The Berkeley Rent Stabilization Board will vote Thursday night on whether to increase its spending on legal fees 48 fold.
Commissioners will consider whether to allocate $360,000 for legal fees for FY20-21. When the board adopted last year’s budget in June 2019, it allocated $7,500 for legal fees. That’s a 4,700% increase.
The bulk of the proposed expenditure will go toward an internal investigation that appears to be examining alleged harassment of an employee, although rent board officials have not confirmed the details, citing employee privacy concerns.
The investigation appears to be centered around Jay Kelekian, the former director who was placed on administrative leave. He has since retired.
Much of the $360,000 will go to “confidential personnel issues,” according to Matt Brown, who stepped in as acting executive director after Kelekian went on leave. The rent board in February hired two law firms to assist the commissioners with an internal investigation, The Renne Public Law Group was retained to look into a “workplace complaint submitted on August 6, 2019, by a rent board employee to the City of Berkeley’s Human Resource Department,” according to its contract. The rent board also hired Sloan, Sasaki, Yeung and Wong to advise the commissioners on how to respond.
In February, the rent board voted to allocate $100,000 to hire the firms. That was on top of the $30,000 it had already spent on the investigation. So far, the rent board has spent $53,200 on legal fees in FY19-20.
“This proposed budget allocation [is] to fund outside legal counsel assistance and matters related to confidential personnel issues on which I am unable to provide any comment,” said Brown.
The rent board may take one step in reducing its legal fees — it is going to put off hiring an entry-level lawyer. Retaining that outside counsel accounts for $40,000 of the proposed $360,000 budget.
There are other cost savings in the $6 million budget, 90% of which comes from the fees landlords pay to register their apartments with the board. The annual registration fee is $250 per unit. The rent board is not filling all positions and will be able to draw on some savings to reduce expenditures, according to a memo going to the board Thursday.
The proposed budget allocates $50,000 to find and hire a new executive director.
Brown said the rent board will do a mid-year review of the budget and will adjust accordingly.
Editor’s note, June 19: This article was corrected after publication to state that much of the $360,000 in legal fees would be spent on “a confidential personnel issue.” The original article stated that the funds would go to the two law firms retained to investigate. The budget does not say that. The original article failed to note that $40,000 of the $360,000 would go to use an outside law firm to handle litigation. This is in lieu of hiring a new staff attorney to handle those matters.
