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Management Partners - 2016 Agreement for FinanceAGREEMENT FOR SERVICES (For contracts over $5,000 - CONSULTANT) This AGREEMENT made this 9 day of lt, - , 20 1-7 , between: CITY: City of Gilroy, having a principal place of business at 7351 Rosanna Street, Gilroy, California and CONSULTANT: Management Partners, Inc. , having a principal place of business at 2107 N. First Street, Suite 470, San Jose, CA 95131. ARTICLE 1. TERM OF AGREEMENT This Agreement will become effective on December 16, 2016 and will continue in effect through June 30, 2017 unless terminated in accordance with the provisions of Article 7 of this Agreement. Any lapse in insurance coverage as required by Article 5, Section D of this Agreemen shall terminate this Agreement regardless of any other provision stated herein. Initial ARTICLE 2. INDEPENDENT CONTRACTOR STATUS It is the express intention of the parties that CONSULTANT is an independent contractor and not an employee, agent, joint venturer or partner of CITY. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between CITY and CONSULTANT or any employee or agent of CONSULTANT. Both parties acknowledge that CONSULTANT is not an employee for state or federal tax purposes. CONSULTANT shall not be entitled to any of the rights or benefits afforded to CITY'S employees, including, without limitation, disability or unemployment insurance, workers' compensation, medical insurance, sick leave, retirement benefits or any other employment benefits. CONSULTANT shall retain the right to perform services for others during the term of this Agreement. ARTICLE 3. SERVICES TO BE PERFORMED BY CONSULTANT A. Specific Services CONSULTANT agrees to: Perform the services as outlined in Exhibit "A" ( "Specific Provisions ") and Exhibit "B" ( "Scope of Services "), within the time periods described in Exhibit "C" ( "Milestone Schedule "). B. Method of Performing Services CONSULTANT shall determine the method, details and means of performing the above - described services. CITY shall have no right to, and shall not, control the manner or determine the method of accomplishing CONSULTANT'S services. 4835- 2267 -03610 LAC104706083 C. Employment of Assistants CONSULTANT may, at the CONSULTANT'S own expense, employ such assistants as CONSULTANT deems necessary to perform the services required of CONSULTANT by this Agreement, subject to the prohibition against assignment and subcontracting contained in Article 5 below. CITY may not control, direct, or supervise CONSULTANT'S assistants in the performance of those services. CONSULTANT assumes full and sole responsibility for the payment of all compensation and expenses of these assistants and for all state and federal income tax, unemployment insurance, Social Security, disability insurance and other applicable withholding. D. Place of Work CONSULTANT shall perform the services required by this Agreement at any place or location and at such times as CONSULTANT shall determine is necessary to properly and timely perform CONSULTANT'S services. ARTICLE 4. COMPENSATION A. Consideration In consideration for the services to be performed by CONSULTANT, CITY agrees to pay CONSULTANT the amounts set forth in Exhibit "D" ( "Payment Schedule "). In no event however shall the total compensation paid to CONSULTANT exceed $32,500. B. Invoices CONSULTANT shall submit invoices for all services rendered. C. Payment Payment shall be due according to the payment schedule set forth in Exhibit "D ". No payment will be made unless CONSULTANT has first provided City with a written receipt of invoice describing the work performed and any approved direct expenses (as provided for in Exhibit "A ", Section IV) incurred during the preceding period. If CITY objects to all or any portion of any invoice, CITY shall notify CONSULTANT of the objection within thirty (30) days from receipt of the invoice, give reasons for the objection, and pay that portion of the invoice not in dispute. It shall not constitute a default or breach of this Agreement for CITY not to pay any invoiced amounts to which it has objected until the objection has been resolved by mutual agreement of the parties. D. Expenses CONSULTANT shall be responsible for all costs and expenses incident to the performance of services for CITY, including but not limited to, all costs of equipment used or provided by CONSULTANT, all fees, fines, licenses, bonds or taxes required of or imposed against CONSULTANT and all other of CONSULTANT'S costs of doing business. CITY shall not be 4835 - 2267 -0361 v1 LAC104706083 responsible for any expenses incurred by CONSULTANT in performing services for CITY, except for those expenses constituting "direct expenses" referenced on Exhibit "A." ARTICLE 5. OBLIGATIONS OF CONSULTANT A. Tools and Instrumentalities CONSULTANT shall supply all tools and instrumentalities required to perform the services under this Agreement at its sole cost and expense. CONSULTANT is not required to purchase or rent any tools, equipment or services from CITY. B. Workers' Compensation CONSULTANT agrees to provide workers' compensation insurance for CONSULTANT'S employees and agents and agrees to hold harmless, defend with counsel acceptable to CITY and indemnify CITY, its officers, representatives, agents and employees from and against any and all claims, suits, damages, costs, fees, demands, causes of action, losses, liabilities and expenses, including without limitation reasonable attorneys' fees, arising out of any injury, disability, or death of any of CONSULTANT'S employees. C. Indemnification of Liability, Duty to Defend 1. As to professional liability, to the fullest extent permitted by law, CONSULTANT shall defend, through counsel approved by CITY (which approval shall not be unreasonably withheld), indemnify and hold harmless CITY, its officers, representatives, agents and employees against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, to the extent arising or resulting directly or indirectly from any willful or negligent acts, errors or omissions of CONSULTANT or CONSULTANT'S assistants, employees or agents, including all claims relating to the injury or death of any person or damage to any property. 2. As to other liability, to the fullest extent permitted by law, CONSULTANT shall defend, through counsel approved by CITY (which approval shall not be unreasonably withheld), indemnify and hold harmless CITY, its officers, representatives, agents and employees against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, arising or resulting directly or indirectly from any act or omission of CONSULTANT or CONSULTANT'S assistants, employees or agents, including all claims relating to the injury or death of any person or damage to any property. D. Insurance In addition to any other obligations under this Agreement, CONSULTANT shall, at no cost to CITY, obtain and maintain throughout the term of this Agreement: (a) Commercial Liability Insurance on a per occurrence basis, including coverage for owned and non -owned automobiles, with a minimum combined single limit coverage of $1,000,000 per occurrence for all damages due to bodily injury, sickness or disease, or death to any person, and damage to property, 4835 - 2267 -0361v1 LAC104706083 including the loss of use thereof; and (b) Professional Liability Insurance (Errors & Omissions) with a minimum coverage of $1,000,000 per occurrence or claim, and $2,000,000 aggregate; provided however, Professional Liability Insurance written on a claims made basis must comply with the requirements set forth below. Professional Liability Insurance written on a claims made basis (including without limitation the initial policy obtained and all subsequent policies purchased as renewals or replacements) must show the retroactive date, and the retroactive date must be before the earlier of the effective date of the contract or the beginning of the contract work. Claims made Professional Liability Insurance must be maintained, and written evidence of insurance must be provided, for at least five (5) years after the completion of the contract work. If claims made coverage is canceled or non - renewed, and not replaced with another claims -made policy form with a retroactive date prior to the earlier of the effective date of the contract or the beginning of the contract work, CONSULTANT must purchase so called "extended reporting" or "tail" coverage for a minimum of five (5) years after completion of work, which must also show a retroactive date that is before the earlier of the effective date of the contract or the beginning of the contract work. As a condition precedent to CITY'S obligations under this Agreement, CONSULTANT shall furnish written evidence of such coverage (naming CITY, its officers and employees as additional insureds on the Comprehensive Liability insurance policy referred to in (a) immediately above via a specific endorsement) and requiring thirty (30) days written notice of policy lapse or cancellation, or of a material change in policy terms. E. Assignment Notwithstanding any other provision of this Agreement, neither this Agreement nor any duties or obligations of CONSULTANT under this Agreement may be assigned or subcontracted by CONSULTANT without the prior written consent of CITY, which CITY may withhold in its sole and absolute discretion. F. State and Federal Taxes As CONSULTANT is not CITY'S employee, CONSULTANT shall be responsible for paying all required state and federal taxes. Without limiting the foregoing, CONSULTANT acknowledges and agrees that: • CITY will not withhold FICA (Social Security) from CONSULTANT'S payments; • CITY will not make state or federal unemployment insurance contributions on CONSULTANT'S behalf; • CITY will not withhold state or federal income tax from payment to CONSULTANT; • CITY will not make disability insurance contributions on behalf of CONSULTANT; • CITY will not obtain workers' compensation insurance on behalf of CONSULTANT. 4835 - 2267 -03610 _ LAM04706083 -4 ARTICLE 6. OBLIGATIONS OF CITY A. Cooperation of City CITY agrees to respond to all reasonable requests of CONSULTANT and provide access, at reasonable times following receipt by CITY of reasonable notice, to all documents reasonably necessary to the performance of CONSULTANT'S duties under this Agreement. B. Assignment CITY may assign this Agreement or any duties or obligations thereunder to a successor governmental entity without the consent of CONSULTANT. Such assignment shall not release CONSULTANT from any of CONSULTANT'S duties or obligations under this Agreement. ARTICLE 7. TERMINATION OF AGREEMENT A. Sale of Consultant's Business/ Death of Consultant. CONSULTANT shall notify CITY of the proposed sale of CONSULTANT's business no later than thirty (30) days prior to any such sale. CITY shall have the option of terminating this Agreement within thirty (30) days after receiving such notice of sale. Any such CITY termination pursuant to this Article 7.A shall be in writing and sent to the address for notices to CONSULTANT set forth in Exhibit A, Subsection V.H., no later than thirty (30) days after CITY' receipt of such notice of sale. If CONSULTANT is an individual, this Agreement shall be deemed automatically terminated upon death of CONSULTANT. B. Termination by City for Default of Consultant Should CONSULTANT default in the performance of this Agreement or materially breach any of its provisions, CITY, at CITY'S option, may terminate this Agreement by giving written notification to CONSULTANT. For the purposes of this section, material breach of this Agreement shall include, but not be limited to the following: 1. CONSULTANT'S failure to professionally and /or timely perform any of the services contemplated by this Agreement. 2. CONSULTANT'S breach of any of its representations, warranties or covenants contained in this Agreement. CONSULTANT shall be entitled to payment only for work completed in accordance with the terms of this Agreement through the date of the termination notice, as reasonably determined by CITY, provided that such payment shall not exceed the amounts set forth in this Agreement for the tasks described on Exhibit C" which have been fully, competently and timely rendered by CONSULTANT. Notwithstanding the foregoing, if CITY terminates this Agreement due to CONSULTANT'S default in the performance of this Agreement or material breach by CONSULTANT of any of its provisions, then in addition to any other rights and remedies CITY 4835- 2267 -03610 LAC104706083 may have, CONSULTANT shall reimburse CITY, within ten (10) days after demand, for any and all costs and expenses incurred by CITY in order to complete the tasks constituting the scope of work as described in this Agreement, to the extent such costs and expenses exceed the amounts CITY would have been obligated to pay CONSULTANT for the performance of that task pursuant to this Agreement. C. Termination for Failure to Make Agreed -Upon Payments Should CITY fail to pay CONSULTANT all or any part of the compensation set forth in Article 4 of this Agreement on the date due, then if and only if such nonpayment constitutes a default under this Agreement, CONSULTANT, at the CONSULTANT'S option, may terminate this Agreement if such default is not remedied by CITY within thirty (30) days after demand for such payment is given by CONSULTANT to CITY. D. Transition after Termination Upon termination, CONSULTANT shall immediately stop work, unless cessation could potentially cause any damage or harm to person or property, in which case CONSULTANT shall cease such work as soon as it is safe to do so. CONSULTANT shall incur no further expenses in connection with this Agreement. CONSULTANT shall promptly deliver to CITY all work done toward completion of the services required hereunder, and shall act in such a manner as to facilitate any the assumption of CONSULTANT's duties by any new consultant hired by the CITY to complete such services. ARTICLE 8. GENERAL PROVISIONS A. Amendment & Modification No amendments, modifications, alterations or changes to the terms of this Agreement shall be effective unless and until made in a writing signed by both parties hereto. B. Americans with Disabilities Act of 1990 Throughout the term of this Agreement, the CONSULTANT shall comply fully with all applicable provisions of the Americans with Disabilities Act of 1990 ( "the Act ") in its current form and as it may be amended from time to time. CONSULTANT shall also require such compliance of all subcontractors performing work under this Agreement, subject to the prohibition against assignment and subcontracting contained in Article 5 above. The CONSULTANT shall defend with counsel acceptable to CITY, indemnify and hold harmless the CITY OF GILROY, its officers, employees, agents and representatives from and against all suits, claims, demands, damages, costs, causes of action, losses, liabilities, expenses and fees, including without limitation reasonable attorneys' fees, that may arise out of any violations of the Act by the CONSULTANT, its subcontractors, or the officers, employees, agents or representatives of either. 4835 - 2267 -0361A LAM04706083 C. Attorneys' Fees If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled. D. Captions The captions and headings of the various sections, paragraphs and subparagraphs of the Agreement are for convenience only and shall not be considered nor referred to for resolving questions of interpretation. E. Compliance with Laws The CONSULTANT shall keep itself informed of all State and National laws and all municipal ordinances and regulations of the CITY which in any manner affect those engaged or employed in the work, or the materials used in the work, or which in any way affect the conduct of the work, and of all such orders and decrees of bodies or tribunals having any jurisdiction or authority over the same. Without limiting the foregoing, CONSULTANT agrees to observe the provisions of the Municipal Code of the CITY OF GILROY, obligating every contractor or subcontractor under a contract or subcontract to the CITY OF GILROY for public works or for goods or services to refrain from discriminatory employment or subcontracting practices on the basis of the race, color, sex, religious creed, national origin, ancestry of any employee, applicant for employment, or any potential subcontractor. F. Conflict of Interest CONSULTANT certifies that to the best of its knowledge, no CITY employee or office of any public agency interested in this Agreement has any pecuniary interest in the business of CONSULTANT and that no person associated with CONSULTANT has any interest that would constitute a conflict of interest in any manner or degree as to the execution or performance of this Agreement. G. Entire Agreement This Agreement supersedes any and all prior agreements, whether oral or written, between the parties hereto with respect to the rendering of services by CONSULTANT for CITY and contains all the covenants and agreements between the parties with respect to the rendering of such services in any manner whatsoever. 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, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. No other agreements or conversation with any officer, agent or employee of CITY prior to execution of this Agreement shall affect or modify any of the terms or obligations contained in any documents comprising this Agreement. Such other agreements or conversations shall be considered as unofficial information and in no way binding upon CITY. 4835.2267 -03610 LAC104706083 H. Governing Law and Venue This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflict of laws provisions of any jurisdiction. The exclusive jurisdiction and venue with respect to any and all disputes arising hereunder shall be in state and federal courts located in Santa Clara County, California. I. Notices Any notice to be given hereunder by either party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses appearing in Exhibit "A ", Section V.H. but each party may change the address by written notice in accordance with this paragraph. Notices delivered personally will be deemed delivered as of actual receipt; mailed notices will be deemed delivered as of three (3) days after mailing. J. Partial Invalidity If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way. K. Time of the Essence All dates and times referred to in this Agreement are of the essence. L. Waiver CONSULTANT agrees that waiver by CITY of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement. Executed at Gilroy, California, on the date and year first above written. CONSULTANT: Management Partners By: "Ie' Jki�� Name: Gerald E. Newfarp e Title: President and C Social Security or Taxpayer Identification Number 31- 1407585 4835 - 2267 -03610 LAC104706083 CITY: CITY OF GILROY By: Name: Title: Approved as to Form City Attorney 4835 - 2267- 0361v1 LAC104706083 EXHIBIT "A" SPECIFIC PROVISIONS I. PROJECT MANAGER CONSULTANT shall provide the services indicated on the attached Exhibit "B ", Scope of Services ( "Services "). (All exhibits referenced are incorporated herein by reference.) To accomplish that end, CONSULTANT agrees to assign Robert Leland, who will act in the capacity of Project Manager, and who will personally direct such Services. Except as may be specified elsewhere in this Agreement, CONSULTANT shall furnish all technical and professional services including labor, material, equipment, transportation, supervision and expertise to perform all operations necessary and required to complete the Services in accordance with the terms of this Agreement. II. NOTICE TO PROCEED /COMPLETION OF SERVICE A. NOTICE TO PROCEED CONSULTANT shall commence the Services upon delivery to CONSULTANT of a written "Notice to Proceed ", which Notice to Proceed shall be in the form of a written communication from designated City contact person(s). Notice to Proceed may be in the form of a -mail, f letter authorizing commencement of the Services. For purposes of this Agreement,.�'�►��'r'h 11 be the designated City contact person(s). Notice to Proceed shall be deemed to have been delivered upon actual receipt by CONSULTANT or if otherwise delivered as provided in the Section V.H. ( "Notices ") of this Exhibit "A ". B. COMPLETION OF SERVICES When CITY determines that CONSULTANT has completed all of the Services in accordance with the terms of this Agreement, CITY shall give CONSULTANT written Notice of Final Acceptance, and CONSULTANT shall not incur any further costs hereunder. CONSULTANT may request this determination of completion when, in its opinion, it has completed all of the Services as required by the terms of this Agreement and, if so requested, CITY shall make this determination within two (2) weeks of such request, or if CITY determines that CONSULTANT has not completed all of such Services as required by this Agreement, CITY shall so inform CONSULTANT within this two (2) week period. III. PROGRESS SCHEDULE The schedule for performance and completion of the Services will be as set forth in the attached Exhibit "C ". IV. PAYMENT OF FEES AND DIRECT EXPENSES Payments shall be made to CONSULTANT as provided for in Article 4 of this Agreement. 4835 - 2267 -0361 v1 4- LAM04706083 Direct expenses are charges and fees not included in Exhibit "B ". CITY shall be obligated to pay only for those direct expenses which have been previously approved in writing by CITY. CONSULTANT shall obtain written approval from CITY prior to incurring or billing of direct expenses. Copies of pertinent financial records, including invoices, will be included with the submission of billing(s) for all direct expenses. V. OTHER PROVISIONS A. STANDARD OF WORKMANSHIP CONSULTANT represents and warrants that it has the qualifications, skills and licenses necessary to perform the Services, and its duties and obligations, expressed and implied, contained herein, and CITY expressly relies upon CONSULTANT'S representations and warranties regarding its skills, qualifications and licenses. CONSULTANT shall perform such Services and duties in conformance to and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Any plans, designs, specifications, estimates, calculations, reports and other documents furnished under this Agreement shall be of a quality acceptable to CITY. The minimum criteria for acceptance shall be a product of neat appearance, well- organized, technically and grammatically correct, checked and having the maker and checker identified. The minimum standard of appearance, organization and content of the drawings shall be that used by CITY for similar purposes. B. RESPONSIBILITY OF CONSULTANT CONSULTANT shall be responsible for the professional quality, technical accuracy, and the coordination of the Services furnished by it under this Agreement. CONSULTANT shall not be responsible for the accuracy of any project or technical information provided by the CITY.. The CITY'S review, acceptance or payment for any of the Services shall not be construed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement, and CONSULTANT shall be and remain liable to CITY in accordance with applicable law for all damages to CITY caused by CONSULTANT'S negligent performance of any of the services furnished under this Agreement. C. RIGHT OF CITY TO INSPECT RECORDS OF CONSULTANT CITY, through its authorized employees, representatives or agents, shall have the right, at any and all reasonable times, to audit the books and records (including, but not limited to,. invoices, vouchers, canceled checks, time cards, etc.) of CONSULTANT for the purpose of verifying any and all charges made by CONSULTANT in connection with this Agreement. CONSULTANT shall maintain for a minimum period of three (3) years (from the date of final payment to CONSULTANT), or for any longer period required by law, sufficient books and records in accordance with standard California accounting practices to establish the correctness of all charges submitted to CITY by CONSULTANT, all of which shall be made available to CITY at the CITY's offices within five (5) business days after CITY's request. 4835 - 2267 -03610 _2_ LAC104706083 D. CONFIDENTIALITY OF MATERIAL All ideas, memoranda, specifications, plans, manufacturing procedures, data (including, but not limited to, computer data and source code), drawings, descriptions, documents, discussions or other information developed or received by or for CONSULTANT and all other written and oral information developed or received by or for CONSULTANT and all other written and oral information submitted to CONSULTANT in connection with the performance of this Agreement shall be held confidential by CONSULTANT and shall not, without the prior written consent of CITY, be used for any purposes other than the performance of the Services, nor be disclosed to an entity not connected with the performance of the such Services. Nothing furnished to CONSULTANT which is otherwise known to CONSULTANT or is or becomes generally known to the related industry (other than that which becomes generally known as the result of CONSULTANT'S disclosure thereof) shall be deemed confidential. CONSULTANT shall not use CITY'S name or insignia, or distribute publicity pertaining to the services rendered under this Agreement in any magazine, trade paper, newspaper or other medium without the express written consent of CITY. E. NO PLEDGING OF CITY'S CREDIT. Under no circumstances shall CONSULTANT have the authority or power to pledge the credit of CITY or incur any obligation in the name of CITY. F. OWNERSHIP OF MATERIAL. All material including, but not limited to, computer information, data and source code, sketches, tracings, drawings, plans, diagrams, quantities, estimates, specifications, proposals, tests, maps, calculations, photographs, reports and other material developed, collected, prepared (or caused to be prepared) under this Agreement shall be the property of CITY, but CONSULTANT may retain and use copies thereof subject to Section V.D of this Exhibit "A ". CITY shall not be limited in any way in its use of said material at any time for any work, whether or not associated with the City project for which the Services are performed. However, CONSULTANT shall not be responsible for, and City shall indemnify CONSULTANT from, damages resulting from the use of said material for work other than PROJECT, including, but not limited to, the release of this material to third parties for work other than on PROJECT. G. NO THIRD PARTY BENEFICIARY. This Agreement shall not be construed or deemed to be an agreement for the benefit of any third party or parties, and no third party or parties shall have any claim or right of action hereunder for any cause whatsoever. 4835- 2267 -03610 _3 _ LAC104706083 H. NOTICES. Notices are to be sent as follows: CITY: Jimmy Forbis, Finance Director City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 CONSULTANT: Gerald E. Newfarmer, President and CEO 2107 N. First St. Suite 470 San Jose, CA 95131 408 - 437 -5400 I. FEDERAL FUNDING REQUIREMENTS. ❑ If the box to the left of this sentence is checked, this Agreement involves federal funding and the requirements of this Section V.I. apply. If the box to the left of this sentence is checked, this Agreement does not involve federal funding and the requirements of this Section V.I. do not apply. 1. DBE Program CONSULTANT shall comply with the requirements of Title 49, Part 26, Code of Federal Regulations (49 CFR 26) and the City- adopted Disadvantaged Business Enterprise programs. 2. Cost Principles Federal Acquisition Regulations in Title 48, CFR 31, shall be used to determine the allowable cost for individual items. 3. Covenant against Contingent Fees The CONSULTANT warrants that he /she has not employed or retained any company or person, other than a bona fide employee working for the CONSULTANT, to solicit or secure this Agreement, and that he /she has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift or any other consideration, contingent upon or resulting from the award or formation of this Agreement. For breach or violation of this warranty, the Local Agency shall have the right to annul this Agreement without liability or, at its discretion, to deduct from the agreement price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift or contingent fee. 4835 - 2267 -0361v1 LAC104706083 EXHIBIT "B" SCOPE OF SERVICES 4835 - 2267 -0361 v1 LAM04706083 Management Partners L December 1, 2016 Mr. Jimmy Forbis Finance Director City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 Dear Mr. Forbis: Gilroy is a full- service city located in the southern Santa Clara City, within the greater Silicon Valley/Bay Area metropolitan area. The City has a current population of approximately 53,000, and has been experiencing significant growth. Given Gilroy's location at the edge of the densely populated greater San Jose area, more growth can be anticipated, as the Silicon Valley tech economy continues to create jobs. The City of Gilroy is a complex multi- service organization providing a full range of services that includes police, fire, public works, water and wastewater utilities, community development, and parks and recreation. It operates under the council /manager form of government. Currently the City employs approximately 260 full -time employees with a total annual budget of about $134 million. Of this, approximately $48 million reflects General Fund spending. In addition to the General Fund the City also has separate budgets for Special Funds, Capital Improvements, Debt, Internal Services and Enterprises. The purpose of this proposal is to provide a scope of work to construct a multi-year financial forecast model to be used for budget and management purposes. It will focus on the General Fund, and build in special revenue funds, capital, debt and internal service funds as necessary to provide managers and policy makers with a clear vision of the fiscal landscape and a means for seeing how expenditure and operational decisions will impact long -term fiscal status. This proposal explains in detail the process Management Partners will use to construct a fiscal model suited to the City's needs. Before describing the details of how we approach fiscal modeling, we would like to share some information about our firm's background and experience. 1730 MADISON ROAD • CINCINNATI, OH 45206 • 513 8615400 • FAx 513 8613480 MANAGEMENTPARTNERS.COM 2107 NORTH FIRST STREET, SUITE 470 • SAN JOSE, CALIFORNIA 95131 • 408 437 5400 • FAx 408 453 6191 3152 RED HILL AVENUE, SUITE 210 • COSTA MESA, CALIFORNIA 92626 • 949 2221082 • FAx 408 453 6191 Mr. Jimmy Forbis Page 2 About Management Partners Management Partners was founded in 1994 with a specific mission to help local government leaders improve their service to the public. Since then we have worked with hundreds of cities, counties, towns, and special districts of all sizes across the United States to help them work more effectively and run more efficiently. We offer a balance of perspectives with a practitioner's bias and a proven track record of successful consulting engagements. This experience gives us a sensitivity that produces positive outcomes. We are proud to say that as a result of our quality work, many of our clients ask us to complete subsequent assignments. Ask our clients and they'll tell you: We Know Local Government. Our associates have served in local governments, so we have a deep understanding of the operating and political environments in which you work. We Take a Collaborative Approach. We consider ourselves part of your team and strive to ensure our work supports your overall corporate strategy and goals. We Have Extensive Experience. Each of our more than 80 associates is an expert in one or more service areas, and our firm has assisted hundreds of jurisdictions in 41 states. We have Developed Proven Methodologies. We understand the importance of a holistic approach to improving organizations, using field- tested techniques for each aspect of the work. Our Work Plan is Tailored to Your Needs. Each of our projects is individually tailored to our client's unique needs, starting with a careful learning process. We take Pride in the Quality of Our Work. Our internal processes ensure first -rate, complete staff work and adherence to the highest of ethical standards in public service. We are Focused on Implementation. As practitioners, our recommendations make practical sense and are able to be implemented. We Provide a Full Suite of Services. Management Partners' services include everything required to support local government leaders, including organization assessments, performance management, process improvement, strategic planning, and financial modeling, planning, budgeting and analysis. Financial and business planning is an important part of our work, and helping local governments address the effects of the recent recession has been an area of major emphasis. Working with cooperating local governments to identify and implement shared service delivery has also been an area of particular competence, especially in the current economic environment. We have extensive experience in developing long -term financial forecast models such as the City of Gilroy is considering. As explained below, we have a process that is customized, but informed by extensive experience and best practices, that can be handed to City staff to use and modify going forward. Mr. Jimmy Forbis Page 3 Understanding of the Engagement Development of a long -term fiscal model was a high priority for management in the 2016 -17 fiscal year budget. As was noted, such a model can serve as a fundamental resource in long- term service planning. Management Partners can complete a fiscal model to meet the needs of the City, designed to City specifications, in three to four months. It can then be used to model different scenarios involving expenditure and revenue variables. We will produce a ten -year forecast for the City that will include all major costs and anticipated revenue. It will include costs related to employees, including obligations from the Ca1PERS State Retirement System, other post - employment benefits (OPEB), salaries, and other compensation. The model will focus on the General Fund, and to the extent necessary, will include special revenue funds, capital, debt and internal service funds to fully support the general fund forecast model. The model will have an easy to use dashboard so assumptions can be easily changed with respect to revenue growth, pension obligations, expenditure assumptions by line item and other factors. We will coordinate closely with City staff to obtain data necessary for a solid financial forecast. Once we complete the model, it will be available for use by staff in the future. We will provide training and a user's guide so City staff can update the forecast themselves as needed. Proposed Plan of Work Based on our experience with financial modeling and our understanding of the needs of the City of Gilroy, we have prepared a plan of work to create a state of the art fiscal model. This framework is amenable to refinements, based on your input. Activity 1— Start Project Management Partners will begin this project with a careful learning phase, starting with a planning meeting with City managers to ensure we have a clear understanding of your objectives for the long -term forecast model. The purpose of the meeting is to finalize our proposed scope of work and the business concerns giving rise to the project so the plan of work and schedule can be precisely tailored to your needs. We will keep you informed of our progress throughout the project. The project start -up activity forms the foundation of the relationship between Management Partners' team and the City. During this initial meeting we will confirm project deliverables and due dates to ensure the project is completed on time and on budget. We will also review the work plan and schedule to confirm that the scope of work is aligned precisely to meet the goals of the City, and to give you confidence that we fully understand the background and concerns. We know that the work associated with this project is in addition to the normal work of the organization. Our goal is to integrate our activities in a manner that is thoughtful, and minimizes disruption to the City operations. However, the cooperation of staff in providing requested data and giving meaningful feedback is crucial to a successful project. Mr. Jimmy Forbis Page 4 Activity 2 — Prepare Draft Long -Term Financial Forecast During this activity, we will prepare a long -term forecast using City data. The financial forecast includes the following components. » Identify baseline cost assumptions. We include assumptions related to remaining competitive in the labor marketplace, meeting funding requirements for pension commitments, sustaining internal service fund levels that lead to timely replacement, reserves, and other major factors. The expenditure forecast will include trend data. » Identify baseline revenue assumptions. This will include all major existing revenue sources along with the identification of risk factors pertaining to any of those sources. The revenue forecast will include trend data. Create model scenarios. The forecast will have model scenarios, including a baseline and scenarios with different sets of assumptions. Scenarios above the baseline will include unmet needs that have been quantified by the City, such as capital, maintenance, internal support and service level increases. Typically, we develop a draft and then review it in person with management staff to refine and validate our assumptions. We are careful to tie back all model data to City source documents and to fully explain the assumptions that underlie the model. After reviewing the model with City managers we will make refinements and develop a final model suitable for presentation. Activity 3 — Report Results We will prepare a final draft forecast and a memorandum describing the results of the forecast. We will meet with City staff to review the forecast in detail. We will then prepare a final version of the memorandum and forecast. We will present the forecast to the City Council in a PowerPoint format, if desired. Activity 4 — Support Implementation Management Partners has a strong bias for action. Our reports and resulting recommendations become tools for setting priorities, and for developing work plans. When developing a fiscal model our plan is to train staff on all the capabilities of the model with the expectation that the staff will "own' and begin using the model as a daily tool. After the presentation we will plan several hours to train staff. We will also provide full documentation in a use's manual. Project Team Management Partners has a strong project team that is well qualified to complete this work for the City of Gilroy. This project will be a top priority for Management Partners and our team members will be available in whatever capacity and with whatever availability will contribute to the success of the project. Our team of professionals includes individuals who have direct experience with the management and operations of City governments and special districts, as well as public finance and economic analysis. They also have extensive experience with the financial analysis of �i Mr. Jimmy Forbis Page 5 municipal service delivery, and real world experience developing budget balancing strategies. In addition, we are very familiar with the range of service delivery parameters and commonly utilized benchmarks and performance measurements. I will serve as project director, overseeing the substantive work of the project with responsibility for reviewing and approving all deliverables. Robert Leland will serve as project manager and will be responsible for execution of the project. The team will also be supported by an experienced analyst, Heain Lee. Brief qualifications for each team member are summarized below. Andrew Belknap, Regional Vice President Andrew is responsible for Management Partners' western operations, based in San Jose and Costa Mesa, California. He has more than 20 years of local government experience, including service as a city manager, public works director, and consultant to California municipalities, counties and special districts. His areas of expertise include fiscal and budget analysis, municipal restructuring, governance models and developing service delivery partnerships and functional consolidations to take advantage of economies of scale in public sector service delivery. With Management Partners, Belknap has served well over 100 California local governments, many on multiple occasions, including 17 of the largest 20 cities. A trained economist, Andy brings a special expertise to fiscal analysis and public finance issues. His blend of quantitative skills, coupled with a practitioner's understanding of public services and management systems, adds value to all types of organizational and policy analysis. Robert Leland, Senior Advisor Bob joined Management Partners in 2012, after 37 years of experience in state and local government finance. He was director of finance for 26 years for the City of Fairfield, California; a city known for its entrepreneurial management and long -term financial planning. He has been preparing long -range forecasts and budget models since the early 1980s. He previously served as assistant finance director for the City of Sacramento, where he managed the city budget, and as a staff consultant to the Assembly Revenue and Taxation Committee, where he drafted and analyzed legislation and worked on the team implementing Proposition 13 in 1978. Since 2010 Bob has consulted in his area of special expertise, municipal budgeting and long - range forecasting. He is a leader in his profession, having been elected by his peers as president of both the California Society of Municipal Finance Officers and the League of California Cities' Fiscal Officers Department. Bob was the recipient of the 2010 Award of Excellence in Public Finance from the California Public Securities Association, which recognizes exceptional work, creativity, service and leadership by a municipal finance professional. Heain Lee, Management Analyst Heain Lee is a trained public policy analyst who is adept at analyzing and framing issues, both quantitatively and qualitatively. She has an in -depth understanding of economics and Mr. Jimmy Forbis Page 6 experience with data collection and analysis, measuring outcomes in various sectors. Her analytic training includes multivariate economic analysis, cost - benefit analysis, financial modeling and operations research, public financial management and budgeting, and strategic planning for the public sector. She is experienced using these tools with data, whether readily available or not, to produce tangible recommendations in team settings. Experience and References We have provided several references for projects that have involved fiscal modeling. Our basic approach was developed in Stockton, California, during the City's bankruptcy in FY 2012 -13. Because the City was negotiating with several very large creditors with highly sophisticated financial advisors, we developed a detailed approach that could withstand scrutiny and challenge. In addition to the references below, our website, managementpartners.com, has information about our past clients, which includes hundreds of jurisdictions in 41 states. You are welcome to contact any of them about our performance. Mr. David Buckingham ( Financial and Operational Studies City Manager Management Partners was engaged to provide an update to a 595 Harbor Street project completed for the City in 2008. Recently we completed Morro Bay, CA 93442 a comprehensive assessment of the City's finances, current (805) 772 -6205 operations and service delivery alternatives. A ten -year financial forecast was prepared along with a financial model that staff could use in the future. In addition, we studied each function in the City to identify operational improvements or potential changes in service delivery. Mr. Kurt Wilson City Manager 425 N. El Dorado St., 2nd floor Stockton, CA 95202 (209) 937 -8212 Ms. Kimberly Trammell Budget Officer 425 N. El Dorado St., 3'd floor Stockton, CA 95202 (209) 937 -5088 Long Range Financial Plan Management Partners was engaged to coordinate the City's bankruptcy process in early 2012, following a financial assessment in late 2011. A major element of this work was the preparation of a 30 -year Long Range Financial Plan (LRFP) that demonstrated the city's ongoing financial viability under their Chapter plan of adjustment. The LRFP withstood repeated court challenges as the city emerged from bankruptcy, and is still used today to set guidelines for the annual budget and labor negotiations. ft�; 3vlr. Jimmy Forbis Ms. Maria Hurtado (formerly Assistant City Manager in Oxnard) Assistant City Manager City of Hayward 777 B Street, 4th Floor Hayward, CA 94541 (510) 583 -4305 Page 7 Long Range Financial Plan and Financial Consulting Services Management Partners was engaged to provide a financial assessment in fall 2014 which identified numerous operating deficits and financial management issues. As a follow -up we prepared a long range financial plan that linked 131 city funds and modeled the impact of corrective budgetary actions. The city used the model to generate the tables for their 2015 -16 budget document, and identify the impact of labor MOUs negotiated in 2016. Ms. Susan Thornton Long Range Financial Plan County Administrator Management Partners was engaged to provide a budget model 150 South 12th Street for Yuma County's General Fund and special revenue funds (100 Phoenix, AZ 85034 in all) in the fall of 2016. A presentation to the County Board of (602) 256 -3175 Supervisors is scheduled for mid - December 2016. Hours, Cost and Schedule As mentioned previously, completing this project is likely to take three to four months, depending on the sense of urgency and other City commitments. Based on the work plan described above, the project will require about 194 hours of consulting staff time at a cost of $30,900, plus an expense allowance of $1,600, for a total of $32,500. Conclusion We appreciate the opportunity to provide this proposal for your consideration. I would be happy to answer any questions you may have about the scope of work or about Management Partners. Sincerely, Andrew S. Belknap Regional Vice President Accepted for the City of Gilroy by: Name: Title: Date: EXHIBIT "C MILESTONE SCHEDULE ft rN 4835 - 2267 -0361v1 LAC104706083 - - - -- -- - -- - -AC PATY ___ - __ Activi'yr,' Amourtt_, Activiq 1: Start Project $6,425 Activ' 2:_Prepare Draft.Model $15,420 Activ' 3: Report Results $8,080 Activity-4: Support Implementation $2,575 TOTAL $32,500 4835 - 2267 -0361v1 LAC104706083 EXHIBIT "D" PAYMENT SCHEDULE Invoicing will be based on completion of milestones listed in EXHIBIT C. 4835- 2267 -03610 LAM04706083 ACOKEP CERTIFICATE OF LIABILITY INSURANCE 9/19/2016 D THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate_ holder in lieu of such endorsement(s). PRODUCER NT CT NAME: Vicki Dixon PHONE - - aC No The Hauser Group 8260 Northcreek Drive, Suite 200 Cincinnati OH 45236 E -MAIL ADDRESS: r ro 0 INSURER(S) AFFORDING COVERAGE NAIC # 33SBAUG1832 INSURER A:Hartford Fire Insurance CO 19682 EACH OCCURRENCE INSURED MANAG -2 INSURER B:LlOydS of London X COMMERCIAL GENERAL LIABILITY INSURER C:Hartford Casualty Ins Co Z9424 Management Partners, Inc. INSURER D 1730 Madison Road Cincinnati OH 45206 $300,000 CLAIMS -MADE X-1 OCCUR INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER: 192446976 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. I�TR TYPE OF INSURANCE INSR WVD POLICY NUMBER MM//DDDY� MNUDD� LIMITS A GENERAL LIABILITY Y Y 33SBAUG1832 3/1/2016 3/1/2017 EACH OCCURRENCE $1,000,000 X COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED PREMISES Ea occurrence $300,000 CLAIMS -MADE X-1 OCCUR MED EXP (Any one person) $10,000 PERSONAL BADVINJURY $1,000,000 GENERAL AGGREGATE $2,000,000 GEN'L AGGREGATE' LIMIT APPLIES PER: PRODUCTS - COMP /OP AGG $2,000,000 POLICY PRO- LOC $ A AUTOMOBILE LIABILITY Y Y 33UECVG5096 3/1/2016 3/1/2017 gmaNFU SINGLE LIMIT accident 1,000,000 X BODILY INJURY (Per person) $ ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJURY (Per accident) $ PROPERTY DAMAGE Peraccident $ NON -OWNED HIRED AUTOS AUTOS A X UMBRELLALIAe X OCCUR Y Y 33SBAUG1832 3/1/2016 3/1/2017 EACH OCCURRENCE $3,000,000 AGGREGATE $3,000,000 EXCESS LIAB CLAIMS -MADE DED_ X RETENTION $10,000 $ C- WORKERS COMPENSATION AND EMPLOYERS' LUIBILITY Y./ N y 33WECBU6135 3!1/2016 3/1/2017 X TNC STATU- OTH- FR E. L. EACH ACCIDENT $1,000,000 ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? NIA E.L. DISEASE - EA EMPLOYEE $1,000,000 (Mandatory In NH) Ii yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $1,000;000 B Professional Liab MPL1008388 6/2012016 6/2012017 Ea. Claim $1,000,000 Occurrence Aggregate $1,000,000 Retro date 06 -20 -08 Deductible $10,000 DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD tot, Additional Remarks Schedule, H more space is required) City of Gilroy, its officers, officials and employees are named as an additional insured, per the attached endorsement City of Gilroy 7251 Rosanna Street Gilroy CA 95020 ACORD 25 (2010/05) SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE 9. ht b)� M 1999 -2010 ACORD CORPORATION_ All rinhtc racarvad The ACORD name and logo are registered marks of ACORD Management Partners Inc. POLICY NUMBER: 33SBAUG1832 Effective: 03 -01 -2016 Expiration: 03 -01 -2017 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modes insurance provided under the following: Additional Insured - Person or Orgnization Scheduled as follows: Services agreement: Development Review Improvement City of Gilroy 7251 Rosanna Street Gilroy CA 95020 Form IH 12 01 1185 Printed in U.S.A.