RETURN TO FRANK CADY
On November 7, 1997, Frank Cady was receiving a monthly retainer of $1,000 plus $450 for health insurance. Employees receive LMUD health benefits. Independent Contractors do not. Cady reveals his scheme to the General Manager, Don Battles and Assistant General Manager, John Baxter.
Cady was providing the following services for his retainer:
Attends regular and special meetings in Susanville
Assists in preparation of closed session agenda items as necessary
Reviews agenda prior to publication as necessary
Review complicated or complex resolutions prior to adoption
Review simple contracts and agreements
Furnish legal advice to LMUD as orginated by routine LMUD operations both at meetings and as needed between meetings; and
Provide "other services" to the District at a reduced hourly rate ($40.00 per hour less than my normal hourly rate, presently $150.00 per hour
These "other services" provided to the District at this reduced hourly rate include, but are not limited to, the following:
Drafting contracts and agreements
Reviewing complex or complicated contracts
Negotiations with bargaining units, defendants, claimants, attorneys, power suppliers, and any other third parties
Attending and tending to any LMUD matters out of town
Reviewing legal complaints and claims against LMUD
Defending or answering any claims or complaints against LMUD
Collection work, including legal actions against account debtors
Representation of LMUD in legal, CPUC, FERC, arbitration or other proceedings.
Frank Cady then goes on, in this document, to explain that he has been averaging $6,200 a month in billings, all inclusive. Now Cady says he will do all of the work for $6,000 + health benefits.
"Further, and as a natural result, I expect that management would utilize my services more thereby ending up with more work product for a monthly retainer which is less than the historic averages"
After John Battles signed this agreement , Frank Cady has not billed LMUD his $72,000 per year + health benefits ( which have escalated to $1162.00 per month ?) but as much as $325,000.
Frank Cady had no intention of including all of his services for $6,000, rather his plan to take advantage of the "ignorance" of the LMUD Board was now in place.