title
AUTHORIZE AWARD OF A 5-YEAR CONTRACT FOR WITH WILLDAN FINANCIAL TO PROVIDE DISTRICT ADMINISTRATION AND REPORTING SERVICES FOR MELLO ROOS AND ASSESSMENT DISTRICTS
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Authorize the City Manager to execute a 5-year contract with Willdan Financial for district administration and reporting services for Mello Roos and Assessment Districts.
2. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.
It is also recommended that the motion authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this motion.
body
Summary
The City currently contracts with Willdan Financial (Willdan) for Mello Roos and Assessment District administration and reporting services. The City released a Request for Proposal (RFP) for those services, and received two proposals. Willdan is the recommended vendor based on expertise, pricing, and the quality of services. If approved, the agreement with Willdan will commence with Council action on June 19, 2018, and continue for five years until June 19, 2023 (Attachment A).
Under this contract, Willdan will provide all the district administration services the City is currently receiving. The anticipated annual cost of the agreement is anticipated to be between $55,000-$65,000 as current districts mature and the City creates new districts.
It is recommended that Council approve a motion to authorize the City Manager to execute a Professional Services Agreement with Willdan.
DISCUSSION
Background
The City formed and manages infrastructure districts commonly referred to as Community Facilities Districts (and other districts referred to as 1915 Act Districts) to finance the construction of facilities necessary to support residential, commercial, and industrial development. The districts issue debt repayable solely through assessments placed on the property tax bills of parcels within the district. These districts, as part of the debt issuance process, are required to report activities on the district and to compile a tax levy each year. They are also required to report annually to the State of California. Willdan, as an administrator specializing in these services, can perform these duties much more economically than the City could do in-house.
Willdan provided district administration and reporting services to the City for the past twenty plus years. They were proficient and cost-effective in the provision of these services. The current contract, in effect since 2009, was written as an evergreen contract, with renewal upon adopted budget. While administratively convenient, contracts that automatically renew do not always ensure the best value for the City and our current practices recommend periodic reviews to ensure the procurement of competitive service and pricing levels.
Present Situation
On April 5, 2018, the City released a Request for Proposals (RFP) for Mello Roos and Assessment District administration and reporting services. The purpose of the RFP was to ensure that these services are provided cost-effectively, and are provided by a highly qualified firm familiar with the legal issues encountered in managing such districts.
The RFP ensured a fair process to solicit competitive proposals. The City informed five firms of the RFP and two responded. Both respondents were able to provide these services, and the City’s review team determined that Willdan was the best value to provide Mello Roos and Assessment District administration and reporting services at a competitive cost to the City.
Some key features of the Willdan proposal include:
1) Experience: while both firms are leaders in this industry, Willdan provides the full scope of work and their proposal met all of the directions for submittal.
2) Willdan has been performing these services for over 20 years and has a greater breadth of in-house experience.
3) Implementation of the contract will not be an issue, as Willdan currently provides these services to Stockton
4) Services under the new contract will be provided at savings of roughly $8,500 annually for the primary services provided, which are administration and reporting.
Findings
SMC section 3.68.070 provides an exception to the competitive bidding process in cases where the City Council has approved findings which support and justify this action.
The following findings support and justify an exception to the competitive bidding process:
1) The City does not have the staff, technology, resources or capacity required to perform district administration and reporting services.
2) Use of the RFP process is appropriate for this agreement because it relies on the evaluation of professional qualifications and performance as the basis for selection of a vendor. Use of these criteria helps ensure selection of a vendor that will provide the highest quality professional service which is in the public interest.
3) The City negotiated the contract following the solicitation of competitive proposals in accordance with SMC section 3.68.070.A.3
FINANCIAL SUMMARY
It is anticipated that annual costs for the contract will fluctuate during the life of the contract falling as some aging districts mature and new ones are added as development continues to come back. With arbitrage reporting, it will fluctuate between roughly $55,000 to $65,000 annually. There is no financial impact on the City as fees paid for services provided by Willdan Financial are reimbursed by the districts being managed.
In the current fiscal year, the City is expected to pay $64,000 for administration and reporting services. Under the new contract, these two primary services are expected to cost $55,000 for the current districts.
Attachment A - Contract with Willdan Financial