Item 4CCity of Southlake, Texas
M E M O R A N D U M
To:
Mayor and Members of the City Council
From:
Shana K. Yelverton, City Manager
Subject:
Approve a Professional Services Agreement with McNally &
Associates in the Amount of $49,900.
Action
Requested:
Approve a Professional Services Agreement with McNally &
Associates in the Amount of $49,900.
Background
Information:
In January 2008, contact was made by our office to secure
the professional services of McNally & Associates. Initially,
we requested that McNally & Associates investigate three
City of Southlake Police Department criminal cases that
were the subject of an anonymous complaint received by the
City Manager’s office in May 2007. Additionally, in the
summer of 2007, a group of City of Southlake police officers
approached the Tarrant County District Attorney’s Office with
concerns about the handling of the above-referenced cases
and concerns about others, of which we were previously
unaware.
The District Attorney’s Office of Tarrant County recently
completed its review of these additional complaints and
determined there was no criminal conduct by the Chief of
Police or any other member of the Southlake Police
Department. The District Attorney noted that the information
presented to the local grand jury did not establish a criminal
event, and therefore they were not empowered to go further
with an investigation. Although they declined prosecution,
they referred the reviewed cases and issues raised to the
City of Southlake City Manager’s Office for possible further
review and assessment. Attached is a chronology of events
that further explains the timeline surrounding these issues.
At that time the City Manager’s Office entered into
discussions with McNally & Associates to expand the scope
of their work to provide an independent review of the
practices and judgment related to the eight cases brought to
the District Attorney’s office. We requested that McNally &
Associates fully evaluate the facts and circumstances of
each case as well as the decision-making process used in
resolving those matters.
The expansion of the scope of the firm’s work from the
original engagement of reviewing the three cases in the
anonymous complaint to include the cases referred by the
District Attorney’s office results in fees in excess of the
$50,000 procurement limits that can be entered into by the
City Manager. To put this in some perspective, the external
audit for the City was recently approved at $80,000 and
although this work will not reach that amount it is very similar
in nature
.
Financial
Considerations:
The original scope of work amounted to approximately
$20,000. This agreement is for $49,900 bringing the total to
$69,900. There are sufficient funds budgeted for this project.
Citizen Input/
Board Review:
N/A
Legal Review:
Cara White of TOASE was consulted with regard to this
agreement
Alternatives:
Attempt to conduct the necessary review in house.
Do no review of the District Attorney’s report.
Supporting
Documents:
1.Chronology of events
2. McNally & Associations Professional Services
Agreement
Staff
Recommendation:
Approve a Professional Services Agreement with McNally &
Associates in the Amount of $49,900.
Staff
Contact:
Shana Yelverton, City Manager
TIM McNALLY & ASSOCIATES- 3/7/08
Tim McNally is a security and risk management consultant. He is located in Thousand
Oaks, California. Mr. McNally is a lawyer by education and spent most of his adult life in
law enforcement. He began his career as a local prosecutor in Wisconsin in 1973-74,
primarily handling cases assigned to the juvenile court system. He spent the next 24 years
(75-99) with the Federal Bureau of Investigation serving in several major cities across the
US and in a variety of investigative and managerial posts.
During his career, he has worked very closely with local and state police officials
throughout the United States. Mr. McNally spent much of his career involved in the
investigation and prosecution of public corruption, organized crime and international
drug trafficking matters. Between 1988 and 1999, Mr. McNally held a number of
leadership and command positions within the FBI. He served as the Assistant Special
Agent in Charge (ASAC) of the Miami Field Division responsible for the organized
crime, public corruption and drug trafficking investigative programs. He later served as
the Special Agent-In-Charge (SAC) at the Washington DC and Baltimore field offices
from 1993 to 96. He was then designated by the Director of the FBI as the Assistant
Director In-Charge of the FBI’s second largest field division located at Los Angeles,
California.
From May 1999 thru the end of 2005, McNally was the Executive Director of Corporate
Security and Legal Services for The Hong Kong Jockey Club. The Hong Kong Jockey
Club is a not for profit organization and is known as the world’s foremost thoroughbred
racing organization. The Company operates horse racing, sports betting, and lottery in
behalf of the Government of Hong Kong. In his position, Mr. McNally directed the
activities of more than 200 investigators, lawyers, security and regulatory personnel
involved in the operation and administration of these activities.
While working in Hong Kong, he worked regularly with the Hong Kong Police and other
law enforcement and regulatory agencies throughout Asia. The Company was the single
largest tax contributor and also operated the largest charitable trust in Asia providing
significant sums of money for educational and public health institutions in Hong Kong.
Mr. McNally was involved in the initial planning and execution of agreements with the
Hong Kong and Chinese Governments, concerning Hong Kong’s hosting of the 2008
Beijing Olympic Equestrian Events.
In January 2006, McNally returned to the US and developed a consultancy business
known as Tim McNally &Associates. This business has focused on issues involving
corporate due diligence, compliance matters, risk assessments, executive screening,
internal fraud issues and related areas involving corporate governance. The business
engages only highly qualified personnel, who possesses extensive investigative and
managerial experience and are fully capable to handle complex projects. The background
and professional resume of each person used in a project will be incorporated with the
report submitted to the client.
ENGAGEMENT LETTER
City of Southlake-McNally & Associates
GENERAL BACKGROUND INFORMATION:
The Client is the City Manager’s Office of Southlake, Texas. In January 2008 contact
was made by that office to secure the professional services of Tim McNally &
Associates. The initial information provided by the client involved three criminal cases
investigated by the Southlake Police Department. The investigations eventually became a
source of dispute, controversy, and internal conflict within the Department. Issues and
questions surfaced regarding the handling of these cases by Patrol and CID personnel,
and more significantly raised concerns about the judgments made and decision making
leading to up to the final resolution of these matters. The referenced cases also were the
subject of an anonymous complaint received by the City Manager’s Office, and these
cases and other issues have surfaced in local media reports, resulting in negative coverage
of the Police Department and casting a cloud on the leadership of the Department and
City oversight.
McNally &Associates has received and reviewed the Police documents associated with
the three criminal cases referred. We have also reviewed interviews and an internal report
prepared by the Deputy City Manager in connection with the anonymous allegation
received by the City Manager’s Office. We have also reviewed press reports and other
relevant documents that might assist us in our review and evaluation of specific issues.
th
It is noted that the anonymous letter received by the City Manager on May 30, 2007
alleged low morale existed within the Police Department, expressed concerns regarding
the leadership and effectiveness of the command staff, and specifically noted that the
Chief, Captain and some of the Lieutenants were directly responsible for this situation.
The writer also alleged that the leadership lacked necessary management skills and
requisite degree of integrity. The writer alleged that the leadership was engaged in
“unethical practices, lying, and possibly breaking the law “, without further specification.
The writer further cited three specific cases that the Chief ordered the CID Sergeant to
drop or reduce charges against Southlake High School students after the cases were
investigated by the Police and referred for prosecution.
The District Attorney’s Office of Tarrant County recently completed its review of
allegations made in late summer 2007 by a group of Southlake Police Officers against the
Chief of Police. The District Attorney’s Office determined there was no criminal conduct
by the Chief of Police or any other member of the Department. The District Attorney
noted that the information presented to the local grand jury did not establish a criminal
event, and therefore they were not empowered to go further with an investigation.
Although they declined prosecution, they referred the cases reviewed and issues raised to
the City of Southlake City Manager’s Office for possible further review and assessment.
SCOPE OF WORK:
Following completion of the DA’s review, the City Manager’s Office has requested that
McNally &Associatesperform a review of the following issues:
Provide an independent review of the eight cases brought to the DA’s office and
to fully evaluate the facts and circumstances of each case, the decision making
process used in resolving those matters, and to receive and assess information
relevant to morale issues currently impacting the Department.
CONFIDENTIALITY:
Our services are confidential and we will not disclose information obtained except as
directed by the client or pursuant to a court order. Furthermore, we will prepare and
maintain documents as confidential and privileged information pursuant to the direction
and discretion of our client and legal advisor. We will follow relevant guidelines and
comply with the legal and privacy requirements of the State of Texas in connection with
the preparation of any report(s).
ENGAGEMENT STAFFING AND FEES:
Timothy McNally and Larry Langberg will be the primary persons assigned to this
engagement. In the performance of this project, they will conduct interviews; review
public and confidential records; provide professional analyses of documents reviewed;
provide independent research as necessary; provide memorandum and periodic briefings
to the City Manager as required; and provide a comprehensive written report of areas
reviewed within the scope of work.
McNally and Langberg, each bill for services rendered at an hourly rate of $225 per hour
for investigation and drafting of a comprehensive written report. McNally and Langberg
charge at a lesser rate of $175 per hour for the initial review of documents and
background material required to undertake this review. Administrative time and support
resources required in this project will also be billed at this lower rate.
We estimate that this review will take approximately 60 to 75 days to complete this
project based upon the requirements provided to us by the City Manager. This estimate is
contingent upon the availability of relevant parties to be interviewed, or new issues
identified during the course of the review that require additional attention at the
instruction and direction of the City Manager. The following is an estimate of time
required for each area of evaluation currently identified by the City.
---- Review of eight police investigations to determine if the cases were handled
properly within the policy and procedures of the Department. This will require the
interview of a significant number of individuals involved in the investigation of these
cases or parties involved in the recently completed District Attorney-grand jury review.
This task will require a detailed review of investigative reports, files and relevant
memorandum and other correspondence pertaining to these matters. It will also involve a
review of applicable Texas law regarding specific criminal, policy and criteria used to
consider charges levied against a defendant, as well as any prosecution guidelines used
by the District or City Attorney related to the prosecution and disposition of these
matters. These tasks will require approximately 300 hours to conduct a comprehensive
review of these matters.
REIMBURSABLE EXPENSES:
In addition to the hourly rate, you will be invoiced for any reimbursable out of pocket
expenses incurred and directly related to the engagement, including but not limited to
transportation, lodging, incidental expenses, photocopying and database searches.
McNally & Associates estimate our fees for services rendered for this specific agreement
will be approximately $49,900. This engagement letter does not include consultancy
services previously provided prior to the signing of this engagement letter.
Thank you for the opportunity to be of service to you in this engagement. If you are in
agreement with this proposal, please execute and return a signed and dated copy.
Timothy McNally
Mayor Andy Wambsganss