Monday, October 17, 2011

Legal Fees, RFPs, Financial Audits and More

The Costa Mesa City Council will hold its regularly-scheduled meeting tomorrow, Tuesday, October 18th in Council Chambers at City Hall beginning at 6:00 p.m. The agenda includes some VERY interesting items - some that might generated spirited discussion among the council and residents. Here's what you have to look forward to, either in person or live and in living color on Time Warner Cable Channel 24 or ATT U-verse channel 99. You can also watch it via streaming video on the city web site.

In the Consent Calendar there are, as usual, a couple Warrants for us to consider. And, since the lovely ladies in
the City Clerk's office now turn the spread sheets 90 degrees for us, it's much easier to read them instead of having to lay on the floor with my head turned sideways.

In #2391, HERE, you'll find some items of interest. For example, we paid the City of Huntington Beach $25,410.00 for helicopter service for the month of August - which would have been a short month.

We paid Jones & Mayer, our outsourced contract City Attorney, $115,668.76 for their work on a variety of issues - 47 separate line items appear - including Benito Acosta (still?); CMCEA; Medical Marijuana; 440 Fair Drive ( a haven for medical marijuana dispensaries and massage parlors), among others.

The very next entry is for Jones Day, the most expensive law firm around, to whom we paid $19,305.00 for "Legal Svs - CMCEA". Which means that, at the rate we were told Jones Day charges - $495/hr - we paid for almost one week of somebody's time - 39 hours. So, we've paid them AND Jones & Mayer for work involving our miscellaneous city e
mployees - apparently to quash the lawsuit. It will be very interesting to follow this particular string of charges since, as you may recall, there was no ceiling in our contract with Jones Day - we basically gave them a blank check.

As I contem
plate that particular relationship - with an outsourced contractor overseeing another outsourced contractor - I find myself thinking this may be just the kind of complication some outsourcing arrangements bring to us. Why would a private firm - who makes their money billing for every breath they take on their client's behalf - suggest putting a ceiling on fees for another firm? It would seem to serve their interests, but not necessarily the City's interests, if that pot of gold remains uncapped.


Speaking of which, this council meeting brings to us three more outsourcing RFPs for consideration - Signs and Marking Services, HERE; Street Sweeping Services, HERE and Emergency Services Equipment, HERE. These are also on the Consent Calendar, which may be voted on without comment unless someone asks for them to be pulled for discussion.


The only Public Hearing of the evening will involve a discussion, based on a report from the Traffic Impact Fee Ad Hoc Committee, of whether or not to change the current schedule for traffic impact fees on developments within the city. After a lengthy study, the committee and staff recommend no change at this time. You can read the report and reasoning behind it HERE.

The council will also consider appointments to various appointed committees. You can read the staff report HERE. You can read the list of committees and applicants HERE and the committee rosters and applications HERE. These are important appointments and, even though there are fewer vacancies coming up this year, there is an extraordinary cadre of applicants from which to select those few this year. Next year there will be MANY more vacancies.

The council will also consider council member Wendy Leece's request for a further examination of just how the minutes of council meetings are to be kept. Presently a detailed description of comments by the members of the public are not being kept in written form. The staff report is HERE.

Bobby Young, Director of Finance and Information Technology, will present his rebuttal to the financial review recently conducted by Harvey M. Rose Associates for the the Orange County Employees Association (OCEA). His point-by-point response should answer any questions raised by the Rose report. You can read the staff report HERE. I'm not going to try to provide an analysis here - the staff report does a good job.


In another fiscal matter, Young will also present a discussion of the audit of City's policies and procedures over Payroll, recently completed by Lance, Soll, Lunghard, LLP. You can read that staff report HERE.

Finally, the council will consider an item titled, "Staff hiring procedures". This is a result of councilman Steve Mensinger's recent call for a hiring freeze to force the bargaining units to the table to adopt a 2-tier pension plan. City Chief Executive Officer Tom Hatch will present to the council the current methodology for managing vacancies. That staff report is HERE. I'm not sure Mensinger and Mayor Pro Tem Jim Righeimer are going to be satisfied with the current methodology. I think, based on the way Mensinger presented his question, that they want a club with which they can clobber the bargaining units into submission. We'll see how this item - at the tail end of the meeting - plays out.


It looks like this meeting will be another long one, with the potential to drag on until Wednesday before the council moves into its closed session. I'm taking a pillow with me this time.

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Anonymous No balls said...

Just grow some balls already and fire everyone!

10/17/2011 06:59:00 PM  
Anonymous Interior Designer Employee said...

Furniture-Gate gearing up this week. Two Interior Designers at City Hall last Friday to inspect and go over last minute measurements. Let's see how long the City Council waits until they redo the entire 5th floor. Money- not an issue, not when it comes to the City Council and their needs. (Football, Booze at Sports Parks etc.) Dan Baker is the coordinator for the project(s) and with HCD leaving this week - no one will be allowed on the 5th floor without a security card.

10/18/2011 05:02:00 AM  
Anonymous Change is Hard said...

As you can see from this comment, change is hard. As a municipal worker, change is even harder with a sense of entitlement. It looks like many feel a sense of entitlement. There are so many of us who would love to have a job. On the 5th floor, on the second floor, on any floor. I think that is lost on some.

10/18/2011 08:54:00 AM  
Anonymous Daisy Mae said...

To Interior Designer that all that you got from Geoff's post? The 5th floor remodel is chump change in the grand scheme of things and complaining about it just makes you look petty. There are so many important items that Geoff brought up. It should be a long, interesting council meeting. Oh and if anyone should be fired it is Bobby Young. What a tool.

10/18/2011 09:40:00 AM  
Anonymous Rob Dimel said...

At using 25,410 for the average month (I'm not sure it is an average month), HB1 will cost us about $304,920 for the year. As I previously pointed out Costa Mesa's portion of the ABLE Maintenance and Operations budget was about $310,000. So on first blush, we save about $5,100 per year for the city on M&O. On the personnel side,Costa Mesa will now have to pick up the full boat on the commander's total comp, since that was a shared position and Newport was paying half of it. That would wash out a whole lot more than that $5,100 savings. Not to mention our city is still on the hook for half the hangar rent until the middle of next year. This is going to save us money, right?

10/18/2011 11:35:00 AM  
Blogger feral390 said...

Pay attention people...this is NOT about saving money and it never was. This is simply a publicity stunt to try and land Riggy in a higher office and try and hurt the democratic party by busting up the public employee unions. Spend on furniture, legal fees, consultants and whatever else. Our tax dollars are funding his political campaign, how do you feel about that ?

10/18/2011 12:21:00 PM  
Anonymous Barry P. said...

Dimel, those are short term costs that we absorb in exchange for lots of long-term savings once the horrible ABLE rip-off is finally dissolved.

The only lesson to be learned from ABLE is that when you start something like that, make it easier to get out of. ABLE was intentionally created in a way to make it nearly impossible to unwind. Poor decisionmaking by the City, poor contract negotiation by the lawyers. Lesson learned. Don't get into something like ABLE. Share it with many agencies to spread work, cost and risk.

That $25k is pennies on what ABLE was costing us--with way more flight time.

Seems the only people still pining for ABLE are those that sucked at its money trough!!

10/18/2011 01:11:00 PM  
Blogger Bruce Krochman said...

The ABLE discussion and many others remind me of this article:

Why Orange County Should be One City

Written by Fred Smoller

February 4, 2011

Dr. Fred Smoller, Ph.D., is the Director of the Masters of Public Administration Program and Center at Brandman University, a division of Chapman University.

If Orange County were a city, it would be the third largest city in the nation, behind New York and Los Angeles, and ahead of Chicago. That could happen if our 34 cities and county government were consolidated.

San Francisco, Denver, Indianapolis, Louisville, Honolulu and Kansas City are among the 30 U.S. municipalities that have consolidated city-county governments. Before you dismiss the idea, consider some of the shortfalls of governmental sprawl.

Fragmented government is inefficient. Orange County has one county government, with five supervisors, and 34 cities with 170 elected officials. This is 46 more than the California assembly, senate and executive branch combined!

Each city has its own city manager, city hall, and staff. The total yearly cost for city managers compensation alone exceeds 10 million dollars. Add to this 19 police and 12 fire departments, 10 (as best I could count) water districts, and dozens of other special districts. Oh yes, we also have the Orange County Sheriff's Department and Orange County Fire Authority, which provide services to the unincorporated parts of the County and to contract cities, mostly in South County. In addition, there are dozens of other governmental agencies such as joint powers authorities and organizations.

Fragmented government undermines democracy. It is impossible for citizens and the media to monitor so many elected officials and candidates for public office. Long election ballots produce voter fatigue and disengagement from civic life. With no one watching, it is not surprising that we are the largest municipality in the nation to declare bankruptcy and that our sheriff is in prison.

Most voters-myself included-haven't a clue as to who would make a good public administrator, treasurer, sheriff, or clerk. These should be appointed offices and it would be the mayor job to make sure that the people who hold these offices are honest and competent.

Also, because most of us tend to identify with our local cities rather than with the County, there is a lack of what sociologists call "social capital" to draw upon to solve vexing county challenges. This was particularly true during the 1.5 billion dollar County bankruptcy and the $100 million 10-year battle over the fate of the Marine Corps Air Station at El Toro.

Fragmented government can be harmful to business. For example, although there is one sun, the Register reported that each of the 34 cities has its own fees and standards for installing residential solar. Currently, there is no countywide plan for the installation of electric vehicle charging stations. Uniform standards are necessary for green jobs to flourish.

Fragmented government also reduces our County's political clout. Because there is no "Mayor of Orange County" both parties have to look outside of the County for someone who has statewide name recognition (such as Arnold Schwarzenegger or Jerry Brown) or has the millions to buy it (Meg Whitman, Carly Fiorina) to support for state office. We are a convenient cash register for candidates for state and national office. But I do not recall anyone from Orange County-since Assemblyman Ken Corry was elected controller in 1974--being elected to statewide office, though many have tried.


10/18/2011 02:31:00 PM  
Blogger Bruce Krochman said...


Look at the political careers of Pete Wilson and Diane Feinstein. Both come from much smaller political jurisdictions. Pete Wilson was mayor of San Diego (population 1.3 million) before he was a US Senator and California's Governor. Likewise, Diane Feinstein was mayor of San Francisco (population 815, 358) before being elected to the US Senate. Few doubt she could have been governor if she wanted the job.

Meanwhile, former San Francisco mayor Gavin Newsom is now Lt. Governor will be a top contender to replace Jerry Brown. Being mayor of a major city allowed them to garner the media attention required for election to statewide office.

Meanwhile, Curt Pringle, one of the youngest Speakers of the Assembly, was defeated in his bid in 1998 for state treasurer. Similarly, Joe Dunn was defeated in his bid for the Democratic nomination for state controller. And other capable Orange County leaders such as Santa Ana's Miguel Pulido, Irvine's Larry Agran, and Supervisors John Moorlach and Bill Campbell-a former Assemblyman--would be considered long shots were they to run for statewide office.

With no single voice to speak for Orange County, we often get stiffed when state and federal funds are awarded. For example, according to Greg Trimache, one of the co-founders of CleanTechOC, "Orange County is not getting anywhere close to their share of stimulus dollars. We're getting about 30 percent of the national average. ... The California Energy Commission awarded $110 million in grants [but] Orange County didn't get a dime of it."

It doesn't have to be this way. The "City and County of San Francisco"-the only city-county consolidated government in California-has one police department, one fire department, and one water department. San Francisco has one mayor and an 11-member Board of Supervisors. Each member is elected from a district where he or she lives. The mayor and council appoint the chief of police, clerk, public administrator and other department heads.

Isn't it ironic that liberal San Francisco is more structurally efficient than conservative Orange County?

We live in a time of soaring budget deficits and shrinking municipal budgets. We need to ask, is local government organized in a manner that best serves Orange County in the 21st century?

A consolidated city county government should be on the table for discussion. Such consolidations and mergers are, in fact, inevitable.

10/18/2011 02:32:00 PM  
Anonymous Houston, We have a math problem said...

According to the City’s audited financials, $1.9 Million is the annual loaded cost for ABLE. Even if we generously back out the $300k from Santa Ana, we are at $1.6M, not including reserve replacement funding for the helicopter. That is just for CM. If we add in Newport Beach, then the cost is $3M.

Do we have the numbers wrong? We can then compare actual fight times and quality, but wanted to establish actual costs.

Dimel’s #’s just do not seem right?

And the concern is that Dimel is the VP of the Police Association that is being asked by the City to make recommendations to cut Police costs. With this math, I have serious concerns about the likelihood of good results.

And in the last election cycle, is it true that the NO RIGHEIMER Trailer that caused such a City issue was often parked at Rob Dimel’s home in Costa Mesa? If so, you can see my concerns about some bias in the math.

What are we missing here? Do we believe the City’s audited financials? Or an individual with the Union who actively campaigned against our City Council?

Looking at the RFP’s is anyone else having some issues with the representations of math, or lack thereof?

10/18/2011 03:00:00 PM  
Anonymous cha ching a ling said...

Yes the 5th floor remodel is chump change compared to the fees spent on lawyers.

10/18/2011 04:35:00 PM  
Anonymous almostdone said...

Houston..... You're saying that ABLE was costing NB and CM a total of $3 million a year in spite of what ABLE' books say?
But HB can offer the same services for $300k?
1/10 the cost for the same services?
And they do that how? Cheaper pilots? Cheaper aircraft?
You and Barry need to put down the pipe and the coolaid and go back to school.

10/18/2011 05:43:00 PM  
Anonymous nooclib1 said...

I work for another public agency--I neither live in nor work for CM, but I think I can offer some perspective. A major part of my job is doing performance audits--measuring the value of what the public gets for its the service the public receives for its tax dollars. I've been doing this for a very long time. Among the common issues I've discovered are 1) there's more to the cost of contracting than the contract. Someone as to manage the contract. The city still has to carry liability insurance for the contractor's activities since its acting as the city's agent. And the city will pay big bucks for any service not in the scope of the contract. 2) Contracted services are only as good as the contract management. If the contractor isn't constantly monitored, it'll try to do the least possible work to maximize its profit. Back in the 1990's, the government innovation gurus who write "Reinventing Government", who favored contracting, admitted that management and overhead can add as much as 30% to the cost of contracting. If you;re going to send out RFP's to compare in-house costs to contracted costs, you better have some very good, objective, and experience analysts research it to death. A lot of functions can be made more cost-efficient, but contracting isn't always the only--or the best--answer.

10/18/2011 07:40:00 PM  
Anonymous Not Surprised said...

Why does ABLE keep coming up? The program is dead for now, so quit harping on it. Speaking of paying for a political campaign, our leprechaun mayor has just announced that he is running for another term. He still believes that people believe in him. What a joke. No matter what side you are on, no one can say he has been good for Costa Mesa. As his Irish ancestors would say "Tóg ort! Gread!" Which means "Get Lost" in Gaelic.

10/18/2011 09:38:00 PM  
Anonymous Wake up call said...

Well, folks - there you have it. Police and Fire want to keep theirs, screw everyone else.


10/18/2011 11:00:00 PM  
Anonymous Rob Dimel said...

Ahhh"Houston". Methinks you are confused. That fully loaded amount in the audited financials of 1.9 million (I'm taking you at your word, admittedly, I haven't looked at the audited financials) is the total ABLE liability. Once again, I said in a previous post that the CM budget reflects the entire ABLE budget, not just CM's half. Further, you can not look at the liabilities alone. C'mon, you have looked at a lot of budgets in your time, you know this. You also have to back revenues out to get your true total liability.

So, using the 1.9 million, here's how that shakes out: Costa Mesa and Newport each pay 950k. Santa Ana's contribution was more like 360k (again, off the top of my head), so both CM and Newport get to split that revenue a 180k each. subtract CM's half of the 180 from the 950k is 770,000. Then there's the revenue from the OCSD for their half of the hangar rent, and their half of the ABLE mechanics that need to be backed out. I don't have those figures handy, but I would be glad to get them and once again demonstrate that the ABLE budget is not 4.9 million dollars. Not Costa Mesa's half, not the entire budget. That has been my premise all along.

Further, you yourself said that the 1.9 mil is the ABLE "fully loaded" budget. Fully loaded means everything all in. Not to mention that ABLE suspended contribution to the replacement fund, so you can't try to tack that on to the "fully loaded" (that means everything, all inclusive, total) budget.

So, to get around to answering your first question, yes, you do have the numbers wrong.

The trailer, yes the trailer was parked in my driveway. Not really sure what the relevance here is, other than it's another way for you to obfuscate. Continue to try to jumble the numbers, then throw other issues at the wall in hopes they stick. Frankly, you can try to discredit me all you like. I'm not running for any office, nor am I trying to win a popularity contest. I am simply tying to make sure the truth is out there. Those who know me know that I am an an honest man who will stand on principle and ethics. Would all who know you say the same?

10/19/2011 03:06:00 AM  
Anonymous Not Surprised said...

Nooclib1 has the right idea in his comment that "Contracted services are only as good as the contract management. If the contractor isn't constantly monitored, it'll try to do the least possible work to maximize its profit. Back in the 1990's, the government innovation gurus who write "Reinventing Government", who favored contracting, admitted that management and overhead can add as much as 30% to the cost of contracting. If you;re going to send out RFP's to compare in-house costs to contracted costs, you better have some very good, objective, and experience analysts research it to death. A lot of functions can be made more cost-efficient, but contracting isn't always the only--or the best--answer."

Unfortunately using common sense in evaluating RFP's and managing contractors is not this Council MO. Their goal is to eliminate as many city employees as possible and take away as much retirement and other benefits from the ones left. Providing quality service to residents of Costa Mesa has never been their priority. Are some of you just getting this now?

10/19/2011 08:13:00 AM  
Anonymous Question for Dimel said...

$1.9 Million, as confirmed by City Staff last night is the Costa Mesa portion of the loaded costs. Separate from Newport Beach.

Here is what we would suggest. Put all your numbers down on paper. Just like Harvey Rose did with the budget numbers. Put your logic down on paper. Make your case.

Make the case formally to the City, in a public forum. That way, the City would be forced to formally respond.

Then, if the logic is supported, you have a case. If the logic is debunked like the Harvey Rose recommendations, then we can move on.

Dimel, will you do that?

10/19/2011 09:57:00 AM  

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