As I discussed yesterday, the City Council considered make an additional appropriation to pay for already incurred outside counsel bills.  I watched the proceedings on the City’s meeting portal today.  Below is a summary:

    City Attorney James Penman stated that there was a 60 percent increase in lawsuits over the last two years. As indicated in the staff report, City Attorney Penman said 40 of 124 cases outside counsel, 84 cases were handled in-house by Deputy City Attorneys. Five of those cases [from the agenda: Maria Mejia, Salvador Melgoza, and Guadalupe Melgoza v. City of San Bernardino, et al. – United States District Court, Case No. EDCV 11-00452 VAP; Andrea Orona v. City of San Bernardino – San Bernardino Superior Court, Case No. CIVDS 1008022; San Bernardino County Transportation Commission v. West Colony Community Association – San Bernardino Superior Court, Case No. CIVDS 1004025; Joe Taylor v. City of San Bernardino – San Bernardino Superior Court, Case No. CIVDS 1100841; and Wells Fargo Bank, National Association v. Samer Kodeih, et al – San Bernardino Superior Court, Case No. CIVDS 1109915.] were discussed in closed session involving “young” Deputy City Attorneys.  Those cases would  have cost much more if farmed out. If the bills for outside counsel are not paid, the law firms could withdraw and sue for damages.  City Attorney Penman said, most notably, that it “clear the money is there” and “the election is over it’s time to move on and do the City’s business.”

    The floor was opened to discussion.  Council member McCammack produced a spreadsheet which was not visible on my screen.  She said that she was “shocked by the numbers.”  She said that the City Manager’s budget increased by 63 percent, and nine city departments had increases in their budgets.  She reiterated an earlier discussion point that “doesn’t make sense to reduce budgets of the departments that can create revenues.”  Council member McCammack said that the City should use the City’s liability reserves, because  “if City Attorney budget not restored . . . that $3 million [in the reserves] won’t be enough.”

    City Manager McNeely said that the nature of the increase in the City Manager’s Office is moving CDBG into the office, and that the creation of the call center moved existing employees to the City Manager, and there was other reorganization.

    Mayor Morris interjected that this item (paying outside counsel) was “not an overview or recalibration of the entire City Budget.”

    Council member Tobin Brinker asked  if City Manager McNeely had a recommendation.  City Manager McNeely’s response was not entirely into the microphone but he said  that he had a concern on his part that these would be brought forward at every council meeting, and recommend, if there is a need to make a correction, do it once.  His concern is the ability to handle with the reserve fund only having closer to $2 million dollars.  City Manager McNeely said that what prompted this was a memo from the finance department that the City Attorney was going over his budget.  When pressed by Tobin Brinker, the Manager said that he was not recommending approval, but that the Council had the power to make policy.

    Council member Virginia Marquez said that if the money will come from $2 million dollar reserve, that  doesn’t leave much in reserve.  City Manager McNeely chipped in to say that  Mr. Penman also alluded to another fund with $500,000 that may be allocated, but that because of other contingencies a 1.3 million dollar reserve fund balance on June 30, 2012 was projected.  City Manager McNeely said that there was already a $760,000 deficit this fiscal year.

    Council member Jenkins said that outside counsel contracts were approved by Council,  and still within the budget caps within the contracts.  Council member Jenkins declared  “something is wrong with the system” because the previous item on the agenda was just the opposite.

    Council member Rikke Van Johnson, said this was asking for more money, and that he was not supporting the item.

    Wendy McCammack revised her figures and  removed CDBG expenditures and revenues from the City Manager’s budget, and said the Manager’s budget was still up by 17 percent,  She said that the decreases have all been in departments that can create revenues.  “3 million won’t be able to cover the judgments.”

    Council member Tobin Brinker said that Council was having the debate for over year, the real debate is whose budget it is coming out of, outside counsel will be paid.  The real debate is  which fund does it come out of, and that’s the sticking point.  He said he needs to see changes in the City Attorney’s Office, its budget grows, and that he is opposed to this agenda item.  He kicked the can down the road by saying that the City Attorney can work with his replacement (John Valdivia), and that he (Tobin Brinker) was going to oppose this effort.

    Council member Jenkins asked the City Attorney if he had any problem with using the General Government Fund.  City Attorney Penman said that the source of the money was up to the Council, but that the City has six jury trials set for June 30, 2011.

    City Attorney Penman told Council member that the book (budget figures) released by the City Manager showed that the City Attorney’s Office did cut 18 percent, including a position cut and made other cuts.  The book also showed that there were increases in other departments. The City Attorney said that his department was not alone, his was not the only department out there, he was not bluffing, and that bad things will happen.  “Attorneys will start withdrawing, and they will start suing and we will lose.”

    Council member Jenkins made a motion after some confusion about whether Council member Johnson had made a motion.  The motion was to take $140,088.93  from the General Government Professional Contractual Non-Departmental Fund with the remainder Litigation-Outside Counsel budget.

    There was a speaker.  Then the Council voted: Marquez, Brinker, Shorett Johnson No; Jenkins, Kelley, McCammack yes. Council member  McCammack set a substitute motion to deduct the amount from 2012-2013 FY City Attorney  budget.  That too was defeated by the exact same vote.  City Attorney Penman, before the vote, reiterated that the lawyers will withdraw, the City will default or lose lawsuits, and  the legacy will be bankruptcy.  The voters had heard the arguments, the voters said no, “go ahead and defy them.”

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