South Pasadena City Council members will decide Wednesday whether to begin a search for a new firm to provide the City’s principal legal services. The long-anticipated vote constitutes a referendum on Colantuono, Highsmith & Whatley (CHW), the firm that’s provided the City’s legal services since 2014 but which has been the subject of considerable controversy over the past several years.
In September 2021, the City approved a contract amendment removing City Attorney Teresa Highsmith and replacing her with Andrew Jared, also of CHW. Last June, the council’s Finance Ad Hoc Committee recommended the City replace CHW, against which it alleged conflicts of interest, misrepresentations concerning the City’s legal liability insurance, and signing off on contracts in violation of city purchasing policy. The FAHC recommendations can be reviewed starting on page 548 of the 568-page agenda packet.
The staff report for Wednesday’s agenda item offers three options: retaining CHW, immediate issuance of a request for proposals (RFP) for a new firm or releasing an RFP in six months. It notes that even though the fiscal year is only half over, CHW has already billed the city for 94 percent of the $450,000 allocated for legal services in the 2022-23 budget.
Four of the council’s five members are attorneys. Two of them–Mayor Pro Tem Evelyn Zneimer and newly elected 5th District Council Member Janet Braun—are both on record supporting an RFP for a new law firm. Zneimer has long been a vociferous critic of CHW’s legal advice and strategy, while Braun says CHW has lost the public trust and believes it relies too heavily on litigation over negotiation.
CHW has been the City’s law firm since 2014. Since then, according to an analysis of court records, the City has been a party to 43 lawsuits filed in LA County Court, with the average annual number rising from 3 per year to 4 per year. During the same period, annual non-employment-related legal service costs increased from $261,000 to $450,000.
The staff report warns solicitation of a new law firm could result in increased costs, “given the work that is before the City, existing and unanticipated litigation costs, as well as higher-than-typical Public Record Act request[s],” many of which require legal review, it said.
The bill of particulars concerning CHW’s performance also includes:
–CHW’s knowing failure to ensure the City’s ongoing compliance with several elements of a 2011 consent decree the City signed with the state Water Board. Besides exposing the City to millions of dollars in potential penalties, critics believe compliance would likely have enabled the City to avoid the events, high litigation costs and public controversy that resulted from a disputed failure of the city’s sewer system. CHW’s tactics in that litigation have also been the subject of criticism.
–CHW’s failure to ensure the City Treasurer was filing state-mandated finance updates, reporting of which may have helped avert the financial reporting crisis that consumed the finance department in 2020.
The council is also poised to review its litigation portfolio. During an unusually long two-hour closed session scheduled to take place ahead of Wednesday’s open meeting, the agenda lists 15 existing and two potential cases for discussion during a conference with legal counsel–far more than usual.
Also Wednesday, the City is slated to approve a $99,500 contract for Raftelis Financial Consultants to complete a long-contemplated assessment of the police department. Raftelis was one of eight bidders on the contract, which includes a community engagement program and will focus on providing technical assistance for the “development of contemporary police services and responsibilities” and advise on “services, delivery, and approaches from a lens of racial equity.”
The City will also consider making appointments to various commissions, including the addition of Sheila Rossi to the Finance Commission. Rossi and her husband, former city council member Stephen Rossi, were instrumental in helping to expose problems in the city’s 2020-21 budget that ultimately contributed to the departure of the former city manager and finance director.