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HomeMy WebLinkAboutAgenda Report - December 20, 2017 C-12TM CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: MEETING DATE: PREPARED BY: AGENDA ITEM C .1 2. Adopt Resolution Authorizing the City Manager to execute an Agreement for Professional Services with Clifford Moss LLC of Oakland, for Strategic Communications and Election Feasibility for Possible 2018 Revenue Measure ($48,500) December 20, 2017 City Manager RECOMMENDED ACTION: Adopt resolution authorizing the City Manager to execute an Agreement for Professional Services with Clifford Moss LLC of Oakland, for strategic communications and election feasibility for possible 2018 revenue measure. BACKGROUND INFORMATION: Lodi provides the full suite of essential municipal services that in many communities are shared with other providers, including Police, Fire, Water, Wastewater, Library, Electric, Streets, Parks and Recreation, Community Center, and much more. While we seem a small city of 64,000, the services the City provides dwarf many other communities our size. That suite of services is at risk today from a major financial challenge. Lodi's Council and staff have been very open about the demands being placed on the General Fund by the underfunded status of CaIPERS. Market losses from the Great Recession, changed actuarial assumptions and performance well below the projected earnings rate have left Lodi at a combined 63.5 percent funding level. To address this crisis, CaIPERS has radically increased Lodi's payment obligations. Within the next five years PERS payments in the General Fund alone are projected to go from $6.5 million per year to more than $13 million per year. The costs continue to explode for an additional three years beyond our current five-year budget forecast, and at a faster rate. The plain and simple truth is that CaIPERS obligations will crowd out such a Targe percentage of our services that without additional revenue many will no longer recognize Lodi as the livable and loveable town it has always strived to be. Many would contend that the City should simply leave CaIPERS and change its retirement plan to a defined contribution model. However CaIPERS has been clear that they will throw insurmountable obstacles in the path of such an effort as reported following the Stockton and Vallejo bankruptcies. CaIPERS has gone so far as to argue that the so-called "California Rule" trumps the United States Constitution's bankruptcy clause, not to mention the hurdles state law has placed before cities actually seek bankruptcy protection. Cities, unlike other entities, must show that they are unable to meet their immediate bills, as opposed to merely showing a horizon upon which they will be insolvent. In other words a City cannot file bankruptcy just because it is on a slow and inexorable slide toward bankruptcy over a five-year period. APPROVED: teen Schwabaity Manager That leaves Lodi only one way out of CaIPERS: paying off 100 percent of the Unfunded Accrued Liability as calculated by CaIPERS staff. Once a City elects to depart CaIPERS, the UAL is calculated at the 20 - year U.S. Treasuries interest rate, which is far lower than the 7 -percent earnings assumption used by CaIPERS for active plans. CaIPERS justifies this rate -change assumption on the theory that a departing plan cannot be relied on to see the highs and lows of the long-term horizon of an active plan. Whatever the rationale, the end result is that Lodi could not pay the more than $400 million dollar exit payment necessary to leave CaIPERS, even on its best credit day. Staff, Council and the League of California Cities have been actively lobbying the CaIPERS Board and the State Legislature for CaIPERS relief and will continue to do so. However, in the words of a California Assemblyman: "There is no appetite at the Capitol for a second round of CaIPERS reform." Unfortunately that leaves Lodi's destiny in its own hands. We must come up with a way to provide a sustainable level of public services in the face of more than $7 million a year in unavoidable cost increases. It is important to note that this Council has been active in addressing this funding crisis in many ways that do not require new revenue. The City has already taken four major steps to address these increased pension funding demands. The City Council created a Pension Stabilization Fund (PSF) via a Section 115 Trust with Public Agency Retirement Solutions ("PARS") at the close of FY 2016-17. Initial General Fund funding for the PSF came in the form of reserves over policy and totaled $2,830,210 Million. The City acted again during FY 2017-18 making additional monthly contributions from the General Fund to the City's pension stabilization fund totaling $2,019,230. The City acted a third time when Staff elected to pay the FY 2017-18 Unfunded Accrued Liability (UAL) payment in full in July 2017, realizing a 3.6 percent savings on the annual CaIPERS UAL bill as compared to the monthly billing option. The City's fourth major action on pension stabilization came in the form of adopting a Pension Stabilization Policy on December 6, 2017 that invests all reserves in excess of reserve policy in the PSF until such time as the city's pension system is 80 -percent funded. That will result in additional funding to the PSF of $3.9 million from the General Fund this year for a total of $8.7 million dollars. The consequence of the above accomplishments should not be lost on the voting public. While neighboring cities and the state of California continue to use budget surpluses to negotiate wage increases, Lodi has used them to preserve public service levels into the future. Unfortunately, the cost curve is just too high for these actions alone to preserve those levels. We are not prepared today to say what will be cut, but at some point we will face approximately $7 million dollars a year in service cuts. This item will give Council a chance to engage its citizens on those service level cuts and to gauge whether there may be other alternatives more palatable to our citizens than those cuts. Clifford Moss proposes to provide consulting and communications services to the City for the period of January 1 through March 31, 2018 for a fixed fee of $48,500. During this first phase of the engagement Clifford Moss will enable staff to engage the Council, Citizens and interest groups and listen to the community on what it perceives its needs to be. Clifford Moss will also engage a polling consultant to further this research. The object is to find the sweet spot between community needs and community support for what can provide a successful campaign. A second phase will likely follow for additional community engagement. And if recommended a third phase would be necessary with a community sponsored campaign committee. Staff recommends that Council authorize this contract to fully engage Lodi's citizens on what is without question the single largest issue impacting service levels in Lodi in the last five generations. FISCAL IMPACT: $48,500 FUNDING AVAILABLE: Funding is provided through savings in the personnel line in the General Fund from budgeted but unfilled positions. St hwabaue , i Manager ClArZtr )6:7 Andrew Keys, Deputy ity Manager CllFfordMoss. December 12, 2017 Steve Schwabauer City Manager City of Lodi 221 W. Pine Street Lodi, CA 95240 Re: Agreement for Professional Services Dear Mr. Schwabauer: This letter confirms our agreement for professional services ("Agreement") and takes effect on the Commencement date provided below by and between CliffordMoss ("Provider") and City of Lodi in Lodi, California ("Client"). 1. Scope of Agreement. Provider will, with consultation from Client and for the direct benefit of Client, provide strategic communications, election feasibility and strategic planning services relating to a possible 2018 local revenue measure, benefitting Client. Provider's scope of work in this process will include: A. Strategic Assessment, Research and Communications Planning Services ■ Review relevant background material on Client's needs and goals ■ Coordinate polling research effort with Godbe Research (pollster) - Develop, conduct, analyze, interpret and present results of a public opinion survey of Client's likely voters. ■ Assess Client's existing public communications efforts and provide messaging guidance. ■ Develop a strategy and plan to engage local opinion leaders, stakeholders and community members on City issues - and obtain their input on Client needs and educate them on needs that might be funded through a potential ballot measure. ■ Guide Client in early (preliminary) communications planning and engagement work. ■ Assist with ongoing communications to keep Client leaders informed. ■ Provide ongoing project -related strategic communications counsel as needed. Provider's services do not include legal or financial advice or counsel of any kind. Commencement Date December 21, 2017 Expiration Date March 31, 2018 Compensation $48,000 (Forty -Eight Thousand Dollars) FLAT FEE $500 — Maximum for approved business expenses $48,500 - Total not -to -exceed Budget Clifford Moss LLC. 5111 Telegraph Avenue, No. 307, Oakland, CA. 94609. www.cliffordmoss.com 2. Compensation Payment Schedule. Provider's FLAT FEE of $48,000 (forty-eight thousand dollars) will be payable in (3) three equal payments of $16,000 (sixteen thousand dollars) each, due on January 15, 2018, February 1, 2018 and March 1, 2018 respectively. 3. Provider's Expenses. Provider's expense budget for Phase 1 of this project is $500 (five -hundred dollars). Client shall separately reimburse Provider for Provider's reasonable and necessary expenses (the "Expenses") up to a maximum of $500 (five -hundred dollars) for Phase 1 expenses, including, without limitation, travel (car rental, gas and other related transportation expenses), lodging, meals, teleconferencing, and/or cellular telephone charges; photocopying and faxes; express mail, messenger or delivery service incurred in performing the Services hereunder. Provider shall be reimbursed by Client within thirty (30) days following presentation of Provider's invoice or statement. 4. Vendor Costs and Payments. Subject to prior approval of Client, Provider is authorized to enter into third party contracts on behalf of Client for Client's public information efforts. Payment of vendor for all good, services, and costs shall be Client's sole responsibility, and shall be in addition to the Compensation or any other fees for the Services. Such third party contracts include, without limitation, contracts for printing, paid field and phone calling, graphic artwork, demographic data and voter data, opinion research (polling services), mailing services, and postage. 5. Client's Obligations. At all times while Provider is providing the Services described above or otherwise assisting Client, Client shall promptly provide Provider with access to the facilities, personnel and other resources necessary for Provider to provide the Services. 6. LIMITED WARRANTY; LIMITATION ON LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OTHER PERSON FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR INCIDENTAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS, HOWEVER CAUSED AND BASED ON ANY THEORY OF LIABILITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER OR NOT CUSTOMER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH PARTY'S LIABILITY SHALL BE LIMITED TO THE AMOUNT PAYABLE BY CUSTOMER TO COMPANY UNDER THIS AGREEMENT FOR DELIVERABLES PROVIDED PRIOR TO THE CLAIMS. 2 7. Indemnification. Each party agrees to indemnify, defend and save harmless from all loss, liability, damage, claim, cost or expense (including reasonable attorney fees or court costs) to the extent caused by the actual or alleged infringement of any patent, copyright, trade secret, or other proprietary right arising from or related to any material it furnished to such other party pursuant to this Agreement. Each party agrees to indemnify, defend, and save harmless the other party from all loss, liability, damage, claim, cost or expense (including reasonable attorney fees or court costs) arising from or relating to any personal injury, death, damage to property, or economic loss to the extent caused by the Indemnifying Party's sole negligent act or omission, intentional misconduct, or other breach of duty. In the event both Provider and Client are at fault, indemnification shall be proportionate to their respective shares of fault. In the event neither party is at fault, each party shall bear responsibility for its own losses, expenses and liabilities. 8. Term; Termination. (a) The term of this Agreement shall commence on the Commencement Date and continue through the Expiration Date as those terms are defined in Section 1 (Scope of Agreement) above. (b) Either party may terminate this Agreement with or without cause by sending written notice of termination at least thirty (30) days prior to terminating the Agreement. In the event of termination, Client shall pay the outstanding balance of all fees due to Provider provided by this Agreement within ten (10) days of the termination. (c) The parties may agree to extend this Agreement at any time by mutual written consent. 9. Agreement Is Confidential. Client agrees that Client shall not during, or at any time following termination of Agreement with Provider, disclose or divulge to other parties, the specific terms of this Agreement, except as required by law. 10. Ownership of Work Product. All finished documents and other materials prepared by Provider under this contract shall be jointly owned by Client and Provider. Joint ownership means that either Client or Provider can use documents or materials as needed at their discretion. The only exception to this joint ownership agreement is artistic renderings. Joint future use of such artistic renderings by Client shall be subject to negotiation between Client and the appropriate artist/sub-vendor. 11. Protection of Confidential Information. Provider has and will develop, compile, and own certain proprietary techniques and confidential information and data that have great value in its business (such techniques, and information and data are referred to in this Agreement collectively as "Confidential Information"). Confidential Information includes, without limitation, (a) all information that has or could have commercial value or other utility in the business in which Provider is engaged or in which it contemplates engaging and (b) all information of which the unauthorized disclosure could be detrimental to the interests of Provider, whether or not such information is identified as Confidential Information by Provider. 3 Client shall keep confidential any and all Confidential Information regardless of means of transmission and storage except as required by law. Failure to mark any of the Confidential Information as confidential or proprietary shall not affect its status as Confidential Information under the terms of this Agreement. Client shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information. Without limiting the foregoing, Client shall take at least those measures that Client takes to protect its own most highly confidential information. Client acknowledges that it is impossible to measure fully, in money, the injury that will be caused in the event of a breach or threatened breach of this provision and Provider shall be entitled to injunctive relief to enforce the provisions of this Agreement, without prejudice to any other remedy that such party may have at law or in equity. 12. Late Charges. Provider may charge a late fee of 1.5% per month on any payment due under this Agreement and not paid in full on the date due, and on any balance due and unpaid more than thirty (30) days after presentation of any statement or invoice from Provider. 13. Notice. All notices required or permitted under this Agreement must be in writing and will be deemed given (a) when delivered personally, (b) two (2) days after having been sent by commercial express courier with written verification of receipt, (c) on transmission by facsimile, provided that receipt is confirmed by a report generated the facsimile machine transmitting such notice, or (d) on the earlier of receipt or seven (7) business days after having been sent by U.S. first class mail, return receipt requested, postage prepaid. The delivery address for any such notice shall be: City of Lodi Attention: Steve Schwabauer City Manager, City of Lodi Lodi City Hall, 221 W. Pine Street Lodi, CA 95240 CliffordMoss Attention: Ms. Bonnie Moss Principal 5111 Telegraph Avenue, Suite 307 Oakland, CA 94609 14. Survival. All terms and provisions hereof intended to be observed and performed by the parties after the termination hereof, shall survive such expiration or termination and shall continue thereafter in full force and effect, subject to applicable statutes of limitations. 15. Severability. If a court of competent jurisdiction finds any provision of this Agreement void, illegal, invalid or unenforceable as applied to any person or circumstance, the remainder of this Agreement and the application of such provision to other persons or circumstances shall be interpreted so as best to effect the intent of the parties hereto. The parties further agree to replace any such void, illegal, invalid or unenforceable provision with a valid and enforceable provision that will achieve, to the fullest extent possible, the economic, business, and other purposes of such provision. 4 16. Assignment Prohibited; Binding Effect; No Third Party Rights. No party to this Agreement may assign any right or obligation pursuant to this Agreement. Any attempt to assign such rights or obligations shall be null and void. Notwithstanding the prior limitation, this Agreement shall be binding on and inure to the benefit of the parties hereto, their successors and assigns. This Agreement shall not create any rights or benefits to parties other than Client and Provider. No third party shall have the right to rely on Provider opinions rendered in connection with the Services without the prior written consent of Provider. 17. Governing Law; Venue. This Agreement shall be governed by the laws of the State of California without regard to any conflicts of law doctrine. In any action or proceeding brought to enforce this Agreement or any other claim arising out of or related to this Agreement, the venue shall be San Joaquin County, California, if the action is brought by Client or Alameda County, California, if the action is brought by Provider. Each party waives, to the maximum extent permitted by law, any and all rights, either substantive or procedural, which in any way limit or prevent enforcement of the terms of this Agreement. 18. Entire Understanding; Waiver; Modification. This Agreement constitutes the complete and exclusive statement of the agreement among the parties about the described subject matter. It supersedes all prior written and oral statements, including any prior representation or statement. No waiver or indulgence of any failure to keep or perform any promise or condition of this Agreement shall be a waiver of any preceding or succeeding breach of the same or any other promise or condition. No waiver of any right shall be construed as a waiver of any other right. Neither party shall be required to give notice to enforce strict adherence to all terms of this Agreement. No waiver or modification of any of the terms of this Agreement shall be valid unless in writing, signed by the party to be bound. Provider: CliffordMoss Address: 5111 Telegraph Avenue Suite 307, Oakland CA 94609 By: Bonnie J. Moss, Principal Client: City of Lodi Address: Lodi City Hall, 221 W. Pine Street, Lodi, CA 95240 By: Steve Schwabauer, City Manager Approved as to.form Citv Attorney Date: Date: 5 RESOLUTION NO. 2017-228 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL SERVICES WITH CLIFFORD MOSS, LLC, OF OAKLAND, FOR STRATEGIC COMMUNICATIONS AND ELECTION FEASIBILITY FOR POSSIBLE 2018 REVENUE MEASURE WHEREAS, staff recommends that the City Council authorize the City Manager to execute an Agreement for Professional Services with Clifford Moss, LLC, of Oakland, for strategic communications and election feasibility for possible 2018 Revenue Measure, in an amount not to exceed $48,500. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize the City Manager to execute an Agreement for Professional Services with Clifford Moss, LLC, of Oakland, California, for strategic communications and election feasibility for possible 2018 Revenue Measure, in an amount not to exceed $48,500. Dated: December 20, 2017 hereby certify that Resolution No. 2017-228 was passed and adopted by the City Council of the City of Lodi in a regular meeting held December 20, 2017, by the following vote: AYES: COUNCIL MEMBERS — Chandler, Johnson, Kuehne, and Mounce NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Mayor Nakanishi ABSTAIN: COUNCIL MEMBERS — None 2017-228 NNIFE;T7M. FERRAIOLO ity Clerk