HomeMy WebLinkAboutN.B. 5 LEGAL FEES 01-20-92A ff -A
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NEW BUSINESS N0. 5
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JANUARY 16, 1992
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
WILLIAM A. HUSTON, CITY MANAGER
`� • `=- J LEGAL FEES
Councilmember Potts had requested a report on the City's cost for legal
services. A report was submitted to the City Council for its November
18, 1991 meeting at which time Councilmember Potts asked that the item
be tabled in order to provide him more time to review the report.
Councilmember Potts subsequently asked for additional detail and that
the report be placed on the January 20, 1992 City Council agenda.
This report responds to the questions and comments in Councilmember
Potts' December 5,. 1991 memorandum to the City Manager. The following
are staff's interpretation of Councilmember Potts' questions and the
responses.
1. What is the contingency fee and benefits paid to the City
Attorney?
The City pays a $6,000 per month retainer fee to the law firm
of Rourke and Woodruff. Four thousand dollars of the retainer
is credited against the total billable hours for legal
services incurred in a month. The balance of $2,000
covers attendance at monthly City Council, Planning Commission
and Redevelopment Agency meetings.
The City pays retirement on the $6,000 retainer amount
and provides health insurance for only the City Attorney.
2. Does the Assistant City Attorney -receive City paid benefits?
No. The Assistant City Attorney is an employee of Rourke and
Woodruff. Any benefits received by the Assistant City
Attorney are through his employment arrangement with the law
firm.
3. Are other cities paying benefits for contract City Attorneys?
Staff has not done a formal survey of cities concerning
providing benefits to contract City Attorneys. Contractual
arrangements with City Attorneys vary from city to city. Some
cities do pay benefits; others do not.
January 16, 1992
Page two
One way to put the City's cost of providing benefits to the
City Attorney in perspective is to compare hourly rates for
legal services. Rourke-& Woodruff charges the City the same
rate for all legal work (including litigation). The hourly
rate is $120 for partners, $110 for associates and $50 for
paralegals/law clerks Listed below are the hourly rates ( for
partners) for nine Orange County cities utilizing contract
City Attorneys:
Dana Point
First 50 hours is $95 per hour;
each additional hour is $120.
Irvine $150 per hour (This is a "blended"
rate where the same rate is charged
for partners and associates.
Typically much of the work is done by
associates, not a partner).
Laguna Beach
Laguna Hills
Laguna Niguel
San Clemente
San Juan Capistrano
Villa Park
Yorba Linda
$145
per
hour
$130
per
hour
$110
per
hour
$150
per
hour
Range of $135 to $175 per hour
depending upon which partner
$150
per
hour
$155
per
hour
The average partner rate for these cities is $143 per hour. Tustin is
paying (partner rate) $120 per hour without the cost of benefits. For
purposes of comparison, a billable hourly equivalent cost of providing
benefits to the City Attorney has been calculated. Taking the partner
rate of $120.00 per hour (the maximum rate charged) and adjusted total
Rourke and Woodruff expenses, the hourly equivalent of benefits paid to
the City Attorney was $2.31 in 1989-90 and $3.71 in 1990-91. These
amounts are computed by using total charges, less the $2,000 monthly
retainer for attending meetings (this amount does not correspond to a
set number of hours), the partner rate and dollar value of benefits.
This calculation provides a basis to compare the City's cost of the City
Attorney at the partner rate plus hourly value of benefits versus the
average of the nine other cities above. The hourly rate of the City
Attorney including benefits was $122.31 in 1989-90 and $123.71 in 1990-
91. The average hourly partner rate (without benefits) for the nine
cities is $143 per hour.
January 16, 1992
Page three
4. What are the total fees paid to attorneys other than the City
Attorney's firm?
It is common practice for cities to retain law firms for
specialized services such as labor relations, personnel
matters, acquisition of property, litigation, workers
compensation, bond issues, etc. This is the. case even for
cities having full time in-house attorneys. The nature of
municipal law is that it consists of many specialized areas of
law. The City of Tustin requires specialized legal services
because of its growth, location in an urbanized area and the
increasingly regional nature (and complexity) of issues.
In fiscal year 1989-90, the City expended $ 146,925 for
attorneys other than the City Attorney's office. In fiscal
year 1990-91, the comparable amount was $ 174,714. In 1989-
90, $19,079 of the total was paid to the law office of Martin
Mayer for legal services in connection with a disciplinary
action against one police officer and the termination of one
police officer. In 1990-91, $2,801 was paid to Martin Mayer
for additional services in the police officer termination
matter.
In 1989-90, $19,937 of the total for attorneys other than
the City Attorney's office was paid to the law office of
Filarsky and Watt for labor relations and personnel matters.
In 1990-91, $15,665 was paid Filarsky and Watt for labor
relations and personnel matters.
Attorneys retained by the City other than the City
Attorney's firm, Martin Mayer, and Filarsky and Watt include
principally those used for liability claims filed against the
City and workers compensation claims. In 1989-90 (excluding
fees for Martin Mayer and Filarsky and Watt), $ 107,909 was
expended for attorneys other than the City Attorney's office.
The comparable costs for 1990-91 were $ 156,248. These costs
include $126,000 that was expended in 1989-90 and 1990-91 for
the City of Tustin/Earl Prescott and John Kelly litigation.
5. How do Tustin's legal expenses compare to the City of Irvine?
Tustin staff contacted the City of Irvine to clarify the
expenditures for legal services identified in a City of Irvine
report regarding attorney fees. Irvine's staff indicated that
the City's general fund legal fees were $536,000 in 1989-90
and $772,000 in 1990-91. Tustin's general fund legal fees
(City Attorney and all other law firms) in 1989-90 were
- $514,470 and $386,999 in 1990-91. Since Irvine does not have
a redevelopment agency or water utility, other legal expenses
were not included in the comparison.
January 16, 1992
Page four
Staff was also able to obtain legal costs for the City of
Laguna Niguel for fiscal year 1990-91. Laguna Niguel is a
contract city (i.e. provides police, fire, water, and most
public works services through contracts) and expended $259,206
for legal services for just the contract City Attorney.
Legal costs for the City of San Clemente were also obtained.
For all legal services (contract City Attorney and other
outside law firms) , San Clemente expended $663, 097 in 1989-90
and $769,536 in 1990-91.
6. What were the City's total legal expenses for 1989-90 and
1990-91?
Attached is a chart showing the City' s total legal expenses in
1989-90 and 1990-91, by fund, and by Rourke & Woodruff and
other law f irms . The City' s total general fund legal expenses
as a percentage of the total general budget were 2.8 % in
1989-90 and 1.8 % in 1990-91.
7. The report prepared by the City Attorney does not identify
attorney expenses for the month of July.
The attachment showing legal expenses, referred to above
includes all actual payments made in 1989-90 and 1990-91. The
November, 1991 report prepared by the City Attorney included
expenses taken from the City's payment register (actual
payment made versus accrued expense). This means that payment
of the July -bill occurred after July 31 and therefore was
reflected in the subsequent months payment. The expenses
shown in the City Attorney's November 1991 report and the
attachment to this report showing annual legal expenses do
reconcile.
8. What controls exist to contain legal expenses?
The City Attorney performs under the policy direction of the
City Council. Any decision about initiating litigation or
settling major claims is done at the direction of the City
Council. There are some circumstances which the City has no
control over such as claims filed against the City.
Regardless of the merits of a claim, the City Attorney's
office is responsible for providing legal services required to
defend the City. All claims filed against the City are placed
on the City Council's agenda for its review and action. The
City Attorney's annual budget is reviewed and approved by the
City Council each year through the budget review and adoption
process.
January 16, 1992
Page -five
The City Attorney provides a variety of legal services to the
City staff on a daily basis. Staff's requests for legal
services are based on programs and policies approved by the
City Council, operational matters required by law and
regulatory guidelines. The City Attorney's November, 1991
report regarding legal costs gave specific examples of the
daily legal services required by City staff. A copy of the
report, without the attachments, is attached.
City staff does have a procedure for monitoring and
prioritizing requests for legal services. The attached form
(Request for City Attorney Legal Services) is submitted to the
City Manager's office whenever a department requires other
than routine legal advice. This procedure enables the City
Manager's office to review requests for legal services
initiated by the departments to decide whether it is needed
and if so, a priority. Decisions about a request take into
account whether it conforms to City Council direction, the
current work plan set forth in the budget and other
considerations. This enables the City Attorney and City
Manager to ensure that policy, administrative and legal
considerations are all taken into account before legal work is
initiated.
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ATE: NOVEMBER 14, 1991
NEW
BUSINESS N0. 3
11-18-91
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: CITY ATTORNEY
REQUEST FOR CITY EXPENDITURES FOR CITY ATTORNEY FEES AND LEGAL
SUBJECT: COSTS FOR PAST TWO YEARS AND COPY OF CITY OF IRVINE REPORT
REGARDING IN-HOUSE LEGAL SERVICES
Pursuant to the request of Councilman Potts, please be advised
as follows.
Attached are the City Attorney Expense Detail for fiscal year
1989-90 and the City Attorney Expense Detail for fiscal year 1990-
91 furnished by the Finance Department. Also enclosed is a
memorandum from the City Attorney to the City Manager dated
June 26, 1990 regarding extraordinary legal fees and costs
concerning the April 1990 City election (the legal fees and costs
set forth in that memorandum deal only with the extraordinary legal
fees and costs incurred in fiscal year 1989-90; additional
extraordinary legal fees and costs on those matters were also
incurred in fiscal year 1990-91).
The level of legal services, and therefore the amount of legal
fees and costs, are directly related to the demand and level of
legal services required by the City. The requests for legal
services are directly related to the projects, activities,
problems, claims and lawsuits in which the City is involved.
The work of the City Attorney's office in conjunction with
staff members of the Community Development Department is extensive
and includes land use matters, involving the General Plan, the
Specific Plan, tract map approvals, Declarations of Covenants,
Conditions & Restrictions, and a host of other community
development matters and projects, which in recent years have
largely," but not wholly, been driven by the projects proposed by
The Irvine Company in East Tustin. East Tustin projects are
complex and require a great deal of time of both the Community
Development staff and the City Attorney's office. The City
Attorney's office is in communication with the staff of the
Community Development Department on a daily basis.
The advice to the many members of the.staffs of the various
City departments is extensive and the preparation of complex
documents by the City Attorney's office is extensive as well as the
review, revision and approval of documents prepared by others.
JGR:jab:R6A11491(1C-ill jab)
Honorable Mayor and City Councilmembers
November 14, 1991
Page 2
Public Works projects of the City are extensive, both in the
East Tustin area as well as in other areas of the City and are on-
going at all times and require considerable coordination with the
staff of the Public Works Department. The City Attorney's office
is heavily involved on an on-going basis with the Public Works
Department. That work involves the review of development
proposals, public works contracts, problems with construction
projects and contractors, payments to contractors, etc. Likewise,
services in connection with the acquisition of property for the
City for the Public Works Department and other purposes is
substantial and involves considerable time. The City Attorney's
office is in daily on-going contact with the staff of the Public
Works Department.
Work is also done on an on-going basis concerning business
license and permit matters.
The City Attorney's office provides on-going consultation and
advice to office of the City Clerk.
On-going services involving personnel matters routinely
involve the City Attorney's office working with the Community
Services Department. On-going work also involves the Community
Services Department in connection with parks and recreation
matters.
The Finance Department, including the Audit Committee, is
another area of on-going work.
Various pro.jects and work involve the Tustin Community
Redevelopment Agency, including the South Central Redevelopment
Agency projects and the Town Center Redevelopment Agency projects.
Work for these project areas is on-going.
The City. Attorney's office coordinates with and provides
advice and work for the Building Official, both on a day-to-day
basis and special projects basis. The problems in the South
Central area regarding sub -standard buildings, overcrowding, etc.
are areas of work on which the City Attorney' s of f ice performs work
with and for the staff of the Building Official and the Community
Development Department.
The City Attorney services are also required in connection
with the Workers' Compensation claims which are filed by City
employees.
The City Attorney's office is in constant communication with
personnel of the Tustin Police Department on an on-going basis,
Honorable Mayor and City Councilmembers
November 14, 1991
Page 3
regarding personnel, discipline, subpoenas, records requests, and
other matters.
The City Attorney or an Assistant City Attorney attends all
regular and special meetings of the City Council, Planning
Commission, Audit Committee, License & Permit Board, Parks &
Recreation Commission, etc.
The City Attorney's office also responds to requests for
information and advice from members of the City Council.
Examples of some larger projects which have involved very
substantial amounts of time and work by the City Attorney's office.
in the 1990-91 fiscal year are the following:
A very large project in which the City Attorney was heavily
involved in the 1990-91 fiscal year was the Regional Trail Project
which involved the City, the County of Orange, and The Irvine
Company and was very complex and required extensive legal work with
City staff, the staff and lawyers of The Irvine Company and the
staffs of several departments of the County and with the County
Counsel's office.
Substantial work was done in the 1990-91 fiscal year on the
very large Jamboree Road Extension Project from I-5 to Barranca
Road.
Projects for the City Water Service vary from month-to-month,
but also are substantial. Examples are the acquisition of sites
for new water wells and reservoirs, repair and reconstruction of
water facilities, water mains, reservoirs, etc. and are important
areas of work.
During the fiscal year 1990-91, considerable City Attorney
time was involved in connection of the enlargement and
reconstruction of the City Hall and contractual arrangements with
The Irvine Company regarding its responsibilities for sharing in
the cost of enlargement and reconstruction, bid specifications,
contracts, insurance and bonding requirements, etc.
In the fiscal year 1990-91, a considerable amount of work was
required concerning solid waste, development and establishment of
the recycling program imposed by the State of California on all
cities and counties and development of an amendment to the City's
contract for solid waste service in order to meet the new recycling
requirements and to fix the costs to the City for the new services
- the City is requiring that its contract solid waste disposal
company perform.
Honorable Mayor and City Councilmembers
November 14, 1991
Page 4
Establishment of the agreements between the County of Orange,
The Irvine Company and the City of Tustin for a new fire station in
East Tustin and arrangements regarding costs of construction and
operation, operational rights and duties, etc. involved extensive
work in the 1990-91 fiscal year.
Considerable work was involved concerning the County's
imposition of jail booking fees and litigation over the County's
claim that it was entitled to retain all property tax penalties and
not remit any part thereof to the cities.
Another matter which required a considerable amount of legal
services in 1990-91 involved the Rezai apartment project, meetings
with citizens to try and resolve the matter and defense of the
lawsuit instituted by the residents against the City and' the
developer.
City annexations is another area which have required extensive
involvement of and work by the City Attorney's office, including
litigation involving annexations, appearances before the Local
Agency Formation Commission and other work in coordination with the
_ City staff.
Considerable work was performed in the 1990-91 fiscal year
concerning the Eastern and Foothill Transportation Corridors and
their alignments and other matters related to the transportation
corridors.
Another area of substantial on-going work by the City
Attorney's office involves liability claims against the City. The
amount of the City Attorney's work regarding liability claims is a
direct function of the number and complexity of claims filed
against the City and involves considerable work. The City's
exposure for liability claims is as follows: The City is
responsible for the first $250,000 of liability on each claim. Any
liability in excess of $250,000 is the responsibility of the Orange
County Cities Risk Management Authority which, in turn, is covered
by an excess liability insurance policy. Pursuant to contractual
arrangements with the OCCRMA, the City is responsible for its own
legal defense fees and costs of all claims and legal actions
against the City. The City has a very precise and detailed general
and automobile liability claims administrative procedures. These
are set forth in the City's General and Automobile Liability Claims
Administration Procedures, a copy of which is attached.
An example of one month services by the City Attorney's office
is illustrated by a copy of the statement to the City for City
Attorney's services in the last month of the 1990-91 fiscal year,
the month of June, 1991 which is attached hereto.
Honorable Mayor and City Councilmembers
November 14, 1991
Page 5
The City has in place a procedure established by the City
Manager to monitor, review, control and establish priorities for
requests for City Attorney services on the projects of the various
departments of the City.
Attached are copies of the City of Irvine's reports regarding
in-house legal counsel.
Enclosure
cc: WH
Description:
REQUEST FOR CITY ATTORNEY LEGAL SERVICES
Date Sent to City Manager:
Date Sent to City Attorney:
Suspense Date:
Contact:
Status: (For Attorney's use)
Route to: Department Head (approval):
Date Requested For Return:
Explanation:
Department:
City Manager (for approval/priority)
Signature/Date
Signature/Date
PRIORITY: (For City Manager's use)
SPECIAL PRIORITY:(Explanation)
NOTE: Keep all copies together until City Manageres signature is received.
A copy will be returned to the appropriate department.
attyform.dfe