REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 24, 2022
FROM
BOB DUTTON, Assessor-Recorder-County Clerk
SUBJECT
Title
Amendment to Agreement with US Imaging, Inc. for Micrographics, Film Conversion, and Indexing Services
End
RECOMMENDATION(S)
Recommendation
Approve Amendment No. 2 to Agreement No. 19-381 with US Imaging, Inc. for micrographics, film conversion, and indexing services, increasing the agreement amount by $4,220,000, from $4,700,000 to a total agreement amount of $8,920,000, extending the term by two years from June 30, 2022, for a total agreement term of July 1, 2019 through June 30, 2024.
(Presenter: Bob Dutton, Assessor-Recorder-County Clerk, 382-3254)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost) as the amendment amount will be funded by revenue in the Assessor-Recorder-County Clerk Department’s (ARC) Modernization (3110002340), Vital Records (3110002342), Social Security Truncation (3110002348), and Restrictive Covenant Modification Program (3110002349) Special Revenue Funds. These funds receive revenue generated by fees charged for recording documents and issuing vital records. The estimated total cost for this amendment is not to exceed $4,220,000, with projected annual expenditures as follows:
|
Fund |
Cost Center |
2022-23 |
2023-24 |
|
Modernization |
3110002340 |
$465,000 |
$535,000 |
|
Vital Records |
3110002342 |
$45,000 |
$45,000 |
|
Social Security Truncation |
3110002348 |
$700,000 |
$700,000 |
|
Restrictive Covenant Modification Program |
3110002349 |
$805,000 |
$925,000 |
|
Total |
$2,015,000 |
$2,205,000 |
The recommended amendment to Agreement No. 19-381 would increase the original agreement amount of $4,700,000 by $4,220,000, bringing the total agreement amount to $8,920,000. Sufficient appropriation and revenue will be included in ARC’s 2022-23 and 2023-24 recommended budgets.
The Restrictive Covenant Modification Program Special Revenue Fund (3110002349) was established in response to approval of Assembly Bill No. 1466 (AB 1466). This bill authorized Recorders to recover a $2 recording fee on all property recordings pursuant to Government Code Section 27388.2(a) to defray reasonable regulatory costs for performing inspections and audits mandated by the State of California (State) to implement a program to remove unlawful and discriminatory covenants from records. The two-dollar fee will be charged, effective July 1, 2022, for recording the first page of every real estate instrument, paper, or notice required or permitted by law to be recorded per each single transaction per parcel of real property, unless otherwise exempted by State law. This fee may be collected through December 31, 2027, unless reauthorized.
The Recorder-County Clerk’s Office projects that the Restrictive Covenant Modification Program Special Revenue Fund should receive approximately $805,000 in Fiscal Year 2022-23 and $925,000 in Fiscal Year 2023-24 in revenue to remove unlawful restrictive covenants from previously recorded documents. The initial scope of this project includes investigating, redacting, processing, and indexing type-written land records from 1853 through 1968. The estimated total cost for this initial phase is approximately $2.6 million. This amount will be spread over multiple fiscal years dependent upon the amount of projected revenue expected in future years for this fund.
BACKGROUND INFORMATION
The Recorder-County Clerk Division of ARC is responsible for the recording and safeguarding of any document that is authorized or required by statute or court order to be recorded. This division is also responsible for the issuance of birth, death, and marriage certificates. The Recorder-County Clerk’s Office must maintain accurate index information on microfilm/fiche and create digital images of these records. The recommended amendment includes three types of work:
1. Micrographics - Conversion of scanned images to microfilm for preservation of permanent County records.
2. Film Conversion - Creates digital images from microfiche and film.
3. Indexing - Identifies fields to be used to retrieve images of recorded documents.
The recommended amendment would enable the Recorder-County Clerk’s Office to meet government mandates by continuing to receive micrographics, film conversion, and indexing services from US Imaging, Inc. for an additional two years, during the period of July 1, 2022, through June 30, 2024, to scan current recordable documents and begin the process of removing unlawful restrictive covenants from previously recorded documents.
On June 11, 2019 (Item No. 14), the Board of Supervisors (Board) approved Agreement No. 19-381 with US Imaging, Inc. to provide micrographics, film conversion, and indexing services from July 1, 2019 through June 30, 2022, with one two-year option to extend the term of the agreement, in an amount not to exceed $1,500,000. The original agreement amount was based on the estimated daily volume of scanning current recordable documents.
On June 2, 2020 (Item No. 12), the Board approved Amendment No. 1 to Agreement No. 19-381 increasing the original agreement amount of $1,500,000 by $3,200,000, bringing the total agreement amount to $4,700,000. After going-live with a new recording system called Horizon in September 2019, Recorder-County Clerk staff discovered that images of some documents transferred from their old system to the new system were either incomplete or missing. The previous system used by the Recorder-County Clerk had inherent flaws and images were stored in a different software format. Until conversion to Horizon, the missing or incomplete images were not identifiable unless a particular record was requested. Staff also realized that documents back to 1853 required scanning in order to provide access to them at each office location where customers do research. Recorder-County Clerk staff are now able to efficiently access their documents and provide copies to the public when requested as a result of the film conversion and indexing of these images and ingestion into Horizon.
On September 28, 2021, the Governor of California approved AB 1466. This bill requires all Recorders in California to establish a regulatory inspection and audit program to identify and redact unlawfully restrictive covenants, and make regular audit reports to the State legislature. Residential racial segregation was enforced throughout the United States (U.S.), including California, by a combination of government policies and judicially enforced private agreements. One mechanism used to maintain residential segregation was the “racially restrictive covenant,” an agreement prohibiting the homeowner from selling or renting the property to members of a specific race, ethnic, or religious background. In 1948, the U.S. Supreme Court held that state court enforcement of racially restrictive property covenants violated the due process and equal protection clauses of the 14th Amendment of the U.S. Constitution (Shelley v. Kramer, 334 U.S. 1; Hurd v. Hodge, 334 U.S. 24). While this ruling made such covenants unenforceable, subsequent State legislation made racial discrimination in housing accommodations, including the use of exclusionary covenants, unlawful. Although, originally targeting racial discrimination, these laws have subsequently been amended to include discrimination on other grounds, such as gender, religion, and sexual orientation, among others (Government Code Section 12955). Despite their unlawfulness and unenforceability, offensive exclusionary restrictions still appear in existing covenants, conditions, and restrictions that are transferred from property sellers to buyers, unless the restrictions have been previously stricken, modified, or re-recorded.
As mandated by Government Code Section 12956.3, the Recorder-County Clerk’s Office, in coordination with the County Counsel’s Office, will begin to search through historic recorded documents in San Bernardino County to provide historic investigations, inspections, and audit services to remove unlawful restrictive covenants. The Recorder-County Clerk’s Office must report on the status of this project each year to the County Recorders Association of California (CRAC). CRAC is required to submit reports to the State Legislature by January 1, 2023, and January 1, 2025, on the progress of each county’s restrictive covenant program.
PROCUREMENT
On June 11, 2019 (Item No. 14), as the result of a successful competitive process, the Board approved Agreement No. 19-381 with US Imaging, Inc. for micrographics, film conversion, and indexing services in an amount not to exceed $1,500,000 for a three-year period of July 1, 2019 through June 30, 2022, with one two-year option to extend the term of the agreement. On June 2, 2020 (Item No. 12), the Board approved Amendment No. 1 to Agreement No. 19-381 increasing the original agreement amount of $1,500,000 by $3,200,000, bringing the total not-to-exceed amount to $4,700,00; all other terms of the agreement remained unchanged.
County Policy 11-04 requires departments to obtain Board approval of services over $200,000 annually.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Kaleigh Ragon, Deputy County Counsel, 387-5455) on April 20, 2022; Purchasing (Bruce Cole, Supervising Buyer, 387-2418) on April 28, 2022; Risk Management (Victor Tordesillas, Director, 386-8621) on May 2, 2022; Finance (Carl Lofton, Finance Analyst, 387-5404) on May 9, 2022; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on May 9, 2022.