BOARD MEETING DATE: April 6, 2007
AGENDA NO. 13

PROPOSAL:

Appropriate Funds from BP ARCO Settlement Fund and Authorize Amending Existing Contracts to Expend Such Funds

SYNOPSIS:

The District is currently involved in a major lawsuit employing outside counsel.  This action is to appropriate $850,000 from the BP ARCO Settlement Fund to the District Counsel FY 2006-2007 budget, Professional and Special Services account, and to authorize the Executive Officer to amend existing contracts with Jones Day to expend these funds.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

1. Appropriate $850,000 from the BP ARCO Settlement Fund to the District Counsel’s FY 2006-07 Budget, Professional and Special Services account.
2. Authorize the Executive Officer to amend existing contracts with Jones Day or enter into contracts with equally qualified firms as determined in consultation with the Board Chairman and Vice Chairman to expend these funds and to execute contracts or amend contracts in the future with specialized legal firms and expert witness services with monies to be appropriated as the need arises.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

In the FY 2006-07 Budget, the Board created a $3 Million Designation for Litigation and Enforcement designed to cover outside counsel expenses for this fiscal year.  In the FY 2006-07 Budget, the District Counsel’s Office was allocated $250,000 for Professional and Special Services for outside counsel/litigation expenses.  The railroad litigation has required additional assistance beyond that currently available to AQMD.  The railroads have hired two large, well-known firms to represent them in the litigation.  To keep up with the litigation, the AQMD has contracted the assistance of Jones Day, a firm with significant resources and special expertise in trial and trial preparation work.  Also, the AQMD has worked with various experts to ensure the best possible defense.

Proposal

In order to defend this litigation, it has been necessary to appropriate additional funds for expenditure by outside counsel.  The railroad case requires appropriation of an additional $850,000 to pay defense costs.  District Counsel will continue to provide monthly reports on the litigation at closed session, including expenditures to date.

Sole Source Justification

AQMD's Procurement Policy, Section VIII B2, provides for a waiver of formal bid processes under certain circumstances based upon documentation justifying a sole-source award.  The award to Jones Day is justified pursuant to Procurement Policy Section VIII B2(d), other circumstances exist justifying a sole-source award, subdivision (4), level-of-effort expert consultation services, in view of the need for immediate significant work involving special expertise in major and complex litigation.  The firm's blended hourly rate is commensurate with the level of expertise and consistent with past Board-approved expenditures.

Resource Impacts

Sufficient funds are available in the BP ARCO Settlement Fund.