Loading...
CC 2017-09-12_11a Report of InvestigationMEMORANDUM TO: CITY COUNCIL FROM: JAMES A. BERGMAN, CITY MANAGER HEATHER K. WHITHAM, CITY ATTORNEY SUBJECT: CONSIDERATION OF REPORT OF INVESTIGATION RESULTING FROM THE INDEPENDENT INVESTIGATION JOINTLY AUTHORIZED BY THE ARROYO GRANDE CITY COUNCIL AND SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT BOARD OF DIRECTORS PERTAINING TO CONDUCT OF JIM HILL IN HIS CAPACITY AS MAYOR OF ARROYO GRANDE AND A MEMBER OF THE BOARD OF DIRECTORS OF THE SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT DATE: SEPTEMBER 12, 2017 RECOMMENDATION: It is recommended that the Council 1) Review the independent Report of Investigation prepared by S.K. Nelson & Company under the direction of the law firm Liebert Cassidy Whitmore (LCW); 2) Consider waiving the attorney-client privilege and work product privilege related to the confidential memorandum prepared by LCW providing their legal conclusions and recommendations regarding the Report of Investigation; 3) Discuss options presented by Shelline Bennett of LCW for possible action in response to the findings contained in the Report of Investigation; and 4) Authorize additional funding to LCW to cover the cost of the investigation and legal services. SUMMARY OF ACTION: Consider possible action in response to the Report of Investigation of conduct by Jim Hill in his capacity as Mayor of Arroyo Grande and a member of the Board of Directors of the South San Luis Obispo County Sanitation District (Sanitation District) and authorize additional funding to LCW. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The City Council previously appropriated $15,000 for the investigation with the understanding that if the Sanitation District joined the investigation, the $15,000 cost of the investigation would be split equally with the Sanitation District. The investigation and legal services provided by LCW have exceeded the initial estimate of $15,000. The City Council will be asked to authorize additional funding to cover the actual cost of the investigation and legal services related thereto. Item 11.a. - Page 1 CITY COUNCIL CONSIDERATION OF REPORT OF INVESTIGATION RESULTING FROM THE INDEPENDENT INVESTIGATION JOINTLY AUTHORIZED BY THE ARROYO GRANDE CITY COUNCIL AND SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT BOARD OF DIRECTORS PERTAINING TO CONDUCT OF JIM HILL IN HIS CAPACITY AS MAYOR OF ARROYO GRANDE AND A MEMBER OF THE BOARD OF DIRECTORS OF THE SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT SEPTEMBER 12, 2017 PAGE 2 BACKGROUND: At the January 24, 2017 City Council meeting, members of the public raised concerns regarding alleged actions by Jim Hill in his capacity as both Mayor of the City of Arroyo Grande and related to his service as the City’s representative on the Sanitation District Board of Directors. The comments referenced allegations of potential Brown Act violations for disclosing confidential information from a closed session to a person not entitled to receive the information, disclosing to third parties the contents of confidential documents, and improper unilateral actions and potential interference with the administration of the City and the Sanitation District. On February 14, 2017, the City Council authorized an independent investigation of these allegations under the direction of the LCW law firm. The City Council also requested that the Sanitation District join the investigation and share the costs. On March 1, 2017 the Sanitation District Board of Directors voted to participate in an independent joint investigation with the City of Arroyo Grande. The investigator, S.K. Nelson & Company, conducted an investigation, which included interviewing witnesses, reviewing documents, and the preparation of a written report with findings of fact. A copy of the Report of Investigation is attached. LCW subsequently reviewed the Report of Investigation and prepared a confidential memorandum with legal conclusions and recommendations for the City Council and the Sanitation District Board of Directors. ANALYSIS OF ISSUES: Shelline Bennett, a partner with LCW will be present at the City Council meeting to discuss the Report of Investigation and LCW’s legal conclusions and recommendations. The Sanitation District at its September 6, 2017 Board meeting, took action to waive the attorney-client privilege and work product privilege related to the confidential memorandum prepared by LCW in order to fully discuss LCW’s legal conclusions and recommendations in public. Ms. Bennett will be discussing the option of the City Council also waiving the privileges at the City Council meeting in order to allow the memorandum to become a public document. Unless both agencies waive the privileges, the memorandum cannot be made public. If the Council decides to waive its confidentiality privilege at tonight’s meeting, staff will be prepared to immediately release the document to the public. The Council and the public will then be able to freely discuss the contents of the document. Item 11.a. - Page 2 CITY COUNCIL CONSIDERATION OF REPORT OF INVESTIGATION RESULTING FROM THE INDEPENDENT INVESTIGATION JOINTLY AUTHORIZED BY THE ARROYO GRANDE CITY COUNCIL AND SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT BOARD OF DIRECTORS PERTAINING TO CONDUCT OF JIM HILL IN HIS CAPACITY AS MAYOR OF ARROYO GRANDE AND A MEMBER OF THE BOARD OF DIRECTORS OF THE SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT SEPTEMBER 12, 2017 PAGE 3 Ms. Bennett will also be discussing the options available to the City Council in response to the Report of Investigation. These options include, but are not limited to, public censure, enhanced training on the Brown Act and government ethics, and/or updates to City policies. Lastly, the City Council will be asked to authorize allocating additional funding to LCW to cover the cost of the investigation and legal services. The City initially received an estimate of $15,000 for an investigation to be conducted on behalf of the City of Arroyo Grande. It was subsequently discussed that should the Sanitation District wish to join in the investigation, the cost of the investigation could be split. As such, the City entered into an agreement with LCW in the amount of $15,000 to be split with the Sanitation District. However, making it a joint investigation significantly expanded the scope, and made it a much more time consuming and complex investigation than an investigation undertaken by the City of Arroyo Grande alone. LCW had difficulties accurately estimating the cost of the investigation because not all of the relevant documents and witnesses were known when commenced. In addition, unexpected legal issues arose during and after the course of the investigation including a substantial Public Records Act request of approximately 2,500 pages of documents that needed to be reviewed and redacted by LCW. As such, the investigation and legal services provided by LCW have exceeded the original estimate. Ms. Bennett will be available to explain the factors that caused the investigation and legal services to exceed the original $15,000 cost estimate and provide a current estimate of the actual cost. A copy of a letter from an attorney representing Mayor Hill dated September 5, 2017, which was sent to the Sanitation District regarding the investigation, is attached to this staff report. ALTERNATIVES: The following alternatives are provided for the Council’s consideration: 1. Waive the privileges related to the confidential memorandum prepared by LCW, provide direction to staff on the actions the Council would like to take in response to the Report of Investigation, and authorize additional funding to LCW; or 2. Provide staff other direction. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2. Item 11.a. - Page 3 CITY COUNCIL CONSIDERATION OF REPORT OF INVESTIGATION RESULTING FROM THE INDEPENDENT INVESTIGATION JOINTLY AUTHORIZED BY THE ARROYO GRANDE CITY COUNCIL AND SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT BOARD OF DIRECTORS PERTAINING TO CONDUCT OF JIM HILL IN HIS CAPACITY AS MAYOR OF ARROYO GRANDE AND A MEMBER OF THE BOARD OF DIRECTORS OF THE SOUTH SAN LUIS OBISPO COUNTY SANITATION DISTRICT SEPTEMBER 12, 2017 PAGE 4 Attachments: 1. Report of Investigation 2. Letter from Stewart Jenkins dated September 5, 2017 Item 11.a. - Page 4 Item 11.a. - Page 8 Item 11.a. - Page 9 Item 11.a. - Page 10 Item 11.a. - Page 11 Item 11.a. - Page 12 Item 11.a. - Page 13 Item 11.a. - Page 14 Item 11.a. - Page 15 Item 11.a. - Page 16 Item 11.a. - Page 17 Item 11.a. - Page 18 Item 11.a. - Page 19 Item 11.a. - Page 20 Item 11.a. - Page 21 Item 11.a. - Page 22 Item 11.a. - Page 23 Item 11.a. - Page 24 Item 11.a. - Page 25 Item 11.a. - Page 26 Item 11.a. - Page 27 Item 11.a. - Page 28 Item 11.a. - Page 29 Item 11.a. - Page 30 Item 11.a. - Page 31 Item 11.a. - Page 32 Item 11.a. - Page 33 Item 11.a. - Page 34 Item 11.a. - Page 35 Item 11.a. - Page 36 Item 11.a. - Page 37 Item 11.a. - Page 38 Item 11.a. - Page 39 Item 11.a. - Page 40 Item 11.a. - Page 41 Item 11.a. - Page 42 Item 11.a. - Page 43 Item 11.a. - Page 44 Item 11.a. - Page 45 Item 11.a. - Page 46 Item 11.a. - Page 47 Item 11.a. - Page 48 Item 11.a. - Page 49 Item 11.a. - Page 50 Item 11.a. - Page 51 Item 11.a. - Page 52 Item 11.a. - Page 53 Item 11.a. - Page 54 Item 11.a. - Page 57 Item 11.a. - Page 58 Item 11.a. - Page 59 Item 11.a. - Page 61 Item 11.a. - Page 62 Item 11.a. - Page 63 Item 11.a. - Page 66 Item 11.a. - Page 68 Item 11.a. - Page 70 Item 11.a. - Page 76 Item 11.a. - Page 95 Item 11.a. - Page 99 Item 11.a. - Page 103 Item 11.a. - Page 104 Item 11.a. - Page 105 Item 11.a. - Page 108 Item 11.a. - Page 109 Item 11.a. - Page 110 Item 11.a. - Page 111 Item 11.a. - Page 112 Item 11.a. - Page 113 Item 11.a. - Page 114 Item 11.a. - Page 115 Item 11.a. - Page 116 Item 11.a. - Page 117 Item 11.a. - Page 118 Item 11.a. - Page 119 Item 11.a. - Page 120 Item 11.a. - Page 121 Item 11.a. - Page 122 Item 11.a. - Page 124 Item 11.a. - Page 125 THIS PAGE INTENTIONALLY LEFT BLANK Item 11.a. - Page 126