HomeMy WebLinkAboutRes2019-114 CITY OF SEWARD,ALASKASponsored by: Meszaros&Terry
RESOLUTION 2019-114
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, APPROVING AN AMENDMENT TO THE LEGAL
SERVICES AGREEMENT WITH BIRCH HORTON BITTNER &
CHEROT
WHEREAS, on December 14, 2015, Seward City Council passed resolution 2015-116
approving a legal services agreement with Birch Horton Bittner&Cherot("Law Firm"); and
WHEREAS, the selection of Birch Horton Bittner & Cherot as the City Attorney
resulted from a competitive request for proposals which resulted in five proposals which were
narrowed down by a scoring committee comprised of members of the City Council, .
Administration, and the City Clerk to three firms interviewed on December 7, 2015 by the
Seward City Council; and
WHEREAS, the legal services agreement continues from year to year until terminated
by either party; the City may terminate the agreement at any time for any reason, whereas the
Law Firm may not terminate the agreement without first giving ninety(90) days' written notice;
and
WHEREAS, due to increased use in 2018 and 2019, legal services rendered exceeded
the$80,000 budgeted amount each year at the previously-approved hourly rate; and
WHEREAS,under the proposed amendment,the City shall pay the Law Firm a fixed fee
of$6,700 per month in exchange for up to 33 hours of general counsel services per month, as
well as a list of other services. The$6,700 per month equals $80,400 per year; and
WHEREAS, Seward City Code §6.10.120 (A)(8) allows for an explicit exemption from
competitive procurement for the purchase of professional legal services.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
Section 1. The city manager is hereby authorized to execute the Amendment to Legal
Services Agreement with Birch Horton Bittner & Cherot in substantial form as attached hereto,
including the modified"Appendix A—Fee Schedule".
Section 2. The city manager will issue a competitive request for proposals by December
31, 2019 fora city attorney.
Section 3.This resolution shall take effect immediately upon adoption.
CITY OF SEWARD,ALASKA
RESOLUTION 2019-114
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 9th
day of December,2019.
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AYES: Osenga Seese, McClure, Butts, Lane, Baclaan,Terry
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
Brenda J. Ballo , MMC
City Clerk
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Agenda Statement
Meeting Date: December 9t' 2019
To: City Council --
Through: Christy Terry, Mayor
From: Scott Meszaros, City Manager
Agenda Item: City Attorney Contract Amendment
BACKGROUND & JUSTIFICATION:
The City entered into a legal services agreement with Birch Horton Bittner&Cherot("Law Firm")
on December 14, 2015 , when the City's prior law firm dissolved after providing legal services to
the City for more than twenty years. The selection of the Birch Horton Bittner & Cherot was the
result of a competitive request for proposals which yielded five submittals. The candidates were
narrowed down by a scoring committee consisting of members of the City Council,Administration
and the City Clerk, and after interviewing the firms, Council selected the firm of Birch Horton
Bittner & Cherot as the City's legal firm, with Will Earnhart serving as Lead Attorney.
The legal services agreement continues from year to year until terminated by either party; the City
may terminate the agreement at any time for any reason, whereas the Law Firm may not terminate
the agreement without first giving ninety(90) days' written notice.
The contract is being amended to modify the hourly fee schedule to a fixed or flat fee schedule of
6,700 per month in exchange for up to 33 hours of general counsel services per month as well as
a list of other services. The $6700 per month equals $80,400 per year.
INTENT:
To amend Appendix "A" of the Legal Services Agreement modify the existing contract fee
schedule, with all other terms remaining in effect.
CONSISTENCY CHECKLIST: Yes No NIA
City Charter: 2.1 (b) " The appointive officers of the citv are the citv
manager, the city clerk and the city attorney. " 2.5 "The compensation o
1. all elective officers and board members, the city manager, the citv clerk and X
the city attorney shall be established by the council." 5.3 "The... city
attorney shall be appointed by the council. (They) shall hold office for
indefinite terms at the pleasure of the council."5.6 "The city attorney shall
act as the le;!,al advisor of, and be responsible to, the city council. "
2. City Code: 2.20.040 The position of city attorney "..shall advise the council
and the city manager, and boards, commissions and all offices andX
departments of the city, on all matters of law."See 2.20.040 - City attorney
3. Pesolution 2015-116 approves initial legal services agreement
ATTORNEY REVIEW: X Yes No
109
FISCAL NOTE:
The 2018 /2019 Budget includes funding for legal services each year in the amount of$80,000.
Approved by Finance Department:
RECOMMENDATION:
Council approve Resolution 2019-114 amending the Legal Services Agreement with Birch
Horton Bittner & Cherot to modify the existing hourly fee schedule to a fixed fee schedule as
described.
110
AMENDMENT TO LEGAL SERVICES AGREEMENT
WHEREAS, Birch Horton Bittner& Cherot (the "Law Firm :) has provided excellent legal
representation to the City of Seward (the "City") for over three years; and
WHEREAS, on February 13, 2018, the Seward City Council voted to continue to retain the
services of the Law Firm; and
WHEREAS, the Law Firm provides legal services to the City at substantially discounted rates;
NOW THEREFORE, the City and the Law Firm hereby agree to amend the current Legal
Services Agreement, dated December 14, 2015, with a new fixed fee schedule, attached hereto as
Appendix A. Appendix A attached hereto replaces the previous Exhibit A amended in January
2018 attached to the December 14, 2015 Legal Services Agreement. All other terms remain in
effect.
City of Seward Birch, Horton, Bittner& Cherot
By: By:
Scott Meszaros
Title: City Manager Title: Managing Shareholder
Date: Date:
111
ATTORNEY-CLIENT PRIVILEGE
MEMORANDUM
TO: SEWARD CITY COUNCIL
SCOTT MESZAROS
FROM: HOLLY WELLS
RE: CITY ATTORNEY SERVICES AND OPTIONS
CLIENT: CITY OF SEWARD
FILE NO.: 507486.1006
DATE: OCTOBER 14, 2019
I. INTRODUCTION
The purpose of this memorandum is to provide City Council with requested information
regarding the viability of in-house legal services and present a flat-fee agreement to
Council that incorporates services and budgetary restrictions requested by Council
members.
II. OPTIONS
A. Flat Fee Services
Due to increased legal fees over the last two years, several City Council members
expressed an interest in exploring the benefits of paying a monthly flat fee for general
legal services instead of paying hourly for such services. As a result, our firm began
monitoring the monthly amount of legal services used by the City and the reasons for this
use. When considering the viability of a flat fee services agreement for a public entity,
Birch Horton generally considers: 1) the predictability of the nature and extent of the
entity's monthly legal services and 2) the ability to safe guard the entity, and the firm, from
unexpected increases and decreases in needed services.
At first blush, the City is not a great candidate for a flat-fee agreement because the
amount of its general legal services have fluctuated significantly over the last four years.
In 2016 and 2017, the City used approximately$68,200 of general legal services per year.
In 2018, these services more than doubled. In 2019, legal services rendered declined
Memo Re: Legal Services Options
Page 1 of 4
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ATTORNEY-CLIENT PRIVILEGE
substantially but still exceeded services rendered in 2016 and 2017, with current 2019
fees more than $100,000.1
Despite the unpredictability of the legal services used by the City over the last four
years, Council's use of legal services is increasing in efficiency. While there are still
months with greater use of legal services than seen on average in 2016 and 2017, legal
services rendered during such months generally involve review of substantial legislative
actions, core transactions, and/or mandated administrative proceedings. This trend
suggests that despite inconsistencies in the use of legal services over the last four years,
a flat fee agreement may be a viable option for Seward, with a few modifications.
After working with administration to determine the City's needs, and determining the
City's ability To this end, Appendix A includes a proposed flat-fee agreement that provides
the City reduced hourly rates for legal services, Council greater oversight over legal
counsel while protecting the City from extreme overages and ensuring the City receives
essential legal services at no additional cost. Under the proposed Agreement, the City
pays the Firm a fixed fee of $6,700 per month in exchange for up to 33 hours of general
counsel services per month as well as a list of other services. The $6700 per month
equals $80,400 per year.
The other services offered as part of the agreement, at no additional cost to the City,
include:
1. Two "in-house counsel sessions." These "in-house counsel sessions"
involve a member of the municipal team traveling to the City and residing in
the City for five consecutive work-days. The purpose of this service is to
ensure that the City Attorney understands the City, its property, its culture,
and its priorities as much as possible. It also gives the Administration and
Council an opportunity to assess the value of having an attorney present in
in-house.
2. One half-hour telephonic or in-person training session with the designated
City Attorney for all newly-elected Council members. The purpose of this
service is to give new Council members an opportunity to ask questions
without doing so in a public forum.
3. One half-hour session annually for each Council member to discuss
concerns, goals, and priorities. This is a service the firm recently provided
Council that seemed to be beneficial for both new Council members and the
City Attorney.
4. One in-person training on municipal governance per year for Council,
commission, and board members not to exceed four hours.
' See Appendix B.
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5. Travel time and travel-related expenses arising from attendance at the 12
Council meetings.
6. Long distance telephone calls
7. Photocopies created at the Firm offices
8. Two one-hour sessions with the City Manager annually to discuss Firm
performance and outstanding goals and priorities of the City.
The hourly rates for general legal services beyond 33 hours per month as well as
the hourly rates for litigation remain the same as current rates. The proposed agreement
does permit the City to roll over hours for general legal services exceeding the 33-hour
cap to the next month, allowing the City to maximize the value of the 33-hour cap.
Given the amount of new services included in the proposed agreement, and the
firm's uncertainty of the cost of these services, the proposed agreement is only for one
year. However, there is a provision that permits the City to renew the agreement with
mutual consent of both parties.
B. In-house Counsel
While the City has always retained outside legal counsel to serve as its designated
City Attorney, Council recently expressed interest in transitioning to in-house counsel. In
an effort to assist City Administration and Council in exploring the in-house counsel
option, we reviewed data and documents that the firm had regarding the costs of in-house
legal departments in municipalities similar in size to Seward.
As was the case with the flat-fee agreement analysis, the City's determination of the
viability of in-house counsel may be difficult to assess given the fluctuation in legal
services over the last four years. According to Kenai's 2020 Fiscal Year Operating
Budget, the FY2020 Adopted Budget affords $348,786 for legal services.2 While this
exceeds the general legal services rendered Seward, the fees resulting from litigation and
other considerations may warrant a deeper analysis of the pros and cons of the in-house
counsel system before dismissing it. Many city managers find in-house counsel to serve
not only as the designated municipal attorney, but also as a valuable member of the
administrative team, which may have less tangible cost savings worth considering.
2https://www.kenai.city/sites/default/files/fileattachments/finance/page/l971/final update
d budget.pdf
Memo Re: Legal Services Options
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If the City delves into this option further, I would recommend reaching out to the Alaska
Municipal League-Attorney's Section, which has among its members many in-house
municipal attorneys. Further, I'd also recommend discussing the potential transition with
the City's insurance carriers and the Alaska Municipal Manager's Association, both of
which may have additional resources for the City.
Memo Re: Legal Services Options
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115
GENERAL COUNSEL LEGAL SERVICES INTERIM FLAT FEE AGREEMENT
Agreement dated as of 2-0 between the CITY OF SEWARD, an Alaska
municipal corporation ("City"), and BIRtI4, HORTON, BITTNER, INC., an Alaska professional
corporation, d/b/a Birch, Horton, Bittner and Cherot ("Firm").
Section 1. Definitions. In addition to the terms defined above, in this contract:
A. "City" means the City of Seward, Alaska.
B. "Council" means the Seward City Council.
C. "Manager' means the City Manager of City.
Section 2. Scope of Services.
The Firm shall act as general counsel to City and shall perform the following work at the
direction of Council:
• Serve as the legal advisor of and be responsible to Council and Manager; advise
Manager and City Clerk concerning matters affecting City Administration and
perform other duties prescribed by Council and Manager.
• Prepare or review legal documents, including but not limited to ordinances,
resolutions, contracts, conveyances, leases, easements and legal opinions, as
needed.
+ Be readily available for consultation with Council, Manager, and City Clerk.
+ Represent City, City employees and officials acting in their professional
capacities, and City departments and agencies in judicial and quasi-judicial.
• Assist Manager in negotiations on City's behalf, as needed.
• At the request of Manager, or by action of Council, draft opinion letters regarding,
among other things, interpretation of Seward City Code, City policies, state and
federal laws, and case law.
+ Perform other such duties as may be prescribed for the City Attorney by
ordinance, resolution or by direction of Council and/or Manager.
• Work effectively with Council, Manager, City Clerk and with all other public
agencies and other entities with which the City has a legal relationship.
+ Attend at least one Council meeting per month and others telephonically as
requested.
B. All representation of City shall continue until the matters or cases assigned are
either closed out by mutual consent or are recalled by Council.
C. The Firm shall not engage any consultant, expert, or other third-party service
without prior approval of Council.
Section 3. Access to City Personnel. Manager shall secure the cooperation of City
personnel as necessary to assist Firm's performance under this agreement.
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Section 4. Contract Administrator. Manager shall administer this contract on behalf
of City and at direction of Council.
Section 5. Term.
A. Initial Term. This agreement becomes effective when signed on behalf of both
parties and shall continue in effect for one year.
B. Option to Extend. Council shall have the option to extend this agreement for a
three (3) year term commencing on the expiration of the Initial Term upon mutual consent of
Firm and Council. All the terms and conditions of this agreement shall apply during any
extended term. No additional options to extend shall be created by City's election to extend this
agreement.
Section 6. Attorney Assignment. Holly C. Wells is the Firm attorney who will be
principally responsible for performing or supervising the work to be done by Firm on City's
behalf and who will be City's principal contact with respect to contract administration and billing.
The responsible attorney will not be changed without written consent of Council. The
responsible attorney may, in her discretion, assign additional Firm attorneys, paralegals, and
law clerks to perform legal services under her supervision.
Section 7. Compensation.
A. City shall pay Firm a fixed fee of $6,700 per month in exchange for up to 33
hours of general counsel legal services per month and the services in subsection B below.
B. The $6,700 monthly fixed fee shall include, at no additional cost to City except as
expressly noted in this section:
1. Two "in-house counsel sessions." These "in-house counsel sessions" involve a
member of the municipal team traveling to Seward and residing within Seward's
boundaries for five consecutive work-days. City shall provide a work-space for
the attorney at City Hall. Holly Wells shall attend at least one of the "in-house
counsel sessions." Firm shall pay the costs of transportation, lodging, and meals
during all "in-house counsel sessions." Legal work performed during these
sessions will be charged in accordance with this agreement. City shall only be
charged for time during which the attorney is engaged in providing legal advice or
performing legal work for City.
2. One half-hour telephonic or in-person training session with the designated City
Attorney for all newly-elected Council members.
3. One half-hour session annually for each Council member to discuss concerns,
goals, and priorities.
4. One in-person training on municipal governance per year for Council,
commission, and board members, not to exceed four hours.
5. Travel time and travel-related expenses arising from attendance at 12 Council
meetings.
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6. Long distance telephone calls
7. Photocopies created at Firm offices
8. Two one-hour sessions with Manager annually to discuss Firm performance and
his, her or Council's outstanding goals and priorities for City.
C. The following hourly rates for work above and beyond 33 hours per month or
work classified as Litigation: Shareholders, Members, and Of-Counsel: $225; Associates:
$205; Paralegals: $130.
D. For travel time between Seward and Anchorage outside the contracted 12 trips,
City agrees to pay Firm the applicable hourly rate, plus out-of-pocket expenses.
E. Except for travel expenses described in subsection A of this section, City shall
reimburse Firm for in-house expenses and third-party expenses incurred on City's behalf. Such
expenses may include applicable filing fees, recording fees, facsimile services, courier services,
expedited mail or delivery services, travel expenses, service of process fees, deposition
transcripts, stenographer fees, computer-assisted legal research fees, title insurance premiums,
and other similar charges.
F. Firm shall receive Council approval before exceeding 33 hours of general legal
services in a calendar month. This section does not apply to litigation fees outside flat fee
amount.
Section 8. Statements and Payment.
A. Firm shall submit itemized monthly statements to City for all fees and costs
incurred during the preceding calendar month. Monthly statements shall identify the subject of
the work performed and the time, to the nearest one-tenth of an hour, spent on each subject.
Costs shall be itemized and described separately on each monthly statement.
B. Payment of monthly statements will be remitted to Firm within 30 days. A late
charge on amounts past due for 30 days or more will be assessed at the rate of .88% per
month, or at the highest rate allowed by applicable law.
C. Overages by City in one month will be rolled over to the next month and applied
to that month's 33-hour cap. Hours may be rolled over consecutively but City agrees to pay
Firm for any remaining overages no later than November 30 of each year. In the event this
agreement is terminated before the term expires, rolled-over fees shall be paid to Firm no more
than 30 days after the date of termination.
Section 9. Insurance. Firm shall maintain in good standing the following insurance
during the term of this agreement, and shall furnish Manager with proof of the required
insurance coverage before rendering any services under this agreement:
A. Worker's compensation insurance as required by AS 23.30.045, including
employer's liability protection not less than $100,000 per person, $100,000 per occurrence.
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B. Comprehensive automobile liability insurance, covering all owned, hired and non-
owned vehicles with coverage limits not less than $300,000 per person/$300,000 per
occurrence.
C. Professional liability coverage for claims up to a minimum amount of $1,000,000
per claim for the term of this agreement, plus a three-year extended reporting period
endorsement after the end of this agreement.
Section 10. Records. Subject to the transfer of a file to another attorney at City's
request, Firm shall retain and maintain all significant components of the files concerning each
matter in which Firm provides services to City for a period of seven years following the
conclusion of representation of City in the matter, unless a longer period of retention is required
under the City of Seward Retention Schedule. During such time, Firm will afford City
representatives reasonable access to each such file. At any time after the end of this seven-
year retention period, Firm, in its discretion, may destroy the file and its contents without further
notice to City. Firm will deliver to City the originals of any documents in a file at the time the file
is closed.
Section 11. Termination of Services. Firm's services under Section 2 may be
terminated:
A. For convenience by City.
B. By mutual consent of the parties.
C. For cause, by either party where the other party fails in any material way to
perform its obligations under this agreement. Termination under this subsection is subject to
the condition that the terminating party notify the other party of its intent to terminate, stating
with reasonable specificity the grounds for termination, and the other party's failure to cure the
default within 15 days after receiving the notice of termination.
Section 12. Notices. Any notice pertaining to this agreement shall be either
personally delivered or mailed by prepaid first class registered or certified mail, return receipt
requested as follows:
City: City of Seward City Hall Building
Attention: City Manager
PO Box 167
Seward, AK 99664
smeszaros cit ofseward.net
Firm: Birch, Horton, Bittner and Cherot
Attn: Holly C. Wells
510 L, Street, Suite 700
Anchorage, Alaska 99501
hwells()bhb.com
Section 13. Amendment. This agreement may be amended only by a writing
executed by each party and approved by Council.
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Section 14. integration. This instrument embodies the entire agreement of the
parties. There are no promises, terms, conditions or obligations other than those contained
herein; and this contract shall supersede all previous communications, representations or
agreements, either oral or written, between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this contract as of the date first
written above.
CITY OF SEWARD BIRCH HORTON BITTNER AND CHEROT
Christy Terry 'H0 Wells
Mayor/City Council Chairperson Attorney
Scott Meszaros
City Manager/Contract Administrator
ATTEST:
Brenda Ballou, CIVIC, City Clerk
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