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ADMINISTRATIVE COMMITTEE |
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4. |
ADOPT
PERIODIC REVIEW OF UTILIZATION OF LEGAL SERVICES |
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Meeting
Date: |
October
10, 2011
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Budgeted:
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N/A |
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From: |
David J.
Stoldt, |
Program/ |
N/A |
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General
Manager |
Line Item No.: |
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Prepared
By: |
David J.
Stoldt |
Cost
Estimate: |
N/A |
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General Counsel Review:
N/A
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Committee Recommendation: The
Administrative Committee reviewed this item on October 10, 2011 and
recommended ___________________.
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CEQA Compliance: N/A |
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SUMMARY: The District’s legal services comprise a significant portion of its annual budget and span a wide variety of activities. Legal counsel reports directly to the Board, not the General Manager. The Board would be benefitted to have better tools to assess the activities and expenses related to legal services, as well as would benefit from regular periodic reviews of those activities as they may relate to the Board’s strategic goals. In the recommendation below, a vehicle to fulfill this need is identified.
DISCUSSION: The District has two traditional contracts for legal services, DeLay & Laredo serves as outside counsel on the day-to-day business of the District and JEA & Associates is on annual retainer for lobbying work. From time to time, additional firms are hired, for example Goodin MacBride is assisting with the Petition to Modify at the California Public Utilities Commission related to the User Fee.
Most of the legal work is in reaction to events or activities that occur during the course of a year. Additional work is generated through meetings regularly attended by Counsel which include Chair/Vice Chair, Water Supply Planning Committee, Rules & Regulations Review Committee, Legislative Advocacy Committee, Technical & Policy Advisory Committees, the Team Supply staff meeting, as well as when requested for Water Demand Committee or other staff meetings as needed.
Legal services are one of the largest budgetary expenditures each year. Last year, expenditures on legal services comprised 5% of total budget (7% of actual revenues received), and 6% of total budget in FY 2010. Further, in the past two fiscal years, actual expenditures on legal services exceeded budgeted amounts by 10% and 26% respectively.
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Fiscal Year |
Legal Services Budget |
Legal Services Actual |
Variance |
Annual Total Budget |
Percent Of Total Budget |
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2010 |
$450,000 |
$495,352 |
+ 45,352 |
$8,424,200 |
6% |
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2011 |
$400,000 |
$504,926 |
+104,926 |
$10,337,000 |
5% |
Activities are reported at monthly Board closed sessions. However, there currently does not appear to be regular reporting at the Board level of actual legal expenses vis-a-vis budget, the allocation of time or activities by purpose or strategic discussion about redirecting efforts or upcoming special needs that might have an impact on the legal services budget. Outside Counsel reports directly to the Board, not the General Manager, hence such additional reporting or strategic actions should occur at the Board level.
RECOMMENDATION: Staff recommends that the Administrative Committee discuss legal services, evaluate expenditures relative to budget, and discuss upcoming needs and strategies on a quarterly basis. It is recommended that the General Manger be included in such discussion. Staff also recommends that you direct the Administrative Services Division Manager to prepare a quarterly summary of actual legal services expenditures compared to budget, as well as by category of activity. Such quarterly review would be done as part of a regular Administrative Committee meeting, beginning with the November 2011 meeting.
IMPACT ON STAFF/RESOURCES: N/A
EXHIBITS
None
U:\staff\word\committees\Admin\2011\20111010\4\item4.docx