02-05-2013 - Joe A. Gonsalves & Son Consultant Agreement - Item SA4 (2).doc City of West Covina
Memorandum
A G E N D A
ITEM NO. SA4
DATE February 5, 2013
TO: Christopher J. Chung, Executive Director
and the Successor Agency of the West Covina
Redevelopment Agency
FROM: Chris Freeland, Community Services Director
SUBJECT: JOE A. GONSALVES & SON CONSULTANT AGREEMENT
RECOMMENDATION:
It is recommended that the City Council, acting as the Successor Agency to the West Covina Redevelopment Agency, authorize the Executive Director to execute the attached agreement with
Joe A. Gonsalves & Son, to provide professional services in the unwinding of the former Redevelopment Agency.
BACKGROUND:
In 2011, the State of California adopted legislation to eliminate local redevelopment agencies as a means to balance the State’s budget by using City finances. The elimination of redevelopment
has significantly impacted our community. The West Covina Redevelopment Agency was the City’s economic engine that helped to create new jobs, transformed blighted properties into new
developments, and promoted the overall fiscal health of the City. The State’s actions took away a vital tool that provided numerous successful projects for the past 40 years. In the
past 10 years, the West Covina Redevelopment Agency created over 5,300 new employment opportunities, over $8 million in new annual revenues to the City, and over $450 million in new
investments in our community. In addition, the West Covina Redevelopment Agency financially assisted over 3,000 affordable housing units. This included over 1,000 new housing units
restricted to affordable housing, 142 down payment assistance to First Time Homebuyers in West Covina, and over 2,000 home improvement loans to West Covina residents to improve the
housing stock of West Covina.
In the aftermath of the elimination of redevelopment, the City of West Covina’s Successor Agency of the West Covina Redevelopment Agency (Successor Agency) has been established to unwind
the operations of the former redevelopment agency, as dictated under the redevelopment elimination legislation (AB 1x26) and the redevelopment trailer bill (AB 1484), which attempted
to resolve matters not addressed in the elimination of redevelopment. AB 1484 also established additional powers and duties of the Department of Finance as the lead agency to monitor
the unwinding of redevelopment agencies.
The unwinding of redevelopment agencies has been much more complicated than what the State of California has expected. Each community in California has unique redevelopment contracts
and agreements, obligations, legal issues, etc. in place that cannot be fairly adjudicated by the Department of Finance. Although an Oversight Board was set up to approve which obligations
are paid, AB 1484 gave the Department of Finance was the ultimate power to determine what is or is not considered an enforceable obligation of the former redevelopment agency. If an
item is not considered an enforceable obligation, then it cannot be paid. One such item is the City Loan to the redevelopment agency in which the Department of Finance has determined
that it is not considered a valid debt.
The Department of Finance has rejected many of the enforceable obligations that effect loan repayments to the respective cities by successor agencies. No cities are required to spend
time and resources in an attempt to persuade the Department of Finance that their former redevelopment contracts and obligations are valid debts. Without the approval of the Department
of Finance, cities may lose millions of dollars that is rightfully the cities. Cities across California are utilizing the services of consultants to assist in navigating through the
bureaucracy of the Department of Finance, participate in the Meet & Confer appeal process, and
to seek legislative relief. The Meet & Confer process allows cities to appeal a denial of an obligation(s) by the Department of Finance.
DISCUSSION:
City staff is seeking the Successor Agency’s approval to retain the services of Joe A. Gonsalves & Son to provide consulting services for the unwinding of the former redevelopment agency.
Former California State Assemblyman and Cerritos Councilmember Joe Gonsalves founded Joe A. Gonsalves & Son in 1975, which provides legislative advocacy for over 50 cities throughout
California. In 1977, Joe’s son Anthony joined the firm after working for the California State Senate for a couple of years. In 2000, Joe Gonsalves passed away and Anthony and his
sons, Jason and Paul have continued the family tradition in Sacramento. Joe A. Gonsalves & Son represents more cities than any other California contract advocacy firm. In the San
Gabriel Valley, they represent Arcadia, Claremont, Diamond Bar, Glendora, Industry, Irwindale, La Puente, Monrovia, Pomona, Rosemead, and Walnut. In addition, they represent the Los
Angeles County Fair (Fairplex), South Coast Air Quality Management District, San Gabriel Valley Water District, and Oak Tree Racing (Santa Anita).
City staff confirmed that Joe A. Gonsalves & Son is highly respected by our local legislators, including Senator Ed Hernandez, Senator Bob Huff, and Assemblyman Curt Hagman. They also
have excellent working relationship with the League of California Cities and the California Contract Cities Association.
Attached is the agreement for the Successor Agency’s consideration (Attachment #1). The agreement requires Joe A. Gonsalves & Son to perform a variety of duties and responsibilities,
including:
Serve as the Successor Agency’s consultant in the unwinding of the former redevelopment agency’s affairs.
Represent the Successor Agency in Sacramento in terms of communicating the Successor Agency’s interests to the appropriate elected representatives, key staff members, state agencies
(i.e. Department of Finance), and other individuals as needed, with emphasis on the Meet & Confer process with the California Department of Finance.
Attend and provide testimony on behalf of the Successor Agency in legislative committee hearings, Meet & Confer meetings, etc.
Develop, coordinate, and execute the Successor Agency’s advocacy efforts, including communication with legislative officials and other governmental officials for the purpose of administrative
action (i.e. Meet & Confer) and legislative proposals.
Develop and maintain good working relationships between the Successor Agency and State legislators, legislative staff, and state agencies.
Review all pertinent legislative bills introduced in the California Legislature and inform the Successor Agency of all such legislation affecting its interest and forward weekly, a copy
of all such bills to the Successor Agency.
Assist in identifying and obtaining state funding available for Successor Agency programs and proposed capital projects.
Obtain support, through letters of support and other means, from state legislators and officials for Successor Agency grant applications.
Provide a monthly written summary during the legislative session and at other times if warranted that gives updates on pending legislation, state budget, and other relevant issues.
Arrange meetings with legislative representatives or key agency staff and Successor Agency representatives.
Provide support, including advising on briefing papers, talking points, etc., when Successor Agency officials are requested to testify before a legislative committee.
Joe A. Gonsalves & Son will also work closely with City staff to preserve the City/Former Redevelopment Agency Loans (Valued at approximately $16 million), secure the sales tax reimbursement
agreement between the City/Former Redevelopment Agency (Valued at approximately $1.5 million/year), and fight to prevent the Department of Finance from any attempt to claw-back approximately
$12 million in legitimate payments from the Former Redevelopment Agency to the City of West Covina, which was done prior to the elimination of redevelopment.
Joe A. Gonsalves & Son was previously under contract with the City of West Covina. Unfortunately, their services were terminated a few years ago as a budget savings measure for the
General Fund. Because of the relationship with the City of West Covina, Joe A. Gonsalves & Son has provided pro bono assistance for the City of West Covina, including participating
in a recent Meet & Confer meeting with the Department of Finance on behalf of the Successor Agency.
OPTIONS:
The City Council has the following options available:
Approve City staff’s recommendation to retain the consultant services of Joe A. Gonsalves & Son;
Instruct City staff to seek applications from other consulting firms;
Take no action and receive and file this report; or
Provide alternative direction.
FISCAL IMPACT:
Per the West Covina Municipal Code (§2-330), professional services are exempt from all formal and informal bidding procedures. The proposed contract has a monthly retainer of $2,500/month
($30,000/year). City staff is proposing that no General Funds be utilized for the consultant services, but rather have it funded as an enforceable obligation of the former redevelopment
agency. AB 1484 allows Successor Agency’s to hire consultants to assist in the unwinding of the operations of the former redevelopment agency. If this item is not approved as an enforceable
obligation by DOF, it will be paid from the administrative allowance of the Successor Agency.
Prepared by: Approved by:
Chris Freeland Thomas Bachman
Community Services Director Assistant City Manager/ Finance Director
Attachment #1 - Agreement for Professional Services Between Joe A. Gonsalves & Son and The West Covina Successor Agency/City Of West Covina