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C
ITY AND
C
OUNTY OF
S
AN
F
RANCISCO
O
FFICE OF THE
C
ITY
A
TTORNEY
 
D
ENNIS
J. H
ERRERA
 City Attorney
D
IRECT
D
IAL
: (415) 554-4748E-M
AIL
gloria.smith@sfgov.org
MEMORANDUM
C
ITY
H
ALL
, R
OOM
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1 D
R
. C
ARLTON
B. G
OODLETT
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LACE
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S
AN
F
RANCISCO
, C
ALIFORNIA
94102-4682R
ECEPTION
: (415) 554-4700
·
 
F
ACSIMILE
: (415) 554-4715
TO: Mayor Gavin NewsomBoard of SupervisorsController Edward HarringtonFROM: Dennis J. HerreraCity AttorneyJesse Capin SmithChief AssistantDATE: June 16, 2005
 
RE: Updated City Attorney Financial Recovery And Savings ReportThe City Attorney's Office defends San Francisco against lawsuits in which millions of  public dollars are at stake. We also manage a nationally recognized affirmative litigation program, where the Office prosecutes lawsuits on behalf of San Francisco and the people of theState. These legal actions often result in substantial net monetary recoveries for Citydepartments and for the General Fund, in addition to achieving industry reforms and promoting public integrity. This Office also provides training and day-to-day counsel to the City'sdepartments, boards, commissions and officials on a wide range of legal matters. Through itstraining and general advice functions, the Office reduces the City's exposure to risk of loss,assists the City in recovering monies owed to it, helps the City realize a greater return on itsassets, and safeguards the City's financial interests in contracts.Particularly in these lean budgetary times, we remain focused on helping protect – andimprove – the City’s fiscal condition in three principal ways: by effectively devoting resources todefending lawsuits where the City has significant financial exposure; by prosecuting cases inwhich the City has the opportunity to recover money damages and civil penalties; and by helpingminimize the City's exposure to potential liability through counsel and training. In the past fewyears, the efforts of the top-flight attorneys and staff who make up this Office have resulted inhundreds of millions of dollars in net savings and recoveries for San Francisco.
Effectively Devoting Resources to Defend Lawsuits
Our deputies represent the City in about 7,500 actions annually, ranging from personalinjury and property damage to breach of contract. Early on, we carefully evaluate the merits of every case that is filed against the City. Where the City is not at fault we vigorously defend thecases. When it appears that they City may be liable, we attempt to resolve cases throughsettlement to reach a fair result, before the parties need to incur significant legal fees. We have
 
C
ITY AND
C
OUNTY OF
S
AN
F
RANCISCO
O
FFICE OF THE
C
ITY
A
TTORNEY
 
Memorandum
TO: Mayor Gavin NewsomBoard of SupervisorsController Edward HarringtonDATE: June 16, 2005PAGE: 2RE: Updated City Attorney Financial Recovery And Savings Report
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developed cost-effective strategies to allocate resources to the cases we defend on behalf of theCity, and we are able to handle almost all of those cases with our in-house expertise. Whereappropriate, the Office also has programs to leverage pro bono assistance from the private bar. Arecent example of such assistance is the same sex marriage case.
Prosecuting Cases to Recover Revenues
As you know, as part of the City Attorney's public integrity initiative we have filed anumber of false claims and unfair business practices lawsuits relating to public contracting withthe City, as well as its School District. We have had a number of successes in these cases thisyear, including, most recently, the settlement with NEC in the E-rate case and the settlement of the SRS case, both described below. While these actions are often costly and difficult to pursue,we expect that San Francisco will recover substantial sums in the coming months and years fromthese actions. In addition these actions often generate non-monetary public benefits for the City by protecting the integrity of the City contracting process and related City ordinances, and inmany instances by reforming industry practices and otherwise improving the quality of life for San Franciscans.During Fiscal Year 2002-2003 we began the Revenue Collection Task Force to assistdepartments in the collection of monies owed San Francisco from various sources, includingfines, penalties, taxes, reimbursements for damage to City vehicles and property and workers'compensation subrogation. This past year we added the Police Department, Fire Department andDepartment of Parking and Traffic to our program, which already includes work for Muni, theDepartment of Public Works, the Department of Building Inspection and the Public UtilitiesCommission. We hope to add other departments to this program in the future and expect to work with departments to intensify revenue collection efforts.In sum, for the first quarter of this Fiscal Year we have helped the City obtain awards andcash recoveries through our various initiatives of over $7,000,000 – and settlements for theSchool District of over $45,000,000 – and we have saved the City many millions more. Cashrecoveries and awards for the City include the following (individual major cases are highlightedin Part I of this memorandum below):
o
Under our Affirmative Litigation Program, we have obtained cash recoveries and judgments totaling about $3,000,000.
o
As part of our ongoing code enforcement efforts we have helped the City collectover $3,500,000.
 
C
ITY AND
C
OUNTY OF
S
AN
F
RANCISCO
O
FFICE OF THE
C
ITY
A
TTORNEY
 
Memorandum
TO: Mayor Gavin NewsomBoard of SupervisorsController Edward HarringtonDATE: June 16, 2005PAGE: 3RE: Updated City Attorney Financial Recovery And Savings Report
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o
As a result of this Office's Revenue Recovery Program we have collected over $1,000,000.This figure is the sum of recoveries of relatively small amounts from a largenumber of collection actions. To date we have brought nearly 750 cases, up from641 cases in the previous fiscal year. And we average collections or more than$85,000 per month, up from $75,000 per month last fiscal year.
o
We have received over $130,000 in bail bond collections and over $18,000 in for welfare fraud (with judgments in welfare fraud for an additional $16,000).
o
Our cash receipts for reimbursement of worker's compensation benefits paid as aresult of accidents with third parties totals almost $1,000,000. The recoveryrelated to subrogation claims for workers compensation benefits paid out toemployees and their medical providers totals an additional almost $1,000,000.Recovery for credit rights totals another about $1,400,000. (These are rights thatCity has to be relieved of its obligation to pay further employee worker compensation benefits to the extent the employee receives a net recovery becauseof a settlement or payment of a judgment). And the recovery related tosubrogation claims for property damage is an additional $100,000. We expect toreceive more funds within the close of the Fiscal Year.
Safeguarding the City Against Potential Liability through Counsel and Training
We have implemented risk management and revenue recovery programs that areworking, having yielded extensive net additional savings and payments for the City and thatcould generate more savings and recoveries in the future. On the risk management side, the CityAttorney's Office has established a program to provide departments with quantitative informationregarding the number, nature and dollar value of claims and litigation against the City. Wegenerate risk management reports regularly and share these reports with department heads andthe City's Risk Manager. We also meet regularly with each department to analyze trends andidentify remedies.In addition to the risk management reports, the Office develops and conducts a variety of training programs for the City's boards, commissions, departments and officials in an effort tohelp avert potential liability. We address matters such as the Sunshine Ordinance, conflict of interest and other ethics laws, preventing discrimination and sexual harassment in the workplace,conflict resolution, and accommodating the public and employees with disabilities. We publishan annual update of the Good Government Guide, which includes an overview of the major laws
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