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Home My WebLink AboutCOM 0062.000 2004-2006 M,r o. N,~ Lincoln S.T. Ashida `~S` . ~ Corporation Counsel Harry Kim Mayor Gerald Takase ,q:~; Assistant Corporation '%'d:'~~'"~ Counsel COUNTY OF HAWAII OFFICE OF THE CORPORATION COUNSEL 101 Aupuni Street, Suite 325 • Hilo, Hawaii 96720-0262 (808) 961-8251 Fax (808) 961-8622 r+ January 6, 2005 Honorable Virginia Isbell Chair, Finance Committee Hawaii County Council ~=s=s 25 Aupuni St. Hilo, HI 96720 Dear Chairwoman Isbell and Committee Members: RE: Request to extend funding of special counsel contract of Pinao & Ono, for the Department of Civil Service, Safety Division, for the handling of worker's compensation cases The purpose of this communication is to seek Hawaii County Council approval to extend the existing special counsel contract of the law association of Pinao & Ono, for the purpose of providing services to the Department of Civil Service, Safety Division. We respectfully request this communication be place on the agenda of your next Finance Committee meeting, or at your earliest convenience. Background In September of 2002, the Safety Division expressed interest in hiring special counsel to resolve long-outstanding worker's compensation cases plaguing our County. Special counsel would also assist in evaluating new, complex cases, and providing needed training for County adjusters. Representatives of the Safety Division approached our office, and sought our assistance in facilitating the hiring of special counsel for their division. Worker's compensation is a very specialized area of the law. Effective prosecution and defense of these cases should be performed by attorneys specializing in the area, since a significant portion of this body of law is comprised of arbitration and hearing decisions. Further, valuation of these cases may be difficult, and should be done by experienced attorneys specializing in this field. Comm. No. 62' Ref. To: Hawaii County is an Equal Opportunity Employer and Provider ~~f t,ote ~~AN 1 Honorable Virginia Isbell January 6, 2005 Page 2 Article VI, Chapter 2, Section 6-2.5, Hawaii County Charter (2000), provides as follows: The council may, by two-thirds vote of its entire membership, authorize the employment of special counsel for any special matter presenting a real necessity for such employment. Any such authorization shall specify the compensation, if any, to be paid for said services. The above language is contained within the Corporation Counsel portion of our Charter. Thus, it is arguable that this section is limited to those instances where there is a conflict of interest or other legal reason why special counsel is required. Further, it is arguable this section is limited to those instances where Corporation Counsel is doing the hiring of special counsel (unlike the present situation, where the Safety Division is the client and pays for special counsel). Although not clearly required, we thought at the time in an abundance of caution that Council approval should be sought in the hiring of special counsel for the Safety Division. The enclosed letter to the Council from our office dated October 28, 2002, outlined the Safety Division's request to hire special counsel. On November 20, 2002, the Hawaii County Council approved the hiring of special counsel (enclosed memorandum dated November 21, 2002, from the Hawaii County Council to Mayor Harry Kim). The hiring of Pinao & Ono Pursuant to the authority granted by the Council and our State Procurement laws, a committee of three in our office was assembled for the purpose of evaluating and recommending potential vendors of professional services. On November 26, 2002, the committee recommended the following three law associations for consideration: 1. Pinao & Ono 2. Wong & Oshima 3. Rush Moore Craven Sutton Morry & Beh The law association of Pinao & Ono was selected, and on February 6, 2003, a contract was executed and entered into between Pinao & Ono and the County. This contract contained a monetary "cap" of $54,000. Ms. Kamaka and I decided upon this cap, since this was the amount of money left for the fiscal year 2002-2003, and that such a limited agreement would allow the County to evaluate whether an extension of this special counsel contract would be warranted, beyond the end of the fiscal year. Honorable Virginia Isbell January 6, 2005 Page 3 On March 25, 2004, a First Amended contract was executed by the parties. This contract increased the total contract amount from $54,000 to $79,000. On December 13, 2004, a Second Amended contract was executed by the parties. This contract increased the total contract amount from $79,000 to $130,000. We have submitted to the Hawaii County Council under confidential cover two memorandums from Safety Division Coordinator Charmaine Kamaka, detailing the progress Pinao & Ono have made on behalf of our County in the area of worker's compensation. These memoranda are submitted under confidential cover, as they contain medical information protected by both federal and state law. Public dissemination of this medical information is prohibited by law. Safety Division's present request The Safety Division wishes to continue this special counsel contract with Pinao & Ono, and seeks enlargement of this existing contract in the amount of $130,000, for a new contract total amount of $260,000. Ms. Kamaka and I will be present at the Finance Committee's meeting in order to address any questions or concerns the Committee members may have. Very truly yours, LINCOLN S. T. ASHIDA Corporation Counsel Encls. c: Charmaine Kamaka, Safety Coordinator (w/ encls.) S: DepartmentsNJOrkers Comp/LSA Misc. corresp./Letter to Council re Pinao & Ono 12-14-04/LSAmr JNSV Os N,w O.• iii Ir~:• Lincoln S.T. Ashida Harry Kim Ma or Cnrpornlinn Counsel Y • ~r4'':• '.;,q Gerald Takase SEE p(•Mr'V' A.csismnt Corporation Cnun.rel ~D1IIT~'kT II~ ~2If112Itt OFFICE OF THE CORPORATION COUNSEL 101 Aupuni Street, Suite 325 • Hilo, Hawaii 96720-4262 • (808) 961-8251 • FAX (808) 961-8622 PRIVILEGED AND CONFIDENTIAL COMMUNICATION ATTORNEY-CLIENT COMMUNICATION NOT A PUBLIC RECORD October 28, 2002 James Y. Arakaki, Chair Hawaii County Council 25 Aupuni St. Hilo, HI 96720 Dear Chairman Arakaki and Council Members: RE: Request for Special Counsel -Workers Compensation Claims Thank you for agreeing to meet with me in executive session regarding the above matter. As background to this matter, enclosed is a memorandum dated October 1, 2002, from Personnel Program Specialist Charmaine L. Kamaka. The Problem Our county is inundated with workers compensation claims. There are a number of cases where the County continues to pay large sums of money, wherein the cases could be reviewed and closed. We find ourselves in this predicament due to our failure to properly monitor these cases in the past, and the lack of legal support in contested cases. Ms. Kamaka reports there were 800 open claim cases when she began her employment as the personnel program specialist. For fiscal year 2001-2002, the County paid out over $3,000,000 in workers compensation claims. This figure was greater than the monies appropriated for the fund. Thus, additional monies were required to meet the County's obligations. Present cases also present challenges. Given the increasing litigious environment, the County is often required to defend itself not having the benefit of proper legal review and guidance. James Y. Arakaki, Chair October 28, 2002 Page 2 The obvious question is whether the Corporation Counsel can and should provide this support. Given the increasing legal demands throughout our County, our limited resources, and our no-growth, status quo budget, resources outside the County are necessary to "stop the bleeding" of taxpayer money in old cases, and to properly review and prepare current claims on behalf of the County. Further, the area of workers compensation, as in most areas of law, has become highly specialized and sophisticated. While our office continues to develop a strong in-house litigation division, and increase our efficiency and capacity in general practice, expertise and resources to properly represent the County in the area of workers compensation is lacking. Presently, our resources are prioritized and deployed to support our County clients in "hot" issues, and issues of far- reaching magnitude and importance. The nronosed answer Attention to old cases is a necessity. Ms. Kamaka reports her staff will be tasked with the responsibility of going through old cases, but will require legal advice and guidance with respect to their disposition. With respect to current cases, apro-active legal approach to these cases is required. The already uneven playing field (slanted in favor of the claimant) is further slanted when the County is not represented by an attorney, and the claimant is. Special counsel with expertise in workers compensation law may address and represent the County on both these issues. The cost to the County Ms. Kamaka estimates special counsel would provide the County with approximately 20 hours of work per week. At an hourly rate of $125 per hour, we calculate the cost to be $130,000 per year. We propose the County enter into a contract, not to exceed the current fiscal year. This will allow the County to assess the performance of special counsel, to determine whether we have in fact "spent money to save more money," and give the County the option of renewing the contract, or allowing it to lapse. As shown in Ms. Kamaka's memorandum, there are available funds to cover the cost of special counsel for this time period. James Y. Arakaki, Chair October 28, 2002 Page 3 Action by the Council It is not abundantly clear whether Council approval is required for the hiring of special counsel under these circumstances. Section 6-2.5 of the Charter may arguably apply to requests made by the Corporation Counsel only. In other words, it is unclear whether the decision to employ attorneys by other departments is subject to Council approval. In an abundance of caution, and due to the concerns expressed by the Council in the past concerning the County's workers compensation program, we seek Council oversight and approval for the hiring of special counsel in this case. Mayor Harry Kim has approved the proposed hiring of special counsel. I will be available at our meeting in executive session to answer any questions you may have. Thank you for considering this request. Very~truly yours, V V' LINCOLN S. T. ASHIDA Corporation Counsel Encl. cc: Mayor Harry Kim (w/encl.) S: Departmenls/Workers Comp./LSA Misc. Corresp./Letter to Council re special counsel 10-2-02/LSAmr ~ye~t~~~, .'cPi~,,no- .%o.~ Lincoln S. T. Ashida, Corporation Counsel .<3~IG. Charmaine L. Kamaka, Personnel Program Specialist 3i,9;T~.~ October 1, 2002 .4g~g~^'B.P Legal Counsel I would like to request your assistance in the hiring of special counsel for the purpose of managing and settling Hawaii County workers' compensation claims. We are making an intensive effort to settle and close open claims that have been languishing for many years. Over the long term, settlement of these claims will result in savings to the County. We anticipate an estimated 20 hours per week of legal services. Funds are available in the following accounts to cover the costs of the special counsel (balances are as of 9/30/02): ? General Fund Account-0109115911.86341 @$1,874,909.50 ? Public Works Highway Fund - 020 911 5911.87 341 @ $421,407.32 ? Public Works Wastewater Fund - 030 911 5911.88 341 @ $78,377.79 ? Public Works Solid Waste Fund - 085 911 5911.93 341 @ $1 11,169.09 We would greatly appreciate your assistance in this matter. Thank you very much. cc: Michael R. Ben, Director of Personnel l~ JAMES Y. ARAKAKI •`•YO"'~ AARON S.Y. CHUNG Chainrran R Presidm O rcer s jf ; BOBBY JEAN LEITHEAD-TODD LENINGRAD ELARIONOFF J. CURTIS TYLER, III JULIE JACOBSON Tice Chavman _ .J ~ ~ 1 Jl ~ 7 4•ti•«~N',+~ NANCY PISICCHIO - GARY SAFARIK DOMINIC YAGONG COUNTY COUNCIL County of Hawaii HaWni "i CaunN Building 25 A«puni Street Hilo, i/awai'i 96720 Phone: 9h1-8225 facsimile: 96/-8972 Re: Comm. 799 November 21, 2002 TO: Honorable Harry Kim, Mayor County of Hawaii SUBJECT: Executive Session -Hiring of Special Counsel for Workers Compensation Division At its meeting of November 20, 2002, the Hawaii County Council concurred with the recommendation of the Corporation Counsel in the executive session mentioned above. Should you have any questions, please do not hesitate to call the Clerk's Office at X8255. Jam . Ar aki, Chairman Ha ai`i unty Council JYA/dl xc: Finance Director VCorporation Counsel Health and Safety Administrator ~~S~P