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HomeMy WebLinkAbout25I - AGMT LEGAL SVCS BBKREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 18, 2018 TITLE: AWARD OF LEGAL SERVICES AGREEMENT WITH BEST, BEST & KRIEGER, LLP, RELATED TO LEGAL ANALYSIS OF PAYROLL PRACTICES, CALPERS REPORTING, AND FAIR LABOR STANDARDS ACT COMPLIANCE (STRATEGIC PLAN NO. 1,3,4) cljr�Y MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute a legal services agreement with Best, Best & Krieger, LLP, ("Firm') in an amount not to exceed $200,000 related to legal analysis of Payroll Practices including employee compensation, CalPERS Reporting, and Fair Labor Standards Act compliance starting September 18, 2018 and ending on December 31, 2019 subject to non -substantive changes approved by the City Manager and the City Attorney's Office. Agreement may be extended for up to one (1) year exercisable by the City Manager and Senior Assistant or Assistant City Attorney. DISCUSSION The City Attorney's office handles and manages a variety of transactional and litigation matters. From time -to -time, the City Attorney's Office will refer administrative and litigation matters to outside law firms with specialized expertise to handle. The City Attorney's Office, City Manager's Office, and Human Resources Department determined that an outside Firm should be engaged to conduct a legal analysis and audit of the City's Payroll Practices, CalPERS Reporting, and Fair Labor Standards Act compliance for the past three (3) fiscal years. On May 25, 2018, the City Attorney's Office sent out a request for proposal to six firms specializing in compensation, payroll and/or CalPERS matters and received three written proposals. Interviews were conducted with the three firms' by a panel consisting of representatives from the City Attorney's Office, Human Resources, the Police Department and the Finance Department. Best, Best & Krieger, LLP received the highest rating and was selected by the panel for award of the Agreement. Best, Best & Krieger, LLP, has decades of experience with federal and state employment tax laws, the Public Employees' Retirement Law (PERL) which governs the California ' The three firms were Liebert, Cassidy & Whitmore; Burke, Williams & Sorenson; and Best Best & Krieger. 251-1 Legal Services Agreement — Best, Best & Krieger, LLP. September 18, 2018 Page 2 Public Employees Retirement System (CaIPERS) and the Fair Labor Standards Act (FLSA). In addition, the Firm specializes in representing public agency clients with their clients including nearly 300 California cities, special districts, educational systems, and other public agencies. Ms. Isabel Safie, a partner in the Firm's Employee Benefits practice group will be the lead attorney for this assignment. Senior Assistant City Attorney Laura Rossini will oversee the agreement working in conjunction with the Executive Director of Human Resources and the Finance Department. This agreement is in addition to the general retainer. The proposed agreement will authorize the City Attorney's Office to engage Firm for legal services as necessary to conduct a legal analysis and audit of Payroll Practices, CalPERS Reporting, and Fair Labor Standards Act compliance for the past three (3) fiscal years STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal No. 1 Community Safety, Goal No. 3 Economic Development, and Goal No. 4. Government Financial Stability. FISCAL IMPACT Funding for the proposed contractual legal services and the costs for the ongoing Fiscal Years are projected as follows for a total amount of $200,000: Account FY 18-19 FY 19-20 Total 01110115-62300 Contract Services $100,000 $0 $100,000 01109050-62300 Contract Services $ 25,000 $25,000 $ 50,000 08109053-62300 Contract Services $ 25,000 $25,000 $ 50,000 $150,000 $50,000 $200,000 APPROVED AS TO FUNDS AND ACCOUNTS: Laura A. Rossini Sergio Vrdal P -\f\ fnb I Senior Assistant City Attorney Assistant Director Finance and Management Services Agency Steven Pham �j Executive Director Human Resources Department Exhibit: 1. Legal Services Agreement for Best, Best & Krieger, LLP. 251-2 LEGAL SERVICES AGREEMENT WITH BEST, BEST & KRIEGER, LLP This AGREEMENT, made and entered into this 18th day of September, 2018, by and between Best, Best & Krieger LLP ("Attorneys'), and the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the constitution and laws of the State of California ("City"). RECPI'ALS A. The City of Santa Ana and the City Attorney's Office desires to employ Attorneys to assist the in-house attorneys for the City in the provision of legal services to the City, for legal analysis, audit and legal advice related to payroll practices, public employment taxation matters, and employee benefit matters by a firm with specialized expertise. B. Attorneys represent that they are licensed to practice law in the State of California, have special experience and knowledge related to payroll practices, public employment taxation issues, and employee benefit matters and desire to undertake said services. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. RETENTION OF ATTORNEYS City hereby agrees to and does retain Attorneys, for the compensation hereinafter specified, to assist the City Attorney's Office with analysis, an audit, and legal advice regarding payroll practices, public employment taxation matters, and employee benefit matters, specifically but not limited to FLSA classification and compliance; Ca1PERS reporting; employee:benefits, payroll taxes, and payroll practices ("the Assignment'. Attorneys accept said retention and agree to perform, in a timely and efficient manner, the Assignment as requested by the City Attorney's Office. 2. COMPENSATION FOR SERVICES RENDERED a. City agrees to compensate Attorneys, and Attorneys agree to accept from City, as and for payment in full for all services for the Assignment, Partners will be billed at the rate of $350-$425 an hour, $290 for all Associates, and $180 an hour for paralegals and law clerks. Time will be billed in 1/10th of an hour increments. b. The total sum to be expended under this Agreement, shall not exceed two hundred V/Y thousand dollars ($200,000), including;an •extehsron,penods C. City agrees to reimburse Attorneys for out-of-pocket expenses, including but not limited to, mileage, copying costs, service of process, and mail services authorized by the City Attorney's Office in connection with the performance of duties under this Agreement. In-house printing, copying, and reproduction charges will be reimbursed at the rate of 20 cents per page. Automobile travel will be reimbursed at the standard mileage rate in effect at the time of billing by the Internal Revenue Service. Any costs in excess of $5,000 requires the approval of a Senior 251-3 Assistant or Assistant City Attomeypriorto incurring the expense. All expenses must have supporting documentation submitted with the invoice. 3. METHOD OF PAYMENT Attorneys shall submit a monthly statement specifying the services performed, dates and number of hours, and an itemization of expenses related thereto with supporting documentation (i.e. receipts, invoices, copy of check, etc.). City acknowledges that the fees incurred for work performed by Attorneys on its behalf are due and owing within 30 days of the work being performed. At Attorneys' discretion, they may choose to defer payment. Notwithstanding this, City agrees that it shall tender payment within 30 days of written demand by Attorneys for payment. Unless expressly stated thereon, monthly statements generated by Attorneys shall not constitute written demand, but shall simply be a written reflection of work performed and fees incurred. 4. CONTROL OF LEGAL MATTERS Attorneys agree that each and every matter or proceeding in which they undertake to assist the City Attorney's Office, as aforesaid, shall be and remain under, and subject to the control and direction of the assigned Senior Assistant City Attorney or Assistant City Attorney at all stages, and that they shall at all times keep the City Attorney's Office informed of all matters pertaining thereto. City will keep Attorneys informed of all significant developments in matters relating to the Assignmentundertaken by Attorneys. Attorneys further agree, if and when their retention hereunder is terminated by City, as hereinafter specified, they shall return to City Attorney's Office any and all files then in their possession concerning the Assignment. 5. REPORTING REQUIREMENTS Attorneys agree to keep the City Attorney's Office, and any other person(s) designated by the City Attorney's Office, informed of significant findings and at a minimum provide an update on the status of the Assignment every thirty (3 0) days. Attorneys also agree to provide the City Attorney's Office an audit report(s) upon completion of the Assignment. 6. TERM The term of this Agreement shall commence on the date fust written above and terminate on December 31, 2019 unless terminated earlier pursuant to Section 15 below. The term of this Agreement may be extended for up to one (1) year upon a writing executed by both parties, including the City Manager and a Senior Assistant or Assistant City Attorney. 7. INDEPENDENT CONTRACTORS It is mutually agreed by and between the parties that, in the performance of their covenants hereunder, Attorneys are and shall be independent contractors, and not officers or employees of City. 251-4 8. INSURANCE Attorneys shall provide to the City Attorney's Office proof of Professional Liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and maintain such insurance throughout the term of this Agreement. If Attorneys fail or refuse to produce and maintain the insurance required by this section, or fail or refuse to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Attorneys' right to be paid for its time and materials expended prior to notification of termination. 9. INDEMNIFICATION Attorneys agree to and shall indemnify and hold harmless the City, its officers, agents, employees, and representatives from liability for personal injury, damages, restitution, judicial or equitable relief to the extent caused by Attorneys' negligent or wrongful performance or conduct related to this Agreement. 10. CONFIDENTIALITY All information and documents shared with Attorneys as well as all work performed by Attorneys in connection with this Agreement should be treated as strictly confidential. Moreover, all communications between Attorneys and City shall be treated as protected by the attorney-client privilege and the attorney work product doctrine. Accordingly, information received by Attorneys from City should be kept in a secure place, and no information about this work may be disclosed to any third party without City's prior written approval. Attorneys shall provide materials directly to the Senior Assistant City Attorney, Laura Rossini, or selected members of the City Attorney's Office, as directed by Ms, Rossini. All such information and any written product in connection with Attorneys` retention under this Agreement, shall be marked as"PRIVILEGED AND CONFIDENTIAL / ATTORNEY -WORK PRODUCT" and shall be the property of the City Attorney's Office, and shall be retumed/provided to the Office of the City Attorney with all copies upon the request of the City Attorney's Office. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Attorneys, disclosed in a publicly available source; (c) is in rightful possession of the Attorneys without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Attorneys without reference to information disclosed by the City. 11. CONFLICT OF INTEREST CLAUSE Attorneys covenant that it presently has no interests and shall not have interests, direct or indirect, that would conflict in any manner with performance of services specified under this Agreement. 12. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: 251-5 To City: Clerk of the Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702-1988 Facsimile (714) 647-6956 Courtesy Copy: Laura Rossini, Senior Assistant City Attorney City of Santa Ana Office of the City Attorney 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 Facsimile (714) 647-6515 To Attorneys: Attention —Ms. Isabel Safie, Partner Best, Best & Krieger, LLP Post Office Box 1028 Riverside, California 92502 Facsimile: 951-686-3083 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Attorneys, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Attorneys. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Attorneys or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any parties, which are not embodied herein. 14. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Attorneys, Attorneys may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in 251-6 this Agreement shall be construed to limit the City's ability to have any of the services which are the subject of this Agreement performed by City personnel or by other Attorneys retained by City. 15. TERMINATION This Agreement may be terminated by City at any time. In such event, Attorneys shall be entitled to receive and the City shall pay Attorneys compensation for all services performed by Attorneys prior to receipt of such noticeoftermination. Asa condition ofsuchpayment, Attorneys shall deliver to the City all files and records generated under this Agreement as of such date. Attorneys may terminate this agreement, subject to their obligation to provide written reasonable notice of at least thirty (3 0) days to arrange alternative representation if applicable. In such case, City agrees to secure new counsel as quickly as possible and to cooperate fully in the substitution of the new counsel. 16. DISCRIMINATION Attorneys shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Attorneys affirm that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 17. JURISDICTION —VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. MISCELLANEOUS PROVISIONS Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 19. COUNTERPARTS: SIGNATURES This Agreement may be executed in counterparts, secured via facsimile transmission or otherwise, each of which shall be deemed to be an original. Photocopies of any executed counterpart shall have the same force and effect as an original. City further acknowledges that it has read and received a copy the full text Section 6148 of the California Business and Professions Code prior to signing this Agreement. 20. NO GUARANTEES City understands and acknowledges that there are certain risks and uncertainties in the pursuit of any matter for which Attorneys have been retained, that law is not an exact science, that Attorneys have made no representations or guarantees of success regarding the conclusion of any particular matter, and that all expressions relative thereto are matters of Attorneys' opinion only. In other words, Attorneys make no representations or guarantees of success regarding any matter. 5 251-7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ATTEST: Maria D. Huizar Clerk of the Council RECOMMENDED FOR APPROVAL: Laura A. Rossini Senior Assistant City Attorney APPROVED AS TO FORM: By:O<t�0` �. Laura A. Rossini Senior Assistant City Attorney CITY OF SANTA ANA Raul Godinez II City Manager BEST, BEST & KRIEGER, LLP By: Isabel Safe Partner 251-8