To: Menlo Park City Council From: Soody Tronson, resident Date: December 2, 2019 Agenda Item: City Council Meeting December 2, 2019, Item CL2. re City Attorney City Attorney Recruitment[i] The retirement of the current City Attorney presents the City of Menlo Park with an opportunity, in several ways, to reconsider the nature of this position, which has been long overdue: 1. Recommendations 1.1. Reevaluate the employment arrangement: in-house versus contract. 1.2. Open the position to a diverse group of qualified applicants. 1.3. Change the compensation scheme even if the position is as a contractor. 1.4. Implement a robust recruitment process. 1.5. Bring transparency to the legal expenditure. DETAILS: 2. REEVALUATE THE MOST IMPACTFUL AND FISCALLY RESPONSIBLE CITY ATTORNEY OFFICE STRUCTURE 2.1. NATURE OF RELATIONSHIP: EMPLOYEE OR INDEPENDENT CONTRACTOR 2.1.1. The current Menlo Park arrangement is uncommon. The City Attorney is a part time employee receiving a set monthly retainer and benefits for working 14 hours a week.[ii] All work done above the 60 hours, is compensated on an hourly basis. 2.1.2. Typical Scenarios: Although some cities with large budgets or high number of transactions have in-house City Attorney, the typical city attorney in California is an independent contractor, and under retainer. The retainer may provide for a maximum number of service hours or unlimited hours for the basic services. If a maximum number of hours is provided for, then the city attorney may be paid on a per hour basis once the maximum hours are reached each month. Many part-time city attorney employment agreements contain provisions defining the nature of the employment relationship. Those where city attorney is part time, they are not considered employees. In this typical arrangement, the attorneys do not receive health care insurance coverage, disability or life insurance, contributions to retirement plans or auto allowances. The attorney must also provide his or her own office space, equipment and legal research resources to provide legal services to the city.[iii] That is not the case in Menlo Park. 3. CITY ATTORNEY COMPENSATION AND BUDGET 3.1. The current Menlo Park arrangement is uncommon. The City Attorney is a part time employee receiving benefits ($58,517/year), for working 14 hours a week.[iv] For 60 hours of “retained” or routine work each month, he receives $11K in salary plus $4900 in benefits. Time spent for work beyond the first 60 hours, is compensated at $250/hr. Last year, he and his firm received $615,974 of the legal expenditure of $825,723[v] (or 75%) from the City. This does not include the developer-fee payments which are charged at a higher rate. 3.2. Menlo Park pays a higher compensation than Palo Alto. The total personal “retainer-work” compensation for the City Attorney is $190,517 for 720 hours of work a year (excluding all other payments for services rendered) [vi] . If a similar position were held as a full time employee of the City, this translates to annual salary of roughly $380K (before benefits) and annual compensation of $550K (after benefits) to the City Attorney personally. The annual salary for City Attorney in Palo Alto is $300K.[vii] Palo offers benefits to regular employees who work at least 20 hours a week (which is greater than the 16 hours/week).[viii] 3.2.1. Work performed and reimbursed by developers is performed at higher rate without benefit to the City ($400/hr). This developer-paid sum is not reflected in the City’s budget document and is above and beyond the disclosed $825,723. This budget also does not capture certain human resources and certain labor negotiation. How much these uncaptured amounts are, has not been publicly disclosed. 3.2.2. The original contract categorized ‘retainer work’ and ‘non-retainer work’ … with non-retainer work having an hourly rate. In the 1st Amendment to the Agreement, since the volume of ‘retainer work’ was higher than the parties had anticipated, an hourly rate for any additional ‘retainer work’ was set (now at $250/hr).[ix] All ‘non-retainer work’ was to be performed at a regular government discounted rate.’ Review of developer agreements was part of the definition of ‘non-retainer work.’ 3.2.3. The 3rd Amendment to the Agreement, stated that the rate for both ‘non-retainer work’ and ‘retainer work’ beyond the first 60 hours a month, will be the same. 3.2.4. The 5th Amendment to the Agreement, added a third category of rates, for the review of agreements which are reimbursed by developers (now at $400).[x] 3.2.5. A question worth asking is if the developer agreements are part of doing business with the City, why is the reimbursed amount not a source of revenue to the City? Why not pay the law firm the same amount as other ‘non-retainer work’ (now $250/hr), as the original contact contemplated? If there is a windfall because of volume of work for developer agreements, should that not benefit the City? 3.3. OPPORTUNITY 3.3.1. Assess the best structure for the Menlo Park City Attorney’s Office: in-house full time, contractor (with or without benefits), reporting requirements, role, etc. 4. ACTUAL OR APPARENT CONFLICT OF INTEREST 4.1. When the City Attorney works for clients other than the City, typically the City Attorney may continue a limited private practice from the office located in the City’s provided that such practice shall not interfere with his obligations to the city. Such private practice may include representation of other public agencies, teaching, judgment on a pro tem basis, advising and representing individuals and businesses provided that such representation does not involve any real or apparent conflict of interest. 4.1.1. Current City Attorney is a partner specializing in real estate, land use, business, and municipal law and advises various business areas. Current City Attorney and his law firm’s represent private entities on topics similar to those for public agencies, including “representation before local as well as regional governmental agencies.”[xi] 4.1.2. Although perhaps not in fact, at least in appearance, this may present a conflict with the City’s business. According to City Attorneys who represent private entities as well as public, they do not represent private entities who do business with the same City which the City Attorney represents, when the nature of the work is the same. It is not clear whether the firm’s private clients conduct any business with the City of Menlo Park in the same areas (although not necessarily the same matters) that the firm represents the City. This is not an assertion that there is a conflict in fact, but the appearance of it, as publicly provided, may be cause for concern. 5. RECRUIT FROM A DIVERSE POOL OF CANDIDATES. 5.1. OPEN RECRUITMENT IS LONG OVERDUE. 5.1.1. The same person has held the Menlo Park City Attorney position since 1993, for 26 years. The same law firm or those associated with the same firm, have filled the Menlo Park City Attorney role since 1961, a year after John D. “Jack” Jorgenson founded the Menlo Park firm, for 60 years. 5.1.2. The position of City Attorney in Menlo Park is an appointed and not an elected one. That said, to allow the same private entity to have the privilege of serving as the highest legal representative of a public service office, for 60 years, does not speak well of the city’s aspiration towards an open, inclusive, and transparent government. 5.1.3. I urge the City Council to demonstrate it is an equal opportunity employer and advertise the position broadly, instead of extending the contract to the same firm. Outreach should be made to organizations with members who qualify and are diverse including the California Minority Counsel Program; League of California Cities; and County Counsel Association, to name a few. The advertisement should be done with sufficient time to respond in order to have a sufficient pool of applicants. 5.2. RELYING ON ORAL HISTORICAL KNOWLEDGE IS NOT ALWAYS A PLUS 5.2.1. Earlier this year, the City Council approved a one time bonus as an appreciation for the ‘historical knowledge” of the City Attorney. Among arguments that have been put forward by some for retaining the same law firm has been that it makes sense “to retain the historical knowledge.” 5.2.2. Familiarity is not always a plus sign. There is a danger that comes along with too much familiarity. Although at the first glance, familiarity may seem to be a mark in the pros column, that is a mark may be in the cons column. … Any professional should have such clear records of their work, that their successors can perform the job with minimum transition effort. 5.2.3. I would ask the Council, the following which are required per the current contract:[xii] • How often and when was the last time they received a breakdown of the City’s legal budget and expenditure by City department and category? • How often and when was the last time they received the periodic reports, required no less than 3 times a year, regarding any current claims? • How often and when was the last time they received the periodic reports on risk management, cost control analysis, and recommendations on each, as appropriate? • How often and when was the last time, they performed the performance evaluation as required by the City Attorney contract? • How often and when was the last time, City Council received disclosure regarding actual or appearance of conflict regarding any representation? If the answer is not often enough, then the question is why? 6. RECRUITMENT PROCESS 6.1. Draft clear definition of the role of City Attorney commensurate with today’s best practices. 6.2. Recruitment, interview, and selection process. 6.2.1. Perform a benchmark ageist well-run city with similar budget and/or transactional volume. 6.2.2. Job description, minimum qualifications, decision on recruitment agency, placement of advertisement, duration of advertisement, interview process, interview questions, selection process 6.2.3. Outreach should be made to organizations with members who qualify and are diverse including the California Minority Counsel Program; League of California Cities; and County Counsel Association, to name a few. 6.2.4. Inclusion of an advisory group (who are not part of the Council or City Staff) in addition to Council and City Staff to be involved in the process. ________________________________ [i] City Council Agenda https://www.menlopark.org/AgendaCenter/ViewFile/Agenda/_12022019-3358 [ii] CITY OF MENLO PARK FISCAL YEAR 2019–20 ADOPTED BUDGET, pages 66-67 https://menlopark.org/ArchiveCenter/ViewFile/Item/9688 [iii] Stepping Into the Evolving Role of the City Attorney. League of California Cities. https://www.cacities.org/getattachment/4c250e84-783c-4a34-9caf-c0152c7e0d92/5-2012-Spring-Carvalho-Guinn-Moutrie-Stepping-Into.aspx [iv] CITY OF MENLO PARK FISCAL YEAR 2019–20 ADOPTED BUDGET, pages 66-67 https://menlopark.org/ArchiveCenter/ViewFile/Item/9688 [v] CITY OF MENLO PARK FISCAL YEAR 2019–20 ADOPTED BUDGET, pages 66-67 https://menlopark.org/ArchiveCenter/ViewFile/Item/9688 [vi] Agreement for services of city attorney, Effective September 7, 1993, found on page 8/17 https://www.menlopark.org/DocumentCenter/View/20843/F1---20190312-City-Atty-agree-amend-SR-CC [vii] City of Palo Alto. Salaries. https://www.cityofpaloalto.org/civicax/filebank/documents/68312 [viii] City of Palo Alto. Benefits https://www.cityofpaloalto.org/gov/depts/human_resources/benefits.asp [ix] 1st Amendment to the Agreement for services of city attorney, June 1st, 2000 [x] 5th Amendment to the Agreement for services of city attorney, July 1, 2011 [xi] Jorgenson, Siegel, McClure & Flegel, LLP website. https://www.jsmf.com/land-use-environmental [xii] Agreement for services of city attorney, Effective September 7, 1993, found on page 8/17 https://www.menlopark.org/DocumentCenter/View/20843/F1---20190312-City-Atty-agree-amend-SR-CC Received on Mon Dec 02 2019 - 14:01:47 PST
