Meeting Date:

June 21, 2010





Darby Fuerst,




General Manager

Line Item No.: Services & Supplies Legal Services


Prepared By:


Rick Dickhaut

Cost Estimate:

$400,000 in FY 2010-11

General Counsel Review: N/A

Committee Recommendation: The Administrative Committee considered this item on June 15, 2010 and recommended approval.

CEQA Compliance: N/A


SUMMARY: Since March 1979, the Board has utilized the firm of De Lay & Laredo to provide legal services to the District. The current two-year agreement expires on June 30, 2010. Exhibit 15-A is a letter dated May 24, 2010 from David Laredo of De Lay & Laredo outlining the proposed terms for a contract for Fiscal Years 2010-11 and 2011-12. Exhibit 15-B is a draft of the proposed contract. The proposed contract maintains the current rate for Fiscal Year 2010-11 and includes a slight rate increase of $5.00 per hour in Fiscal Year 2011-12. The table below summarizes current and proposed rates.


Fiscal Year

Retained Hours (45)

Hours in Excess of 45

Current 2009-10



Proposed 2010-11



Proposed 2011-12



Mr. Laredo will maintain professional errors and omissions insurance coverage of $1,000,000 during the term of the new agreement. As in previous agreements, the legal services agreement may be terminated at any time during its term, without cause, by the affirmative vote of five members of the Board. The proposed contract contains no other changes from the current contract.


RECOMMENDATION: Authorize the General Manager to execute a contract for legal services with De Lay & Laredo for Fiscal Years 2010-11 and 2011-12. The Administrative Committee reviewed this item on June 15, 2010 and voted 3 to 0 to recommend approval.


IMPACT ON STAFF AND RESOURCES: The proposed budget for Fiscal Year 2010-11 includes $400,000 to cover the costs for legal services to be provided by De Lay and Laredo, as well as limited services from other special counsel, if required. It is anticipated that legal activities related to the Cease and Desist Order, Regional Water Project and District User Fee will wind down during the first half of FY 2010-11. Accordingly, the legal services budget has been reduced from the FY 2009-10 budgeted amount of $450,000, with the $50,000 difference to be set aside in the Litigation/Insurance Reserve to fund potential future unanticipated legal activities. District staff and legal counsel believe that legal costs in FY 2010-11 could actually be as low as $350,000 and any amount saved from the budgeted amount of $400,000 would also be placed in the Litigation/Insurance Reserve.


BACKGROUND: The law firm of De Lay & Laredo has provided legal services to the District since March of 1979. The most recent contract for services, for the period July 1, 2008 June 30, 2010 was executed in July 2008. For the current fiscal year, the contract provides for retained services of 45 hours per month at $205 per hour, with all services provided beyond the retained amount being compensated at $210 per hour. The contract also provided that retained hours not used in any month be carried forward, but not beyond the end of any fiscal year. The contract contains a provision that, in absence of a written renewal, the contract shall continue on a monthly basis as of July 1, 2010.



15-A Letter from David Laredo dated May 24, 2010

15-B Draft Agreement for Legal Services for July 1, 2010 June 30, 2012