REPORT TO THE CITY COUNCIL FROM: GEORGEANNE A. WHITE, City Manager Office of Mayor & City Manager BY: GREGORY A. BARFIELD, Assistant City Manger Office of Mayor & City Manager ALMA G. TORRES, Deputy City Manager Office of Mayor & City Manager SUBJECT ..Title Approve an agreement between the City of Fresno and Fresno Humane Animal Services to provide animal control services in the amount not to exceed $ 6,500,000 for a 14-month term beginning May 12, 2022 through June 30, 2023. ..Body RECOMMENDATION Staff recommends that the City Council approve the terms of the Agreement between the City of Fresno and Fresno Humane Animal Services (FHAS) for a 14-month term in an amount not to exceed $6,500,000 and authorize the City Manager to execute subject to City Attorney approval. EXECUTIVE SUMMARY The Central California Society for the Prevention of Cruelty to Animals (CCSPCA) has notified the City that effective June 30, 2022 it will no longer provide all animal control, pound master, veterinary and animal sheltering services, and facilities pursuant to a contract entered into in March 2014. As a result, the City requests approval from Council to enter into a 14-month contract with Fresno Humane Animal Services (FHAS) to provide these legally mandated services. BACKGROUND The Central California Society for the Prevention of Cruelty to Animals (CCSPCA), has provided all animal control, pound master, veterinary and sheltering services, facilities and related activities authorized and required by applicable law including California Food and Agriculture Code sections 31105, 31106, California Penal Code section 597f and Fresno Municipal Code sections 10-301 to 10-329 to the City of Fresno (City). The CCSPCA has previously notified the City of their desire to discontinue services as they transition to a new business model. In response to this notice, the City has been in the process of constructing a new animal shelter facility and construction was finalized in April of 2022. On March 24, 2022 Council approved the Fifth Amendment to the Agreement with the CCSPCA, at which time the CCSPCA also notified the City that no additional extensions to the agreement would be provided and all services and contractual relationships would end on June 30, 2022. In April of 2019 the City published a Request for Qualifications (RFQ) for Animal Control Services and in June 2019, the only respondent to this RFQ was Fresno Humane Animal Services (FHAS). Fresno Humane Animal Services was formed in 2015 for the specific purpose of providing animal control and shelter services to Fresno County. Since then, FHAS has had a positive relationship working with the County of Fresno and in 2019 the County Board of Supervisors approved the execution of an agreement with FHAS thru December 31, 2029. The extension of the agreement with the County of Fresno provides the City the backing and confidence that aside from the unique qualifications that FHAS has, which includes the appropriate community contacts and partnerships, they also possess the breadth of knowledge to effectively operate an Animal Control Shelter of the magnitude required by the City. The proposed agreement is for a 14-month term during which time, the current best practices will be implemented as part of the operations with the input and oversight of animal shelter experts including the UC Davis Koret Animal Shelter Program and Best Friends Animal Society. These best practices are intended to decrease euthanasia rates in the community and provide the best outcomes for animals. Due to the new model of operations, FHAS has agreed to this 14-month term to allow FHAS and the City to collect data that will more accurately account for the costs of operations reflective of the new site and best practices protocols that will differ from historic approaches to animal control. FHAS has actively participated in the development of the City's animal shelter and is willing to provide their animal shelter operational expertise on an actual cost reimbursement basis until sufficient data exists that aligns best operating practices with actual costs for a full comprehensive contract. This non-traditional approach will ensure that the City and FHAS work through the anticipated obstacles of transition, including the current labor availability constraints and supply chain shortages, while also allowing the City to build the internal infrastructure for these services intended to ascertain that those proven outcomes are established in future contracts with maximum transparency and accountability. This contract would also allow the expert partners to provide additional support and training to FHAS through the embedding of qualified staffing in the field of animal control services. Additionally, this actual cost reimbursement approach ensures that it satisfies the requirements of the IRS Revenue Procedure 2017-13 applicable to the Use of Safe Harbor for Management Contracts due to the sites bond funding. The terms of the agreement would continue to ensure that the City, through Fresno Humane will continue to provide the legally mandated services of 1) Licensing of dogs, 2) Vaccination requirements, 3) Animals at large, 4) Reporting of dog bites, 5) Recordkeeping. The methodology for the compensation was based on the current contract with the CCSPA of $5,571,000 annually or $464,250 monthly. This monthly amount was applied to 14-months and a compensation of up to $6,500,000 is being recommended for approval for the services to be provided during this timeframe. Staff will return to Council to provide a workshop six to eight months after the initial operation begins to provide updates on the outcomes of the operations and financial status. ENVIRONMENTAL FINDINGS This is not a project under California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378. LOCAL PREFERENCE Fresno Humane is considered local pursuant to Fresno Municipal Code Sec. 4-109. FISCAL IMPACT The FY 2022 Adopted Budget includes sufficient appropriations to fund the first two months of services, funding for the remaining months will be included in the annual approval of the FY2023 Budget. Attachment: Agreement