why rockville need s an in-house city attorney page

8/14/2019 Why Rockville Need s an in-House City Attorney Page

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Prepared by Drew Powell 1035 Carnation Drive Rockville, MD 20850

Why Rockville

Need s anIn-House

City Attorney


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June 9, 2008

The City of RockvilleMayor and Council111 Maryland AvenueRockville, Maryland 20850

Executive Summary

The City of Rockville currently uses an out sourced attorney for all of it legal services. On average those out sourced feestotal about $1M over the last eight years. When compared to other Maryland municipalities of similar populationRockvilles legal costs are substantially higher. Also, there may be potential conflicts of interests in that Venable, LLPRockvilles out sourced attorney, represents many clients who do business in Rockville and/or do business with the Cityof Rockville itself. Transitioning to an in house attorney would a.) substantially reduce costs, b) increase budgetarypredictability, c.) eliminate potential conflicts of interest, and d.) increase legal services availability.

Why Rockville Need s an In-House City Attorney

The Mayor and Council should be commended for swiftly moving forward on this initiative, which will have manypositive effects for our city. Although the current out-sourced city attorney, Venable LLC, has served the city adequatelyfor nearly two decades, the cost of Venable and other out-sourced legal services soaks Rockville taxpayers an average of

more than $1M per year over the last seven years. Other Maryland cities of similar population employ in-house cityattorneys and spend one quarter (Gaithersburg) to one half (Frederick) as much for all of their legal services.

Having an in-house attorney also increases budgetary predictability. Rockvilles legal bills have vacillated between$0.8M to $1.5M in recent years, compared to other cities significantly lower and constant rates. In these tight timesbeing able to accurately budget for the next fiscal years costs are even more important.

Comparing apples to apples (only out sourced attorneys fees), in 2004, Venable billed Rockville for more than $1.2M inlegal services, while the City of Gaithersburg paid their out-sourced attorney $149K and the City of Bowie paid their out-sourced attorney $160K. Gaithersburg's population is slight larger than Rockville's and Bowie's is slightly less. In otherwords, Rockville's legal bills, which totaled nearly 1.4M in 2004, were nearly TEN times that of other comparableMaryland municipalities.

Cities such as Gaithersburg have been presented with significant legal challenges, such as the development of Rio Centerday labor centers and the annexation of Crown Farm. Yet their legal bills remain dramatically lower than Rockvilles.

Add to that, possible conflicts of interest regarding Rockvilles current out-sourced attorneys, as they represent not onlythe City, but developers, who in some cases do business with The City of Rockville. Its easy to understand somecitizens concerns, when Rockvilles legal representatives sit on both sides of the table.

Any city attorney must report to the Mayor and Council, as stipulated by Rockvilles City Charter. This is how all otherMaryland municipalities structure their legal departments. Its crucial that Rockvilles city attorney be able to acautonomously and minimize actual or perceived conflicts of interest by reporting directly to this citys governmentalbody.

Respectfully Submitted,

Jacques Gelin Rich Gottfried Christina Ginsbergby Drew Powell1035 Carnation DriveRockville, MD 20850

Presentation follows:

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What are the Advantagesof an In-House Attorney?

Conforms to the RockvilleCity Charter

(City Attorney reports to the Mayor & Council)

Stabilize Year to Year

Operating Costs(Budgetary Predictability)

Eliminate PotentialConflicts of Interest


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What are the Advantagesof an In-House Attorney?

Increase Legal Services

Accessibility

Increase Oversight and

Review

Cut Costs by 30% to 50%


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How We Compare .

to other Marylandmunicipalities withoutsourced attorneys

City of FrederickGrowing city adding morehousing and industry,

significant infrastructure

City of Gaithersburg

Recent Projects include RioComplex and Crown FarmAnnexation


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Population:

30,000

35,000

40,000

45,000

50,000

55,000

60,000

Gaithersburg Frederick Rockville

Gaithersburg, at approximately 59,000 people, is only slightlylarger than Rockville, with approximately 58,000 people, andFrederick with 56,000 people. There is no statisticaldifference between the size of Rockville and the size ofGaithersburg.

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Attorney fees:*As reported in the city budgets, may include staff andconsultants.

$0.00

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

Gaithersburg Frederick Rockville

Average 2001-2008

FY '07

Rockville has a consistent pattern of significantly higherattorney costs than comparable cities.

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Cost Comparison:

Rockville spends:179% proportionate to legal

expenses in Frederick

427% proportionate to legalexpenses in Gaithersburg

Cost of one lawyer per hour:

Contracted (now): $475 per hour

Staff (in-house): $100,000/2080hrs/yr= $48.00 per hour + benefits


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Each citizen pays:

$2.71 $2.75$3.75

$2.53

$4.56$3.68

$5.68

$8.11$7.03

$9.16

$12.48 $11.89

$8.84$9.62$9.20

$13.77$14.50

$23.79

$26.34

$14.77

$17.50

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

2001 2002 2003 2004 2005 2006 2007 2008

Gaithersburg

Frederick

Rockville

$4 in Gaithersburg$10 in Frederick $17 in Rockville

FY05 Peak in Rockville $26.34Page 9 of 22



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Comparison of Municipal Legal Expenses

Year / City Gaithersburg Frederick Rockville

2001 $160,000 $453,906 $533,826

2002 $162,000 $393,800 $798,458

2003 $221,000 $512,937 $841,142

2004 $149,000 $698,788 $1,379,597

2005 $269,000 $665,594 $1,527,565

2006 $217,000 $495,160 $856,581

2007 $335,000 $538,786 $1,014,786

2008 $348,000 $673,976 $998,700*

Total Cost ( 8 years) $1,861,000 $4,432,947 $7,950,655

Average Cost per Year $232,625 $554,118 $993,832**Rockville Legal FeesCompared w/other City 427% 179% N/A

City Budget $50,600,000 $75,200,000 $93,800,000

City '08 Population 59,000 58,000 58,000

Cost per Citizen $4 $10 $17

Data Sources (inclusive of ALL 2001 - 2008 legal costs (in-house and out-sourced), annual city, budget,population, city attorney organization:

Gaithersburg: Harold Belton, Director, Finance and Administration, City of Gaithersburg. Phone: 301-258-6320

Frederick: Gerry Kolbfleisch, Comptroller, City of Frederick Phone: 301 600-1395

Rockville: March 2007 FOIA and Gavin Cohen, Director of Finance, City of Rockville Phone: 240-314-8402

Notes: * Rockville 2008 legal fees annualized based on July 2007 thru January 2008 data (all other expenses are actual)** Legal expenses for Rockville do not include Anita McCombs, Assistant to the City Attorney,

who is an employee of the City of Rockville.


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2001

2002

2003

200

4

2005

2006

2007

2008

Gaith

ersbur

g

rederick

ockville

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000


Gaithersburg

Frederick

Rockville

Rockville Town Center

GDA signed September

9, 2003, how ever,

Rockville legal expenses

spike 164% in FY 2004and 182% in FY 2005.

2001

2002

2003

200

4

2005

2006

2007

2008

Gaith

ersbur

g

rederick

ockville

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000


Gaithersburg

Frederick

Rockville

Rockville Town Center

GDA signed September

9, 2003, how ever,

Rockville legal expenses

spike 164% in FY 2004and 182% in FY 2005.

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aith

ersbur

g

ederic

k

ockville

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000$1,000,000


Gaithersburg

Frederick

Rockville

Cost per Year over

Eight Year Period

(2001 - 2008)

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Rockville Legal Expenses Lack of Budgetary Predictability

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

2001

2002

2003

2004

2005

2006

2007

2008

Rockville

Rockville Town

Center GDA signed

September 9, 2003,

however, Rockville

legal expenses spike

164% in FY 2004 and182% in FY 2005.

Trendline shows

radical deviation

from constant or

predictable legal

fees year to year,

making budgetary

planning difficult

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Who is Rockvilles Attorney:

Outsource Contract with: Venable, LLPformerly known as Venable, Baetjer & Howard LLP

the Maryland REITcounsel of choice

What is a REIT?

A REAL ESTATE

INVESTMENT TRUSTExample:

Federal Realty Investment Trust(NYSE: FRT)

o Developero Primary Rockville Town Center Developer and Signatory of

Rockville Town Center General Development Agreement (GDA)


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Venable LLP clients include:

Federal Realty Investment Trust (NYSE: FRT)o Developero Primary Rockville Town Center Developer and Signatory of

Rockville Town Center General Development Agreement (GDA)

Archstone-Smith Trust (NYSE:ASN)Recently Acquired by Tishman Speyer and Lehman Brothers' RealEstate Division, brokered by Venable LLP)o

Developero 192 Unit Apartment Complex at Veirs Mill and First St (Rt 911)o Archstone Communities 222 unit condo/apartment complex East

side of Hungerford Drive between City Center shopping center and451 Hungerford Drive office building

Corporate Office Properties Trust (NYSE:OFC)o DeveloperoRockville Corporate Center, $221,702 sq ft, $43.3M located at 15

West Gude Drive and 45 West Gude Drive

Ahold, USA (NYSE:AHO) (Giant Food, Inc.)oRetaileroOperating several grocery stores throughout the City of Rockville

Marriott International (NYSE:MAR)oHotel/HospitalityoOperates Hotels/Motels within the City of Rockville


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SECONDARY OUTSOURCED ATTORNEYS:

Holland & Knight LLP clients:JBG

o DeveloperoTwinbrook Commons

aka Twinbrook Station at the Twinbrook Metro Center

WMATA (Washington Area Metro Transit Authority)o Regional Transit AuthorityoOwner of the Twinbrook Metro Center

EYA (Eakin-Youngentob Associates, Inc)

oTown Center Developer

o Holland & Knight LLP acts as both council and Lobbyist for EYA Many other REITs and Developers


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Personnel/OrganizationCity Attorneys office consists of:

In House City AttorneyAdministrative Assistant and/or legal aidOut sourced council as needed

City Attorney must report directly to Mayor and Council

Existing Org Chart from the City of Rockville ShowsReporting Structure for City Attorney

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STAFFING:

RockvilleFY '08: $93.8 Million

Structure OutsourcedReports

to:Mayor and Council

Gaithersburg FrederickFY 08:$50.6 Million

FY '08:$75.2 Million

Structure In-House In-House

Reportsto: Mayor and Council Mayor and Coun

Staff 1 City Attorney 1 City Attorney1 AdministrativeAssistant

2 Assistant CityAttorneys

1 Legal Clerk

1 Legal Assistan1 AdministrativeAssistant


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Scope of Work1.) Provides legal advice, counsel, services, training, consultation, and opinions to the Mayor

City Council, Boards and commissions, and all levels of the City government, on a wide variety

of civil assignments, including but not limited to land use planning, laws against discrimination

construction of public works, condemnation, purchasing and procurement, leasing, purchase and

sale of property, employment legal matters, public disclosure issues, and tort law. The City

Attorneys advice includes methods to avoid civil litigation.

2.) Furnishes legal representation at all City Council meetings, and at other meetings when

requested.

3.) Prepares and reviews ordinances and resolutions, contracts and other documents for legal

correctness and acceptability.

4.) Assists officials and employees to understand statutes, regulations, ordinances, codes etc. that

apply to their respective offices and/or employment and assist in ensuring compliance thereto.

5.) Identify issues outside this scope of work that may require special counsel. Upon approval of

the City to engage special counsel, coordinate with other special counsel as needed to assure

proper management of legal issues, and proper coordination and transition of legal issues among

special counsel.

6.) Prepares legal opinions at the request of the City or the Mayor and Council.

7.) Provides the Mayor, Council, and administration a legal perspective and advice on various

governmental issues.

8.) Performs other legal services and tasks as assigned by the Mayor or the Council.

9.) Provides reports to the Mayor and City Council that detail the billings for general counsel

work and specialty work and compare to the budgets established for said services.

10.) May provide prosecution services either directly or through a subcontract with out-sourced

legal council for the City in the General District Court. May provide collection services directlyor through a subcontract with out-sourced legal council for overdue payments to the City such as

overdue tax bills.

11.) Serves as the Parliamentarian for the City Council meetings.

12.) Appears before courts and administrative agencies to represent the Citys interests.


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Specifications

1.) The appointed City Attorney (the lead attorney) must attend all regular City Council meetings.

These are scheduled for every Monday, beginning at 7:00 p.m. and typically lasting 2 - 4 hours. The

City Attorney attends all Council meetings to maintain continuity in representation.

2.) The appointed City Attorney also attends most City Council Work Sessions. These are typically

scheduled in lieu of a regular City Council meeting (above). Attendance is determined by the City

and is generally requested by the City if there are matters of concern scheduled, which could benefit

by the City Attorneys attendance.

3.) The appointed City Attorney also attends most City sponsored Public Hearings. These are

typically scheduled on days other than regular City Council meetings (above). Attendance is

determined by the City, and is generally requested by the City if there are matters of concern

scheduled, which could benefit by the City Attorneys attendance.

4.) The appointed City Attorney must be available by phone, cell phone, fax and e-mail.

5.) The appointed City Attorney must be available to the City at all reasonable times. Timeliness of

response and accessibility to the appointed City Attorney is an important aspect of the service

Accessibility and responsiveness for the proposed designated City Attorney is of greatest

importance.

Contract Term

The City anticipates a two-year contract, with optional two-year renewals. Renewal will require

Mayor and Council reauthorization.


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Recommended Actions:

Confer with other local municipalities, such as Gaithersburg,regarding methods of transition to In-House City Attorney

Create and post RFP, which includes Scope of Work andSpecifications for City Attorney position (see sample)

Hire one In-House Attorney Employment Contract Must Include a Non-Competitive

Clause for at least one year after termination of employment Start with small staff (administrative assistant and/or legal

assistant)

Engage out-sourced attorney on an as needed basis Institute a formal audit and review process for the City

Attorneys office for all legal actions by an outside agency

(Montgomery County Inspector General)

Formalize structure in accordance with City Charter theCity Attorney reports to Rockville Mayor and Council,

NOT the City Manager (conflict of interest)

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