REPORT TO COUNCIL
SUBJECT
Title
Approve Budget Modification No. 13 for Payment of Attorney’s Fee Award in San Francisco Baykeeper v. City of Sunnyvale (U.S. District Court Case No. 5:20-CV-00824-EJD)
Report
REPORT IN BRIEF
A budget modification is requested to fund a court-ordered payment of $432,586 to San Francisco Baykeeper.
EXISTING POLICY
Pursuant to Sunnyvale Charter Section 1305, at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by affirmative votes of at least four members so as to authorize the transfer of unused balances appropriated for one purpose to another, or to appropriate available revenue not included in the budget.
ENVIRONMENTAL REVIEW
The action being considered is not a project within the meaning of the California Environmental Quality Act because it is a non-discretionary decision (CEQA Guidelines Section 15357).
DISCUSSION
In February 2020, San Francisco Baykeeper, an environmental non-profit organization, filed lawsuits in the U.S. District Court against the cities of Sunnyvale and Mountain View alleging violations of the federal Clean Water Act due to bacterial contamination in stormwater outflows from the cities’ creeks and channels into San Francisco Bay. Because of overlapping factual and legal issues involving both cities, the Sunnyvale and Mountain View entered into a joint defense agreement to share the expense of litigation, and the District Court consolidated the cases for discovery and trial. In September 2022, the District Court issued a partial ruling against the cities on a motion for summary judgment, finding an “inference of violations” of the Clean Water Act on three days in 2019. However, the case must still go to trial for final determination of liability and remedies.
Based on the partial grant of summary judgment, in December 2023, Baykeeper filed a motion for approximately $1.8 million in interim attorneys’ fees to fund its continued litigation of the case. The cities strongly opposed the request, but in September 2024 the District Court ruled on the motion and ordered the cities to pay Baykeeper a total of $795,527.98 in fees and $69,642.79 litigation costs for a total of $865,170.77. The cities have exhausted all available avenues to challenge the fee award, including asking for review by the Ninth Circuit Court of Appeals, which declined to hear the matter. Subsequently, the District Court has ordered the cities to pay the award by March 4, 2025. The trial of the case has been delayed several times due to conflicts on the District Court’s calendar but is currently set to begin June 10, 2025.
As the District Court did not allocate the fee award between Sunnyvale and Mountain View, the cities have agreed to split the award 50-50 while reserving the right to make an adjustment after trial based on the cities’ respective share of liability. Therefore, Sunnyvale’s share of the interim fee award payment is $432,586.
FISCAL IMPACT
Budget Modification No. 13 has been prepared to appropriate Wastewater Management Fund Rate Stabilization Reserve funds in the amount of $432,586 for interim attorney fees to San Francisco Baykeepers to Project 835480 - Baykeeper Litigation Expenses.
Budget Modification No. 13
FY 2024/25
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Wastewater Management Fund |
|
|
|
|
Reserves |
|
|
|
|
Wastewater Management Fund Rate Stabilization Reserve |
$54,666,602 |
($432,586) |
$54,234,016 |
|
|
|
|
|
|
Expenditures |
|
|
|
|
Project 835480 - Baykeeper Litigation Expenses |
$116,389 |
$432,586 |
$548,975 |
Including this award, the City will have incurred a total of $1.06 million in expenses related to the Baykeeper litigation to date. This and other additional costs will be incorporated in the Wastewater Fund Resource Allocation Plan as part of the FY 2025/26 Recommended Budget, and it is anticipated that rates for Wastewater collection services will be impacted.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
STAFF RECOMMENDATION
Recommendation
Approve budget modification since the payment has been ordered by the District Court.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
_x_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Rebecca Moon, City Attorney
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Court Order