The City of Davis took a battering on the issue of DACHA (Davis Area Cooperative Housing Association) at the recent council meeting – many of those who called for further scrutiny into the city’s role have cited an often repeated figure for the city’s legal costs – 800,000 dollars.
Former Davis Mayor Anne Evans, the wife of David Thompson, one of the principals at Neighborhood Partners and Twin Pines, cited the figure in her recent letter to the city, in which she lobbied city leadership to “rise to the occasion and direct your staff accordingly. There is so much to be done on your watch, but affordable housing availability is not the least of those important items.”
She writes, “The legal battle has cost the city over $800,000.”
In a conversation that the Vanguard had with City Manager Steve Pinkerton, that figure came up and he told me at the time that the figure was not true, that the total cost to the city from day one until now was about half that – that figure includes not just legal fees but all costs.
One of the things that I have learned in my time in this role is to trust no one and verify everything. It sounds cynical. It sounds like there is some conspiracy theory. But it is a healthy cynicism because it forces everyone to be accountable and to lay their cards on the table.
The city manager’s response to my cynicism was to send him a public records request and he would get me an answer.
Fine, I sent him the public records request on February 7, 2012 and was told he was getting me the answer and would have it to me by the next day.
Ten days later, at the end of the statutory period at 3:37 pm on a Friday before a three-day weekend, I got the city’s response.
City Attorney Harriet Steiner wrote, “On February 7, 2012 you asked Steve Pinkerton for documents that would substantiate the fees that the City/Agency have spent on litigation costs related to DACHA. This e mail is in response to that request.”
The city continued, “After approval by the City Council, the City has determined to release a summary of attorneys’ fees related to DACHA, and, if you so request, redacted invoices. We are in the process of preparing the summary for release, which should be available next week.”
In other words, the simple request for information about legal costs on DACHA – something that the city manager asked me to request, something that should have helped the city, something that was intimated to me would take a day, had to get city council approval – I assume in closed session.
But there is more: “As you are may be aware, the City and the Agency has not provided records of litigation expenses, including attorneys’ fees during the pendency of litigation.”
I was not aware of that nor did I realize that is something the city could actually withhold. But apparently she has legal justification for that.
Ms. Steiner goes on to add: “Since early 2010, the City of Davis and the Davis Redevelopment Agency have been parties to two lawsuits – Twin Pines Cooperative Foundation v. Davis Cooperative Housing Association, Yolo County Superior Court Case No. CV PO 08-3424, as well as a related bankruptcy action in which the City and Redevelopment Agency are creditors, In re Davis Area Cooperative Housing Association, United States Bankruptcy Court, Eastern District of California, Sacramento Division, Case No. 10-30314-E-11, which has been dismissed.”
Ms. Steiner writes, “With respect to pending litigation, section 6254, subdivision (b) of the Act exempts from disclosure ‘[r]ecords pertaining to pending litigation to which the public agency is a party . . . until the pending litigation . . . has been finally adjudicated or otherwise settled.’ Subdivision (b) ‘was primarily designed to prevent a litigant opposing the government from using the [Public] Records Act’s disclosure provisions to accomplish earlier or greater access to records pertaining to pending litigation or tort claims than would otherwise be allowed under the rules of discovery . . .’ Roberts v. City of Palmdale, 5 Cal.4th 363, 372 (1993). This ‘pending litigation’ exemption covers documents protected by the attorney-client privilege and the work product doctrine.”
Of course, one can question whether legal expenses are really covered under this exception to the Public Records Act. And they probably are not. However, as always, the city uses the backdoor to prevent the release of such material.
Ms. Steiner suggests that, by writing: “Section 6254, subdivision (k) of the Act further exempts documents covered by the attorney-client privilege or attorney work product doctrine regardless of whether there is pending litigation on the subject covered by the privileged documents. Id. at 372-73.”
Now we get to the crux of the argument: “The billing records you requested contain attorney-client privilege and work-product protected information, and communications with other law firms related to the above litigation matters are protected by the common interest doctrine. See Meza v. H. Muehlstein & Co., Inc., 176 Cal.App.4th 969 (2009).”
In other words, my request, which really was not meant to seek billing records so specific as to require the city to breach attorney-client privilege, were taken to seek such. I had no idea when I made what I saw as an innocuous way to set the public record straight that these records had even a possibility of being withheld from me – unbeknownst to me, under the guise of attorney-client privilege and protected work product.
But don’t worry, the city has decided to be nice and release this information.
Ms. Steiner continues: “The City Council has determined to release information related to the costs of the DACHA litigation because of the public statements that have been made related to these costs. Staff is in the process of preparing this information and will provide it to you next week.”
She goes on to say, “If after reviewing the summary information, you would like to review the actual invoices, these will also be made available. However, please be aware that attorney-client privilege and work product information will be redacted from the invoices, as will any information that may impair the City and the Agency’s defense in the pending litigation matters.”
So let me recap what has happened here. The city manager cited a number that I wanted to verify more closely as it runs counter to the number presented by those supporting David Thompson and Luke Watkins. When I asked for that information, I was promised it shortly, but in fact it took a long and drawn-out process to get, and it eventually required council action to release.
I will get those figures this week, but the city will redact information that I never requested. However, now that they are redacting this information, I am now forced to want to see what it is that they are trying to hide.
Gee, I wonder why I would fail to trust the word of the city when, in fact, they have made so transparent their efforts to hide information from the public under the guise of the Public Records Act.
The irony is that all I really wanted to know is how they arrived at the figure that is roughly $400,000 for all costs associated with DACHA. Now I have a big mess on my hands that I never asked for in the first place.
The further irony is that for the past several years, there is apparently a running joke, which is closer to a persistent whine, that I have wasted inordinate amounts of staff time and money making numerous public records requests – requests that are overly-complicated, in part because the city never bothers to call to find out what I actually want, and requests that, by the way, I am entitled to as a member of the public.
As I said, with such transparent efforts to cover up information, who can blame me for being suspicious.
The city has been under fire for failing to come forward with answers to the public about DACHA, and perhaps this is all an illustration as to why that is.
I have no dog in this fight, I understand that the city is being sued on this matter, but matters of public record should be matters of public record.
There is a maxim that I adapt to fit this case: Those who have nothing to hide, hide nothing. Those who hide behind exemptions to the Public Records Act probably have something to hide.
Until the city shows me otherwise, I have no choice but to accept that maxim as true.
—David M. Greenwald reporting
[quote]principles[/quote]highbeam… assistance needed…
Thanks, hp, and you realize that i don’t have access to the articles until they are posted, until they are available to all? And the rest of my life often keeps me up late the night before…
David
I also have no stake in this issue and I interpret events somewhat differently than you. Please correct me if I am misstating your position. From your post “So let me recap what has happened here. The city manager cited a number that I wanted to verify more closely as it runs counter to the number presented by those supporting David Thompson and Luke Watkins. When I asked for that information, I was promised it shortly, but in fact it took a long and drawn-out process to get, and it eventually required council action to release.
I will get those figures this week, but the city will redact information that I never requested. However, now that they are redacting this information, I am now forced to want to see what it is that they are trying to hide.
Gee, I wonder why I would fail to trust the word of the city when, in fact, they have made so transparent their efforts to hide information from the public under the guise of the Public Records Act.”
1) You were promised information sooner than it was able to be delivered. This happens in my office frequently. A mammographer or ultrasound tech will for example tell a patient that she will receive her results the next day. She will do this whether it is a Friday or a Monday, whether or not I am in the office or on vacation, or independent of countless other variables and despite system wide instruction that only the doctor should notify of anticipated response time. The tech is not lying, from her point of view the results will be available, nor I am I trying to cover anything up.
The tech is simply unaware of my other obligations and therefore may be unreasonably optimistic about turnaround time.
2) As for redacted information, why would that automatically make you think there is nefarious intent. Why could not a reasonable alternative be that they incorrectly but innocently assumed that your request included legally confidential material that needed to be redacted ?
3) “I am now forced to want to see what it is they are trying to hide.”
I do not see how anyone is forcing you to want anything. You have told yourself a story about what their motivations must be and are now trying to flesh it out into some conspiratorial plot.
To any of you who may be my patient’s, please do not apply this line of reasoning to me. And if you do think that I am not being fast enough in addressing your concerns, please send me an email or leave me a message and I promise that I, or one of my partners will address it promptly.
No need to post it on the Vangard ; )
[quote]”One of the things that I have learned in my time in this role is to trust no one and verify everything. It sounds cynical. It sounds like there is some conspiracy theory.”[/quote]
[b]Neither Cynicism Nor Conspiracy Theory [/b]
David, it is your job as a reporter and all of us a citizens to verify positions and information that is presented to us. None of us can accept anything at face value with so many interested and biased parties involved. Verify the facts, filter the opinions based on the personal interest of the party. You are doing excellent work that benefits your readers, not only on the DACHA Debacle… but many other topics.
And Problem Is, what you say is abundantly true with DACHA situation!
Medwoman:
Perhaps I did not explain my position well enough:
1. I felt this was a simple matter of getting my financial records which are always considered public documents – now I find out that they may not be and it’s not nearly as simple as I was hoping
2. I feel like information is not coming forward in a straightforward manner and that is a common complaint that I have about the city
3. When I use the force, I use it in a less than literal sense. In this case, it means that I want to find out what the city might be trying to hide.
I hope that better explains my position
I think “Problem Is” lays it out a bit more clearly – I view it was my job to not accept things at face value – even if I agree with them – and question things. I have found that I am really good at questioning things when I disagree with them, I am trying to get better at questioning things when I agree with them.
So… are you accepting NP/Watkins/Thompson’s positions at face value? Will you request information from them (tho’ they are NOT subject to PRA)? If they decline, will you assume they have something to hide?
If I took their positions at face value, why would I have asked about the legal fees to begin with? I have at times requested information from them.
All you said was that you asked for the CITY’s attorney fees… have you asked the ‘developer’ how much they received in payments from DACHA? How much additional money they are seeking, including THEIR legal fees if they are awarded them in future litigation? Will they provide numbers even if some details are “redacted”?
One of the things that is getting lost in this discussion is WHY the city WAS FORCED to expend the money on legal expenses…
“One of the things that is getting lost in this discussion is WHY the city WAS FORCED to expend the money on legal expenses… “
That’s certainly true, though I suspect a more complex answer than simply because the city was being sued.
David, good on you! I hope you’ve completed the paperwork for the invoices themselves, in spite of Harriet’s transparent efforts to discourage you from doing so.
(“I should be providing you these invoices in response to your original, written request for public documents, but since your wording was awkward, we’ll make up a new public document that might not tell the whole story but that we hope quiets you down if we say the invoices will be worthless to you ’cause we’ll mark them up so you can’t tell whether they’re bills for DACHA work or something else and, even though we could have met the public records request deadlines by providing copies of the invoices to which we have almost immediate access, we’re adding the unnecessary work of preparing a summary to build in delay to let you know that we’ll be resisting any future requests you might have using this technique in combination with the questionable PRA exclusion claims at which we’ve hinted here,” the city attorney might as well have told you and pretty much did.)
Time for you to stop saying you “have no dog in this fight.” Everyone who lives in Davis has an interest in how the city staff and city council spend massive amounts of our tax money and how they manage municipal programs and projects.
Furthermore, you don’t need to be apologizing for or justifying your routine use of public records requests. Every one of us has such a right; we pay for the work that results in public documents; we pay for staff time to respond to such requests and on the timely basis required by state law.
I’m surprised that Sue’s so unconcerned about this aspect of the DACHA fiasco and just writes it off by repeatedly but vaguely telling us how the whole thing’s that big bad David Thompson’s fault.
Please post copies of your original records request and of Harriet’s response(s). Including the actual correspondence makes your reports more powerful and can result in bigger impacts for improved government. This is a VDR (Vanguard Documents Request).
Again, great job, David!
I appreciate your comments – by no dog in this fight, I mean I have not taken sides in the issue of DACHA or the consultants. I have a dog in the fight as you describe – an interest in knowing what city staff and council have done with public money.
“One of the things that is getting lost in this discussion is WHY the city WAS FORCED to expend the money on legal expenses….”
I don’t think that question’s getting lost at all, Elaine. All of us have been asking that very question for months–it’s THE major unanswered question of this whole debacle: what happened to DACHA? Maybe the original invoices will help David get closer to an answer, but it’s questionable, given the city’s apparent desire to hide everything about its dealings with DACHA.
The answer to the question about how DACHA (maybe with city legal/monetary help) and the city itself ended up getting sued looks like it’ll be answered in the courtroom and/or (as you supported before) by an eventual, independent investigation.
I’d prefer an arbitrated or negotiated settlement to this unending public screaming about who did what to whom. However, as the mayor and David both have publicly noted, the person who has raked in $400,000-$800,000 in this case and who personifies the city-as-defendant hardly is the one who can effectively represent us in the effort.
[quote]””One of the things that is getting lost in this discussion is WHY the city WAS FORCED to expend the money on legal expenses… “…[b]E.Musser [/b]
That’s certainly true, though I suspect a more complex answer than simply because the city was being sued.” –[b]David Greenwald[/b][/quote]Why?
[b]@David Greenwald:[/b]The city is being sued. What do you think the city should do?
Sue:
1. I have questions about the city’s role in this to date
2. The easy answer is that if the city is being sued they should defend themselves legally but the more complex answer is that the city is a public entity and as such their first responsibility is not to protect themselves legally per se but to be open and forthcoming with the residents of this community about their use of public money.
In short, if the city’s conduct itself led to it being sued, then the amount spent on legal defense is actually the fault of the city not the fault of plaintiffs. That’s where the complexity enters into this equation.
[b]@David Greenwald:[/b] Another question: What do you think David Thompson and Luke Watkins’ hope to achieve by launching this lawsuit?
My concern is primarily with the behavior and conduct of the city.
The citizens do deserve to know how much cost/waste there has been by City staff on DACHA. At the core of this has always been the questionable role of the City Attorney.
What should be asked for are all of the billings of the law firm to the City so that each billing can be looked at to determine whether it was an expense charged to the City that was related to DACHA.
I fear what Davis will get are only those expenses that Ms. Steiner believes are related to DACHA. David’s request to the City should also ask for a description of all uses of Davis’ public funds in relationship to DACHA.
Her report will not detail the legal expenses paid by DACHA or for DACHA from public funds. Those should be definitely included in the overall cost of public funds expended on DACHA.
There is a lot that will be hidden by City staff. Let’s take a look at the public funds used for legal expenses by DACHA that won’t be in Ms. Steiner’s accounting.
The loan of $4 million to DACHA which was finally made in August of 2008 clarified the purposes for which the loan was made with clarification at subsequent Council meetings that none of it should go for legal costs or litigation.
We will show that in fact against the staff report, public funds lent to DACHA were used for legal costs.
Staff report on DACHA to City Council December 7, 2007
1.The loans must be used for the following purposes:
Purpose Current Estimate
Purchase of primary loans (includes existing City/Agency assistance to DACHA) $3,501,000
Repayment of Secondary Loans $172,000
Establishing Reasonable General Reserves (Capital, Maintenance, Administrative And Vacancy Reserves, as well as reserves for other share price stabilization) $415,000
Total Estimate: $4,088,000(Rounded)$4,100,000.
The City confirmed that none of the public funds were to be used for legal costs.
David Thompson, Neighborhood Partners, LLC.
[b]@David Greenwald:[/b]You said that you need an answer to the question of why the city is forced to spend money on a defense, and that the answer that we are being sued is not sufficient for you, when I ask “Why?”, you give two reasons. The first is that you have questions about the city’s role in this to date.
I have answered these questions at length, but you don’t accept the answers.
Second, you answer: [quote]The easy answer is that if the city is being sued they should defend themselves legally but the more complex answer is that the city is a public entity and as such their first responsibility is not to protect themselves legally per se but to be open and forthcoming with the residents of this community about their use of public money.–[b]David Greenwald[/b][/quote]But I think you forget that we are not “trying to protect ourselves”, we are trying to protect that City’s affordable housing funds, so that we can build more affordable housing. And we have been open and forthcoming. Staff wrote thorough op-ed piece explaining what happened last year. There are many available public documents and staff reports. I have tried to answer questions on this blog.
Again, you just don’t like our answers.
[quote]ERM: “One of the things that is getting lost in this discussion is WHY the city WAS FORCED to expend the money on legal expenses… ”
DGM: That’s certainly true, though I suspect a more complex answer than simply because the city was being sued.[/quote]
Some answers are quite simple…
[quote]My concern is primarily with the behavior and conduct of the city –[b]David Greenwald[/b][/quote]Again, why? Shouldn’t your concern be analyzing the answers that you have gotten from DACHA members, David Thompson and Luke Watkins, and the city?
It seems to me that you are playing GACHA, not examining DACHA.
So at the moment on this issue:
$171,000 Public funds borrowed by DACHA used to pay for (unauthorised)litigation expenses (est.)
$130,000 Unpaid legal bills for work done by lawyers for DACHA at City staff’s request that we think were anticipated to be paid from public funds.
$301,000 legal expenses billed to DACHA
$116,510. In March, 2007, DACHA’s illegal board (only two of eight board members were eligible to serve) asked the City of Davis if they could forebear paying their entire publicly funded mortgage so they could pay lawyers to defend themselves in a private matter (breaking a private legal contract).
City staff recommended to Council that DACHA be allowed for six months to forebear repaying public funds to the City in an amount of $6, 427.79 per month.
However, the forbearance went on for almost 19 months and finally amounted to $116,510. Did the Council approve all of the required six month extensions?
$38,099. Amount owed by DACHA members to DACHA when they obtained forbearance from City staff. As a lender, it would seem prudent for City staff to ask DACHA members to pay down their large delinquencies before forbearing on 18 months of repayment of public funds.
By the end of the forbearance the trend would show DACHA members owed DACHA $75,000.
So DACHA appears to have used the cash flow from the forbearance to increase their delinquencies from $38,000 to $75,000.
No demand by City staff on DACHA members to address their delinquencies. As a result, DACHA delinquencies increased by $37,000 during the public fund forbearance.
$93,000. Amount presently owed to DACHA’ lawyer (Nossaman). What was done with City’s $116,510 forbearance? How much did Nossaman get paid of that $116,510?
$116,510. Amount of DACHA public fund repayment forborne. Was all of that used by DACHA to pay for the purpose approved by the City? Did City staff certify that the $116,510 was used specifically to pay for DACHA’s legal bills?
$4 million in public funds lent to DACHA. August 2008. Mayor and City Attorney state publically that none of the borrowed public funds can be used for litigation purposes.
$25,000. August/September 2009. Amount paid by DACHA board to Heffner for litigation purposes. Cat Huff emails City staff member Ayala-Garcia that “we wiped out our reserves when we paid the retainer for the new lawyer ($25,000).
$30,000. April 23, 2010. DACHA lawyer asks City Attorney to fund $30,000 retainer for litigation costs from public funds repaid to City. City agrees and Danielle Foster of City staff sends funds from City to Hefner.
Did Council approve either of these disallowed expenses from borrowed public funds?
According to DACHA Dissolution Report two law firms are owed money by DACHA:
Nossaman is owed $93,000 and
Hefner is owed $37,000
The $116,000 was intended to pay Nossaman but did it?
About $55,000 was funneled to Hefner and what happened to that?
The only way in which these two law firms obtained payment was from City Attorney blessed transfers of DACHA’s borrowed public funds. So one has to think that both law firms anticipated that given that the City Attorney wanted to support DACHA’s efforts against NP and TPCF that in the end the City would find a way to pay their bills?
After all, we have the billing records of Hefner deciding only to take the case for DACHA after the City Attorney approved the release of public funds to them.
City Attorney and City staff actions on DACHA we think place the City Attorney in a very conflicted postion. NP does not understand why Ms. Steiner and her law firm are continuing to represent the City in these matters.
City staff’s use (or misuse) of public funds relating to DACHA should indeed be investigated.
David Thompson, Neighborhood Partners, LLC