HomeMy WebLinkAboutItem No. 09 - Amendment No. 1 to Representation Letter with Rutan & Tucker, LLP for Special Counsel Services9)Amendment No. 1 to Representation Letter (Rutan & Tucker, LLP)
Approve and authorize the City Manager to execute Amendment No. 1 to the
Representation Letter with Rutan & Tucker, LLP to provide Special Counsel services to the
City in such final form as approved by the City Attorney.
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REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:David Mann, Acting City Attorney
Date:August 12, 2025
Subject:Amendment No. 1 to Representation Letter (Rutan & Tucker, LLP)
Recommendation
Approve and authorize the City Manager to execute Amendment No. 1 to the Representation
Letter with Rutan & Tucker, LLP to provide Special Counsel services to the City in such final form
as approved by the City Attorney.
Background
The City entered into Representation Letter dated as of November 23, 2024 with the law firm of
Rutan & Tucker, LLP to provide special counsel services in connection with pending litigation
involving the Lake and Mountain project (DS & RS Investment LLC v. City of Lake Elsinore;
Riverside Superior Court Case No. CVME2402627) (the “Pending Litigation”).
Discussion
Rutan & Tucker, LLP has provided excellent services and has been a key partner with the City
Attorney’s office in diligently representing the City in the Pending Litigation. Continued legal
services are necessary to bring the Pending Litigation to completion and to implement applicable
agreements, if any, approved by the City Council. The only modification to the original
Representation Letter is authorization by the City Council for continued services in excess of the
City Manager’s contracting authority. All other terms and conditions for legal services remain the
same.
Fiscal Impact
General Fund monies have been budgeted for legal services and will be used to pay for these
services.
Amendment No. 1 to Representation Letter (Rutan & Tucker, LLP)
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Attachments
Attachment 1 - Representation Letter
Attachment 2 - Amendment No. 1
William H. Ihrke
Direct Dial: (714) 338-1863
E-mail: bihrke@rutan.com
November 23, 2024
Rutan & Tucker, LLP | 18575 Jamboree Road , 9 th Floor
Irvine , CA 92612 | 714 -641 -5100 | Fax 714 -546-9035
Orange County | Palo Alto | San Francisco | Scottsdale | www.rutan.com
698/099999-0084
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VIA ELECTRONIC MAIL
Jason Simpson, City Manager
City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
c/o Barbara Leibold, City Attorney
Re: Representation Letter
Dear Mr. Simpson:
Thank you for asking Rutan & Tucker, LLP to provide legal services. This letter sets forth
our proposal for the basic terms of the engagement and the arrangement for fees and costs that will
apply to the engagement.
If you have any questions about these provisions, or if you would like to discuss possible
modifications, do not hesitate to call. Otherwise, if you agree, please sign the enclosed copy of
this letter in the space provided below. We are pleased to have the opportunity to serve you.
1. Client; Scope of Representation. Our client in this matter will be the City of Lake
Elsinore. We will be engaged to represent the City in connection with litigation entitled “DS &
RS Investment LLC v. City of Lake Elsinore,” Riverside Superior Court Case No. CVME2402627.
You may limit or expand the scope of our representation from time to time, provided that we must
agree to any substantial expansion or limitation of the representation. The firm will perform these
services, will take reasonable steps to keep you informed of progress, respond to your inquiries,
and will consult with you as necessary. This letter covers all preliminary work we have already
performed, as well as future services we will perform.
2. Duties of Client. You agree to timely provide us such information, assistance and
cooperation as is necessary for us to effectively perform our services and to timely pay our bills
for fees, costs and expenses as further described herein.
3. General Terms; Fees and Expenses. To assist you in understanding our billing
practices and other general terms, enclosed is a copy of our current Policy on Professional Fees
and General Terms of Engagement (the “General Terms”). The General Terms are incorporated
in this letter. The General Terms describe the ranges of hourly rates for our attorneys and
paraprofessionals and our policies regarding reimbursement of costs and expenses. We have
agreed to the hourly special counsel rates as follows: $395 per hour for Bill Ihrke, as lead attorney,
Jason Simpson, City Manager
November 23, 2024
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and for any other partners who may work on the matter after receiving authorization from the Lake
Elsinore City Attorney; $365 per hour for all associates; and $200 for all paralegals. Bill Ihrke
will be the lead working partner, and will be assisted by Denise Mester and potentially other
associates, as needed.
4. Billing. We will submit monthly billings describing the services performed, the
date services were performed, the number of hours spent and by whom, and a description of any
reimbursable expenditures. Services will be billed in increments of one-tenth (1/10th) of an hour.
Invoices may be submitted electronically to ap@lake-elsinore.org with a copy to City Attorney
Barbara Leibold at barbara@ceqa.com. We acknowledge that City Council approval will be
required in the event total compensation hereunder exceeds $30,000. In order to allow for
preparation of amendment to this Representation Letter and presentation to the City Council at a
regularly scheduled meeting, we will notify the City Attorney when total compensation is likely
to exceed $30,000.
5. Term of Engagement. In accordance with the General Terms, either of us may
terminate the engagement at any time for any reason by written notice, subject on our part to
applicable Rules of Professional Conduct.
6. Retainer. It is customary under certain circumstances that we receive a retainer as
an advance against fees, costs and expenses prior to commencing work on the matter. We have
not, however, requested a retainer for the initial representation in this matter. It occasionally may
be appropriate to require a retainer or an additional retainer (as the case may be) after the
commencement of the engagement, or to require an increase in a retainer, depending on, among
other things, your payment history or on the scope of the work. For example, before a trial, we
may require a retainer sufficient to cover expected fees, costs and expenses. We also customarily
request an advance retainer for the purpose of paying substantial out-of-pocket costs we incur on
your behalf. Any retainer received by this firm will be held in our trust account as security for
your payment of all amounts owing to us and applied to the final billing in the matter. It may also
be applied before the final billing to out-of-pocket costs and expenses which must be advanced on
your behalf or to unpaid fees in our discretion.
7. Binding Arbitration. We appreciate the opportunity to serve as your attorneys and
anticipate a productive, harmonious relationship. If you become dissatisfied for any reason with
the services we have performed, the fees charged, or any other aspect of the attorney-client
relationship, we encourage you to bring that to our attention immediately. Similarly, if we perceive
a problem with the representation, we will discuss it with you. Most such problems can be rectified
by communication and discussion. Although in our experience disputes of any type are rare, a
dispute conceivably could arise between us which cannot be resolved by discussion or negotiation.
We believe such attorney-client disputes are most satisfactorily resolved through binding
arbitration rather than by litigation in court.
Jason Simpson, City Manager
November 23, 2024
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Arbitration is, as you likely know, a process by which both parties to a dispute agree to
submit the matter to a retired judge or other arbitrator who has expertise in the area and to abide
by the arbitrator’s decision, instead of litigating in court. In arbitration, there is no right to a trial
by jury and the arbitrator’s legal and factual determinations are generally not subject to appellate
review. Arbitration rules of evidence and procedure are often less formal and rigid than in a court
trial. Arbitration often results in a decision much more quickly than proceedings in court, and the
attorneys’ fees and other costs incurred by both sides are often substantially less.
Both the United States and California Supreme Courts have endorsed arbitration as an
accepted and favored method of resolving disputes, because it is economical and expeditious.
Arbitration is also less acrimonious and more confidential than traditional litigation and is,
therefore, particularly suited to resolution of disputes between attorneys and their clients.
Your agreement to arbitrate disputes is not a condition of our agreeing to represent you,
and if you do not wish to agree to arbitrate, then you should advise me before signing the copy of
this letter, so we can delete this section of the agreement. You are free to discuss the advisability
of arbitration with us or your independent counsel or any of your other advisors.
By signing this agreement, you agree that if any dispute arises out of or relating to this
agreement, our relationship, or the services performed by us (including but not limited to any
disputes regarding our fees and expenses and any failure by you to pay such fees and expenses in
accordance with this agreement, claims of professional negligence, breach of contract or fiduciary
duty, fraud or any claim based upon a statute), such dispute shall be resolved by submission to
final and binding arbitration in Orange County, California, before a retired judge or justice of the
California Superior Court or a higher court. Please be advised that by agreeing to binding
arbitration, you are waiving any right to a jury trial on any such dispute. If you and we are unable
to agree on a retired judge or justice, each party will name one retired judge or justice and the two
named persons will select a neutral judge or justice who will act as the sole arbitrator. Should you
elect to have any fee dispute arbitrated pursuant to non-binding arbitration under statutory or case
law (including your rights to request mandatory fee arbitration under the rules of the Orange
County Bar Association), then such non-binding arbitration shall determine only the issue of the
amount of fees properly chargeable to you. Any other claims or disputes between us, including
claims for professional negligence, shall remain subject to binding arbitration pursuant to this
agreement. In the event of such an arbitration, the parties shall be entitled to take discovery in
accordance with the provisions of the California Code of Civil Procedure, but either party may
request that the arbitrator limit the amount or scope of such discovery, and in determining whether
to do so, the arbitrator shall balance the need for the discovery against the parties’ mutual desire
to resolve disputes expeditiously and inexpensively.
8. Conflicts in this Matter. We cannot, without appropriate consents, represent any
party if there is a conflict of interest with any of our other clients. In order to avoid conflicts of
interest among our clients, we maintain an index of relevant names. In connection with this matter,
Jason Simpson, City Manager
November 23, 2024
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we have searched our index for the following names: (i) the City of Lake Elsinore as potential
client(s) and (ii) DS & RS Investment LLC and JSVP Investment LLC as potential adverse parties.
We have not discovered any conflict which requires further action before undertaking our
representation. Please advise us, at or before the time you return the signed copy of this letter, if
you know of any other individuals or entities which may be involved in this matter. In addition,
please inform us at once if you learn in the future of other persons or entities who may be involved
so we can make a conflict of interest search with respect to them.
9. Conflicts Waiver. In undertaking this representation, our objective is to represent
you to the best of our ability without forfeiting the continuing representation of our general clients.
One purpose of this letter, therefore, is to avoid our disqualification from representing clients
which we represent on a more general basis or which we regularly represent in particular matters
or controversies. Given the limited nature of our representation, there are certain conditions to our
engagement which we would like to explain to you and to which we would like to secure your
approval and consent. Rutan & Tucker, LLP is a large law firm which has represented, and
continues to represent, many different corporate and individual clients with various interests in
numerous industries. It is possible that, during the time we are representing your interests in this
matter, you may become involved in transactions and/or disputes in which your interests are
adverse to those of one of the firm’s present or future clients. Therefore, as a specific condition to
our undertaking your representation, you understand and agree that this firm may continue to
represent or may undertake in the future to represent existing or new clients in any matter that is
not substantially related to our work for you even if the interests of such clients in those other
matters are directly adverse to your interests. We agree, however, that your prospective consent
to conflicting representation contained in the preceding sentence shall not apply in any instance
where, as a result of our representation of you, we have obtained proprietary or other confidential
information of a nonpublic nature, that, if known to such other client, could be used in any such
other matter by such client to your material disadvantage.
Please be aware that you have the right to obtain the advice of independent counsel
regarding the terms of this agreement, and you should feel free to do so.
This letter and the attached General Terms constitute the entire agreement between you
and Rutan & Tucker, LLP with respect to our engagement. No prior oral or written understanding
shall be of any force or effect with respect to these matters. This agreement may not be modified,
except by a document in writing executed by both parties. A waiver of any party of any breach of
any of the conditions, terms or time requirements under this letter shall not be construed as a waiver
of any succeeding breach. This letter may be executed in multiple counterparts, each of which
shall be deemed an original.
Please review this letter and the General Terms attached hereto carefully. If the terms and
conditions of our representation and the billing arrangements under this agreement meet with your
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POLICY ON PROFESSIONAL FEES
AND
GENERAL TERMS OF ENGAGEMENT
Professional Fees and Billing Procedures.
Experience has shown that the attorney-client relationship works best when there is a
mutual understanding about fees and payment terms. The following is intended to explain briefly
our present billing policies and procedures. These policies and procedures are subject to change.
We encourage you to discuss with us at any time any questions you might have concerning these
policies and procedures.
Unless otherwise agreed in writing by you and us, our professional fees will be based on
the hourly rates of the attorneys and paraprofessionals working on your matter(s). Our hourly rates
for attorneys and paraprofessionals are adjusted from time to time and generally as of January 1st
of each year. Adjustments in billing rates will be reflected in the invoice for legal services which
constitutes our written notice to you. The current hourly billing rates for attorneys and
paraprofessionals at the firm for 2024 are as follows: (i) partners range from $345.00 to $1,200.00
per hour, (ii) associates range from $310.00 to $750.00 per hour and (iii) paralegals, law clerks,
legal interns, legal assistants, document clerks and other paraprofessionals range from $75.00 to
$355.00.
Rutan & Tucker, LLP bills its clients for costs advanced on a client’s behalf, such as filing
fees, transcript and deposition fees, reasonable travel expenses, and expert witness fees. The firm
also charges for certain costs and expenses incurred on behalf of clients such as long-distance
telephone calls, facsimile and telecopier transmissions, copying, scanning, printing, postage,
mileage, messengers, and computerized research. Notwithstanding the foregoing, we may forward
to you large disbursement invoices for your direct payment to the supplier.
We make every effort to include disbursements in the statement for the month in which the
disbursements are incurred. Some disbursements, however, may not be available to us until the
following months, in which case a subsequent statement may be rendered to you for these
additional charges, or an estimated amount may be included in the initial billing and an adjustment
made when the actual disbursement information is available.
In the absence of other arrangements, our billing statements ordinarily will be rendered to
you on a monthly basis.
Our billing statements are due and payable upon receipt. We ask and expect payment of
our statements on a current basis, as delayed payment adds to our overall costs of providing
services. Unless you notify us of any objection to any such billing statement (specifically
describing the basis for such objection), within thirty (30) days after the date we send the billing
statement to you, we will presume that you have no objection to the amounts set forth in the billing
statement. If any statement remains unpaid for more than thirty (30) days after the date the
statement is sent by this firm, interest may be added at the rate of 10% per annum on the unpaid
balance.
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Unless specifically agreed in writing, we cannot make any guarantee as to the amount
which you will incur for attorneys’ fees and costs in any matter, as those figures will wholly depend
on the time and effort required to be devoted to such matter. Any estimates of anticipated fees and
costs, whether for budgeting purposes or otherwise, are, due to the uncertainties involved,
necessarily only an approximation of potential fees and costs. Unless specifically agreed in
writing, such estimates are not a maximum or minimum quotation and are not binding. The actual
fees and costs will be determined in accordance with the policies described above.
General Terms.
We have been engaged to represent the person(s), company(ies) or organization(s) agreed
to in writing by this firm. Unless agreed to in writing, we are not representing any of their
respective members, shareholders, affiliates, subsidiaries, parent companies, joint ventures,
officers, directors, partners, principals, investors, or employees. Accordingly, we can take on
matters that may be adverse to these related parties or their legal interests, unless precluded by
reason of the Rules of Professional Conduct.
Either of us may terminate the engagement at any time for any reason by written notice,
subject on our part to applicable Rules of Professional Conduct. If we terminate the engagement,
we will take such steps as are reasonably practicable to protect your interests in the matter(s) for
which we have been engaged. If you so request, we will use reasonable efforts to suggest to you
possible successor counsel and provide it with whatever documents you have provided to us, but
will retain materials that we have generated, as noted below.
Unless previously terminated, our representation of you in any matter will terminate upon
our sending to you our final invoice for services rendered for such matter. Upon the termination
of such representation, our own lawyer work product documents, notes and files (the “Work
Product Files”) pertaining to your matter will be retained by the firm. Your documents, property
and files that are not Work Product Files (the “Client Files”) will be, at your request, returned to
you upon the termination of such representation. Both the Client Files (unless otherwise returned
to you at your request) and the Work Product Files will be transferred to the person responsible
for administering our records retention program. For various reasons, including the minimization
of unnecessary storage expenses, we reserve the right to destroy or otherwise dispose of any such
documents, property, files or other materials retained by us within a reasonable time after the
termination of the engagement. Specifically, it is our current policy to store your Client Files for
a period of five (5) years and at the conclusion of such five (5) year period we will make an attempt
to contact you as to the disposition of your Client Files, but if we are unable to locate you, we
reserve the right to destroy such Client Files.
In the performance of our services, you may disclose personal information about
individuals to us, including personal information we collect on your behalf. In doing so, you
acknowledge that such disclosure is pursuant to a business purpose and not for commercial
purposes. In performing our services, we shall not: (a) sell personal information; (b) retain, use or
disclose the personal information for any purpose other than for the performance of its services;
(c) retain, use, or disclose personal information for commercial purposes; or (d) retain, use, or
disclose personal information outside of our direct business relationship. We certify that we
understand these restrictions and will comply with them. Notwithstanding the foregoing, we may
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have legal and/or ethical obligations which may mandate the processing (including the collection,
use, disclosure, deletion, or retention) of personal information disclosed to us by you. Rutan &
Tucker, LLP shall not be liable for the processing of personal information that is, or is reasonably
believed to be, necessary for: (v) compliance with a federal, state, or local law; (w) compliance
with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by federal, state,
or local authority; (x) cooperation with law enforcement agencies concerning conduct or activity
that it believes may violate a federal, state, or local law; (y) the exercising or defending of legal
claims; (z) compliance with our ethical duties. Moreover, the processing restrictions placed upon
us in this paragraph shall not apply where compliance with such restriction(s) would violate an
evidentiary privilege under California (or other states’) law, and shall not prevent us from
providing personal information of an individual to a person covered by an evidentiary privilege
under California (or other states’) law as part of a privileged communication. For purposes of this
section, “personal information” means information that identified, relates to, describes, is
reasonably capable of being associated with, or could reasonably be linked, directly or indirectly,
with a particular individual or household. Personal information does not include publicly available
information, deidentified information, or aggregate consumer information.
You are engaging the firm to provide legal services in connection with specific matter(s).
After completion, changes may occur in the applicable laws or regulations that could have an
impact upon your future rights and liabilities. Unless you actually engage us after these matters
have been completed to provide additional advice on issues arising from these matters, this firm
has no continuing obligation to advise you with respect to future legal developments. In particular,
please be advised that this firm does not undertake to perform further actions on your behalf in
connection with renewal of perfection of liens, filing of UCC continuation statements, and the like
in connection with any loan related matter. Further, we do not offer the service of
annuity/maintenance fee payments with respect to patent prosecution.
We have made no representations, promises or guarantees to you regarding the outcome of
your matter. Any comments about the outcome of your matter at any time during the performance
of services do not constitute promises, guarantees, or assurances, as to the outcome of your matter.
Unless otherwise agreed in a signed writing, the firm shall have no responsibility to
investigate or evaluate whether insurance is available for any matter covered by this engagement
or to tender any matter covered by this engagement to any insurance carrier.
If we are required to respond to a subpoena of our records relating to services we have
performed for you, or testify by deposition or otherwise concerning such services, then we will
take reasonable steps to consult with you as to whether you wish to supply the information
demanded or assert objections to the extent you may properly do so. You agree to pay us for our
time and costs incurred in responding to any such demand, in accordance with the provisions of
this letter, including, but not limited to, time and expense incurred in search and photocopying
costs, reviewing documents, appearing at depositions or hearings, and otherwise litigating issues
raised by the request.
In order to maximize efficiency, please be advised that attorneys and paraprofessionals at
this firm routinely use the following communications methods to the fullest extent possible:
e-mail, document transfer by computer, mobile telephones, and facsimile transfers.
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Although not required in California, some states require that a law firm disclose the
existence of errors and omissions insurance coverage applicable to the services to be rendered.
Rutan & Tucker, LLP hereby confirms the existence of such insurance coverage for the purposes
of complying with such a requirement.
Duty to Preserve Relevant Evidence in the Event of Litigation or Disputes.
If you are currently involved in a dispute which has resulted or is likely to result in
litigation, or if you become involved in such a dispute at a later date, please be aware that you have
a legal obligation to preserve “documents and data” potentially relevant to any such dispute. In
addition to the obvious fact that we may need the evidence to help prove or defend your case, the
primary reason we need to tell you about this obligation is because, if you do not take such steps,
you could suffer severe sanctions in any litigation (or arbitration) that might arise. Those sanctions
could include, among others, direct and substantial monetary sanctions, “issue sanctions”, resulting
in a directed finding against you on certain issues in the case, or even possibly a directed judgment
against you, resulting in loss of the entire case.
Compliance with the obligation to preserve all potentially relevant evidence may not be as
easy as it sounds. Preservation obligations include, for example, the obligation to suspend normal
document destruction routines and otherwise protect against inadvertent deletion of evidence,
especially electronic evidence. You need to notify and work with all of your employees and
managerial personnel who might possess any such evidence, and consider all of the places where
such evidence might be located, such as, e.g., home computers, laptop computers, cell phones,
backup devices, and a wide range of other electronic devices and physical locations outside your
normal offices and outside your network. You also need to evaluate the extent to which any of
your agents, outside professionals, or consultants may have evidence which should be preserved.
Furthermore, all of this needs to be documented.
We ask that you coordinate with our professional staff to ensure that proper steps have been
taken to preserve all potentially relevant evidence, including electronic evidence whenever
litigation, or a dispute which may lead to litigation, arises. To the extent that you have qualified
and sophisticated in-house personnel experienced with document preservation activities, such
coordination may simply consist of providing us with the documentation reflecting the steps taken
and review of that documentation and the processes reflected. To the extent you do not have such
in-house capabilities, our staff can help lead you through the process. In either event, it is very
important for us to confirm the steps that have been taken so that we can later both establish your
compliance with the obligation to preserve potentially relevant evidence and also utilize the
documentation to coordinate the efficient identification, retrieval, and production of evidence for
the presentation of your case.
Please let me know if you have any questions and, in any event, please let me know who
within your organization would be best to coordinate these efforts so that I can put them in touch
with our staff.
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AMENDMENT NO. 1
TO REPRESENTATION LETTER
Rutan & Tucker, LLP
Special Legal Services
This Amendment No. 1 to Representation Letter is made and entered into as of
8/12/2025, by and between the City of Lake Elsinore, a municipal corporation (“City) and Rutan
& Tucker, LLP, a California limited liability partnership (“Firm”).
RECITALS
A. The City and Firm entered into that certain Representation Letter dated as of
11/23/2024 (the “Original Agreement”) for Special Counsel services in connection with pending
litigation involving the Lake and Mountain project (DS & RS Investment LLC v. City of Lake
Elsinore; Riverside Superior Court Case No. CVME2402627) (the “Pending Litigation”). Except
as otherwise defined herein, all capitalized terms used herein shall have the meanings set forth
for such terms in the Original Agreement.
B. The Original Agreement requires City Council approval to authorize compensation
for services in an amount greater than $30,000.
C. The Firm has performed legal services pursuant to the Original Agreement and
City desires Firm to continue to provide legal services requested by City to bring the Pending
Litigation to completion and to implement applicable agreements, if any, approved by the City
Council.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth
herein, City and Firm agree as follows:
1. The last paragraph of Section 3, Fees and Expenses, of the Original Agreement is
deleted in its entirety. Except for this change, all other terms and conditions of the Original
Agreement shall remain in full force and effect and legal services will be provided by Firm to City
in accordance with the terms and conditions thereof.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be executed
on the respective dates set forth below.
“CITY”
City of Lake Elsinore, a municipal
corporation
Jason Simpson, City Manager
“FIRM”
Rutan & Tucker, LLP
William H. Ihrke
ATTEST:
Candice Alvarez, CMC City Clerk
APPROVED AS TO FORM:
David Mann, Acting City Attorney