HomeMy WebLinkAbout3/15/2017 - STAFF REPORTS - 5.F. ♦O�P A`M Spy
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DATE: MARCH 15, 2017 NEW BUSINESS
SUBJECT: APPROVAL OF AN AGREEMENT WITH GARY SCHONS TO PROVIDE
SUPPLEMENTAL LEGAL SERVICES FOR THE CITY
FROM: David H. Ready, City Manager
BY: Douglas Holland, City Attorney
SUMMARY
The City Council will consider approval of (1) an agreement with Gary Schons of the law
firm of Best, Best and Krieger, to provide legal services for the City in connection with
potential issues involving Government Code Section 1090 and (2) an advance waiver of
potential or actual conflicts that may arise due to Best, Best and Krieger's
representation of CVAG and DWA.
RECOMMENDATION:
Approve an Agreement with the law firm of Best, Best and Krieger to provide legal
services for the City in an amount not to exceed $100,000 and authorize the City
Manager to execute the Agreement on behalf of the City.
STAFF ANALYSIS:
The City Attorney has identified a need for the City to bolster its legal resources to
address potential Government Code Section 1090 issues related to various projects
potentially implicated in the recent criminal indictment levied against a former city official
and two local developers. Gary Schons, a former Assistant Attorney General for the
State of California and currently with the law firm of Best, Beat and Krieger is experienced
in Government Code Section 1090 and was recommended to the City Attorney by Grover
Trask, a former District Attorney for the County of Riverside. The City Attorney
recommends the City Council retain Mr. Schons to assist the Office of the City Attorney in
devising approaches for unwinding or renegotiation of each implicated transaction as may
be required in response to any Government Code Section 1090 impacts.
There are currently no existing conflicts between the City and Mr. Schon's law firm, Best,
Best and Krieger. However, Best, Best and Krieger represents the Desert Water Agency
(DWA) and the Coachella Valley Association of Governments (CVAG) and it is asking the
City to acknowledge these relationships and prospectively waive any conflict that may
arise in the event of any dispute between the City and either one of these two clients. It is
the City Attorney's opinion that Mr. Schon's and his firm's representation of the City is
narrow in scope and the work Mr. Schon will perform on behalf of the City is not likely to
ITEM NO. 5 F.
City Council Staff Report
March 15, 2017-- Page 2
Agreement for Legal Services
conflict with or affect either CVAG or DWA. The City Attorney recommends the Council
consent to the waiver and authorize the City Manager to execute the advance waiver of
any conflict of interest. The waiver letter is also attached to this Staff Report.
FISCAL IMPACT:
The cost for the agreement will be paid from the City's Risk Fund.
David Ready, City Mana Dougla Holland, City Attorney
Attachments: Agreement
Waiver
02
Indian Wells I lei,& Sacramento
(760)568-2611 (916)325-4000
Irvine BEST BEST & KRIEGER n San Diego
(949)263-2600 ATTORNEYS AT LAW (619)525-1300
Los Angeles Walnut Creek
(213)617-8100 (925)977-3300
Ontano 3390 University Avenue,5th Floor, P.O.Box 1028,Riverside,CA 92502 Washington,DC
(909)989-8584 Phone:(951)686-1450 1 Fax:(951)686-3083 1 www.bbklaw.com (202)785-0600
March 9, 2017
City of Palm Springs
Attn: Mr. Doug Holland, Palm Springs City Attorney
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92263-2743
Engagement Letter: re Legal Services
Dear Mr. Holland:
ABOUT OUR REPRESENTATION
Gary Schons of Best Best & Krieger LLP is pleased to represent the City of Palm Springs
("Palm Springs"). Mr. Schons will represent Palm Springs regarding projects potentially
implicated in the recent criminal charges levied against the former Mayor of Palm Springs,
Stephen Pougnet, and two local developers, John Wessman and Richard Meaney. Specifically,
Mr. Schons would assist the City Attorney's Office in devising approaches for the unwinding or
renegotiation of each transaction as may be required in response to the Government Code
Section 1090 allegations.
This letter constitutes our agreement setting the terms of our representation. If you want
us to represent you and agree to the terms set forth in this letter, after you review the letter please
sign it and return the signed copy to us.
CONFIDENTIALITY AND ABSENCE OF CONFLICTS
An attorney-client relationship requires mutual trust between the client and the attorney.
It is understood that communications exclusively between counsel and the client are confidential
and protected by the attorney-client privilege.
To also assure mutuality of trust, we have maintained a conflict of interest index. The
California Rules of Professional Conduct defines whether a past or present relationship with any
party prevents us from representing Palm Springs. Similarly, Palm Spring's name will be
included in our list of clients to ensure we comply with the Rules of Professional Conduct with
respect to your firm.
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BEST BEST & KmEGER q
ATTORNEYS AT LAW
March 9, 2017
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We have checked the following names against our client index: City of Palm Springs,
Doug Holland, Stephen Pougnet, John Wessman, and Richard Meaney. Based on that check, we
can represent the City if we obtain the advance written consent from you as discussed in the
accompanying letter describing future conflict of interests with our existing clients. Please
review the list to see if any other persons or entities should be included. If you do not tell us to
the contrary, we will assume that this list is complete and accurate. We request that you update
this list for us if there are any changes in the future.
YOUR OBLIGATIONS ABOUT FEES AND BILLINGS
We have already discussed with you the fee arrangement. My current billing rate is $330
rate per hour. The billing rates for others are described in the memorandum attached to this letter
which is entitled "Best Best & Krieger LLP's Billing Policies." It also describes the other
aspects of our firm's billing policies. You should consider the Billing Policies memorandum part
of this agreement as it binds both of us. For that reason, you should read it carefully.
INSURANCE
We are also pleased to let you know that Best Best & Krieger LLP carries errors and
omissions insurance with Lloyd's of London. After a standard deductible, this insurance
provides coverage beyond what is required by the State of California.
NEW MATTERS
When we are engaged by a new client on a particular matter, we are often later asked to
work on additional matters. You should know that such new matters will be the subject of a new
signed supplement to this agreement. Similarly, this agreement does not cover and is not a
commitment by either of us that we will undertake any appeals or collection procedures. Any
such future work would also have to be agreed upon in a signed supplement.
HOW THIS AGREEMENT MAY BE TERMINATED
You, of course, have the right to end our services at any time. If you do so, you will be
responsible for the payment of fees and costs accrued but not yet paid, plus reasonable fees and
costs in transferring the case to you or your new counsel. By the same token, we reserve the
right to terminate our services to you upon written notice, order of the court, or in accordance
with our attached Billing Policies memorandum. This could happen if you fail to pay our fees
and costs as agreed, fail to cooperate with us in this matter, or if we determine we cannot
continue to represent you for ethical or practical concerns.
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BEST BEST & KRIEGER
ATTORNEYS AT LAW
March 9, 2017
Page 3
CLIENT FILE
If you do not request the return of your file, we will retain your file for five years. After
five years, we may have your file destroyed. If you would like your file maintained for more
than five years or returned, you must make separate arrangements with us.
THANK YOU
On a personal note, we are pleased that you have selected Best Best & Krieger LLP to
represent you. We look forward to a long and valued relationship with you and appreciate your
confidence in selecting us to represent you in this case. If you have any questions at any time
about our services or billings, please do not hesitate to call me.
If this letter meets with your approval, please sign and date it, and return the original to
us. Unless you sign, date and return the original by March 20, 2017, we will not represent you in
any capacity, and we will assume that you have made other arrangements for legal
representation. We have enclosed a separate signed copy of this letter for your records.
Very truly yours,
Gary W. Schons
For BEST BEST & KRIEGER LLP
AGREED AND ACCEPTED:
By:
Dated:
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BEST BEST & KRIEGER LLP'S BILLING POLICIES
Our century of experience has shown that the non-attomey personnel to perform its services when it is
attorney-client relationship works best when there is reasonably necessary in the judgment of the responsible
mutual understanding about fees, expenses, billing and BBK attorney. Hourly fees for non-attorney personnel
payment terms. Therefore, this statement is intended to will be charged at the rate then in effect for such
explain our billing policies and procedures. Clients are personnel. A copy of BBK's current rates and titles for
encouraged to discuss with us any questions they have non-attomey personnel will be provided upon request.
about these policies and procedures. Clients may direct Except for paralegals, BBK will not incur more than
specific questions about a bill to the attorney with whom $550 in fees for a non-attomey's work on a client matter
the client works or to our Accounts Receivable without fast continuing by email or written
Department. Any specific billing arrangements correspondence with the client the intended use of the
different from those set forth below will be confirmed in non-attomey and the hourly rate for that person.
a separate written agreement between the client and the
fire Fees For Other Services,Costs and Expenses
Fees for Professional Services We attempt to serve all our clients with the most
effective support systems available. Therefore, in
Unless a flat fee is set forth in our engagement letter addition to fees for professional legal services, we also
with a client, our fees for the legal work we will charge separately for some other services and expenses
undertake will be based in substantial part on time spent to the extent of their use by individual clients. These
by personnel in our office on that client's behalf. In charges include but are not limited to, mileage at the
special circumstances which will be discussed with the current IRS approved rate per mile, extraordinary
client and agreed upon in writing, fees will be based telephone and document delivery charges, copying
upon the novelty or difficulty of the matter, or the time charges, computerized research, court filing fees and
or other special limitations imposed by the client. other court-related expenditures including court reporter
and transcription fees. No separate charge is made for
Hourly rates are set to reflect the skill and secretarial or word processing services; those costs are
experience of the attorney or other legal personnel included within the above hourly rates.
rendering services on the client's behalf. Time is
accrued on an incremental basis for such matters as ESI: BBK provides Electronically Stored
telephone calls (minimum .3 hour) and letters Information (ESr,) services for matters requiring ESI
(minimum .5 hour), and on an actual basis for all other support — typically litigation or threatened litigation
work. Our attorneys are currently billed at rates from matters. BBK shall receive payment for ESI support, if
$225 to$750 per hour,and our administrative assistants, needed, at BBK's then current rates. A copy of BBK's
law clerks, litigation analysts, research analysts, and current rates for such services will be provided upon
paralegals are billed at rates from$140 to$290 per hour. request. BBK shall not incur costs for ESI support on a
These hourly rates are reviewed annually to particular matter without first continuing by email or
accommodate rising firm costs and to reflect changes in written correspondence with the client that the client
attorney status as lawyers attain new levels of legal agrees such services are necessary for the matter at
experience. Any increases resulting from such reviews hand.
will be instituted automatically and will apply to each
affected client,after advance notice. We may need to advance costs and incur expenses
on your behalf on an ongoing basis. These items are
Non-Attorney Personnel: BBK may employ the separate and apart from attorneys' fees and, as they are
services of non-attomey personnel under the supervision out-of-pocket charges, we need to have sufficient funds
of a BBK attorney in order to perform services called for on hand from you to pay them when due. We will
in the legal services agreement. The most common advise the client from time to time when we expect
non-attomey personnel utilized are paralegals. Other items of significant cost to be incurred,and it is required
types of non-attomey personnel include, but are not that the client send us advances to cover those costs
limited to, case clerks, IT analysts, and specialty before they are due.
consultants. The client agrees that BBK may use such 06
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Advance Deposit Toward Fees And Costs It is our policy to treat every question about a bill
promptly and fairly. It is also our policy that if a client
Because new client matters involve both a does not pay an invoice within 60 days of mailing, we
substantial undertaking by our firm and the assume the client is, for whatever reason, refusing to
establishment of client credit with our accounting office, pay. We reserve the right to terminate our engagement
we require an advance payment from clients. The and withdraw as attorney of record whenever our
amount of this advance deposit is determined on a case- invoices are not paid. If an invoice is 60 days late,
by-case basis discussed first with the client, and is however, we may advise the client by letter that the
specified in our engagement letter. client must pay the invoice within 14 days or the firm
will take appropriate steps to withdraw as attorney of
Upon receipt,the advance deposit will be deposited record. If the delay is caused by a problem in the
into the firm's client trust account. Our monthly billings invoice, we must rely upon the client to raise that with
will reflect such applications of the advance deposit to us during the 14-day period. This same policy applies to
costs and not to attorney's fees (unless otherwise noted fee arrangements which require the client to replenish
in our accompanying engagement letter). At the end of fee deposits or make deposits for anticipated costs.
engagement, we will apply any remaining balance first
to costs and then to fees. We also reserve the right to From time to time clients have questions about the
require increases or renewals of these advanced format of the bill or description of work performed. If
deposits. you have any such questions,please ask them when you
By signing the initial engagement letter, each client receive the bill so we may address them on a current
basis.
is agreeing that trust account balances may be
withdrawn and applied to costs as they are incurred and Changes in Fee Arrangements and Budgets
to our billings, when we issue our invoice to the client.
If we succeed in resolving your matter before the It may be necessary under certain circumstances for
amounts deposited are used, any balance will be a client to increase the size of required advances for fees
promptly refunded, after the commencement of our engagement and
depending upon the scope of the work. For example,
Monthly Invoices and Payment prior to a protracted trial or hearing, the firm may
require a further advance payment to the firm's trust
Best Best & Krieger LLP provides our clients with
account sufficient to cover expected fees. Any such
monthly invoices for legal services performed and
expenses incurred. Invoices are due and payable upon changes in fee arrangements will be discussed with the
client and mutually agreed in writing.
receipt.
E Because of the uncertainties involved,any estimates
Each monthly invoice reflects both professional and
of anticipated fees that we provide at the request of
other fees for services rendered through the end of the
prior month, as well as expenses incurred on the client's client for budgeting purposes, otherwise, can only be
behalf that have been processed by the end of the prior an approximation of potential feeee s.
month. Processing of some expenses is delayed until
the next month and billed thereafter. BEST BEST&KRIEGER LLP
Our fees are not contingent upon any aspect of the
matter and are due upon receipt. All billings are due and
payable within ten days of presentation unless the full
amount is covered by the balance of an advance held in
our trust account. If a bill is not paid within 30 days, a
late charge of one percent per month on the unpaid
invoice shall be added to the balance owed,
commencing with the next statement and continuing
until paid.
0995 9.00000'29591727.1 07
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Indian Wells I• • Riverside
(760)568-2671 lss
BEST BEST &KRIEGER Sacramento
o
crame t
Irvine Snto
(949)263-2600 ATTORNEYS AT LAW (916)325-4000
Los Angeles Walnut Creek
(213)617-8100 (925)977-3300
Ontario 655 West Broadway, 15`r Floor,San Diego,CA 92101 Washington,DC
(909)989-8584 Phone: (619)525-1300 1 Fax:(619)233-6118 1 www.bbklaw.com (202)785-0600
Gary W.Schons
(619)525-1348
gary.schons@bbklaw.com
February 24, 2017
City of Palm Springs
Attn: Mr. Doug Holland, Palm Springs City Attorney
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92263-2743
Advance Conflict Waiver re: Representation of Desert Water Agency&
Coachella Valley Association of Government
Dear Mr. Holland:
The City of Palm Springs ("Palm Springs") has requested that Best Best & Krieger LLP
("BBK) represent Palm Springs regarding projects potentially implicated in the recent criminal
charges levied against the former Mayor of Palm Springs, Stephen Pougnet, and two local
developers, John Wessman and Richard Meaney. Specifically, Gary Schons of BBK would
assist the City Attorney's Office in devising approaches for the unwinding or renegotiation of
each transaction as may be required in response to the Government Code Section 1090
allegations.
Before BBK can represent Palm Springs, BBK performed a conflict check and found that
there are no actual conflicts with its existing clients as of today. However, we found that BBK
does represent other clients which may have in the future conflicting interests with Palm Springs
in matters unrelated to the Palm Springs Matters. This letter concerns our relationship with the
Desert Water Agency ("DWA") and the Coachella Valley Association of Government
("CVAG"). If we are to advise Palm Springs about the Palm Springs Matters, we must first get
Palm Spring's advance informed written consent to any potential or actual conflict of interest
concerning our representation of DWA and CVAG.
RULES OF PROFESSIONAL CONDUCT
Rule 3-310 of the California Rules of Professional Conduct provides in pertinent part:
(C) A member [of the Bar] shall not, without the informed written consent of each
client:
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BEST BEST & KRIEGER 3
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(1) Accept representation of more than one client in a matter in which the
interests of the clients potentially conflict; or
(2) Accept or continue representation of more than one client in a matter in
which the interests of the clients actually conflict; or
(3) Represent a client in a matter and at the same time in a separate matter
accept as a client a person or entity whose interest in the first matter is
adverse to the client in the first matter.
REPRESENTATION OF DESERT WATER AGENCY &
ADVANCE WAIVER OF CONFLICTS
BBK has represented DWA for many years in a variety of different types of matters.
BBK is not currently representing DWA with respect to the Palm Springs Matters. Furthermore,
we do not believe that we are representing DWA on any matters which are adverse to Palm
Springs. However, BBK has represented DWA on matters adverse to Palm Springs in the past.
Having DWA as a longtime client, BBK may be asked to represent DWA in a transaction or
dispute, including litigation, which is directly adverse to Palm Springs.
If we are still representing Palm Springs on the Palm Springs Matters or other issues, and
DWA asks BBK to represent DWA against Palm Springs on unrelated matters, then we would
first need to obtain consent from Palm Springs to do so. Because DWA has been a BBK client
for so many years, however, we cannot take the chance that Palm Springs would refuse such
consent. Therefore, we ask that you sign this letter giving Palm Springs's consent now to any
future representation of DWA against Palm Springs so that we do not need to ask you for such
consent in the future. Furthermore, Palm Springs agrees that we can continue representing DWA
on other unrelated matters despite the conflict issue.
REPRESENTATION OF COACHELLA VALLEY ASSOCIATION OF
GOVERNMENTS & ADVANCE WAIVER OF CONFLICTS
BBK has represented CVAG for many years in a variety of CEQA matters. We do not
believe that we are representing CVAG on any matters which are adverse to Palm Springs.
However, BBK does represent CVAG in a specific matter known as the CV Link Project that
involves Palm Springs. We understand that there is no current conflict with Palm Springs in the
CV Link Project and that Palm Springs has been, and continues to be, supportive of the CV Link
Project. However, circumstances could always change, and a conflict could arise between Palm
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Springs and CVAG in the future. Because BBK has been representing CVAG on the CV Link
Project, we ask that you sign this letter giving Palm Springs's consent now to any future
representation of CVAG against Palm Springs so that we do not need to ask you for such consent
in the future. Furthermore, as part of this consent, Palm Springs will not seek advice from BBK
about the CV Link Project and agrees that we can continue representing CVAG on the CV Link
Project and other matters despite the conflict issue.
POTENTIAL ADVERSE CONSEQUENCES
Because DWA and CVAG are not currently adverse to Palm Springs, it is impossible to
predict exactly the facts related to any such future conflict, but we do believe it is possible to
describe the reasonably foreseeable adverse consequences that would arise which include the
following:
• We may be tempted to favor the interests of our other clients over Palm Springs's
interests.
• Our exercise of independent judgment to Palm Springs may be impaired or
clouded by our relationship with our other clients.
• We may be restricted from forcefully advocating Palm Springs's position for fear
of alienating our other clients depending upon the circumstances.
• We may inadvertently disclose confidential information to a client that Palm
Springs would not like revealed.
• Lawyers from BBK might conduct discovery against Palm Springs, appear in
court to argue against Palm Springs, and depose or question Palm Spring
employees or representatives in an adverse manner.
• There may be an appearance of impropriety in our representation of multiple
clients simultaneously in unrelated matters.
YOUR CONSENT
We believe that we have provided you enough information about the matters described
here to allow you to make an informed choice about how to proceed. If you believe you need
additional information, please let us know.
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You are entitled to, and should consider asking a non-BB&K attorney to review this letter
and provide independent advice to you whether you should sign this letter and provide the
consent that we have requested.
If you are willing to consent, please sign and return to us the enclosed copy of this letter:
i. acknowledging that we have informed Palm Springs of our relationship with
DWA and CVAG;
ii. acknowledging that Palm Springs has been advised of Rule 3-310 and although no
conflict of interest exists today, BBK is requesting for advance consent to future
conflicts regarding DWA and CVAG;
iii. indicating that Palm Springs consents to our continued representation of DWA
and waives any future conflicts described in this letter so that a further waiver is
not needed;
iv. indicating that Palm Springs consents to our continued representation of CVAG
and waives any future conflicts described in this letter so that a further waiver is
not needed.
If you have any questions, please do not hesitate to call.
Sincerely,
Gary W. Schons
for BEST BEST & KRIEGER LLP
AGREED AND ACCEPTED:
By:
Dated:
Enclosure
IL
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