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BACKGROUND ACAP's purpose has been to administer programs and services for low income populations through a variety of public and private funding sources. These programs included housing assistance, jobs training and education, and youth development services. In February 2011, staff of ACAP presented a number of concerns about management of the agency to the ACAP Governing Board. Significant financial and performance issues have given rise to the termination and layoff of ACAP staff. Management Partners Inc. was engaged to manage and implement a close out of ACAP. The general intention is to close out ACAP with a minimum of expense while minimizing the ACAP members' liabilities from various sources such as disallowed grant costs. The JPA was last amended in 1995 and states that the members are liable for repayment of any misspent funds in the event that ACAP is unable to meet those obligations. An Ad Hoc Committee comprised of two city managers and three city attorneys have been guiding this work and the process. All known grant obligations have been or will be closed out by September 30, 2011 or as soon thereafter as practical. Current invoices are being processed and older invoices are being cleared in the system or paid. An audit for 2010 is underway. Management Partners is in the process of identifying a third-party administrator to manage ongoing obligations. A recommendation will be forthcoming for approval by the new ACAP Governing Board DISCUSSION After Management Partners concludes its task and the third party administrator is retained, most of the ongoing obligations will be administrative rather than policy oriented. There are several continuing obligations that ACAP cannot avoid, such as records retention, responding to lawsuits and claims, and paying for disallowed grant costs. At the Interim Executive Director's direction, attorney John Bakker of the Meyers Nave law firm (Mr. Bakker serves as city attorney to the city of Dublin) prepared a JPA amendment that will limit future exposure for member agencies by delineating insurance ACAP must maintain and circumscribing ACAP's role simply to winding up its affairs. Additionally, the JPA amendments will delegate oversight to the County and City Managers of the member agencies rather than the elected officials. It will also delete requirements associated with grant programs and ACAP original purposes, such as the Community Action Board. Specifically, the amendment will: 1. Restructure ACAP's powers to be consistent with its current "wind up" task (see Section I.C). This deletes all program activities and describes ACAP as a caretaker/close out organization. 2. Specifies that by entering into the agreement none of the members are admitting that they were parties to the original JPA. (See Section VI.G). 3. Eliminates the Community Action Board and related actions. Without this change, the Governing Board would be required to continue appointing members to the CAB and for the CAB to hold quarterly meetings. Page 2 of 3