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HomeMy WebLinkAbout02202020 City Council Laydown - Supplemental City Atty Report MEMORANDUM TO: CITY COUNCIL MEMBERS MAYORTERRY FROM: OLLY C. WELLS RE: CITY ATTORNEY REPORT ® JiA UA Y 2020 SUPPLEMENT CLIENT: CITY OFSEWARD FILE 006 DATE: February 21, 2020 After finalizing the City of Seward ("City") invoice for January 2020 and working with BHBC accounting to revise the hours and costs to reflect the new agreement between the City and BBC, it became apparent that a more detailed analysis of this monith's hours and the impact of the new agreement on legial service costs was needed. A careful review of the legal work completed in January also clarified areas in the agreement that may require attention or revision to best serve the City. To this end, I worked with both City Manager Meszaros and Mayor Terry to identify ways to structure the agreement to ensure that future monthly overages are easier to anticipate, prevent, and budget. This supplemental report serves the following goals: I. Examine and detail finalized "general legal service" hours and "litigation„ hours; 2. Propose changes to the attorney report format and agreement terms based upon agreemenit execution; and 3. Identify complimentary legal services provided in Jianuary 2020, under the agreement, and from outside resources. I. EXAMINATION OF JANUARY 2020 "GENERAL LEGAL SERVICES" AND "LITIGATION" HOURS After revising the final invoice for January 2020 to revise entry errors for individual timekeepers and remove fees associated with services now included in the agreement, the total nonitigation hours for January 2020 are 75 and the total litigation hours are 7.70. Attorney Report Supplement—Jan. 2020 Page I of 00907136.DCC General Legal Services "General legal services" includes all legal work performed for the City except for "litigation" hours. The most substantial areas of legal services in January were: ® preparation and attendance at Council meetings, which accounts for approximately 16 general legal service hours; O research regarding the airport mitigation and repair project, as well as City options for directing improvements and management of the airport, which accounts for approximately 7 hours; • research regarding the rezone application and review process, which accounted for approximately 6 hours; C other enforcement proceedings and negotiations regarding nuisance abatements, conditional use permit and variance applications, which accounted for approximately 4 hours of legal work; and • personnel matters, including labor negotiations and coordination, termination, discipline, and grievance responses, which accounted for approximately 18 hours of legal work. Other projects such as the rainbow crosswalk project, Open Meetings Act inquiries, public records disclosure and retention concerns, the adoption of the remote seller's tax code, review of the social media policy, and other general legal matters accounted for approximately 6 hours of additional legal work. These breakdowns in hours are approximate as some billing entries involve several subjects in one entry and cannot be easily parsed. By way of example, a billing entry may say: "telephone conference with City Manager regarding nuisance enforcement and termination proceedings" and list the time for completion of that telephone call. Moving forward, all Firm timekeepers are working on invoicing their time more particularly for each subject matter. This should increase Council's and the City Manager's ability to analyze and monitor the City's legal work. Litigation Litigation hours are generally legal fees derived from representation before tribunals such as courts or administrative agencies. It would also include representation of the City in disputes before its own administrative agencies in a quasi-judicial proceeding. This definition would exclude, however, representation provided to the City Council sitting as the Board of Adjustment or to the Planning Commission. It would also exclude representation and guidance regarding matters that are legislative in nature, such as the review and consideration of a rezone application. Essentially, "litigation" has been limited to legal services where there is an "adverse" party to the City. The City is not adverse to parties appearing before it as a decision-maker or a legislature. Additionally, fees that are reimbursable by a third party are also included in "litigation." Attorney Report Supplement—Jan. 2020 Page 2of6 00907136.00c This ensures that the City has an easy way to invoice the third party for such fees. Using this definition for "litigation," this month's hours are 7.70. It. PROPOSED CHANGES TO ATTORNEY REPORT FORMAT AND AGREEMENT TERMS After reviewing January's legal services and the ways in which those hours were billed, we recommend several adjustments to the attorney report and, if necessary, the agreement to effectuate Council's goals while ensuring the City receives essential legal services. In order to ensure Council has the information it needs to evaluate attorney performance under the new agreement, I recommend the following changes: 1. A clear statement of the number of total "general legal services" hours- worked and the number of hours worked outside the cap, as well as a statement of the current balance of"roll-over" hours remaining under the agreement. 2. A clear statement of total 'litigation" hours and a list of those matters by case or matter name as well as the hours spent on each of those matters. 3. A section entitled "Council-Approved Overages" that provides the date Council approved/directed legal work that exceeded the hour cap for a given month. For example, an entry would say, "on January 24, 2020, Council directed City Attorney to work with Administration on assessing airport management and ownership options and approved additional legal hours needed for that project." In circumstances where Council wants to allot a specific number of hours of legal services to a matter, any such motions doing so will be noted in the attorney report as well. 4. A section entitled "Personnel and employment" hours. Personnel issues generally arise instantaneously and require immediate attention. Even where the City is nearing or has exceeded its monthly cap, the City is obligated to consult an attorney on these matters or risk waiving insurance coverage. For this reason, while these hours remain a part of the capped amount, they should be separated out for analysis and computation. Essentially, these hours should be given standing "Council approval." However, it is also important to have these hours separated out from general legal service hours because Council should be aware when these issues arise. Generally, the attorney report will not be the appropriate place to provide details of these matters, which are often confidential and require discretion. 5. A section entitled "Enforcement Fees Subject to Reimbursement." The agreement did not anticipate legal fees arising from enforcing contracts, drafting land sale or lease documents, or the creation, review or enforcement of other documents where legal fees are reimbursable by the other party. This month, there were 2.10 hours of fees resulting from the enforcement of a lease. Under the contract, these fees are reimbursable to the City. If, however, these fees are included in a flat fee agreement, it would be difficult to identify the amount of fees that are owed to the City. Similarly, in incidents where the City impounds personal property (such as a derelict vessel), the City may be able to recover legal fees from the property owner from the Attorney Report Supplement—Jan. 2020 Page 3of6 00907136.DOC sale of the property. However, recovery may be more difficult if such fees are paid as part of a flat fee agreement. As a result, the Firm includes these fees in the definition of "litigation" hours. 6. A section entitled "Potential Executive Sessions." Personnel matters, litigation matters, and negotiations for services often require more detailed updates than is appropriate in a public attorney report. However, preparation of memoranda and research required to prepare for executive sessions can often increase legal fees. Creating a "potential executive sessions" section permits Council to identify the areas its members believe warrant additional information. 7. A section entitled "Complimentary Legal Services." The City has substantial complimentary legal services under the agreement. However, these services may be lost if we don't work together to ensure they are utilized. To this end, this section will state the complimentary services under the agreement, identify any services used in that month, and provide a reminder of the services that remain available. III. BHBC COMPLIMENTARY LEGAL SERVICES UNDER THE AGREEMENT AND MAXIMIZING FREE LEGAL SERVICES FROM OUTSIDE PARTIES Although revisions to the attorney report will assist Council in monitoring the fees incurred under the agreement, the overages in January emphasize the need for additional steps to reduce legal fees and approach legal projects in a more cost- effective manner. While the Administration and the Firm are working towards these goals, the most direct way to alleviate legal costs is to reduce or eliminate them. Thus, this supplement identifies the Firm's efforts to provide free legal services to the City both in response to the first invoice under the agreement and under the terms of the agreement itself. It also provides an introduction to free legal services available through other resources. BHBC legal Service Discounts and Credits After reviewing the January invoice and discussing the City's goals regarding the reduction of legal fees with both City Manager Meszaros and Mayor Terry, it became apparent that it might take a few months to change access and use of legal services to best utilize the agreement. The City is working diligently to adopt internal policies to streamline requests for legal services and monitor legal service usage. In addition to working alongside the City in its efforts, the BHBC municipal team was also able to secure Firm approval of both the $3,500 discount off January legal services, as well as an additional $2,000 credit towards February overages and $2,000 towards March overages. We are hopeful that this discount will provide the Administration, Council, and the Firm some breathing room as we work together to refine the way legal services are utilized, requested, and invoiced. Attorney Report Supplement—Jan. 2020 Page 4of6 00907136MC Complimentary Legal Services Under the Agreement In addition to the discounted legal services provided by the Firm, we are working with Administration to ensure that the City takes advantage of complimentary legal services under the agreement and available through outside sources. Under the agreement, the City receives the following complimentary legal services: 1. Two "in-house counsel" sessions. These sessions involve a member of the Firm's municipal law team traveling to Seward and residing within Seward's boundaries for a full work week. That attorney will work out of City Hall and be available to meet with City employees, Council, and commission members. The City will only be charged for work performed under the agreement and the Firm will pay for the travel, lodging, and all other related costs. Currently, after consulting with the Manager, City Attorney Wells was scheduling a session for the first or second week in April. The second session has not yet been discussed. 2. One half-hour training or information session for each newly-elected Council member. Given that the agreement is new, the Firm is interpreting this provision to offer all Council members with this session. 3. One half hour session for each Council member to discuss concerns, goals or priorities. 4. One in-person training on municipal governance per year for Council, commissions and/or board members, not to exceed four hours. 5. Travel time to and from 12 Council meetings. The value of these complimentary services is approximately $13,500, which does not account for the in-house counsel sessions since the cost of these sessions will depend largely on the available housing costs at the time of the session. However, the City may lose the value of these services if we do not take the time to schedule them. To this end, the Firm will circulate a sign-up sheet for Council member sessions and work with Mayor Terry, City Manager Meszaros, and City Clerk Ballou on scheduling the half day training. Outside Free Legal Services In addition to the services offered by the Firm, there are legal services offered by third parties that the City may be able to use to minimize its use of the Firm. For example, AML-JIA offers an employment law hotline that provides municipalities with advice regarding general personnel issues. The Firm has drafted manuals, documents, and guidelines for derelict vessel impoundment that are publicly available through the Alaska Harbormasters Association. Further, there are great training opportunities with the Alaska Municipal league, as well as various state agencies such as the Alaska Public Offices Commission ("APOC"), the American Planners Association, and national organizations such as the International Municipal League Attorney's Association. We Attorney Report Supplement—Jan. 2020 Page 5 of 6 00907136.©OC are compiling a list of these resources with the City Manager so that general questions can be preliminary addressed without incurring legal fees. The City Manager and the Firm will provide Council with a list of these services in the next City Attorney Report or corresponding City Manager report so the Council is fully aware of its legal resources and how they are being used to provide efficient streamlined legal services. IV. CONCLUSION Jennifer Alexander will be in attendance at the February 24, 2020 City Council meeting as she has been instrumental in assisting the City with personnel issues this month. However, if Council would like to discuss the agreement or the administration of the agreement, City Attorney Wells will be available telephonically at any time during the Council meeting. Attorney Report Supplement—.fan. 2020 Page 6 of 6 00907136.DOC