BOARD MEETING DATE: January 6, 2006
AGENDA NO. 4

Amend Employee Relations Litigation and Negotiation Services Contract and Appropriate Funds from Undesignated Fund Balance

SYNPOSIS:

The AQMD has incurred significant attorneys’ fees defending an employment lawsuit. The court recently granted AQMD’s motion for summary judgment, which will end the case, unless plaintiff appeals. Although most of the fees will be reimbursed by the plaintiff or insurance, it is necessary to amend the contract with AQMD’s outside counsel, Best, Best & Krieger, to pay those fees. It is also necessary to appropriate this amount from the undesignated fund balance.

COMMITTEE:

Administrative, December 9, 2005, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Chairman to amend the existing contract with Best Best & Krieger for employee relations litigation and negotiation services to increase the contract amount for FY 2005-06 by an additional $50,000.
2. Appropriate $50,000 from the Undesignated Fund Balance to the FY 2005-06 Budget, District General, Professional and Special Services account.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On June 6, 2003, the Board approved a prequalified list of five law firms to provide employee relations litigation and negotiation services for the period July 1, 2003, through June 30, 2006. An existing three-year contract with one of these firms, Best, Best & Krieger, is limited to $50,000 per year. The firm currently represents AQMD in an employment case, ongoing since 2001, that will exceed the annual contract limit. This is the only AQMD matter handled by Best, Best & Krieger. Current fees expended on the case will exceed the $50,000 annual limit approved by the Board. Thus, it is necessary to increase the annual contract limit by an additional $50,000. It is also necessary to appropriate this amount from the undesignated fund balance.

The costs for this case have exceeded the deductible amount of $50,000 in AQMD’s employment-claims insurance policy, and thus the insurance will cover most remaining costs and fees, including the $50,000 proposed to be appropriated in this item.

AQMD recently prevailed on a motion for summary judgment in this case. We have also filed a motion to recover a substantial portion of our attorney’s fees. We are hopeful that the ruling will terminate additional attorneys’ fees and costs, at least for AQMD. However, if plaintiff appeals, staff will need to make an additional request for authorization from the Board for increased funding to pay the costs of an appeal.

Proposal

Staff recommends that the Board authorize an additional amount of up to $50,000 for the existing contract with Best, Best & Krieger for FY 2005-06, and that the Board authorize appropriating $50,000 from the undesignated fund balance to the District Counsel’s Professional and Specialized Services account.

Resource Impacts

There is minimal financial effect from this item, other than a temporary loss of funds in the amount of $50,000, because most amounts paid for this matter will be reimbursed by insurance or by the plaintiff if we prevail on our motion for attorney’s fees.

Attachment(s)
None

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