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Home My WebLink About#9 Legal Services Agreement Porter Simon Law AGENDA ITEM #9 Public Utility District m MEETING DATE: February 7, 2024 TO: Board of Directors FROM: Brian Wright, General Manager SUBJECT: Consideration of Approving an Updated Legal Services Agreement with Porter Simon Law APPROVED BY: Brian C. Wright, General Manager RECOMMENDATION: Authorize the General Manager to execute an updated legal services agreement with Porter Simon Law to reflect an increase in General Counsel and litigation services effective March 1, 2024, as proposed. BACKGROUND: The District has utilized Porter Simon Law for General Counsel and litigation services since 1981. Mr. Gross joined the firm in 1991 and has been retained specifically for General Counsel and litigation services since that time. Having provided General Counsel and litigation services for the District now for more than 30 years, the District has developed a strong and trusting professional relationship with Mr. Gross and the team at Porter Simon. ANALYSIS AND BODY: In January 2024, the District received a letter from Mr. Gross requesting to implement an increase in hourly billing rates for both General Counsel and litigation service effective March 1, 2024 (Attachment 1). The requested hourly billing rate increase for General Counsel services is from the current rate of $250/hr to a new rate of $280/hr, and the litigation services rate increase from $300/hr to a new rate of $335/hr. As indicated in his letter to the District, Mr. Gross is very cognizant of the challenging financial environment in which we all operate. While the new rates will represent a 12% increase to current rates, Porter Simon's rates for the District have not increased since September 2018. Therefore, the average annual increase in rates over the past five and half years is less than 2.25% per year. During this time, we have experienced some very high inflation, and my costs continue to rise. This is only the third time since 2005 that Mr. Gross has requested an increase in rates. As General Counsel, Mr. Gross provides a wide range of legal services, including labor and employment related matters, water utility, energy, complex CEQA and Page 1 of 2 Page 12 of 73 environmental matters, real estate, land acquisition and disposal, fees and charges (including Prop 218 work), public construction disputes, financing and other matters. GOALS AND OBJECTIVES: District Code 1.05.020 Objectives: 1. Responsibly serve the public. 2. Provide a healthy and safe work environment for all District employees. 3. Provide reliable and high quality water supply and distribution system to meet current and future needs. 4. Provide reliable and high quality electric supply and distribution system to meet current and future needs. 5. Manage the District in an environmentally sound manner. 6. Manage the District in an effective, efficient and fiscally responsible manner. District Code 1.05.030 Goals: 1. Manage for Financial Stability and Resiliency 2. Environmental Stewardship: Create a sustainable resilient environment for all our communities. 3. Engage with our customers and communities in a welcoming and transparent way to identify opportunities. 4. Take the best of private sector thinking to modernize the utility and add value to our communities. 5. Developing an inclusive culture drives organizational integration and success. FISCAL IMPACT: Over the course of the past five years, the average annual billable services provided by Porter Simon has been approximately $120,000/year. An increase in billable rates of 12% is estimated to result in an average annual expense in the amount of just over $134,000. Sufficient funds exist in the Board approved FY2024-25 budget, including budgeted legal services in the amount of$171,000 and $134,330 respectfully. ATTACHMENTS: 1. Letter Requesting Rate Increase - 01-16-2024 (01139290) Page 2 of 2 Page 13 of 73 Ethan J. Birnberg*0 James L. Porter,Jr., Of Counsel Kelley R. Carroll*t Louis A. Basile, Of Counsel Sara D. Davidson Pamela M. Everett *Also licensed in Nevada Steven C. Gross" PORTER SIMON �Also licensed in Colorado and Brian C. Hanley* Wyoming Traci S. Mason t Certified Specialist in Estate LAW — Planning, Trust&Probate Law James E. Simon (California Board of Legal Ravn R. Whitington* Specialization) David W. Wolfe* January 16, 2024 Via Email: brianwright@tdpud.org Board of Directors Truckee Donner Public Utility District 11570 Donner Pass Road Truckee, CA 96161 Re: Request for Porter Simon Rate Increase Board Members: I am writing to request an increase in my hourly billing rate for General Counsel services from the current rate of$250/hr to $280/hr and an increase in my rate for litigation services from $300/hr to $335/hr. I am requesting that the new rates become effective as of March 1, 2024. I am very cognizant of the challenging financial environment in which we all operate. While my new rates will represent a 12% increase to my current rates, I have not increased rates since September 2018. Therefore, the average annual increase in my rate over the past five and half years is less than 2.25% per year. During this time, we have experienced some very high inflation and my costs continue to rise. This is only the third time since 2005 that I have requested an increase in my rates. I believe that my proposed rates are competitive with rates charged for similar services by other law firms in Truckee and northern California and by attorneys with experience similar to that of our attorneys. This will be my 36th year of practicing law. For about the past 33 years, I have focused my practice on representing public agencies. I understand that lawyers with my experience charge rates for general counsel type work similar to or more than my proposed hourly rate of$280/hr. Law firms that specialize in providing services to public agencies typically provide "general counsel" services at one hourly rate and charge higher hourly rates for "special services."We are proposing to charge for litigation services at a higher rate,but not for any other services. Some public agency firms define "special counsel services" very broadly to include litigation, labor and employment related matters, including disciplinary hearings, energy, complex CEQA and environmental matters, real estate, land acquisition and disposal, fees and charges (including Prop 218 work), public construction disputes, financing and others matters. Rates for special services often well exceed $335.00/hr., especially when they are provided by {01139290.DOC 1 } TRUCKEE 140200 Truckee Airport Road, Suite I, Truckee, California 96161 ' phone (530) 587-2002 ' fax (530) 579-5999 RENO Page 14 of 73 Page 2 of 2 January 16, 2024 firms that specialize in one area of practice, such as environmental, eminent domain or public financing. Our proposed rates are discounted and significantly less than the rates we charge to non- public entity clients. My hourly rate for private clients is $450/hr. The hourly rates for other Porter Simon attorneys providing services to private clients range from $350—$450/hr. During these many years, I have kept a close eye on the amount and cost of my services and will continue to do so in the future. I truly enjoy working with the District and appreciate your confidence in me and my firm. Thank you. Sincerely yours, PORTER SIMON Professional Corporation 4TEVEN C. GROSS gross(a�portersimon.com 101139290.DOC 1 } Page 15 of 73