City Attorney Costs Close to Before

Morro Bay City SealBy Neil Farrell

Since being hired early last year, Morro Bay’s contract attorney firm has billed more than $200,000, according to information provided by City Hall.
Joseph Pannone, of the firm Alshire & Wynder, LLP, was hired initially as an interim city attorney, replacing another temporary hire, who stepped in after the former city attorney, Rob Schultz, was forced out in December 2013 along with the city manager.
Picked by a council subcommittee who worked with former interim City attorney, Anne Russell, Pannone and his firm was officially hired as a “contract city attorney” in February 2014, according to the City’s document archives.
The initial contract called for the firm to be paid $155 per hour for general legal services, for the first 75 hours a month. Above 75 hours and the rate jumps to $175 an hour. Specialized services or litigation rates were $195 an hour.
That rate was set through the end of August, when the rates remained the same but the hours dropped to 50 a month for basic services.
As of Jan. 1, 2015, the general services rates bumped up to $165 (first 50 hours) and $185 above the 50 hours, and specialized-litigation rates are now currently $205 an hour.
Back on Sept. 23, the city council removed the “Interim” title from the contract and Alshire & Wynder got the full-time contract with Pannone the primary attorney for the City. Various others from the firm have stood in at different board meetings. The new title didn’t change the contract’s rates or hourly conditions.
According to Russell’s staff report from Feb. 21, 2014, “Due to lower ‘ramp up’ rates and hours, but depending on number of hours and types of contract City Attorney services required, the cost to the City for the remaining four months of the Fiscal Year (from March 1 to June 30, 2014), is estimated at $66,500 (for 75 hours per month at $155/hour for general City Attorney legal services plus $20,000 in specialty and litigation services).”
That estimate was a little short as the actual bills from April-July (bills are for the previous month’s work) totaled $107,755 (Pannone billed the City $16,881 in April, his first invoice; in May he billed $28,190; $28,200 in June; and $34,484 in July, closing out last fiscal year).
Russell also estimated that “For fiscal year 2014-2015, with contracted price increases and other changes, depending on the number of hours and type of legal services provided, the cost is estimated at $149,000 [for 75 hours per month of general city attorney services plus $60,000 in litigation and specialty services].” That would total $209,000.
Actual billing for FY 2014-15 through the end of the calendar year has been — $21,165 for last August; $20,367 September; $32,127 in October and $32,127 for November-the end of December, for a total so far this fiscal year of $105,786, pretty close to the predicted annual costs after six months of the current fiscal year.
The total compensation for Pannone and A&W from March through December 2014 was $215,619.
A&W also charges for out-of-pocket costs, Russell explained, but, “will not charge for travel time or mileage to/from Morro Bay for Council meetings or office hours. A&W will charge for hotel if the Council meeting goes past 11 p.m., or if the City desires the City Attorney attend to City business in San Luis Obispo County the next day.”
“Specialized legal services include litigation, public finance, disciplinary actions or hearings, labor negotiations, cable television, toxics, refuse (trash), franchising, enterprise activities (OTHER THAN water, sewer, and harbor) and any major contract negotiation involving more than 10 hours (with City Manager approval),” Russell’s report said.
“A&W charges for legal assistants and document clerks, but will utilize the City’s in house legal assistant to the maximum extent feasible to limit City’s legal expenses.”
That legal assistant City position was vacated with the promotion of Dan Swanson to City Clerk last year.
As a comparison, former City Attorney Rob Schultz, according to the 2013 City employee salary schedule, was making $154,682 a year, $12,890 a month or $74.37 an hour for a full 40-hour work week.
The City kicked in 7-percent for his retirement ($10,827 a year). In the 2013-14 budget the City Attorney’s office was at $147,499 out of the general fund with some 60% of the overall department budget being billed to the sewer, water and harbor funds, lessening the impact of the office to the general fund. With Pannone’s contract, he bills each department hourly.
Russell explained that attorney fees are not easy to predict. “The numbers may be higher or lower depending on how the City utilizes the City Attorney, and depending on unknown demands for specialty or litigation services. Any major litigation could easily deplete the $60,000.”
The city hasn’t been involved in “major litigation” since the new attorneys were hired last March however, Pannone did file a brief in Superior Court for the Save the Park vs. Dan Reddell lawsuit, that sought to block the late-Reddell’s approved single family residence project on Cerrito Peak.
That brought out a slew of Save the Park supporters demanding the City withdraw the brief, which challenged the judge’s authority in the case.
The court brief reads in part, “In event that the Court grants in part the petition for writ of administrative mandamus and sets aside the mitigated negative declaration that the city adopted for construction of the single family residence at issue in this case, both statutory authority and an unbroken line of cases unequivocally hold that the court may net compel the city to prepare a full-blown environmental impact report and thereby require the city to exercise its lawful discretion in a particular way.”
And, “the court may only order the City to set aside its approval of the MND and to undertake appropriate CEQA review if the applicant wishes to proceed with the project.”
That brief lit a fire under activists that have been fighting the Cerrito Peak project and spilled into sharp criticisms at a council meeting in January, calling on the Council to withdraw the brief and give up on the lawsuit.
Also, before the November 2014 General Election, which had one Morro Bay issue, Pannone handed down a decision that while largely unnoticed, effectively shut off political commentary during public comment periods at the council meetings.
“The public comment period at Council meetings is to provide a limited forum for the public to comment on City business,” Pannone wrote in an email to council members and obtained by The Bay News. “It is not a forum for individuals to advocate positions on political matters, including measures on the ballot. That is not to say a member of the public couldn’t provide information to the Council about a matter that involves City business.
“For example, comments could be made about the effect Measure D-14 or J-14 could have on the City. That limited forum would, however, prevent someone from advocating how to vote on either matter as part of that speech.”
He said he was worried the public comment periods could become free speech free-for-alls. “The concern I have is if the Council continues to allow individuals to make political statements, including about ballot measures, that could result in the Council public comment period being considered a traditional public forum. If that happens, then the Council would be preventing what a speaker may say during that period (again within the parameters allowable for traditional public forums).”
And, “Based on the foregoing, if at any future meeting someone makes a statement during public comment that advocates how someone should vote on a ballot measure or for a candidate or stating they are a candidate for office, unless the Council directs otherwise at that meeting, and if the person conducting the meeting does not do so, then I will explain such speech is not permitted during public comment periods.
“I understand the sensitivity needed when such a comment is made and will exercise caution in how I make that communication.”
At least one woman was actually interrupted while attempting to advocate for Measure D, the local $175 million school bond that was being decided in November.