While the City of Davis and the Davis City Council figure out what to do in wake of the collapse of McDonough, Holland and Allen, one of the largest firms in the region and the firm that the city has a contract with for City Attorney Services, one of the questions that has emerged is whether this is the appropriate time to reevaluate things.
The city council will not have a lot of time to review the City Attorney contract before the August Break, but there does seem to be some sentiment at least in the community to look into whether the city should continue to have a contract City Attorney.
If the city’s contract is nullified with MHA, will the city automatically re-hire Harriet Steiner in deference to her work with the city over 24 years and “institutional memory” that she possesses or will they at least entertain the option of competitive bids?
Harriet Steiner told the Vanguard last Friday that she does not anticipate that the changes to impact the services to the city. She wrote in an email, “I cannot comment at this time except to say that my work for the city should not be affected. In addition the other lawyers in my firm are also committed to assuring that any changes at My firm do not impact the services to the City.”
But Ms. Steiner does not make all of the decisions here, the city council has direct hiring authority of two positions in the city. One is the city manager and the other is the city attorney. Thus the council and not the city manager makes the determination as to whether to retain Ms. Steiner as City Attorney.
Councilmember Sue Greenwald has been pushing hard for discussions. She has pushed to get the new council sworn in early. “We have an emergency in that our city attorney’s firm going out of business before we return from August break,” she said on Thursday. “It is critical that the new council be able to meet in closed session concerning this issue as soon as possible. Two weeks is not enough, IMHO.”
“It made sense to swear in the new council at the end of the June 29 meeting, because no council business is scheduled to occur between then and the time two weeks later that the new council would be seated,” she posted on the Vanguard. “Swearing in the new council at the end of the July 29 meeting would have enabled us to start working together on the city attorney issue; an issue that arose after the tentative ingoing-outgoing scheduling had been made.”
The Vanguard in March of 2009 at least looked into some of the cost questions. While this data is now about a year and a half hold, it seems likely that at least it reflects a good sampling. In the fiscal year of 2004-05 the City of Davis paid its City Attorney and law firm $514,154.10. In 2005-06 it was $535,664.50. In 2006-07 it was $641,025.70. And in 2007-08 it was $464,145.50.
The question is would the city save money by going in-house. We survey over 100 cities in the fall of 2008 and 85 of them responded. The result was not even close. Cities that outsourced their city attorney services paid far less than those who had their own in-house city attorney.
The data also suggest that larger cities tend to go in-house whereas smaller cities tend to outsource. Even so, those who in-house pay a larger percentage of their general fund for attorney services (1.54 percent) than those who outsource (1.31).
Davis ranks right in the middle in terms of costs. In terms of absolute spending Davis ranks 37 out of 85. In terms of percent of general fund, Davis ranks 34 out of 85. Among those who outsource, Davis ranks 16th highest among the 52 cities. However if they were to in-house their city attorney services, Davis would rank in the bottom third of spending ahead of just 12 and behind a full 21.
In terms of the cities that Davis often compares itself to, Davis is one of the few that outsources its city attorney, but also spends less than most.
In order to bring the city attorney in-house, the city would need to hire probably at least three employees, the city attorney, a deputy, and an assistant. With total compensation, already the city would be looking at least at $400,000. That would not include other costs to run the office. It would not include the frequent need for outside opinions should the area of the law be something the attorney is less familiar with. The city often utilizes specialists in the MHA firm to assist. And there may be additional litigation costs over and above the salaries.
It is not impossible that the city might save money going in-house, but it is not for certain either. Last year, the Vanguard concluded that the data was not definitive. Davis seems to sit right on the bubble between needing to go in-house and continuing to outsource. That would suggest that part of the discussion should be driven less by cost and more by quality of service.
The bigger question is whether the city council believes it is receiving adequate quality of service. The problem with using the new council to determine that is that two of the councilmembers will be unfamiliar with the product that the city receives.
This is a tough question but a crucial one as the city moves forward.
—David M. Greenwald reporting
The cost of an in-house attorney is probably underestimated, since it does not include the cost of the unfunded liabilities or the coming increases in PERS contributions.