HomeMy WebLinkAboutURBAN FUTURES, INC._ E ON FILc
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DATE.
�(� AGREEMENT WITH URBAN FUTURES, INC.
0: -fin f,, t ro) i e je a 2 TO PROVIDE PENSION/OPEB ANALYSIS
AND FINANCIAL MODELING SERVICES
THIS AGREEMENT is made and entered into on this 9'1' day of December, 2019 by and between
Urban Futures, Inc., a California corporation ("Consultant"), and the City of Santa Ana, a charter
i city and municipal corporation organized and existing under the Constitution and laws of the State
w of California ("City").
0
CM RECITALS
N
O
A. The City desires to retain a Consultant having special skill and knowledge in the field of
services to California cities to provide pension & OPEB modeling/analysis and financial
modeling services.
B. Consultant represents that it is able and willing to provide such services to the City.
C. In undertaking the performance of this Agreement, Consultant represents that it is
knowledgeable in its field and that any services performed by Consultant under this
Agreement will be performed in compliance with such standards as may reasonably be
expected from a professional consulting firm in the field.
NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the
teens and conditions hereinafter set forth, the parties agree as follows:
1. SCOPE OF SERVICES
Consultant shall perform during the term of this Agreement, the tasks and obligations
including all labor, materials, tools, equipment, and incidental customary work required to fully
and adequately complete the services described and set forth in the proposal identifies as Exhibit
A, attached hereto and incorporated by reference. City requires Consultant to complete Phase I
(modeling/evaluation of funding strategies) of the pension finding analysis. Pork on Phases 2
and 3 shall be optional at the discretion of the City to commence per the terms of this Agreement.
2. COMPENSATION
a. City agrees to pay, and Consultant agrees to accept as total payment for its services for
City, the rates and charges identified in Exhibit A. The total amount to be expended
during the term of this Agreement shall not exceed SM,000.
b. Payment by City shall be made within forty-five (45) days following receipt of proper
invoice evidencing work performed, subject to City accounting procedures. Payment
need not be made for work which fails to meet the standards of performance set forth
in the Recitals which may reasonably be expected by City.
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3. TERM
This Agreement shall commence on the date first written above for a two (2) year term
with the option for the City to grant up to a one (I) -year renewal, exercisable by a writing by the
City Manager and the City Attorney, unless terminated earlier in accordance with Section 15,
below.
4. INDEPENDENT CONTRACTOR
Consultant shall, during the entire term of this Agreement, be construed to be an
independent Consultant and not an employee of the City. This Agreement is not intended nor shall
it be construed to create an employer -employee relationship, a joint venture relationship, or to
allow the City to exercise discretion or control over the professional manner in which Consultant
performs the services which are the subject matter of this Agreement; however, the services to be
provided by Consultant shall be provided in a manner consistent with all applicable standards and
regulations governing such services. Consultant shall pay all salaries and wages, employer's social
security taxes, unemployment insurance and similar taxes relating to employees and shall be
responsible for all applicable withholding taxes.
S. OWNERSHIP OF MATERIALS
This Agreement creates a non-exclusive and perpetual license for City to copy, use,
modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property
embodied in plans, specifications, studies, drawings, estimates, and other documents or works of
authorship fixed in any tangible medium of expression, including but not limited to, physical
drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or
caused to be prepared by Consultant under this Agreement ("Documents & Data'). Consultant
shall require all subcontractors to agree in writing that City is granted a non-exclusive and
perpetual license for any Documents & Data the subcontractor prepares under this Agreement.
Consultant represents and warrants that Consultant has the legal right to license any and all
Documents & Data. Consultant makes no such representation and warranty in regard to
Documents & Data which were provided to Consultant by the City. City shall not be limited in
any way in its use of the Documents and Data at any time, provided that any such use not within
the purposes intended by this Agreement shall be at City's sole risk,
6. INSURANCE
Prior to undertaking performance of work under this Agreement, Consultant shalt maintain
and shall require its subcontractors, if any,'to obtain and maintain insurance as described below:
a. Commercial General Liability Insurance. Consultant shall maintain commercial
general liability insurance naming the City, its officers, employees, agents,
volunteers and representatives as additional insured(s) and shall include, but not be
limited to protection against claims arising from bodily and personal injury,
including death resulting therefrom and damage to property, resulting from any act
or occurrence arising out of Contractor's operations in the performance of this
Agreement, including, without limitation, acts involving vehicles. The amounts of
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insurance shall be not less than the following: single limit coverage applying to
bodily and personal injury, including death resulting therefrom, and property
damage, in the total amount of $1,000,000 per occurrence, with $2,000,000 in the
aggregate. Such insurance shall (a) name the City, its officers, employees, agents,
and representatives as additional insured(s); (b) be primary and not contributory
with respect to insurance or self-insurance programs maintained by the City; and
(c) contain standard separation of insureds provisions.
b. Business automobile liability insurance, orequivalent form, with a combined single
limit of not less than $1,000,000 per occurrence. Stich insurance shall include
coverage for owned, hired and non -owned automobiles.
C. Worker's Compensation Insurance. In accordance with the provisions of Section
3700 of the Labor Code, Contractor, if Consultant has any employees, is required
to be insured against liability for worker's compensation or to undertake self.
insurance. Prior to commencing the performance of the work under this
Agreement, Consultant agrees to obtain and maintain any employer's liability
insurance with limits not less than $1,000,000 per accident.
d. If Consultant is or employs a licensed professional such as an architect or engineer:
Professional liability (errors and omissions) insurance, with a combined single limit
of not less than $1,000,000 per claim with $2,000,000 in the aggregate.
e, The following requirements apply to the insurance to be provided by Consultant
Pursuant to this section;
i. Consultant shall maintain all insurance required above in full force and
effect for the entire period covered by this Agreement.
K. Certificates of insurance shall be ftirnished to the City upon execution of
this Agreement and shall be approved by the City.
ui. Certificates and policies shall state that the policies shall not be canceled or
reduced in coverage or changed in any other material aspect without thirty
(30) days prior written notice to the City.
iv. Where the amounts or coverage provided by the certificates of insurance
provides coverage greater than those listed by this Agreement, the amounts
provided by the certificates of insurance shall be incorporated by reference
into the Agreement.
V. Consultant shall supply City with a fully executed additional insured
endorsement.
If Consultant fails ar refuses to produce or maintain the insurance required by this
section or fails or refuses to furnish the City with required proof that insurance has
been procured and is in force slid paid for, the City shall have the right, at the City's
election, to forthwith terminate this Agreement. Such termination shall not affect
Contractor's right to be paid for its time and materials expended prior to notification
of termination. Consultant waives the right to receive compensation and agrees to
indemnify the City for any work perforated prior to approval of insurance by the
City.
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INDEMNIFICATION
Consultant agrees to defend, and shall indemnify and hold harmless the City, its officers,
agents, employees, contractors, special counsel, and representatives from liability: (1) for personal
injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for
personal injury, including death, and claims for property damage, which may arise from the
negligent operations of the Contractor, its subcontractors, agents, employees, or other persons
acting on its behalf which relates to the services described in section 1 of this Agreement; and (2)
from any claim that personal injury, damages, just compensation, restitution, judicial or equitable
relief is due by reason of the terms of or effects arising from this Agreement, This indemnity and
(told harmless agreement applies to all claims for damages, just compensation, restitution, judicial
or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in
this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant
further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including
fees and costs for special counsel to be selected by the City, regarding any action by a third party
challenging the validity of this Agreement, or asserting that personal injury, damages, just
compensation, restitution, judicial or equitable relief due to personal or property rights arises by
reason of the terms of, or effects arising from this Agreement. City may make all reasonable
decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing,
to the extent Contractor's services are subject to Civil Code Section 2792.8, the above indemnity
shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of,
pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor.
8. INTELLECTUAL PROPERTY INDEMNIFICATION
Consultant shall defend and indemnify the City, its officers, agents, representatives, and
employees against any and all liability, including costs, for infringement of any United States'
letters patent, trademark, or copyright infringement, including costs, contained in the work product
or documents provided by Consultant to the City pursuant to this Agreement.
9. RECORDS
Consultant shall keep records and invoices in connection with the work, to be performed
under this Agreement, Consultant shall maintain complete and accurate records with respect to
the costs incurred under this Agreement and any services, expenditures, and disbursements
charged to the City for a minimum period of three (3) years, or for any longer period required by
law, from the date of final payment to Consultant under this Agreement. All such records and
invoices shall -be clearly identifiable. Consultant shall allow a representative of the City to
examine, audit, and make transcripts or copies of such records and any other documents created
pursuant to this Agreement during regular business hours, Consultant shall allow inspection of all
work, data, documents, proceedings, and activities related to this Agreement for a period of three
(3) years from the date of final payment to. Consultant under this Agreement
10. CONFIDENTIALITY
If Consultant receives from the City information which due to the nature of such
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information is reasonably understood to be confidential and/or proprietary, Consultant agrees that
it shall not use or disclose such information except in the performance of this Agreement, and
further agrees to exercise the same degree of care it uses to protect its own information of like
importance, but in no event less than reasonable care, "Confidential Information" shall include all
nonpublic information, Confidential information includes not only written information, but also
information transferred orally, visually, electronically, or by other means. Confidential
information disclosed to either party by any subsidiary and/or agent of the other party is covered
by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any
information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the
Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant
without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e)
is independently developed by the Consultant without reference to information disclosed by the
City,
11, CONFLICT OF INTEREST CLAUSE
Consultant covenants that it presently has no interests and shall not have interests, direct
or indirect, which would conflict in any manner with performance of services specified under this
Agreement,
12. NON-DISCRIMINATION
Provider shall not discriminate because of race, color, creed, religion, sex, marital status,
sexual orientation, gender identity, gender expression, gentler, medical conditions, genetic
information, or military and veteran status, age, national origin, ancestry, or disability, as defined
and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization,
promotion, termination or other employment related activities or any services provided under this
Agreement. Provider affirms that it is an equal opportunity employer and shall comply with all
applicable federal, state and local laws and regulations,
13. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement between the City and
Contractor, and supersedes any and all other agreements, oral or written, between the parties. In
the event of a conflict between the terms of this Agreement and any attachments hereto, the terms
of this Agreement shall prevail, This Agreement may not be modified except by written instrument
signed by the City and by an authorized representative of Contractor. The parties agree that any
terms or conditions of any purchase order or other instrument that are inconsistent with, or in
addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the City. Each
party to this Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any
party, which is not embodied herein.
14, ASSIGNMENT
Inasmuch as this Agreement is intended to secure the specialized services of Contractor,
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Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior
written consent of the City and any such assignment, transfer, delegation or subcontract without
the City's prior written consent shall be considered null and void. Nothing in this Agreement shall
be construed to limit the City's ability to have any of the services which are the subject to this
Agreement performed by City personnel or by other Contractors retained by City.
15. TERMINATION
This Agreement may be terminated by the City upon thirty (30) days written notice of
termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant
compensation for all services performed by Consultant prior to receipt of such notice of
termination, subject to the following conditions:
a. As a condition of such payment, the Executive Director may require Consultant to
deliver to the City all work product(s) completed as of such date, and in such case
such work product shall be the property of the City unless prohibited by law, and
Consultant consents to the City's use thereof for such purposes as the City deems
appropriate-
b. payment need not be made for work which fails to meet the standard of
performance specified in the Recitals of this Agreement.
16, WAIVER.
No waiver of breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this Agreement shall be effective unless it is in writing and signed by
the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or
remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not
similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies.
17, JURISDICTION -VENUE
This Agreement has been executed and delivered in the State of California and the validity,
interpretation, performance, and enforcement of any of the clauses of this Agreement shall be
determined slid governed by the laws of the State of California. Both parties further agree that
Orange County, California, shall be the venue for any action or proceeding that may be brought or
arise out of, in connection with or by reason of this Agreement.
18. PROVE SSIONAL LICENSES
Consultant shall, throughout the term of this Agreement, maintain all necessary licenses,
permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder
and required by the laws and regulations of the United States, the State of California, the City of
Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and
in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and
exemptions. Said inability shall be cause for termination of this Agreement.
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19. NOTICE
Any notice, tender, demand, delivery, or other communication pursuant to this Agreement
shall be in writing and shall be deemed to be properly given if delivered in person or mailed by
first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in
the manner provided in this Section, to the following persons:
To City:
Clerk of the City Council
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O, Box 1988
Santa Ana, CA 92702-1988
Fax: 714- 647-6956
With courtesy copies to:
Executive Director,
Finance and Management Services Agency
City of Santa Ana
20 Civic Center Plaza (M-17)
P.O. Box 1988
Santa Ana, California 92702
Fax:714-647-5414
To Contractor:
Urban Futures, Inc.
Michael P. Busch, CEO
3111 North Tustin, Suite 230
Orange, CA 92865
Fax:714-283-5464
A party may change its address by giving notice in writing to the other party. Thereafter,
any cdmmunication shall be addressed and transmitted to the new address. If sent by mail,
communication shall be effective or deemed to have been given three (3) days after it has been
deposited in the United States mail, duly registered or certified, with postage prepaid, and
addressed as set forth above. If sent by fax, communication shall be effective or deemed to have
been given twenty-four (24) hours after the time set forth on the transmission report issued by the
transmitting facsimile machine, addressed as set forth above. For purposes of calculating these
time frames, weekends, federal, state, County or City holidays shall be excluded,
20. MISCELLANEOUS PROVISIONS
a. Each undersigned represents and warrants that its signature herein below has the
power, authority and right to bind their respective parties to each of the terms of
this Agreement, and shall indemnify City fully, including reasonable costs and
Page 7 of 8
Exhibit A
URBAN FUTURES I .Financial Solutions
August 22, 2019
Kathryn Downs
Finance Director
Clty of Santa Ana
20 ClAcCenter Plaza
Santa Ana, CA 91789
RE: Pension & OPEB Modeling/Analysis & Financial Modeling Services
Dear Kathryn,
Thank you for reaching out to me conveying an interest in our Pension/OPEB Analysis Services, Urban
Futures, Inc. (UFI) Is a full -service financial advisory firm that provide a broad spectrum of services to
California cities, water agencies, special districts, schools and non -profits.
UFI develops comprehensive solutions and recommendations, tailored to your individual needs. our
services Include feasibility analysis, financial alternative analysis, financial forecasts, pension/OPEB
modeling, bond financing, reinvestment of bond proceeds, post -sale compliance and arbitrage rebate
services.
UFI is at the forefront of pension and OPEB Issues In California, We create customized pension models
based on CaIPERS actuarial data (amortization bases), which enables agencies to determine the financial
impact of different solutions with accuracy. We can integrate the financial cash flows from the
Pension/OPEB model Into your financial forecasting model.
We befleve our staff has a unique combination of qualifications and experience, which enables us to
provide our clients unparalleled finoncial advice and creative financial solutions.
We will assist staff With analysis and decision -making relating to the City's pension/OPEB liability. Our
goal Is to serve as an extension of staff. The focus of our initial engagement will be on addressing the
City's retirement costs, which will be comprised of four integrated and successive phases:
1. Develop a pension/OPEB model.
2. Analyze and recommend financial solutions to help address your pension/OPEB liabilities
3, Facilitate City Council and Committee Review Process
4. Assist the Cityin Implementing and executing the financial solutions
f , YSI5&.MODELING
1. CALPE $ UAL pCNStON +OREBANA4
UFI takes a comprehensive perspective of the City's financial position, we will review the City's major
financial documents, including the annual Comprehensive Annual Financial Reports (CAFRs), annual
budgets, Capital Improvement Plan (CIP), labor agreements (MOUs), and bond, loan and capital lease
documents. In developing potential financial solutions and recommendations, we will examine all the
City's major long-term financial obligations, including:
• UAL + Norma I Costs
Urban Futures, Inc. ■ 17a211T^Street, Sulte245 • 7ustln, CA 92790
Telephone: (714) 283.9354 • www.urbanfutureslnc,com 0 Fax; (714)283.9319
CITY OF SANTA ANA— Pension/OPEB Analysis & Financing Solutions
OPEB
• Debt Service on existing bonds
• Capital Improvement Plan (CIP)
• Projected Salary and Rate Increases
We will commence the analytical by work building a customized pension model that Incorporates the
City'$ current Amortization Bases: 18 Miscellaneous Plan& 17 Safety Plan, The model corresponds solely
to the UAL for the 110 Tier "Classic." plan —since the predominant portion of the UAL is concentrated in the
1" Tier.
The City's FY 19.20 UAL for the I" Tier Plans are equal to $635 million:
• $275 million for Miscellaneous Plan —18 Amortizatlon Bases
• $360 million Safety Plan-17 Amortization bases
UFI will create an amortization schedule for each Amortization Base for each
plan. These schedules serve as the foundation of the pension model, which
enables the City to perform scenario analysis and determine the optimal
solution for the use of Additional Discretionary Payments (ADPs) to COWERS,
We will incorporate 3 funding solutions In the pension/OPEB model: 1)
synthetic/soft fresh start, 2) tax-exempt exchange, and 3) Pension Obligation
Bonds (POBs). This Information will serve as the baseline for the scenario
analysis phase of the engagement.
OPEB
U,pfuffr(gra9yFfuad iabilily
The city has an unfunded
Ilablllty of $635 million — 69%
The Clty's annual UAL payments
are scheduled to Increase from
$44 million In FY 19-20to $65
million In F120$0-al.
These Payments are In addition,
to the OtVs Normal costs, which
are based an a percentage of
payroll =19%(Mlac.) & 23%
(Safety).
The City only pays the PEMCHA minimum, currently $133 per month to is retirees as a retiree medical
benefit, which significantly reduces the City's OPEB liability. Nonetheless, the City has 481 retirees and
502 active employees who are eligible forthis benefit, resulting In a $54.6 million OPEB liability,
We will incorporate the projected "pay -go" retiree medical premiums into our financial retirement costs
projections. Moreover, we will work with the City to identify potential OPEBfundingstrategies,
Our projections will take Into account all of the City's significant financial obligations, collectively. We
can integrate the cash flows from our pension/OPEB models Into your existing forecasting/rate model or
help you to refine or develop a long-term financial planning model.
Once the model is developed and data is analyzed, we will hold an In -person meeting to present basic
findings and discuss potential financial solutions to City staff,
After our initial meeting with City staff, using data outputs from the customized pension model to analyze
the Impact of different options to address these liabilities, we seek to obtain feedback regarding the most
viable financial solutions, UPI will refine these financial solutions, perform scenario analyses, and develop
specific recommendations, We will present Our recommendations In a PowerPoint presentation to the
(UUF I
CITY OF SANTA ANA— Pension/QPEB Analysis & Financing Solutions
City's Management, Economic Development, Infrastructure, Budget and Technology Committee, and City
Council.
We believe that addressing rising retirement costs will be the most significant financial Issue that most
municipal employees and elected officials will face in their careers, This problem Is complex and
Involves many financial and legal/administrativeintricacies. We have found that this issue requires a
significant education process before buy -in can be achieved for a recommended solution. UFI believes
that this education process is so critical that we highlighted it as a key step in the proposal,
Conducting City Council workshop is often the best initial step toward the implementation of financial
solutions. UFI can conduct a Council Workshop; 1) to explain the pension/OPEB liabilities and 2) to
present potential solutions to addressing these costs as well implementation requirements. Wefindthat
conducting one-on-one or "2-2.1" meetings before the Council Workshop provides an ideal setting for
Council to learn, ask key questions, and formulate opinions. Perhaps of greater Importance, these "pre -
sessions" provide staff with a clearer picture of council leanings regarding potential solutions.
We anticipate that the City Council wail request that the Economic Development, Infrastructure, Budget
and Technology Committee convene and provide a recommendation to the City Council, We will be
availableto make presentationsto this Committee to further facilitate the approval process.
4t. IMPLEMENTATION OF a AND RHOMMENDATIONS
UFi will work with the City staff to provide specific and detailed recommendations regarding addressing
Its retirement costs and needed steps to maintain or improve Its financial position. We anticipate that
the City will select more than orle financial solution.
UFI will he available to assist the City In implementing each selected strategy;
• UFI can assist with the issuance of bonds to facilitate tax-exempt exchange
UFI can help the City select the Amortization Base to provide optimal savings, If you make
additional discretionary payments (ADPs)
e UFI can review/refine the investment strategy for monles held in a 115 Trust
Moreover, UFI wilt actively monitor the City's retirement Ilabillty; and will provide follow-up service on an
as -needed basis.
MoirCt TEAM
We have assigned three of outmost senior staff to your project. Collectively, we have over 50 years of
combined executive -level government and public finance experience, including financial forecast
modeling, capital project financing, fiscal sustainability, strategies and restructurings, pension (and QPEB)
analytics and management, and pension obligations bands.
CITY OF SANTA ANA— Pension/OPEB Analysis & Financing Solutions
We have helped cities, water agencies, and specials districts complete hundreds of capital project
financings, explained complex fiscal and analytic concepts to elected officials, and gained the trust and
respect of numerous councils and boards. More Importantly, all ourwork, findings and recommendations
are tailored to our client's financial needs and objectives.
I will be the engagement manager and Julio Morales will be the day-to-day contact. H will develop the
pension model, perform requested analytics. Between the two of us, we shall be available to attend all
meetings and presentations. The two other members listed below, comprise our Pension Tearn, who may
assist on various tasks and shall be available to attend meetings or Board Presentation In the event of
unforeseen scheduling conflicts.
The team will be available to serve the City of Santa Ana and meet with City staff and board as requested.
Below arothe biographies end relevant experience of the proposed members of the team for this project,
Michael Busch, President & CEO
17821 East 171h Street, Suite 245,t
Tustin, CA 92780
(714) 293-61S0
m( eib urba future inc c
Michael will have overall responsibility for delivery of all our services to the City, including project
oversight and coordination of services to the City.
Michael Busch Is the firm owner and serves as the Chief Executive Officer managing day-to-day
operations. Prior to joining U FI, Michael served several Southern California public agencies as an Assistant
and Deputy City Manager and Chief Financial Officer. He Is a registered financial advisor with over $2
billion In tax-exempt debt transactions for municipalities and local governments over the Inst 12-years.
Michael utilizes his experience in the areas of municipal finance and management to assist client agencies
with the successful development and implementation of fiscal restructuring, forecasting, capital planning
and debt management.
Michael earned a Bachelor of Arts Degree from California State Polytechnic University Pomona in Urban
and Regional Planning. In addition, he holds a Master of Arts Degree in Public Administration from
California State University Long Beach with an emphasis In public finance and public works.
Julio F. Morales, Managing Director
17821 East 17th Street, Suite 245,
Tustin, CA 92780';,.2c
(7141283-9334 office / (626) 298-9583 cell
Juliom @urbarrfuturesinc,cum
Julio has over twenty-five years of working in the areas of public and corporate finance, city management,
municipal budgeting and financial leadership. He served as the City Manager forthe City of Huntington
Park; having also served at its Finance Director and Treasurer. In both roles Julio helped Implement
changes and improvements that led to the elimination of a $4.0 million (1SYS) structural deficit. He also
served as the Finance Director and Treasurer for the City of El Monte, Most recently, Julio worked for the
Department of the Treasury's Office of Technical Assistance (OTA), providing financial advice to the
Treasurerof Paraguay and helping to streamline and automate their operations. Julio began his career in
CFI
CITY OF SANTA ANA— Pension/OPEB Analysis & Financing Solutions
public and corporate finance as a financial advisor at PFM, an Investment banker with Bank of America,
derivative/ investment providerfor Transamerica, and debt manager for the City of Oakland.
Julio earned his undergraduate degree from the University of Michigan, a Master of Public Policy (MPP)
from the Harvard Kennedy School of Government, and an MBA from UCLA, where he was a Dean's
Fellowship Recipient.
James P. Morris, Managing Director
17821 East 1711 Street, Suite 245,
Tustin, CA 92780
(909) 648.3176;
m rAqnfAWLesine.c 9m
Jim will have primary responsibility for the performance of our Public Management Group team, ensuring
comprehensive data collection, thorough analytics, and actionable recommendations. He has overtwenty
years of experience working in the fields of financial analysis, m unicippl law and public agency governance.
Jim utilizes his diverse background and expertise In local government to assist cities and special districts
in the areas of long-term forecasting, fiscal stabilization and financial sustainability planning.
His recent engagements Include preparing fiscal forecasts for Pomona, Beaumont and various municipal
utilities, conducting program evaluation services in Pasadena, and developing specialized fiscal models for
utilities in Azusa, Needles and Pomona, Jim began his professional career as a public law attorney with
Best Best & Krieger LLP, where he served as General Counsel for Western Municipal Water District and
Victor Valley Wastewater Reclamation Authority. Jim is a graduate of Dartmouth College, and received
both hisJuris Doctorate and Master's In Urban Planningfrom UCLA,
Tim Frydendall, Analyst
17821 East 17rh Street, Suite 245,
Tustin, CA 92780
(714)293-3586
tlmoth ur n r
Tim will assist Julio and Jim on quantitative analytics, research, preparing presentation material, and
additional administrative needs throughout the project.
Tim has two years of experience working in public accounting as an auditor at Vasquez & Co. LLP. His
recent engagements at UFI include financial analysis and administrative duties for charter schools located
In California, Arizona, Louisiana, Nevada, and New York. He has also participated in compliance reporting
for UF1's municipal, charter school and water agency clients. Tim attended Loyola University, Chicago and
received a bachelor's degree In Accounting from California State University, Long Beach.
aiii;ENT PENIe7N fiPf6A6liN1l!lfItTS
We encourage you to contact any of our recent pension and financial modeling clients listed below to
discuss their experience and satisfaction with UFI. Included as Exhibit A Is a listing of past and current
pension and modeling clients, Below are references for agencies where UFI is In the process of or recently
completed financial modeling and forecast services that Involved substantial analysis, evaluation and
recommendations, Additionally, we have included references for an agency where UFI is completing an
engagement Involving the presentation of strategic alternatives for management of the agency's pension
liabilities in alignment with the Its financial objectives,
UFI
CITY OF SANTA ANA — Pansion/OPEB Analysis & Financing Solutions
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City of Glendora — The City of Glendora hired UFI, after a competitive RFP
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process, to develop a pension model to help them determine the size of
City of Glendora
their UAL to pre -pay, and to execute a pension Obligation Bond,
June Overholt
Additionally, the finance director requested that UFI develop a financial
Finance Director
forecasting model that incorporates the cash flaws from to pension/OPEB
1626)457,1800
model. The financial forecasting model Is intended to be used with the City
Jverholt@cLglendora.ca.us
Council to prioritize /designate the use of additional revenues expected to
be generated from their newly passed.75 cent sales tax measure.
City of Simi Valley —The City of SIMI Valley Issued an RFP for pension/OPEB
modeling and financial advisory services. UFI was selected among severalEsaabr!te@s1mIvslIey,org
i valley
firms, via competitive RFP process, to help the City evaluate and Implementbnte
various financial solutions to their rising retirement costs, The engagementnager
commenced on March 18".
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valley.org
Rowland Water District - UFI has developed a pension model, includes 14
individual amortization schedules and well as pay-gocostprojectiansforthe
Rowland Water DiStrict
District's retiree medical costs, to address the District's outstanding $4.4
Tom Coleman
million COWERS liability and $3.6 million retiree medical (OPEB) liability,
General Manager
Elements of theponslon/OPEBmodel are expected tobeIntegrated Into the
(818)898-7a07
District's existing rate model. We will evaluate potential financial solutions,
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Including the use of tax-exempt exchange and synthetic Fresh Start; and
assist the District In the implementation of these solutions.
City of San Fernando - The City of San Fernando Issued an RFP for --
pension/OPEB modeling and financial advisory services. UFI was selected City of San Fernando
among several firms, via competitive RFP process, to help the City evaluate INick Kimball
and Implement various financial solutions to their rising retirement costs. City Manager
UF) has developed their pension model and has commenced the analysis and (818) 898-7307
alternatives phase of the assignment. The City of San Fernando is ono of 22 nldmbaa@sfdty,org
agencies in California that have a voter -approved pension override tax;
therefore, addressing theirOPEB liabilities is expected to be a significant focus,
City of Desert Hat Springs - UFI prepared a long-term financial forecast for
the City in 2017. The City also requested UFI present to the City a special
report explaining the CaIPERS retirement system to the City Council and the
Impacts associated with the city's current and projected pension costs. UFI
has developed a pension model for the City and written a recommendation
for the pre -payment of $1 million of their UAL to CaiPERS.
SGVCOG — U FI was hired by the San Gabriel Valley Council of Governments
"SGVCOG" to help them model their future retirement costs, including
Potential alternatives to CaIPERS such as 401(a), PARS, as well as exiting the
CAPERS system (I.e., termination). We developed a customized model,
driven by individual employee data (salaries), to estimate termination
payments to CaIPERS using different discount rates.
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Desert H7SPrIngsCtiucic MaynaCity Manager
(760) 329-64citymarager rg
San Gabriel Valley
Council of Governments
Marisa crater
Executive Director
(626)457-2800
mcreder@sgvcog,org
CITY OF SANTA ANA — Pension/OPEB Analysis & Financing Solutions
UFl is will rig and prepared to refine, modify and tailor our tasks and work product to meet the City's needs
and financial parameters. For purposes of generally estimating costs associated with the work described
herein, the following are estimates based on a three-phase approach to work completed in recent
engagements. We believe the phase can be Individually approved if preferred by the City.
Phase One; $15,000
1. Baseline Pension & OPEB Model - We charge a base rate to develop the pension model of $10,000
(Pension & OPEB Model). The baseline pension model can be developed in as little as 1-2 weeks. In
order to keep costs down, we typically request that your OPEB actuary provide pay -go costs schedules
(I.e., projected retiree medical premiums) to incorporate Into our model, Incorporating OPEB cash
flows will depend on the responsiveness/avallability of pay -go projections from your actuary.
2. Scenario Analysis / Presentations & Meetings -Once the baseline model is complete, we charge on
a time and materials basis for the costs of running different scenarios, performing additional analysis,
developingfrnaking presentations, and attending meetings, This ensures that you receive the level of
service and analysis thatyou require. Typically, these hourly fees are In the $5,000 range.
Phase Two: $5,000
3. City Council and Committee Review Process - once staff has developed a recommend plan of
solutions, we will be available to facilitate the education and review with the Budget and Pension
Committee and City Council. We anticipate that the initial plan approval process may require 3-5
meetings, plus additional subsequent meetings for the implementation of selected solutions. We
charge on a time and materials basis for the costs of developing/making presentations, performing
requested analysis, and attending meetings. These fees are also in the $5,000 range.
Phase Three: $S,000-$10,000
k. Implementation of Financing Solutions - Assistance with the implementation of proposed solutions
and/or additional services will he addressed In an addendum to this agreement. Depending on the
City's needs, the pension data can be Integrated Into a Financial PlanningiForecasting Model.
Implementation of solutions such a Fresh Start or Synthetic Fresh Start (make additional payments to
CaIPERS) will be billed on an hourly basis. The hourly costs for these services are expected to fall
between $5,000—$10,000, depending on the number and complexity ofthe proposed solution(s),
if the City decides to issue securities (tax-exempt exchange or P08s), such fees will be determined
under a separate contract.
Hourly kATR$
Due to variables In every engagement and to ensure Santa Ana maintains flexibllity to tallor the
work to fit within the City's time and fiscal constraints, UN proposes to carry out its work on an
actual time and materials basis with the overall costs being governed by the ffnandai llmits defined
by the City, utilizing the following professional service rate schedule:
"e' UFI
CITY OF SANTA ANA— Penslon/OPEB Analysis & Financing Solutions
UFl Professional Staff
Hourly Rates
Chief Executive Officer
$350
Managing Director
$325
Associate
$275
These rates will remain constant through July 30, 2020 and are subject to change thereafter. Costs for
telephone, e-mail and facsimile expenses, postage and incidental photocopying are included within the
above noted rate schedule. The rate schedule does not include Out-of-pocket and travel expenses that
may be incurred during the work. Out-of-pocket expenses include Inter -regional travel, project specific
services or data from third -party vendors (prior approval required), or extraordinary or specifically
requested materials, supplies, printing, or electronic data storage, All out-of-pocket expenses will be
charged based on an actual cost.
CONCLllSIpN
LIN Is wel I-equ Ipped to provide the City of Santa Ana with the highest level of service at the lowest possible
cost, Two of ourfirm's most important values are; a COMMITMENT to serving our clients with integrity,
honesty, and mindfulness of the public Interest; and a dedication to RESULTS —delivery of service that is
an time, within budget, and at a level that exceeds the expectations of the client.
We are enthusiastic about the opportunity to work with you and the city staff. If you have any questions,
please do not hesitate to contact me at (714) 923-3541 Work or (714) 316-6150 Cell, or
J»�_V_gi;UajJlturesinc com.
Sincerely,
Michael Busch
President & CEO
Urban Futures, Inc,
CITY OF SANTA ANA — Penslon/oPEB Analysis & Financing Solutions
Exhibit A: Past and Current Pension/ Modeling Clients
Pension Modeling, POBs & Financial Forecasting
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attorney's fees, for any injuries or damages to City in the event that such authority
or power is not, in fact, held by the signatory or is withdrawn.
b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully
set forth in the body of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first
above written.
O)aisy Gomez
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
Lisa Storck
Assistant City Attorney
RECOMMENDED FOR APPROVAL:
Kathryn Downs, CPA
Executive Director
Finance and Management Services Agency
CITY OF SANTA ANA
me Ridge
City Manager
CONSULTANT:
"ichael ch
Chief Executive Officer
Page 8 of 8
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