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HomeMy WebLinkAboutResolution - SA 15-01 STATE OF CALIFORNIA ) RESOLUTION NO. SA 15-01 COUNTY OF RIVERSIDE ) ss CITY OF SAN JACINTO ) A RESOLUTION OF THE GOVERNING BOARD OF THE SUCCESSOR AGENCY TO THE SAN JACINTO REDEVELOPMENT AGENCY, APPROVING AN ENGAGEMENT LETTER WITH BEST BEST & KRIEGER LLP, AND AUTHORIZING THE INITIATION OF LITIGATION REGARDING A HOUSING AUTHORITY ADMINISTRATIVE ALLOWANCE WHEREAS, pursuant to Health and Safety Code section 34173(d), the City of San Jacinto is the successor agency ("Successor Agency") to the dissolved San Jacinto Redevelopment Agency; and WHEREAS, in order to not impose these new housing obligations on the City of San Jacinto's general fund, the City Council of San Jacinto established a housing authority, in accordance with state law; and WHEREAS, in 2014, the California Legislature passed, and the Governor signed into law, AB 471, which authorizes the payment of an allowance to a housing authority assuming the housing obligations of a former redevelopment agency, in an amount up to one percent (1%) of the property taxes annually allocated to the successor agency's Redevelopment Obligation Retirement Fund, but not less than $150,000 per year; and WHEREAS, notwithstanding AB 471, the California Department of Finance ("DoF") has refused to approve the allowance for housing authorities of cities, claiming that the allowance was only intended to compensate housing authorities that were not associated with the host jurisdiction (i.e., a county housing authority operating in a city where there is no city housing authority); and WHEREAS, there is no language in AB 471 that would support such a narrow interpretation; and WHEREAS, the Successor Agency intends to seek a judicial determination that the DoF's interpretation of AB 471 is incorrect, and to ensure a funding source for the San Jacinto Housing Authority's administrative costs; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED, ordered, and determined by the governing board of the Successor Agency to the San Jacinto Redevelopment Agency: 1 SECTION 1 . Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. SECTION 2. CEQA Compliance. Pursuant to California Environmental Quality Act (Pub. Resources Code, §§ 21000 et sec..) ("CEQA") and the State and local CEQA Guidelines, the governing board of the Successor Agency determine that the initiation of litigation proposed by this Resolution is not an action that may have a significant effect on the environment, in that this action is merely litigation which is expected to result in a funding mechanism, neither of which will have any effect on the environment. The City Clerk, acting on behalf of the Successor Agency, is authorized and directed to file a Notice of Exemption with the appropriate official of the County of Riverside, California, within five (5) days following the date of adoption of this Resolution. SECTION 3. Approval of Engagement Letter with Best Best & Krieger LLP. The Governing Board of the Successor Agency hereby approves the accompanying engagement letter with Best Best & Krieger LLP, in substantially the form attached to this Resolution as Exhibit A. Best Best & Krieger is hereby authorized to file suit, in the appropriate forum, for a judicial determination of the applicability of AB 471. SECTION 4. Further Acts. The Executive Director and Best Best & Krieger, and their respective designees, are hereby authorized and directed to take any action necessary to carry out the purposes of this Resolution and comply with applicable law. SECTION 5. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The RDA Successor Agency declares that the RDA Successor Agency would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution. SECTION 6. Certification. The City Clerk, acting on behalf of the RDA Successor Agency, shall certify to the adoption of this Resolution. SECTION 7. Effective Date. This Resolution shall become effective immediately upon its adoption. 2 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council, serving as the successor agency to the dissolved San Jacinto Redevelopment Agency, on the 3rd day of February, 2015, by the following vote: AYES: Bartel, Ledezma, Miller, Ruiz NAYS: None ABSENT: Kotyuk ABSTAIN: None City of San Jacinto ��Lfi;=c 2�:� — Crystal P4z, Chair ATTEST: �Z- LA� Richard Miller, Board Secretary 3 EXHIBIT A Engagement Letter with Best Best & Krieger LLP [Attached behind this page] 4 BEST BEST & KRIEGER t ATTORNEYS AT LAW INDIAN WELLS RIVERSIDE (760)568-2611 400 Capitol Mall.Suite 1650 051)656-1450 — Sacramento,Celifomis 95814 — IRVINE (916)325400a SAKI 01EGO (949)263.2000 WE)52G-1JOD _ (916)325-4010 Fax _ 109 ANGELES BBKlaw.com WALNUT CREEK (213)617-8100 (925!917-3300 ONTARIO Iris P.Yang (916)551-2826 iriv/an®do6k1aw,ecm February 3, 2015 VIA ELECTRONIC MAIL Tim Hults, Executive Director San Jacinto Successor Agency and San Jacinto Housing Authority 595 S. San Jacinto Avenue, Building A San Jacinto, CA 92583 Dear Mr. Hults: Best Best & Krieger LLP is pleased to represent the San Jacinto Successor Agency and the Housing Authority of San Jacinto (collectively "San Jacinto") with respect to a dispute with the California Department of Finance ("DOF") regarding its denial of a "housing cost administrative allowance" to your Housing Authority. We will represent you in common with the successor agency and housing authority of the City of Riverside, the City of Santa Rosa and the County of Sonoma (collectively, the "Other Petitioners"). The primary issue involves DOF's interpretation of certain statutes which allow a successor agency to claim a housing cost administrative allowance for a housing authority that is the housing successor to the former redevelopment agency. This letter, including the attached Standard Terms, constitutes our agreement setting forth the terms of our representation. Brent Hawkins and I will be the attorneys primarily responsible for providing the litigation services to you under this Agreement. We each have a current billing rate of $310 per hour. On occasion we may ask other attorneys or legal assistants to assist us in providing services under our supervision. A schedule of billing rates for all attorneys and legal assistants is included in the Standard Terms attached to this letter. In addition, the rates shall be automatically adjusted as follows: On July 1, 2015 and every July 1st thereafter during the term of this Agreement, they shall be adjusted for the change in the cost of living for the twelve (12) month period published for the month of May, as shown by the U.S. Department of Labor in its All Urban Consumers Index set forth for the San Francisco-Oakland-San Jose area; provided however, that such adjustment shall never be lower than zero percent (0%), nor more than five percent (5%). 09977.00001\9520383.1 BEST BEST & KRIEGER ATTORNEYS AT LAW Tim Hults, Executive Director February 3, 2015 Page 2 As you know Best Best & Krieger LLP currently represents you in other matters. However in this litigation matter, we will be jointly representing you and the Other Petitioners who are also existing clients of the firm. Although you and the Other Petitioners have a common interest in this proposed litigation, careful thought must be given to conflicts of interest. It is possible that differences of opinion and different interests may develop among you. This could occur, for example, if you and the Other Petitioners have different views on strategy, whether to appeal, and other issues. In addition, our firm serves as City Attorney or special counsel for a number of cities and counties that have successor agencies and housing authorities, however none of these clients has an interest in this matter that is not comparable to the interest of you or the Other Petitioners. However, an attorney cannot represent clients in unrelated matters if those two clients have a legal conflict or other adversity between them, even if that conflict is unrelated to the work the attorney is handling. We cannot undertake this representation if it would impair our ability to continue to represent our existing clients. Accordingly, your retention of our firm to represent you along with the Other Petitioners in this matter represents your agreement to waive any conflict of interest that may exist among you and the Other Petitioners, accepting that any limitation on our ability to represent individual cities' or counties' interests made necessary by our service to you and the Other Petitioners is acceptable to you in light of the efficiency, cost savings and other benefits to you of joint representation. You agree not to share with us any confidential information which you do not wish us to share with the Other Petitioners and to look to your own City Attorney or other independent counsel for any advice you may desire as to issues in which your interests do not align with those of the Other Petitioners. Further, you agree that we may represent you in this case and represent our existing general and special counsel clients, and new local entity clients, on matters unrelated to this case even if you have a legal conflict or other adversity with that other local government, such as a different position on a claim against an insurance risk pool, a boundary dispute, a commercial dispute or any other inter-agency disagreement. You agree not to share with us any confidential information unrelated to this case which might impair our ability to represent our existing general and special counsel clients and other local governments in unrelated matters notwithstanding any legal conflict or other adversity between you and those other local governments. You should consider these conflict waivers carefully and of course, San Jacinto should feel free to consult with your attorney or independent counsel before signing this Agreement. You agree that our fees and charges for services in this case will be divided equally between you and the Other Petitioners. It is possible, pursuant to a separate agreement between 09977.00001%9520383.1 BEST BEST & KRIEGER ATTORNEYS AT UAW Tim Hults, Executive Director February 3, 2015 Page 3 the City of Santa Rosa and other public entities that the fees and charges for services may be partially reimbursed by contributions from those other public entities, however Best Best & Krieger LLP is not a party to that agreement and that agreement shall not affect the obligations of San Jacinto under this Agreement. In additional to billing rates, the Standard Terms attached to this letter describes the other aspects of our firm's billing policies. You should consider the Standard Terms part of this agreement as it binds both of us. For that reason, you should read it carefully. On a personal note, I am pleased that you have selected Best Best & Krieger LLP to represent you. I look forward to continuing to work with you and appreciate your confidence in selecting us to represent you on these matters. 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 in the enclosed envelope. We have enclosed a separate signed copy of this letter and memorandum for your records. Please feel free to call me if you have any questions. Sincerely, /S/Iris Yang Iris P. Yang for BEST BEST & KRIEGER LLP AGREED AND ACCEPTED: By: Dated: 09977.00001\9520383.1 BEST BEST & KRIEGER LLP'S STANDARD TERMS This statement of Standard Terms, along with the terms stated in the accompanying letter, constitutes the Agreement for Legal Services ("Agreement") between you and Best Best & Krieger LLP ("BB&K"). Effective Date The Agreement is effective the date BB&K first performed services on your behalf. If we have performed legal services at your request while waiting for you to sign and return this Agreement, you will still be required to pay for those services even if you decide not to sign and return this Agreement. 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 maintain 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 you. Similarly, your name will be included in our list of clients to ensure we comply with the Rules of Professional Conduct with respect to you. Additional conflicts checks will be performed for any new matters for which you request our services. Fees for Professional Services Our century of experience has shown that the attorney-client relationship works best when there is mutual understanding about fees, expenses, billing and payment terms. Therefore, this statement is intended to explain our billing policies and procedures. You are encouraged to discuss with us any questions you have about these policies and procedures. You may direct specific questions about a bill to the attorney with whom you work or to Judy Ismael of our Accounting Department. Any specific billing arrangements different from those set forth below will be confirmed in a separate written agreement between you and the firm. Our fees for legal services are based on the total amount of time expended on all work necessary to your representation, multiplied by the hourly rate then in effect for the person doing the work. Hourly rates are set to reflect the skill and experience of the attorney or other legal personnel rendering services on your behalf. Time is accrued on an incremental basis in minimum increments of 0.1 hours. From time to time, those assigned to work on your matter may need to confer among themselves concerning your representation. When that occurs, each person will charge for the time expended in conference. It may on occasion be necessary or advisable for more than one person to attend a meeting, court hearing or other proceeding and each will charge for the time that is spent in making those appearances. We will also charge for waiting time in court and elsewhere and for all travel time both out of town and locally. Time spent on the telephone discussing your matter, including telephone calls with you, also will be billed, as well conferences with others such as investigators, consultants, or experts. For this matter, partners shall be billed at $310 per hour, associates at $245 per hour and paralegals at 09977.00001\9520383.1 $170 per hour, These hourly rates are reviewed annually to accommodate rising firm costs and to reflect changes in attorney status as lawyers attain new levels of legal experience. Any increases resulting from such reviews will be instituted automatically and will apply, after advance notice to you. Fees For Other Services, Costs and Expenses We attempt to serve all our clients with the most effective support systems available. Miscellaneous expenses are covered by a standard administrative charge, currently set at 4%, which compensates the cost of normal photocopying, long distance telephone calls, regular mail postage, telecopy charges and other expenses as to which individual itemization in impractical. Costs specific to your matter such as investigation and filing fees, process server fees, required costs of travel, out-of-town lodging and meals, mileage at the current IRS-approved rate per mile, courier and express delivery and mail services, deposition and court reporter fees, computerized legal research, major photocopying, conference calls and staff overtime, as needed, are itemized and will appear on your monthly statement as separate items. We may need to advance costs and incur expenses on your behalf on an ongoing basis. These items are separate and apart from attorneys' fees and, as they are out-of-pocket charges, we need to have sufficient funds on hand from you to pay them when due. We will advise the client from time to time when we expect items of significant cost to be incurred, and it is required that the client send us advances to cover those costs before they are due. Monthly Invoices and Payment Best Best & Krieger LLP will provide you with monthly invoices for legal services performed and expenses incurred. Invoices are due and payable upon receipt. Each monthly invoice reflects both professional and other fees for services rendered through the end of the prior month, as well as expenses incurred on your behalf that have been processed by the end of the prior month. Processing of some expenses is delayed until the next month and billed thereafter. 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. It is our policy to treat every question about a bill promptly and fairly. From time to time clients have questions about the format of the bill or description of work performed. If you have any such questions, please ask them when you receive the bill so we may address them on a current basis. Changes in Fee Arrangement and Budgets It may be necessary under certain circumstances for a client to increase the size of required advances for fees after the commencement of our engagement and depending upon the 09977.00001\9520383.1 scope of the work. For example, prior to a protracted trial or hearing, the firm may require a further advance payment to the firm's trust account sufficient to cover expected fees. Any such changes in fee arrangements will be discussed with you and mutually agreed in writing. Because of the uncertainties involved, any estimates of anticipated fees that we provide at your request for budgeting purposes, or otherwise, can only be an approximation of potential fees. Client's Duties You agree to be truthful with us, to cooperate, to keep us informed of developments that relate to our services, to abide by this Agreement, to pay our bills on time, and to keep us advised of your current address, telephone number and your place of employment and telephone number. You also agree to respond promptly, fully and accurately to requests for information or documents and to other requests for assistance made by BB&K. Experts To prepare or present your case or legal position, we may need expert witnesses, consultants, or investigators. We will select and engage them and you are responsible for their bills. When feasible, we will consult with you before completing the engagement. Settlement If we are hired to pursue or defend a claim on your behalf, BB&K will not settle the claim without your approval, and you have the absolute right to accept or reject any offer of settlement. We will notify you promptly of the terms of any settlement proposal that we receive on your behalf. Disclaimer of Guaranty BB&K can make no promises or guarantees about the outcome of this representation. Our comments about the outcome of your matter are expressions of opinion only. Independent Contractor BB&K shall perform all legal services requested pursuant to this Agreement as an independent contractor of you and shall remain, at all times as to you, a wholly independent contractor with only such obligations as are required under this Agreement. Neither you, nor any of your employees, shall have any control over the manner, mode or means by which BB&K, its agents, or employees, render the legal services contemplated under this Agreement, except as otherwise set forth. You shall have no voice in the selection, discharge, supervision or control of BB&K's employees, representatives or agents, or in fixing their number, compensation or hours of service. 09977.00001\9520383.1 Insurance r We are also pleased to let you know that BB&K 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. Cessation of Representation This Agreement and the services to rendered under it may be terminated at any time upon ten (10) days prior written notice from either party, with or without cause. In the event of such termination, BB&K shall be paid for all services authorized by you and performed up through and including the effective date of termination. "Cause" includes your failure to pay or other breach of this Agreement, refusal to cooperate with us or follow our advice on a material matter, or any fact or circumstance that would render our continuing representation unlawful or unethical. After our services are concluded, we will, upon your request, deliver your file to you, along with any funds or property of yours in our possession. Modification This Agreement may be modified by subsequent agreement between you and BB&K only by a writing signed by both parties. Entire Agreement This statement of Standard Terms and the letter to which it is attached constitute the entire Agreement between you and BB&K. No other agreement or statement made on or before the effective date of this Agreement is binding. Severability If any provision of this Agreement is held in whole or in part to be unenforceable for any reason, the remainder of that provision and the rest of the Agreement will remain in effect. Conflict Waiver In a large firm with multiple offices representing public and private clients, actual or possible conflicts sometimes arise between existing or potential clients. We may be required to ask for a conflict waiver in that event. BB&K asks for your understanding and cooperation if we request a conflict waiver in order to undertake or continue representation of another client in a manner that will not be specifically detrimental or adverse to you in any matter in which another BB&K attorney represents you. California Law This Agreement is deemed to be entered into at our office in Sacramento, California and shall be interpreted according to California law, excluding its conflict of laws provisions. 09977.00001\9520383.1 Negotiated Terms This is a negotiated agreement that can be accepted or rejected by the parties. The terms of the Agreement are not set by law. You may consult independent counsel before entering into this Agreement. Additional Terms The scope of BB&K's representation in this matter is fully set forth in the letter which is part of this Agreement as are any additional terms relating to this representation. If, after initial representation, you decide to retain our services for other matters, and we agree to perform them, these Standard Terms shall apply. BEST BEST & KRIEGER LLP 09977.00001\9520383.1