Jones & Mayer Tosses A Hot Potato
What did I say earlier today about not much happening at City Hall this week? WRONG! I should have known better.
CMCEA LEGAL COSTS TO EQUAL $250,000?
Joe Serna, in a Daily Pilot article this evening, HERE, tells us that Assistant City Attorney Harold Potter of Jones & Mayer has estimated that the legal fees the city will rack up dealing with the lawsuit filed by the Costa Mesa City Employee's Association (CMCEA) will likely reach a quarter million dollars and may take two years to resolve. Yikes!
JONES & MAYER HAND-OFF
He also tells us that Jones & Mayer is tossing this hot potato to yet another firm, Hanson Bridgett LLP, a move that will almost double the hourly rate charged by Jones & Mayer. And, since this new firm is "San Francisco-based", one must assume we will be paying very significant travel and lodging expenses for their staff as they work on our case. Do you know any lawyers that stay at Motel 6 or eat at Carl's Jr.? Neither do I.
JONES & MAYER - PARAGON OF OUTSOURCING?
Let me see if I've got this right. Some council members have pointed to our contract attorney - Jones & Mayer - as a great example of how well outsourcing can work. I remember the process by which they were selected and one of the reasons they were chosen was because they were a "full service" firm, with all the legal specialties normally associated with municipal government right there under their roof. At the time the City had it's own, in-house legal counsel, but we apparently frequently found ourselves having to contract with outside firms for litigation expertise. That was the big sell for outsourcing the legal department back then - the need for litigation expertise. So, our outsourced legal department is now outsourcing our work itself!
LEGAL FEES EXCEEDING BUDGET BY 75%!
Jones & Mayer - a reputable firm by all reports - is presently billing us well over $100,000 per month. That rate, which, if we extended the last three months payments for a full year, would be $1.4 million annually. We budgeted $800,000 for the 2011-2012 budget year. And, on top of that, we will now be incurring higher fees yet because of this shift of responsibilities on the CMCEA case. Sounds like a pretty sweet deal for Jones & Mayer, who will certainly also have to provide some oversight on this lawsuit - all billable hours, of course.
WHERE ARE THE PAYMENTS CHARGED?
Interim Communication Director Bill Lobdell has advised me that comparing the legal department budget to the checks written each month is misleading because some of those amounts will be charged against the Self-Insurance Fund. However, after a couple weeks since I asked about it, nobody has provided me with any indication of which, if any, of the recent payments will be charged to that account.
IS THIS THE FUTURE OF "OUTSOURCING" IN COSTA MESA?
Is anybody else a little nervous about this? And, more important, is this the kind of experience we can expect from other outsourced operations? Can we expect firms to bid on the other 18 operations being considered for outsourcing to give us a nice, low, cost-effective price for the service, then end up billing us for "extras" that will blow our budget out the window? Is this what Jim Righeimer and Steve Mensinger mean when they say our city "should be run like a business"? Geez, I sure hope not.
THE BLAME IS RIGHEIMER'S
Oh, yes. Lest we forget... it was Righeimer's political ambition that gave us this whole "outsourcing" fiasco in the first place. Now we have a very, very significant legal expense staring us in the face because he wanted to show his pals in the OC GOP that he was a "pension reformer". This is the kind of government you get when you elect political hacks and major municipal decisions are hammered out on soggy bar napkins by bogus "committees".