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  City Tries to Spend and Spin Itself Out of Financial Crisis
February 15, 2004

Getting the message out the way they want it and circling the wagons to defend themselves from any adverse consequences of recent statements about the City’ financial position led to City officials advising the City Council of an urgent need to retain a quartet of expensive consultants specializing in spin, bankruptcy and bonds.


At the February 10, 2004, City Council meeting, the City Council approved contracts totaling $250,000 with four firms to, as a memo prepared by our new public relations firm states “… assist City staff as it addresses the City’s fiscal condition.”


The four firms are:


  • Winston and Strawn, LLC, a law firm that cited its bankruptcy experience as its principal qualification.
  • Saybrook Restructuring Advisors, also a firm with substantial bankruptcy experience
  • Orrick, Herrington & Sutcliffe, LLP, a law firm, whose partner John H. Knox, has served as bond counsel to the City for many bond issues.
  • Davis & Associates Public Relations, LLC, headed by Darolyn Davis, daughter of Belva Davis of KQED. Darolyn Davis also has close ties with Willie Brown and worked for him as both Speaker of the Assembly and Mayor of San Francisco.


The City Council voted to hire the first three firms in executive session under privilege granted by the Brown Act, Government Code Section 54956.9, which deals with litigation. In order to comply with the Brown Act, there doesn’t have to be any litigation -- just the possibility that someone may sue the City, which is a loophole big enough to drive a truck through. The contracts, which were announced by the City Attorney in the open session that followed, were supported by the entire City Council except me. The one exception was Orrick, Herrington & Sutcliffe, which I supported because they have been one of the City’s long-time bond counsels and may be able to provide critical information on bond-related options while the Finance Department is consumed with producing a second quarter budget review.


In open session, the City Council hired Davis & Associates Public Relations, LLC, without even seeing the contract. Again, I was the only Council member dissenting.


There was no explanation of how the City will pay for this added expense except that it will come out of the City Manager’s budget. It is interesting that one month ago, the City was apparently so broke it couldn’t bring back a single laid off firefighter, but his month $250,000 was miraculously found in the City Manager’s budget. And more may be needed. Incidentally, you could hire at least 25 firefighters for a month with $250,000.


In related business, the City’s previously promised second quarter review that was supposed to reveal the true condition of the fiscal situation was postponed from February 17 to March 2.


I remain skeptical of this substantial commitment of funds as the City tries the novel approach of spending and spinning   itself out of an apparent financial crises. I say “apparent,” because no information has come forth to quantify the City’s financial position.


At the January 6, 2004, City Council meeting, Acting City Manager Jay Corey described the City’s financial situation as follows (quotes transcribed from video tapes):


  • “The City’s financial situation is, at best, perilous.”
  • “Our best available information is that on April 15 next year (sic), we will have $125,000 in cash. That’s our best estimate. That’s reality.”
  • “Had we not taken and don’t continue to take these difficult measures, checks will bounce around mid-April.”
  • “I don’t anticipate any encouraging news on the financial front.”


On January 8, 2004, an article in the Contra Costa Times with the headline “Richmond Verges on Bankruptcy,” may have set off the current spending spree on financial, legal and public relations consultants.  City officials have been quick to blame the use of the “B” word by a sloppy headline writer as the basis for the subsequent downgrading of the City’s bond rating. From what I can discern, the word “bankruptcy” in the headline did not, in fact, come from a public statement of any Richmond official, but the article, itself, was accurate.


On January 9, 2004, the City issued a press release that not just disavowed the “B” word, but also the characterization described by Corey just three days earlier: “The financial information in the [Contra Costa Times] articles was based on information developed in early November 2003 prior to implementation by the City of a number of steps to curb spending and reallocate amounts within various funds.”

As recently as February 10, 2004, a press release, apparently prepared by the City’s new flack, took another swipe at revising the context of the previous statements:  “Recent news reports on the City’s financial condition have included incorrect statements that the City will only have $125,000 on hand as of April 15, 2004. City staff generated the reported number in October 2003, as a projection of general fund cash-on-hand for April 2004, after giving effect to payment of bond debt.”


With no numbers to quantify the financial condition of the City, who can blame the public, the press and the bond rating organizations for hanging on the only characterization made by City officials in public – “perilous?” According to a February 12 article in the Contra Costa Times, “Bond analysts Standard & Poor's recently downgraded Richmond's bond rating, and Moody's Investors Services has placed the city on its watch list for possible downgrade, because of the city's failure to produce required reports.”


The reason I opposed hiring most of the consultants is that I believe the best way to confront the current financial problems, to the unknown extent they exist, is for City officials to stick to the fundamentals. Produce the numbers; they will speak for themselves. Forget the spin and just tell the truth – the facts will speak for themselves. As far as restructuring City government to reduce costs and improve revenue, we all know what need to be done. We don’t need bankruptcy attorneys and work out experts to tell us what to do. What we need is simply the resolve to do it.


At no time in my City Council service has the pressure to conform to management’s perception of the correct course of action been stronger. Deviants from management recommendations, bolstered by the City Council majority, are considered tantamount to traitors and labeled as “dangerous.” Being the lone man out on City Council decisions such as these is not easy. The popular conception among most City Council members and City management is that the City Council and City management are a “team,” and to dissent is to not be a “team player.” Not being a team player is seen as endangering the City. Even worse is not endorsing the majority opinion once a vote is taken. A good team player on the losing end of a vote is supposed to then support the majority opinion – or at least to remain silent on the issue thereafter. In my opinion, a City Council is not, nor is it intended to be, a team in the sports analogy. We don’t have a coach whose job is to manage the team, and we don’t have a playbook. While we may share the goal of making Richmond the best it can be, we each have a different perception of how to get there. Because my colleagues don’t agree with the plays in my book is not, I believe, justification for me to abandon my playbook and my principles.


The latest tactic to scare dissident City Council members is to have the City Attorney’s office pass out copies of portions of the Brown Act and threaten legal action against Council members who might divulge too much of what goes on in secret executive sessions of the City Council. Since anyone could make up a scenario under which the City might be sued for something, the City Council can find an excuse to discuss it in closed session.


On the revenue side, Richmond has been lackadaisical almost forever. Two years ago, I discovered that the previous Finance Directors had violated Municipal Code Section 13.45.010 by not making Consumer Price Index adjustments to business license fees since 1986. This has cost the City of Richmond about $6 million in revenue that can never be recovered. When the adjustment was finally made last year, the City’s projected business license revenue went up by $750,000 a year. Even with that, an estimated 20% of Richmond businesses are not even paying license fees because no one at City hall is sending them a bill. Similarly, the City’s charges for services, such as planning reviews, had not been adjusted since the early 1990’s, despite huge increases in the City’s costs of providing these services. For years, the City Council has refused to hire experts to find out if Chevron’s loophole in the Utility User Tax Ordinance is costing the City money. Ignorance is bliss, it seems.


I can go on and on. How about the $1.1 million rent for the temporary City Hall at Marina Bay while no plans are being made for the old City Hall? The City is renting out 50 acres of prime waterfront property at former Terminal 4 for only $3,500 a month. The Port of Richmond ties up hundreds of acres of prime waterfront property that is unused or underutilized. Unlike most cities, Richmond collects no business license fees from residential rental landlords. If we just copied neighboring El Cerrito, Richmond would realize over $1 million annually from residential landlords. Many of these decisions are political – the City Council is afraid of offending some special interest, like the powerful California Apartment Association that already successfully lobbied the City Council to cease enforcement of the City’s Rental Unit Inspection Ordinance. For months, the City Council has resisted taking a hard look at benefit assessment districts to stabilize revenue for basic services, such as street lighting and landscaping – or even parks and libraries. Cities such as Vallejo spun theses services off to districts a long time ago.


On the expense side, resistance to change is equally entrenched. Most municipal experts will agree that Richmond’s nine-person City Council is two to four persons too large to govern effectively and is a recipe for disaster, financial and otherwise. But the city Council is not willing to take the first step for a remedy. When staff told the City Council we could afford the enhanced pension plans without cost-sharing, we believed what we wanted to hear, and we all went along to get along. Cities larger than Richmond typically get by with smaller staffs and budgets, and we can learn from them. Resisting the use of technology has cost Richmond much in the way of potential operational savings.


Apparently, the City Council will be more inclined to embrace these opportunities when they show up in a report from a $375 dollar per hour consultant. And $375 is a “blended” rate, meaning some of the consultant’s employee’s are billing at higher rates, and some at lower. All the City will see, however, is a fixed hourly rate. Blended rates are a trick developed by the legal profession to obscure high hourly rates that would otherwise gag clients. The flip side, however, is that the youngest and most inexperienced employees of the consultant will also be billed at $375 per hour, and we will never know the difference.


For those who like to review the source documents, several follow. City press releases can be viewed at http://www.ci.richmond.ca.us/announcements/pressreleases.htm.


Contra Costa Times (Walnut Creek, CA)

January 8, 2004




RICHMOND -- Contra Costa County's second largest city is on the brink of bankruptcy as officials devise a plan to avert defaulting on a major bond payment and bouncing checks come April.


With only $125,000 in available cash flow, Richmond is in such financial peril it could conceivably face a third, deep round of service cuts and staff layoffs before the fiscal year ends on June 30.


But city officials Wednesday stopped short of declaring Richmond bankrupt, though they called the situation "perilous" and "dire."


News of the city's fiscal straits spilled publicly Tuesday night during a raucous, two-hour fire union rally at the City Council meeting aimed at reversing layoffs of 18 firefighters made to help plug a $9.5 million budget gap.


"I don't anticipate any good financial news," said acting City Manager Jay Corey.


"The next 18 months we're going to have a tough, tough time," he said. "If we don't take different steps, checks are going to start bouncing. The state is broke. That's the reality."


Council members had been extensively briefed on the shortfall.


On Wednesday, Corey described the situation as "'the perfect storm.' It's a combination of things: Big seas, big storms, big wind, and human error."


Contributing to Richmond's crisis is the state deficit, which has left California unable to help its municipalities as tax revenues plunge. In fact, it is more likely than ever to raid their resources, officials said.


Additionally, Richmond is vulnerable to two annual cycles of massive bills, including $12 million bond payments in April and December. Payments are distributed more evenly in most cities, Samsell said.


Adding to the misery is a $4 million boost this year alone in Richmond's payment to the Public Employees Retirement System, or PERS, which has passed along extensive losses to cities and counties. Richmond officials expect another $4 million hike next year.


In the past, the city has sold bonds and use d various one-time-only pools of money to cover cash-flow shortfalls, said Finance Director Pat Samsell.


As recently as a month ago, Samsell was not so sure the city would not go bankrupt.


"I was at a point where I thought, 'I can't recommend the city go out to borrow, because they couldn't pay it back,'" he said. "We've slowed down spending considerably."

In addition to layoffs across city departments, expenditures of more than $1,000 must be approved by a cash-flow committee including Samsell, Corey and Assistant City Manager Leveron Bryant. Promotions were frozen, and the only new hires are for revenue-generating positions.


To augment the $90 million general fund budget, city officials are considering user fees for city services, and special assessment districts, including a citywide lighting and landscaping district. Costs would be shared by new developments that are bringing in nearly 1,000 new homes to the city of 107,000 residents.


Retiring City Manager Isiah Turner already had penciled in a cut in his own salary before he quit for health reasons.


"I've cut this office disproportionately since we started this," Turner said. Last spring, he axed his public information officer, community liaison and others.


Numerous critics charged the council with wasting money by renting a temporary City Hall at 1401 Marina Way for $100,000 a month.


But Corey said the rent is far less than the debt payments would be on upgrading the seismically unstable Civic Center at 2600 Barrett Ave. Even the most modest proposal would cost about $400,000 a month, he said.


Firefighters from across the East Bay and beyond, including two from New York, came to the council meeting Tuesday to blast the Jan. 1 layoffs which, they say, leave the city's fire protection below national averages.


"We can't have an off day, an off month, an off year," fire union president Jim Russey said. "As every day! passes, it becomes obvious this was a bad decision. Commitment is the lifeblood of the fire department."


Councilman Jim Rogers insisted the 18 positions be reinstated, but Corey, Samsell, and Turner said the money simply isn't there. The council already transferred $3 million from the police department to the fire department in January.


"It was a very controversial decision," Councilwoman Maria Viramontes said. "We were overspending our budget in hopes that motor vehicle license fees would come back (to cities from the state). I personally asked the unions to consider cost-sharing health benefits. I suggest we go back to the (negotiating) table."


But Russey said the fire department saves the city money by having the city pay their pension costs.


"We traded salary for pension benefits, because we got a better take-home pay," he said. "If we took that 9 percent in salary, our hourly rate would be higher, which would mean increased overtime, holiday pay."


Samsell said other cities also are facing perilous budgetary times.


For Corey, who began his career during the passage of Proposition 13, there is no explaining away the current crisis.


"This dwarfs Proposition 13," Corey said. "Then the state could bail us out. This isn't getting as much press, but it dwarfs Proposition 13."


Contra Costa Times (Walnut Creek, CA)

January 18, 2004




IT CAUSES US great anguish when the subject of a story, in this case the city of Richmond, calls into question our reporting by issuing a press release saying a story we published was false.


We react by opening our ears and requesting specifics from the city on where we were wrong, because accuracy and fairness go to the heart of our credibility with you, our readers.


This scenario with Richmond played out when Times staff writer Rebecca Rosen Lum first reported in our Jan. 8 edition that the city was devising a plan to avert defaulting on bond payments and avoid bouncing checks.


That's such a significant story that we splashed it on our front page in the lead position with the headline "Richmond verges on bankruptcy."


What's critical right now is that the city issued a press release claiming the story was false and attempting to undermine our credibility.


Now, we make mistakes. Pretty much every day, actually. Most are minor mistakes like a misspelled word, a misspelled name or a typographical error. If we're wrong, we want to know it. We need to know it. Tell us and we'll do our best to make it right.


But we don't make major blunders, or at least we shouldn't, and we strive to avoid doing so. And we sure as heck don't deceive. If we do, we take serious measures, including termination of employment, to help ensure we never do it again.


So if Richmond leaders believe we are in error, they should tell us directly. They should sit down with Rosen Lum and explain their financial situation. Sit down with her editor, Scott Corey. Sit down with me. Sit down with Times Editor John Armstrong. Answer our questions so that we do get it right.


We deserve that much. The residents of Richmond deserve that much. The 450,000 people who read this newspaper every day deserve it.


What galls us is when municipal officials issue a press release saying we're wrong, but then wo! n't discuss inaccuracies with us. My guess is that if Rosen Lum's story was off base, Richmond officials would have been knocking down my door demanding a front-page retraction. I know I would have if I were in their shoes and the newspaper of record had done me wrong. I'd call them on it.


That hasn't happened, and I suspect it hasn't because the story was accurate and Richmond knows it. In fact, when we called acting Richmond City Manager Jay Corey for an explanation on what was wrong with the story, we got a completely different response from him.


He said he didn't like the headline, and who can blame him. But as for the story, he said, "I had no quibble with the text of the story. I thought it was pretty accurate."


He should know. He was the one who sounded the alarms during a City Council meeting. He's the man running the city. If you can't believe him when he says publicly that the city will start bouncing checks if it doesn't get its financial house in order, then when can you believe him?


His only regret may ! be that he said it while our reporter was sitting there writing down every word, as she should be. That's her job, to be a watchdog for the residents of Richmond. She's very good at it. This is the same reporter who exposed the knuckleheads who attempted to scam 76-year-old Irene Feaster from her Richmond home. Rosen Lum's stories ultimately led to a judge returning Feaster's home to her.


This is the same reporter who took on Richmond landlord Inderjit Bal by reporting on the lousy living conditions his tenants pay him good money for. As a result, city and county officials turned around and cited Bal with 40 health and safety code violations.


This is the same reporter who last month exposed Richmond's Employment and Training Department managers for using $200,000 in literacy program funds to pay for their own salaries, and then laying off seven of nine literacy tutors because of a money shortage.

If anything, Richmond and its residents should be thankin! g this reporter for her diligence in bringing positive change and for standing up for people like Feaster and the city's taxpayers.


Instead, the city issues a press release calling her, and us, liars.

Now that's unfair and inaccurate.


Richmond hires veteran PR consultant
Posted on Mon, Feb. 09, 2004


With attention to Richmond increasing amid reports of fiscal turbulence, the city has hired a veteran public relations consultant to communicate with the news media.

Darolyn Davis, whose firm is based in San Francisco, worked for the state Legislature for 10 years, including eight for then-Assembly Speaker Willie Brown. She later handled the press for the Oakland School District during its flap over the use of ebonics to improve the language skills of African-American students.

City Manager Jay Corey contracted with Davis using a line item prerogative acceptable for assignments of less than $10,000. The low fee does not require an outside bid.

"I hired her on an initial contract just to get her going," Corey said.

The city has not had a public information officer since the first round of layoffs in the spring. City Manager Isiah Turner began cutting with his own staff, eliminating the job of spokeswoman Angela Jones, who now works for the Sacramento Housing Authority.

Mayor Irma Anderson had pressed Turner, and more recently Corey, to hire a publicist, but Turner rejected the request, saying the money was not there.

"When times are tough, that's when you need somebody," Anderson said. "It's so important to get information out and for it to be correct. We've got nine people on the council and sometimes people forget to say 'in my opinion.'"

Several council members said they had no idea that the hire was in the works.

"I'm skeptical about those kinds of things," Councilman Tom Butt said. "We're better off with city officials talking directly with the media, because they're the ones with the information."

Several incidents have drawn media attention to Richmond, including a recent Point Richmond blaze that firefighters said could have been a disaster given the layoffs of 18 firefighters.

Reporters also have been circling the city's finance director amid reports the bond ratings have been downgraded by credit rating agencies.

Some staff members have said a consequent flood of media inquiries has disrupted their work.

Finance director Pat Samsell, struggling to put together a comprehensive financial report by Feb. 17, said numerous calls about the city's bond rating have slowed his progress.

Davis said she was not directed to focus on specific issues.

"What's more, the issue over there is that they are just very short-staffed," she said.

Her job is "not permanent," she said.


Richmond enlists aid of budget advisers
Posted on Thu, Feb. 12, 2004


City officials on Tuesday night hired experts in complex financial problems, including high-exposure bankruptcies, to advise city leaders on budget issues, at a cost of $195,000.

Officials also delayed releasing the city's midyear financial report, expected Feb. 17, until March 2, and allocated an additional $55,000 to a public relations team to shepherd the city through the next five weeks of budgetary review.

After a closed session presentation, the council approved contracts with bond adviser John Knox, a partner in the San Francisco law firm of Orrick, Herrington & Sutcliffe, and with the international law firm Winston & Strawn.

According to a summary of the finance team's duties, Winston & Strawn advised the council to bring on Saybrook Restructuring Advisors, which has handled five of the nation's largest bankruptcies, including Kmart, Pacific Gas and Electric Co., United Airlines and Orange County.

The firms will size up the city's financial condition, including budget, revenues and bond indebtedness; then they will propose fixes and cuts.

In a second phase, the team will focus stemming loss or damage to the city, and engineer a prompt turn-around with "short-term relief," the summary report says.

Winston & Strawn brought Saybrook on board not because of any impending bankruptcy but because of "their experience with municipal finance," said Darolyn Davis, a public relations consultant hired by the city. "They provide lots of services, and they're very, very good at financial structures. We want to leverage that."

Mayor Irma Anderson said the expert advisers have "all kinds of skills in helping local government."

"Anybody who is expert in municipal finance is what we need," Anderson said. Winston & Strawn "did an assessment, made a diagnosis, and we are looking for someone to help us move forward and deal with our problem."

When asked if she knew Saybrook specialized in large bankruptcies, Anderson said, "I don't know that I was aware of that."

The finance experts and Davis "will be joined at the hip to get good, high-quality information out to the public," said acting City Manager Jay Corey.

Although all the contracts extend through June, the council may need to authorize additional money by the end of March, Corey said.

When audited financial statements are released in late March, Richmond will "either no longer have need for these services or we'll be back before you" to ask for additional funds, Corey said.

Winston & Strawn, which will charge the city $375 an hour, handles bankruptcies and insolvencies, and litigates complex commercial cases, according to its Web site. The partners who made Tuesday's council presentation are experts in corporate restructuring and bankruptcy.

The firm's clients include Bank One, General Electric, Philip Morris and Waste Management Inc.

"Richmond's really lucky to have them on board," Davis said. "They've seen everything that comes up. They'll be great at coming up with alternatives to whatever (the city) decides to do."

Davis said the city will be actively seeking community input through the neighborhood councils about how to proceed as the financial picture becomes clear.

Bond analysts Standard & Poor's recently downgraded Richmond's bond rating, and Moody's Investors Services has placed the city on its watch list for possible downgrade, because of the city's failure to produce required reports.

Standard & Poor's credit analyst Paul Dyson said the ratings agency was stymied by a lack of information. City officials have failed to project cash flow for fiscal year 2004 or report financial results for 2003.

Although Finance Director Pat Samsell said a detailed financial report would answer all the pertinent questions upon its release, Standard & Poor's lowered its rating by two grades in mid-January.

"June 2002 is just not recent enough to maintain their credit rating," Steven Zimmerman, managing director of the San Francisco office of Standard & Poor's, said of the city's most recent audited reports.

Lower bond ratings may spike the amount of interest Richmond would pay on future bonds.

In a news conference Wednesday, Anderson said the delay in releasing the report was necessary to allow the advisers and an outside auditor time to scrutinize records and issue accurate information.

"This is normal for a mid-year review," said Councilwoman Maria Viramontes. "Being late two weeks is not unusual. This has been blown out of proportion."


California Government Code 54956.9.  Nothing in this chapter shall be construed to prevent a legislative body of a local agency, based on advice of its legal counsel, from holding a closed session to confer with, or receive advice from, its legal counsel regarding pending litigation when discussion in open session concerning those matters would prejudice the position of the local agency in the litigation.For purposes of this chapter, all expressions of the lawyer-client privilege other than those provided in this section are hereby abrogated.  This section is the exclusive expression of the lawyer-client privilege for purposes of conducting closed-session meetings pursuant to this chapter.For purposes of this section, "litigation" includes any adjudicatory proceeding, including eminent domain, before a court, administrative body exercising its adjudicatory authority, hearing officer, or arbitrator.    For purposes of this section, litigation shall be considered pending when any of the following circumstances exist:(a) Litigation, to which the local agency is a party, has been initiated formally.    (b) (1) A point has been reached where, in the opinion of the legislative body of the local agency on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the local agency.(2) Based on existing facts and circumstances, the legislative body of the local agency is meeting only to decide whether a closed session is authorized pursuant to paragraph (1) of this subdivision.     (3) For purposes of paragraphs (1) and (2), "existing facts and circumstances" shall consist only of one of the following:    (A) Facts and circumstances that might result in litigation against the local agency but which the local agency believes are not yet known to a potential plaintiff or plaintiffs, which facts and circumstances need not be disclosed.    (B) Facts and circumstances, including, but  not limited to, an accident, disaster, incident, or transactional occurrence that might result in litigation against the agency and that are known to a potential plaintiff or plaintiffs, which facts or circumstances shall be publicly stated on the agenda or announced.    (C) The receipt of a claim pursuant to the Tort Claims Act or some other written communication from a potential plaintiff threatening litigation, which claim or communication shall be available for public inspection pursuant to Section 54957.5.    (D) A statement made by a person in an open and public meeting threatening litigation on a specific matter within the responsibility of the legislative body.    (E) A statement threatening litigation made by a person outside an open and public meeting on a specific matter within the responsibility of the legislative body so long as the official or employee of the local agency receiving knowledge of the threat makes a contemporaneous or other record of the statement prior to the meeting, which record shall be available for public inspection pursuant to Section 54957.5.  The records so created need not identify the alleged victim of unlawful or tortious sexual conduct or anyone making the threat on their behalf, or identify a public employee who is the alleged perpetrator of any unlawful or tortious conduct upon which a threat of litigation is based, unless the identity of the person has been publicly disclosed.    (F) Nothing in this section shall require disclosure of written communications that are privileged and not subject to disclosure pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1).    (c) Based on existing facts and circumstances, the legislative body of the local agency has decided to initiate or is deciding whether to initiate litigation.    Prior to holding a closed session pursuant to this section, the legislative body of the local agency shall state on the agenda or publicly announce the subdivision of this section that authorizes the closed session.  If the session is closed pursuant to subdivision (a), the body shall state the title of or otherwise specifically identify the litigation to be discussed, unless the body states that to do so would jeopardize the agency's ability to effectuate service of process upon one or more unserved parties, or that to do so would jeopardize its ability to conclude existing settlement negotiations to its advantage.    A local agency shall be considered to be a "party" or to have a "significant exposure to litigation" if an officer or employee of the local agency is a party or has significant exposure to litigation concerning prior or prospective activities or alleged activities during the course and scope of that office or employment, including litigation in which it is an issue whether an activity is outside the course and scope of the office or employment.  


California Government Code Section 54957.1.  (a) The legislative body of any local agency shall publicly report any action taken in closed session and the vote or abstention of every member present thereon, as follows:    (1) Approval of an agreement concluding real estate negotiations pursuant to Section 54956.8 shall be reported after the agreement is final, as specified below:    (A) If its own approval renders the agreement final, the body shall report that approval and the substance of the agreement in open session at the public meeting during which the closed session is held.    (B) If final approval rests with the other party to the negotiations, the local agency shall disclose the fact of that approval and the substance of the agreement upon inquiry by any person, as soon as the other party or its agent has informed the local agency of its approval.    (2) Approval given to its legal counsel to defend, or seek or refrain from seeking appellate review or relief, or to enter as an amicus curiae in any form of litigation as the result of a consultation under Section 54956.9 shall be reported in open session at the public meeting during which the closed session is held.  The report shall identify, if known, the adverse party or parties and the substance of the litigation.  In the case of approval given to initiate or intervene in an action, the announcement need not identify the action, the defendants, or other particulars, but shall specify that the direction to initiate or intervene in an action has been given and that the action, the defendants, and the other particulars shall, once formally commenced, be disclosed to any person upon inquiry, unless to do so would jeopardize the agency's ability to effectuate service of process on one or more unserved parties, or that to do so would jeopardize its ability to conclude existing settlement negotiations to its advantage.    (3) Approval given to its legal counsel of a settlement of pending litigation, as defined in Section 54956.9, at any stage prior to or during a judicial or quasi-judicial proceeding shall be reported after the settlement is final, as specified below:    (A) If the legislative body accepts a settlement offer signed by the opposing party, the body shall report its acceptance and identify the substance of the agreement in open session at the public meeting during which the closed session is held.    (B) If final approval rests with some other party to the litigation or with the court, then as soon as the settlement becomes final, and upon inquiry by any person, the local agency shall disclose the fact of that approval, and identify the substance of the agreement.    (4) Disposition reached as to claims discussed in closed session pursuant to Section 54956.95 shall be reported as soon as reached in a manner that identifies the name of the claimant, the name of the local agency claimed against, the substance of the claim, and any monetary amount approved for payment and agreed upon by the claimant.     (5) Action taken to appoint, employ, dismiss, accept the resignation of, or otherwise affect the employment status of a public employee in closed session pursuant to Section 54957 shall be reported at the public meeting during which the closed session is held.  Any report required by this paragraph shall identify the title of the position.  The general requirement of this paragraph notwithstanding, the report of a dismissal or of the nonrenewal of an employment contract shall be deferred until the first public meeting following the exhaustion of administrative remedies, if any.    (6) Approval of an agreement concluding labor negotiations with represented employees pursuant to Section 54957.6 shall be reported after the agreement is final and has been accepted or ratified by the other party.  The report shall identify the item approved and the other party or parties to the negotiation.    (b) Reports that are required to be made pursuant to this section may be made orally or in writing.  The legislative body shall provide to any person who has submitted a written request to the legislative body within 24 hours of the posting of the agenda, or to any person who has made a standing request for all documentation as part of a request for notice of meetings pursuant to Section 54954.1 or 54956, if the requester is present at the time the closed session ends, copies of any contracts, settlement agreements, or other documents that were finally approved or adopted in the closed session.  If the action taken results in one or more substantive amendments to the related documents requiring retyping, the documents need not be released until the retyping is completed during normal business hours, provided that the presiding officer of the legislative body or his or her designee orally summarizes the substance of the amendments for the benefit of the document requester or any other person present and requesting the information.    (c) The documentation referred to in paragraph (b) shall be available to any person on the next business day following the meeting in which the action referred to is taken or, in the case of substantial amendments, when any necessary retyping is complete.    (d) Nothing in this section shall be construed to require that the legislative body approve actions not otherwise subject to legislative body approval.    (e) No action for injury to a reputational, liberty, or other personal interest may be commenced by or on behalf of any employee or former employee with respect to whom a disclosure is made by a legislative body in an effort to comply with this section.