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HomeMy WebLinkAboutR01-Redevelopment Agency o o o Redevelopment Agency · City of San Bernardino 300 Ncnh "D" Saeet, Founh Floor . Sill B~ California 92418 (714) 384-5081 FAX (714) 888-9413 .e. ID-;; ~ ;- Ste_ H. Dullelt Execuliv. Dileclllr JULY 7, 1989 PROPOSED KATZ, HOLLIS, COREN AND ASSOCIATES CONTRACT AMENDMENT Synopsis of Previous Commission/Council/Committee Action: 6/5/89 6/22/89 6/29/89 7/05/89 Committee contInued to 6/22/89 Committee continued to 6/29/89 Committee forwarded matter to CommissIon Commission continued to 7/10/89 (COMMUNITY DEVELOPMENT COMMISSION) Recommended Motion: o a. That the Commission approve a proposed amendment to the contract with Katz, Hollis, Coren & Associates, Inc. to provide for expanded services over a one-year term at a cost not to exceed $42,500. - or - b. That the Commission approve a proposed amendment to the contract with Katz, Hollis, Coren & Associates, Inc. to provide for expanded services over a one-year term at a cost not to exceed $82,500. Director Supporting data attached: Yes FUNDING REQUIREMENTS: $37.500 Hard: All Project: All Commission Notes: o SD:kp:1362S Agenda of: July 10. 1989 Item No. .i.. o o o o o Redevelopment Agency S T A F F R E P 0 R T This is to request that the Commission approve a proposed amendment to the contract with Katz, Hollis, Coren & Associates, Inc. (Katz Hollis) to provide for expanded services over a one-year term at a cost not to exceed $42.500. BACKGROUND On March 20. 1989, the Commission authorized approval of a contract with Katz Hollis to assist in the development of a long-term financial plan for the Agency. It was anticipated that the majority of the work program could be accomplished within 90 days of execution of the contract, and thus the information would be available by the start of the new fiscal year. Katz Hollis has completed a preliminary assessment and on May 30. 1989 arrived at several initial findings/recommendations. These findings/recommendations are summarized below: 1. Agency staff's tax increment revenue monitoring and verification procedures require some expansion and modification to provide more timely and complete results; 2. Substantial modification to Agency staff's assumptions and methodologies relative to tax increment revenue projections is necessary; 3. A systematic analysis of Agency obligations (through bonds or otherwise) and proper accounting for these obligations must be prepared; 4. The Agency needs to modify its accounting and financial management procedures; and 5. Agency counsel needs to review existing documentation to ascertain whether the Agency is in conformance with recent housing requirement legislation. AB:mv: 1753R 2 o o o o o Redevelopment Agency In conducting their preliminary assessment of the Agency's fiscal activities, Katz Hollis encountered a number of limitations which delayed their progress in completing the work program as originally scheduled. Among these Issues were the following: a lack of consolidated information relative to project area development activities that are not Agency assisted and are needed to analyze accurate tax Increment projections; complicated and in some cases unclear language relative to the allowable tax increment limits that require legal review in several of the project area plans; Inconsistencies in some of the revenue estimates prepared by staff; a lack of comprehensive listings of Agency obligations necessary for accurate cash flow projections; a lack of adequate accounting methodologies and systems to identify fund balances; and a lack of current or complete financial statements relative to each project area. For your information, on June 19, 1989, Agency staff provided Katz Hollis with an Initial response to their preliminary findings which In certain areas differs with Katz Hollis. Under the amended contract Katz Hollis will be required to reconcile any differences. Nevertheless, as a result of the above, it has become necessary for Katz Hollis to perform time consuming independent research and investigation In order to gather and format the voluminous base data/information necessary to complete their analysis and projections. At the outset of the contract, it was intended that Katz Hollis would only review and verify the available staff work and proposed recommendations or modifications to staff's projections. Based upon the above limitations, Katz Hollis will only be able to complete their analysis of the Agency's tax increment revenues and bond obligations as of June 30, 1989, within the current contract limit of $25,000. To provide a reconciliation of their initial findings relating to the accomplishment of the overall work program and staff's response to those findings as well as certain financial advisory services In relationship to pending bond issues, it Is proposed that the contract be amended to provide for completion of the work over a one-year period at a cost not to exceed $42,500. For your information the proposed contract amendment also contains several additional or special work activities that may need to be performed. The decision to carry out these activities and the assessment of their cost(s) will be dependent on the results of Katz Hollis' reconciliation of their and Agency staff's Initial findings/responses. If as a result additional resources are required, an appropriate contract amendment can be recommended later. 3 o o Redevelopment Agency o It Is Important to note that the purpose of the alternative motion listed on the cover sheet Is to allow the Commission the option of Including an additional $40,000 In the contract amendment. These additional funds would pay for the several additional or special work activities that may be needed. The proposed contract amendment that would Implement this alternative Is also attached (Exhibit 2). Although this alternative was discussed with the Redevelopment Committee at their meeting on June 29, 1989, It Is now staff's belief that the Agency will be better served by proceeding with a smaller contract amendment Initially and consider further amendments If the results of Katz Hollis' reconciliation of their and Agency staff's Initial findings/responses justifies such an effort. The attached proposed contract amendment(s) and revised work program (Attachment I) to complete the financial analysis being performed by Katz Hollis has been approved, as to form and legal content and executed by Katz Hollis. It Is, therefore, requested that the Commission approve the attached amendment to the Katz Hollis contract and authorize the Executive Director to execute the agreement. A8:mv: 1753R o o 4 XEROX TELECOPIER 295; ??-??-??;??:?? ??; ]UN 28 '89 13:35 KATZ HOLLlOL.A. CCITT G3 .. nnnnnnnnnnAA c:> tI 2 P.2/3 EXHIBIT 2 o , . J1DiVILOPmT AGENCY Cln or SAR ,..vnnuo COXftAcr AMIIIn8ltt ~A..ot Ho. 01 tHIS A!CIHmc!NT TO ACllIMENT aade th.11 4&1 of _ , 1989. '" the led.vtlopaeat Acaae, of cM tit)' of Sa~ leraard.1DO. h.ra1Q&nu cal184 che .AaeDOY.. _4 lata. BoWl. Cor_ " Aaaoc.1aee., ur.baltel' c&11e4 ell<< -CoIltrlceo,.. W1MSSlD DA'l1 ~lIlUS. the Ai_DC' 04 tile (olleractor preYloual)' IDtud 11\to _ or1a1JlA1 Acr....e OJ), Much ~O, 19891 p4 WN"'''''. it DOV 1leCOllleI D.C....%)' to a.ene! latd A,r...ee pe! lIoth p.rU.. ar. ..ds-olll of .uc:1I Del14l111lt. NOW, 'l'BDUOU, 11\ cODl14eraUOIl of the IIUtual udere.ldllll b6rdll. the part.1'. ..rae that 1.1d Aar....at bl -..nd,a .. follow.. o 1. BectiOll~. Painole. the purpoee of. ebb "reeDent 11 to allow AceDC,. Oto proclJu the .erv.1oe. of 111 uper.1e:llCeeS profell1olll1 fira to .....l1op & 10lll-een fillllldal pla4 for: eech of AleDII1'. rcuve1opell.t project ar... an4 to ,rar1eSa othar t.cbaicll ...iltaDCe 1. furtheruc. of AlellC'" I P108. project. t.JlcI. pro.r.... 2. SeeUOIl 2. 1tl..101l. Aa_oy hereby rataiDl Ccm.u1tut for the provbioal of .enicI. .1 &lItl1or1&,4 ill .dUlla by tbe b.cu.t1ve Dlreetor of .lleuy. Such ~thor1a.tioll ,hall b. be.eeS OIl ..eimate. of .chedul1D1 aile! coapeDlat1OD ... ahall have b.eJl mutuall,. a.l'e.4 UpOll by the E,ncuUvI J)1r:ec:to~ &114 CODIultlllt. S.rvieel..,. illc:1ud. !lilt nled Rot be 11111t.4 to tbo.. d..cti1led ill AttacM.llt I, Work 'ro,r... Conau1tlllt her.by accepta auch r'.poD.ihillty a. 4e.crihe4 hlreiD. 3. Sect:lOll 3. T.ras. o 'lhti Acn..tIlt ahall COlllDllICe .. of the uy aU. ,...1' Uut above Ihow alleS ehsll. 1'..111 ill full forc. ud effect for a ,.docS of Olll ,..ar UIll... .00IlOl1' teX1l:llUltl4 .. provide. hueio. fhe E..c~t1v. Director of ".Ilc,. or hi. or her 4'.LaD.. :I.. .uthodzad to p:tead thl1 Aara..lllC for up to 30 d.,.. t.JlcI. .pprova 11111 it... aeSjuatMllea to the !ara",llt'l '1'0'1". lluqec a. lOlla &S 11tb.r of avell a......oc. ar. UPOll thl .... t.~. aDd coll41tiolll a. .pacified herata. '.0 P.~/2 .~EROX TELECOPIER 296: 11-77-??;1?:77 17; ~AA_~~___ cellT G3 . . JUi :lll '89 15:48 ~:Ar.: fULlS L.A. ~ Rede,elopll1tDt AIOCY . . 4. sectIOn 4, Consultant Rts~slblllths. o o. I , :0 Lawrenc. J. Arc.n.aux, Jr.. PrIncIpal, Is add.d to the lIst of . cOlIII thd personn.l. 5. SectIon &. OQmRensatlon. . DurIng the terl of thIs Agrellent. Ag.~cy shall pay Consultant on an hourly basIs In accordance wIth the SChedule descrIbed In Attachment II. Budget, Said comp.nsatlon shill be considered full Ind cOIplet. r.lmbursement for III of Consultant's costs assocIated wIth the s.rvlces provld.d her.under. The "IlIUm cOlpensatlon for servlc.s. IncludIng all Consultant's costs. under the t.rms of this Agreement, shall not .xceed $42,500.00. 6. All oth.r tenll and condItions of saId Agr....nt shall r...ln In full forc. and .ffect. IN WITNESS WHEREOF, the Agency and the Contractor, through th,'r duly authorIzed offIcers, hive executed thIs amendment as of the date fIrst lbov. wrItten. APPROVED AS TO fORM . AND LEGAL CONTENT: REDEVELOPMENT AGENCY OF THE CITY (I SAil BERMINO BY Ex.cutlve 6'r.ctor APPROVED AS TO p~: REDEVELOPMENT AGENCY Of THE CITY OF SAN BERNARDINO CONTRACTOR BY Admlnlstratlv. Oeputy BY~~~~ TITLE~ o o Redevelopment Agency o ATTACHMENT I WORK PROGRAM o The Consultant will develop for the Redevelopment Agency of the City of San Bernardino (Agency) a long-term financial plan for Its redevelopment project areas and provide other technical assistance In furtherance of the Agency's plans, projects and programs. Work activities shall be accomplished In accordance with the schedule described below. Priority Group No.1 1. Verify the Agency's tax Increment revenues (to the extent records are available) by analysis of Agency staff's existing data base and a significant sample test on a parcel by parcel basis of the secured and unsecured tax rolls for the redevelopment project areas for the base year and current year. This process will Identify and reconcile discrepancies between taxable values existing In the project areas and those values as reported by the County. Subsequent to this verification, the Consultant shall analyze and prepare tax Increment revenue projections over a five to ten year period. 2. Review all active bonded debt having priority liens on the flow of tax Increment revenue. Prepare a cash flow analysis Including Incorporation of tax revenue projections and a documented cash flow suitable for general presentation. 3. Prepare a written summary of Initial findings relating to the accomplishment of the overall work program described herein (completed on May 30, 1989). The above three tasks shall be completed by July I, 1989 at a cost not to exceed $25,000. Priority Group No.2 1. Review Agency staff's June 19, 1989 response to Consultant's Initial findings and consult with and review additional Information to be made available from the staff of the Agency's Accounting and Development Divisions and assess balance of work necessary to continue completion of the Agency's long-term financIal plan. Based upon thIs assessment, the Consultant shall provIde an updated report relatIve to the InItIal fIndIngs submItted to the Agency on May 30, 1989, and cost estImates relative to the balance of the planned work assIgnments contaIned hereIn. o - 1 - . o o Redevelopment Agency o o Services provided pursuant to this work task shall be completed by July 15, 1989 at a cost not to exceed $2,500. Review and assess all active development agreements relative to their liens against the flow of tax increment funds. Update the cash flow analysis which was prepared under Item #2 of Priority #1 to include these junior lien data. The cost and scheduling of this work task shall be as mutually agreed upon subsequent to the completion of work task #1 of this second priority grouping. Preparation of a financing plan/bond plan for each project area that will either eliminate cash and scheduling flow shortfalls or generate additional financing opportunities. The cost and scheduling of this work task shall be as mutually agreed upon subsequent to the completion of work task #1 of this second priority grouping. 4. Provide financial advisory services to the Agency for new bond issuances or for the refunding of outstanding bond issues on an as needed basis (currently estimated to be three issuances>. Services to be provided include document review (verification of the compatibility between the provisions contained in the resolution of issuance and the amounts and timing of revenue receipts>. review and analysis of tax sharing agreements which may impact the Agency's ability to pledge tax increment revenue, attendance at any meetings related to bond issuance. and representation of the Agency in meetings with bond rating agencies and bond insurance companies. Services provided for this activity shall be at a cost not to exceed $5.000 per issue. Scheduling of these services shall be as mutually agreed upon by the parties. 2. 3. Priority Group No.3 The work tasks listed below shall be undertaken during the term of the contract upon a schedule mutually agreeable to the parties. The cost and scheduling of these work tasks shall be as mutually agreed upon subsequent to the completion of work task #1 of the second priority grouping. 1. Review and recommend necessary adjustments to the Agency's accounting and financial management methodologies and systems. In fulfilling this task. the Consultant may be required to engage the services of one or more qualified Certified Public Accounting firms as subconsultant(s> to assist in developing appropriate recommendations. Such subconsultants must be approved in writing by the Agency's Executive Director prior to the initiation of any work. o - 2 - o o Redevelopment Agency o 2. Provide assistance in reviewing other related issues including, but not limited to, the following: a. Potential use of pre-1986 bond proceeds in the furtherance of Agency programs; and b. Impact of recent court rulings ordering the reassessment of railroad property on Agency finances; and 13525 o o - 3 - . Redevelopment Agency o Prlorltv Group o 2 3 o o o ATTACHMENT II KATZ HOLLIS 1989 Hourly Rate Schedule Principals Senior associates Associates Senior Analysts Analysts Research Analysts Secretarial/Administrative $120 per hour $100 per hour $ 80 per hour $ 70 per hour $ 55 per hour $ 50 per hour $ 35 per hour BUDGET BY WORK ACTIVITY Activltv No. Cost 1 Included In subtotal 2 Included In subtotal 3 Included In subtota 1 Subtotal $25,000 1 $ 2,500 2 To be determined 3 To be determined 4 15 000 Subtotal 17,500 1 To be determined 2 To be determined Subtotal To be determined Grand Total $42.500 o o ~ Redevelopment Agency REDEVELOPMENT AGENCY CITY OF SAN BERNARDINO CONTRACT AMENDMENT o Amendment No. 01 THIS AMENDMENT TO AGREEMENT made this day of . 1989, by the Redevelopment Agency of the City of San Bernardino. hereinafter called the "Agency". and Katz, Hollis. Coren & Associ ates, herei nafter called the "Contractor". WITNESSETH THAT: WHEREAS. the Agency and the Contractor previously entered into an original Agreement on March 20, 1989; and WHEREAS. it now becomes necessary to amend said Agreement and both parties are desirous of such amendment. o NOW, THEREFORE. in consideration of the mutual undertakIngs hereIn. the parties agree that said Agreement be amended as follows: 1. Section 1. Puroose. The purpose of this Agreement is to allow Agency to procure the services of an experienced professional fIrm to develop a long-term financial plan for each of Agency's redevelopment project areas and to provide other technical assistance in furtherance of Agency's plans. projects and programs. 2. SectIon 2. MissIon. Agency hereby retaIns Consultant for the provision of services as authorized in writIng by the Executive Director of Agency. Such authorization shall be based on estImates of schedulIng and compensatIon as shall have been mutually agreed upon by the ExecutIve Director and Consultant. Services may include but need not be lImited to those described in Attachment I, Work Program. Consultant hereby accepts such responsibility as described hereIn. 3. Section 3. Terms. c ThIs Agreement shall commence as of the day and year first above shown and shall remain In full force and effect for a perIod of one year unless sooner terminated as provIded hereIn. The ExecutIve DIrector of Agency or hIs or her desIgnee Is authorIzed to extend thIs Agreement for up to 30 days and approve lIne Item adjustments to the Agreement's program budget as long as eIther of such amendments are upon the same terms and conditIons as specifIed herein. XEROX TELECOPIER 295: ??-??-??:??:?? ??: JUN 28 '89 13:36 KATZ HOLLOL.A. CCITT 03 + /I 3 AAMnnnnnnnn o F.3/3 , o 4. 8ectioo 4. COll.uttoln: "'1>00.:1.111111:1'0. La~.DC' J. Are.DUIIS. Jr.. biadpal. b acW.d 1:0 ch. Un of co.a1cte4 par'OGAel. 5. ..ctiOA 6. ClIIIllella.tloo. Dlirltl1 the teZll of I:hi. AI"laUt, Aaeacy 1ha11 pa, Coa.u1t_t Oil d hour11 Nlil 1Il accOrdallC' nth the aeWll1. ducrikd ill Att.chapt II, Wlet. Idd Coap.lllIItiOtl .haU .. coui4ere4 full ad compleu n1ll11llraeunt for oU of Coo.u1t_c' 0 colt. e..od.ted with Ch. u7:'I1c.. provid.d hu.UlU!er. !be..ziaua cOIIpella.doo fOJ: ..nicel. 11lclud1lla dl eouu1tatt. ooat.. lIl:Idar the t.ra. of thi. AaJ:'lIWlt. ah&111lot ce.ec! tl2.500.oo. 6. All other t.ra IIl4 c0ll41tiou of .&td Acr._t .1Iall zoeuiJl :hl full force ad -'feet. IN VIMS8 lIfIII01, the qncy acl the COlltr.ctor. thl'Oll.h tllab duly authodted officer.. have a.cuted ehil ...041114t a. of the elate fUlt above vxitua. o AJPl.OVIJ) AS to lOIH ~ u.cw. COJIm'fa IIDEVlLOl'H!IlT MINCY OF tIl2 ClfY or WI IIIHdDDO ~) A.'1IC1 a1 BY !stoutlva 1)11'.cto1' Alnov!!) AS m PIOOIAH; lIDIVILObIJI'f AGIlfC'f O' DE CITY or W 1DXAIDlHO Ma11l1nr.uv. n.Pllt1 IT o was Redevelopment Agency o o o ATTACHMENT I HaRK PROGRAM o The Consultant will develop for the Redevelopment Agency of the City of San Bernardino (Agency) a long-term financial plan for Its redevelopment project areas and provide other technical assistance In furtherance of the Agency's plans, projects and programs. Work activities shall be accomplished In accordance with the schedule described below. Prlorltv Group No.1 1. Verify the Agency's tax Increment revenues (to the extent records are available) by analysis of Agency staff's existing data base and a significant sample test on a parcel by parcel basis of the secured and unsecured tax rolls for the redevelopment project areas for the base year and current year. This process will Identify and reconcile discrepancies between taxable values existing In the project areas and those values as reported by the County. Subsequent to this verification, the Consultant shall analyze and prepare tax Increment revenue projections over a five to ten year period. 2. Review all active bonded debt having priority liens on the flow of tax Increment revenue. Prepare a cash flow analysis Including Incorporation of tax revenue projections and a documented cash flow suitable for general presentation. 3. Prepare a written summary of Initial findings relating to the accomplishment of the overall work program described herein (completed on May 30, 1989). The above three tasks shall be completed by July 1, 1989 at a cost not to exceed $25,000. Prlorltv Group No.2 1. Review Agency staff's June 19, 1989 response to Consultant's Initial findings and consult with and review additional information to be made available from the staff of the Agency's Accounting and Development Divisions and assess balance of work necessary to continue completion of the Agency's long-term financial plan. Based upon this assessment, the Consultant shall provide an updated report relative to the initial findings submitted to the Agency on May 30, 1989, and cost estimates relative to the balance of the planned work assignments contained herein. o - 1 - . Redevelopment Agency o o o o ServIces provIded pursuant to thIs work task shall be completed by July 15, 1989 at a cost not to exceed $2,500. RevIew and assess all actIve development agreements relatIve to theIr lIens agaInst the flow of tax Increment funds. Update the cash flow analysIs whIch was prepared under Item #2 of PrIorIty #1 to Include these junIor lIen data. The cost and schedulIng of thIs work task shall be as mutually agreed upon subsequent to the completIon of work task #1 of thIs second prIorIty groupIng. PreparatIon of a fInancIng plan/bond plan for each project area that wIll eIther elImInate cash and schedulIng flow shortfalls or generate addItIonal fInancIng opportunItIes. The cost and schedulIng of thIs work task shall be as mutually agreed upon subsequent to the completIon of work task #1 of thIs second prIorIty groupIng. 4. ProvIde fInancIal advIsory servIces to the Agency for new bond Issuances or for the refundIng of outstandIng bond Issues on an as needed basIs (currently estImated to be three Issuances). ServIces to be provIded Include document revIew (verIfIcatIon of the compatIbIlIty between the provIsIons contaIned In the resolutIon of Issuance and the amounts and tImIng of revenue receIpts), revIew and analysIs of tax sharIng agreements whIch may Impact the Agency's abIlIty to pledge tax Increment revenue, attendance at any meetIngs related to bond Issuance, and representatIon of the Agency In meetIngs wIth bond ratIng agencIes and bond Insurance companIes. ServIces provIded for thIs actIvIty shall be at a cost not to exceed $5,000 per Issue. SchedulIng of these servIces shall be as mutually agreed upon by the partIes. 2. 3. PrIorIty Group No.3 The work tasks lIsted below shall be undertaken durIng the term of the contract upon a schedule mutually agreeable to the partIes. The cost and schedulIng of these work tasks shall be as mutually agreed upon subsequent to the completIon of work task #1 of the second prIorIty groupIng. o 1. RevIew and recommend necessary adjustments to the Agency's accountIng and fInancIal management methodologIes and systems. In fulfIllIng thIs task, the Consultant may be requIred to engage the servIces of one or more qualIfIed CertIfIed Public AccountIng fIrms as subconsultant(s) to assIst In developIng approprIate recommendatIons. Such subconsultants must be approved In wrItIng by the Agency's ExecutIve DIrector prIor to the InItIatIon of any work. - 2 - . o o o Redevelopment Agency o o 2. Provide assistance In reviewing other related issues Including. but not limited to, the following: a. Potential use of pre-1986 bond proceeds In the furtherance of Agency programs; and b. Impact of recent court rulings ordering the reassessment of railroad property on Agency finances; and Priority Group No.4 1. Carry out any other task related to the work program or mission of this Contract. In addition, the financial resources contained In the budget that are allocated to this priority group may also be used (through a budget transfer approved by the Agency's Executive Director) to cover the costs of activities 2 and 3 In the second priority group and 1 and 2 In the third priority group once their costs are determined. 13525 - 3 - . 0 0 Redevelopment Agency 0 ATTACHMENT II KATZ HOLLIS 1989 Hourly Rate Schedule PrincIpal s $120 per hour SenIor assocIates $100 per hour AssocIates $ 80 per hour SenIor Analysts $ 70 per hour Analysts $ 55 per hour Research Analysts $ 50 per hour SecretarIal/AdmInIstratIve $ 35 per hour BUDGET BY WORK ACTIVITY PrIorIty GrouD ActIvIty No. Cost 1 1 Included In subtotal 2 Included In subtotal 0 3 Included In subtotal Subtotal $25.000 2 1 $ 2,500 2 To be determIned 3 To be determl ned 4 ~15,OOO Subtotal $17,500 3 1 To be determIned 2 To be determIned Subtota 1 To be determIned 4 1 40 000 Subtotal 40,000 Grand Total $82,500 o