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IREPORT <br /> To the HonOrable Mayor and City Council <br /> Fr°m the City Manager <br /> <br /> January 28,2002 <br /> <br /> Subject <br /> Extension of legal services agreement with Nossaman, Guthner, Knox and Elliott, LLP, in <br /> providing representation in connection with Chapter 11 bankruptcy case filed by Pacific <br /> Gas & Electric. <br /> <br /> Recommendation <br /> Approve continuation of the legal services letter agreement with Nossaman, Guthner, Knox <br /> and Elliott, LLP, as set forth in this report. <br /> <br /> Background <br /> On or about May 24, 2001, the City Council authorized entering into a legal services <br /> agreement with the law firm of Nossaman, Guthner, Knox & EIliott, of Los Angeles, <br /> California. Since the inception of the agreement, Allan Ickowitz, Esq. (Nossaman firm), has <br /> represented the City of Redwood City's interest. <br /> <br /> In light of the on-going nature of the bankruptcy proceeding, I requested that Mr. Ickowitz <br /> prepare an estimate of the legal expenses that may be incurred as well as a projected time <br /> line within which the PG&E bankruptcy matter might be completed. Legal expenses <br /> incurred through November 30, 2001 were $14,726.06. The current estimated cost to be <br /> incurred from December 1,2001 forward is $21,000. The projected time for completion of <br /> the matter is January 2003. As is the case for all litigated matters, the associated costs <br /> and the time period for completion are only estimates. <br /> <br /> This particular litigation is unique in the sense that there is very little precedence within the <br /> law of bankruptcy to guide either the parties or the court. It is my understanding that only <br /> two or three cases addressing public utilities have been litigated under the present federal <br /> bankruptcy law prior to PG&E's case. <br /> <br /> Alternative <br /> The City Council could determine to seek other legal counsel to represent its interest. <br /> <br /> Fiscal Impact <br /> Funding for the legal services will need to be budgeted within the Administrative Support <br /> budget within the general fund. Should this contract be approved, staff will then include <br /> funding for this contract with the budget amendments that will be presented to Council later <br /> this fiscal year. <br /> <br />-"'Stan Yamat~oto, Ed Everett <br />City A~ City Manager <br /> <br /> <br />