Contracting out

The city of Chico’s consideration of contracting out government services has struck a nerve of late with the possible privatizing of the city attorney’s job. Last October, City Attorney Lori Barker gave a six-month notice—as required by her contract—that she would be stepping down in April. Barker was hired as assistant city attorney in 1990 and was promoted to the top legal post seven years ago.

She did not want to comment publicly on the matter other than to say her decision to retire was not triggered by any inside pressure to do so, as has been suggested by some city government watchdogs. But the fact that the city may hire an outside legal firm to advise and represent it triggered a letter from former City Councilman Andy Holcombe that was printed in this paper last week, as well as one this week from current City Councilman Mark Sorensen in response to Holcombe.

Holcombe, an attorney by trade, said the move would be “a costly mistake. The cost of an outside firm providing the same level of service and accessibility to it would be more.”

Sorensen argues against that suggestion in his letter and said in an email response for this story that “Chico is the rare example of a city its size bearing the payroll and benefits costs of an in-house City Attorney department, particularly in this day and age, where business is conducted largely via telephone and email.”

He went on to say that Barker “was one of the four primary people in the old ‘Budget Team.’ It seemed that the ‘budget team’ carefully plotted the course, developed the talking points, and decided how information would be provided, when, and carefully filtered and shaped the information that was allowed to come to the public and to council.”

Sorensen said such a setup led to excessive city spending that took the city close to insolvency. “[This] further demonstrates the need for far greater levels of city attorney objectivity and independence from internal management and staff,” he said.

The city already contracts out on certain issues, he noted, such as how to dissolve its redevelopment agency.

“That is an advantage to contracting out of city attorney services,” Sorensen said. “In most cases, you are contracting with a firm of several attorneys who bring various areas of expertise. Today, we pay top dollar and still go outside for specialized services.”

Barker’s annual salary is about $190,000, although, as Sorensen pointed out, total compensation including benefits is much greater: $263,000.

The City Council will consider three options to cover Barker’s retirement: privatization of all city attorney services; contracting out some services but keeping on board an assistant attorney and paralegal to be supervised by the outside firm; or keeping the status quo by hiring a new attorney and keeping an assistant city attorney.

Mayor Scott Gruendl said he’s generally supportive of asking for requests for proposals from outside firms just to see if such a move would be positive for the city. While there have been some inquiries, he said on Jan. 28 that there had not been any actual proposals. “The best way to do that would be to collect actual information for contracting out so we can make an informed decision,” he said.

He and Sorensen will screen whatever proposals come in by Friday (Jan. 31), which is the deadline for submissions, he said. They will then schedule for closed session on Feb. 22 council interviews with the law firms that do respond.

Gruendl is weary of the city’s layoffs of employees as it downsizes to try to become fiscally solvent.

“If out of that screening process there are no proposals that move forward, or it becomes really clear that, at least to me, contracting out doesn’t necessarily produce a savings to the city, then it’s kind of an act in futility,” he said. “There’s been so much we’ve put the organization through relative to layoffs and budget reductions and that’s not over. … I don’t need to participate in any additional significant change unless there’s significant value associated with it.”

Councilwoman Mary Goloff echoed Gruendl, saying that while she’s interested in learning more about contracting out legal services, “I remain committed to maintaining staff in the City Attorney’s Office.”

Councilman Sean Morgan said he wasn’t surprised by Holcombe’s letter, seeing as how the former council member is also an attorney.

“Could it be less expensive to contract it out, avoid the benefit and pension costs?” he asked. “I think the answer is: probably. It’s worth looking into, as long as we can manage to protect institutional knowledge within the city, which the various proposals attempt to do.”