City attorney differs with audit

Deirdre Newman

The city’s legal costs are more in line with other cities’ than an

independent review showed, according to a report by the acting city

attorney.

The City Council hired a consultant firm to do the independent

cost/benefit analysis of the city attorney’s office and identify ways

to make it more efficient after the departure of former City Atty.

Jerry Scheer.

The review, which the council received at a study session on Dec.

8, and acting City Atty. Tom Wood’s supplement arrived at the same

conclusion: Costa Mesa should keep its legal services in-house.

Wood felt compelled to issue his report to let the council know

the true legal costs of the office versus the “rough approximations”

used in the third-party review.

Mayor Gary Monahan said he appreciated Wood’s clarification.

“I think [the independent reviewers] gave an excellent report and

Tom did an excellent report,” Monahan said. “It’ll definitely help

the council as we go forward in trying to organize/reorganize the

city attorney’s office and make it a very efficient and lean

department.”

Management Partners, the company that conducted the independent

review, conceded that it had used inflated costs for external counsel

but said comparisons using these numbers still had value.

Since Wood has been in the city attorney’s office on and off since

1980, he has access to the actual numbers. He thought they would

paint a clearer picture of Costa Mesa’s costs compared to other

cities.

For example, Wood found that the report overstated outside legal

fees by more than $1 million for the fiscal year that ended in June

2002. With his numbers, Wood found that the percentage of city

operating expenditures spent on outside counsel was much lower and

closer to comparable cities for the past three years.

“When you look at the actual numbers, our city is in line with

other cities our size,” Wood found.

Wood also found major errors in the independent review for the

city’s in-house legal fees. For the three fiscal years starting with

2000-01, the cost of in-house legal services was inflated by about

20%, Wood said.

While the independent review pegged the in-house legal costs at

between about $773,000 and $858,000 over the past three years, the

actual costs were between $646,000 and $723,000, Wood found.

With his supplemental report, Wood reached the same conclusion

that he came to in June when he presented his own review of the city

attorney’s office to the City Council -- that the legal counsel

should stay in-house.

Monahan said this conclusion makes sense.

It will be up to the full council to decide whether to recruit for

the city attorney position that has been vacant since Scheer’s

departure, Monahan said.

After a protracted legal fight, Scheer and the city reached a

$750,000 agreement in October that prompted his retirement.

Scheer filed a lawsuit against the city, four present and former

council members and a deputy city attorney in September. The suit

contained 16 complaints for damages, including violation of free

speech and due process; unlawful harassment based on age and

disability, and violation of the Brown Act open meeting law.

Scheer was hired without a recruitment process, Monahan added.

“And that’s a fatal flaw that we can’t have happen,” Monahan said.

* DEIRDRE NEWMAN covers Costa Mesa and may be reached at (949)

574-4221 or by e-mail at deirdre.newman@latimes.com.