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Home My WebLink AboutR-97-0784J-97-764 1 1 /1 /97 RESOLUTION NO. 9 784 A RESOLUTION APPROVING THE CITY ATTORNEY'S ENGAGEMENT OF THE LAW FIRM OF TEW AND BEASLEY, P.A. TO SERVE AS COUNSEL TO THE CITY OF MIAMI IN CONNECTION WITH LITIGATION PROCEEDINGS TO BE INITIATED AGAINST DELOITTE & TOUCHE, FORMER CITY OF MIAMI EXTERNAL AUDITORS; SAID ENGAGEMENT TO BE UNDER A REDUCED HOURLY AND MODIFIED CONTINGENCY FEE ARRANGEMENT AS HEREIN SPECIFIED, WITH ALL EXPENSES TO BE APPROVED BY THE CITY ATTORNEY; ALLOCATING FUNDS THEREFOR, IN AN AMOUNT NOT TO EXCEED $50,000, FROM ACCOUNT NO. 92-10-02, MINOR OBJECT CODE 270. WHEREAS, pursuant to Resolution No. 96-774, adopted October 24, 1996, the City Manager was authorized and directed to proceed with Phase I, the fact finding phase, of determining the existence of possible liability on the part of the City's former external auditors, Deloitte & Touche; and WHEREAS, the law firm of Tew & Beasley, P. A. was subsequently engaged for this purpose; and WHEREAS, it has been determined that liability exists on the part of Deloitte & Touche and the next step is to proceed with legal action against said firm; and WHEREAS, it is recommended that the law firm of Tew & Beasley, P.A. be engaged to serve as counsel to the City of Miami in connection with litigation proceedings in this matter; t co SSiOiw STING OF Nov 0 1 1997 Revolution No. NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAM1, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. Section 2. The City Attorney's, engagement of the Law Firm of Tew & Beasley, P.A. to serve as counsel to the City of Miami in connection with litigation proceedings to be initiated against Deloitte & Touche, former City of Miami external auditors, said engagement to be under a Reduced Hourly and Modified Contingency Fee Arrangement, as proposed below, is hereby approved, with funds therefor hereby allocated, in an amount not to exceed $50,000, from Account No. 92-10-02, Minor Object Code 270. Section 3. The Reduced Hourly and Modified Contingency Fee Arrangement with the Law Firm of Tew & Beasley in connection with the hereinabove matter proposes: 1) a reduced hourly rate of $150 per hour for partners, $125 per hour for associates, and $75 per hour for paralegals upon the City's authorizing litigation proceedings after reviewing the Tew & Beasley report and recommendation; 2) an additional fee equal to the difference between the reduced hourly rates and full standard and customary hourly rates if recovery is between $1 and $2 million. No additional fee would be due if recovery is less than $1 million; 3) if recovery is between $2 and $5 million, the additional fee would be equal to one and one-half times the full standard and customary hourly rates, less the amount already paid based upon the reduced rates; 4) if recovery exceeds $5 million, the additional fee would be equal to two times the full standard and customary hourly rates, less the amount already paid based upon the reduced rates; 5) all expenses are to be approved by the City Attorney. -2- 9 7- 784 Section 4. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 1st day of November, 1997. JA iEMAN CITY CLERK APPROVED AS TO FORM AND CORRECTNESS: Q;61NN46,WiES, III CITY ATT PONEY W 1969:CSK:AQJ 97- 784 Tew & Beasley Fee Proposals Straight and Full Billing is Participation In Case Attorney 10% Tom Tew 25% Joe Rebak 44% Associate 21 % Paralegal 100% Standard Hourly rate $380 $275 $170 $90 0 Estimate of Hours for a Two Year Trial High Low Hours 4,700 5,500 Estimated Legal Fees Est. Out of Pocket $$ Estimated Total Costs -- Win or Lose Costs at Standard Rates $178,600 $209,000 323,125 378,125 351,560 411,400 88,830 103,950 $942,115 $1,102,475 150,000 200,000 $1,092,115 $1,302,475 Page 1 C Reduced Hourly and Modified Contingency Lose Case or Win Less than $1 Million Participation In Case Attorney 10% Tom Tew 25% Joe Rebak 44% Associate 21 % Paralegal 100% Reduced Hourly Rate $150 $150 $125 $75 Estimated Legal Fees Est. Out of Pocket $$ Estimated Total Costs -- Win < $1 M Win Between $1 and $2 Million Estimated Total Costs -- Based on Standard Rates Win Between $2 and $5 Million Estimated Total Costs -- Based on 1 1/2 imes Standard Rates Win Over $5 Million Estimated Total Costs -- Based on 2 Times Standard Rates Page 2 Costs at Reduced Rates @4,700 Hrs. @5,500 Hrs. $70,500 $82,500 176,250 206,250 258,500 302,500 74,025 86,625 $579,275 $677,875 150,000 200,000 $729,275 $877,875 $1,092,115 $1,302,475 $1,563,173 $1,803,713 $2,034,230 $2,354,950 • • Pure Contingency Recovery Amount $0 $1,000,000 Between 1 and $5 Million $2,000,000 $4,000,000 $5, 000, 000 Over $5 Million $6,000,000 $10,000, 000 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100, 000, 000 $120,000,000 Total Fee Legal Total Cost with Out of Pocket Costs % Fees At Low End At High End 0% $0 $150,000 $200,000 25% $250,000 $400,000 $450,000 20% $450,000 $600,000 $650,000 $850,000 $1,000,000 $1,050,000 $1,050,000 $1,200,000 $1,250,000 15% $1,200,000 $1,350,000 $1,400,000 $1,800,000 $1,950,000 $2,000,000 $3,300,000 $3,450,000 $3,500,000 $6,300,000 $6,450,000 $6,500,000 $9,300,000 $9,450,000 $9,500,000 $12,300,000 $12,450,000 $12,500,000 $15,300,000 $15,450,000 $15,500,000 $18,300,000 $18,450,000 $18,500,000 Page 3 Fund Name Enterprise Funds G&OFund Marine Stadium Miami Stadium Orange Bowl Convention Center Marinas Auditorium Golf Courses Warehouse Parking Garage Building & Zoning Solid Waste Property Mgt. Manual Artime Other Funds Total Enterprise Internal Service Funds City of Miami Proprietary Funds Profit and ;1 _ �_3) 1985 1986 1987 1988 1989 $142 $61 $194 $433 44 117 2 90 33 147 97 156 146 129 634 103 374 795 804 2,715 1,277 1,665 9,588 2,565 910 567 43 2,643 1,975 59 94 127 113 186 271 89 33 40 57 16 21 13 10 7 3,106 81 121 8 100 126 148 106 604 560 480 23 415 69 276 812 5 year 1989 Inc. or Retained Loss Earnings 1990 1991 1992 1993 1994 $708 $882 $420 $447 $311 $582 $139 194 368 18 93 60 201 363 790 158 123 172 269 1,442 629 0 740 1,243 739 1,751 17,810 24,185 3,883 2,254 1,552 344 1,200 2,188 758 1,964 442 379 3,318 382 579 2,821 190 144 68 198 512 310 44 44 32 47 37 47 337 124 14 14 13 3,416 3,702 1,191 701 147 322 417 380 380 144 224 716 24 1,644 2,505 3,270 1,133 726 2,752 1,798 1,043 1,043 1,442 5 31 27 40 463 11 Year 1995 Profit of Retained 1995 Loss Earnings $372 $2,979 $3,153 8 547 557 6,472 5,557 559 26,914 35,934 509 764 666 332 1,247 960 382 118 402 4,314 4,600 1,440 3,680 15,003 15,864 0 49 30 493 824 4 671 997 $2,640 $9,325 $5,935 $23,568 $32,910 $8,421 $5,494 $4,530 $6,123 $4,902 $5,577 $58,615 $67,558 Fleet Management $1,984 $4,060 $6,620 $1,005 $1,244 $10,945 Property Maint. 379 220 418 284 30 133 Print Shop 45 67 94 285 64 427 Procurement Mgt. 7 24 29 115 29 74 Communications 222 748 1,107 288 620 1,301 Self -Insurance Total Internal Sery t Total Proprietary Funds $757 $693 $1,533 $2,523 $738 $2,262 $2,090 $20,784 $10,596 170 65 81 309 30 506 812 1,806 1,843 759 120 14 27 38 68 167 355 687 140 14 174 39 16 10 43 142 76 602 573 305 554 523 385 1,133 1,910 1,211 7,210 7,210 93,088 2,533 4,631 8,268 1.747 619 12,732 2,148 79 1,497 2,290 1,237 3,075 2,965 17,787 107,501 $2,138 $5,628 $10,908 $11,072 $6,554 $36,300 $35,058 $8,342 $6,991 $6,820 $7,360 $7,977 $2,612 $76,402 $175,059 • Ef -10 -20 -30 -40 -50 -60 -70 -80 -90 Consolidated General Fund 1989 1990 1991 1992 1993 1994 1995 • •