JUNE 21, 2005 AMENDMENT TO THE AGREEMENT FOR LEGAL SERVICES – RICHARDS, WATSON & GERSHON JUNE 21, 2005 AMENDMENT TO THE AGREEMENT FOR LEGAL SERVICES – RICHARDS, WATSON & GERSHON

TO: HONORABLE MAYOR AND CITY COUNCIL

FROM: CITY MANAGER

DATE: JUNE 21, 2005

SUBJECT: AMENDMENT TO THE AGREEMENT FOR LEGAL SERVICES – RICHARDS, WATSON & GERSHON

RECOMMENDATION:

Approve the Amendment to Legal Services Agreement with Richards, Watson & Gershon.

BACKGROUND:

Since City incorporation in 1973 City Attorney services have been provided under contract by Richards, Watson & Gershon ("RWG"). The current contract for services with RWG was entered into on July 1, 1998 and includes the City, the Redevelopment Agency and the Improvement Authority.

Basically, RWG provides:

Various billing rates apply to each of these services as described in the Agreement, however the hourly rate for "General Legal Services," which are usually provided by Carol Lynch or David Snow, has been $145 since 1998. Likewise, the hourly rate for employment/labor law services has been $165 since 1998. The hourly rate for litigation varies depending on the billing rate for the litigator, but a 10% discount on these rates has been maintained.

DISCUSSION:

At the May 31, 2005 City Council meeting, the City Council discussed the performance of the City Attorney. Based on the review received, the City Council unanimously (Councilman Long absent) directed the City Manager to prepare an amendment to the agreement for legal services with RWG. That amendment has been prepared and is attached to this report.

RWG is proposing an increase in the rate for general legal services from $145 per hour to $165 per hour and to increase the rate for labor relations and general personnel and employment advice from $165 to $185 per hour. Concurrently, RWG is proposing an increase in the "discount" for litigation services from 10% to 15%.

Over the past four years the average annual cost of general legal services has been $281,000. Applying the rate increase proposed by RWG to the average cost of these services will increase annual contract costs by approximately $39,000. Applying the additional 5% discount to the average annual litigation costs of $448,000 yields an annual savings of over $22,000. The net additional cost to the City in granting the City Attorney fee adjustment will be about $17,000, or less than 2% of the budget for legal services.

The Amendment to the Agreement for Legal Services makes the following changes to the current agreement between the City and Richards, Watson & Gershon:

    1. Section 2 of the Agreement has been amended so that David Snow now is designated as the Assistant City Attorney. The City Council approved that change at the budget policy workshop.
    2. Exhibit "A," paragraph I. B. of the Agreement for Legal Services has been revised to reflect an increase in the hourly billing rate to $165 per hour for general legal services
    3. Exhibit "A," paragraph II. B. of the Agreement for Legal Services has been revised to reflect an increase in the discount to 15% for litigation services.
    4. Exhibit "A", paragraph IV A has been amended to increase the rate for labor relations and general personnel and employment services to $185 per hour.

Except as expressly set forth in the amendment to the agreement, all of the other provisions of the agreement for legal services have not been altered and remain in effect.

Staff has been very satisfied with the performance of RWG over the years. Our current City Attorney, Carol Lynch, has been with us since 1991 and has considerable institutional memory. She has also proven to be accessible, responsive and competent. The request for rate increase is justified.

Respectfully Submitted,

Les Evans

City Manager

Attachment: Amended Agreement