Loading...
HomeMy WebLinkAboutHF&H CONSULTANTS, LLC -2011INSURANCE NOT REQUIRED N-2011-144 WORK MAY PROCEED CLERK OF COUNCIL DATE. OFF,-) 2 2011 CONSULTANT AGREEMENT F M ©?.??ct5c2 THIS AGREEMENT, made and entered into this 2q day of November, 2011 by and Gu??eri1q;etween HF&H Consultants, LLC, a California limited liability company (hereinafter ,,Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The City desires to retain a consultant having special skill and knowledge to review and analyze transfers from the Water Enterprise and services related thereto. B. Consultant represents that Consultant is able and willing to provide such services to the C C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall review and analyze the current procedures regarding the Water Enterprise and attend at least two meetings at the City to meet with staff in this regard. Consultant shall provide options for deriving cost-based transfers and at the conclusion of its review shall provide the City with a comprehensive list for cost-based transfers as set forth in the Proposal dated November 11, 2011 (see Exhibit A attached hereto and incorporated herein). 2. DELIVERY OF WORK PRODUCT -OWNERSHIP Consultant warrants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. Consultant's contribution to the Project, including works to be produced by Consultant hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or party. Consultant shall deliver to City any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with City's information systems, as agreed between the Project Manager and Consultant. In regard to all material produced as a deliverable under this Agreement, including but not limited to records, papers, drawings, specifications, programs, systems and other materials prepared by Consultant, Consultant agrees, for itself and its affected officers, employees, agents, contractors, and volunteer workers, that (a) other such material shall be the property of the City, and may not be copyrighted without prior approval of the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, a royalty-free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. 3. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the charges identified in Exhibit A. The total sum to be expended under this Agreement shall not exceed $10,000.00 during the term of this Agreement. b. Payment by City shall be made within sixty (60) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 4. TERM This Agreement shall commence on the date first written above and terminate on March 1, 2012, unless terminated earlier in accordance with Section 12, below. The term of this Agreement may be extended by a writing executed by the Executive Director of Finance and Management Services and the City Attorney. 5. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 6. INSURANCE Insurance is waived due to the nature of the services provided. 7. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from the direct or indirect operations of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. 8. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources- (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 9. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 10. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: City Clerk City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1 98 8 telefacsimile (714) 647-6956 With courtesy copies to: Finance Department, City of Santa Ana 20 Civic Center Plaza (M-17) P.O. Box 1988 Santa Ana, California 92702 and City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647-6515 To Consultant: HFBzH Consultants, LLC 201 N. Civic Drive Walnut Creek, CA 94596 Phone (925) 977-6950 FAX (925) 977-6955 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 11. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, that terms and conditions hereof, shall not bind or obligate Consultant nor the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 4 12. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City_ 13. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 14. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 15. JURISDICTION -VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 16. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of her inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 17. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forkh in the body 0 f this Agreement. N-2011-144 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: G??----- ? Maria D. Huzar City Clerk CITY OF SANTA ANA C---????/V ?- Paul Walters lnterim City Manager APPROVED AS TO NORM: JOSEPH STR.AKA Interim City Attorney ` _. _ Lisa Storck Assistant City Attorney RECOMMEND FOR APPROVAL: e?me? `tom r-_¦ ? ? . ? -- - Francisco Gutierrez, Executive Directar- Finauce and Management Services Agency CONSULTANT J I ? W. Fanikop T le: TAX ID_ 94-3097242 7 HFBzH CONSULTANTS, LLC Managing Tomorrow's Resources Today 201 North Civic Drive, Suite 230 Walnut Creek, California 94596 Tel: (925)977-6950 Fax: (925)977-6955 hfh-consultants.com November 11, 2011 Mr. Francisco Gutierrez Executive Director of Finance City of Santa Ana 613 E. Broadway, Suite 220 Glendale, CA 91206 Sent via email Subject: Proposal: Review Transfers From the Water Enterprise Dear Mr. Gutierrez: Robert D. Hilton, CMC John W. Farnkopf, PE Laith B. Ezzet, CMC Richard J. Simonson, CMC Marva M. Sheehan, CPA On behalf of HFBsH Consultants, LLC, I am pleased to submit this proposal to conduct a review of the transfers from the Water Enterprise for related services. This proposal describes the project background, our proposed methodology and approach, our qualifications, staffing, and the schedule and budget. I. Background The City has transferred funds from the Water Enterprise to the General Fund that are identified in the budget as "Cross Charges". In particular, within the Miscellaneous Operating Expenses are payments that are described as "in lieu of property taxes, franchise fees, and a return to investors." These payments amount to almost $9 million of the $12.5 million shown being transferred from the Water Enterprise to the General Fund in Figure 1 below. Figure 1 also shows the transfer from the Water Enterprise to the Internal Services Fund. Other transfers are also shown among the other funds within Public Works Administration (PWA). In addition, there is a utility users tax that is assessed to the Water Enterprise. The City was advised by its budget stabilization consultants to review the basis for the Water Enterprise transfers to provide a cost justification. The City's current practice, which is not thoroughly documented, should be updated to address recent legislation, Mr. Francisco Gutierrez November 14, 2011 Page 2 such as Proposition 218, with its substantive provisions, and court decisions, such as the 2004 Roseville decision, which addresses municipal franchise fees. The purpose of the proposed project is to respond to the City's auditors advice. Figure 1. Public Works Enterprise Interfund Transfers FY O!/10 F11VAFYNM GENERAL FUND 6-? _ t ------------------- II. Methodology and Approach We propose the following tasks to evaluate the Water Enterprise transfer. The tasks are structured to evaluate the current transfers and provide options for future funding. Depending on which options are selected by the City, further analysis may be required to quantify the potential additional funding. Task 1. Evaluate Current Conditions. We will collect and review relevant background documentation including the City budget, the City indirect cost allocation plan, the most recent water rate study, and any related fiscal policies. During this review, we will interview key City Staff to confirm our understanding of the City's current combination of transfers. At the end of this task, we will have a revised, more detailed update of Figure 1 plus a matrix showing sources and use of transfers within PWA and between PWA and the General Fund. This table will summarize the current conditions. Task 2. Identify Other Funding Options. After this background review and interview process, we will outline options for deriving cost-based transfers. We expect these options to include funding for (1) right-of-way maintenance, (2) increased funding for public safety (e.g., not only direct funding for specific fire staff but additional funding for both fire and police commensurate with the array of services that are provided by Mr. Francisco Gutierrez November 14, 2011 Page 3 public safety staff that benefit the Water Enterprise by protecting property and personnel), (3) funding for the rental of the corporation yard, as well as well sites at park locations, and other facilities shared by the Water Enterprise(e.g., possibly based on a rate of return and depreciation calculation), and (4) other funding requirements that the Water Enterprise should make in return for benefits received (some of which may already be in place, such as funding for the stormwater program, but that may not currently provide full reimbursement). The City may request an enhancement of scope within the agreement, if necessary, upon mutual agreement (including cost) and within the authority of the City Manager only. At the conclusion of this task, we will produce a comprehensive list of options for cost- based transfers. The list will explain which of the current transfers are appropriate with any recommended refinements and any additional funding that should be provided by the Water Enterprise and establishing an appropriate category or label. Task 3. Present Funding Evaluation. The results of Tasks 1 and 2 will be summarized in a brief technical memorandum for review by City Staff. The report will summarize the current conditions and recommended modifications and additional funding options. Within the scope of this report, it may not be possible to quantify the options that are selected by the City. However, we will present the report to City Staff for review. Any further analytical assistance that is required by the City at that time can be assessed and a scope of services provided. III. Qualifications HFBzH is known to the City from our prior consulting on solid waste projects. The firm also provides water, sewer, and stormwater rate consulting throughout the western United States. In the course of doing rate studies, we carefully evaluate the funding issues discussed in this proposal to establish compliance with Proposition 218's substantive requirements. Since the passage of Proposition 218, I have been active with the League of California Cities regarding interpretations that are consistent with rate-making practices. I have served on League panels with its attorneys and public works officials to explain how rates need to be set to comply with Proposition 218's requirements. I have also worked with one of the State's foremost legal expertsl involving Proposition 218 for various clients. I have also conducted a study of municipal franchise fees in the wake of the RoseviZZe decision. The purpose of that study was to determine the rationale that cities with Reference: Michael Colantuono, Esq., 530-432-7359. Mr. Francisco Gutierrez November 14, 2011 Page 4 municipal franchise fees had for setting their fees. We summarized a statewide survey to help the clientz and assisted in developing a new approach for the city. III. Staffing Assisting me will be Ms. Sima Mostafaei, who works with me on all of our water, sewer, and stormwater rate studies. The qualifications we bring to this study will combine our specific expertise with Proposition 218 and Roseville with direct experience with studies of this type. We also bring our broader experience in rate making, which will enable us understand the overall impact on rates of any similar utility service that could be affected by applying the same approach. In other words, we have the skills needed to not only develop legally defensible approaches, but to also clearly demonstrate the funding and potential rate impacts. IV. Schedule and Budget We understand that time is of the essence. We would be prepared to start upon notice to proceed and would expect to complete the work in 45 days. We propose a budget of $10,000, which includes two meetings at the City by me. The City would be billed on a time-and-expenses basis for services rendered. If additional services are required for subsequent analysis, we can provide a budget estimate for the specific work based on our hourly rates ($210 and $155 per hour for me and Sima, respectively). I hope this proposal addresses your needs. Please do not hesitate to contact me if you have any questions. I appreciate the opportunity to submit this proposal. Very truly yours, HFBsH CONSULTANTS, LLC Ji?hi? W. FarnI?pf ' Senior Vice President ? Reference: Brian Ponty, Finance Director, City of Redwood City, 650-780-7070.