To: HONORABLE MAYOR AND From: Board of Administration for

CITY COUNCIL the Police & Fire Dept.

Retirement Plan

Subject: Legal Services Agreement Date: 11-17-03

RECOMMENDATION

Approval of the Seventh Amendment to the legal services agreement with Ogden, Gibson, White, and Broocks to increase the compensation by $50,000 for a total not to exceed $735,000.

BACKGROUND

Effective October 1, 1998, the Board entered into an agreement with the law firm of Ogden, Gibson, White & Broocks, L.L.P. (“OGWB”) to represent the Board in the matter of The Board of Administration for the Police and Fire Department Retirement Plan of San José California vs. Tangle Woodway, LTD, et al; No. 98-57712; in the 215 Judicial District Court of Harris County Texas, a construction defect case involving Deerwood Apartments, a property in the Board’s real estate portfolio.

The original budget was $50,000 and as the law firm developed our case, it became a viable claim. Due to the extent of the construction defects and the damage to the buildings, many defendants were added to the lawsuit and subsequent increases to the contract were made to the current not to exceed limit of $685,000. The last amendment was in June 2001.

ANALYSIS

Settlement with all defendants has been reached and all but one has paid in full. The ongoing legal work performed by OGWB was in reference to the claim filed with Travelers Insurance, the Deerwood’s insurance carrier at the time. The Board’s legal counsel felt at the time there was opportunity to get funds from them. Travelers filed a motion for summary judgment to dismiss our claim based on late notice in December 2002.

In March 2003, staff reported to the Retirement Board that all the funds on the OGWB agreement had been expended. At that time, OGWB recommended waiting until a ruling on the summary judgment was made before adding money to their agreement. Ruling in favor of Travelers on the Summary Judgment was made on September 30, 2003.

The $50,000 added to the agreement will cover all remaining amounts due to Ogden, Gibson, White and Broocks on this matter.

The Police and Fire Retirement Board approved this item at their November 6, 2003 meeting.

PUBLIC OUTREACH

Not applicable.

COORDINATION

Preparation of the contract amendment was coordinated with the Office of the City Attorney.

COST IMPLICATIONS

The expenses will be paid from the Police and Fire Retirement Funds. In accordance with the Mayor’s Budget Strategy, this proposal meets the following General Principle:

Ø Continue to emphasize prevention and expenditures that reduce costs to the City and our community.

BUDGET REFERENCE

Fund: Police and Fire Retirement Fund

Amount: $50,000

Budget Document: Proposed 2003-2004 Operating Budget

Page 861

CEQA

Not a Project

EDWARD F. OVERTON

Secretary, Board of Administration