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File Number: 16-319 <br />presented to the City Council for consideration on February 19, 2013. <br />On May 20, 2013, the City Council voted to adopt a new 13-month agreement with Meyers <br />Nave, effective from June 1, 2013 through June 30, 2014, which was subsequently extended <br />for two additional twelve-month periods, with the current agreement set to expire on June 30, <br />2016. The current agreement continues to utilize the fee-for-service cost structure outlined <br />above, with a not-to-exceed cap of $802,780 that includes a $50,000 set-aside for use at the <br />City Manager’s discretion in consultation with the City Attorney to retain separate outside legal <br />counsel. <br />Analysis <br />The City has now been operating under the new contractual structure for approximately three <br />years, and based upon staff's analysis, the current contract structure is effective in controlling <br />costs and generating financial savings as predicted by the MRG analysis. In the current fiscal <br />year concluding on June 30, 2016, projections indicate that total fees for city attorney/general <br />counsel services will remain approximately 20% below the not-to-exceed threshold that was <br />adopted as part of the current contract. <br />Following several months of negotiations with the City Council, Meyers Nave now requests <br />that the City Council authorize a new contract for legal services for a 5-year period, i.e. <br />commencing July 1, 2016 and concluding June 30, 2021. As part of this proposed new <br />contract, Meyers Nave will provide a $550,000 volume discount, to be distributed <br />incrementally over the first three years of the contract period. <br />In recognition of increased regional cost of living expenses, the proposed agreement boosts <br />the hourly billing rates in FY 2016-17 from the current rate of $230/hour for general legal <br />services to $245/hour. For all litigation services, the rate would change from the current cap of <br />$280/hour to a range of between $280/hour to $350/hour. The cost of paralegal services <br />would remain flat at its current rate of $150/hour. As a result, the total annual budget cap for <br />legal services in FY 2016-17 will increase to $824,415 from its current cap of $802,780, <br />exclusive of reimbursable costs. During the remaining four years of the five-year term, the <br />hourly rates will be adjusted each July 1, beginning July 1, 2017, by the April percentage <br />change in the Consumer Price Index (CPI) for the San Francisco-Oakland-San Jose area. <br />Except for automatic annual CPI adjustments rounded to the nearest $5.00, the hourly <br />compensation will remain fixed and no renegotiation of hourly rates may occur during the term <br />of the agreement. <br />Fiscal Impacts <br />For Fiscal Year 2016-17, the budget for "city attorney/general counsel services" is $824,415. <br />This amount includes a $50,000 set-aside that may be used by the City Manager for outside <br />legal services, consistent with the existing Agreement. Per the Agreement, Meyers Nave’s <br />contract is a not-to-exceed amount that constitutes a "hard cap" in the budget that the City <br />Council has no obligation to increase.. <br />Budget Authority <br />Sufficient funds for the first year of the proposed five-year contract have been included in the <br />Page 2 City of San Leandro Printed on 6/14/2016