Opinion
F079073
02-03-2021
CALIFORNIA PUBLIC RECORDS RESEARCH, INC., Plaintiff and Appellant, v. COUNTY OF STANISLAUS, Defendant and Respondent.
Donald W. Ricketts for Plaintiff and Appellant. Porter Scott, John R. Whitefleet and Thomas L. Riordan for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. Nos. 2006090, 2010489)
OPINION
APPEAL from a judgment of the Superior Court of Stanislaus County. Timothy W. Salter and Stacy P. Speiller, Judges. Donald W. Ricketts for Plaintiff and Appellant. Porter Scott, John R. Whitefleet and Thomas L. Riordan for Defendant and Respondent.
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In 2014, plaintiff California Public Records Research, Inc. filed a petition for writ of mandate challenging the fees charged by the County of Stanislaus (County) for copies of official records. The trial court denied the petition. We reversed and required County's Board of Supervisors (Board) to make findings under Government Code section 27366, supported by substantial evidence, as to the fee "amount necessary to recover the direct and indirect costs of providing the copies" and to set the copying fees in accordance with those findings. (California Public Records Research, Inc. v. County of Stanislaus (2016) 246 Cal.App.4th 1432, 1460-1461 (Public Records-Stanislaus).)
All unlabeled statutory references are to the Government Code.
On remand, the trial court issued the writ of mandate, County hired a consultant to prepare a study of copy costs, the consultant prepared a draft and final study, County personnel reviewed the study, staff prepared recommendations for the Board, and a public hearing was held. At the end of the public hearing, the Board approved an ordinance setting the fees at $6.75 for the first page and $3 for each subsequent page. The trial court determined the Board had complied with the writ's instructions and discharged the writ. Plaintiff appealed, contending (1) the trial court erred by excluding extra-record evidence (see Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559 (Western States)); (2) the Board did not apply the correct test for identifying allowable indirect costs; and (3) the Board's findings about direct costs, indirect costs, and the cost of providing subsequent pages were not supported by substantial evidence.
First, under the particular circumstances of this case, we conclude the extra-record evidence submitted by plaintiff is admissible as (1) background information, (2) to address the accuracy of the administrative record—that is, the items the Board contends it considered in reaching its decision—and (3) whether the Board fulfilled its duties under the writ and section 27366 in making its finding and setting the copying fees. (See Western States, supra, 9 Cal.4th at pp. 578-579 [possible exceptions to general rule against admission of extra-record evidence].) Therefore, we will consider the extra-record evidence in evaluating plaintiff's claims that the Board abused its discretion and failed to comply with the directions in the writ of mandate.
Second, we conclude the Board applied the correct test for identifying indirect costs. This conclusion is based on the contents of (1) the transcript of the May 2, 2017 public hearing, (2) the staff recommendations in the Board's agenda for that hearing, and (3) the attachments to the agenda. Those documents show the Board used the "general test that requires [indirect] costs to be reasonably attributed to (i.e., reasonably related to) the service of providing copies and rejects costs not reasonably attributed to the service of providing copies." (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1461.)
Third, as described below, we conclude substantial evidence supported the Board's findings relating to costs and its decision to set copying fees at $6.75 for the first page and $3 for subsequent pages. Thus, the Board complied with section 27366 and the writ of mandate.
We therefore affirm the judgment.
FACTS AND PROCEEDINGS
In July 2001, the Board unanimously enacted an ordinance setting the Clerk-Recorder's copy fees at $3 for the first page and $2 for each subsequent page. In February 2014, plaintiff initiated this litigation by filing a verified petition for writ of mandate alleging the copying fees charged by County were excessive relative to the costs allowed by law. Plaintiff alleged the Board abused its discretion in setting the copying fees and the fees violated both section 27366 and the California Constitution.
In September 2014, the trial court denied the petition for writ of mandate, directed judgment to be entered in favor of County, and awarded County its costs. Plaintiff appealed.
In April 2016, this court reversed the denial of a writ of mandate and remanded for further proceedings. (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1460.) We directed the trial court to "issue a peremptory writ of mandate compelling County's board of supervisors to (1) consider the matter of fees charged by the clerk-recorder's office for copying official records; (2) make findings under section 27366, supported by substantial evidence, as to the fee amount necessary to recover the direct and indirect costs of providing the copies; (3) determine what constitutes an 'indirect cost' by using the general test that requires such costs to be reasonably attributed to (i.e., reasonably related to) the service of providing copies and rejects costs not reasonably attributed to the service of providing copies; and (4) set the copying fees charged by the clerk-recorder's office in accordance with its findings under section 27366." (Id. at pp 1460-1461.) In June 2016, this court issued a remittitur to the trial court. MGT's Reports
In December 2016, County entered into an agreement with MGT of America Consulting, LLC (MGT) for services relating to a fee study and calculations of hourly rates and per page fees for copies of official records. Later that month, MGT conducted a week-long study of the time clerks spent on requests for official documents. The study collected data from copy requests handled by five different Legal Clerks, III. The clerks kept a log of the time they spent on five steps, from the initial customer inquiry to processing payment.
On February 15, 2017, MGT circulated a draft of its findings among certain County employees. The draft report stated the data indicated an average of eight minutes of actual clerk time was spent on requests under 10 pages. It estimated the full cost of clerk's time at $67.64 per hour, which it rounded up to $1.13 per minute. Accordingly, the draft report calculated the cost of clerk time at "$9.02 per transaction for a request of ten pages or less" (eight minutes per transaction times $67.64/hour divided by 60 minutes/hour). The draft report also stated it took a total of nine minutes to process a request over 10 pages and less than 40 pages and took 10 minutes to process requests over 40 pages. Thus, the total cost of clerk time for transactions in these categories were $10.15 (nine minutes times $67.64/hour divided by 60 minutes/hour) and $11.27 (10 minutes times $67.64/hour divided by 60 minutes/hour), respectively.
The hourly figure of $67.64 consisted of (1) salary and benefits ($30.61), (2) internal department administration ($30.23), and (3) external support ($6.80). The latter two are allocations of indirect costs.
The clerks logged only two transactions for copies of documents with over 10 pages—one for 22 pages and another for 24 pages took six minutes each, based on start and end times. Thus, the draft report's conclusion that requests for more than 10 pages and less than 40 pages takes nine minutes contradicts the data actually collected.
MGT's draft report then used these estimates of the total cost of clerk time per transaction to create a comparison between the copying revenues collected in fiscal year 2015-2016 and the cost of providing those copies. The purpose of this comparison was to determine if County was undercharging or overcharging for copies. Undercharging would mean County was subsidizing the cost of copy requests, while overcharging would mean that copy fees were subsidizing other operations of the Clerk-Recorder's Office. The comparison was made in a table of (1) the total number of transactions in each month of fiscal year 2015-2016, (2) the total revenue generated by those copy requests, and (3) the MGT's estimate of the total cost of clerk time to provide those copies. There were 5,411 transactions generating a total revenue of $47,527 at an estimated total cost of $49,225.09. Thus, the draft report stated costs exceeded revenue by $1,698.09, or about 3.45 percent. Allocating the $49,225 in costs over the 19,224 pages copied in fiscal year 2015-2016, the draft report estimated the average direct and indirect cost at $2.56 per page. In a section titled "Fee Recommendations," the draft report stated: "Because the County's revenues are in line with the full costs of providing official document request copies, MGT would not recommend any changes to the per page fees of $3 for the first and $2 for the second page."
Using MGT's time-based methodology that estimated copy requests of one through nine pages took approximately eight minutes leads to the conclusion that a one-page request costs $9.02 or $9.02 per page, a two-page request costs $9.02 or $4.51 per page, and a three-page request costs $9.02 or $3.01 per page, and so forth with a nine-page request costing $1.00 per page ($9.02 divided by nine pages).
MGT's draft report also made a comparison of the revenue and cost based on the number of pages requested. The purpose of this comparison was to determine the amount of overcharge or undercharge based on the length of the document copied. The draft report analyzed data from a single month (August 2015) where 495 copy requests were processed and 1,508 pages copied. Approximately 45 percent of the requests asked for a single page and those 223 requests generated $669 in revenue. Using the estimated cost of $9.02 per transaction of that size, these 223 requests resulted in a total copying cost of $2,011.46. Comparing revenue to that estimate of total cost produced the conclusion that persons requesting a copy of one page had been undercharged (i.e., subsidized) a total of $1,342.46 in that month. The same cost to revenue comparison produced the conclusion that persons requesting copies of two or three pages also had been undercharged and persons requesting copies of four or more pages had been overcharged. For example, the draft report stated only one request for a copy of a 22-page document had been made that August and the revenue collected was $47. When compared to the cost of the nine minutes of time spent copying a document of that length ($10.15), the $47 collected included an overcharge of $36.85.
On February 22, 2017, MGT released the final report of its findings. MGT revised its determination of the full cost of copies of official documents to $13.06 per page, which was over five times higher than the $2.56 per page estimate in the draft report. MGT's final report included a new calculation—the average amount of clerk time spent copying a page. According to the report, data from 31 copy requests showed 206 minutes were spent copying 98 pages, which produced an average of 2.1 minutes per page copied. MGT also slightly revised its estimate of the cost of clerk time, recalculating it to be $65.17 per hour, which was the sum of salary and benefits ($30.61/hour) and indirect costs ($34.57/hour). These time and cost figures were used to generate a direct and indirect clerkcopy time cost of $2.28 per page ($65.17/hour divided by 60 minutes/hour times 2.1 minutes/page).
The indirect costs ($34.57) layered onto the hourly cost of a clerk's salary and benefits ($30.61) were, according to MGT's final report, a proportionate share of (1) other operating expenses and internal departmental administrative costs (i.e., departmental overhead) and (2) countywide overhead. The methodology used by MGT to determine the indirect costs and allocate $34.57 to an hour of clerk's time involved the creation of an indirect cost pool and a comparison of the total of indirect costs in the pool to a direct cost base (which consisted of the clerk's salary and benefits) to produce an indirect cost rate (ICR) of 112.94 percent. When the hourly cost of salary and benefits ($30.61/hour) was multiplied by this percentage, it produced $34.57 per hour as the indirect cost attributable to one hour of clerk's time.
The countywide overhead was taken from County's cost allocation plan. As support, MGT's final report attached one-page summary schedule labeled "OMB A-87 Cost Allocation Plan." This schedule showed the countywide costs allocated to the County's various departments. These countywide costs include the cost County Counsel, the Chief Executive Officer, the Auditor-Controller, equipment depreciation, and risk management. The Clerk-Recorder's Office was allocated no cost for building use or grounds maintenance.
"OMB A87" is a reference to federal Office of Management and Budget circular A87 (Circular A87). Issues involving Circular A87 are discussed in part II of this opinion. (See fn. 6 and accompanying text.)
The total cost (direct and indirect) of clerk copy time was one of 10 items of costs included in MGT's calculation of the full per page cost of providing copies. The other nine items (with per page cost) were direct supervision ($3.05), staff counter time ($1.35), equipment maintenance ($0.42), ink and toner ($0.04), paper ($0.01), direct printer cost ($0.00), storage services microfiche ($2.60), data processing ($1.84), and software licenses ($1.48). These per page costs, when added to the clerk copy time of $2.28 per page, totaled $13.06.
In late February 2017, County filed and served MGT's final report. This was done to comply with an earlier court order. Writ of Mandate
On March 7, 2017, the trial court issued the peremptory writ directing County to consider the matter of the fees charged by the Clerk-Recorder's Office for copying official records. The court instructed County to file a return on or before May 12, 2017.
Plaintiff's Objections
After reviewing MGT's final report, plaintiff sent a letter dated April 12, 2017, to Supervisor Vito Chiesa. Plaintiff asserted it was fully familiar with the copying methods employed by all 58 California counties and the cost actually incurred. Plaintiff contended MGT's findings about the amount of time attributed to copying each page and the costs per page "defy the common experience of everyone who has ever printed a document from the internet, a word processing program, a flash drive, etc., etc., on a computer." Plaintiff ended the letter by stating its belief "that a fee in excess of $1.00 per page with a maximum of $5.00 per document would be found by the courts, after continuing, protected, expensive litigation, to be unreasonable and in violation of the several statutes and constitutional provisions that regulate these fees." Auditor-Controller's Fee Analysis
MGT's final report was referred to County's Auditor-Controller's Office for review. The results of that review were set forth in an April 21, 2017 letter, with attachments, from Auditor-Controller Lauren Klein, C.P.A., to the Board. The fee analysis included a section addressing the definition of direct and indirect costs. That section referred to definitions adopted by the federal Office of Management and Budget and the State Controller's Manual of Accounting Standards and Procedures for Counties (Manual). The Manual stated direct costs are specifically traceable to specific goods, services, units, programs, activities, or functions and indirect expenses could not be specifically traced and, therefore, had to be allocated on some systematic and rational basis. The Manual defined indirect costs or expenses as overhead and, in turn, defined overhead as the elements of cost necessary to produce a good or service that are not directly traceable to the good or service. The Manual's examples of overhead included rent, heat, light, supplies, management and supervision.
The Auditor-Controller's fee analysis agreed with the MGT's methodology for allocating indirect costs, which included the creation of an indirect cost pool and the calculation of an indirect cost rate. The Auditor-Controller concluded the methodology complied with federal guidelines and was supported by the principles and guidelines contained in the Manual. The Auditor-Controller made some adjustments to the costs included in the indirect cost pool and, as a result, reduced MGT's calculation of an indirect cost rate of 112.94 percent to 67.26 percent. Applying this indirect cost rate to the per hour cost of a clerk's salary and benefits ($30.61), the Auditor-Controller recalculated the indirect cost component of clerk time at $20.58 and the full hourly cost of clerk time at $51.19 ($30.61 plus $20.58). The Auditor-Controller also removed data processing as a direct cost and placed it in the indirect cost pool.
The Auditor-Controller's adjustments to MGT's calculations reduced the clerk's copy time cost from $2.28 per page to $1.79 per page. That adjustment and others reduced MGT's estimate of the full per page copy cost from $13.06 to $6.78. Public Hearing
The Board set Tuesday, May 2, 2017, as the date for a public hearing to address an ordinance to increase the existing fees charged by the Clerk-Recorder for copies of official records. Notice of this public hearing and its purpose was published in the Modesto Bee on April 21, 2017, and April 27, 2017.
Prior to the public hearing, an agenda item was prepared for an ordinance setting the copying fee at $6.75 for the first page and $3 for each subsequent page. This agenda item included staff recommendations and an eight-page discussion and was part of what is sometimes referred to as the "board packet." Usually, the board packet is sent to Board members on the Friday before the Board's Tuesday meeting.
On May 1, 2017, plaintiff sent a second letter to the Board that included a statement in opposition to the proposed fee schedule. The letter referred to a decision a few weeks earlier by the Alameda County Superior Court that had invalidated the copying fees charged by that county.
The superior court's decision was reversed by the First District in California Public Records Research, Inc. v. County of Alameda (2019) 37 Cal.App.5th 800 (Public Records-Alameda). The fee schedule had been set in 2010 and charged a flat rate of $3.50 per page copied. (Id. at p. 803.)
On May 2, 2017, the Board held the public hearing on the approval of a new copying fee schedule. The Board unanimously approved all staff recommendations. The staff recommendations and the public hearing are described in part II.D. of this opinion.
The following week, the Board adopted an ordinance amending the County Code and resetting the copying fees charged for official document to $6.75 for the first page and $3 for each additional page. Discharge of the Writ
On May 12, 2017, County filed a notice of compliance with peremptory writ of mandate and requested a hearing date and briefing schedule. A dispute arose between the parties over whether plaintiff had the right to conduct discovery prior to the hearing addressing discharge of the writ. In July 2017, the trial court issued an order allowing plaintiff to conduct discovery and directing counsel to meet and confer on a discovery plan. Subsequently, plaintiff took depositions of Supervisor Chiesa, Auditor-Controller Klien, Clerk-Recorder/Registrar of Voters Lee Lundrigan, a member of the Auditor-Controller's staff, and the main author of MGT's final report. In April 2018, the court held a status conference, closed discovery, and set a briefing schedule. In June 2018, plaintiff filed an offer of proof that included 18 documents and also filed excerpts from the five depositions.
In January 2019, the trial court held a hearing on the pending matters. On March 4, 2019, the trial court filed an order discharging the peremptory writ of mandate. The court concluded the extra-record evidence submitted by plaintiff was not admissible. The court's order included specific findings about the Board's compliance with the terms of the writ. Of significance in this appeal is the court's finding that the Board "[d]etermined what constitutes an 'indirect cost' by using the general test that requires such costs to be reasonably attributed to (i.e., reasonably related to) the service of providing copies and rejects costs not reasonably attributed to the service of providing copies."
Later in March 2019, the trial court filed a judgment stating the peremptory writ of mandate issued two years earlier was discharged. In April 2019, plaintiff filed a timely appeal.
DISCUSSION
I. EXTRA-RECORD EVIDENCE
A. Contentions of the Parties
Plaintiff contends the trial court erred when it denied plaintiff's request to admit extra-record evidence into the record for consideration by the court. Plaintiff acknowledges the principle "that extra-record evidence is generally not admissible in traditional mandamus actions challenging quasi-legislative administrative decisions on the ground that the agency 'has not proceeded in a manner required by law' within the meaning of Public Resources Code section 21168.5." (Western States, supra, 9 Cal.4th at p. 576.) Plaintiff contends this general rule does not apply for two reasons. First, the Board's approval of the new copy fee schedule was not a quasi-legislative administrative decision. Second and alternatively, an exception to the general rule applies. Under one exception, "evidence that could not be produced at the administrative level 'in the exercise of reasonable diligence' should be admitted in traditional mandamus proceedings." (Id. at p. 578.)
County argues the trial court properly excluded the extra-record evidence offered by plaintiff because the general rule stated in Western States applies to the Board's decision and the trial court's determination that no exception applied was not an abuse of discretion. County asserts the only relevant evidence is that which was actually before the Board and there was enough time for plaintiff to submit evidence to the Board prior to its hearings.
B. Legislative and Adjudicative Acts
Plaintiff contends the Board is not an administrative agency, its meetings are not administrative proceedings, and the ordinance adopted is not an administrative ruling. Plaintiff asserts the Board is a legislative body and, therefore, its enactment of the fee ordinance was a legislative act, not an administrative ruling. Plaintiff's argument is based in part on section 50002, which states: " 'Legislative body' as used in this division, means board of supervisors in the case of a county ...."
First, we reject the argument that the Board's adoption of an ordinance containing a fee schedule must be deemed a legislative act simply because the Board is defined as a legislative body in the Government Code. Boards of supervisors perform many functions. Some of these are legislative, some are adjudicatory, and some involve a combination of legislative and adjudicative decisions. For example, where a city council or county board of supervisors determines that a development approval is consistent with its general plan based on the application of a general plan's established land use designation to a particular development, that determination "is fundamentally adjudicatory." (Orange Citizens for Parks & Recreation v. Superior Court (2016) 2 Cal.5th 141, 155.) Similarly, a local government makes an adjudicative decision when it imposes conditions on an application for a building permit relating to an individual parcel. (Santa Monica Beach, Ltd. v. Superior Court (1999) 19 Cal.4th 952, 965.) In contrast, a local government's adoption of zoning ordinances "involve essentially legislative determinations classifying entire areas of the city" or county. (Ibid.)
Second, we consider the specific functions the Board performed in this particular case to reach its decision to adopt the fee ordinance. Those functions are defined in part by our disposition in Public Records-Stanislaus, which directed the superior court to "issue a peremptory writ of mandate compelling County's board of supervisors to (1) consider the matter of fees charged by the clerk-recorder's office for copying official records; (2) make findings under section 27366, supported by substantial evidence, as to the fee amount necessary to recover the direct and indirect costs of providing the copies; (3) determine what constitutes an 'indirect cost' by using the general test that requires such costs to be reasonably attributed to (i.e., reasonably related to) the service of providing copies and rejects costs not reasonably attributed to the service of providing copies; and (4) set the copying fees charged by the clerk-recorder's office in accordance with its findings under section 27366." (Public Records-Stanislaus, supra, 246 Cal.App.4th at pp. 1460-1461.) To comply with the writ of mandate issued, the Board was required to evaluate the evidence and make findings of fact—an adjudicative function. After making its findings, the Board then made a legislative decision to adopt a generally applicable rule (i.e., the fee schedule) based on its findings and considerations of public policy—a legislative act. (See Horn v. County of Ventura (1979) 24 Cal.3d 605, 613.) Because of the combination of acts performed by the Board to comply with the writ of mandate, we conclude the Board's adoption of the fee ordinance is comparable to a quasi-legislative administrative decision and, therefore, is subject to the general rule and exceptions relating to the admission of extra-record evidence set forth in Western States.
C. Exceptions to General Rule
In Western States, the Supreme Court explicitly approved one exception to the general rule that extra-record evidence is inadmissible in traditional mandamus actions challenging quasi-legislative administrative decisions. (Western States, supra, 9 Cal.4th at p. 578.) The appellant had argued that evidence that could not be produced at the administrative level in the exercise of reasonable diligence should be admitted in traditional mandamus proceedings. (Ibid.) The court agreed there was such an exception in traditional mandamus proceedings challenging quasi-legislative administrative decisions, but stated the exception was to be narrowly construed. (Ibid.) "Extra-record evidence is admissible under this exception only in those rare instances in which (1) the evidence in question existed before the agency made its decision, and (2) it was not possible in the exercise of reasonable diligence to present this evidence to the agency before the decision was made so that it could be considered and included in the administrative record." (Ibid.)
In addition, the court stated it did not foreclose the possibility of other exceptions for unusual circumstances or for very limited purposes not presented in the case before it. (Western States, supra, 9 Cal.4th at p. 578.) In footnote 5, the court acknowledged commentators had proposed limited exceptions allowing the admission of "evidence relevant to (1) issues other than the validity of the agency's quasi-legislative decision, such as the petitioner's standing and capacity to sue, (2) affirmative defenses such as laches, estoppel and res judicata, (3) the accuracy of the administrative record, (4) procedural unfairness, and (5) agency misconduct." (Id. at p. 575, fn. 5.)
The court also stated federal courts allow extra-record evidence to be admitted for background information or for the limited purpose of ascertaining whether the agency considered all the relevant factors or fully explicated its course of conduct or grounds for decision. (Western States, supra, 9 Cal.4th at p. 579.) In Outfitter Properties, LLC v. Wildlife Conservation Bd. (2012) 207 Cal.App.4th 237, the court interpreted the Supreme Court's reference to federal decisions to mean extra-record evidence "may be admissible to provide background information regarding the quasi-legislative agency decision, to establish whether the agency fulfilled its duties in making the decision, or to assist the trial court in understanding the agency's decision." (Id. at p. 251.)
Under the particular circumstances of this case, which include a writ directing the Board to perform specific acts, we conclude the extra-record evidence submitted by plaintiff is admissible as (1) background information, (2) to address the accuracy of the administrative record—that is, the items the Board contends it considered in reaching its decision—and (3) whether the Board fulfilled its duties (which include complying with the writ) in making its decision. Therefore, we will consider the extra-record evidence in evaluating plaintiff's claims that the Board abused its discretion and failed to comply with the directions in the writ of mandate. II. TEST USED TO IDENTIFY INDIRECT COSTS
A. Background
At its foundation, the parties' dispute about the copying fees charged for the County's official records involves an application of section 27366, which provides that the fees "shall be set by the board of supervisors in an amount necessary to recover the direct and indirect costs of providing the product or service or the cost of enforcing any regulation for which the fee or charge is levied." In the prior appeal, we concluded the statutory term "indirect costs" was ambiguous and resolved that ambiguity by adopting a "a general test that requires such costs to be reasonably attributed to (i.e., reasonably related to) providing copies and excludes costs that cannot be reasonably attributed to the service of providing copies." (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1456.) This test incorporated the statute's limiting prepositional phrase " 'of providing the product or service.' " (Id. at p. 1454.) While this prepositional phrase limits the cost that can be recouped, we concluded the indirect costs " 'of providing the product or service' " were not limited to the cost of duplication. (Ibid.)
We described the nature of this general test by stating its application "presents a question of fact, which must be decided by a county's board of supervisors when it sets the fee for copying official documents." (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1456.) Our determination that the "test presents a question of fact dependent upon the surrounding circumstances" played a role in our discussion of section 54985, a more general statute governing cost recoupment by counties. (Public Records-Stanislaus, supra, at pp. 1456-1457.) Section 54985 states a fee may reflect the average cost of providing any product or service and then states: "Indirect costs that may be reflected in the cost of providing any product or service ... shall be limited to those items that are included in the federal Office of Management and Budget Circular A-87 on January 1, 1984." (§ 54985, subd. (a), italics added.)
The limitation on indirect costs in section 54985 raised a question about how to harmonize the recovery of indirect costs allowed in section 54985 with the recovery of indirect costs authorized in section 27366. The parties argued this point in the prior appeal. Plaintiffs contended the term "indirect costs" used in section 27366 was narrower than section 54985's test that refers to the 1984 version of federal Office of Management and Budget circular A-87 (Circular A-87) and County contended "indirect costs" in section 27366 should be interpreted more broadly. (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1457.) Based on the record presented, we were "reluctant to establish any hard and fast rules about the role of section 54985 and, more particularly, circular A-87 in defining the meaning of 'indirect costs' for purposes of section 27366." (Public Records-Stanislaus, supra, at p. 1457.) Consequently, we did not "find, as a matter of law, that the various categories of indirect costs identified in a particular version of circular A-87 always constitute costs that are reasonably attributed to (i.e., related to) a county's providing copies of official records and, therefore, satisfy the 'reasonably attributed to' test." (Ibid.) Instead, we noted "that versions of circular A-87 might provide useful guidance," but were not definitive. (Ibid.) In other words, a county's board of supervisors has the responsibility of resolving the factual question of whether the items included as indirect costs in Circular A-87 are reasonably attributed to that county's service of providing copies.
We recognize our interpretation differs from the statutory interpretation subsequently adopted by the First District in Public Records-Alameda, supra, 37 Cal.App.5th 800. The First District concluded the omission of any reference to Circular A-87 in the amended version of section 27366 meant (1) counties may "recover 'indirect costs' that are not limited to the items listed in the [OMB] Circular"; (2) section 27366 authorizes counties to consider a wider range of indirect costs than section 54987; and (3) the Legislature gave counties greater flexibility in identifying indirect costs associated with the production of copies. (Public Records-Alameda, supra, at p. 810; see California Public Records Research, Inc. v. County of Yolo (2016) 4 Cal.App.5th 150, 157 [same]).)
Our interpretation also provides flexibility to a county's board of supervisors, but that flexibility is derived from the board's authority to make factual findings when applying the reasonablyattributedto test.
For purposes of this appeal and analyzing plaintiff's contention that the Board did not apply the correct test for indirect costs, the two most important points made in Public Records-Stanislaus, supra, 246 Cal.App.4th 1432, are (1) the application of section 27366's phrase "indirect costs of providing the product or service" involves "a general test that requires such costs to be reasonably attributed to (i.e., reasonably related to) providing copies and excludes costs that cannot be reasonably attributed to the service of providing copies" (Public Records-Stanislaus, supra, at p. 1456) and (2) that general test does not preclude a board of supervisors from finding that indirect costs identified in Circular A-87 are reasonably attributed to providing copies (id. at p. 1457).
B. Contentions of the Parties
Plaintiff contends County did not obey the directions in the writ of mandate, which required the Board to make findings, supported by substantial evidence, as to what constitutes an indirect cost by using the general test adopted in Public Records- Stanislaus. In addition, plaintiff presents the following argument about the meaning of the general test and its relationship to Circular A-87:
"The standard for determining indirect costs set forth in Circular A-87 is a very liberal standard, not the standard enunciated by the Court of Appeal. It allows for, e.g., recoupment of advertising, alcoholic beverages, bad debts, entertainment, fines and penalties, and depreciation. [Citation to record.] None of these fees are related to producing copies."
County asserts the Board obeyed the terms of the writ. County argues the record reflects the evidence relied upon by the Board to find the direct and indirect costs in resetting the copying fees and those costs were all reasonably related and reasonably attributed to the service of providing copies of official records. In addition, County argues plaintiff's view of Circular A-87 is contrary to the discussion in our prior opinion.
C. Circular A-87
We first address plaintiff's argument that the indirect costs identified in Circular A-87 contradict the standard adopted in our prior opinion. We reject this argument.
Properly interpreted, our prior opinion does not categorically reject the indirect costs identified in Circular A-87 as failing to meet the general test of being reasonably attributed to providing copies of official records. Instead, we recognized that Circular A-87 might provide useful guidance, but the Board must apply the general test to the items identified in Circular A-87 and determine, based upon the surrounding circumstances, whether a particular item was reasonably attributed to providing copies of official documents. (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1457.)
Plaintiff's argument about Circular A-87 is also unconvincing because its description of the contents of Circular A-87 is not accurate. Plaintiff's briefing in the trial court and in this court asserts Circular A-87 allows the recoupment of the cost of alcoholic beverages, bad debts and entertainment. Appendix B ("Select Items of Cost") to part 225 of title 2 of the Code of Federal Regulations addresses 43 items of cost. Item 3 states: "Costs of alcoholic beverages are unallowable." Item 5 states: "Bad debts, including ... related collection costs, and related legal costs, are unallowable." Item 14 states: "Costs of entertainment ... are unallowable." No attorney or layperson who has read the appendix—particularly the language we have quoted—could reasonably represent to a court that Circular A-87 allows for the recoupment of the cost of alcoholic beverages, bad debts or entertainment.
Consequently, we reject the view that the recovery of costs described as "indirect" in CircularA-87 is necessarily contrary to the principles we stated in Public Records-Stanislaus. Whether an indirect cost listed in Circular A-87 may be recouped in the fee charged for a copy of an official document is a question of fact that a board of supervisors must decide based on the evidence before it.
D. Evidence of the Test Applied by the Board
Plaintiff's argument that the Board did not obey the writ, because it did not apply the general test for indirect cost, is based on a factual assertion about what the Board did and did not do. Consequently, we refer to the evidence in the record and in the extra-record documents submitted by plaintiff to determine what test the Board applied.
In part I.C., ante, we concluded extra-record evidence would be considered in determining whether the Board complied with the terms of the writ of mandate in making its decision.
Plaintiff supports its assertion that the Board did not apply the correct test for identifying indirect costs by referring to MGT's draft report, MGT's final report, the Auditor-Controller's fee analysis, and the deposition testimony of persons involved in the preparation of those documents. Plaintiff's opening brief contends (1) County did not contradict or contest any of this evidence and (2) the evidence established that County violated the test of indirect costs set forth in our prior opinion and repeated in the writ of mandate. We reject this remarkable interpretation of the evidence.
The record contains direct evidence of what the Board did when it approved the new fee schedule—namely, the transcript of the Board's May 2, 2017 public hearing. Because plaintiff's appellate briefing does not describe what occurred at the hearing, we summarize that proceeding here.
Initially, Clerk-Recorder/Registrar of Voters Lee Lundrigan provided the Board with an overview of the litigation, MGT's final report, section 27366, the issue of identifying direct and indirect costs, and how the Clerk-Recorder's Office maintains official records and provides copies to the public. Next, Auditor-Controller Klein responded to questions from the Board about direct and indirect costs and the adjustments her office's fee analysis had made to the calculations contained in MGT's final report. There were no comments or questions raised by members of the public attending the hearing. The Board's chairman then referred to a second letter from plaintiff, stating it added nothing of substance to the April 12, 2017 letter and did not explain or provide evidence for the fee schedule plaintiff recommended. Next, the chairman stated: "So with that, I bring it back to the Board for action." A supervisor made "a motion to approve all staff recommendations," which was seconded and unanimously approved.
The Board's explicit approval of the staff recommendation leads us to the content of those recommendations, which were set forth in the agenda for the May 2, 2017 public hearing. The recommendations were to (1) "[a]pprove the proposed ordinance, included as Attachment A, which sets the Clerk-Recorder department fees for production of an official record at $6.75 for the first page and $3.00 for each additional page"; (2) find the current fees were inadequate to cover the direct and indirect costs of providing copies; (3) accept MGT's final report, "which calculated the full potential cost of providing copies of Official Records"; (4) accept the recommendations and copy fee analysis from the Auditor-Controller; (5) "[a]dopt the findings, included as Attachment F, and specifically find that the proposed fee of $6.75 for the first page and $3.00 for each subsequent page is sufficiently necessary to capture the direct and reasonably-related indirect costs of providing copies of Official Records under Government Code section 27366, based on the substantial evidence presented"; and (6) "[d]etermine that the proposed fee only captures those 'indirect costs' that are reasonably attributed to (i.e., reasonably related to) the service of providing copies of Official Records, and rejects costs not reasonably attributed to the service." (Italics added.)
Immediately following the staff recommendations was an eight-page discussion that summarized the litigation and the purpose and responsibilities of the Clerk-Recorder's Office. The staff's discussion also described a 2001 fee study, MGT's final report and its appendices, the Auditor-Controller's fee analysis, and the recommendations of the Clerk-Recorder to adopt the approach of the Auditor-Controller and charge a copying fee of $6.75 for the first page and $3 for each subsequent page. The staff's discussion stated that MGT's final report identified the indirect costs in two categories—personnel costs and other operating expenses—and that indirect costs included "a proportionate share of other operating expenses and internal departmental administrative costs taken from the County Cost Allocation Plan." The discussion also stated how the Auditor-Controller's adjustments "reduced the Indirect Cost Pool," "increased the Direct Cost Base" and, thus, reduced the "Indirect Cost Rate" calculated by MGT.
These terms are derived from Circular A-87. Section B of Appendix E, "State and Local Indirect Cost Rate Proposals," to part 225 of title 2 of the Code of Federal Regulations states (1) " '[i]ndirect cost pool' is the accumulated costs that jointly benefit two or more programs or other cost objectives"; (2) " '[i]ndirect cost rate' is a device for determining in a reasonable manner the proportion of indirect costs each program should bear. It is the ratio (expressed as a percentage) of the indirect costs to a direct cost base"; and (3) " '[b]ase' means the accumulated direct costs (normally either total direct salaries and wages or total direct costs exclusive of any extraordinary or distorting expenditures) used to distribute indirect costs to individual Federal awards. The direct cost base selected should result in each award bearing a fair share of the indirect costs in reasonable relation to the benefits received from the costs." Section C of Appendix E addresses the allocation of indirect costs and the determination of indirect cost rates.
Attachment F to the agenda was labeled "Findings and Determinations" and began: "The Board of Supervisors makes the following findings and determinations with regard to the Proposed Ordinance to Set the Fee of the Clerk-Recorder's Office for copying of Official Records under Government Code Section 27366 at $6.75 for the first page and $3.00 for each subsequent page." The findings included a description of the Auditor-Controller's adjustments to the calculations of the per page cost of copying contained in MGT's final report, stated the Board accepted the adjustments and the resulting ICR of 67 percent, and further stated: "These adjustments reduced the total cost of providing the service from $13.06 per page to $6.78 per page, rounded down to $6.75 for ease of completing the transaction." The findings addressed the subsequent page fee of $3, which "amount includes the Copy Time ($1.79), Staff Counter Time ($0.97), Direct Ink ($0.04), Direct Paper ($0.01), Direct Printer Cost ($0.00), and Cost of Storage of Official Records on Microfiche ($0.52), totaling $3.33 per page and rounded down to $3.00 ... for ease of completing the transaction." The findings stated:
"[] Thus, the proposed fee of $6.75 for the first page and $3.00 for each subsequent page is an amount sufficiently necessary to capture the direct and reasonably-related indirect costs of providing copies of Official Records under Government Code section 27366, based on the substantial evidence presented."
"[] The proposed fee only captures those 'indirect costs' that are reasonably attributed to (i.e., reasonably related to) the service of providing copies of Official Records. The Board rejects all other costs not reasonably attributed to the service, however, there are no costs in the MGT Fee Study or Auditor-Controller's Fee Analysis that are not reasonably related."
The findings also addressed the issue of methodology for determining direct and indirect costs by stating MGT's methodology for determining "the cost per page is valid and consistent with general accounting principles and guidelines. The Auditor-Controller's Office agreed with this methodology [in its] limited scope review and the calculations meet the criteria established by both federal and state guidelines."
To summarize, both the staff recommendations and the findings and determinations attached to the staff recommendation repeatedly reference the reasonably-attributed-to test for indirect costs and the alternate phrasing of that test as "reasonably related to." Moreover, the findings filled any gap created by the failure of MGT's final report and the Auditor-Controller's fee analysis to explicitly reference the reasonably-attributed-to test by referencing the test and stating "there are no costs in [these two documents] that are not reasonably related."
E. Analysis of the Error Claimed
It is unclear from plaintiff's appellate briefing whether it is contending (1) the trial court erred because substantial evidence does not support that court's express factual finding that the Board applied the correct test for indirect costs or (2) the record and extra-record evidence allows this court to directly review the Board's action (i.e., conduct an independent review without reference to the trial court's determinations) and find that the Board failed to apply the correct test for indirect costs. This lack of clarity is also reflected in plaintiff's failure to identify the standard of review this court must apply when addressing this particular claim of error. Consequently, we address both possibilities.
1. Challenge to the Trial Court's Findings
The trial court's order discharging the writ of mandate stated County "is found to have fully complied with the directives of the Court of Appeal on remand, and the Peremptory Writ of Mandate issued by this Court on March 7, 2017." The order included specific determinations that the Board "[m]ade findings under section 27366, supported by substantial evidence, as to the fee amount necessary to recover the direct and indirect costs of providing the copies" and "[d]etermined what constitutes an 'indirect cost' by using the general test that requires such costs to be reasonably attributed to (i.e., reasonably related to) the service of providing copies and rejects costs not reasonably attributed to the service of providing copies."
To the extent that plaintiff is challenging the trial court's determination that the Board complied with this court's opinion and the writ, by applying the correct test for indirect costs on the ground the trial court's determination, constitutes a finding of fact unsupported by substantial evidence, the challenge fails completely.
First, well-established principles of appellate practice govern how challenges to the sufficiency of the evidence must be presented. Appellants are required to " 'summarize the evidence on that point, favorable and unfavorable, and show how and why it is insufficient. [Citation.]' [Citation.] Where a party presents only facts and inferences favorable to his or her position, 'the contention that the findings are not supported by substantial evidence may be deemed waived.' " (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 738, italics omitted; see In re Marriage of Fink (1979) 25 Cal.3d 877, 887 [appellant "cite[d] only evidence favorable to his position, ignoring all to the contrary. Such briefing is manifestly deficient."]; Doe v. Roman Catholic Archbishop of Cashel & Emly (2009) 177 Cal.App.4th 209, 218 [a "party who challenges the sufficiency of the evidence to support a finding must set forth, discuss, and analyze all the evidence on that point, both favorable and unfavorable"]; Haynes v. Gwynn (1967) 248 Cal.App.2d 149, 150-151.) Here, plaintiff failed to summarize the evidence unfavorable to its claim of error and show how or why it was insufficient. As a result, plaintiff failed to carry its burden as the appellant to affirmatively demonstrate the trial court erred in finding the Board complied with the writ of mandate. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [appellant must affirmatively demonstrate prejudicial error].)
Second, the transcript of the Board's May 2, 2017 public hearing, the agenda for that meeting containing the staff recommendations, and the proposed findings and determinations attached to the agenda as Attachment F constitute substantial evidence supporting the trial court's findings that the Board applied the correct test.
2. Independent Review
Alternatively, we consider plaintiff's claim of error as a request for this court to conduct an independent review of the record and extra-record evidence and reach its own determination as to whether the Board failed to apply the correct test for indirect costs.
Our independent review leads us to the same conclusion reached by the trial court. The Board applied the reasonably-attributed-to test. The fact MGT's draft report, MGT's final report, and the Auditor-Controller's fee analysis did not explicitly mention the reasonably-attributed-to test does not reasonably support the inference that the Board failed to apply that test because the staff recommendations explicitly approved by the Board addressed MGT's final report and the Auditor-Controller's fee analysis and stated that "there are no costs in [those documents] that are not reasonably related."
In sum, to the extent this court may sit as a trier of fact and review the evidence to determine what test the Board applied, we find clear and convincing evidence that the Board applied the reasonably-attributed-to test. Thus, the test applied by the Board complied with this court's prior opinion and the writ of mandate. Plaintiff's vehement claim that the Board acted in contempt of court is devoid of merit. III. SUFFICIENCY OF THE EVIDENCE
Plaintiff contends the Board abused its discretion because many of the amounts allocated to the direct and indirect costs of providing copies were not supported by substantial evidence. We begin with plaintiff's arguments about direct costs and then consider its arguments about indirect costs and the $3 fee for subsequent pages.
A. Substantial Evidence Standard
Plaintiff acknowledges the sufficiency of the evidence for the Board's findings of fact are reviewed under the substantial evidence test. Plaintiff's appellate briefing, however, does not set forth the basic principles defining that standard and, as a result, many of its arguments about the sufficiency of the evidence seem tailored to a trier of fact rather than a court of review. Consequently, before addressing plaintiff's arguments about the absence of substantial evidence for specific findings, we set forth some of the basic principles defining that standard of review.
When applying the substantial evidence standard, "we must consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the judgment. [Citations.] [¶] It is not [a reviewing court's] task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, in support of the judgment." (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630-631.) Thus, " 'we have no power to judge of the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom.' " (Montebello Rose Co. v. Agricultural Labor Relations Bd. (1981) 119 Cal.App.3d 1, 21.) Consequently, where substantial evidence supports the Board's findings of fact, "we are not concerned that contrary findings may seem to us equally reasonable, or even more so." (Rivcom Corp. v. Agricultural Labor Relations Bd. (1983) 34 Cal.3d 743, 756-757.)
B. Copy Time Costs
Plaintiff contends the copy time cost included by the Board in direct costs were not supported by substantial evidence and argues an accurate cost for copy time is 81.6 cents per page. Plaintiff calculates this amount by accepting 19,244 as a reasonable estimate of the total pages copied in a year and multiples 19,244 by 1.6 minutes to copy a page, resulting in 30,790.4 minutes (513.17 hours) as to the total clerk time spent copying in a year. Adopting $30.61 as the hourly cost of this time, plaintiff arrives at $15,708.24 as the yearly cost of the time a clerk spends on copy requests. Plaintiff divides that yearly cost by 19,244 pages, which results in a cost of clerk time of 81.6 cents per page.
Here we consider two of the figures used in plaintiff's calculations—the time to copy of 1.6 minutes per page and the hourly cost of clerk time of $30.61. Those figures differ from the numbers used in the Auditor-Controller's fee analysis and ultimately approved by the Board, which were 2.1 minutes to copy a page and $51.19 as the full cost per hour of clerk time. Using these two figures, the Auditor-Controller calculated a copy time cost of $1.79 per page ($51.19/hour divided by 60 minutes/hour times 2.1 minutes/page).
1. Time Per Page
The Auditor-Controller's use of 2.1 minutes as the time needed to copy a page accepts the calculation of 2.1 minutes stated in MGT's final report. MGT had clerks keep a log of the time they spent on five steps to complete a copying transaction, from the initial customer inquiry to processing payment. Five clerks recorded the time spent on 30 copy requests made in December 2016. MGT's final report stated there were 31 transactions, but a two-page copy request made at 10:56 a.m. on December 15, 2016, was entered twice in the data. The clerks usually recorded their time spent on each step in whole minutes, although a few times 30 seconds was entered for a particular step. This rounding to the nearest whole minute inflated the total time logged for the 30 transactions. For instance, the duplicate entry from December 15, 2016, stated one minute was spent on each of the five steps for a total time of five minutes. However, the transaction started at 10:56 a.m. and ended at 10:59 a.m., indicating the total time spent was three minutes, not five.
Although not addressed by the parties, we have reviewed the start and end time for the 30 transactions and, setting aside some uncertainties not worth mentioning here, those start and end times indicate 181 minutes was the total time for 30 transactions that produced 96 pages of copies. Using these figures, the copy time averaged 1.89 minutes for each page copied. In comparison, MGT's final report concluded from the data that 206 minutes were spent copying 98 pages, which resulted in 2.1 as the average minutes per page. MGT's calculations inflates the results of the start-end time data by about 10 percent. We conclude this 10 percent difference in the average time per page copied is small enough that substantial (albeit, contradicted) evidence supports the Board's finding that the average total clerk time per page copied is 2.1 minutes.
Next, we consider plaintiff's argument that the correct time is 1.6 minutes per page and analyze whether the Board was required to use that figure instead of 2.1 minutes as the average time spent copying a page. The figure of 1.6 minutes per page appears to be derived from the statement in MGT's draft report that the average time involved in processing a request for an official document under 10 pages was eight minutes. Plaintiff interprets this statement and the underlying data to mean "MGT found that the average time to copy a single page in an average 5-page document was 1.6 minutes." Thus, plaintiff probably calculated the 1.6 minutes per page simply by dividing eight minutes by five pages.
Plaintiff's factual assertion that the documents in the category of copy requests under 10 pages averaged five pages does not withstand scrutiny. Our first inquiry is whether any evidence supports the five-page average. On that point, we note plaintiff has not cited, and we have not located, any evidence in the administrative record or the extra-record evidence supporting a finding that (1) copy requests under 10 pages averaged five pages or (2) MGT actually determined copy requests averaged five pages. Our second inquiry is whether plaintiff provided a reasoned explanation for its use of the five-page average. Plaintiff provided no such explanation, since its briefing fails to describe how plaintiff calculated the average. As a result, we infer that plaintiff based its assertion of fact about the average document length by taking the upper limit of the page range (i.e., 10 pages) and simply dividing it by two. As described below, this simplistic calculation of the average page length contradicts the data in the administrative record and in the extra-record evidence.
The first source of data is derived from MGT's time study of 30 copy requests submitted to the Clerk-Recorder's Office in December 2016. Of the 30 requests, 26 were less than 10 pages—six requests were for one page, six requests were for two pages, four requests were for three pages, four requests were for four pages, two requests were for five pages, two requests were for six pages, and two requests were for seven pages. Thus, the total number of pages copied to fulfill the 26 requests was 82 pages. When 82 pages are divided by 26 requests, it results in an average of 3.154 pages per request, which is significantly smaller than the five-page average asserted by plaintiff.
As described earlier, MGT's report refers to 31 transactions, but the underlying logs prepared by the clerks show one two-page transaction was entered twice. Our discussion of MGT's time study data corrects that error by omitting the time and page data from one of the duplicate entries.
The second set of data contradicting plaintiff's five-page average is contained in Table C of MGT's draft report. MGT's draft report was included in plaintiff's extra-record evidence. Table C sets forth data about copy requests processed by County in August of fiscal year 2015-2016. The total number of transactions (i.e., copy requests) was 495, of which 475 were less than 10 pages—223 requests were for one page, 129 requests were for two pages, 45 requests were for three pages, 25 requests were for four pages, 11 requests were for five pages, 19 requests were for six pages, eight requests were for seven pages, nine requests were for eight pages, and six requests were for nine pages. Thus, 1,067 pages were copied to fulfill 475 requests for documents under 10 pages. When 1,067 pages are divided by 475 requests, an average of 2.246 pages per request is the result. This average is less than half of the five-page average plaintiff used in its calculations.
The third set of data contradicting plaintiff's five-page average is contained in Table C of MGT's final report, which provides details about the copying requests submitted during the course of fiscal year 2015-2016. A total of 5,411 transactions were completed in that fiscal year and the number of pages copied totaled 19,244. Thus, the average number of pages for all requests was 3.556 pages per request, which is well below the five-page average asserted by plaintiff. It is mathematically impossible to increase this overall average of 3.556 pages per request by eliminating the requests of 10 pages or more from 5,411 total requests because eliminating the larger requests would decrease the average.
As a historical comparison, a 1994 study performed for County examined 6,600 copy requests and generated data showing "the average length of the documents copied was 4.52 pages." (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1438.) A 2001 study of 18,575 pages copied and the revenue collected "leads to the conclusion that about 7,459 documents were pulled and each document contained, on average, slightly under two and a half pages." (Id. at p. 1440.) The average lengths from 1994 and 2001 are for all copy requests, not just those under 10 pages.
To summarize, plaintiff's assertion that five was the average number of pages copied to fulfill requests for documents of less than 10 pages contradicts the data available and, therefore, is not supported by substantial evidence. Therefore, the 1.6 minutes of clerk time per page plaintiff calculated by dividing the average of five pages per request into eight minutes per request also lacks evidentiary support. In contrast, we have concluded substantial evidence supports the Board's use of an average of 2.1 minutes of clerk time for each page copied in determining the cost of copying a page.
2. Cost Per Hour
The Board accepted the Auditor-Controller's calculation of the total cost of clerk time at $51.19 per hour, which was less than the $65.17 per hour cost estimated in MGT's final report. Plaintiff contends the proper cost of clerk time is based solely on the salary and benefits paid to the clerks who make the copies, which is $30.61 per hour. In comparison, the figure of $51.19 per hour was calculated by multiplying $30.61 per hour by an ICR of 0.6726 to produce a $20.59 estimate of indirect costs attributable to an hour of clerk time. This estimate of indirect costs ($20.58) was added to the salary and benefit cost ($30.61) and produced the total hourly cost of $51.19. Plaintiff contends adding on an ICR is inexplicable and the use of the ICR is not supported by substantial evidence. We disagree.
The creation of an indirect cost pool and the application of an ICR to allocation of some indirect costs involved a choice of methodology. In our prior opinion, we concluded "a board of supervisors' choice of method for determining direct costs and allocating indirect costs is subject to review under the abuse of discretion standard. Consequently, the choice must not be arbitrary, capricious or entirely without evidentiary support. [Citation.]" (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1458; see generally, Center for Biological Diversity v. Department of Fish & Wildlife (2015) 62 Cal.4th 204, 228 ["lead agency enjoys substantial discretion in its choice of methodology" for evaluating the significance of an environmental impact].) This standard is more deferential than the substantial evidence standard. (American Coatings Assn. v. South Coast Air Quality Management Dist. (2012) 54 Cal.4th 446, 461.)
Under this standard, we conclude the Board did not abuse its discretion when it explicitly approved a methodology that allocated indirect costs by (1) calculating an ICR after creating an indirect cost pool and (2) multiplying the direct hourly cost of clerk's time (i.e., wages and benefits) by the ICR. This methodology was used in both MGT's final report and the Auditor-Controller's fee analysis. Those documents provide the requisite evidentiary support and establish the methodology was not arbitrary or capricious. Thus, the fact that an indirect cost pool was created and an ICR was calculated and used to create an hourly rate for clerk's time does not automatically taint the hourly rate with error. Stated another way, nothing in section 27366 or our prior opinion precludes the use of a methodology that creates an hourly rate for clerk's time that included both direct and indirect costs. Here, based on the appellate record, we conclude the time-based method and the use of an ICR to allocate indirect costs was not an abuse of discretion.
In Public Records-Stanislaus, we explicitly left open the question of "whether the use on remand of the time-based method of allocating costs would constitute an abuse of discretion." (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1458.)
The next argument plaintiff raises against the ICR is that the indirect cost pool used to calculate the ICR included other operating expenses that did not qualify as cost reasonably attributed to providing copies of official records. The items included in and excluded from the indirect cost pool are listed as items four through 67 of Appendix 1, "Full Cost Calculation of Indirect Cost Rate," to MGT's final report. Plaintiff's opening brief lists a number of these items and asserts: "None of these have anything to do with making copies; many are costs of the Clerk's office." One of the items challenged by plaintiff is "Maintenance-equipment." The entry in the appendix's column for allowable indirect costs for this item is "(0)" and the entry in the column for allowable direct costs is $10,070. Thus, the item was not actually included in the indirect cost pool.
As to the other costs placed in the indirect cost pool—including insurance, fingerprint processing, mail room postage, and fleet fuel and rental charges—these are costs of the Clerk-Recorder's office and a fair share of those costs may be reasonably allocated among the various services provided by that office, including copies of official records. Arguing that these costs have nothing to do with making copies appears to miss the point that these costs are indirect and it is reasonable to attribute a fair share of general overhead costs not attributable to a specific task or activity to the activity of providing copies. The substantial evidence supporting the inclusion of those costs in the indirect cost pool includes MGT's final report (and appendices) and the Auditor-Controller's fee analysis, which accepted most of the items included in MGT's final report.
C. Staff Counter Time
Both MGT's final report and the Auditor-Controller's fee analysis listed staff counter time as one of the costs of providing copies. Plaintiff argues that staff counter time is nonexistent as a recoupable cost or, alternatively, its inclusion in calculating the cost of providing copies was not supported by substantial evidence. Again, plaintiff "cites only evidence favorable to his position, ignoring all to the contrary. Such briefing is manifestly deficient." (In re Marriage of Fink, supra, 25 Cal.3d at p. 887.) Thus, plaintiff's violation of the rules of appellate practice provides a sufficient ground for rejecting the challenge to the inclusion of staff counter time in the costs of providing copies.
Alternatively, we reject plaintiff's argument on the merits because the record contains substantial evidence supporting the inclusion of staff counter time in the cost of providing copies. Table E of MGT's final report states the total cost of staff counter time allocated to copying costs was $25,972.42, which it calculated by multiplying five times four times 52 times the full hourly cost of clerk's time and then subtracting the full cost of copy time. The 10th page of the Auditor-Controller's fee analysis provides further details about the calculation of the cost of staff counter time by showing this calculation multiplied five days per week by four hours per day by 52 weeks per year to produce a total hours per year of 1,040. The Auditor-Controller then multiplied 1,040 hours per year by $51.19 per hour and obtained a yearly figure for counter time of $53,237.60. Because the cost of the time clerk's spent providing copies had already been calculated ($34,478.51 equals 673.54 hours times $51.19 per hour), that cost was subtracted from the counter time cost, which reduced the staff counter time cost to $18,759.09. Dividing $18,759.09 by the hourly rate of $51.19 produces 366.46 hours of counter time where a clerk was not working on a copy request. Restating the data provided, 1,040 hours of clerk time is spent covering the counter, of which 673.54 hours are spent working on copy requests and the other 366.46 hours are not.
During his deposition, Patrick J. Dyer, the primary author of MGT's final report, was unable to specify what each number in this equation represented. However, Dyer provided a general description of staff counter time by stating: "That's the amount of time that the [clerks] have to cover the counter and be available to make copies." Dyer also stated: "It's the amount of time that the counter is covered and they're not selling copies."
Based on the contents of these documents, we reject plaintiff's assertion that staff counter time is nonexistent. MGT's reports were based on its discussion and work with staff and management of the Clerk-Recorder's office. It is reasonable to infer from MGT's reports and the statements about counter time in Dyer's deposition that the figures for staff counter time was derived from his discussions with staff and management. This favorable inference is required by the principles defining the substantial evidence standard of appellate review. (See Montebello Rose Co. v. Agricultural Labor Relations Bd., supra, 119 Cal.App.3d at p. 21.) Based on this principle about inferences, we conclude MGT's reports did not need to describe in detail the evidence accumulated and relied upon in making the specific determination about the amount of time spent covering the counter without working on copy requests. In other words, MGT's final report constitutes substantial evidence as to the staff counter time during which a clerk was covering the counter and available to handle a copy request instead of actually being involved in fulfilling a copy request.
Consequently, plaintiff's claims of error relating to the inclusion of staff counter time are rejected.
D. Direct Supervision
1. Background
Table E in MGT's final report set forth 10 cost components used to calculate the total annual cost (both direct and indirect) of providing copies ($251,236.58) and allocated that total cost to the pages copied in fiscal year 2015-2016 (19,244) to produce a full per page cost of $13.06. The second component was direct supervision ($59,639.28), which was 50 percent of the full cost of a Legal Clerk, IV and equated to $3.05 per page. MGT calculated the total cost of an hour of time of a Legal Clerk, IV by (1) multiplying the annual salary of $45,125 by a fringe benefit rate of 55.29 percent to produce $24,950 as the estimated annual cost of the benefits, (2) adding the salary and the estimated benefits, and (3) dividing the total of $70,075 by 2,080 hours per year to get $33.69 per hour in direct costs. To calculate the fair share of indirect cost attributable to an hour of Legal Clerk, IV time, MGT multiplied the direct hourly costs ($33.69) by its ICR of 112.94 percent to get an estimate of indirect costs at $38.04 per hour. Adding the direct hourly costs ($33.69) to the indirect hourly costs ($38.04), MGT determined $71.73 was the total hourly cost of a Legal Clerk, IV. Next, MGT multiplied this total hourly rate by 1,635 productive hours per year to estimate the total annual cost of a Legal Clerk, IV and then cut this total in half to get the cost of time spent supervising copying ($58,639.28).
A standard eight-hour workday times five days per week times 52 weeks per year produces 2,080 total hours per year. The estimate of annual productive hours at 1,635 takes into account paid holidays, sick time, paid vacation, and training time.
The Auditor-Controller's fee analysis adjusted MGT's calculation of the total hourly rate and the percentage of time spent supervising. Based on the Auditor-Controller's ICR of 67.26 percent, the total hourly cost for a Legal Clerk, IV was reduced from $71.73 to $56.35. The Auditor-Controller reduced the supervision effort "from 50% to 32.28% in accordance with the percentage of [Legal Clerk, III] productive time spent making copies: 674.5 hrs/2080 hrs."
The Auditor-Controller's fee analysis explained the adjustments resulting from the use of a different ICR and then addressed the amount of time allocated to supervision, stating: "MGT assigned a 50% rate as direct costs for those employees who supervise staff. As a result of discussion with department staff we believe a more reasonable supervision rate is 33%. This shift of 17% (from 50% to 33%) reduces the total of direct cost. [¶] These changes were made based on our internal understanding of how the County and the Department operates with respect to this fee."
2. Contentions of the Parties
Plaintiff contends the calculation of direct supervision costs was not supported by substantial evidence. Plaintiff argues that the Legal Clerk, IV supervises all four Legal Clerk, III's at the same time and, of the 8,320 annual hours worked by those clerks, only 6 percent was spent servicing copy requests. In plaintiff's view, it is inconceivable that a third of the supervisor's time is spent supervising employees who, collectively, spend less than 10 percent of their time making copies.
County responds to plaintiff's arguments about supervision costs by asserting plaintiff submitted no evidence to the Board in April or May of 2017 that challenged the amount of supervision cost sought ($29,902.14) by County. County also argues plaintiff attempts to diminish the extensive supervisory role regarding the entire process of providing the public with photocopies of official records and asserts time other than time spent actually photocopying documents can be included in the supervisory role because that role encompasses much beyond the time documents are actually being photocopied.
3. Sufficiency of Supporting Evidence
We conclude the Auditor-Controller's fee analysis constitutes substantial evidence supporting allocation of $29,902.14 in direct supervision costs. The fee analysis stated: "As a result of discussion with department staff we believe a more reasonable supervision rate is 33%." An attachment to the fee analysis stated the "supervision effort is reduced from 50% to 32.28% in accordance with the percentage of [clerk] time spent making copies," which the attachment calculated as 674.5 hours of copy time per year divided by 2,080 hours per year of paid time for one clerk. The Auditor-Controller's fee analysis can constitute substantial evidence without setting forth the details of the discussion with staff. As a result, the Board could reasonably rely on the fee analysis in making its findings about the direct and indirect costs reasonably attributed to providing copies of official records.
E. Maintenance of Equipment
1. Background
MGT's final report and the Auditor-Controller's fee analysis included equipment maintenance costs of $8,031.74 per year as one of the 10 cost components in calculating the total annual cost of providing copies. Appendix 2 to MGT's final report provides expenditure detail by object code. Object code 61600 is assigned to "Maintenance-equipment." The total of $439,756.90 for this expenditure is allocated to automation ($108,948.28), elections ($312,776.88), recorder ($8,031.74) and truncation ($10,000). This total and its components are confirmed by spreadsheets included in attachment C to the staff's recommendation presented to the Board. As described earlier, none of the total expenditures on maintenance of equipment ($439,756.90) was included in the indirect cost pool as an allowable indirect cost.
During his deposition, Michael A. Firpo testified that it was his understanding the maintenance expenditure was for "the equipment specific to the Recorder's division that would be making the copies." When asked if that meant the printer, Firpo responded "it would be the maintenance costs associated with the various types of equipment used." When asked what types of equipment are used, Firpo stated he "wasn't privy to that level of detail."
Klein testified Firpo was on the staff of the Auditor-Controller's Office and he did the underlying work and calculations contained in the Auditor-Controller's fee analysis.
2. Plaintiff's Contentions
Again dissatisfied with the level of detail provided in the record produced by County and in the depositions and other documents submitted as extra-record evidence, plaintiff contends the equipment maintenance costs are not supported by substantial evidence. Plaintiff notes Firpo was not able to identify the type of equipment and the only specific equipment cost listed in the table of total and per page costs is the entry for "Direct Printer Cost" of $45.80. Plaintiff then argues it is highly unlikely County spent over $8,000 to maintain a $45 printer. Plaintiff infers the equipment is computer and servers required to record, store, index, image, and make documents available to the public and asserts such equipment is not related to the act of copying. Plaintiff also argues copying requires no data processing and these costs would be incurred whether County made copies or not.
MGT's final report arrived at $45.80 by multiplying $229 by two and dividing by 10. What these numbers represent is not described in MGT's final report or the Auditor-Controller's fee analysis.
3. Sufficiency of Supporting Evidence
First, we consider plaintiff's assertion of fact that copying requires no data processing because data processing is not related to the act of copying. We reject this factual assertion. Substantial evidence supports the finding that other equipment is essential to the process of providing copies. This evidence includes the presentation by Lundrigan at the May 2, 2017 public hearing describing the recording and retrieval of official documents. Lundrigan stated the records were digitized back to 1920 and, until recently, the Clerk-Recorder's Office used more terabytes of computer than all the rest of the County's government. Thus, it is reasonable to infer that digitized data about an official record has to be processed and sent to a printer in order to provide a copy of an official record and it takes equipment to perform this processing and delivery of data to the printer. Stated in the negative, a printer that is not connected to other equipment cannot produce a copy of an official record. Accordingly, plaintiff's argument that "[c]opying requires no data processing" mischaracterizes the facts supported by substantial evidence.
Second, we consider plaintiff's argument that the cost of computers and servers to record, store and index the documents available to the public "would be incurred whether County made copies or not." This argument is based on a misunderstanding of the legal standard for determining direct and indirect costs. Plaintiff seeks to limit recoverable costs to the marginal costs of producing a particular copy, not the direct and indirect costs allowed by section 27366. Previously, "we conclude[d] that the direct costs of providing copies of official records is the cost of operating the equipment used to satisfy the request and the cost of the employee time taken to provide the service, and the cost of the paper and toner used to make the copies." (Public Records-Stanislaus, supra, 246 Cal.App.4th at p. 1454, italics added.) We used the phrase "cost of operating equipment" to include, without limitation, the funds spent maintaining the equipment. Accordingly, we reject plaintiff's argument about the cost of equipment maintenance because it is based on a view of costs that contradicts section 27366 as interpreted in our prior opinion.
Third, we consider plaintiff's argument about the absence of information about what types of equipment were maintained. The lack of this detail, in plaintiff's view, means the record did not contain substantial evidence supporting the Board's decision to include equipment maintenance costs as a component of the total cost of providing copies. As previously stated, MGT's reports were based on discussions with management and staff of the Clerk-Recorder's Office. Firpo's deposition demonstrates that he discussed maintenance costs with such personnel in connection with preparing the Auditor-Controller's fee analysis. Specific details about each item of costs addressed in the reports and fee analysis need not be set forth in those documents for them to constitute substantial evidence. Thus, we conclude MGT's final report and the fee analysis constitute substantial evidence for the inclusion of equipment maintenance costs in the costs of providing copies.
F. Microfiche
MGT's final report and the Auditor-Controller's fee analysis included "Storage Services Microfiche" as one of the 10 cost components of the total annual cost of providing copies. MGT's final report stated this cost was $50,000. In contrast, the Auditor-Controller's fee analysis stated "a more reasonable amount ... is $10,000 rather than $50,000. After discussion with Clerk-Recorder staff[,] it was noted that the full cost of the project over a five year time period is $50,000. An annual cost of $10,000 is more appropriate and consistent with the time period basis used for other calculations in the report."
Plaintiff contends the inclusion of costs for "Storage Service Microfiche" was not supported by substantial evidence. In response, County contends the $10,000 is an indirect overhead cost with a reasonable relationship to the cost of providing copying services. County also contends plaintiff's "failure to raise the issue until well after the Board had set the new rate deprived the County of the opportunity to supply additional information upon request of the Board."
County's argument about the failure to raise the argument at or before the May 2, 2017 public hearing raises the question of when plaintiff learned MGT's final report included a cost for microfiche storage services. The record shows MGT's final report was filed and served in late February 2017. Plaintiff's letter dated April 12, 2017 (a month and a half after service of MGT's final report) made no mention microfiche or the costs related to microfiche. Accordingly, we agree with County that plaintiff had an opportunity to raise this issue and failed to do so. Moreover, we conclude the Auditor-Controller's fee analysis, which was based on discussions with staff in the Clerk-Recorder's Office, constitutes substantial evidence for the inclusion of this cost in the costs of providing copies. (See Montebello Rose Co. v. Agricultural Labor Relations Bd., supra, 119 Cal.App.3d at p. 21 [inferences drawn from the evidence].)
G. Software Licenses
MGT's final report and the Auditor-Controller's fee analysis included "Software Licenses" as one of the 10 cost components of the total annual cost of providing copies. MGT's final report included a paragraph addressing software licenses:
"These calculations take into account the proportionate share of software license fees. There are five different groups within the Clerk-Recorder: Vital Records, Clerk, Recorder, Records Retention and Data Processing. The last two divisions are required to produce official copies and therefore 40% (two-fifths) of the annual software costs are directly assigned to those requesting official copies and included in the full per page calculation above."
MGT's indirect cost pool listed "Data processing services" in the total amount of $50,388 as item 48 and excluded this amount from the pool and classified it as an allowable direct cost. The Auditor-Controller's fee analysis disagreed with this classification and stated data processing "aligns more closely with indirect costs rather than 100% as direct costs as stated in the MGT report. The data processing services provided by the County's Strategic Business Technology Department benefit the Clerk-Recorder as a whole. These costs represent technology data line as well as telephone lines and are better represented in the indirect cost pool."
Plaintiff interprets the evidence to mean "[t]here is no data processing involved in making copies" and extrapolates from that interpretation to assert "Software Licenses are unrelated to the task of producing copies and they are unsupported by substantial evidence." Plaintiff's argument implies that no other line of reasoning or interpretation of the evidence presented is reasonable. We disagree. The Auditor-Controller's decision to classify data processing as an indirect cost does not necessarily compel the exclusion of 40 percent of the cost of software licenses from the cost of providing copies. Furthermore, under the principles of appellate review requiring us to draw reasonable inferences from the evidence presented, we conclude MGT's final report and the Auditor-Controller's fee analysis constitute substantial evidence for the inclusion of this cost in the costs of providing copies. (See Montebello Rose Co. v. Agricultural Labor Relations Bd., supra, 119 Cal.App.3d at p. 21.)
H. Revenue Collected
Plaintiff contends the calculation of the cost of providing copies is flawed because revenues were not considered in either MGT's final report or Auditor-Controller's fee analysis. Plaintiff argues that the other types of fees collected are used to pay salaries and benefits in addition to costs included in the indirect cost pool and, therefore, failing to account for these revenues means the copying fees result in a double recoupment. In response, County contends revenue is irrelevant to the calculation of costs. County notes that plaintiff has cited no legal authority to support its argument.
Plaintiff's argument refers to Dyer's February 15, 2017 e-mail relating to MGT's draft report. That e-mail stated: "The revenue detail by page, is critical to the analysis and opposing counsel will/may want to see, but I don't want to hit people with 100+ page report when most of the message is in the first 10 pages." Plaintiff appears to interpret this statement as referring to all revenue collected by the Clerk-Recorder's Office and not simply copy fee revenue.
Based on our review of MGT's draft report, we conclude plaintiff has taken the sentence from Dyer's e-mail out of context. MGT's draft report discusses revenue on pages four and five, stating: "As part of this study, MGT also analyzed the revenue collected for these official document requests." The data indicated the total number of pages requested and the fees collected for the requests. Nothing in the draft report refers to fees collected for services other than providing copies. Therefore, we conclude the e-mail is not evidence that supports plaintiff's argument that revenue from other services must be included in the calculation of the cost of providing copies. Instead, the revenue data was "critical" because it was used to analyze whether the fees being charged exceeded MGT's estimate of the cost of providing copies. The data supported MGT's preliminary conclusion "that the fees do not exceed estimated full cost." In other words, MGT did not use the revenue data in a way that reduced the costs attributable to providing copies. Consequently, plaintiff's argument is, at its foundation, an attempt to have the other fees subsidize the cost of providing copies.
I. Incomplete Record
Plaintiff's opening and reply briefs assert the Clerk-Recorder failed in her duty to provide the Board with a complete record. Neither brief refers to any authority defining the legal duty plaintiff contends was violated. Accordingly, plaintiff has failed to establish the existence and scope of such a duty and, furthermore, has not established the duty was breached. As a result, this argument fails to carry an appellant's burden of affirmatively demonstrating reversible error. (See Denham v. Superior Court, supra, 2 Cal.3d at p. 564.) Furthermore, nothing in the extra-record evidence presented by plaintiff shows the Board considered materials that were omitted from the record provided by County.
J. Subsequent Page Fee
Plaintiff contends the recommendation for and the adoption of a subsequent-page fee of $3 per page was not supported by any evidence, stating "it is not discussed in any of the three reports." It is true that MGT's draft and final report and the Auditor-Controller's fee analysis did not suggest the fee of $3 for subsequent pages. This fee was recommended by the Clerk-Recorder in her presentation at the May 2, 2017 public hearing and by the staff when it prepared the Board's agenda.
The party challenging the sufficiency of the evidence must set forth all evidence, both favorable and unfavorable, in its appellate briefing. On the cost of subsequent pages, plaintiff "cites only evidence favorable to his position, ignoring all to the contrary. Such briefing is manifestly deficient." (In re Marriage of Fink, supra, 25 Cal.3d at p. 887.) This violation of the rules of appellate practice is a sufficient ground for rejecting the challenge to the inclusion of staff counter time in the costs of providing copies. In addition, the record contains substantial evidence supporting the specific items of cost and the per page calculation underlying the Clerk-Recorder's recommendation. These items were copy time ($1.79 per page), staff counter time ($0.97 per page), direct ink ($0.04 per page), paper ($0.01 per page) and storage cost ($0.52 per page), which total $3.33. The fact these per page costs were calculated as an overall average does not preclude their use for determining the cost of providing copies of subsequent pages of a document. Use of an average cost is expressly authorized by section 54985 and we conclude its use does not violate any implied requirement of section 27366.
The fact that this total figure of $3.33 was rounded down 10 percent to $3 per page offsets instances where rounding up was used in calculating the underlying components. For instance, the possibility that the $1.79 cost of clerk copy time per page was overstated by 10 percent and could have been calculated at $1.61 is cancelled out by rounding down the total cost per page by $0.33. (See pt. III.B.1., ante.) --------
DISPOSITION
The judgment is affirmed. County shall recover its costs on appeal.
FRANSON, Acting P.J. WE CONCUR: PEÑA, J. MEEHAN, J.