03 - Laserfiche WebLink

THE CITY OF ell j�LEAS�4NTONm CITY COUNCIL AGENDA REPORT 03 May 17, 2011 May 3, 2011 City Manager/Law TITLE: CITY CONTRIBUTION TO WIND-DOWN ASSOCIATED COMMUNITY ACTION PROGRAM (ACAP) SUMMARY The serious fiscal management problems of the Associated Community Action Program (ACAP) now necessitate that member entities, of which Pleasanton is one, provide financial assistance to pay off ACAP's obligations and wind-down the agency. The status of the wind-down was discussed with the ACAP Board and recommended by a subcommittee appointed by the board and consisting of two member city managers and their city attorneys. The ACAP Board provided direction to Management Partners, a consultant firm utilizing the services of a retired city manager from our area, Richard Ambrose, to proceed with the wind-down plan; and the subcommittee of city managers and city attorneys confirmed the plan and the associated amounts. RECOMMENDATION That the City Council approve an additional allocation of $121,539 toward the wind- down of the Associated Community Action Program, and authorize the City Manager to make payments for documented expenses as they are invoiced. FINANCIAL STATEMENT Management Partners has estimated that the preliminary estimated cost to wind-down ACAP's affairs, which includes the payment of back wages to former employees, is approximately $1,280,000. The member agencies have requested that Management Partners also provide an estimate for costs that the member agencies might be required to bear related to potential liabilities that will not be known until after the close-out process. Management Partners has provided a rough estimate of $600,000 for such potential liabilities. These two components result in a total preliminary estimate of $1,880,000. It is possible that this amount may be reduced by the proceeds of the disposal of ACAP's assets and outstanding grant claims from ACAP, if such grant claims are paid by the grant funders. The funding for the City's portion of this obligation estimated to be $121,539 will come from the City's Self Insurance Fund.