HomeMy WebLinkAboutStaff Report 4.D 6/3/2013 Agenda/ Item/1i 44;
<cALtr,
\"n
av
2858 •
DATE: June 3,2013
TO: Honorable Mayor and Members of the City Council
FROM: John C. Brown,.City'Manage
SUBJECT: Resolution Accepting the Recommendations of the City Council Committee to
Establish an In-House City Attorney's Office, and Approving an At-Will
Agreement for Employment of the City Attorney, Authorizing the Mayor to
Execute Said Agreement.
RECOMMENDATION
It is recommended that the City Council:
1. Accept the recommendations of the City Council Committee,to establish an in-house City
Attorney's Office; and
2. Approve a resolutionnin substantially the same form as the attached At-Will Agreement
. for Employment of the:City Attorney and authorizing the,Mayonto execute said
agreement.
BACKGROUND':
The City Charter establishes the position of City Attorney, and allows that the position may be
filled by a City Employee,appointed'for that purpose or through an employment agreement if the
City Attorney is not an employee.
In 1994, the City entered,intotan employment agreement for City Attorney Services with Richard
Rudnansky. The Agreement was amended in 2001 to reflect Mr.:Rudnansky's changed status as
a shareholder with'the:firm Meyers, Nave, Riback, Silver, and Wilson(Meyers/Nave). That.
:amendment also adjusted the compensation paid to Mr.Rudnansky and to other members of the
firm and became the City's agreement for legal.services with Meyers/Nave. The'Agreement was
amended again in 2004 to-establish.billing rates that are still in effect, and in 2005 to designate
Eric Danly asPetaluma's City Attorney.
Since 2004, Meyers/Nave clients;throughout Sonoma County all granted rate adjustments.
Today, Petaluma's rates rare the lowest paid by any Meyers/Nave clients in the region. The firm
first raised the-:issue,of a Petaluma rate adjustment nearly four years ago, but deferred any action
in recognition of the City's,fihahcial condition.
Agenda Review:
City Attorney Finance Director I City-Man
In June, 2012 Meyers/Nave:requested.rateadjustinentsto compensate for inflation since 2004,
provide additional adjustments going,`forward,,and_bring Petaluma*into•line with rates charged to
other clients. The:.followingtable provides a comparison;of-Meyers/Nave's'existing rates, and
those requested in'June 2012.
Table 1. Proposed Rate Adjustments, by Matter
BILLING CURRENT RATE II,PROPOSED.RATE INCREASE INCREASE' .
CATEGOR_Y/Matter I
(Per'Hour) (Per Hour) (Dollars) (Percent)
Municipal Law 160 190 30 18.75%
Specialty,Law - Principal .195: 260 65 33.33%
Specialty Law:-Sr. Assoc. 195 220 25 12.82%
Specialty Law-Jr.Assoc: 175 200 25 14:29%
Cost Recovery 225 270 45 20.00%
Paralegal/law clerk 95 125 30 31.58%
Meyers/Nave categorizes the,work it does for the City into "matters". "Municipal Law" includes
general government legal work. "Specialty Law" includes litigation, mobile home rent control,
Redevelopment, eminent domain, labor and.eniployment,.telecommunications, environmental,
special revenuescand impact:fees,;enterprises, utilities, and internal services. "Cost Recovery"
includes work which is paid for by project applicants. The/following table provides a summary,
by Matter,of the "Fee" (hourly rates)portion of the City's legal costs in calendar year 2012.
Also billed were "costs" attendant to these fees that are not included in the following summary,
but added $83,215 to charges rfor.2012. "Specialty Law" matters are displayed by sub-category,
to better display'where'the City'slegalcosts are incurred. The majority of the City's costs are
incurred in the Specialty Law category. Litigation matters represent approximately half of the
2012 total.
Table 2. Legal Costs By Matter, 2012
MATTER;] I COST
Municipal Law $212,174
Specialty Law, Litigation $529,903
Specialty Law,Special Funds $61,265
Specialty Law, Enterprise
Funds $8,034
Specialty,Law, Utility Funds $19,876;
Cost Recovery $207,857
Annual Total $1,039409
2
it
•
DISCUSSION
A Committee consisting of the'Mayor.and Council Members,Albertson and Healy was formed
last summer to evaluate the Meyers/Nave proposal, to investigate and evaluate alternatives,to the
current service delivery model, and to recommend a rate adjustment or viable alternative(s)to
the full City Council_ Early meetings focused on evaluating the Meyers/Nave proposal,
,including its anticipated effect on budgets, and on opportunities for cost containment within the
contract. The Committee also sought_independent verification of some:of the comparisons
provided by Meyers/Nave in justification of the proposed rate adjustments. Provided by
Meyers/Nave, among other comparisons, was a summary ofthe,rates charged:to its other clients
in the region. The following table provides that comparison; all figures are the'hourly rates in
effect at that time:
Table 3. Rate Comparison between Meyers/Nave's;Regional Clients
MATTER Cloverdale Cotati* i Ft. Bragg Healdsburg Petaluma Windsor
Municipal Law $180 $275 $200 $200 $160x $205
Specialty
Law $230 $210-310 240/210 $230 195/175r $270
Cost,Recovery $270 $310 300/280 $280 t f$225f $320
Paralegal time $100 $100 $100 eve $125
* Cotati utilizes a'retainer-based system. Amounts represent per hour cost in
excess of retainer limits:.
The June 2012 Proposal
The proposal will increase the City's legal costs-on an hourly basis as•noted in Table 1. Costs •
can beicontained only by reducing the amonntof legal services used. The Committee discussed
the City's use of legal services and changes made during the past several years to reduce reliance
on the firm for support. Department access to`the=City Attorney is limited, through the City
Manager''s,Office; litigation•and•potential litigation matters are now being evaluated earlier in
the clairns`process by the City-Manager;.Risk Manager,the Attorney's Office, and involved.
departments; the City Attorney has standardized agreements and indemnification requirements
and has provided training to staff to reduce the Attorney's involvement in Public Record Act
request and document handling. While opportunity for improvement exists, many of
these steps-have achieved:much:oftheir cost savings potential. The Committee,also•discussed
opportunities,at•the'City Council level for reducing the need:for legal services. These included
reordering,.Open and Closed,sessions of Council meetings to reducethe time the Attorney is
present; handling,routine matters such as presentations: proclamations, Public and Council
comment without the,Attorney in attendance; and managing•agendas so some meetings would
not require Attorney coverage: Were the Committee recommending the Council's approval of
the rate adjustment proposal,at would also recommend;that all these steps be taken, as cost
containment measures.
3
As previously indicated; the Committee reviewed theanticipated effect•of the rate adjustment on
the City's budget. Thefollowing.table provides an estimate of thateffect.
Table 4. Estimated Effect of Proposed Rate Adjustment, Using 2012 Base
J{
MATTER 2012 Increase Projected 'Estimated
: Actual Factor Increase Cost
,
Municipal Law $212,174 18':75% $39,783 $251,957
Specialty Law, Litigation $529,903 24.32%, * $128;87.2 $658,775
Specialty Law, Special Funds $61,265 24.32%; * $14,900 $76,165
Specialty Law, Enterprise'Funds $8,034 24:32% * $1,954 $9,988
Specialty Law,.UtilityFunds $19,876 24.32%. * $4,834 $24,710
Cost Recovery $207,857 20:00% $44,571 $249,428
Total $1,039,109 $231,914 $1,271,023
* reflects the average"increase.between Junior Associate and Principal rates
The cost of legal services for.the City has been;an ongoing area of concern. Given the City's
financial position, recent history of budget reductions andlay-offs, scarcity of reserves, and
continuing lack of ability to fund programs at,optiinal levels,or"provide salary adjustments to
City employees, the Committee;did;not feel it is appropriate—now or in'the foreseeable future-
, to recommend the proposed rate adjustment to the Council for approval. The Committee sought,
in evaluating alternatives, an option that avoids an increase in rates or the cost of legal services
paid by the City.
Alternatives
The Committee considered:several,alternatives,.including:;modifying service delivery to
incorporate a partially retainer-based rate structture, moving to a hybrid model that relies on an
in-house attorney to reduce contractworkload and manage contract services; and an-in-house
tnodel. These are discussed in greater detail below.
The Committee also,discussed-.opening;up the contract'for City Attorney services to a
competitive process. This alternative was not given serious consideration because the City's
legal,service,needs are many, frequently complex, and occasionally sophisticated. It appears a
firm large enou g h to p rovi de the same de p th ofex p en ence,as'Me yers/Nave`would;be needed
and based on a narrow review of other cities that contract for legal services;:it appears Meyers/
Nave's rates are in line with those charged by other firms with similar,size and depth. The.
Committee was also concerned about continuity in a•transition:from one provider to another, in
terms of cost and loss of institutional knowledge. That concern was also a.consideration in all
the alternatives explored, and is addressed-in th'e.recommendation to maintain Mr. Danly in the
role of City Attorney.
•
4
Retainer
Some Meyers/Nave clients pay for legal services(on a aretainer-basis. "They pay-a set fee,
typically monthly, and receive;aguaranteed maximum level of"service for that amount. If that
maximum is exceeded, the hours;are charged at an hourly rate, usually at a premium. The
fee is not reduced if the maximum is not reached, nor are unused;hours carried forward to apply
in high demand months. The Committee wanted to explore a retainer model. They began with
the premise that Specialty Law,and Cost.`Recovery are not predictable and make setting a
• monthly maximum fon services inrhose=areas difficult. Because the City's General Law needs
are more predictable, the Committee asked-Meyers/Nave to provide a retainer proposal for only
that set of services. Meyers/Naveoffered.two options. Option I provided 90 hours of service
per month for $16,200. Option 2 provides more hours, 120, at a cost of$22,200 per month.
Meyers/Nave reviewed the number,of hours billed for General Law matters over a nearly two-
year period, and determined that average monthly use was 90 hours. During that same period,
ten (10) months exceeded 90 hours,wwith;halfof that number exceeding 120 hours. In the same
period, eleven(11) months required less than 90 hours,oflegal services.
Under Option 1, base hours are$180 per month; hours;in excess of 90 would be billed at $195
per hour. These rates represent an increase of$20 andi$35`per hour, respectively, over what is
currently charged for General Law matters. They are, however $10 and per hour,
respectively, less than the rate proposed in June 2012. Option 2 has an hourly rate of$185;
hours in excess of 120 would°be billed at $190!. This optionrrepresents a savings of$5 per hour
for base services, but is calculated atthe,same rate as the June 2012 proposal:for:hours in excess
of120:;per month. Neither of the options avoided a rate adjustment, a critical goal for the
Committee. They also both exposed the City to "over payment" much of the-time, particularly
Option 2, and billing for excess hours approximately half of the time The Committee
challenged Meyers/Nave to refine its proposal to providelall-the services the City might need
within one flat rate,the firm was:not able;to provide,a proposal that would do that to the
Committee's satisfaction. Duero,these misgivings; the Committee did not find the retainer
model an attractive alternative to the standard rate structure-for-General Law-inatters.
In-House/Contract Hybrid
This alternative focused'<on the feasibility of hiring an in-house.Attorney, who:would mainly be
responsible`for.General Law matters,:some Specialty Law based,on-that person's individual,
qualifications, and who would manage a scaled down contract for outside legal services. To help
control.the cost of outside counsel in the defense:of tort cases,this alternativerwould relyon the
"Defense Panel"concept.promoted.by our Risk Manager. The defense panel has-two
conipoiierits: a City team, earn-prised of the Risk'Manager,'City.Attorney, City Manager, and
other appropriate designees; and:a panel of defense-attorneys.
The team approach is.currentlybei_ng.used on amlimited basis, but would-be expanded'to evaluate
cases, establish litigation direction (in,concert with the¢City'Council), and review the
performance of panel attorneys. Until recently; Meyers/Nave has largely determined the
directiOn for defense strategy, particularly-for cases that are net being actively litigated.
5
Meyers/Nave has also evaluated the performance ofthe„attorneys assigned to the City's cases,
for the mostpart as'an internal matter.
With respect to panel members, they would"be selected to a list and called upon to defend
particular cases based on their litigation strengths, approach,;success rates, and.cost proposals.
The City team would evaluate the performance of these-attorneys,-and update the panel list as
needed. As stated, the City is:moving in,this direction already, and implementing the approach is
recommended by the Council Committee, even ifthe hybrid alternative isrnot.
In that regard, the hybrid model is not recommended. The in-houserattorney would need to be a
generalist and a manager, and while that person might specialize in some field of the law, it is
highly unlikely that they could specialize in enough areas of the law to effectively reduce the
City's reliance oncontract counsel. The most likely scenario, to avoid.the transition conceits
previously discussed, would be to continue<to contract with Meyers/Nave for most of the City's
Litigation, Specialty Law aril Cost recovery needs. As,seen in Table 2, these areas are where the
majority of the City's legal costs occur. This alternative would net avoid the rate:adjustments
proposed for these areas, and would'.not be expected to result in cost savings or avoidance.
In House Model
This alternative would bring the:majority of the City's legal services in-house, and anticipates
hiring a fully.staffed City-Attorney's office. This approach is used in Santa Rosa, which
addresses the majority of its,legal needs with an'eleven-person office:comprised of seven (7)
attorneys, and four(4) support staff. Estimates for Petaluma are based on a four-person office,
including the City Attorney, two (2) senior level attorneys, and;a Legal Assistant. This level of
staffing, based on past workloads and'hours billed by Meyers/Nave is believed sufficient to meet
most of the City's legal needs <although some services.would.still need to be performed by
outside counsel. As with theprevious alternative, the City Attorney would provide.General Law
support and some Specialty Law. He would also manage the office and outside counsel. The
defense panel approach would„be used-to help‘manage outside_counsel, and contain the costs of
tort defense. Senior Attorneys would primarily handle Specialty-Law and Cost Recovery
matters, and depending on their skills, some Litigation. A-Legal Assistant would provide
attorney support and handle routine matters. Pursuant to the City.Charter, the City Attorney
would report directly to the City Council, as do the City Clerk and City•Manager. All-other staff
in the City Attorney's office will',be`City employees who report through their department and
ultimately to the Cit •Manager.
Attachment 2 provides an estimated cost for this alternative. The first-year cost of the office,
including one time charges associated with recruitment, equipment, space remodeling and
furnishings,,is'estimated at approximately$972,000. The ongoing cost of the office, excluding
one-time-charges, is approximately$898;000. This'does not-include-any cost-adjustments that
may occur as the;result of employee salary step advancements, or increases in the'costs of
benefits that mayoccur.
Salary assumptions are based on the following;iThe City Attorney's position is costed at the top
end of Petalumas Department Head scale, consistentviith1hat of the Chief of This
6
salary is in linewith that of the Santa Rosa,City Attorney; and is within the range of salaries of
other in-house City Attorneys in the region that were reviewed as part'of this exercise. Legal
staff estimates are based on Santa Rosa'ssalary`schedules benefits are calculated as a
percentage of salary That is.consistentwith that of non-Safety,senior managers in Petaluma.
Actual costs will be determined as these positions are classified within the framework of the
City's,salary structure, but appear realistic'whenscompared to the salaries paid to other Petaluma
positions requiring similar levels of technical competency.
Services and supplies estimates are,based on a Variety ofassumptions, Were reviewed with the
City Attorney, and appear tobe+sufficient for an office,of the size that is contemplated.. The
primary expense in this category is for outside counsel. As noted, there will always be some
need for outside counsel. In another evaluation staff reviewed, that compared in-house to
contract attorney services,,the estimate for these ongoing costs ranged from $50,000 to $150,000
annually. This was based'on-the complexity of cases rather than on the size of the.organization.
Staff selected the mid-point, $1'00,000 for this estimate, based on its review of that information.
The actual amount needed will depend on the 'skill sets of the- Senior Attorneys, workload,
complexity of issues or cases that must be,litigated,_and the success of the defense panel
approach.
The in-house model is expected to generate significantsayings; compared'to costs pursuant to
the current rate structure, or to,the rate:structure proposed-in June 2012, In'•that regard, this
alternative best achieves the Committee's goals to avoid a rate increase and to contain, or reduce,
legal costs. Savings will be discussed in the Financial Impact section.
There are at least two"drawbacks,to this models start-up is not immediate; there will be a
transition of workload during that period from Meyers/Nave while in-house staff is being
recruited'and hired, and.the Citywill remain reliantorrthe,firm during that period and subject to
rates that are at least those in the June 2012 proposal, Nevertheless, the Committee believes the
benefits of this alternative outweigh the-drawbacks, andrecornmends it to the Council, to be
implemented effective with.the'2b13/14•fiscal year.
The City Attorney
Committee members;and:the;City Council as a whole have;high'regard for EricDanly. Mr.
Danly has'proven himself a valuablelassetto the City since 2005. He provides sound legal
advice, a-creative:approach'to problem-solving; strong,support.to the team concept, and exhibits
strong intellect, and exceptional ethics. For these reasons;!the,Committee believes it is
appropriate to offer Mr. Danly theopportunity`to assume;the;role of in-house City Attorney
pursuant to an individual employment.agreement. In addition to'the attributes just mentioned,
Mr. Danly manages,MeyerslNave's SantaRosa office„and,has the experience necessary to
manage an office for Petaluma: As previously discussed; the Committee has serious concerns
about asmooth transition and loss of institutional memory. Retaining Mr. Danly as City
Attorney alleviates these,concerns;:hisrelationship with-Meyers/Nave should make for a
smoother transition; and his knowledge of the City for nearly'eight years ensures that
institutional memory will not be lost.
7
The'Committee reviewed its:recommendations'with.the City Council, and'Was given
authorization to negotiatean employment agreement with Mr. Danly, The deal points of that
agreement were negotiated to the satisfaction of:both parties. A.draft of the.documentwhich'
incorporates those deal points is;attached for the Council's,consideration and approval. Due to
the conflict that would occur if Mr.,Danly were to advise the Council on his contract,'the•
document needs to be reviewed by independent outside counsel. Arrangements,have been made
for that review, and should be.completed well before the anticipated start-date of July 1„2013.
As the document,is largely.based on the City Manager's employment•agreement, which was
recently subject to legal review and found to be in order, itis not expected that the final
agreement will differ in any material aspects from the attached document..
FINANCIAL IMPACTS
•
It is estimated that an City•Attorney's•Office-willl cost$972,170 to establish. Adjusted
to remove non-recurring costs, the Office is estimated.to cost $898,170. Both of these estimates
are less than the City's.actua12012 legal services costs of,$1;039,108, and both of these
estimates are significantly less thamthe estimated costs of legal services of$1,271,023 associated
with June 2012 proposal. Savings;,.depending;on the scenario, range from a low
of approximately$67;000 to a high of approximately $373000 and are displayed in the last six
rows of Attachment 2.
ATTACHMENTS
1. Resolution'
2. Projected Costs for an In-House City Attorney's Office
f
8
Ii
ATTACHMENT 1
Resolution No.2013- N.C.S.
of the City of Petaluma, California
RESOLUTION ACCEPTING THE RECOMMENDATIONS OF THE„CITY COUNCIL
COMMITTEE TO ESTABLISH.AN IN-HOUSE CITYATTORNEY''S OFFICE, AND
APPROVING,ANAT-WILL AGREEMEN,T'FOREMPLOYMENT OF THE CITY
ATTORNEY, AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT
WHEREAS, a City Council Committee was formed to evaluate City Attorney services
for the City of Petaluma; and
WHEREAS,the Coniniittee evaluated,a-number of alternatives for securing legal
services for the City, including,contract and in=house models;Nand
WHEREAS,key to the Committee's evaluation were objectives to secure high-quality
legal services, reduce, contain, or avoid legal costs, and to maintain institutional knowledge
through any transition betweemservice<delivery models; and
WHEREAS, an in-house model.employing;Eric Danly as the City Attorney was the only
alternative that achieved all these objectives; and
WHEREAS, the City Council has accepted the Committee's recommendation to
establish an in-house Office of the City Attorney, employing Eric Danly as the City Attorney;
and
WHEREAS, the City desires to employ the services of City Attorney; and
WHEREAS, Eric Danly desiresto accept employment as'the City Attorney of the City
of Petaluma; and
WHEREAS,the Committee and Eric Danly have negotiated,and the City Council and
Eric Danly agree to,the terms;of an At-Will Agreement for Employment of the City Attorney
attached.as Exhibit.A.
NOW, THEREFORE, BE IT RESOLVED that the City Council ofthe City of
Petaluma hereby approves an At-Will Agreement for Employmentof the City Attorney, attached
as Exhibit A and'incorporated.herein by reference.
BE IT FURTHER RESOLVED'that the City Council of the City of Petaluma hereby
authorizes the Mayor to execute said Agreement, or anlAgreement that is substantially the same
as the attached Exhibit A.
9
EXHIBIT A
AT-WILL AGREEMENT'FOR EMPLOYMENT
OF CITY ATTORNEY
Background
The Petaluma City Council appointed Eric Danly,as'City Attorney of the City of
Petaluma by Resolution no. 2005-205'adopte&December,5 2005: By the same resolution, the
City Council approved the,fourth.amendment to an agreement for legal services originally
executed August 29, 1994 with Meyers, Nave,tRiback, Silver and Wilson. Eric Danly has served
as the Petaluma City Attorneyas an employee of Meyers,Nave, Riback, Silver and Wilson,
pursuant to the contract between the'City:of Petaluina'and Meyers, Nave, Riback, Silver and
Wilson since December 5, 2005.
To reduce overall legal service costs of the City theTetaluma, the City Council has
decided to provide for the City'-slegalservice needs primarily through_attorneysremployed by the
City rather than through legal service contracts. The City Council has invited Eric Danly to
continue serving as the Petaluma City Attorney-pursuant to,:an employment contract with the
City and to establish an in=housexlegal services department'for City.
Eric Danly desires to:continue servingstas the Petaluma City Attorney and to establish an
in-house legal services department forthe City in accordance wjththe/City Council's direction.
Agreement
This Agreement (the"`Agreement"'),is mad"e'bythe;City of Petaluma, ("the CITY"), a
California charter city,:and Eric W. Danly ("ERICDANLY"). The CITY and ERIC DANLY are
referred to collectively in this Agreement as "the Parties:"' This Agreement will be effective July
2013 (the "Effective Date"). The Parties agree as follows:
1. Appointment ofiCity Attorney:
The CITY acknowledges the,continuing appointment of ERIC DANLY as City Attorney
of the CITY. Commencing on the;Effective:Date, ERIC DANLY's.appointment as City
Attorney will be pursuant to this;Agreement.
2. Term:
The term of this Agreement shall,tommence,on;the.Effective Date and expire upon
termination`in accordance with Section22
3. At-Will Employment:
ERIC DANLY willbean,at-will'.employee_of the:CI-TY in accordance with California
Labor Code Section 2922,and will serve at the pleasure of the City Council The CITY's
Personnel Rules, Policies, Procedures, Ordinances and Resolutions will not apply to
�0
ERIC DANLY,:and,nothing inthis Agreement:confers upon ERICDANLY any right to
or expectation of any right,or property interest'in continued employment by the CITY. If
the CITY terminates ERIC DANLY's employment,whether with or without cause, ERIC
DANLY will;be entitled to only that due process that provided by CITY Charter or
ordinance, or this Agreement. Nothing"in this Agreement will limit the right of ERIC
DANLY to resign at any time from his position with the CITY subject to requirements in
Section 22 of this Agreement.
4. City Attorney Duties and Responsibilities:
a. ERIC DANLY will continue performing the duties of City Attorney of the CITY
pursuant to this Agreement commencing on the Effective Date.
b. ERIC DANLY will serve as theiCity Attorneyofthe,City of Petaluma, and will
be vested with the powers, duties and responsibilities and perform-the functions
and duties specified under the laws of the State of California, the Petaluma City
Charter and the Petaluma Municipal Code, and the ordinances,and resolutions of
the CITY and other'applicable.law, andisuch other duties and functions as the
City Council may from time to time assign.
c. ERIC DANLY agrees to remain in the exclusive employ, of the CITY, and to
devote his full."productive time and attention..tothe CITY's business during the
term of this Agreement.. However, ERIC DANLY may seek,,and the City
Council may give, its written permission for ERIC DANLY to occasionally teach
or write during ERIC DANLY's time off.
d. The CITY recognizes that ERIC`DANLY is expected to devote necessary time
outside normal office;hours to business of the CITY. ERIC DANLY will be
allowed to take reasonable time off for such work, as ERIC DANLY. deems
appropriate, during normal office hours: As an exempt employee, ERIC DANLY
will not receive;overtime or extra compensation for work performed outside
normal business hours. However, ERIC DANLY will receive administrative
leave in accordance with Section 9, subdivision (c).
5. Compensation:
a. The CITY agrees-to pay ERIC DANLY an annual base salaryof$185,500:00,
payable in installments at the same time that the other management-employees of
the CITY are paid.
b. The CITY may increase ERIC DANLY's compensation in such amounts and to
such extent as the City Council=may determine is desirable on the basis of any
annual salary review of ERIC DANLY:
6. Benefits:
ERIC DANLY will be entitled to the benefits specified in Exhibit 1 which is attached to
and made a part of this Agreement.
7. Disability:
If ERIC DANLY is permanently disabled or otherwise unable to perform his duties
because of sickness, accident, injury,J ry, mentalincapactty�or health for a period of ninety
(90) successive days beyond any accrued sick leave, the CITY will have the option to
terminate this Agreement. Upon termination pursuant to this section, the CITY`will have
no obligation to pay severance pursuant to Section 23:
8. Use of Vehicle:
ERIC DANLY may use vehicle to conduct CITY business, in which
case CITY will reimbur`se.ERIC DANLY for actual-business'travel at the maximum
amount per mile then allowed by the Internal Revenue Service. ERIC DANLY may also
use a CITY-owned vehicle to conduct CITY business;if one is available.
9. Vacation, Sick,Administrative and Holiday Leave:
a. ERIC DANLY will accrue overtime, and have credited to ERIC DANLY's
personal account, vacation at the rate of ten (10)hours per month up to a
maximum of eleven and one-third (11-1/3) hours per month,;in accordance with
Exhibit 1. Upon the Effective Date,ERIC DANLY'will accrue vacation at the
rate specified in Exhibit 1 that would apply to an employee employed by the City
since December 5, 2005. Upon the Effective Date, ERIC DANLY's personal
accountFwill be credited with 120 hours of vacation balance, equal to a full year's
accrual. ERIC DANLY will accrue no further vacation balance until 1 year has
elapsed following the Effective Date: Upon 1 year elapsing from the Effective
Date ERIC DANLY will accrue'vacation balance in accordance with Exhibit lat
the rate specified in Exhibit 1 that would apply to an employee employed by the
City since December 5, 2005.
b. Sick leave shalliaccrue`and be credited to ERIC`D'ANLY'Spersonal account in
accordance with'Exhibit1.
c. Administrative.leave shall be credited to ERIC DANLY's account at the rate.of
12 days per year-. Each year during the-term of-this Agreement ERIC DANLY
may elect to receive a-payment equal to ERIC DANLY's unused administrative
leave balance in that year of up to forty(40) hours. ERIC;DANLY may'carry
forward up to forty (40) hours of unused'.administrative leave into the next fiscal
year: ERIC DANLY rimay not niaintam a balance ofmore than 136 hours of
administrative leave. Carry-forward administrative leave may only betaken'as
paid time off, has no cash value, and shall not be included in the totals subject to
paymentuunder Section 22-, subdivision (a), paragraph (3). -
d. Holidays will be credited to ERIC DANLY's account in accordance with Exhibit
1.
1
10. Disability, Health, and Life Insurance:
a. The CITY'agrees:tot purchase and.to;pay during the term of this Agreement,
premiums on.term life'insurance policies,equal in,amount to one and'one-half;(1-
1/2) times the amount of the annual base salary of ERIC DANLY in accordance
with Section 5.
b. The CITY agrees toiprovide and to pay Te CITY's,share of premiums for
medical, dental,,:and vision insurance for ERIC DANLY and his dependents in
accordance with Exhibitl. ERIC DANLY will have the right to select medical,
dental and vision coverage from the plan options specified-in.Exhibitl.
c. The CITY agrees to have in force and make required'premium payments for
ERIC DANLY's participation in theCITY'scurrent group disability plan.
11. Retirement:
CITY agrees to enroll,ERIC DANLY in the California Public Retirement'System,
(PERS). CITTY agrees make all the appropriate contributions on ERIC DANLY's
behalf, for the PERS employer share required, and to:contributeoon behalf of ERIC
DANLY seven percent,(7%) of ERIC DANLY's,base salary in accordance with Section
5 of this Agreement, as amended from time to time,into the City of Petaluma 401 (A)
Government Money Purchase Plan and
12. Dues and Subscriptions:
Subject to budgetary approval by the CITY, theCITY agrees°to pay for professional dues
and subscriptions of ERIC DANLY necessary for ERIC DANLY's continuation and full
participation in national, regional, state and local associations=and organizations
necessary and desirable for'ERIC`DANLY's•continuedprofessional participation, growth
and advancement and for the good of the CITY.
13. Professional Development:
a. Subject to budgetary approval by CITY,.the„CITY agrees to pay, for, to,theextent
allowed by law, travel.,and subsistence expenses ofERICDANLY for official
travel,.meetings and eventsfas necessary and appropriate to continue the
professional development of ERIC DANLY and to adequately represent CITY at
gatheringstsich.as the IMLA annual conference, California League of Cities
meetings and conferences, and such other national, regional, state and local
governmental groups and committees in which ERIC DANLY may participate as
a representative'of the CITY.
b. Subject to budgetary approval by the CITY,the:CITY agrees to pay for, to the
extentallowedby.law, travel and subsistence expenses•of ERIC DANLY for short
courses, institutes and seminars that are necessary for ERIC DANLY's
professional development and for the gobdof the CITY.
14. General Expenses:
The CITY recognizes:that certain expenses of a non-personal nature may be incurred by
ERIC DANLY for the benefit`of the CITY in the coursetof performance of ERIC
DANLY's duties and hereby agrees to reimburse or to general expenses, and
CITY's Finance-Director is hereby authorized to disburse;such monies upon-receipt,of
duly executed expenses of petty cash vouchers,receipts, statements.or personal affidavits
to the extent allowed:by'law;.subject to;budgetary approval.
15. Bonding:
The CITY will bear the full cost of any fidelityior other bonds required of ERIC DANLY
as City Attorney of the CITY under any law or ordinance.
16. Continuity:
In the event of a change of the elected representation Of the City Council, there will be a
ninety(90) day period commencing upon the seating of new City Council members when
the City Council may take no action regarding the provisions of this.Agreement, unless
both Parties agree or the action is for cause in accordance with.Section 22, subdivision
(e), paragraph (1).
17. Attorney Fees:
In the event of any suit'or'action by either Party under this Agreement, the prevailing
party in the suit or action will be entitled to reasonable attorney fees and costs to be fixed
by the court.
18. Other Terms and Conditions.of Employment:
The CITY, in consultation with ERIC DANLY, may fix any other terms,and conditions
of employment, as it may determine from time to time,,relating;to the performance of
ERIC DANLY's duties'as City Attorney,provided,such.terms and conditions are not
inconsistent.with or in,conflict,with•theterms ofthisAgreement, the Petaluma City
Charter, the Petaluma Municipal Code Or any other'applicable'state or federal law.
19. Indemnification:
a. The CITY will:defend, hold harmless and indemnify ERIC.DANLY against any
tort,,civil rights, personnel, discrimination, or professional liability claim or
demand or other legal action; whether:groundless or otherwise,+arising out of an
allegedact=or omission occurring in=the performance.of ERIC DANLY's duties as
City Attorney in accordance with the provisions of California Government Code
Section 825 and;following,'as amended from timeto time, and provide a defense
in accordance with California Government Code:Section 995 and following.
Notwithstanding anything to theicontrary in this Agreement, the CITY reserves
the right to refuse to provide a defense of ERICDANLY for the reasons set forth
in California Government Code Section 995.2 or other applicable provisions of
law.
b. Following termination of this Agreement for;anyreason, the CITY agrees to pay
ERIC DANLY reasonable consulting fees and'travel expenses when ERIC
DANLY serves,as a witness, advisor and/or consultant to the CITY regarding
pending litigation.
20. Notices:
Notices pursuant to this,Agreement must be in writing given by deposit in the custody of
the United:States Postal Service, first class postage;prepaid, addressed as follows:
a. CITY:
Mayor and City Council
11 English Street
Petaluma CA 94952
b. ERIC DANLY:
Eric W. Darily
City Attorney
11 English Street
Petaluma CA 94952
Alternatively, notices required pursuantto this,Agreement maybe personally served in
the same manneras is applicable to civil judicial process. Notice will be deemed given as
of the date of personal,service or as of the date of deposit of such written notice, postage
prepaid, with the United States Postal Service.
21. Performance Evaluations:
a. The City Council will review and evaluate ERIC DANLY's'performance,as City
Attorney atrleast once annually in advance of the adoption of the annual operating
budget. The review and,evaluation will-be in accordance with criteria developed
jointlybyCITY and ERIC DANLY. The critetia'may be amended as'the City
Council may from time to time determine,and`in consultation with ERIC
DANLY The City Council will'conduct its evaluation of ERIC DANLY in closed
session. The City Council will provide ERIC DANLY with the written evaluation
and provide an adequate opportunityfor'ERICDANLY to discuss the evaluation
with the City Council.
b. In recognition of ERIC DANLY's accomplishments and objectives, and
satisfactory performance _a;potential annual merit increase may be negotiated
following completion of the annual performance review and evaluation.
c. Annually, the,City Council and ERIC DANLY will define and reduce to writing
such,goals and performance objectivesas they determine necessary for the proper
operation of the CITY and the attainment of the;City Council's policy objectives,
and will further establish a-relative-priority,among the various goals and
objectives. The annual goals and objectives will generally be attainable within the
time limitations as specified in the annual operating and capital budgets and
appropriations provided.
d. In effecting this section, the City Counciland:ERIC DANLY mutually agree to
abide by the proyisions'of applicable law.
e. ERIC DANLY'will:coordinate with the:City Manager to timely cause to be placed
on the CityCouncihagenda each year a closed session for purpose of ERIC
DANLY's performance evaluation.
22. Termination of Employment:
a. Termination by Either Party
1. The Parties may terminate this Agreement with or without cause by giving
notice in accordance with this section;andhsection 20 of this Agreement.
2. During the period following notice of termination-by either Party and until
the termination:becomes effective,;all'therights�and''obligations of the
Parties,under this Agreement will remain in effect.
3. Upon,separation from CITY employment for any reason, ERIC DANLY
will be,,paid-for all earned, accrued, and unused vacation, administrative
leave, and floating holidays, without litnit.
b. Termination By ERIC'DANLY without Cause:
1. For purposes,of this Agreement, termination by Eric panty without cause
will be°deemed`to occur when ERICD'ANLY gives the City Council
written notice of termination of this Agreement-without cause as defined
in this subdivision.
2. ERIC DANLY will',give,ithe CITY a minimum of sixty(60),days written
notice in,adVance ofterriiinationwithoiut cause, unless:the Parties agree
otherwise.
3. For,purposes of this Agreement,:termination by ERIC DANLY without
cause means termination in the absence of an uncured Material breach by
CITY of this Agreementras defined in subdivision (c) of this section.
c. Termination by ERIC DANLY with'Cause .
1. For purposes of this Agreement,Ltermination.by ERIC DANLY with cause
will be deemed to occur when ERIC,DANLY gives the City Council
written.notice of termination of this Agreementwith causeas defined in
this subdivision.
2. ERIC DANLY must declare;material,breach<of this Agreement in writing
to the CITY specifying the basis for the•declaration, and the CITY will
have thirty(30)1/4days from receipt of notice to'cure the declared material
breach:
3. For purposes,ofthis Agreement, termination-by'ERIC DANLY with cause.
means termination for CITY's materialibreach?of this Agreement declared
by ERIC DANLY and not cured by theCITY imaccordance with this
subdivision.
d. Termination,by CITY without Cause.
For the purposes ofthis Agreement, termination-by CITY without cause will be
deemed to occur"when:
1. A majorityof the City Council votesyto,terminate ERIC"DANLY at'a duly
authorized public meeting without;cause, as defined,in subdivision (e),
paragraph(1)of this Section.
2. The City Council, the:citizens of the;CITY„or the California Legislature
acts to amend any provisions:of'the City Charter, CITY codes, or other
legislation'pertaining.to the role, powers, duties,iauthority,or
responsibilities;of the City Attorney in a way that substantially changes
the.form,of CITY government or the role, powers, duties, authority or
responsibilities,ofthe City Attorney. ERIC DANLY.will have the right to
declare that such amendments in the absence,of cause as defined in
subdivision (e), paragraph (I)of this Sectionconstitute termination
without cause.
3. The City Council reduces the base salary,.compensationor any other
financial benefit of ERIC DANLY; ERIC will'have the,right to
declare that such reduction in the absence of cause as defined.in
subdivision (e), paragraph (1) of this Section=constitutes termination
without cause.
The.CITY will give ERIC DANLY a minimum of sixty (60)idays written notices in
advance ofierininationwithout:cause in,accordancewith this subdivision unless the
Parties agree"otherwise.
e. Termination by CITY for Cause;
1. For purposes of this Agreement, cause for temiination by CITY means:
A. Willful and repeated failure:to,perform the:duties of City Attorney
or other material breach of this Agreement declared in writing by
CITY by notice inv accordance'with section 20 and not cured within
thirty days ofreceipt of notice=of the declared material breach;
B. Conviction of ERIC,DANLY for an employment related"criminal
act;
C. Conviction of ERIC'DANLYTora felony; or
D. A.finding,bya-court,jury,,State or Federal Attorney General, the
Fair Political.Practices Commission, or any successor agency,that
ERIC DANLY engaged in intentional or negligent misconduct in
relation to the performance of ERIC DANLY's duties as City
Attorney.
2. Prior to terminating thisAgreementfor cause, the CITY will give ERIC
DANLY at least ten (10) days prior written notice of the charges or other
alleged.cause for;termiriation. Withifithe ten-day notice period, but not
earlier than five days after the notice has been given,the City Council will
meet with ERIC DANLY in'closed session and give,,ERIC DANLY an
opportunity to address the City Council regarding the alleged cause-for
• termination. ERIC DANLY may also-choose to have complaints or
charges brought against him heard:in open session in accordance with
California,Government Code Section 54957, subdivision (b),paragraph 2.
After hearing.ERIC DANLY's response,to.the+alleged cause for
termination, the City Council will decide whether to terminate this
Agreement•and inform ERIC DANLY in!writing;of its decision.
3. ERIC DANLY will not be entitled to severance.pursuantto Section 23 of
this Arèethedt upon termination by CITY for cause inaccordance with
this subdivision.
23. Severance Pay:
a: If CITY terminates this Agreement,during its term without cause as defined in Section
22, subdivision,(e), then ERIC DANLY will be entitled'to a severance payment equal to
seven:(7)-months of base salar`yinaccoidance With Section S,atthe rate in.effect at the
time of termination, plus.CITY'a share of the cost;of continuing health, dental, and vision
insurance for ERIC DANLY and all dependents as provided in,Section 10, subdivision
(b) for seven (7) months: At ERIC DANLY's election, and pursuant=to:ERIC DANLY's
written instructions atahe-tiirie of termination,severance pay shall be paid either in a
lump sum•cash payment within thirty (30) days of the date of termination, or in equal
monthly payments. Should ERIC DANLY electto'receive severance pay in equal
payments, the number of such monthlypayments will not exceed seven(7).
b. All payments required under`subdivision (a):of'this Section are subject to and shall be
interpreted to comply with the limitations set forth in California Government Code
Sections 53260 and 5326.1. The,CITY's share of the cost of Health, Dental and Vision
benefits shall continue for the same duration time;as covered in the settlement or until
ERIC DANLY finds other.employment, whichever occurs first.
c. If CITY terminates ERIC DANLY for,cause in accordance with Section 22, subdivision
(e),paragraph (1), he will,not be entitled.to aseverance'payment.
24. Reimbursement Required for Conviction'for Crime Involving,Abuse,of Office:
a. In accordance with California Government Code Sections 53243, 53243.1, and
53243.2,1f if ERIC.DANLY is convicted,of a crime involving an abuse of his office
or position, all of the following will apply:
I. If ERIC DANLY is provided with paid leave salary pending an
investigation, ERIC DANLY must fully reimburse the CITY any salary
provided for that purpose.
2. If the CITY pays:for.the`legal criminal defense of ERIC DANLY, ERIC
DANLY must.fully reimburse CITY any funds•provided for that purpose.
3. If this Agreement is terminated,any cash settlement related to the
termination that ERIC DANLY may receive from the CITY must be fully
reimbursed to■CITY, or,rif a.cash settlement related to termination of this
Agreement hasi of yet been paid, the CITYis'excused from paying the
cash settlement.
b. For the;purposes:of this section;•abuse of office or position means either:
1. an abuse of public authority, includingbut not limited to, waste, fraud,
and.violation of the`law-..under color of authority;,or
2. a crime4gainst;public justice, including, but not limited to, a crime
described in Title 7 (commencing with'Section.92);of Part '1 of the
California Penal Code:
25. Miscellaneous:.
a. This Agreement reflects the entire agreement between the Parties_This
Agreement may not be modified,except by writtemagreement executed by both
Parties.
b. If any provision, or any portion thereof,�contained in this Agreement is held
unconstitutional, invalid or unenforceable,the remainder of this Agreement,or
portion thereof; will be deemed-severable,will notbe,.affected and will remain in
effect.
c. This Agreement will be governed by'the laws of the State of California.
d. The Parties agree that=any-ambiguity in this Agreement:will not be construed or
interpreted again st, or in favor of, either;Party.
•
e. ThisAgreement will bindand inure.to:the"benefit_of the successors, heirs and
assigns of the_Parties.
ERIC DANLY CITY
By By
Eric W. Danly; City,Attorney David Glass, Mayor
DATED: DATED:
ATTEST:
Claire Cooper, City Clerk
APPROVED AS TO FORM:
Special Counsel
^n
Projected Costs for an In-Mouse City Attorney's Office ATTACHMENT 2
Estimated Estimated TOTAL' TOTAL I
Cost Item , Salary Benefits Sal/Ben Other
Salaries and Benefits
City Attorney $186,000 • $59;520 $245,520
Senior Attorney $144,780 $46,330 $191,110
SeniorAttorney $144,780 $46;330 $191,110
Legal Assistant $58,584 $18 747 $77,331
S and B Subtotal $534,144 $170;926 $705,070
Recurring One Time
_ Costs Costs
Services and Supplies
Prof. Svcs. -specialty law $100;000
Office Supplies $4,500
Operationaf:Supplies $2;000
Dues/Memberships ;$13;000
Recruitment $30,000
Conferences and Training $7;500
Meetings $600
Print/Copy Services $2,1,500
S and S Subtotal ;$130;100 $30,000
Indirect/IGS
Indirect Costs $42;000
IGS-IT $14,000
General Services $2,000
Liability $5,000
Indirect/IGS Subtotal $63,000
Capital
IT start-up $19;000
Space remodel/furnishings $25;000'
'Total Capital $44;000,
Total,All Columns $534,144 $170;926 $193400 $74,000'
TOTAL Recurring and one Time $972,170
Difference,.2012;Actual'($1,039,108) -$66,938
Difference, Post Increase Est: ($1,271,023) -$298;853
TOTAL Recurring only $898,170
Difference,2012 Actual ($1,039,108) -$140,938
Difference, Post Increase Est. ($1,271,023) -$372,853