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HomeMy WebLinkAboutC-4961-1 - Agreement for Tourism Promotion, Branding and Marketing ServicesAGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND VISIT NEWPORT BEACH INC., FOR TOURISM PROMOTION, BRANDING, AND MARKETING SERVICES THIS TOURISM PROMOTION, BRANDING, AND MARKETING AGREEMENT ("Agreement") is made and entered into as of this 1st day of January, 2025 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and VISIT NEWPORT BEACH INC., a California nonprofit corporation ("VNB"), whose address is 1600 Newport Center Drive, Suite 120, Newport Beach, CA 92660, 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. VNB is a 501(c)(6) marketing organization whose mission is to partner with the City and the tourism and hospitality industry by protecting and promoting the City's brand and to deliver additional spending by leisure and conference visitors, leading to enhanced community economic vitality and quality of life. C. To promote tourism in Newport Beach, the Parties have entered into written agreements whereby the City provides a portion of the City's transient occupancy tax ("TOT") to VNB for the purpose of funding marketing efforts and the promotion of tourism within the city, with the most recent agreement set to expire December 31, 2024. D. The Parties now desire to continue the arrangement whereby a portion of the City's TOT is provided to VNB for the purpose of funding marketing efforts and promotion of tourism within the city ("Project"). E. VNB represents that it possesses the skill, experience, ability, background, certification and knowledge to provide the professional services described in this Agreement, and City desires VNB 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 December 31, 2029, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED VNB 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") In performance of the Work, VNB expressly agrees to abide by each term and condition set forth herein and in the Exhibits. 3. TIME OF PERFORMANCE 3.1 Time is of the essence in the performance of Services under this Agreement and VNB 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 VNB to strictly adhere to the schedule set forth in Exhibit A, or to perform the Services in a diligent and timely manner shall be considered a default and may result in termination of this Agreement by City in accordance with Section 27.1. 3.2 Notwithstanding the foregoing, VNB shall not be responsible for delays due to causes beyond VNB'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 VNB 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 VNB's control. 3.4 For all time periods not specifically set forth herein, VNB shall respond in the most expedient and appropriate manner under the circumstances, by hand -delivery or mail. 4. COMPENSATION 4.1 City shall pay VNB for the Services in accordance with the provisions of this Section and the Transfer of TOT for Services Exhibit B, which is attached hereto and incorporated herein by reference. Exhibit B provides the total compensation to be provided to VNB for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees. 4.2 VNB shall utilize the compensation only for those costs, expenses and reimbursements specifically identified in a City Council approved Marketing Plan, as defined in Exhibit A, and only up to the amounts approved in the Biennial Budget, as defined in Exhibit A. 4.3 VNB 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 Visit Newport Beach Inc. Page 2 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. 4.4 Upon expiration or termination of this Agreement, VNB shall return to the City any remaining TOT that has not been spent on marketing activities, in accordance with this Agreement. 5. RIGHT TO AUDIT 5.1 City reserves the right to designate its own representative(s) or its contracted representatives with a Certified Public Accounting firm who shall have the right to audit VNB's accounting procedures, internal controls of VNB's financial systems, and to examine any cost, revenue, payment, claim, other records or supporting documentation resulting from any items set forth in this Agreement. Any such audit(s) shall be undertaken by City or its representative(s) at mutually agreed upon reasonable times, not more than once per year. City will make every attempt to finish the audit in a timely manner and VNB agrees to submit all records requested by City or its representatives in a timely manner. VNB agrees to fully cooperate with any such audit. 5.2 This right to audit shall extend during the length of this Agreement and for a period of three (3) years or longer, if required by law, following the date of any payment tendered under this Agreement. VNB agrees to retain all necessary records/documentation for the entire length of this audit period, and to provide, upon prior notice to VNB, access to VNB's auditors for this purpose. 5.3 The City will notify VNB in writing of any exception taken as a result of an audit. If VNB disagrees with any such exceptions, VNB will notify City in writing within twenty (20) days after the notification of exceptions to VNB. VNB and the City Manager, or the City Manger's designee, will then meet and attempt to resolve any discrepancies. VNB will be provided an opportunity to include its written responses to audit exception items in the final report of the audit. Any expenditure of funds for a purpose not authorized by this Agreement shall be paid by VNB to the City within thirty (30) calendar days from presentation of City's findings to VNB. If VNB fails to make such payment, VNB agrees to pay interest at a rate of ten percent (10%) per annum. Interest will be computed from the date of written notification of exception(s) to the date VNB reimburses City for any exception(s). 6. PROJECT MANAGER 6.1 VNB 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. VNB has designated its President & CEO to be its Project Manager. VNB 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. Visit Newport Beach Inc. Page 3 7. ADMINISTRATION This Agreement will be administered by the City Manager's Office. The City Manager, 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. 8. STANDARD OF CARE 8.1 All of the Services shall be performed by VNB or under VNB's supervision. VNB 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 community professional standards and with the ordinary degree of skill and care that would be used by other reasonably competent practitioners of the same discipline under similar circumstances. All Services shall be performed by qualified and experienced personnel who are not employed by City. By delivery of completed Work, VNB certifies that the Work conforms to the requirements of this Agreement, all applicable federal, state and local laws, and legally recognized professional standards. 8.2 VNB 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 VNB to practice its profession. VNB shall maintain a City of Newport Beach business license during the term of this Agreement. 8.3 VNB shall not be responsible for delay, nor shall VNB 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 VNB'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, VNB 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 the negligent, reckless, and/or willful acts, errors and/or omissions of VNB, 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). Visit Newport Beach Inc. Page 4 9.2 Notwithstanding the foregoing, nothing herein shall be construed to require VNB 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 VNB. 10. INDEPENDENT CONTRACTOR It is understood that City retains VNB on an independent contractor basis and VNB is not an agent or employee of City. The manner and means of conducting the Work are under the control of VNB, 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 VNB or its employees. Nothing in this Agreement shall be deemed to constitute approval for VNB or any of VNB's employees or agents, to be the agents or employees of City. VNB shall have the responsibility for and control over the means of performing the Work, provided that VNB is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct VNB as to the details of the performance of the Work or to exercise a measure of control over VNB shall mean only that VNB shall follow the desires of City with respect to the results of the Services. 11. COOPERATION VNB 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 Project Manager on the Project. 12. RESERVED 13. PROGRESS VNB 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 VNB's indemnification of City, and prior to commencement of Work, VNB 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. Visit Newport Beach Inc. Page 5 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of VNB, or of the interest of any general partner or joint venturer or syndicate member or cotenant if VNB is a partnership or joint -venture or syndicate or co -tenancy, which shall result in changing the control of VNB. 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 VNB 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 the Project Administrator. 17. OWNERSHIP OF DOCUMENTS 17.1 All intellectual property and each and every image and writing including, but not limited to, all website/digital content, brochures, publications, guides, promotions, social media accounts, blog, application, photograph, video, artwork, report, draft, record, or other document ("Documents"), produced, created, prepared or caused to be produced, created or prepared by VNB, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall be owned by VNB. 17.2 Notwithstanding anything else in this Agreement, VNB grants to City a non- exclusive, royalty -free, without further compensation to VNB or any other party, perpetual license to use the Documents for any purpose, which provision shall survive the termination of this Agreement. 17.3 VNB shall, at VNB's expense, provide all Documents, including all logins and password information to City upon written request. 17.4 All Documents shall be transmitted to City in formats compatible with Microsoft Office, Adobe Acrobat, or other appropriate format acceptable to City. 18. INTELLECTUAL PROPERTY INDEMNITY VNB shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement or alleged Visit Newport Beach Inc. Page 6 infringement of any United States' letters patent, trademark, or copyright, including costs, contained in VNB's Documents provided under this Agreement. 19. RECORDS VNB shall keep records and invoices in connection with the Services to be performed under this Agreement including, but not limited to, detailed records of how all compensation provided to VNB under this Agreement is expended and how costs are shared with other entities. VNB 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 VNB under this Agreement. All such records and invoices shall be clearly identifiable. VNB shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. VNB 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 VNB under this Agreement. 20. RESERVED 21. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of VNB which result in expense to City greater than what would have resulted if there were not errors or omissions in the Work accomplished by VNB, the additional expenses shall be borne by VNB and not paid out of the compensation provided under this Agreement. Nothing in this Section is intended to limit City's rights under the law or any other sections of this Agreement. 22. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other marketing or public relations consultants in connection with the Project. 23. CONFLICTS OF INTEREST 23.1 VNB or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et seq., which (1) require such persons to disclose any financial interest that may foreseeably be materially affected by the Work performed under this Agreement, and (2) prohibit such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. 23.2 If subject to the Act and/or Government Code §§ 1090 et seq., VNB shall conform to all requirements therein. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. VNB shall indemnify and hold harmless City for any and all claims for damages resulting from VNB's violation of this Section. Visit Newport Beach Inc. Page 7 24. NOTICES 24.1 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. All notices, demands, requests or approvals shall be addressed as follows: If to VNB: Visit Newport Beach Inc. Attn- President & CEO 1600 Newport Center Drive, Suite 120 Newport Beach, CA 92660 If to City: City of Newport Beach Attn: City Manager 100 Civic Center Drive Newport Beach, CA 92660 With a copy to: City of Newport Beach Attn- Finance Director 100 Civic Center Drive Newport Beach, CA 92660 25. CLAIMS VNB and City expressly agree that in addition to any claims filing requirements set forth in this Agreement, VNB shall be required to file any claim VNB may have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.). 26. TERMINATION 26.1 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 fourteen (14) calendar days, or if more than fourteen (14) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within fourteen (14) 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. STANDARD PROVISIONS 27.1 Recitals. City and VNB acknowledge that the above Recitals are true and correct and are hereby incorporated by reference into this Agreement. Visit Newport Beach Inc. Page 8 27.2 Compliance with all Laws. VNB 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 VNB 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. 27.3 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. 27.4 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. 27.5 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. 27.6 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. 27.7 Amendments. This Agreement may be modified or amended only by a written document executed by both VNB and City and approved as to form by the City Attorney. 27.8 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. 27.9 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. 27.10 Equal Opportunity Employment. VNB represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status, sex, sexual orientation, age or any other impermissible basis under law. 27.11 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. Visit Newport Beach Inc. Page 9 27.12 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] Visit Newport Beach 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 ATTORNEYS OFFICE Date: ( I � I2 y CITY OF NEWPORT BEACH, a California municipal corporation Date: ,� 31Z.0 z y By:_ A, By: Aaron . Harp Will O'Neill City Attorney Mayor ATTEST: CONSULTANT: Visit Newport Beach Inc., Date: a California nonpr fait 9grporation Date: /t'�, 1 S By:_ 41 A4J4WyX-"1 71, W"Imu"I City Clerk .- • PORT 0, \ n ,.... _ �P cgC�FO¢� By: Homer Bluda Secretary [END OF SIGNATURES] Attachments: Exhibit A - Scope of Services Exhibit B - Transfer of TOT for Services Exhibit C - Insurance Requirements Visit Newport Beach Inc. Page 11 EXHIBIT SCOPE OF SERVICES Visit Newport Beach Inc. Page A- EXHIBIT A SCOPE OF SERVICES Goals and Objectives: At a minimum, and in a manner consistent with standard practices in the tourism and hospitality industry ("Standard Practices"), VNB shall develop, plan, carry out, and supervise a program to market and promote the Newport Beach brand to increase tourism in, and serve the needs of, visitors to Newport Beach and thereby drive up the amount of TOT collected and improve the overall tourism business and commerce throughout the City ("Services"). Services shall, at a minimum, include the following: • The maintenance of suitable office space and the employment of competent personnel to properly carry out promotional, branding, and marketing duties; • The creation of marketing materials and information to promote tourism and inform prospective visitors of the recreational activities, cultural assets, shopping and dining opportunities, night-time stay opportunities, and natural beauty of Newport Beach. These materials may include, but are not limited to, website and digital content, brochures, publications, guides, online promotions, social media campaigns and various forms of print and digital advertising; • The dissemination of information described in this section by way of print and digital media, including direct mail, publications, social media, websites, mobile applications, direct digital advertising, events or other means of distribution; • The development and implementation of specific marketing programs designed to increase awareness of the Newport Beach brand and to increase business and visitor trade in Newport Beach; and • Any additional services as may be proposed by the City from time to time, subject to mutual agreement of the Parties, which are consistent with the promotion of tourism and the Newport Beach brand. Reporting/Approvals: Interim Scope of Services & Budget. The Parties agree that from January 1, 2025, to June 30, 2025, VNB shall only spend compensation provided for under this Agreement on items set forth in the Marketing Plan and in accordance with the Budget reviewed by the City Council on July 23, 2024. Visit Newport Beach Inc. Page A-2 Long -Term Scope of Services & Budget: By June 1, 2025, and thereafter by June 1 in the respective year, biennial reports shall be submitted by VNB to the City. The reports shall be subject to review, approval, denial or modification by the City: • Biennial Performance Standards Report. VNB shall prepare, and VNB's Board ("VNB Board") shall adopt, biennial performance standards for the two (2) twelve (12) month fiscal years that begin each July 1, which shall correspond with the goals and objectives of this Agreement. The Biennial Performance standards shall, at a minimum: o Identify deliverables and ensure satisfactory delivery; o Track and evaluate the efficiency, success, and effectiveness of marketing programs, materials, and plans; o Monitor progress toward objectives and goals, including but not limited to, quality and performance deadlines; o Conduct audits when necessary, including but not limited to, for critical compliance issues; o Track and evaluate subcontract compliance, accuracy, and prompt payment; o Ensure accountability and compliance with internal processes and controls for the tracking and use of funds and receipt of income, if any; and o Identify subcontract and subcontractor issues, and resolution thereof. • Biennial Marketing Plan. VNB shall prepare, and VNB's Board shall adopt, a biennial marketing plan describing VNB's marketing and branding efforts for the two (2) twelve (12) month fiscal years that begin each July 1. • Biennial Budget. VNB shall prepare, and VNB's Board shall adopt, a biennial budget for a period of two (2) twelve (12) month fiscal years that begin each July 1, which budget shall incorporate input from the City's Finance Director as to the level of specificity needed in the budget. The City Council shall review each biennial budget and approve, or modify and approve, the budget. The biennial budget shall describe the revenues and expenditures required to meet the Performance Standards and Biennial Marketing Plan obligations, which shall include, but not be limited to, the following: Visit Newport Beach Inc. Page A-3 o VNB overhead and operating expenses attributable to the performance of this Agreement; o The total amount of compensation and benefits of VNB officers and staff attributable to the performance of this Agreement; o VNB expenses, including but not limited to, travel and entertainment, attributable to the performance of this Agreement; o Capital outlay, inventory, and valuation attributable to the performance of this Agreement; o Debt service attributable to the performance of this Agreement; o Sources of income and anticipated return on investment attributable to the performance of this Agreement; o Sponsorships of special events and not -for -profit organizations, including the identity of each prospective recipient, the estimated amount or range to be provided to each recipient, a brief description of how it is intended to further the goals and objectives of this Agreement, and a summary of historical return on investment of same, o The categories or types of subcontractors to be retained to assist in the performance of this Agreement and the amounts budgeted thereto; and o Miscellaneous costs, expenses, or income not otherwise accounted for incurred in furtherance of this Agreement and a brief description thereof. • Annual Audited Financial Statements. By September 30th of each year, VNB shall submit to the City audited financial statements for its most recently ended fiscal year, including any management letter associated with the audited financial statements. • Annual Expenditure Report. By September 30th of each year, VNB shall submit an expenditure report which shall be certified by VNB and a Certified Public Accountant to the effect that the funds received pursuant to this Agreement were expended in accordance with this Agreement in the previous fiscal year for purposes authorized by this Agreement. This report shall include reasonable detail in support of the certification. Visit Newport Beach Inc. Page A-4 Internal Processes and Controls: In accordance with Standard Practices, by January 31, 2025, the VNB Board shall adopt the internal policies and controls ("Policies") set forth below. The Policies shall be maintained and enforced by VNB and shall include, at a minimum, the following: • A procurement policy that includes a fair and open request for proposals process for the selection of any and all subcontractors retained by VNB pursuant to this Agreement; • A policy to establishing a process for ensuring there is a fair and equitable allocation of any shared costs and expenses between VNB and the Meetings Assessment Partnership, or similar entity that receives funding that is similar to TOT (hereinafter "MAP"), including but not limited to, travel expenses, sponsorship/grants, joint marketing campaigns, and overhead/operational costs, such as rent, utilities, insurance, employee salaries, accounting fees, legal fees, office supplies, advertising expenses, and business licenses; • A travel and entertainment expense authorization and reimbursement policy that includes a process for pre -authorization, identification of how the expense furthers the goals and objectives of this Agreement, restricts its application to VNB officers and staff in the performance of this Agreement, limits when private, first class or business class air travel is allowed, sets reasonable limits for costs associated with mileage, meals, and hotel accommodations, requires approval by the VNB Board Chair for VNB's Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer travel expenses as well as full disclosure of VNB's Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer travel expenses to the full VNB Board, and requires adequate documentation to substantiate all expenditures and reimbursements, including but not limited to, receipts, invoices, and statements; • A conflict -of -interest policy applicable to VNB staff and VNB Board members that requires VNB executive officers, including but not necessarily limited to, the Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer to annually file FPPC Form 700 Statement of Economic Interests for all Form 700 categories, and additionally, includes procedures which ensure compliance with the applicable provisions of: o California Corporations Code, o Internal Revenue Service best practices, Visit Newport Beach Inc. Page A-5 o Political Reform Act, and o Government Code §1090; • Policies and procedures to ensure that none of the funds provided pursuant to this Agreement are used for any purpose other than the performance of this Agreement; and • Policies and procedures to ensure that none of the funds provided pursuant to this Agreement shall be used to supplant or replace any other funds that are allocated to, or intended for, the same activity. Governance: VNB expressly agrees that it shall adhere to the following: • VNB shall only spend funds in accordance with the approved budget; • The compensation and benefits for VNB's Chief Executive Officer shall be approved by the full VNB Board. The compensation and benefits for VNB's other executive officers, including but not limited to, the Chief Financial Officer, and Chief and Chief Marketing Officer shall be approved by the Chief Executive Officer. VNB Board Members shall be able to view individual employee salary and benefit information that is paid by TOT funds upon request; • Unless previously approved by the City Council in the biennial budget, as amended from time to time, VNB shall seek City Council approval before obligating itself in any way to pay any "fixed operating costs" by One -Hundred Thousand Dollars ($100,000) or more in any twelve (12) month period. The City Council may approve, deny or modify the request. "Fixed operating costs" is defined as any expenditure, other than a one (1) time expenditure, that commits VNB to an on- going fiscal obligation; • VNB shall not comingle any compensation received under this Agreement with compensation from any other entity; • VNB shall ensure that the MAP covers its proportional share of all the foregoing costs/expenses set forth in this subsection including, but not limited to costs/expenses for employees working on MAP -related services, including offsetting costs of any VNB executive -level employee whose time is taken for MAP - related activities. VNB shall track all shared expenses and their allocation between Visit Newport Beach Inc. Page A-6 the City and the MAP. The proportional costs and how the costs are calculated should be reviewed annually and reported to the VNB Board. • VNB shall not pay for any costs that are for the benefit of another entity and not the City; • VNB shall not transfer any money to or contract with the MAP or any entity that is a parent, affiliate or subsidiary of VNB to provide services to VNB. This provision shall not prevent the MAP from contracting with VNB so that VNB can provide the MAP with marketing services. VNB shall not allow any entity that it contracts with to subcontract with the MAP or any company that is a parent, affiliate or subsidiary of VNB; • VNB shall not spend any compensation received pursuant to this Agreement on political activities or for political purposes. No executive officer of VNB shall have any role in the leadership of a Political Action Committee and no VNB paid staff time shall be used for political purposes; • The VNB Board shall approve sponsorships/grants to any person, entity, group or event that cumulatively exceeds Ten Thousand Dollars ($10,000) but is less than Fifty Thousand Dollars ($50,000), in any fiscal year. City Council approval shall be required of any sponsorship/grants to any person, entity, group or event that is equal to or exceeds Fifty Thousand Dollars ($50,000), in any fiscal year. VNB shall ensure that the City is credited for any event sponsorship or grants that are paid for with compensation received under this Agreement; • VNB shall provide, without cost to the entity hosting the event, Twenty -Five Thousand Dollars ($25,000) of marketing support services for the event known as the Newport Beach Christmas Boat Parade. The Commodores Club of the Newport Beach Chamber of Commerce has traditionally hosted the event known as the Newport Beach Christmas Boat Parade; • By June 30, 2025, VNB shall take action so that it is governed by a seven (7) member Board of Directors that shall be the only voting board governing the affairs of VNB. The City Manager and the City Finance Director shall serve as two (2) of the seven (7) full voting members of the VNB Board. VNB expressly agrees that Visit Newport Beach, Inc., and Newport Beach & Company will be merged into a single entity and no longer be two separate entities by June 30, 2025; • The City shall have the right to have a representative on any Ad Hoc Committee; and Visit Newport Beach Inc. Page A-7 • VNB shall notify the City Manager and the City Finance Director of any and all meetings of the VNB Board of Directors not less than 72 hours before each meeting. VNB shall provide the City with a copy of all tax filings and communications with the Internal Revenue Service or State Franchise Tax Board including, but not limited to its Form 990 filings tax forms, within five (5) business days of filing said tax forms or sending/receiving said communications. Visit Newport Beach Inc. Page A-8 EXHIBIT B TRANSFER OF TOT FOR SERVICES Visit Newport Beach Inc. Page B-1 EXHIBIT B TRANSFER OF TOT FOR SERVICES City shall provide VNB with twenty three percent (23%) of the City's annual total commercial transient occupancy tax ("TOT") collected from operators, excluding TOT collected from short-term lodging operators/operations, pursuant to Newport Beach Municipal Code Chapters 3.16, and 3.28. The funds provided shall not include any other tax, fee, or assessment including, but not limited to, any fee paid to the City for the right to develop timeshares. Funds shall be forwarded electronically to VNB monthly on the twentieth (20th) day of each month following the receipt of TOT funds from operators, other than short-term lodging operators/operations, during the term of this Agreement. Visit Newport Beach Inc. Page B-2 EXHIBIT C INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES 1. Provision of Insurance. Without limiting VNB's indemnification of City, and prior to commencement of Work, VNB 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. VNB agrees to provide insurance in accordance with requirements set forth here. If VNB uses existing coverage to comply and that coverage does not meet these requirements, VNB 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. VNB 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. VNB shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its City Council, boards and commissions, officers, agents, volunteers and employees. B. General Liability Insurance. VNB shall maintain commercial general liability insurance, and if necessary, excess/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 two million dollars ($2,000,000) per occurrence, four million dollars ($4,000,000) general aggregate. The policy shall cover liability arising from bodily injury, property damage, 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. VNB 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 VNB 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. D. Professional Liability (Errors & Omissions) Insurance. VNB shall maintain professional liability insurance that covers the Services to be performed in Visit Newport Beach Inc. Page C-1 connection with this Agreement, in the minimum amount of two million dollars ($2,000,000) per claim and four million dollars ($4,000,000) in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Effective Date of this Agreement and VNB agrees to maintain continuous coverage through a period no less than three years after completion of the Services required by this Agreement._ E. Criminal Conduct Insurance in an amount not less than two million dollars ($2,000,000) with coverage including, but not limited to theft, forgery, alteration, computer fraud and funds transfer fraud. F. Excess/Umbrella Liability Insurance shall be "following form" of the underlying policy coverage, terms, conditions, and provisions and shall meet all the insurance requirements stated in this Agreement, including, but not limited to the additional insured, primary & non-contributory and waiver of subrogation insurance requirements stated herein. No insurance policies or self-insurance maintained by the Lessor, whether primary, reinsurance or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until Lessee's primary and excess/umbrella liability policies are exhausted. 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 City Council, boards and commissions, officers, agents, volunteers and employees or shall specifically allow VNB or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. VNB 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/umbrella liability, pollution liability, and automobile liability, if required, but not including professional liability and crime, shall provide or be endorsed to provide that City, its City Council, boards and commissions, officers, agents, volunteers and employees shall be included as insureds under such policies. C. Primary and Noncontributory. 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. Visit Newport Beach Inc. Page C-2 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. VNB 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. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15) calendar days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced, VNB shall, within ten (10) calendar days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. City reserves the right to require complete, certified copies of all required insurance policies, at any time. 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 VNB sixty (60) calendar days' advance written notice of such change. If such change results in substantial additional cost to VNB, City and VNB may renegotiate VNB's compensation. C. Subcontractor Insurance. VNB shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and VNB shall ensure that City is an additional insured on insurance required from subcontractors. For CGL coverage, subcontractors shall provide coverage with a format at least as broad as CG 20 38 04 13. D. Reserved. E. 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 VNB maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for higher limits maintained by the VNB. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. Visit Newport Beach Inc. Page C-3 F. 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. G. City Remedies for Non -Compliance. If VNB 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 VNB'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 VNB or reimbursed by VNB upon demand. H. Timely Notice of Claims. VNB shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from VNB's performance under this Agreement, 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. I. VNB's Insurance. VNB shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. Visit Newport Beach Inc. Page C-4 k 2 . . z ¢ K \ ^ / � 2 ° ] k \ \ 2 / ( 3 B � k � § £ G E k y � 7 CD § \ E 7 2 t § \ \ \ § u k ) \ - z \ j - 2 \ J \ « k 3 k § « E £ R / m / E 3 ) / § \a. \ \ \ \ z \ \ \ � + ! \ \ A j / Z