Staff ReportPREPARED BY : ROBERT SCHULTZ
Town Attorney
Reviewed by: Town Manager Assistant Town Manager _____Finance
MEETING DATE: 10 /1 8 /1 6
ITEM NO: 4
COUNCIL AGENDA REPORT
DATE: OCTOBER 12 , 201 6
TO: MAYOR AND TOWN COUNCIL
FROM: ROBERT SCHULTZ , TOWN ATTORNEY
SUBJECT: I. REQUEST FOR AUTHORIZATION TO ENTER INTO A LEGAL
SERVICES AGREEMENT FOR LITIGATION DEFENSE IN THE MATTER
OF EDEN HOUSING INC., SUMMERHILL HOMES LLC, AND
GROSVENOR USA LIMITED V. TOWN OF LOS GATOS FOR A TOTAL
CONTRACT NOT -TO -EXCEED AMOUNT OF $100,000
II. AUTHORIZE A BUDGET ADJUSTMENT TO INCREASE LEGAL
SERVICES APPROPRIATION FROM ANTICIPATED FY 2015/16 YEAR
END GENERAL FUND SAVINGS FOR NORTH 40 LITIGATION
EXPEN DITURES IN THE AMOUNT OF $100,000
RECOMMENDATION :
The Town Attorney’s Office recommends authorization to enter into an agreement to provide for
litigation defense services in the Matter of Eden Housing Inc., Summerhill Homes LLC, and
Grosvenor USA Limited v. Town of Los Gatos for a Tota l Contract Not -To -Exceed Amount of
$1 00,000 .
In addition, Authorize a budget adjustment to increase legal services appropriation form
anticipated FY 2015/16 y ear end General Fund savings for North 40 Litigation Expenses in the
amount of $100,000.
DISCUS SION:
The Town Attorney’s Office is seeking Council approval to enter into a legal services agreement,
in an amount not -to -exceed $1 00,000 for expenses associated with the litigation entitled Eden
Housing Inc., Summerhill Homes LLC, and Grosvenor USA Limited v. Town of Los Gatos . The
lawsuit was brought by Eden Housing Inc., Summerhill Homes LLC, and Grosvenor USA
Limited asserting that: (1) the Town of Los Gatos violated the Town’s Housing El ement ; and (2)
the Town violated the State’s Housing Accountability Act; and (3) the Town violated the State
Density Bonus Law. The lawsuit requests the Court to direct “the Town to comply with its clear,
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: NORTH FORTY LITIGATION
October 12, 2016
DISCUS SION (Cont ’d):
mandatory, and ministerial duty to approve the proj ect in compliance with the Town’s Housing
Element , the Housing Accountability Act and the Density Bonus Law .”
The Town’s Attorney’s Office maintains a list of qualified outside counsel available to assist
with litigation matters and is currently in the pr ocess of interviewing the most qualified firm to
strongly represent and defend the Town ’s interest in this lawsuit .. This contract amount should
cover expenses incurred since the initiation of the lawsuit through the end of fiscal year
2016/2017. Any additional funding needed for the 2017/2018 fiscal year would be brought
forward during fiscal year 2017/2018 budget discussion.
It is recommended that the Council authorize a budget adjustment to increase Legal Services
appropriation in the amount of $1 00,000 from anticipated FY 2015/16 General Fund year end
saving for the North 40 Litigation Expenditures , and authorize the Town Attorney to enter into a
contract for legal services in an amount not -to exceed $1 00,000.
ALTERNATIVES :
Alternative 1: The Town Council could decide not to hire outside counsel and require the Town
Attorney to represent the Town in this matter. This alternative would have implications on other
Council priorities and workload requirements.
E NVIRONMENTAL ASSESSMENT :
This action is not a project as defined under CEQA , and no further action is required.
FISCAL IMPACT :
Def ending this litigation is anticipated to cost up to $3 00 ,000. Funding f or fiscal year 201 6 /201 7
in the amount of $100,000 are available from anticipated F Y 15/16 year end General Fund
savings .