BOARD MEETING DATE: July 13, 2007
AGENDA NO. 9

PROPOSAL:

Transfer and Appropriate Funds for Litigation Defense and Authorize Contracts to Expend Such Funds

SYNOPSIS:

This item is to 1) transfer and appropriate funds in the amount of $275,000 from the BP/ARCO Settlement Projects Fund and 2) authorize the Executive Officer to enter into new contracts with Shute, Mihaly & Weinberger and Jones Day LLC to assist AQMD in post-trial/appeal matters relating to defending the railroad rules.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

1. Transfer $275,000 from the BP/ARCO Settlement Projects Fund (46 Fund) to the General Fund and appropriate $275,000 to the District Counsel’s FY 2007-08 Budget, Professional and Special Services account.
2. Authorize the Executive Officer to enter into new contracts with Shute, Mihaly & Weinberger (up to $200,000) and Jones Day LLC (up to $75,000) for post-trial/appeal legal services 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

The appeal of the railroad litigation will require additional assistance beyond that currently available to AQMD. To assist AQMD with the appeal process, staff recommends retaining Daniel P. Selmi of the firm Shute, Mihaly & Weinberger. Mr. Selmi will be assisted by Jones Day, LLC.

Proposal

In order to defend this litigation, the Board has directed District Counsel to rely on funding from the BP/ARCO Settlement Projects Fund (46 Fund) for outside counsel. Staff is recommending that up to $200,000 from this fund be appropriated to Shute, Mihaly & Weinberger and up to $75,000 to Jones Day LLC to handle the appeal of the lawsuit. District Counsel will provide monthly reports on this appeal process at closed session, including expenditures.

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 LLC 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 of Shute, Mihaly & Weinberger is currently on the list for pre-qualified legal services.

Resource Impacts

Sufficient funds are available in BP/ARCO Settlement Projects Fund (46 Fund).