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RESOLUTION (ID # 4152) DOC ID: 4152 D
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Agreement/Contract
From: Allen Parker M/CC Meeting Date: 11/16/2015
Prepared by: Georgeann "Gigi" Hanna,
Dept: City Manager Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing
the Execution of a Seventh Amendment to the Consultant Services Agreement Between
Urban Futures Inc. and the City of San Bernardino. (#4152)
Current Business Registration Certificate: Yes
Financial Impact:
Staff proposes to move forward under the current hourly rates for Urban Futures with a
not to exceed amount of$375,000. Based on the anticipated workload to complete the
City's plan of adjustment and through the plan confirmation process, the 2015-16
budget, as approved through the budget appropriation of the Mayor and Common
Council, for the chapter 9 process has sufficient resources to fund the additional
services needed for the balance of the Fiscal Year.
Motion: Adopt the Resolution.
Summary
Urban Futures has performed admirably in supporting the City in the chapter 9 process.
The workload has been immense. It was Urban Futures that prepared the City's Pre-
Pendency and Pendency Plans, financial support for the City's Term Sheet in October
of 2013 and provided the City of San Bernardino with support, including expert
testimony, through the eligibility process. We want to continue with urgency the
chapter 9 process so that we can pursue negotiations with our creditors and present an
updated plan of adjustment to the Court on or before the November 25, 2015 deadline.
A plan of adjustment is the City's plan to adjust its debts and its multi-year financial plan
to support the organization outside of bankruptcy. This plan must be a feasible plan
that convinces a judge that San Bernardino will be cash, budget and service solvent for
the foreseeable future. Without professional consultant resources, we simply cannot
achieve this goal.
Background
Since June 4, 2012, the resources and expertise of Urban Futures have been invaluable
to the fiscal analysis and chapter 9 process. Quite frankly, we could not have been
found eligible for chapter 9 protection without Urban Futures' help. The workload has
been enormous. Urban Futures has dedicated their best resources to the engagement,
providing exceptional experience in accounting, municipal finance and municipal
operations. Urban Futures has provided the chapter 9 support and technical financial
assistance for the engagement. Key elements have included the support to
negotiations with creditors, financial modeling and reporting, and the development of
Updated: 11/10/2015 by Jolena E. Grider D I Packet Pg. 128
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4152
responses to discovery requests during litigation. The financial models they produced
are a foundation for our restructuring plan and the financial reports they provided have
been a key element in communicating our financial condition. The chapter 9 team has
allowed staff to continue to run the daily business of the City while moving forward with
the chapter 9 processes. The support of Urban Futures has been critical to the City's
ability to be responsive and flexible to the timelines and requests made by all creditors
as well as the bankruptcy court throughout the chapter 9 process.
On September 17, 2013, Judge Jury ruled that the City was eligible for protection under
chapter 9 of the federal bankruptcy code. Since this ruling, the City's professional
consultants and the entire chapter 9 team expended tremendous resources in order to
manage the engagement, prepare for the anticipated trial, and continue to work toward
the ultimate exit from bankruptcy with the City on a path to financial stability.
On November 18, 2014, Judge Jury established the deadline of May 30, 2015 for
submission of the City's plan of adjustment to the court. In meeting this deadline, UFI
provided additional resources necessary to continue chapter 9 engagement support and
financial restructuring through the plan of adjustment preparation and confirmation by
the Court.
Now, the City must provide the court an updated plan of adjustment concurrent with
continued creditor discovery, creditor negotiations, financial planning and the plan
confirmation process. As a result, it is recommended that an amendment be authorized
for their contract.
RECOMMENDATION
It is recommended that by motion action the Mayor and Common Council authorize a
contract change order to the agreement with Urban Futures, Inc. to continue to assist the
City throughout the chapter 9 bankruptcy process.
City Attorney Review:
Supporting Documents:
Seventh Amendment to UFI Agreement Reso (DOCX)
agrmt 4152 (PDF)
Updated: 11/10/2015 by Jolena E. Grider D Packet Pg. 129
5.E.a
RESOLUTION NO.
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2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE EXECUTION OF A SEVENTH
3 AMENDMENT TO THE CONSULTANT SERVICES AGREEMENT BETWEEN
URBAN FUTURES INC AND THE CITY OF SAN BERNARDINO.
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NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
6 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
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7 SECTION 1. The City Manager of the City of San Bernardino is hereby authorized and
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directed to execute on behalf of said City a Seventh Amendment to Consultant Services a
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Agreement between Urban Futures Incorporated (UFI) and the City of San Bernardino °
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11 regarding Restructuring and Fiscal Analysis Services, a copy of which is attached hereto E
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12 marked Exhibit "A" and incorporated herein by reference as fully as though set forth at E
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14 SECTION 2. The Finance Department is hereby authorized to issue an amended N
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Purchase Order to Urban Futures Incorporated for consultant services to increase the amount
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by$375,000.00.
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18 SECTION 3. The authorization granted hereunder shall expire and be void and of no U
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19 further effect if the Agreement is not executed by both parties and returned to the Office of the =
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20 City Clerk within sixty(60) days following the effective date of this Resolution. 'a
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Packet Pg.130
I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO AUTHORIZING THE EXECUTION OF A SEVENTH
AMENDMENT TO THE CONSULTANT SERVICES AGREEMENT BETWEEN
3 URBAN FUTURES INC AND THE CITY OF SAN BERNARDINO.
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4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor vi
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5 and Common Council of the City of San Bernardino at a meeting LL
6 thereof,held on the day of , 2015,by the following vote, to wit:
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8 Council Members: AYES NAYS ABSTAIN ABSENT
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9 MARQUEZ
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Georgeann Hanna, City Clerk °
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20 The foregoing Resolution is hereby approved this day of , 2015.
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23 R. Carey Davis, Mayor N
City of San Bernardino
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Approved as to form:
25 Gary D. Saenz, City Attorney
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27 By:
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Packet Pg. 131
I SEVENTH AMENDMENT TO CONSULTANT SERVICES AGREEMENT BETWEEN
2 THE CITY OF SAN BERNARDINO AND URBAN FUTURES,INC.REGARDING
3 RESTRUCTURING AND FISCAL ANALYSIS SERVICES
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5 THIS SEVENTH AMENDMENT is made and entered into as of November 16, 2015 by
6 and between the CITY OF SAN BERNARDINO, a charter city ("CITY") and URBAN
7 FUTURES, INC. ("CONSULTANT") as to restructuring and fiscal analysis services only. In L
8 consideration of the mutual covenants and conditions set forth herein,the parties agree as follows: u
9 1. This Amendment is made with respect to the following facts and purposes:
10 a. On June 4, 2012 CITY and CONSULTANT entered into a certain agreement 3
11 entitled "CONSULTANT SERVICES AGREEMENT" in the amount of van
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12 $150,000 for consultant services,$86,000 of said$150,000 was specifically for
13 restructuring and fiscal analysis services and $64,000 of said $150,000 was E
14 specifically for Interim Public Works Director services. E
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15 b. On October 1, 2012 the CITY and CONSULTANT entered into the First
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16 Amendment to Consultant Services Agreement Regarding Interim Public
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17 Works Director Services which increased the amount for those services only by 'rq-
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18 $115,200. E
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19 c. On October 1, 2012 the CITY and CONSULTANT entered into the Second
20 Amendment to Consultant Services Agreement Regarding Restructuring and
21 Fiscal Analysis Services which increased the amount for those services only by a
22 $214,000.
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24 d. On April 1,2013 the City and Consultant entered into the Third Amendment to
25 Consultant Services Agreement Regarding Restructuring and Fiscal Analysis
26 Services which increased the amount for these services by$100,000.00.
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I e. On August 5, 2013, the CITY and CONSULTANT entered into the Fourtl
2 Amendment to Consultant Services Agreement Regarding Restructuring an(
3 Fiscal Analysis Services which increased the amount for those services only tc
4 an amount not to exceed $600,000.
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f. On August 18, 2014 the CITY and CONSULTANT entered into a Fifth
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7 Amendment to Consultant Services Agreement Regarding Restructuring and a
Fiscal Analysis Services which increased the amount for those services by an
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9 amount not to exceed$602,000 for Fiscal Year 2014/15,through June 30,2015
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g. On April 23, 2015, the CITY and CONSULTANT entered into a Sixth "3
11 Amendment to Consultant Services Agreement Regarding Restructuring and a
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Fiscal Analysis Services which increased the amount of those services by an
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amount not to exceed $375,000.00 for Fiscal Year 2015/16.
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h. The parties now desire to increase the payment for restructuring and fiscal Q
1 S analysis services in the amount of$375,000 and amend the Agreement as set to
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forth in this Amendment.
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2. Section 2. Compensation of the Agreement is hereby amended to read as follows:
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City hereby agrees to pay Consultant a sum not to exceed a total of$375,000(Three o
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Hundred and Seventy-five Thousand Dollars and no cents) for restructuring and d
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fiscal analysis services for Fiscal Year 2015/16,through June 30,2016. City shall
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pay Consultant for services rendered pursuant to this Agreement at the time and in
22 the mariner set forth herein. Any terms in Exhibit A other than the payment rates
23 and schedule of payment are null and void. The Seventh Amendment amount
24 shall not exceed $375,000.00 for additional consulting services regarding
25 restructuring and fiscal analysis services.
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1 3. Except for the changes specifically set forth herein, all other terms and conditions o:
2 the Agreement shall remain in full force and effect.
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I SEVENTH AMENDMENT TO CONSULTANT SERVICES AGREEMENT BETWEEN
2 THE CITY OF SAN BERNARDINO AND URBAN FUTURES,INC. REGARDING
3 RESTRUCTURING AND FISCAL ANALYSIS SERVICES
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5 IN WITNESS THEREOF, the parties hereto have caused this Amendment to be executed
6 by and through their respective authorized officers, as of the date first above written. c
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8 CITY OF SAN BERNARDINO, CONSULTANT
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Allen Parker, City Manager Michael Busch,President 3
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12 APPROVED AS TO FORM:
13 Gary D. Saenz, City Attorney E
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