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HomeMy WebLinkAboutC-6094 - PSA for Contract Compliance AuditCCo PROFESSIONAL SERVICES AGREEMENT WITH SJOBERG EVASHENK CONSULTING, INC. FOR CONTRACT COMPLIANCE AUDIT THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and entered into as of this 13th day of April, 2015 ("Effective Date'), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and SJOBERG EVASHENK CONSULTING, INC., a California corporation ("Consultant"), whose address is 455 Capitol Mall, Suite 700, Sacramento, California 95814, and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City desires to engage Consultant to conduct a contract compliance audit ("Project'). C. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the professional services described in this Agreement. D. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Consultant to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the Effective Date, and shall terminate on June 30, 2015, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the services described in the Scope of Services attached hereto as Exhibit A and incorporated herein by reference ("Services" or "Work"). City may elect to delete certain Services within the Scope of Services at its sole discretion. 3. TIME OF PERFORMANCE 3.1 Time is of the essence in the performance of Services under this Agreement and Consultant shall perform the Services in accordance with the schedule included in Exhibit A. In the absence of a specific schedule, the Services shall be performed to completion in a diligent and timely manner. The failure by Consultant to strictly adhere to the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely manner may result in termination of this Agreement by City. 3.2 Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the Services to be provided for the Project, each party hereby agrees to provide notice within two (2) calendar days of the occurrence causing the delay to the other party so that all delays can be addressed. 3.3 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator as defined herein not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Consultant's control. 3.4 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by hand -delivery or mail. 4. COMPENSATION TO CONSULTANT 4.1 City shall pay Consultant for the Services on a time and expense not -to - exceed basis in accordance with the provisions of this Section and the Schedule of Billing Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's compensation for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall not exceed Seven Thousand Dollars and 00/100 ($7,000.00), without prior written authorization from City. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 4.2 Consultant shall submit monthly invoices to City describing the Work performed the preceding month. Consultant's bills shall include the name of the person who performed the Work, a brief description of the Services performed and/or the specific task in the Scope of Services to which it relates, the date the Services were performed, the number of hours spent on all Work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar days after approval of the monthly invoice by City staff. 4.3 City shall reimburse Consultant only for those costs or expenses specifically identified in Exhibit B to this Agreement or specifically approved in writing in advance by City. 4.4 Consultant shall not receive any compensation for Extra Work performed without the prior written authorization of City. As used herein, "Extra Work" means any Work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Sjoberg Evashenk Consulting, Inc. Page 2 Compensation for any authorized Extra Work shall be paid in accordance with the Schedule of Billing Rates as set forth in Exhibit B. 5. PROJECT MANAGER 5.1 Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated Marianne P. Evashenk, President, to be its Project Manager. Consultant shall not remove or reassign the Project Manager or any personnel listed in Exhibit A or assign any new or replacement personnel to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of non -key personnel. 5.2 Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of Services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 5.3 If Consultant is performing inspection services for City, the Project Manager and any other assigned staff shall be equipped with a cellular phone to communicate with City staff. The Project Manager's cellular phone number shall be provided to City. 6. ADMINISTRATION This Agreement will be administered by the Finance Department. City's Finance Director or designee shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator shall represent City in all matters pertaining to the Services to be rendered pursuant to this Agreement. 7. CITY'S RESPONSIBILITIES To assist Consultant in the execution of its responsibilities under this Agreement, City agrees to provide access to and upon request of Consultant, one copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Consultant's Work schedule. 8. STANDARD OF CARE 8.1 All of the Services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the Services required by this Agreement, and that it will perform all Services in a manner commensurate with the highest professional standards. For purposes of this Agreement, the phrase "highest professional standards" shall mean those standards of practice recognized by one (1) or more first- class firms performing similar work under similar circumstances. Sjoberg Evashenk Consulting, Inc. Page 3 8.2 All Services shall be performed by qualified and experienced personnel who are not employed by City. By delivery of completed Work, Consultant certifies that the Work conforms to the requirements of this Agreement, all applicable federal, state and local laws, and the highest professional standard. 8.3 Consultant represents and warrants to City that it has, shall obtain, and shall keep in full force and effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Consultant to practice its profession. Consultant shall maintain a City of Newport Beach business license during the term of this Agreement. 8.4 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's Work promptly, or delay or faulty performance by City, contractors, or governmental agencies. 9. HOLD HARMLESS 9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any Work performed or Services provided under this Agreement including, without limitation, defects in workmanship or materials or Consultant's presence or activities conducted on the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable, or any or all of them). 9.2 Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Consultant. Sjoberg Evashenk Consulting, Inc. Page 4 10. INDEPENDENT CONTRACTOR It is understood that City retains Consultant on an independent contractor basis and Consultant is not an agent or employee of City. The manner and means of conducting the Work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. No civil service status or other right of employment shall accrue to Consultant or its employees. Nothing in this Agreement shall be deemed to constitute approval for Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the means of performing the Work, provided that Consultant is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Consultant as to the details of the performance of the Work or to exercise a measure of control over Consultant shall mean only that Consultant shall follow the desires of City with respect to the results of the Services. 11. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the Work to be performed. City agrees to cooperate with the Consultant on the Project. 12. CITY POLICY Consultant shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 13. PROGRESS Consultant is responsible for keeping the Project Administrator informed on a regular basis regarding the status and progress of the Project, activities performed and planned, and any meetings that have been scheduled or are desired. 14. INSURANCE Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement or for other periods as specified in this Agreement, policies of insurance of the type, amounts, terms and conditions described in the Insurance Requirements attached hereto as Exhibit C, and incorporated herein by reference. 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the Services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall Sjoberg Evashenk Consulting, Inc. Page 5 be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or joint -venture or syndicate or co -tenancy, which shall result in changing the control of Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five percent (25%) or more of the assets of the corporation, partnership or joint -venture. 16. SUBCONTRACTING The subcontractors authorized by City, if any, to perform Work on this Project are identified in Exhibit A. Consultant shall be fully responsible to City for all acts and omissions of any subcontractor. Nothing in this Agreement shall create any contractual relationship between City and any subcontractor nor shall it create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise required by law. City is an intended beneficiary of any Work performed by the subcontractor for purposes of establishing a duty of care between the subcontractor and City. Except as specifically authorized herein, the Services to be provided under this Agreement shall not be otherwise assigned, transferred, contracted or subcontracted out without the prior written approval of City. 17. OWNERSHIP OF DOCUMENTS 17.1 Each and every report, draft, map, record, plan, document and other writing produced, including but not limited to, websites, blogs, social media accounts and applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Additionally, all material posted in cyberspace by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents, including all logins and password information to City upon prior written request. 17.2 Documents, including drawings and specifications, prepared by Consultant pursuant to this Agreement are not intended or represented to be suitable for reuse by City or others on any other project. Any use of completed Documents for other projects and any use of incomplete Documents without specific written authorization from Consultant will be at City's sole risk and without liability to Consultant. Further, any and all liability arising out of changes made to Consultant's deliverables under this Agreement by City or persons other than Consultant is waived against Consultant, and City assumes full responsibility for such changes unless City has given Consultant prior notice and has received from Consultant written consent for such changes. Sjoberg Evashenk Consulting, Inc. Page 6 17.3 All written documents shall be transmitted to City in formats compatible with Microsoft Office and/or viewable with Adobe Acrobat. 18. CONFIDENTIALITY All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the Services in this Agreement, shall be kept confidential unless City expressly authorizes in writing the release of information. 19. INTELLECTUAL PROPERTY INDEMNITY Consultant shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement or alleged infringement of any United States' letters patent, trademark, or copyright, including costs, contained in Consultant's Documents provided under this Agreement. 20. RECORDS Consultant shall keep records and invoices in connection with the Services to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any Services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Consultant shall allow inspection of all Work, data, Documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 21. WITHHOLDINGS City may withhold payment to Consultant of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue Work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 22. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which result in expense to City greater than what would have resulted if there were not errors or omissions in the Work accomplished by Consultant, the additional design, construction and/or restoration expense shall be Sjoberg Evashenk Consulting, Inc. Page 7 borne by Consultant. Nothing in this Section is intended to limit City's rights under the law or any other sections of this Agreement. 23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. 24. CONFLICTS OF INTEREST 24.1 Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act"), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the Work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. 24.2 If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 25. NOTICES 25.1 All notices, demands, requests or approvals, including any change in mailing address, to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first- class mail, addressed as hereinafter provided. 25.2 All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Attn: Dan Matusiewicz, Finance Director Finance Department City of Newport Beach 100 Civic Center Drive PO Box 1768 Newport Beach, CA 92658 25.3 All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant at: Attn: Marianne P. Evashenk, President Sjoberg Evashenk Consulting, Inc. 455 Capitol Mall, Suite 700 Sacramento, CA 95814 Sjoberg Evashenk Consulting, Inc. Page 8 26. CLAIMS Unless a shorter time is specified elsewhere in this Agreement, before making its final request for payment under this Agreement, Consultant shall submit to City, in writing, all claims for compensation under or arising out of this Agreement. Consultant's acceptance of the final payment shall constitute a waiver of all claims for compensation under or arising out of this Agreement except those previously made in writing and identified by Consultant in writing as unsettled at the time of its final request for payment. Consultant and City expressly agree that in addition to any claims filing requirements set forth in the Agreement, Consultant shall be required to file any claim Consultant may have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.). 27. TERMINATION 27.1 In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non -defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. 27.2 Notwithstanding the above provisions, City shall have the right, at its sole and absolute discretion and without cause, of terminating this Agreement at any time by giving no less than seven (7) calendar days' prior written notice to Consultant. In the event of termination under this Section, City shall pay Consultant for Services satisfactorily performed and costs incurred up to the effective date of termination for which Consultant has not been previously paid. On the effective date of termination, Consultant shall deliver to City all reports, Documents and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 28. STANDARD PROVISIONS 28.1 Recitals. City and Consultant acknowledge that the above Recitals are true and correct and are hereby incorporated by reference into this Agreement. 28.2 Compliance with all Laws. Consultant shall, at its own cost and expense, comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all Work prepared by Consultant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. Sjoberg Evashenk Consulting, Inc. Page 9 28.3 Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 28.4 Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 28.5 Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 28.6 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 28.7 Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 28.8 Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 28.9 Controlling Law and Venue. The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange, State of California. 28.10 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, age or any other impermissible basis under law. 28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees. 28.12 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. [SIGNATURES ON NEXT PAGE] Sjoberg Evashenk Consulting, Inc. Page 10 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: y/' / 1 S By: Aaron arp UM osju1 IS City Attorney ATTEST: rL )31/� Date: ' By: 41� OP Leilani I. Brown City Clerk 'ALI FOµ CITY OF NEWPORT BEACH, a California municipal corporation Date: .1 By: Da atusiewicz Finance Director CONSULTANT: Sjoberg Evashenk Consulting, Inc., a California corporation Date: Signed in Counterpart By: Marianne P. Evashenk President Date: Signed in Counterpart By: Kurt R. Sjoberg Vice -President & Corporate Secretary [END OF SIGNATURES] Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates Exhibit C — Insurance Requirements Sjoberg Evashenk Consulting, Inc. Page 11 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: y/J / 1S -2 Aaron "arp NM 031r l IS City Attorney CITY OF NEWPORT BEACH, a California municipal corporation Date: By: Dan Matusiewicz Finance Director ATTEST: CONSULTANT: Sjoberg Evashenk Date: Consulting, I California corporation Dater 2.0 'f— By: By: Leilani I. Brown Ma [ani e P. vashenk City Clerk Presi nt Date: �By: . Kurt . Sjoberg Vice -President & Cor orate Secr ary [END OF SIGNATURES] Attachments: Exhibit A – Scope of Services Exhibit B – Schedule of Billing Rates Exhibit C – Insurance Requirements Sjoberg Evashenk Consulting, Inc. Page 11 EXHIBIT A SCOPE OF SERVICES Sjoberg Evashenk Consulting, Inc. Page A-1 EXHIBIT A— SCOPE OF SERVICES Sjoberg Evashenk Consulting, Inc. ("Consultant") shall conduct a Contract Compliance Audit regarding the City's Tree Maintenance Services Contract. THE PROJECT The City of Newport Beach ("City") maintains nearly 34,000 trees located on parkways, slopes, medians, in parks, and at City facilities. Tree maintenance services (pruning, planting and removals) are performed by contractors overseen by the City's Municipal Operations Department. The agreement with the current contractor, Great Scott Tree Services (GSTS), was approved by the City Council on November 12, 2013 for a 10 -year term with option for three extensions of two years each. During the first year of services, it came to the City's attention that the services required for tree maintenance may be greater than other years. The City is interested to determine whether the executed contract aligns with the RFP's scope of work or whether conditions have changed and a new procurement is warranted. City is retaining Consultant to review the procurement and provide advice on how to proceed in this situation. GENERAL APPROACH Consultant shall conduct interviews and document analysis as to understand and evaluate the City contract related to the contracted Tree Maintenance Services. Consultant shall conduct this project on a "stop and go" basis; this Agreement entails a first "phase"; any additional work on this matter would be negotiated with the City to develop the work plan and additional budget. Consultant's "work plan" and approach for this "reconnaissance" or "as is" will entail: • Conduct interviews with relevant City staff. • Obtain and review the following documents: o RFP for the procurement o Responses to the RFP o Scoring criteria and scoring sheets o Executed contract with scope of services o Prior contract for Tree Services o Relevant policies and procedures for such procurements. • Analyze these and other relevant materials to determine whether the contract awarded aligns with the RFP, whether the current situation suggests that the City's requirements are greater than those expressed in the RFP or under the previous contract, if the existing contract should remain as is or amended, or if the services should be re -procured. DELIVERABLE Consultant shall conduct this brief reconnaissance to assess the current "condition" and determine its view of how the City should proceed in this matter. To expedite the process and EXHIBIT A —SCOPE OF SERVICES contain the costs, Consultant suggests that the "deliverable" is a bullet point discussion document conveying what it found and its advice of alternatives going forward. Should a formal report be necessary, Consultant shall request additional budget and time. CONSULTANT BACKGROUND Sjoberg Evashenk Consulting—The Equation for Excellence. This is not only our motto; it is the way we do business—every day, every project, every effort. We at Sjoberg Evashenk Consulting have dedicated our careers to improving operations and programs in government and quasi -government organizations. Important to this project is that Sjoberg Evashenk has conducted more than 250 audits since our founding in 2000 serving more than 100 state and local government entities throughout the western United States, including the City of Newport Beach. Our firm is led by partners Kurt Sjoberg and Marianne Evashenk—former California State Auditor General and Chief Deputy State Auditor—who bring our clients decades of experience and expertise in government performance audit, program evaluation, compliance, contract, financial audit, and many other areas of management consulting. Regardless of the type of service, our firm's overall consulting philosophy is simple. We strive to deliver more to our clients than they expect, and do so with unsurpassed quality. Our consulting approach and rigid quality control procedures ensure that we consistently produce insightful, on -point, actionable, value-added, and practical solutions—and we do so on-time and on -budget. Sjoberg Evashenk Consulting offers over 15 years of relevant experience in evaluating contracting, procurement, compliance, and control environment over governmental and quasi - government operations. We offer not only audit and evaluation expertise, but bring direct experience managing and operating governmental organizations as well. We understand the City's fiduciary position to the public and the duties, roles, responsibilities, challenges and parameters that these officers, executives, managers and staff must manage within. Established in 2000, Sjoberg Evashenk Consulting, Inc. is organized as a Sub -Chapter S Corporation headquartered in Sacramento, California. We are comprised of highly experienced audit staff all having long tenure with our firm and each bringing advanced educational and professional credentials. Sjoberg Evashenk Consulting is federally and state recognized disadvantaged business enterprise—woman-owned, and a California small business "micro" enterprise. PROPOSED STAFF For this engagement, Sjoberg Evashenk offers a small, but highly qualified team. Each member of the team brings direct experience in conducting performance audits and compliance reviews. They bring deep expertise in areas of procurement and contracting processes, contract compliance, and public works. Marianne Evashenk, CPA, CGFM, CGMA: Project Partner • George Skiles, MA, CIA, CRMA: Project Manager Robert Evashenk, BS: Consultant EXHIBIT A— SCOPE OF SERVICES Our team will work in concert to conduct this engagement. Mr. Skiles and Mr. Evashenk will conduct the majority of the on-site fieldwork with Ms. Evashenk superintending and providing assistance. If the project requires additional team members, we will provide their resumes and request in writing for the City's approval to add them to the team; unless the scope of the project changes, costs related to any additions to our team will be absorbed in the budget. EXHIBIT A– SCOPE OF SERVICES Marianne P. Evashenk, cofounder and President of Sjoberg Evashenk Consulting. Ms. Evashenk has dedicated her career to improvement in accountability and excellence in government services. Reviews she has conducted involved all levels of complexity and entity size at the state and local levels—isolating and evaluating the fiscal and operational aspects specific programs, assessing compliance and service delivery, reviewing business processes and controls, determining information flow and integrity, monitoring and reviewing system's implementation and contracts, and examining service efforts and accomplishments. She brings vast experience in areas contract delivery and the evaluation of related controls and enterprise risk. Moreover, her projects often entail various areas and functions of a program or organization such as structure, personnel and human resource issues, business cycle forensic analysis, benchmarking, and monitoring and oversight. Ms. Evashenk always strives to provide practical, relevant, timely and practical information and recommendations to leaders and other decision - makers. Examples of pertinent compliance and contract engagements include: * Los Angeles World Airports * California Health Benefits Exchange * San Francisco City and County -various projects * Queen Mary lease with City of Long Beach * City of Newport Beach * City of Long Beach * City of Anaheim * City of Elk Grove * Judicial Council of California For more than 7 years, Ms. Evashenk managed the operations of the California State Auditor. During this 18 -year career, she participated and managed literally hundreds of performance, financial, contract, and compliance audits, as well as managed the Bureau's investigative hotline. EXHIBIT A — SCOPE OF SERVICES George Skiles, manager with Sjoberg Evashenk Consulting brings more than 15 years' experience in evaluating programs in the public and private sector. In this time, he managed dozens of consulting engagements and performance audits that encompass a wide range of government and non-profit operations. Mr. Skiles has managed or conducted several performance audits evaluating contracting practices as they relate to professional services, construction of capital improvement projects, memorandums of understanding and intergovernmental agreements, and purchasing. He is also familiar with the operating environment of the City of Los Angeles, having conducted independent, GAGAS-compliant audits in the departments of in public works, water and power, airports, harbor, information technology, and general services agencies. Below is a brief list of of related engagements managed by Mr. Skiles: Contracting practices in Department of Public Works, including CIP projects administered by Bureaus of Sanitation, Street Services, Street Lighting, and Contract Administration. Contracting practices at LAWA, including professional services and construction. ♦ Centre City Development Corporation, including redevelopment projects and public works infrastructure projects. ♦ City of Elk Grove's Development Services Division, including public works, planning, and building and safety. ♦ Contracting Practices at Department of Water and Power. ♦ Contracting Practices at the Port of Los Angeles. Many of these engagements involved assessments of contract administration, contract compliance, scheduling and budget -to - actual, competitive solicitation activities, amendments and change orders, benchmarking and comparisons of existing practices to best or leading contracting and CIP practices. EXHIBIT A — SCOPE OF SERVICES Robert Evashenk is a Staff Consultant with Sjoberg Evashenk Consulting. Since joining the firm, he has worked on a number of complex and challenging projects. Mr. Evashenk has worked on a variety of engagements and is currently completing work on a large-scale audit of the San Diego TransNet transportation program where he is evaluating financial and contract activities. Mr. Evashenk recently completed two contractor compliance reviews relating to parking lot concessions and more than a dozen reviews of contractor overhead rate determinations and a third project evaluating the City of San Francisco's Department of Public Works' Job Order Contracts program. He was recently a key team member on the firm's performance audit of the City of Los Angeles' Fire Department's Emergency Services billing and collections activities. This project entails complex compliance matters relating to two key vendor contracts—procurement and award, contractor compliance, and performance sanctions. He also worked on a comprehensive project to develop processes, procedures, and oversight of a new $85 million state -level loan guarantee program. This project is built upon a previous engagement where he evaluated loan portfolios in compliance with federal provisions. Additionally, participated in the review of the LA Memorial Coliseum Commission, fiscal operations at the Los Angeles Superior Court, and he was a key team member on a performance audit for the City of Elk Grove Police Department as the City's internal auditor. Recently, he completed two projects with the San Francisco City Service Auditor, reviewing contractors' overhead rates from the Municipal Transportation Agency Central Subway Project. Further, his team conducted a comprehensive study of Colorado's College Opportunity Fund program involving data for thousands of college students over a ten year period. Finally, among other engagements he was a team member on the firm's engagement of the review of Sacramento's Community Services Department's building permitting processes. EXHIBIT B SCHEDULE OF BILLING RATES Consultant shall conduct the interviews and the document review and analysis within 20-25 hours of work and at a reduced blended billing rate of $175.00 per hour. The work on this aspect of the project will be conducted by Marianne Evashenk, Partner, and George Skiles, Manager. It is anticipated that there is no need for additional staff for this brief assignment. It is estimated that to complete this phase of the engagement that services costs will not exceed $5,000. This engagement can be completed remotely from the Consultant's offices in Sacramento as most of the effort entails document review and interviews. However, if coming on site is deemed value-added or if in-person briefings are requested, Consultant shall be reimbursed for actual travel costs. Any additional work, as mutually agreed, would be billed at the following: LEVEL HOURLY RATE Partner $225.00 Manager $160.00 Consultant $90.00 Sjoberg Evashenk Consulting, Inc. Page B-1 EXHIBIT C INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES 1. Provision of Insurance. Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Consultant agrees to provide insurance in accordance with requirements set forth here. If Consultant uses existing coverage to comply and that coverage does not meet these requirements, Consultant agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Consultant shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Consultant shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees and volunteers. B. General Liability Insurance. Consultant shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) general aggregate. The policy shall cover liability arising from premises, operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). C. Automobile Liability Insurance. Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit each accident. Sjoberg Evashenk Consulting, Inc. Page C-1 D. Professional Liability (Errors & Omissions) Insurance. Consultant shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of one million dollars ($1,000,000) per claim and two million dollars ($2,000,000) in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Effective Date of this Agreement and Consultant agrees to maintain continuous coverage through a period no less than three years after completion of the Services required by this Agreement. 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subconsultants. B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, if required, but not including professional liability, shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self- insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar days notice of cancellation (except for nonpayment for which ten (10) calendar days notice is required) or nonrenewal of coverage for each required coverage. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Consultant shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. Sjoberg Evashenk Consulting, Inc. Page C-2 B. City's Right to Revise Requirements. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Consultant sixty (60) calendar days advance written notice of such change. If such change results in substantial additional cost to Consultant, City and Consultant may renegotiate Consultant's compensation. C. Enforcement of Agreement Provisions. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform Consultant of non-compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. D. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. E. Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be considered to comply with these requirements unless approved by City. F. City Remedies for Non -Compliance. If Consultant or any subconsultant fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Consultant's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Consultant or reimbursed by Consultant upon demand. G. Timely Notice of Claims. Contractor shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Contractor's performance under this Contract, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. H. Consultant's Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own Sjoberg Evashenk Consulting, Inc. Page C-3 judgment may be necessary for its proper protection and prosecution of the Work. Sjoberg Evashenk Consulting, Inc. Page C-4 CERTIFICATE OF INSURANCE CHECKLIST City of Newport Beach This checklist is comprised of requirements as outlined by the City of Newport Beach. * Date Received: 4/3/15 Dept./Contact Received From: Anthony Date Completed: 4/3/15 Sent to: Anthony By: Chris/Alicia Company/Person required to have certificate: All Other Type of contract: Sjoberg Evashenk Consulting Inc. I. GENERAL LIABILITY EFFECTIVE/EXPIRATION DATE: 12/31/14 to 12/31/15 A. INSURANCE COMPANY: Sentinel Insurance Company B. AM BEST RATING (A-: VII or greater): A; XV C. ADMITTED Company (Must be Califomia Admitted): Is Company admitted in California? N Yes ❑ No D. LIMITS (Must be $1 M or greater): What is limit provided? 2M/2M, 2/M/3M-Prof Liab E. ADDITIONAL INSURED ENDORSEMENT — please attach N Yes ❑ No F. PRODUCTS AND COMPLETED OPERATIONS (Must (What is limits provided?) include): Is it included? (completed Operations status does F. PRIMARY & NON-CONTRIBUTORY WORDING (For Waste not apply to Waste Haulers or Recreation) N Yes ❑ No G. ADDITIONAL INSURED FOR PRODUCTS AND G. HIRED AND NON -OWNED AUTO ONLY: COMPLETED OPERATIONS ENDORSEMENT (completed H. NOTICE OF CANCELLATION: Operations status does not apply to Waste Haulers) N Yes ❑ No H. ADDITIONAL INSURED WORDING TO INCLUDE (The City its officers, officials, employees and volunteers): Is it included? N Yes ❑ No I. PRIMARY & NON-CONTRIBUTORY WORDING (Must be included): Is it included? N Yes ❑ No J. CAUTION! (Confirm that loss or liability of the named insured is not limited solely by their negligence) Does endorsement include "solely by negligence' wording? ❑ Yes N No K. ELECTED SCMAF COVERAGE (RECREATION ONLY): N N/A ❑ Yes ❑ No L. NOTICE OF CANCELLATION: ❑ N/A N Yes ❑ No IL AUTOMOBILE LIABILITY EFFECTIVE/EXPIRATION DATE: 12/31/14 to 12/31/15 A. INSURANCE COMPANY: Sentinel Insurance Company B. AM BEST RATING (A-: VII or greater) A; XV C. ADMITTED COMPANY (Must be California Admitted): Is Company admitted in California? N Yes ❑ No D. LIMITS - If Employees (Must be $1 M min. BI & PD and $500,000 UM, $2M min for Waste Haulers): What is limits provided? 2,000,000 E LIMITS Waiver of Auto Insurance / Proof of coverage (if individual) (What is limits provided?) N/A F. PRIMARY & NON-CONTRIBUTORY WORDING (For Waste Haulers only): ® N/A ❑ Yes ❑ No G. HIRED AND NON -OWNED AUTO ONLY: ❑ N/A N Yes ❑ No H. NOTICE OF CANCELLATION: ❑ N/A N Yes ❑ No III. WORKERS' COMPENSATION EFFECTIVE/EXPIRATION DATE: 12/31/14 to 12/31/15 A. INSURANCE COMPANY: Sentinel Insurance Company B. AM BEST RATING (A-: VII or greater): A; XV C. ADMITTED Company (Must be California Admitted): ® Yes ❑ No D. WORKERS' COMPENSATION LIMIT: Statutory ® Yes ❑ No E. EMPLOYERS' LIABILITY LIMIT (Must be $1M or greater) 1,000,000 F. WAIVER OF SUBROGATION (To include): Is it included? ® Yes ❑ No G. SIGNED WORKERS' COMPENSATION EXEMPTION FORM: ® N/A ❑ Yes ❑ No H. NOTICE OF CANCELLATION: ❑ N/A ® Yes ❑ No ADDITIONAL COVERAGE'S THAT MAYBE REQUIRED IV. PROFESSIONAL LIABILITY V POLLUTION LIABILITY V BUILDERS RISK HAVE ALL ABOVE REQUIREMENTS BEEN MET? IF NO, WHICH ITEMS NEED TO BE COMPLETED? Approved: Agent of Alliant Insurance Services Broker of record for the City of Newport Beach 413115 Date ❑ N/A ® Yes ❑ No ® N/A ❑ Yes ❑ No ® NIA ❑ Yes ❑ No ® Yes ❑ No RISK MANAGEMENT APPROVAL REQUIRED (Non -admitted carrier rated less than _; Self Insured Retention or Deductible greater than $ ) ❑ N/A ❑ Yes ❑ No Reason for Risk Management approval/exception/waiver: Approved: Risk Management Date * Subject to the terms of the contract. J i l,� IIL June 7, 2012 W. Dan ..4fatusiewiez Deputy Finance Director City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 42663 Dear Mr. Matusiewicz: Sjoberg Evashenk Consulting is pleased to provide the City of Newport with services to conduct a generally accepted government auditing standards ("GAGAS")-compliant review related to two grant agreements between the City of Newport Beach and the Newport Beach Chamber of Commerce ("Grantee"). The subject grants included in this engagement relate to two City awards supporting two specific events: $7,200 for the 2011 Taste of Newport, and $30,000 for 2011 Christmas Boar Parade. The objectives of the grant reviews are to determine whether grant funds were spent solely for the approved uses as stipulated within the provisions of the agreements. Further, the audit will assess the Grantee's activities related to support of Political Action Committees ("PACs") during the last three years and include limited testing and audit procedures to determine whether the City -sponsored event profits subsidized the funding of PACs and if event proceeds were appropriately segregated from funds supporting PACs. The grant agreements include parameters of allowable uses of the grant funds and require that these City funds be expended solely for the specific purpose. The audit work will assess Grantee compliance with agreement provisions' including expending the fiords within the stipulated term of each agreement and the appropriate return to the City of any unused funds. Further, the audit will determine if grant funds were used for any activity that would violate City, state, or federal statutory or decisional law (including taxation provisions under Section 501(c) (3) of the Internal Revenue Code). 'Me City and Sjoberg Evashenk mutually agreed to the following limited scope of work as follows: • Evaluate the Grantee's use of the Grant funds for each of the two 201 1 events to determine how the funds were used and whether such funds were expending on allowable costs and for purposes relating to the event. • For each of the two 2011 events, assess the proportion of City -provided funds in relation to ali revenues and sources for those events to identify the proportion of support and context of use. • In relation to the two 2011 events, review payments and in-kind transactions and assess whether any City grant funds or the proceeds of City -sponsored events were used to supp*)n PAC and `or lobbying activities, Obtain Grantee managernent assertions related to PAC andior lobbying activities, City of Newport June 7.201 2 Page 2 of 2 • Determine the level and type of support provided by the Grantee for PAC and;'or lobbying activities over the three fiscal years ending in FY 2011-2012 Sjoberg Evashenk Consulting will maintain open communication and ensure that matters under audit are discussed with the Grantee, and findings developed and supported by sufficient evidential matter. The preliminary findings of our audit will be presented in an exit conference with the Grantee. After the exit conference and our internal quality review, we will provide the City Finance Director with our written draft report for review and comment. A final draft report will then be provided to the Grantee for comment and written response. Upon obtaining the City's approval, we will finalize the audit report and submit it to the City in an agreed to form and format. Our audit will be conducted in compliance with generally accepted government auditing standards as promulgated by the U.S. Comptroller General. As mutually agreed, the City will notify the Grantee of the audit. Upon die execution of this agreement through signing this letter in the space provided below, Sjoberg Evashenk will contact the Grantee to set up a mutually agreed to time and date for an entrance conference. We will provide the City with frequent status reports and expect to deliver the post -exit draft report to the City within 30-45 days of the entrance conference—schedules of key persons permitting. Sjoberg Evashenk Consulting will conduct this engagement for five thousand dollars ($5,000). This fixed fee is inclusive of all travel and out-of-pocket expenses. Any testimony before the City Council or other entities is not included in above fee and will be billed on an hourly basis at the appropriate hourly rate disclosed in your proposal. Travel and out-of-pocket expenses associated with any testimony will be reimbursed at cost. Sjoberg Evashenk looks forward to commencing this important engagement and working closely with the City. Please do not hesitate to contact me or my partner Kurt Sjoberg if you have any questions. Sincerely, f Man4ne P. Evashenk, President