues from the
Economic Development Agency, there would be greater assurance that such charges
are proper.
It should also be noted that other issues and uncertainties would affect the ability of
the City to collect additional revenues. These would include:
• Clarification of the City's Charter may be required prior to directly billing the
Water Department for services rendered. Under a 1935 amendment to the
City's Charter, the City may only transfer a prescribed percentage of Water
Department operating revenues to the City's General Fund. However, the
2We do not express an opinion, however, on whether the EDA should be relieved of its obligation to
pay the City Attorney for services rendered in FY 1992-93.
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SECTION 6 COST EFFECTIVENESS OF OUTSIDE COUNSEL
• THE OFFICE OF THE CITY ATTORNEY AND
THE ECONOMIC DEVELOPMENT AGENCY
COULD REALIZE SIGNIFICANT SAVINGS BY
REDUCING RELIANCE UPON OUTSIDE
COUNSEL TO PROVIDE LEGAL SERVICES.
• WHILE THE HOURLY SALARY AND BENEFIT
COST OF A DEPUTY CITY ATTORNEY IV
AMOUNTS TO $54 PER HOUR, THE COST OF
OUTSIDE COUNSEL RANGE FROM $95 TO $125
PER HOUR. FURTHERMORE, THE CITY
ATTORNEY ESTIlIIATES THAT AS MUCH AS 60
PERCENT OF THE LITIGATION FILES
REFERRED TO OUTSIDE COUNSEL COULD BE
PERFORMED BY IN-HOUSE STAFF.
• IN ADDITION THE ECONOMIC DEVELOPMENT
AGENCY EXPENDS MORE THAN $300,000 PER
YEAR TO RETAIN LEGAL SERVICES FROM
OUTSIDE COUNSEL AT AN AVERAGE COST OF
$140 PER HOUR. HOWEVER, BASED UPON
DOCUMENTATION PROVIDED BY THE EDA,
THESE COSTS COULD BE SIGNIFICANTLY
REDUCED IF THE CITY ATTORNEY PROVIDED
THESE SERVICES.
• BY DELETING FUNDING FOR ONE VACANT
PARALEGAL POSITION AND ADDING
FUNDING FOR A VACANT DEPUTY CITY
ATTORNEY POSITION TO THE CITY
ATTORNEY'S BUDGET, AND FILLING THIS
POSITION IMMEDIATELY, THE CITY
ATTORNEY COULD GENERATE NET ANNUAL
SAVINGS OF $125,000 FOR THE CITY AND THE
FOR THE EDA.
Employing outside counsel is an essential part of managing the workload of the
Office of the City Attorney. Based upon interviews with professional staff within the
Office and based upon our survey of comparable city attorney offices Athin the
State of California, outside counsel is retained for the following reasons:
• The need for specialized expertise.
• The need to supplement existing staff.
• Potential conflicts which preclude the involvement of the City Attorney to
represent a City entity.
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a
' Despite these factors, the Office of the City Attorney should limit expenditures for
such services where practical for the following reasons:
• The cost of obtaining the services of outside counsel is on average more than
double that of hiring attorneys directly. Based upon the current City Attorney
salary and benefit cost for a Deputy City Attorney IV of $92,000 per year,
based upon our assumption that 1,720 productive hours would be provided,
the cost for in-house counsel amounts to approximately $54 per hour. By
comparison, the Office of the City Attoi riey spends between $95 and $125 per
hours to acquire the services of outside counsel.
• Because outside counsel is customarily paid by the hour, outside counsel
generally has a lesser incentive to control costs than do in-house counsel. In
addition, the cost of outside counsel has risen significantly during the past
several years.
The following table illustrates the Office of the City Attorney expenditures for
outside counsel during the past several years.
Table 6.1
Office of the City Attorney
Expenditures for Outside Counsel
FY 1989-90 through FY 1992-93
Total Average Number of
Fiscal Expenditures for Cases Assigned to
Year Outside Counsel Outside Counsel
1989-90 $290,418 39
1990-91 $144,658 36
1991-92 $239,975 48
1992-932 $984,929 48
In addition to these expenditures, the Economic Development Agency relies heavily
upon the services of outside counsel to provide both litigation services and advice
and consultation. During FY 1992-93, the EDA expended approximately $300,000
for such services at an average hourly rate of$140.
To evaluate whether the potential exists for cost savings through reduced reliance
upon outside counsel, we performed the following activities:
• Reviewed the current Office of the City Attorney litigation directory and
consulted with the professional staff within the Department to determine the
10ff-ice of the City Attorney Litigation Directory as of July, 1993.
20utside counsel expenditures in FY 1992-93 are significantly greater than in prior vears due to a
single case that required an extraordinary amount of effort by outside counsel on behalf of the City.
41
reasons that litigation files were being referred to outside counsel rather than
being retained in-house.
• Reviewed the extent to which the EDA retained outside counsel due to the
lack of sufficient staff availability within the Office of the City Attorney.
Based upon these activities, we determined that:
• Approximately 60 percent of the Office of the City Attorney's current outside
counsel caseload could be performed by in-house attorney staff if sufficient
staff existed. In the remaining 40 percent of cases handled by outside counsel,
the need for specialized expertise and/or the potential conflict within the
Office precluded the use of in-house counsel.
• Based upon correspondence submitted ' the Economic Development Agency
to the Office of the City Attorney, a significant amount of the Agency's
expenditures for outside counsel services were made due to the unavailability
of City Attorney staff to provide general legal consultation services. The City
Attorney indicates that in many instance, legal services were independently
obtained by the EDA without consulting with the Office of the City Attorney.
These data points demonstrate that significant cost savings could be realized by
augmenting the authorized staffing level of the Office of the City Attorney by one
full-time equivalent Deputy City Attorney position. These savings could be realized
by one or a combination of the following:
• Reducing reliance upon outside counsel to provide litigation services.
• Increasing the level of support to the Economic Development Agency.
The following table illustrates the potential for not only the City Attorney but the
Economic Development Agency to realize significant cost savings through the above
listed activities.
42
•
b
Table 6.2
Potential Cost Savings
Through Reduced Reliance upon Outside Counsel
Office of the City A .t rnev and Economic Develolpment Agency
Total
Reduced number of direct
labor hours required of
outside counsel 1,720
Multiplied by average hourly rate
paid to outside counsel $125
Equals estimated Cost Savings from
reduced reliance upon
outside counsel $215,000
Less Additional Cost of
Deputy City Attorney ($90.000)
Equals net savings from reduced
reliance upon outside counsel _125,000
As indicated in the above table, the Office of the City Attorney and the Economic
Development Agency would realize an estimated $125,000 in net cost savings
annually by reducing reliance upon outside counsel to provide litigation and legal
advisory services. This analysis assumes that a combination of the two previously
listed approaches would be employed.
We believe that employing a combination of the two approaches discussed
previously is appropriate because litigation activity and the need for outside counsel
can vary significantly from year to year. For example, in Section 3 of this report, we
have determined that expenditures for outside counsel in FY 1993-94 will be
significantly less than amounts expended in previous years. If this trend continues,
it may be more appropriate for the Office of the City Attorney to dedicate the newly
hired Deputy City Attorney entirely to assist the Economic Development Agency.
Therefore, the City Attorney should be given the discretion to use the newly created
Deputy City Attorney position to reduce outside counsel expenditures or to provide
additional support to the EDA.
However, to provide the necessary funding for the newly created Deputy City
Attorney position, the Mayor and City Council should either reduce the City
Attorney's budgeted expenditures for outside counsel or increase the estimated
revenues from the EDA. In order to adjust such appropriations and budgeted
revenues appropriately, it will become necessary for the City Attorney to report to
43
the Mayor and City Council on how the newly created Deputy City-Attorney
position is being utilized.
It should also be noted that the EDA will share in the estimated $125,000 in cost
savings available to the City through reduced reliance upon outside counsel.
Assuming that the rates which the Office of the City Attorney charges the EDA is
consistent with that recommended in Section 5 of this report ($87 per attorney
hour), the EDA would acquire an additional 688 attorney hours at a cost of
approximately $60,000 or 37.5 percent less than the $96,000 that the EDA must
expend to acquire a similar level of service from outside counsel.
In Section 3 of this report, we evaluate the potential for increased productivity
through improved systems of accountability. In addition, Section 3 presents a
comparative analysis of the professional and support staffing levels of the City of
San Bernardino Office of the City Attorney with those of other cities. Based upon
our review, we have concluded that, although the existing Office of '-1e City
Attorney staffing levels appear to be reasonable, its productivity could be increased
through improved systems of accountability. Therefore, we do not recommend that
the staffing level of the Office of the City Attorney be increased to accommodate the
additional work that the Office would have to assume to realize this savings.
Instead, we recommend that funding for one vacant paralegal position be eliminated
and that one deputy city attorney position be added. The additional cost to
accomplish this addition/deletion would be approximately $90,000 annually.
Although the City has imposed a general hiring freeze, the newly created position
should be exempted from the hiring freeze due to the significant potential for net
cost savings.
Conclusion
The Office of the City Attorney relies upon outside counsel to support its operations
for a variety of reasons, including: to supplement existing staff; the need for
specialized expertise and the potential for conflict. Due to the significant cost
differential between employing outside counsel and hiring attorneys directly, the
Office of the City Attorney and other City agencies should limit their reliance upon
outside counsel wherever possible. Based upon a review of the City Attorney's and
the EDA's use of outside counsel, we have estimated that the City Attorney and the
EDA could realize $125,000 per year in cost savings through reduced reliance upon
outside counsel. Therefore, the Mayor and City Council should approve the deletion
of a vacant paralegal position and the addition of one Deputy City Attorney position
at an estimated additional cost of $90,000 per year. Due to the potential for
significant cost savings, the Deputy City Attorney position should be filled as soon
as possible.
44