STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of July 12, 2022
TO: Members of the City Council
SUBMITTED BY: Dante Hall, City Manager
Edwin Gato, Director of Finance
SUBJECT: Extension of Professional Services Agreement with Doherty Law Group for Legislative Advocacy Services
RECOMMENDED ACTION
Staff recommends that the City Council of the City of Hercules adopt a resolution to extend the Doherty Law Group agreement from April to June 2022 for an additional cost of $18,000.
FISCAL IMPACT OF RECOMMENDATION
The proposed sixth amendment increases the total contract amount under this agreement by $18,000, for a total amount of $222,000.
The General Fund has sufficient available cash balance for the additional cost of this contract amendment.
EXECUTIVE SUMMARY
On October 23, 2019, the City of Hercules retained the services of Doherty Law Group (“Doherty”) to assist the City’s efforts to receive a finding of completion from the State of California regarding certain Successor Agency (formerly known as Hercules Redevelopment Agency) financial obligations. The efforts have not been completed and are ongoing, but the City’s funding allocation was exhausted on March 30, 2022. The City Council must allocate $18,000 for additional work or services incurred through June 30, 2022.
BACKGROUND
On October 23, 2019, the City of Hercules retained the services of Doherty Law Group to assist the City’s efforts to receive a finding of completion from the State of California regarding certain Successor Agency financial obligations. Specifically, the City is interested in having the State Department of Finance grant a Finding of Completion (FOC) to the City of Hercules for certain financial obligations incurred by its now defunct Redevelopment Agency.
When granted, the FOC will benefit all local entities including the City, local school districts, and other taxing agencies because it would facilitate refinancing and pre-payment options of existing redevelopment debt that are estimated to generate additional income over the next 20 years (front- loaded in first 5 years) for local public entities ranging from $35 to $42 million dollars with $20 to $25 million going to local public schools, and up to $2 million for local affordable housing development.
This effort will not add cost to the State of California and will help local entities fund existing programs by taking advantage of the historically low cost of credit and financing. The City, last year, concluded that attaining a FOC from the State Department of Finance will require a skilled legislative effort, and retained the Doherty Law Group to manage that task.
DISCUSSION
The Doherty Law Group worked diligently in the fiscal year 2021 to craft a trailer bill for consideration and approval by the State legislature. The due date for the State Budget to be passed was June 15, 2021, and, for most of the last decade, all trailer bills were completed by June 30. While the State legislature passed a budget in June 2021, the Governor has yet to sign it, so the State is running behind its typical schedule. The Legislature continued working on trailer bills in July, August, and September 2021. Due to the pandemic and the tight deadline to submit the proposed language in September, staff and the consultant decided to postpone it to the next meeting in January 2022. However, given the large view approach of the Governor's budget produced each year, Hercules's proposal was not included in the public budget on January 10, 2022.
Doherty Law Group's Contract expired on March 30, 2022. Still, since the City's trailer bill was not included in January 2022, the firm continued to work on the legislative portion of the process to add the City's desired budget item to Senate Budget. The firm worked with the City in hammering out the exact numbers that the State and the City could agree upon.
Staff recommends extending the Doherty agreement thru June 30, 2022, to reimburse the firm for the services incurred through June 2022 for $18,000. This will be the final contract amendment for this effort.
ATTACHMENTS:
Resolution
Original Contract and Amendment Nos: 1, 2, 3, 4 and 5
Contract Amendment No. 6
Financial Impact
Description: Doherty Law Group, Lobbyist.
Funding Source: General Fund
Budget Recap:
Total Estimated cost: $18,000 New Revenue: $
Amount Budgeted: $ Lost Revenue: $
New funding required: $ New Personnel: $
Council Policy Change: Yes No
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