How Jim Righeimer’s Legal Wars are Draining Costa Mesa Dry.


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Trolls, monsters, scary pranksters … dark tales whispered.  Villagers nervously huddled together, while screams and curses bellow out through the late night hours…it must be… just another routine boring Council meeting during Election season in Costa Mesa!

Every city gets its fair share of craziness during election season, but in Costa Mesa the line between reality and make-believe gets blurrier and blurrier.

Throughout the Righeimer regime we residents have suffered through an barrage of vitriol and propaganda. We residents, are constantly reminded that we can’t have nice things like other cities do.  We can’t have a police force or fire stations with working air conditioners, because we have an “unfunded pension liability.”  But here, let’s spend $650K for lights in a dawn-to-dusk park, close to a million on a 3-day party (which nobody attended) and $400K for a recently renovated median (in front of Righeimers’ house, which he just decided they needed to re-do again), and that’s just a sampling of the ludicrous spending habits.  Oh, and about that infrastructure…new curbs for everybody!!!

But, sorry, you can’t have police – they cost too much.

So, when the above illustration recently ran in the local Daily Pilot (well, it was actually a paid ad, the paper didn’t just “run” it), I was a little shocked to see a visual of exactly how much Costa Mesa has lost in public safety services from just one department.  All those little red X’s represent an estimated $4 million a year savings for employment costs to the city.  But no other city in the county, when blessed with increasing revenues and rising property values, has taken the seriously monstrous steps Costa Mesa has, led by Jim Righeimer.

But hey – did I mention we got new curbs?

These reprobates sitting in City Hall have also insidiously corrupted our quality of information. The hiring of former Daily Pilot Editor William Lobdell as City spokesman (or as we call him, “Head of Ministry of Truth”) has turned our local daily independent paper into a PR mechanism for the City.  Just recently a local piece ran, touting the City as having a $6 million dollar surplus.  The claims made in the paper were nothing more than repeating misleading misrepresentations  sent out by the PR apparatus of the City. 

These “facts” were never investigated.  That one story led our very own uber-knowledgable La Femme Wonkita, to pen this tome entitled “Financial Fantasies?”  In Wonkita’s world, one doesn’t just swallow the spoonfuls of pablum, the pablum gets examined and analyzed.  Wonkita goes to the source.  In this case she chose, “What do the City’s audited financial statements say?”  Well, they paint a very different financial picture than that painted by a crass career politician like Righeimer, trying to get re-elected.  Her conculsion was that the auditors and Righiemer tell two different versions of financial reality.  She chooses to believe the auditors.

Sadly, the Daily Pilot continues to just print whatever the government feeds it without ever questioning or resourcing the facts. That’s assuming that the City would even release the facts.

ONE local activist resident has been suffering under the systematic refusal of access to public documents.  The City in this case has chosen to say “NO” to the wrong person.  Anna Vrska is not your average watchdog, or council gadfly.  She listens. She asks questions. She waits patiently for the answers and then waits for the proper documentation to back up the claims made by the city.   In many cases, those documents have been redacted to the point that they are almost unreadable.  Still she persists.  One question being answered led to more questions needing to be asked. 

One obstacle kept recurring: the obstruction by the outsourced cadre of hired gun attorneys.  At almost every turn, another attorney was managing some minor administrative duty that is unheard of in most other city’s.  While other cities naturally respect the residents right to the public documents (after all, they are paid for using public monies) in Costa Mesa our tax dollars were being used to hire high priced legal firms to review every single public document request made at the city clerks office.

This led Anna to begin to question, just how much was the City spending on Legal fees?  Her findings were shocking.  Her attempts at having the Daily Pilot print or write about her story were thwarted.  Her “following the money” makes the following piece a must read for any Costa Mesa voter.  Read this and take at glimpse at the “Shell Game” they are playing with the depleted fund reserves. Depleted Reserves vs. Phony Surpluses. The financial schemes at the City of Costa Mesa should be aptly named “all Tricks, no Treat”

I’ll let Anna’s words and research speak for themselves.  Ladies and Gentleman, Anna Vrska.

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A recent City press release touts Costa Mesa’s $6 million surplus. At City Council meetings I often hear Mayor James Righeimer describe Costa Mesa as “thriving.”  I’d characterize my beloved city more as precariously perched on a precipice.  The many reasons include the City’s rising legal expenses, depletion of the Internal Service Funds and the expanding role of contracted City Attorneys.

Skyrocketing Legal Expenses

Since 2010, the year Righeimer took office, the City’s legal expenses skyrocketed from $1.3 million to $2.84, $2.33, and $2.72 million each subsequent year. These figures are particularly worrisome considering the City spent $737,383 on attorneys the year the role was outsourced (’05-’06), and through 2010 legal fees averaged $1 million. Even before outsourcing, the average was $1.5 million per year, and no annual legal expenditure was higher than $1.88 million.

Further, it’s frightening to consider that there is no indication of this trend slowing.

Depletion of the Internal Service Funds

Where is the money for legal fees coming from? Per the City’s Comprehensive Annual Financial Report (CAFR), a portion comes from the General Fund (under City Attorney) and the rest comes out of the Self Insurance Fund (along with the Equipment Replacement Fund part of the Internal Service Funds).

Fiscal Year (July-June) General Fund – City Attorney (actual)    Self Insurance Fund – Legal Expense  Total Legal Expense
2013-14 figures not released figures not released $2.72 million
2012-13 $1.04 million $1.29 million $1.33 million
2011-12 $.956 million $1.88 million $2.84 million
2010-11 $.854 million $.446 million $1.3  million
2009-10 $.405 million $.495 million $.09   million
2008-09 $.448 million $.712 million $1.16 million

However, because the General Fund can’t keep pace with the recent increase in legal expenses, the Internal Service Funds (ISF) have been depleted.  Also, since expenditure details for the Self Insurance Fund are not broken out, it impossible for residents to know what the City is spending on legal fees and how much is actually coming out of that fund.* This accounting is misleading and millions of dollars of expenditure without details makes me uncomfortable.

I estimate that over the last three fiscal years $4.5 million from the Self Insurance Fund has been used for legal fees, and the  ISF totals have dropped from $12.61 million in ’08-’09 to $4.27 million in ’12-’13. For perspective, since 2001 the ISF has averaged $12-$14 million and didn’t dip much below $10 million until ’10-’11 – again after the Mayor took office. It is also interesting to note that the Self Insurance Fund has been in the red for multiple years, but alarmingly so the last several. And the numbers for fiscal year ’13-’14 are not even in yet!

As long as funds meant for insurance are being surreptitiously depleted, I cannot consider my City thriving. I often wonder about the true financial health of our City?

Fiscal Year (July-June) Equipment Replacement Fund Self Insurance Fund Internal Services Funds (ISF) Total
2013-14 figures not released figures not released figures not released
2012-13 $10.18 million ($5.91) million $4.27 million
2011-12 $10.28 million ($3.11) million $7.17 million
2010-11 $9.53 million ($2.47) million $7.07 million
2009-10 $12.12 million ($2.90) million $9.21 million
2008-09 $13.95 million ($1.35) million $12.61 million

I further venture that the Self Insurance Fund may have been improperly used (and abused) the last few fiscal years. Internal Service Funds are used to account for the financing of goods and services provided by the one City department to others, or of other governmental units on a cost-reimbursement basis. As the City Attorney is an outsourced entity and not a City department per se, this matter should be further examined. **

Furthermore, as the Self Insurance Fund is established to account for the receipt and disbursement of funds used to pay worker’s compensation, general liability and unemployment claims filed against the City, I think it is stretching the definition to use it for paying millions of dollars in litigation costs. ***

Expanding Role of City Attorneys

In July 2014 Jones & Mayer billed the city $157,675:  The equivalent of five full-time attorneys, each working 22 complete days at the rate of $177 per hour.  In contrast, Jones & Mayer billed $69,176 in July 2006 – an increase of 128% in eight years.  What accounts for this in a city the size of Costa Mesa?  Why do we need five full time City Attorneys plus an additional eight firms?  What were “we” spending so much money on?

The current City Council majority, and specifically the Mayor’s, callous attitude of ‘my way or the highway’ make fertile ground for lawsuits. The CMCEA litigation alone cost the City $1.94 million (Jones Day billing at $495 per hour!)  Even with that lawsuit nearing conclusion, legal spending runs rampant.

One reason is the expanding role of City Attorneys. Through my work on the Fairview Park Citizens Advisory Committee, and in my experience with public record requests, I repeatedly witnessed City Attorneys doing administrative tasks unrelated to legal issues.

Jones & Mayer, not the City, hired Zamucen and Curren, LLP to review the financials after the 60th celebration. Every public record request is reviewed by a City Attorney, even though the City’s website states that sometimes some requests are reviewed by City staff. And the list continues …

What Checks and Balances?

In this orgy of legal spending, who’s keeping tabs? Who is overseeing the quality of attorney work? Per the Jones & Mayer contract an annual review of City Attorneys is supposed to be performed, but the last time one was done was in 2008. If attorneys and their work aren’t consistently evaluated, how do we know we are getting good service and value?

Who is making sure the City is accurately billed? I’ve been informed by the City that City Attorney Tom Duarte checks the invoices and City Manager Tom Hatch signs off on them. I wonder if this is enough. Over the last three fiscal years monthly legal bills averaged $219,000. That’s a lot of legal work to be familiar with to adequately determine if billing is appropriate and correct. It seems billing inaccuracies could slip through the cracks.

Not that residents have any good way of finding out one way or another. From personal experience I know how difficult it is to get documentation, especially specifics regarding legal billing. Numerous times I’ve been denied documents on the basis of privilege, but I fail to see how the date work was performed, amount of time the task took, and attorney who performed the work, is privileged information.

Another troubling aspect is that the City’s out-sourced attorney, Jones & Mayer, are responsible for overseeing all other out-sourced firms.  So, in effect, we are paying Jones & Mayer to administrate at their legal rates, and also do something counter to logic.

Geoff West, author of A Bubbling Cauldron, captured the sentiment aptly in an October 2011 entry.

“As I contemplate that particular relationship – with an outsourced contractor overseeing another outsourced contractor – I find myself thinking this may be just the kind of complication some outsourcing arrangements bring to us. Why would a private firm – who makes their money billing for every breath they take on their client’s behalf – suggest putting a ceiling on fees for another firm? It would seem to serve their interests, but not necessarily the City’s interests, if that pot of gold remains uncapped.”

This precisely illuminates my worry concerning the (perhaps unsupervised and out of control) burgeoning legal expenses of the last few fiscal years.

Jones & Mayer billing increased from $636,108 in fiscal year ’05-’06 to $1.77 million in fiscal year ’13-‘14 (almost tripled in eight years!).  As an outsourced company with an at-will contract, and ever increasing billing, what incentive does the City Attorney have to do what’s best for the residents as opposed the iron will of the City Council majority?

So what do we currently have in Costa Mesa?  An attorney-happy City Council majority, an outsourced City Attorney (and eight additional law firms) with no incentive to curb legal costs, and ‘no checks and balances’ process including resident access to relevant attorney billing documents.  It’s a recipe for disaster.

I don’t buy Mayor Righeimer’s rosy words about how well Costa Mesa is doing. He’s gotten us in this mess and I know I’ll be thinking about the burgeoning legal expenses and accompanying issues in the upcoming election.  It is something we all need to monitor so we come off the precipice and move toward thriving.  Jay Humphrey and Katrina Foley can help guide us in that direction.

*My calculations – total legal expenditure for a fiscal year minus the actual from the General Fund under City Attorney equals the amount taken from the Self Insurance Fund.

**On the City’s website the City Attorney is delineated as a department. By definition a department is a part of a whole and an outsourced entity does not fut that definition. In my examination of 27 OC cities, none that outsource their attorney put them on their City’s website as a City department.

***No comma after general liability would indicate it refers to general liability claims not general liability.


About Gericault

Our Costa Mesa correspondent, the son of an OC Farmer. Personal Qualities not Measured by Tests, Creativity, Critical Thinking, Resilience, Motivation, Persistence, Curiosity, Question Asking, Humor, Endurance, Reliability, Enthusiasum, Civic-Mindedness, Self-Awareness, Self-Discipline, Empathy, Leadership, Compassion, Courage, Sense of Beauty, Sense of Wonder, Resourcefulness, Spontaneity, Humility.....and constantly working on all of these.