City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: APRIL 26, 2022 FROM: FINANCE DEPARTMENT WARDS: ALL
SUBJECT: SECOND AMENDMENT TO PROFESSIONAL CONSULTANT SERVICES AGREEEMENT FOR ASSESSMENT ENGINEER SERVICES WITH WEBB MUNICIPAL FINANCE, LLC., TO EXTEND THE TERM OF THE AGREEMENT TO MARCH 31, 2024, AND INCREASE THE COMPENSATION AMOUNT BY AN ADDITIONAL $283,288 FOR A TOTAL AGREEMENT AMOUNT OF $805,619.
ISSUES:
Approve the Second Amendment to the Professional Consultant Services Agreement for Assessment Engineer Services with Webb Municipal Finance, LLC., exercise both one-year options to extend the term of the Agreement to March 31, 2024, and increase the agreement compensation amount by $283,288 for a total Agreement amount of $805,619.
RECOMMENDATIONS:
That the City Council:
Approve the Second Amendment to the Professional Consultant Services Agreement for Assessment Engineer Services with Webb Municipal Finance, LLC., and exercise two (2) one-year options to extend the agreement term to March 31, 2024, and increase the compensation amount by $283,288 for a total agreement amount of $805,619.
Authorize the City Manager, or designee, to execute the Second Amendment to the Professional Consultant Services Agreement with Webb Municipal Finance, LLC., including making minor and non-substantive changes.
BACKGROUND:
The City of Riverside selected Webb Municipal Finance (“Webb”, formerly Albert A. Webb Associates) in July 2017 through a competitive RFP process. On July 25, 2017, the City Council approved a Professional Consultant Services Agreement (Agreement) with Webb. Per RFQ/RFP No. 1680, and per the parties, the intent of the original Agreement was for five (5) years, with two options to extend additional one (1) year periods. It was the intent of the City as specifically noted in the RFP process and was clear to all respective bidders, including Webb, that the contract term would be structured in this manner.
In March 2020, the City Council approved the First Amendment with Webb to increase the compensation for a total Agreement amount of $522,331 to provide additional Program Management Services related to the various assessment districts that are administered by the City. These added services allow Webb to serve as an administrative liaison between developers, property owners, and the County Recorder’s Office saving the City significant staff time and resources.
The second amendment originally went to City Council on April 12, 2022, as a consent item. Council pulled the item from the consent calendar and requested a more thorough explanation of why staff recommended to exercise the two options to extend the existing contract term for a total additional two years, rather than an initiating a formal Request for Proposal (RFP).
DISCUSSION:
Through the competitive procurement process in 2017 (RFP #1680), Webb, a City of Riverside business, was selected as the service provider of choice due to their capacity to provide expertise, training, and, most importantly, historical knowledge of the City’s special districts. Webb provides Assessment Engineer Services and prepares the Special Tax and Assessments levy for the Street Light Assessment District, City Library Services Parcel Tax, Community Facilities Districts, Landscape Maintenance Districts, and Assessment Districts. Additionally, Webb has over 60 years of special district consulting and engineering services, and over 30 years of partnership with the City of Riverside.
Webb has been an integral component of the Special Tax and Assessments levy process, working with City staff to submit accurate and complete information to the Riverside County Assessor’s Office in a timely manner so the levies can be included on the printed property tax bill and mailed to the property owners of Riverside. This is a lengthy process which takes several months to complete. For this reason, City Council approved Webb as the Engineer of Record in January 2022 to begin the levy process for Riverwalk LMD, Sycamore Canyon LMD, and the Street Light Assessment District. In addition to annual administration of the City’s special districts, Webb is currently working with the City on three new district formations and a bond sale.
The current Agreement with Webb expired March 31, 2022. While the City’s process for exercising the options was started in December 2021, administrative issues arose delaying completion of the extension prior to the end of March. To mitigate the timing issue, the current amendment, should it be approved, contains a provision with an effective date of March 31, 2022.
It is critical that Webb continue to provide the services for the City to meet deadlines established by the Riverside County Assessor’s Office for the annual levy process. Issuing a new RFP this late in the process and selecting a new vendor for these services would prohibit the City from meeting the County’s deadline of August 10 to submit all data for the upcoming property tax levy. If the City fails to transmit the levy to the County by this deadline, the City will be unable to collect an estimated $12.2 million of Special Taxes and assessments, and would put the City at high risk of default for multiple bond issuances. Also, the City will not have sufficient assessment revenue to maintain its duty of care to the maintenance assessment districts next fiscal year. If the City defaults on bond issuances, there are serious ramifications which include penalties, having to report significant event notices with the SEC, damage to the City’s reputation as an issuer of municipal debt, and higher borrowing costs on future bond issuances.
Throughout the term of this Agreement, Webb has been extremely thorough and reliable in assisting City staff with gathering the vast information necessary to file State debt and special district reports each year. These reports are prepared and filed annually to meet both State requirements, as well as continuing disclosures requirements related to bond issuances.
Webb also continues to be a valuable asset to the City in the formation of new community facilities districts. They have the expertise and resources to prepare for each formation the Rate and Method of Apportionments as well as district boundary maps using their team of GIS Specialists.
They are actively involved during the entire formation process for new Community Facilities Districts and negotiating with residential developers on the City’s behalf and act in the capacity as a fiduciary to the City.
Additionally, the City will achieve a significant cost savings by exercising the contract option due to a fixed 2% annual price escalator stated in the current Agreement, which is well below the current rate of inflation. If the City were to conduct a new competitive procurement instead of exercising the option stated in the original RFP, the City would lose all cost savings benefits of a locked-in 2% escalator and would likely need to enter into a new agreement at a much higher cost given the current economic environment.
To meet critical deadlines, maintain valuable knowledge, effectively time the RFP process through the levy and reporting cycles, and run a cost-effective Special Tax and Assessment levy program, City staff recommends approving the exercise of both one-year options now to extend the term of this agreement for two years through March 31, 2024. Alternatively, the Council can direct staff to exercise the first one-year extension and return next year for additional discussion and direction on the second and final one-year option. Based on Council direction and prior to the final extension period, the Finance Department will issue a new RFP for these Special Tax/Assessment Engineering/Program Management services and will bring the winning bid to the City Council for approval at that time.
Transferring the extensive knowledge of the City’s districts formation and history from Webb to a new vendor at this juncture would require an expensive setup fee and a minimum six month ramp up time before new assessment work can begin, delaying critical special district projects that are currently in process. Furthermore, the critical time to make this changeover would be after the levy is completed in August and before The California Debt and Investment Advisory Commission (CDIAC) reports are due in October, allowing for overlap time for Webb to wrap up special district formations and bond sales.
The Purchasing Manager concurs that this request is in compliance with Purchasing Resolution No. 23812.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority No. 5 High Performing Government and Goal No. 5.3 – Enhance communication and collaboration with community members, to improve transparency, build public trust, and encourage shared decision-making.
This item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The formation of Special Districts provides a transparent and equitable way to manage, administer, and report on specific infrastructure and services related to new development in the City. Webb Municipal Finance plays an integral role in the process of district formation, assessment and special tax apportionment, tax rate analysis, and compliance with continuing disclosure.
Equity – Special Districts are designed to share the cost of infrastructure and maintenance services among each property owner and spreads the cost long-term across the generations of property owners that benefit from it.
Fiscal Responsibility – Utilizing a special tax consultant helps to ensure that the assessments that we levy and the tax burden we share is accurate and well researched. Webb Municipal Finance’s expertise and knowledge has been integral to delivering a consistently accurate and equitable process.
Innovation – Special Districts are an innovative way to plan and offset the cost to support new development with the City.
Sustainability & Resiliency – Special Districts provide a way to share the cost of infrastructure and maintenance across the property owners who benefit directly from them. Webb Municipal Finance acts as an extension of staff to ensure the proper taxes and assessments are levied and recorded each year.
FISCAL IMPACT:
The total fiscal impact of the action is $283,288 spread over Fiscal Year 2022/23 and Fiscal Year 2023/24. The General Fund portion of this cost is $24,000 and is budgeted in the General Fund, Finance Debt and Treasury, Professional Services account number 2302000 - 421000. The remaining costs are paid by the Developers requesting formation, and through the Community Facilities Districts and Assessment Districts, incorporated during the annual levy and budgeting process for these Districts each year.
Prepared by: Heidi Schrader, Debt and Treasury Manager
Certified as to
availability of funds: Edward Enriquez, Chief Financial Officer/City Treasurer Approved by: Kris Martinez, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments: Second Amendment to the Professional Consultant Services Agreement Second Amendment to Agreement with Webb Municipal Finance ● Page 3