Santa Paula City Council splits vote on potential RFP for city legal services

June 24, 2011
Santa Paula City Council

You get what you pay for, and the city seems to be paying less for a lot of legal counsel, according to the staff report that detailed costs.

The report was presented at the June 20 City Council meeting.

And now whether or not the city will get proposals from other law firms for a price comparison with the firm of City Attorney Karl Berger will be discussed when the council meets again in August, although the city manager told the council actual legal costs are “extremely competitive.” The motion by Vice Mayor Bob Gonzales to issue a request for proposal for legal services was automatically continued on the 2-2 vote; Councilman Ralph Fernandez was not present at the June 20 meeting.

City Manager Jaime Fontes presented the report on the rate structures and costs associated with doing legal business with the city. Berger, who is with Jenkins & Hogan, LLP, was appointed city attorney in 2003; the firm also supplies Assistant City Attorney John Cotti.

Fontes told the council the firm amended its contract in 2006 to charge for services on a hourly basis, and since then charges are “blended... the same regarding the particular level of attorney.” The city now pays $175 an hour blended fee, and litigation is billed at $214 an hour; there has been no cost increase since 2008.

According to Fontes’ report, a rate study conducted in April shows “J&H’s rates are extremely competitive” when compared to other law firms providing municipal services. Santa Paula’s hourly rates were found to be generally below or equal to what other cities pay for code enforcement, litigation, transactional matters, advising council and planning commission, etc.

Fontes noted that one-third of the city’s legal costs Fiscal Year 210-2011 will be reimbursed by developers - who pay market rate fees - while other costs are drawn from enterprise funds for related services. The privatization of the refuse department increased legal costs. Fontes said at times “highly specialized” legal issues such as personnel, bond writing and eminent domain require outside counsel.

The council had a month-by-month break down of legal costs based on hours, department and how billed. From July 2010 through May 2011 the city itself has paid $156,000, less than half of the total legal costs of $348,000. The city was reimbursed about 55 percent, about $191,000 by developers or from special funds such as enterprises.

“I brought this up for a couple of reasons,” said Gonzales. “Number one I think we’ve had some decent representatives,” but the city has had to go through cost cutting, including employee salary reductions. “Just to keep in light with what we’ve done, I think we should renegotiate with Mr. Berger or see what else is out there... not Mr. Berger personally, but his firm.”

Robinson clarified that the totals were fees paid to Berger’s firm, including the services of Cotti, “so we’re dealing with the firm here.”

Gonzales said the city has had to use the services of other firms. Berger agreed and noted, “On very rare occasions” the city uses specialized counsel, which bill about $230 an hour. After more discussion Berger noted his firm has voluntarily not exercised its automatic fee increase since 2008.

Gonzales made the motion to go out for an RFP “and include” Berger’s firm as a responder. Councilman Jim Tovias seconded the motion.

But Councilman Rick Cook questioned the action, noting Santa Paula has solid service: “You look at some of the cities, the school boards” who pay lower fees and were found to have violated the Brown Act and incurred high litigation costs. Cook said, “You get what you pay for,” and “Just for a change or just because someone is upset” is no reason to change, especially as only one city pays less for legal costs than Santa Paula. “And,” he added, “they’ve been in contempt of the Brown Act.”

Tovias said it’s more an issue of exploring options and consistency:  “Based on my conversations with different people,” the average a law firm services a city is four to five years. “They’ve been doing a great job,” but in the face of cuts options should be explored.

Cook said he thought the issue “just seems to be funny,” and it’s timing less than ideal with the city facing some potential challenges.

Comparing costs, said Tovias, is being fair to the citizens.

Although fiscally watchful, Robinson said he is concerned about any potential change at this time, especially for such a “critical position” with broad responsibilities. Robinson said he had considered asking Fontes to discuss contract costs with the firm, but considering fees had been frozen since 2008 and that fees are already more than competitive “is essentially good enough for me... they have made their contribution.”

It is “critically important for the city to be well represented,” and Robinson said Berger’s work has met and exceeded that in various areas including various aspects of the LAFCO process that led to the approval of East Area 1. “I know Mr. Berger wrote much of the staff report,” as well as responses, public relations and crafting testimony. With a relatively new city manager and other issues, Robinson said considering another law firm was “for me though, not now.”

Robinson and Cook voted no, Gonzales and Tovias yes. Due to the tie vote the issue will return for council consideration August 15.

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