TUSTIN : Potts Asks Review of City Legal Fees

Alarmed at what he described as a “tremendous jump” in city legal fees over the last four years, Councilman Jim Potts has asked the city staff to review accounting policy on legal expenses and how City Atty. James G. Rourke and his law firm bill the city for services.

At Tuesday’s council meeting, Potts said he wants to know what has caused the rise in legal fees at a time when the economy was declining and the city was trying to cut administrative costs.

Potts said the review should include recommendations on installing stricter accounting controls so that payments for legal expenses indicate the type of services rendered and how much time was spent for those services.

“We want to know exactly what we’re paying for,” said Potts in an interview after the meeting. “There has been a tremendous jump from 1989. I want to know why.”

Using records from the Finance Department to illustrate his concern, Potts said that for fiscal year 1989-90, the city paid $709,000 in legal fees. Of that amount, he said, $84,000 was paid to Rourke in retainer’s fees and benefits and $488,000 was paid to his law firm, Rourke & Woodruff. The rest was paid to other law firms.

Potts said that the 1989-90 legal fees nearly doubled that of the 1988-89 fiscal year, in which the city spent $365,000. In the last two fiscal years, the city has spent $1.3 million.

In fiscal year 1988-89, Rourke received a retainer of $2,400 a monthly but in fiscal year 1989-90, the fee was “adjusted” to $6,000 monthly.

Potts said that the raise was “hidden” in the 1989-90 budget and was not separately discussed by the council at that time. “No one in the council knew about this increase,” he said.

Under this adjustment, Rourke was paid $2,000 for attending City Council, Planning Commission and Redevelopment Agency meetings and $4,000 for 35 hours of legal work. Beyond that, he would be paid an hourly rate of $120.

In addition, the city pays for Rourke’s health, dental and retirement benefits.

“A council resolution was not necessary for the adjustment,” Rourke said Wednesday. “Salary adjustments do not always need a council resolution. They can be reflected in the budget.”

Rourke said he has “no problem” with Pott’s request of a review of the city’s legal fees. “These are all public records and available to anyone,” he said.

Rourke, who has been the city attorney since 1960, said the increase in legal fees was a result of litigation the city was involved in during 1990 and 1991. He said two former members of the council have sued the city on election-related issues. “Those expenses were related to those lawsuits,” Rourke said.

Rourke said his law firm monitors the type of legal service provided and the amount of time spent for each service but does not provide the breakdown to the city.

“It’s the way it has always been done,” said Finance Director Ron Nault. He said it would be helpful if a breakdown of the hours is provided, but it has never been a requirement.

“It’s not our concern,” he said. “Our concern is that each department stays within its budget.”

Potts, who has been a constant critic of the city attorney’s office, has asked for an investigation into the city’s legal fees before.

In 1991, he asked the staff to study the legal expenses of cities comparable in size to Tustin to determine if hiring an in-house attorney would be less costly. After a survey of nine Orange County cities, including Irvine, Dana Point and San Clemente, the study concluded that at $120 per hour, Tustin was paying less than most of the other cities.

Tustin Law During the last four fiscal years, the city of Tustin’s legal expenses have nearly doubled. The fees earned by City Atty. James G. Rourke jumped 139% while fees paid to his law firm, Rourke & Woodruff, increased by about one-third. Billing by “outside” legal firms increased by more than 400%. Total legal fees In thousands 91-92: $712

Tustin Law James Rourke & Other Rourke Woodruff legal firms 88-89 $37,892.48 $280,401.52 $46,489.23 89-90 83,943.93 488,167.33 136,861.83 90-91 87,373.00 339,176.37 203,385.11 91-92 90,392.55 371,047.35 251,120.09

Source: City of Tustin