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
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