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HomeMy WebLinkAboutItem 4.3 Settlement Agreement ACTEB CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: July 8, 1991 SUBJECT: Alameda County Training and Employment Board/ Associated Community Action Program (ACTEB/ACAP) Proposed Settlement Agreement (Prepared by: Paul S. Rankin, Assistant City Manager) EXHIBITS ATTACHED: 1 . Letter dated June 27, 1991 from Robert Bloom, ACTEB/ACAP 2. Resolution Authorizing Mayor to Execute Proposed Settlement Agreement on Behalf of the City of Dublin RECOMMENDATION: Adopt Resolution. FINANCIAL STATEMENT: The Settlement Agreement provides for resolution of outstanding issues without any financial contribution. DESCRIPTION: In 1984, the City of Dublin became a signatory to the Joint Powers Agreement (JPA) , which established ACTEB/ACAP. The primary purpose of the JPA was to develop an organization, which could oversee Federal Job Training and Employment Training within Alameda County. This was primarily the area addressed by ACTEB. The division referred to as ACAP was originally established to address federal programs operated as the "war against poverty" under the Economic Opportunity Act. The original membership included Alameda County and all cities with the exception of the City of Oakland. Councilmember Moffatt *has been the City of Dublin representative on the ACTEB/ACAP Board of Directors. In 1990, the Governor took action to designate the Alameda County Board of Supervisors as the Chief Elected Official for Job Training Partnership Act (JTPA) Programs. This eliminated ACTEB/ACAP's role with administering JTPA programs. The action by the Governor was the State's response to a dispute between the City of Berkeley and the remaining members of ACTEB/ACAP. Alameda County has developed a structure to administer these programs. Among the tasks necessary to bring about the dissolution of ACTEB/ACAP was a final resolution to pending litigation with the Federal Department of Labor. At a meeting on June 26, 1991 , the ACTEB/ACAP Board was presented with a settlement agreement proposing a final resolution to outstanding issues with the U. S. Department of Labor. (DOL) The Board approved the forwarding of the agreement to each of the member agencies for action by their governing boards. As a practical matter, the settlement agreement provides for the release of ACTEB/ACAP from owing monies to the DOL, pursuant to any previous legal actions. In addition, ACTEB/ACAP agrees to discontinue efforts to pursue financial claims against DOL. These disputes were attributable to claims under programs prior to the City joining ACTEB/ACAP. Section III of the JPA identifies that the City of Dublin would have been excluded from liability for any funds misspent under CETA or CSBG, unless the City chose to contribute towards the obligation of ACTEB/ACAP. Given that the final settlement does not require any financial contribution, this issue is moot. ---------------------------------------------------------------------- COPIES TO: ITEM NO. 41# 600 - /-/Q The settlement agreement also contains several procedural obligations for ACTEB/ACAP. For example, the JPA shall cease its objections to the redesignation of the Alameda County Board of Supervisors as the "Chief Elected Official" for JTPA programs. Also, the agreement contains a one year prohibition against all twelve members reconstituting a successor organization to provide JTPA programs. Future actions will also be necessary to complete the dissolution of ACTEB. Staff recommends that the City Council adopt the resolution authorizing the Mayor to execute the settlement agreement. If there are specific questions related to ACTEB/ACAP services or operations, .Councilmember Moffatt may be able to respond. a:s78acteb.doc.agenda#5 f CAlameda County Training and Employment Board IA ACTEB/ACAP _I_ 0 =-= Associated Community Action Program Governing June 27, 19 91 Board Robert E.Nichols Chairman Mayor Kay Peck Albany City of Dublin Edward Campbell P. O. Box 2340 Vice-Chairperson Dublin, CA 94568 Supervisor Alameda County SUBJECT: Request to Place Action Item on City Council Agenda; "Lil"Arnerich Settlement Agreement on ACTEB/ACAP Audit Findings Vice-Mayor Alameda with the U.S. Department of Labor Bill Ball Dear City Clerk: Mayor Fremont At the direction of the members of Alameda County Training and Robert Glaze Vice-Mayor Employment Board and Associated Community Action Program San Leandro (ACTEB/ACAP) Governing Board at its June 26, 1991 meeting I am requesting that a special action item be placed on the agenda Matt Jimenez of our City Council as soon as is possible. Time is of the Councilman Y Y P Hayward essence and Governing Board members recognized that many Tom Kitayama Councils have fewer meetings scheduled for July. Your Mayor assistance to expedite this action is requested. Union City Paul Moffatt A two-step process is now to take place that will have the Councilman effect of disbanding the ACTEB joint powers agreement, Dublin settling all outstanding audit disallowances from the earlier Karin Mohr Period when ACTEB administered the federal Comprehensive Councilwoman Employment and Training Act (CETA) program, and maintain the Pleasanton ACAP entity as a stand-alone joint powers agency. This Skip Rhodes request is for action on the first step, specifically to agree Mayor to an overall ACTEB debt settlement with the U.S. Department Piedmont of Labor. In the immediate future, a followup action will be Neil Riley requested of the cities and count tC G L .1 ciaily disband Councilman ACTEB, yet maintain ACAP. Livermore Robert Savage Attached please find the following two items for your Vice-Mayor assistance: Emeryville Shirley D.Sisk 1. The June 27, 1991 letter from the ACTEB/ACAP Councilwoman Newark attorney, Ms. Elaine Wallace, which outlines a chronologic approach to be taken by ACTEB/ ACAP members. Again, only item number one is Robert L.Bloom requested of you at this time. Executive Director 1 Ay a if 22225 Foothill Boulevard, Hayward, California 94541 • (415) 670-5700 2 . The June 25, 1991 letter from the Solicitor's Office of the U.S. Department of Labor, which includes the finalized text of the joint ACTEB/DOL negotiated settlement agreement. In summary, the agreement provides: - Termination of DOL's debt collection efforts on all old CETA audit dis- allowances (totaling $293 ,790. 00 plus accrued interest) . - Dissolution of the ACTEB joint powers agency. - Prohibition against reconstitution of ACTEB, or any successor organization with 12 or more former members, for one year from execution of this agreement. Termination of an ACTEB-initiated claim to DOL for unpaid CETA administrative costs (totaling $542 ,732. 39, plus accrued interest) . - Restitution to DOL of an ACTEB-maintained old CETA account with $1,204 . 38 plus in- terest contained therein. Cessation of ACTEB's objections to the redesignation actions which have led to Alameda County now serving as the Job Training Partnership Act service de- livery area for all of Alameda County, aside from Oakland. Agreement that both DOL and ACTEB will bear their own fees and expenses regard- ing all these proceedings. DOL agrees to release its legal expense claim of $216. 00 from the recent ACTEB vs. DOL appeal to the federal Ninth Circuit Court. - Agreement that ACTEB will not further appeal or contest the two decisions of the Ninth Circuit Court. - This agreement shall be the basis to dismiss or withdraw all pending matters with prejudice. 2 The net effect of this settlement is a "win-win" situation where ACTEB is relieved of any possible cash pay-back obligation (along with member governments) and DOL sees a dissolution of the ACTEB entity with which DOL has been forced to contest various audit issues and service delivery area designation actions. This latter outcome where ACTEB dissolves, is certainly acceptable to the Governing Board insofar as the various appeals were not successful, for the immediate time period Alameda County is the recognized administrator for the federal Job Training Partnership Act program, and ACTEB has no basis for current existence. Any new interests on governance structures for the future can now start anew. The settlement of various financial amounts due to one another is, in fact, the hoped-for and requested ability to use "offsets" rather than cash as the means to settle the debts. The DOL acceptance of such an approach has been sought for the last seven years. As a closing note, ACTEB's experience under the Job Training Partnership Act program has been exemplary in terms of having no disallowed costs. The final audits for the ACTEB will now also be concluded and there will likely be no costs due to the Department of Labor based on JTPA disallowances. ACTEB can close down after sixteen years with no remaining liabilities and no adverse experiences that required financial contributions from the member governments. The requested action, therefore, is to schedule City Council action to approve this "Settlement Agreement" , and specifically to authorize your mayor to sign said agreement. Should you have need for additional information or assistance feel free to contact Ms. Wallace at 530-9616, or Mr. Jack Summerfield of this office, at 670-5777. Thank you in advance for your assistance. Sincerely, Robert L. Bloom RLB:se cc: Mayor Governing Board member Elaine Wallace Robert Nichols 3 RESOLUTION NO. - 91 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *************************** AUTHORIZING THE MAYOR TO EXECUTE A SETTLEMENT AGREEMENT BETWEEN THE U. S. DEPARTMENT OF LABOR (DOL) AND THE ALAMEDA COUNTY TRAINING AND EMPLOYMENT BOARD (ACTEB) WHEREAS, ACTEB was created by a Joint Powers Agreement (JPA) dated September 1 , 1983; and WHEREAS, the City of Dublin became a member of ACTEB through execution of the JPA; and WHEREAS, there have been certain disputes between DOL and ACTEB; and WHEREAS, ACTEB and DOL desire to settle these matters without the necessity of additional litigation; and WHEREAS, the existing JPA identifies that the City of Dublin is not liable for any funds misspent under CETA or CSBG; and WHEREAS, the settlement does not require any financial contribution from the City of Dublin. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby authorize the Mayor to execute the attached Settlement Agreement (Exhibit A) by reference incorporated herein. PASSED, APPROVED AND ADOPTED this 8th day of July, 1991 . AYES : NOES: ABSENT: Mayor ATTEST: City Clerk a:resoacte.doc.agenda#5 JU I I �. SETTLEMENT AGREEMENT THIS AGREEMENT is entered into between the U. S . Department of Labor ( "Department") , as represented by the Director, Office of Grants and Contracts Management, the United States, as represented by the United States Attorney, and the Alameda County Training and Employment Board ("ACTEB") , as represented by the Executive Director of that agency. WHEREAS , the Department and ACTEB entered into various grant agreements, under the authority of the Comprehensive Employment and Training Act ( "CETA") , 29 U. S .C. § 801 et sea. , as amended, which with any and all amendments, changes, and modifications hereto are hereinafter referred to as "the Grants" ; AND WHEREAS, ACTEB, as presently constituted, consists of 13 units of local government organized as a consortium: Alameda County, and the cities of Alameda, Albany, Dublin, Emeryville , Fremont, Hayward, Livermore, Newark, Piedmont, Pleasanton, San Leandro and Union City; AND WHEREAS , the City of Berkeley withdrew from ACTEB as of April 6 , 1990 ; AND WHEREAS , the Grant Officer, pursuant to various audit reports examining these Grants, has issued Final Determinations and sought to collect disallowed costs under these Grants ; AND WHEREAS , ACTEB has appealed these determinations of the Department; LAMBIT A - 2 - AND WHEREAS , the matters to be resolved herein include the following four debts totalling $293 , 790. 00 , plus accrued interest: a. Pursuant to Audit Report No. 09-80-C-041-01 , the Regional Grant Officer in San Francisco issued a Final Determination which disallowed costs incurred under the various grants audited. 1) ACTEB appealed the Final Determination to the Office of Administrative Law Judges ("OALJs") and the case was docketed as Case No. 81-CTA-63 . The Administrative Law Judge ( "ALJ" ) affirmed judgment for the Department in the amount of $134 , 117 . 60 . Payments and credits reduced the amount in dispute to $85 , 592 . 60 . ACTEB appealed to the U.S . Court of Appeals for the Ninth Circuit and judgment was entered for the Department. Alameda County Training and Employment Board v. Donovan, 743 F. 2d 1267 (9th Cir. 1984) . 2) ' On November 25, 1987 , the U.S . District Court for the Northern District of California entered summary judgment for the United States on the Department ' s debt collection action in the sum of $85 , 592 . 60 principal plus accrued interest. United States of America v. Alameda County Training and Employment Board, Case No. C-86-6390 JPV. b. Pursuant to Audit Report Nos. 09-80-C-041-P1 and 09-82-C-041-P1 , the Regional Grant Officer issued two Final Determinations which disallowed costs incurred under the various grants audited. - 3 - 1) In the first case, ACTEB appealed this matter to the OALJs and this case was docketed as Case No. 83-CTA-62 . On August 25 , 1988 , the ALJ issued a Decision and order -affirming the determination of the Regional Grant Officer that the amount of $153 , 939 . 69 was due and owing to the Department. The Secretary declined to review ACTEB' s appeal and the ALJ ' s Decision and Order became the final agency action of the Department. 2) In the second case, ACTEB also appealed the Final Determination to the OALJs and the case was docketed as Case No. 83-CTA-208 . On April 6, 1989 , the ALJ issued a Decision and Order affirming the determination of the Regional Grant Officer and finding that the Grant Officer properly disallowed $27 , 181 . 00. ACTEB did not appeal the decision and, thus , the debt of $27 , 181. 00 became the final decision of the Secretary of Labor, and due and owing to the United States . 3) On September 27 , 1990, the U.S . District Court for the Northern District of California entered summary judgment for the United States in the sum of $183 , 068 . 79 principal plus accrued interest. United States of America v. Alameda County Training and Employment Board, Case No. C-89-3074 JPV. This matter is now on appeal to the United States Court of Appeals for the Ninth Circuit in United States of America v. Alameda County Training and Employment Board, Case No. 90-16476 (9th Cir. ) . - 4 - C. Pursuant to Audit Report No. 09-81-C-041-01 , the Regional Grant Officer issued a Final Determination which disallowed costs incurred under the various grants . 1) ACTEB appealed the Final Determination to the OALJs and the case was docketed as Case No. 82-CTA-267 . This matter is now pending in the OALJs and the amount in issue is $ 27 , 078 . 00 . AND WHEREAS , ACTEB has filed a claim with the Department for $542 , 732 . 39 for previously unclaimed indirect costs to which ACTEB alleges it is entitled under CETA. Said claim has been denied by the Grant Officer and ACTEB has appealed this denial to the OALJs and the case has been docketed as 90-CTA-3 . AND WHEREAS , ACTEB and the Department desire to settle these matters without the necessity of additional litigation; THEREFORE, the parties hereby stipulate and agree as follows : 1 . ACTEB stipulates that it has no non-federal assets , other than as set forth below in paragraph 6 , except for miscellaneous equipment and office furniture. Said miscellaneous equipment and furniture will be turned over to the successor Job Training Partnership Act grantee in the geographical area formerly occupied by ACTEB. 2 . The United States Attorney for the Northern District of California, the U. S . Department of Labor and the Department ' s attorney have reviewed these matters and have determined that, - 5 - consistent with law and policy, it is in the best interest of the Government to terminate debt collection action against ACTEB on the above noted four debts totalling $293 , 790. 00 plus accrued interest. 3 . The members of ACTEB will dissolve the consortium in accordance with the State of California Joint Powers Act within 90 days of the execution of this Agreement. Such dissolution will be effectuated by the approval of the full governing board of ACTEB as well as the consent of each members ' City Council or County Board of Supervisors. Each member of ACTEB shall agree to abide by the terms of the agreement set forth herein. 4 . The members of ACTEB further agree that they will not, for a period of one year from the date of execution of this agreement, , reconstitute ACTEB or form any successor organization to ACTEB for purposes of administering Federally funded employment and training programs. This provision shall be construed so as to prohibit the formation of any successor organization which includes twelve or more former members of ACTEB. 5 . ACTEB agrees, on behalf of all of its members, and each member individually agrees, to release and waive its late claim for $542 , 732 . 39 (plus accrued interest, if any) which was filed with the Department on September 23 , 1983 . - 6 - 6 . ACTEB agrees to turn over to the Department all funds which it currently holds in a "CETA" bank account totalling approximately $1204 . 38 , plus interest. 7 . ACTEB agrees that it will not commence and will cease all litigation and appeals contesting, objecting to or in any other manner disputing the designation or redesignation of a grantee under the Job Training Partnership Act, 29 U. S . C. § 1501 et sea. , for the geographical area formerly administered by ACTEB for the time remaining in Program Year 1990 and 1991 . This includes , but is not limited to, appeals to the U. S . Department of Labor, Federal District Court and to the U.S . Court of Appeals . 8 . Each party hereby agrees to bear its own fees and other expenses , including attorney fees, incurred by such party in connection with any. stage of these proceedings, including negotiating this settlement. The Department also agrees to release its claim for $216 . 00 in fees and expenses incurred in Alameda County Training and Employment Board v. Secretary of Labor, Case No. 91-70252 . 9 . ACTEB agrees that it will not appeal , nor further contest in any manner, the two cases which the United States Court of Appeals for the Ninth Circuit has decided against it, in Alameda County Training and Employment Board v. Secretary of Labor, Case Nos . 90-70537 and 91-70252 . - 7 - 10 . This Settlement Agreement shall be the basis upon which the parties shall seek dismissal or withdrawal of all of the above noted matters with prejudice. DATED: ELAINE WALLACE Attorney for the Alameda County Employment and Training Board DATED: ROBERT BLOOM Executive Director Alameda County Employment and Training Board DATED: MARY KING President, Board of Supervisors County of Alameda DATED: WILLIAM WITHROW Mayor, City of Alameda DATED: THELMA RUBIN Mayor, City of Albany DATED: PETER SNYDER Mayor, City of Dublin DATED: GREG HARPER Mayor, City of Emeryville DATED: WILLIAM BALL Mayor, City of Fremont DATED : MICHAEL SWEENEY Mayor, City of Hayward DATED: CATHIE BROWN Mayor, City of Livermore DATED: DAVE SMITH Mayor, City of Newark DATED: SKIP RHODES Mayor, City of Piedmont DATED: KENNETH MERCER Mayor, City of Pleasanton DATED: DAVE KARP Mayor, City of San Leandro DATED: TOM KITAYAMA Mayor, City of Union City DATED: RONALD PETERSON Assistant United States Attcrnev - 9 - DATED: EDWARD A. TOMCHICK Director, Office of Grants and Contracts Management U.S . Department of Labor DATED: VINCENT C. COSTANTINO Attorney for the U. S . Department of Labor Office of the Solicitor