Wednesday, July 18, 2012
C.A. Upholds City’s Decision Not to Award Golf Cart Contract
‘Distasteful’ Lobbying No Ground for Reversing Decision to Take Services In-House, Justices Rule
By KENNETH OFGANG, Staff Writer
The use of political connections to overturn a an impartial panel’s judgment in favor of a proposed bidder on a city contract may be “distasteful,” but it isn’t a ground for a court order that the bidder be awarded the contract, the Court of Appeal for this district has ruled.
In a June 21 decision, certified Monday for publication, Div. Eight affirmed the denial of a petition for writ of mandate by aggrieved bidder Michael Leslie Productions, Inc., doing business as Ready Golf.
Ready Golf had bid for a contract to provide cart services at Los Angeles’ seven public golf courses. The bid was in response to a “request for proposal” by the Department of Parks and Recreation in 2007.
Prior to the bid, the services were provided by Kishi, Inc. But Kishi’s contract expired in 2003, and the company was continuing to operate the concession on a month-to-month basis.
Ready Golf, Kishi, and a third company submitted bids. The city’s independent panel, made up of golf course management experts from other jurisdictions, rated Ready Golf the preferred bidder, with Kishi second.
The city’s independent consultant, the department head, and the Parks and Recreation board all agreed that Ready Golf should be awarded the contract, with a 10-year term and a five-year renewal option. But the contract was subject to City Council approval, as are all contracts with a term of more than three years, under the City Administrative Code.
The council’s Art, Parks, Health and Aging Committee voted to approve the contract. But when the contract reached the council for a vote, Councilmember Jan Perry moved for a delay because Michael Yamaki, Kishi’s lawyer and the nephew of its owner, was not present.
Yamaki is a former city police and fire commissioner and an adviser to Sheriff Lee Baca.
Yamaki Lobbying Alleged
Ready Golf claims that it was given no explanation as to why the contract’s approval was delayed, or why it was later sent back to committee—where it was approved again. The company said it believed Yamaki was lobbying the council to reject the contract, and noted that the lawyer was also president of Riviera County Club and golfed readily with city officials.
When the matter came back before the council in September 2009, the council voted 8 to 7 against awarding the contract to Ready Golf, and later passed motions asking the board to award a five-year contract to Kishi and the department to conduct a study as to the feasibility of having the city itself take over at the end of the five years.
An audit of Kishi, which was ongoing at the time, ended in August 2010 with the conclusion that Kishi had underreported revenues and used improper accounting procedures The department subsequently concluded that self-operation was preferable to privatization and that the Kishi relationship should be terminated.
All Bids Rejected
On Sept. 7, 2010, Ready Golf was notified that all bids had been rejected and had its deposit returned. It then asked the Los Angeles Superior Court for a writ of either traditional or administrative mandate requiring the city to approve the contract.
Judge Holly Kendig sustained the city’s demurrer, which was made on the ground that the decision on whether to grant the contract or provide the services itself was within the city’s discretion under the charter.
Justice Elizabeth Grimes, writing for the Court of Appeal, agreed.
Administrative mandate does not lie, the justice explained, because the decision was not quasi-judicial. A traditional writ could be granted, she said, if the city’s actions were contrary to the charter, but they were not.
Sec. 371 of the charter, Grimes noted, gives officials “the right to reject any and all bids or proposals and to waive any informality in the bid or proposal when to do so would be to the advantage of the City.”
Ready Golf, the justice explained, argued that the city violated the charter because the superiority of its bid meant that it was not to the city’s advantage to deny Ready Golf the contract. But Sec. 371, Grimes said, only governs the underlying bid process and does not supersede other provisions, such as Sec. 373, which requires council approval of long-term contracts.
The council’s decision to self-operate, Grimes wrote, clearly was not due to undue influence by Kishi, since Kishi’s bid was rejected along with Ready Golf’s.
The justice reasoned:
“If facts were pled showing the City had violated the contracting requirements of its governing charter, Ready Golf may have stated a claim for writ relief....Or, if facts had been pled showing that Kishi’s undue influence had resulted in an award of the contract to it, Ready Golf may have stated a basis to set aside the award due to the tainted process and require the City to reconsider the bids under applicable law.
“Or, if all that remained following the Board’s award of the proposed contract to Ready Golf were nondiscretionary acts necessary to finalize and execute the contract, a claim may have been stated to compel City action.”
But none of those things were pled, Grimes pointed out, and there was no dispute that it was “a classic discretionary function” of the city to approve or reject the recommendations that Ready Golf be given the contract.
“No matter how distasteful we may find the appearance of bias in favor of Kishi, the courts have no authority to substitute judicial discretion for the City’s discretionary decision to self-operate the golf-cart concession,” the justice concluded. “There is no legal basis for a writ of mandate in this case based on the City’s exercise of the right to reject provision in the City charter.”
Yamaki was not available yesterday for comment.
The case is Michael Leslie Productions, Inc. v. City of Los Angeles, 12 S.O.S. 3527.
Copyright 2012, Metropolitan News Company