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HomeMy WebLinkAboutCC AG PKT 2011-02-14 #G AGENDA STAFF REPORT DATE: February 14, 2011 TO: Honorable Mayor and Council Members THRU: Patrick Importuna, City Manager FROM: Robbeyn Bird, Director of Administrative Services/Treasurer SUBJECT: REQUEST FOR PROPOSAL (RFP) FOR ANNUAL AUDITING SERVICES SUMMARY OF REQUEST: The proposed City Council action will authorize staff to initiate the request for proposal process so that a contract may be awarded for annual auditing services. BACKGROUND: In April 2008, the City contracted with Mayer Hoffman McCann, certified public accountants to provide annual auditing services. With expiration of their agreement, staff requests authorization to initiate the RFP process to retain auditing services beginning with the fiscal year ending 2011. Cities often alternate auditors on a regular basis, a prudent and responsible practice. The City will entertain proposals from highly respected auditing firms within the field of government accounting and auditing, including its current auditor. Attached for your review is a copy of the request for proposal for audit services. FISCAL IMPACT: There is no immediate impact to the General Fund as the auditing fees are budgeted annually. ANALYSIS: Since the scandal in the City of Bell, the subject of auditors has been an item of media attention. The City's current auditors were the auditors for the City of Bell. Staff has been monitoring this situation very closely in the recent past months. Agenda Item G Page 2 Due to the negative media attention and the fact that the auditor's contract is up for renewal, staff feels that this is the perfect time to release an RFP and evaluate responsive bids for Auditing Services. RECOMMENDATION: Staff recommends that the City Council authorize staff to initiate the request for proposal process. SUBMITTED BY: NOTED AND APPROVED: h Rob eyn Bird, A Patrick P. Importu a Director of Administrative Services City Manager Attachments: A. Request for Proposal B. Agreement for Auditing Services CITY OF SEAL BEACH REQUEST FOR PROPOSAL PROFESSIONAL AUDITING SERVICES A. INTRODUCTION The City of Seal Beach (City) is requesting proposals from qualified firms of certified public accountants to audit its financial statements for the fiscal years ending June 30, 2011, June 30, 2012, and June 30, 2013. These audits are to be performed in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standard, issued by the Comptroller General of the United States including the new suite of auditing standards issued by the American Institute of Certified Public Accountants (SAS Nos. 104 through 111), and the provisions of the Federal Single Audit Act in accordance with the Office of Management and Budget (OMB) Circular A -133, Audits of States, Local Governments and Non - Profit Organizations. There is no expressed or implied obligation for the City to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. Proposals will only be accepted from parties that are free from all obligations and interests that might conflict with the best interest of the City and are able to provide services on a timely basis in accordance with the timetable listed in Section E of this request. Five copies of the proposal must be received by no later then 5:00 p.m., March 15, 2011, at the address listed below for your firm to be considered for this engagement: Robbeyn Bird, CPA Director of Administrative Services/Treasurer City of Seal Beach 211 Eighth Street Seal Beach, CA 90740 Proposals submitted will be reviewed and evaluated by City staff to determine which firm best meets the needs of the City. Oral interviews will be held for the top firms submitting proposals. The City reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the City and the firm selected. It is anticipated that the selection process will be complete by March 31, 2011. Following the notification of the selected firm and Council approval, it is expected that a contract will be executed between both parties by April 30, 2011. 1 B. GENERAL INFORMATION 1. The City of Seal Beach The City of Seal Beach is a Charter City in the State of California located in northern Orange county. The City was incorporated on October 25, 1915, and operates under a Council- Manager form of government. The City is a coastal community consisting of approximately 18.2 square miles with an estimated population of 26,010. The City is bordered by Garden Grove, Long Beach, Los Alamitos, Huntington Beach, and Westminster. 2. Organizational Structure The City has a Council- Manager form of government with five members on the City Council. The City has approximately 92 full -time employees and 40 part- time employees. During the summer months, additional part-time staff is employed by the City's recreation and lifeguard departments. Seal Beach operates as a "full service city', primarily utilizing contracts with other governmental entities, private firms and individuals to provide the supplemental municipal services to the community. City services include police, water, sewer, road maintenance, and planning, building and engineering services. Fire protection is provided by the Orange County Fire Authority. The City's principal revenue sources are property taxes (30 %), utility users tax (22 %), and sales & use taxes (14 %). 3. Accounting System The City and the Seal Beach Redevelopment Agency (Agency) financial records are maintained by the Administrative Services Department. The accounting records are computerized on a PC network utilizing Springbrook software applications. The City and the Agency currently share one bank account through which most of the banking activities flow. The City and the agency issue approximately 5,000 checks, excluding payroll, per year. There are no known exceptions to accounting principles generally accepted in the United States or other material accounting problems. Copies of the City's comprehensive annual financial report (CAFR) and the Agency's basic financial statements are available upon request at City Hall at the following address: City of Seal Beach 211 Eighth Street Seal Beach, CA 90740 2 4. Name of Contact Persons/Location of Offices The auditor's principal contact with the City will be Robbeyn Bird, Director of Administrative Services, or a designated representative, who will coordinate the assistance to be provided by the City to the auditor. Reasonable workspace will be provided along with access to a telephone line, photocopying facilities and facsimile machines. 5. Finance Department and Clerical Assistance The Finance Department staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of confirmations will be the responsibility of the City, with the assistance of the auditor. In addition, reasonable clerical support will be made available to the auditor for the preparation of routine letters and memoranda. C. SCOPE OF AUDITING AND ACCOUNTING SERVICES The scope of the audit shall include all funds and accounts of the City and Agency. 1. The auditors shall accept the responsibility of expressing an opinion on the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City and the Agency. If a Single Audit is required, the auditors shall provide opinions as to the compliance with the Federal Single Audit Act in accordance with the Office of Management and Budget (OMB) Circular A -133, Audits of States, Local Governments and Non - Profit Organizations. 2. The fiscal periods to be covered by the audit are July 1, 2010 through June 30, 2011 and the succeeding two fiscal years. 3. The audit firm will assist with the preparation of the City's CAFR in accordance with the requirements of Governmental Accounting Standards Board and the Governmental Accounting, Auditing and Financial Reporting (GAAFR). The transmittal letter, management's discussion and analysis, and statistical sections will be prepared by the City. The City submits its CAFR under the Government Finance Officers Association's (GFOA) "Certificate of Achievement for Excellence in Financial Reporting" award program. 4. It is expected that the selected firm will keep the City informed of new guidance and developments that may affect municipal accounting and finance. 5. Meetings shall be conducted at the beginning of the audit, prior to the commencement of fieldwork and after the first draft of the financial statements 3 have been prepared. The meetings shall be attended by the engagement partner or designated professional staff and City staff. 6. Separate basic fmancial statements shall be prepared for the Agency, a legally separate entity. For this audit, the scope shall be expanded to include a compliance examination in accordance with the Guidelines for Compliance Audits for California Redevelopment Agencies as published by the State Controller. The Agency has two bond issues and makes semi -annual debt service payments to the fiscal agent. 7. The auditors shall observe the adequacy of the systems of internal control, accounting procedures and other significant observations. If material weaknesses are noted, appropriate recommendations should be reviewed with management and included in a separate management letter. This letter should address areas where the City's operations could be impaired or controls could be strengthened. Upon the completion of the interim fieldwork, any deficiencies in the internal control system should be communicated to the Director of Administrative Services and the City Manager. 8. In addition to the audit reports and the management letter, the auditor shall perform certain GANN Appropriations Limit agreed -upon procedures for each of the years in the three -year period for the City. 9. The auditor is also expected to provide informal advice and consultation throughout the year on matters relating to accounting and financial reporting. This would not include any task that entails significant research or a formal report. 10. The firm should be available to the City Council and management to answer questions related to audit findings. 11. The auditing firm shall type and have printed the final financial statements and reports on or before the listed due dates in the number of copies specified. a. Comprehensive Annual Financial Report 35 b. Redevelopment Agency Financial Report 20 c. Single Audit Report 20 d. Management Letter 10 e. GANN Appropriations Limit Report 5 12. Management is not aware of any unusual circumstances warranting an extended scope; however, if in due course of the examination evidence of such circumstances occurs, the auditors shall agree to provide the City with all ascertainable facts relative to such circumstances together with an estimate of additional services required and the additional cost thereof in order that proper contract modifications may be completed before commencing with such extended examination. 4 13. The City acknowledges that it is management's responsibility for the reliability, accuracy and completeness of financial presentations. 14. Any exceptions to the City and the Agency's requirements should be clearly indicated in the proposal. D. COORDINATION REQUIRED 1. All work will be coordinated with the Director of Administrative Services to . facilitate staff scheduling and year -end closing. 2. The auditor shall provide the Director of Administrative Services with periodic progress reports while performing the audit fieldwork. These reports shall identify problems encountered or foreseen, deficiencies in work being performed by City staff, disagreements over the application of accounting principles and other items that could result in delay of the audit work or additional work. 3. Prior to commencement of work each year, both parties shall establish in writing, an example format of each audit work paper and the financial statements and compliance statements to be prepared by the City. 4. The City expects that the professional staff provided by the independent audit firm will be fully qualified with the appropriate experience, and that answers and guidance given will be provided by executives to senior and junior staff. E. PROPOSAL AND SUBMISSION REQUIREMENTS 1. Five (5) copies of proposals must be submitted to the City by 5:00 p.m. on March 15, 2011. 2. Proposals will be accepted only from parties that are free of all obligations and interest that might conflict with the best interest of the City. 3. The proposal of the successful firm shall be incorporated as part of the contract. 4. To achieve a uniform review process and obtain the maximum degree of comparability, proposals shall be organized in the following manner: a. Title Page Show the Request for Proposal subject, the name of your firm, local address, telephone number, name of contact person, alternate contact person and date. 5 b. Table of Contents Clearly identify the material by section and page number. • c. Letter of Transmittal Limit to one or two printed pages. 1. Briefly state your firm's understanding of the work to be done and make a positive commitment regarding availability to perform the work in a timely manner. 2. Give the names of the persons who will be authorized to make representations for your firm, their titles, addresses and telephone numbers. d. Profile of the Organization, Technical Qualifications, and Approach 1. State whether your audit organization is national, regional or local and indicate the location of the office that has responsibility for the audit. 2. Indicate the number of personnel by level located within the proposing office that will perform the audit. 3. Describe the range of activities performed by the proposing office, such as audits, accounting, tax services, or management services. 4. Provide a list of current and prior government audit clients (cities, redevelopment agencies, special districts, and Federal Single Audits), including telephone number and contact person's name, indicating the type(s) of services performed and the number of years served. 5. Describe specialized audit services that the firm has provided for municipalities, such as transient occupancy tax audits, business license audits and franchise fee audits, etc. 6. Indicate the proposing office's experience in providing additional services to government clients by listing the name of each government, the type(s) of service performed and the year(s) of engagement. 7. Firm's formal education programs in the area of municipal accounting and auditing available to clients. 8. Describe any regulatory action taken against the firm or local office. 6 9. Describe your approach to the audit. This should include, at a minimum, the general approach, organization of audit team and expectation of assistance from City staff. 10. Anticipated amount of time (workdays) required to complete the audit. It is estimated that the records will be ready for audit by September 15 of each fiscal year. The following timetable must be adhered to: a. Interim work is to be conducted after the contract award. In subsequent years, interim work is to be conducted during April, May, or June. b. Final examination is to begin around September 15 each year. c. 31st. Copies of the draft CAFR and management letter are due October d. Final copies of CAFR and management letter are due November 16 e. GANN Appropriations Limit agreed -upon procedures are due November 30 f. Final copies of the Agency's Basic Financial Statements are due November 30 g. Final copies of the Single Audit are due December 31 11. Why should Seal Beach consider hiring your firm? 12. What priority will your firm give Seal Beach on this engagement? 13. Describe the firm's participation in the "peer review" program. Provide the date and extent of the local office's last participation. 14. The City reserves the right to make such changes in the Request for Proposal as it may deem appropriate. Any and all .changes in the Request for Proposal shall be made by a written addendum, which shall be issued by the City to all prospective firms who have been issued or obtained a copy of the Request for Proposal. 15. If the evaluation of any proposal indicates minor non - compliance or variance with the Request for Proposal, the City may, but need not, make written request to the firm for a supplement to the submitted proposal. 7 Such request will attempt to identify the non - compliance or variance, and will establish a date in which the firm may submit a supplement to the Request for Proposal. If so requested, the firm may submit a supplement to the Request for Proposal responsive to such request, within the time period established, which the City will evaluate in conjunction with the Request for Proposal. Any supplement to the Request for Proposal will be deemed to be an integral part of the firm's submittal. e. Summary of the Firm's Individual Audit Staff Technical Qualifications Identify the partners, managers and supervisors who will participate in the audit. Include resumes for each supervisory person to be assigned to the audit. The City realizes that definite staff commitments may change from time to time. The City agrees to cooperate with the auditor in this regard; however, it reserves the right to approve substitutions for assigned audit personnel proposed for this engagement. f. Basis for Increases/Decreases The proposal should show how cost increases or decreases will be calculated, should the City subsequently request an adjustment in the scope of the audit. g. Scope Clearly describe the scope of the required services to be provided. Separately state the fees for the City's CAFR, Agency's basic financial statements, Single Audit, and GANN Appropriations Limit agreed -upon procedures. h. Insurance Requirements Audit firm shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the audit firm, its agents, representatives, or employees. Audit firm shall maintain limits no less than: Coverage Minimum Limits General Liability $1,000,000 Combined Single Limit, Comprehensive General Liability, including: per occurrence and general aggregate Premises and Operations Contractual Liability Personal - Injury Liability Independent Contractors Liability (if applicable) 8 Automobile Liability $1,000,000 Combined Single Limit, Comprehensive Automobile Liability, per occurence (including owned, non -owned and hired autos) Workers' Compensation and Employer's Statutory, $1,000,000 Liability Workers' Compensation Insurance • Employer's Liability Professional Liability $1,000,000 per claim and annual aggregate Any deductibles or self - insured retention levels must be declared to and approved by the City. The General liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the audit firm; products and completed operations of the consultant; premises owned, occupied or used by the audit firm; or automobiles owned, leased, hired or borrowed by the audit firm. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees or volunteers. 2. For any claims related to the work described herein, the audit firm's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees and volunteers. Any insurance or self - insurance maintained by the City, its officers, officials, employees or volunteers shall be excess of the audit firm's insurance and shall not contribute with it. 3. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, has been given to the City. Insurance is to be placed with insurers, which are "admitted" in the State of California unless otherwise acceptable to the City. Audit firm shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. 9 i. Indemnification Audit firm agrees to protect, indemnify and hold harmless the City and its officers, officials, employees and agents from and against all claims, demands and causes of action by consultant's employees or third parties on account of personal injuries or death or on account of property damages arising out of the work to be performed by consultant hereunder and resulting from the act or omissions of consultant, consultant's agents, employees or subcontractors. F. FEES It is the City's desire to solicit proposals for auditing and accounting services for a three -year time period. The City requests that a statement of maximum cost be made for the annual audit and reports as set forth in this request for proposal. All expenses, including typing, clerical, printing costs, and binding should be included in the total audit fee. The fee should be allocated to the various reports and components of the audit (City CAFR, Agency basic financial statements, Single Audit, and GANN Appropriations Limit agreed -upon procedures) with a maximum annual fee for each of the three fiscal years ending June 30, 2011 through 2013. The City requests that the proposal include a schedule of rates of professional staff by classification. The schedule should reflect rates for auditing services, accounting services and consulting services. It should also reflect the anticipated distribution of hours per staff classification. G. EVALUATION OF PROPOSALS Proposals will be evaluated by City staff to determine which firm best meets the needs of the City. The factors to be considered during the evaluation are: 1. The firm's response in clearly stating the understanding of the work to be performed. 2. The firm's experience with local government, redevelopment agency and federal and state grant audits. 3. The technical qualifications and experience of staff proposed for the audit with local government, redevelopment agency, and federal and state grants. 4. The firm's size and structure. 5. The anticipated support requirements of City staff 6. The audit fees. 10 All proposals will be evaluated first by City staff using the above criteria. After the top candidates have been selected using this criteria, oral interviews may be arranged to assist in making the final decision. If held, oral interviews will be conducted by a panel designated by the City Manager or his designee. Selection of the successful proposal will be at the sole direction of the City Council. All firms will be notified of the Council's selection following the award of the contract. H. ADDITIONAL INFORMATION 1. The City will not be liable for any cost incurred in preparing proposals or associated travel costs. The City reserves the right to request such additional information as the City may reasonably require for evaluation purposes. The City also reserves the right to conduct pre - contract negotiations with any or all potential firms. 2. The submission of a proposal shall be evidence that the firm has full knowledge of the scope, nature, quantity and quality of work to be performed, the detailed requirements of the specifications, and the conditions under which the work is to be performed. 3. The City reserves the right to reject any and all proposals and to accept the proposal most favorable to the City's interest and the right to waive irregularities in the procedures described in the request for proposal. 4. If the selected certified public accounting firm does not execute an agreement with the City within fourteen (14) days after notification of selection, the City may give notice to that firm of the City's intent to select from the remaining firms or to call for new proposals, whichever the City deems appropriate. 5. The City may conduct personal interviews with the top firms prior to selection. If conducted, it would be desirable that senior audit staff be present for the interviews. 6. All supervisory and managerial personnel assigned to the engagement, including the person in charge of the daily fieldwork, must have appropriate significant local government and redevelopment agency audit experience. The field staff assigned to the City must include one person with at least two years of audit experience, including local government and redevelopment agency audit experience. 7. The total audit staffing should be at a level sufficient to complete the audit in the time scheduled and specified in the request for proposal. In addition, the audit staff should remain constant through each year's audit process. At least one staff member from the prior year's audit is to be a member of the subsequent year's audit team. 11 8. The auditors shall comply with the provisions of any and all Federal, State, County and City orders, statutes, ordinances, bond covenants, administrative codes and orders, rules and regulations that may pertain to the work required in the engagement. 9. Working papers shall be retained by the audit firm for a minimum of three (3) years after the conclusion of the engagement unless authorized to do otherwise in writing by the Director of Administrative Services or the City Manager. Accordingly, the workpapers shall be made available upon request. 10. It is expected that the firm chosen will make itself available for additional projects that may be necessary from time to time. Separate fees will be negotiated for each project. 11. Compensation for the auditing and accounting services will be paid upon submission of progress billings. A final billing will be paid after receiving the required final reports. 12. It is mutually understood and agreed that the successful bidder shall not assign, transfer, convey, sublet or otherwise dispose of the contract or the right, title, or interest therein, or the power to execute such contract, to any other person, company or corporation without prior written consent of the City Manager. 13. After the award of the contract has been made by the City Council, all findings and information considered in determining which proposal best meets the needs of the City and will be most advantageous with respect to price, conformity to the specifications and other factors, will be made available for public inspection. 14. Causes for termination of the contract may include the following: failure to promptly and faithfully provide the services required in this Request for Proposal; failure to cooperate upon receiving any reasonable request for information for service; and improper actions of the firm's officers or employees. The City retains the right to cancel this agreement without cause by providing written notification. 12 AGREEMENT TO PROVIDE PROFESSIONAL AUDITING SERVICES Between : # f .- Sao, itt �9. '0 Y, Via= City of Seal Beach 211 - 8th Street Seal Beach, CA 90740 [Consultant's Name] [Consultant's Address] [Consultant's Phone Number] This Professional Service Agreement ( "the Agreement ") is made as of , by and between , Certified Public Accountants, and the City of Seal Beach ( "City"). RECITALS A. The City desires to conduct a comprehensive, independent, annual audit of the City's finances. B. The Consultant represents that it has the necessary professional skills and experience to satisfactorily complete the audit in a timely manner. NOW THEREFORE, in consideration of the Parties' performance of the promises, covenants, and conditions stated herein, the Parties hereto agree as follows. AGREEMENT 1. Scope of Services 1.1 Consultant shall provide auditing services ( "Services ") for fiscal year 2010- 11, fiscal year 2011 -12 and fiscal year 2012 -13 as set forth in the certain "Proposal to Perform Professional Auditing Services" dated ( "Proposal "). A true and correct copy of the Proposal is attached hereto as Exhibit A. To the extent that there is any conflict between the Proposal and this Agreement, this Agreement shall control. 1.2 Consultant shall perform all Services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to City. 1.3 In performing this Agreement, Consultant shall comply with all applicable provisions of federal, state, and local law. 1.4 Consultant will not be compensated for any work performed not specified in the Proposal unless the City authorizes such work in advance and in writing. 2. Term 2.1 This term of this Agreement shall be for a period of three years beginning with the fiscal year ending June 30, 2011, unless previously terminated or extended as provided by this Agreement. 2.2 Option Year One. The City at its sole option may extend the term of this Agreement until June 30, 2014. 2.3 Option Year Two. If extended pursuant to Section 2.2, the City at its sole option may further extend the term of this Agreement until June 30, 2015. 2 3. Consultant's Compensation 3.1 For all Services satisfactorily rendered, City will pay Consultant at the hourly rates set forth in Exhibit _. 3.2 In no event will the City pay Consultant more than: Initial Term. $ for all services rendered in connection with the FY 2010 -11, FY 2011 -12 and FY 2012 -13 budgets. Option Year One. $ for all services rendered in connection with the FY 2012 -13 budget. Option Year Two. $ for all services rendered in connection with the FY 2013 -14 budget. 3.3 Any additional work authorized by the City pursuant to Section 1.4 will be compensated at the hourly rates set forth in Exhibit B. 3.4 Consultant will not receive reimbursement for any expenses incurred by Consultant. 4. Method of Payment 4.1 Consultant shall submit to City monthly invoices for all services rendered pursuant to this Agreement. Such invoices shall be submitted within 15 days of the end of the month during which the services were rendered and shall describe in detail the services rendered during the period, the days worked, number of hours worked, the hourly rates charged, and the services performed for each day in the period. City will pay Consultant within 30 days of receiving Consultant's invoice. City will not withhold any applicable federal or state payroll and other required taxes, or other authorized deductions from payments made to Consultant. 4.2 Upon 24 -hour notice from City, Consultant shall allow City or City's agents or representatives to inspect at Consultant's offices during reasonable business hours all records, invoices, time cards, cost control sheets and other records maintained by Consultant in connection with this Agreement. City's rights under this Section 4.2 shall survive for two years following the termination of this Agreement. 5. Termination 5.1 This Agreement may be terminated by City, without cause, or by Consultant based on reasonable cause, upon giving the other party written notice thereof not less than 30 days prior to the date of termination. 3 5.2 This Agreement may be terminated by City upon 10 days' notice to Consultant if Consultant fails to provide satisfactory evidence of renewal or replacement of comprehensive general liability insurance as required by this Agreement at least 20 days before the expiration date of the previous policy. 5.3 Consultant agrees to cease all work under this Agreement on or before the tenth day of receiving such notice. 5.4 In the event that City terminates or cancels this Agreement due to no fault or failure of performance by Consultant, City will pay Consultant for all Services satisfactorily rendered through the date of termination. In no event shall Consultant be entitled to receive more than the "not -to- exceed" figures set forth in Section 3.2 for the applicable fiscal year. Consultant shall have no other claim against City by reason of such termination. 6. Party Representatives; Project Manager 6.1 City Manager or his designee, is the City's representative for purposes of this Agreement. 6.2 is the Consultant's primary representative for purposes of this Agreement. 6.3 is Consultant's Project Manager, who will have the overall responsibility and will supervise the work performed by Consultant pursuant to this Agreement. 7. Notices 7.1 All notices permitted or required under this Agreement shall be deemed made when personally delivered or when mailed 48 hours after deposit in the United States Mail, first class postage prepaid and addressed to the party at the following addresses: To City: City of Seal Beach 211 -8th Street Seal Beach, California 90740 Attn: City Manager To Consultant: Attn: Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 4 8. Independent Contractor; Consultant's Personnel 8.1 Consultant is an independent contractor and not an employee of the City. All services provided pursuant to this Agreement shall be performed by Consultant or under its supervision. Consultant will determine the means, methods, and details of performing the services. Any additional personnel performing services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 8.2 Consultant represents that it has, or will secure at its own expense, all personnel required to perform the services under this Agreement. All of the services required under this Agreement will be performed by Consultant or under its supervision, and all personnel engaged in the work shall be qualified to perform such services. Consultant reserves the right to determine the assignment of its own employees to the performance of Consultant's services under this Agreement, but City reserves the right, for good cause, to require Consultant to exclude any employee from performing services on behalf of the City. 8.3 Consultant shall indemnify and hold harmless City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs and expenses of any nature to the extent arising from Consultant's personnel practices. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City any reimbursement or indemnification arising under this Section. 9. Subcontractors 9.1 No portion of this Agreement shall be subcontracted without the prior written approval of the City. Consultant is fully responsible to City for the performance of any and all subcontractors. 10. Assignment 10.1 Consultant shall not assign or transfer any interest in this Agreement whether by assignment or novation, without the prior written consent of City. Any purported assignment without such consent shall be void and without effect. 5 11. Insurance 11.1 Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that Consultant has secured all insurance required under this Section. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements shall be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. 11.2 Consultant shall, at its expense, procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of this Agreement. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Professional Liability. Consultant shall maintain limits no less than: (1) General Liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage and if Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Professional Liability: $1,000,000 per claim /aggregate. 11.3 The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to state: (1) coverage shall not be suspended, voided, reduced or canceled except after 30 days prior written notice by certified mail, return receipt requested, has been given to the City; (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, (3) coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage and that any insurance or self - insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it; (4) for general liability insurance, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the services or operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (5) for automobile liability, that 6 the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible. 11.4 All insurance required by this Section shall contain standard separation of insureds provisions and shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents, and volunteers. 11.5 Any deductibles or self- insured retentions shall be declared to and approved by the City. Consultant guarantees that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the City, its directors, officials, officers, employees, agents, and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. 12. Indemnification, Hold Harmless, and Duty to Defend Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, volunteers and agents serving as independent contractors in the role of City officials (collectively "Indemnities ") free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any acts or omissions of Consultant, its employees, or its agents in connection with the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys' fees and other related costs and expenses, except for such loss or damage arising from the sole negligence or willful misconduct of the City. With respect to any and all such aforesaid suits, actions, or other legal proceedings of every kind that may be brought or instituted against Indemnitees, Consultant shall defend Indemnitees, at Consultant's own cost, expense, and risk, and shall pay and satisfy any judgment, award, or decree that may be rendered against Indemnitees. Consultant shall reimburse City and its directors, officials, officers, employees, agents and /or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its directors, officials, officers, employees, agents or volunteers. All duties of Consultant under this Section shall survive termination of this Agreement. 13. Ownership and Confidentiality of Work Product 13.1 All reports, drafts, documents or other material, whether in written or electronic form (collectively "Work Product "), developed by Consultant in connection with all services provided pursuant to this Agreement shall be and remain the property 7 of City without restriction or limitation upon its use or dissemination by City. Consultant shall deliver to the City all Work Product upon termination of this Agreement. 13.2 Consultant, in the course of its duties, may have access to financial, accounting, statistical, and /or personnel data of private individuals and employees of City. Consultant covenants that all data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without prior written authorization by City. City shall grant such authorization if the law requires disclosure. Consultant shall surrender and return all such data to City immediately upon the termination of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. 13.3 Notwithstanding the foregoing, pursuant to authority given by law or regulation, Consultant may be requested to make certain audit documentation available to a Cognizant or Oversight Agency or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. Consultant will notify City of any such request. If requested, access to such audit documentation will be provided under the supervision of Consultant's personnel. Furthermore, upon request, Consultant may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. 14. Equal Opportunity Consultant affirmatively represents that it is an equal opportunity employer. Consultant shall not discriminate against any subcontractor, employee, or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, sexual orientation, or age. Such non - discrimination includes, but is not limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or termination. 15. Labor Certification By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code that require every employer to be insured against liability for Workers' Compensation or to undertake self - insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 8 16. Licenses and Compliance with Laws 16.1 Consultant will obtain all necessary licenses, permits and other approvals to perform the Services and will pay all fees or taxes required for the issuance of the same. 16.2 Consultant shall comply with all applicable federal, state and local laws, ordinances, codes and regulations. 17. Entire Agreement This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. This Agreement may only be modified by a writing signed by both parties. 18. Severability The invalidity in whole or in part of any provisions of this Agreement shall not void or affect the validity of the other provisions of this Agreement. 19. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of California. 20. No Third Party Rights or Beneficiaries No third party shall be deemed to have any rights hereunder against either party as a result of this Agreement. 21. Waiver No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a party shall give the other party any contractual rights by custom, estoppel, or otherwise. 22. Prohibited Interests 22.1 Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City has the right to rescind this Agreement 9 - without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 22.2 Consultant and its officers, employees, associates and subcontractors, if any, will comply with all conflict of interest statutes of the State of California applicable to Consultant's services under this Agreement, including, but not limited to, the Political Reform Act (Government Code Section 81000, et. seq.) and Government Code Section 1090. During the term of this Agreement, Consultant and its officers, employees, associates and subcontractors shall not, without the prior written approval of the City, perform work for another person or entity for whom Consultant is not currently performing work that would require Consultant or one of its officers, employees, associates or subcontractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Consultant agrees that a clause substantially similar to this section shall be incorporated into any sub - agreement, which Consultant executes in connection with the performance of this Agreement. 23. Discrimination and Equal Employment Opportunity In the performance of this Agreement, Consultant shall not discriminate against any employee, subcontractor or applicant for employment because of race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation. Consultant will take affirmative action to ensure that subcontractors and applicants that are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation. 24. Attorneys' Fees If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party all of its attorneys' fees and other costs incurred in connection with such action. • 25. Time Is Of the Essence Time is hereby expressly declared to be of the essence of this Agreement and of each and every provision hereof; and each and every provision hereof is hereby declared to be and made a material, essential and necessary part of this Agreement. 26. Severability Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be valid under applicable law. If any provision of this Agreement is 10 determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect. 27. Exhibits All exhibits referenced in this Agreement are hereby incorporated into the Agreement as if set forth in full herein. In the event of any material discrepancy between the terms of any exhibit so incorporated and the terms of this Agreement, the terms of this Agreement shall control. 28. Corporate Authority The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of said Parties and that by their execution, the Parties are formally bound to the provision of this Agreement. IN WITNESS WHEREOF, the Parties hereto, through their respective authorized representatives have executed this Agreement as of the date and year first above written. CITY OF SEAL BEACH CONSULTANT By: By: Patrick P. Importuna, City Manager _ Name: Attest: Its: By: By: Linda Devine, City Clerk Name: - Approved as to Form: Its: ' By: Quinn Barrow, City Attorney 11