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HomeMy WebLinkAbout4.11 - 1226 Management Partners Report Page 1 of 4 STAFF REPORT CITY COUNCIL DATE: November 15, 2016 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Update on Efforts to Improve Professional Services Contracting Practices Prepared by: Linda Smith, Assistant City Manager EXECUTIVE SUMMARY: The City Council will receive an informational report on Staff’s efforts to improve the City’s contracting practices for professional services. Earlier this year, the City Manager issued six Administrative Actions aimed at increasing contracting transparency. The City Manager also requested an independent review of the Administrative Actions to determine if they are sufficient or if additional steps should be taken to meet with best practices of other municipal organizations that rely heavily on contracting services for their ongoing operations. STAFF RECOMMENDATION: Receive the report. FINANCIAL IMPACT: None. DESCRIPTION: Background In February 2016, the City Manager issued six Administrative Action s (Attachment 1) to improve the City’s contracting practices for professional services. At that same time, the City Manager directed the Assistant City Manager to engage with an outside firm to evaluate whether the six actions were sufficient or if additi onal steps should be taken to ensure that Dublin was adhering to the best practices of other cities that rely heavily on professional services. The City engaged Management Partners, a firm that specializes in assisting municipalities with operational and process improvements, to evaluate the actions. Management Partners provided a scope of services, which is included as an exhibit to the attached report. The engagement began in March 2016. Page 2 of 4 Management Partners Review Since March, Staff has been working with Management Partners to provide the necessary documentation, interviews and input to assist in their review. This review and the City Manager’s Administrative Action were in response to public concerns raised related to the billings of a specific consultant providing staff augmentation services. The concerns ranged from the number of hours worked weekly and aberrations in daily billings to the span of control for this service provider. In each instance, Management Partners reviewed the area of concern. Management Partners concluded that the number of work hours billed during a billing period was consistent with the work assigned to that service provider. They also concluded, via interviews with City staff and the service provider, that the aberra tion in daily billings was likely as a result a lack of emphasis on reporting total activity by day as the City's emphasis was on bi-weekly project-based billing. Since the City evaluated work based on the project where services were provided on a bi -weekly basis, it would have been extremely difficult for Staff to appropriate hours to each day. Even prior to the City Manager’s formal Administrative Action, Staff implemented the change to also require daily billings for that service provider as an additio nal way to ensure transparency. The Management Partners report contains some key observations related to the City’s contracting practices for professional services, offers additional recommendations to improve the City’s current contract administration practices, as well as lists some best practices that all municipalities should institute and many of which the City of Dublin already does. In summary, Management Partners acknowledged that the steps taken by the City Manager were appropriate and made the following top line (both positive and negative) observations. · The use of consulting services for staff augmentation has met the City’s goal of remaining flexible with market demand · Appropriate internal controls were in place to review billings from c onsultants · Appropriate supervision/direction was provided to its consultant(s) providing staff augmentation services · The City does not have formal policies, procedures and guidelines that can assist with proper oversight of a decentralized contracting process. · The standard language in the City’s consulting services agreement can be inconsistent with certain types of service providers, such as those firms providing staff augmentation services. Page 3 of 4 · The City’s practice of project-based reporting/billing for its professional service consultants (prior to the City Manager’s Administrative Action) did not allow for an efficient or effective review of daily work. Following the above top line observations and others included in this summary, Management Partners provided the City with eight recommendations to strengthen the process. Prior to the finalization of the report, Staff began implementing some of the recommendations. Following is a list of the eight recommendations and the City’s actions (in italics) to date to implement them. Recommendations from Management Partners Report 1. Amend the City’s Purchasing Procedures Manual and/or the City Municipal Code to incorporate contract administration procedures. Staff has convened an internal working group, meeting with key departmental staff to discuss the inclusion of contract administration procedures. Staff agrees that formal guidelines for both contract administration and purchasing are required. Separate from this engagement, Staff engaged Ma nagement Partners to assist the City in carrying out this recommendation. It is anticipated that these formal guidelines and procedures will be in effect by the end of the calendar year. 2. Amend the City’s standard consultant services agreements for a s-needed staff augmentation services. Key departmental staff, along with the Assistant City Attorney, has worked on an update the City’s agreement form in order to account for the various types of professional consulting services retained by the City. This new agreement form has been implemented. 3. Inform all consultants in writing of the City’s new invoicing requirements and request their immediate adoption. Staff has notified all of our consultants individually and many of their agreements have been updated with the new Fiscal Year agreements. 4. Adopt a policy requiring consultant services agreements to include a reasonable term limit based on an evaluation of service needs. With the new contract services for this Fiscal Year, Staff has included te rm limits on these new contracts, ranging from two to three years. 5. Conduct a review of current Purchasing Agent authorization limits for approving as-needed services agreements for staff augmentation services. Page 4 of 4 The City Council did discuss purchasing agent authorization in the last year and determined that they were not interested in adjusting the authority. 6. Develop a work plan identifying project specific assignments and performance expectations before entering into a consultant service agreement for as-needed staff augmentation work. This recommendation pertains to on-site planning staff augmentation work, and the City is currently utilizing augmentation services for field inspections and project-specific planning. However, should on-site staff augmentation services become necessary again, Staff would require a work plan from the consultant to determine the amount of time necessary to provide services for each project. 7. Establish a policy detailing requirements and testing procedures for dete rmining in independent contractor status, particularly for those consultants performing as - needed staff augmentation work. Human Resources staff is keenly aware of the IRS and CalPERS requirements to maintain independent contractor status and they do cond uct regular checks based on the hours worked by contractors. 8. Require issuance of a purchase order annually for all consultant service contracts with an amount equal to the maximum value of the service contract. While all project based work also has a purchase order, staff augmentation services traditionally have not. For any new staff augmentation agreements, Staff will establish a not-to-exceed amount in the contract and issue a purchase order for that amount. Staff believes that the work and resp onse to the report to date is evidence of the City’s commitment to improve its processes and its transparency related to the provision of consulting services in the operation of the City. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. City Manager's Administrative Actions 2. Management Partners Report CITY MANAGER’S STATEMENT ON CONTRACT SERVICES IN THE CITY OF DUBLIN Contract services have been the cornerstone of the City of Dublin’s operations since its incorporation in 1982. It has allowed the City to efficiently and cost-effectively staff its operations over the past 34 years to help meet the needs of the community. The City’s current financial position bears this out. The City has, at last count, dozens of contracts totaling over $34 million in FY 15-16. In addition to the large contracts with the Alameda County Sheriff’s Office, Alameda County Fire Department and MCE (parks, facilities and street maintenance services), the City maintains dozens of contracts ranging from janitorial to plan check services. The City also works with several firms that provide on-call services to augment staff in land development. On-call contract services are and will remain strategically important in the delivery of services in the City. Recently, one of the City’s long-term, on-call consulting firms received media and community attention regarding its daily and annual hours billed. It should be noted that consultant work performed was at the direction of the City and that I believe the hours billed are reasonable given the work that the City has asked of this consulting firm over the last several years. I also believe that the City received good value for what it has paid to the consulting firm. However, I am concerned about some of the billing practices that led to the media attention, and I have conducted a thorough review of the City’s contracting processes. From that review, I have advised the City Council of six changes to our current practices that I will be instituting: 1. On-call City consulting firms will now be required to provide two measures of hourly billing. They will be required to submit daily logs of total hours worked by each individual performing service under the consultant contract, and they will also be required to log hours by City project assignment. This change will provide the necessary cross-check for staff to ensure hours will not be aggregated on a single day for work conducted over multiple days. 2. All on-call consulting firms that serve as staff augmentation for development services will be deemed to be “consultants” under the Political Reform Act and required to file Form 700s. In addition, I have directed the City Attorney's Office to review all of the City’s consulting contracts to determine whether any additional individuals would be considered “consultants” under the Political Reform Act and required to file Form 700s. 3. Contractors working for an on-call consulting firm shall work no more than 2,000 hours in a fiscal year. In certain circumstances, I would approve a small variance if a project and/or service demands necessitate it. 4. Currently, contract consultant service agreements don’t address the increments of time in which the firm’s time is billed; the practices among consulting firms have varied. Moving forward, the City shall require consulting firms to bill in either tenths of hours or quarter hours. 5. All Requests for Proposals for contract consulting services will include a section that will identify what public and private clients the consultant is serving at that time (and in what communities they are doing that work). City Staff shall include that list as an attachment to any contract consultant services agreement when it is considered by the City Council. 6. While the City retains the right to terminate any on-call consultant agreement, the contracts do not currently include a provision for a “date certain” termination of the agreement. Moving forward, all new contracts with the City of Dublin shall include this provision. It is my belief these changes will help to further strengthen the City’s solid reputation for strong fiscal management and will address the concerns raised by members of the public and the media. In addition to these administrative changes, upcoming Council meetings will include discussions on Consultant and Professional Services contracts and the City’s Conflict of Interest Ordinance. For questions or more information, please email city.manager@dublin.ca.gov. 1730 MADISON ROAD •CINCINNATI,OH 45206 •513 861 5400 •FAX 513 861 3480 MANAGEMENTPARTNERS.COM 2107 NORTH FIRST STREET,SUITE 470 •SAN JOSE,CALIFORNIA 95131 •408 437 5400 •FAX 408 453 6191 3152 RED HILL AVENUE,SUITE 210 •COSTA MESA,CALIFORNIA 92626 •949 222 1082 •FAX 408 453 6191 To:Ms. Linda Smith, Assistant City Manager, City of Dublin From:Steve Bocian,Special Advisor, Management Partners Subject:Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Date:November 7,2016 This memorandum provides the results of Management Partners’review of the City of Dublin’s current policies, practices, and procedures related to contract administration for consultant services. This engagement was prompted by the City’s concern with certain billing irregularities related to its service agreement with Stevenson, Porto & Pierce, Inc. (SP2) that led the city manager to prepare an Administrative Action on February 16, 2016 pertaining to the administration of private consultant contract service agreements and procedures. The goal of our work was to provide observations and recommendations about the Administrative Action and existing contract administration policies to ensure the City is administering its consultant service agreements consistent with best practices.The scope included the following: Review existing service contracts to determine their overall effectiveness in addressing the City’s needs as well as compliance with internal procedures; Review the City-prepared draft amended contract administration procedures; Interview the City’s community development and administrative services directors to determine their specific needs and expectations from service contract providers; Review the City’s policies for awarding and administering service contracts, including contract extensions and amendments; Conduct research into best practices for service contracting, including standards for billing submittals and review; and Review current billing and accounts payable procedures related to payments for service contracts. In addition, based on City staff’s concern with consultant invoicing practices, we reviewed Sections 1, 2, 3, 8, and 9 of SP2’s current services agreement dated May 15, 2012 as well as a number of invoices and services SP2 provides. This provided insight into specific SP2 actions, SP2 submittals, and the City’s current contract administration practices for all service agreements. The SP2 services agreement provided a good basis for also evaluating other City service contracts Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 2 and invoices.Management Partners’observations related to SP2, City invoicing practices, and existing service contract language,were developed from reviewing this material. The detail of our work is described more fully in our March 2, 2016 engagement letter, which is included as Attachment A. Background The City of Dublin maintains an administrative and service delivery model that relies heavily on contract services for a broad range of municipal services. For example, police and fire services are provided using service contracts with outside agencies. In addition, the City uses a wide range of contracted specialized professional services with private firms to provide assistance . These are generally categorized as follows: 1.Project-specific contract services such as preparation of an environmental impact report, implementation of information services, financial audits, etc. 2.General contract services that cover a wide range of services and activities for clearly defined scopes of work such as analysis of City fees, janitorial services, plan checking, building inspection, etc. 3.Consultant services that augment City staff work, generally on an on-call/as-needed basis. The utilization of consulting services, to meet Community Development Department needs (as identified in item 3 above),has allowed the City to be nimble and flexible to changing market conditions and work demands, which vary greatly depending on development and construction activity. While the City has used many consulting firms to provide needed services, it has maintained a contractual relationship with Stevenson, Porto, & Pierce, Inc., since 1996. This firm has performed a full range of services provided at the City related to the processing of new residential and commercial development applications and the inspection of new residential and commercial construction. SP2’s services have been focused primarily on implementation of the City’s Eastern Dublin Specific Plan, which was adopted initially on January 7, 1994. While SP2’s specific services provided over the years have changed, they have ge nerally included the following. Field inspections of new construction to assure conformity with the City’s development design approval. These include both preliminary inspections of exterior treatments, such as when stucco, siding,and building veneers are applied (commonly referred to as “lath inspections”),and final inspections. Review of plot plans, parcel maps,and subdivision maps. Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 3 Plan check of development plans submitted as part of a development application and plan check of final plans submitted for conformance with approved development plans. Review of development application-related materials, including environmental impact reports, traffic studies, zoning maps, etc. Preparation of general staff material, including reports and studies. Attendance at City meetings, including City Council and Planning Commission meetings. The contractual relationship with SP2 and the services it has provided is unique in that it has occurred over an extended period with a broad scope of services. Recently, the City identified several SP2 invoices that included a number of service days with an excessive number of total service hours. In response, on February 16, 2016 the city manager revised the City’s policies related to consulting services through the issuance of an Administrative Action. While these revised policies apply to all types of consultant services, they are focused primarily on services related to the Community Development Department provided in connection with specific development applications and new construction. An outline of these new policies developed through the February 16, 2016 Administrative Actions as follows. 1.Require consultants to submit daily logs of total hours worked for the billing period for each individual employee performing services under the contract. 2.Submit a record of service hours provided for each specific job assignment (individual Developer Deposit Accounts). 3.Identify consultants required to file Form 700s,in accordance with California Government Code Section 87200,and notify the consultants of their obligation to file as a condition of continued service with the City. 4.Establish that beginning in fiscal year 2016-17, no individual consultant shall work over 2,000 hours in a fiscal year,unless specifically authorized by the city manager or his/her designee. 5.Establish a minimum billing increment of 15-minute blocks of time. 6.Require that any City request for proposals for consulting services require a respondent to identify what additional public and private clients the consultant is serving at that time. In addition to the Administrative Action, the city manager also directed staff to provide a detailed accounting analysis of SP2 daily service hours. These spreadsheets were provided to Management Partners for our review. While the city manager’s February 16, 2016 Administrative Action is Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 4 currently in use by the organization,the development of contract administrative policies is recommended. Project Approach Management Partners conducted its review of the City of Dublin’s contract administration policies and procedures using several analytical and management techniques. These steps enabled project team members to gain an understanding of the existing procedures and enabled us to identify opportunities to optimize performance in these areas. Our approach included the elements described below. Interviews Management Partners conducted three separate interviews with individuals to gather background information and opinions about current contract administration practices and the challenges and benefits the City accrues from using consultant services.From these interviews we learned about the workflow related to contract administration, specifically, invoice processing;how work is assigned to consultants and City policies related to these activities;an outline of what is working well;and opportunities for improvement.We conducted interviews with the following individuals. Linda Smith, Assistant City Manager Like Sims, Community Development Director Jeff Baker, Assistant Community Development Director Colleen Tribby, Administrative Services Director/Finance Director Lisa Hisatomi, Assistant Administrative Services Director/Budget Jay Baska, Financial Analyst The interview with City employees focused on the City’s current administrative procedures for administering consultant agreements, processing invoices related primarily to consultant services provided in the City’s Community Development Department, consultant work assignments, and the City’s financial spreadsheets chronicling SP2 billed service hours. We also conducted a telephone interview with Mike Porto,principal with SP2. This interview included a discussion of the types of work provided to the City, the allocation of assignments and submittals, and the firm’s current and past invoicing practices. Document and Data Analysis Management Partners reviewed a variety of documents and data provided by the City,including those listed below. The City’s Purchasing Procedures Manual dated September 2012; Chapter 2.36, Contracts and Purchasing, from the City’s Municipal Code; Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 5 Sections 1, 2, 3, 8, and 9, of the Consulting Services Agreement Between the City of Dublin and Stevenson, Porto & Pierce, Inc. for On-Call Contract for Planning Services dated May 15, 2012; SP2 invoices submitted since 2004; SP2 revised invoices detailing changes to days with significant recorded hours,and City financial spreadsheets detailing a historical record of SP2 invoices. Best Practices A best practice is defined as the most efficient and effective way of accomplishing a task, based on favorable experiences in other similar organizations and identification by industry associations. As things change over time, new best practices emerge and are adopted by leading organizations.We have included a listing of best practices for consideration later in this memorandum. Key Observations Based on our review and analysis, Management Partners has identified the following observations about the City’s specific practices related to administering the SP2 services agreement and processing its invoices. While we did not review invoices from other consultants, based on our interviews,the review process used for SP2 is similar to the process used for similar consultant service agreements. Therefore, our observations should apply to the City’s overall process of providing contract administration as well. Utilizing consulting services for development review has met the City’s goal of obtaining flexibility consistent with market demands and work requirements. Our review of SP2 invoices indicates that from fiscal year (FY)2006-07 through FY 2014-15 the number of annual service hours fluctuated from a low of 3,033 in FY 2008-09 to a high of 4,833 in FY 2013-14. This fluctuation is consistent with the City’s overall approach of using these services as needed to meet service demands. Had we not seen this fluctuation, we would have assumed the services were being used for purposes other than meeting demands on an as-needed basis. The city manager’s February 16, 2016 Administrative Action represents a positive step in improving its contract administration practices.The City’s new procedures cover a range of contract administration practices that will have wide-ranging implications for how it administers contracts for services. This includes the potential for needing additional firms to provide as-needed services for staff augmentation work because of the 2,000 hours limitation and an increased burden on City staff reviewing daily activity logs and services hours. Nevertheless, these are positive and necessary improvements. Our recommendations listed further in this memorandum include procedures that expand on this Administrative Action. Staff markings on SP2 invoices indicate they were approved by City staff consistent with its practice of having invoices signed off by a management employee prior to submittal to the Finance Department for payment.We looked at many, but not all, of the SP2 invoices provided and in all cases, there is clear indication they were reviewed in detail and approved. This is important in that Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 6 it verifies that City staff evaluated the work performed and that appropriate internal controls occurred prior to issuance of payment. City staff has been providing appropriate supervision of consultant services to maximize the value of consultant services.Our interviews indicated the City’s Community Development Department takes steps to assign work to consultants to assure they remain focused on fundamental tasks consistent with service demands. In addition, when appropriate, consultants attend staff meetings to assure they are up to date with current development related issues and procedures. Finally, staff takes steps to assure that consultant activities, work products,and recommendations to the City Council and commissions are a direct reflection of City staff and not the consultant. We found no indication the consultant was acting on matters contrary to staff direction. The City has not adopted policies for administering consultant service agreements.While it is not standard for a city to retain a comprehensive policies and procedures manual that provides guidance to staff regarding the processing of invoices related to service agreements, considering the amount Dublin relies on these types of services, this type of policy would be effective. As noted in our recommendation below, these policies should be included in the City’s Purchasing Procedures Manual. Services provided by SP2 were consistent with the terms of its service agreement.An attachment to SP2’s service agreement (provided as Appendix 1 to this memorandum)lists the consultant’s scope of work as including the following: Provision of Planning, Public Works, and other developmental services, including, but not limited to, environmental, architectural, landscape architectural, ecological and/or biological consulting services to the City of Dublin regarding processing of development entitlements and processing of City of Dublin projects. Said services shall be performed at the direction of the Community Development Director on an as -needed basis. As indicated previously, our review of invoices did not identify cases where services were performed outside of the above scope. As such, we believe City staff is aware of the consultant’s scope of services and identify consultant work assignments that comply with the service agreement. Notwithstanding this observation, a more detailed scope of services included in the City’s services agreement would benefit staff by focusing assignments, developing work plans, and improving the transparency of anticipated tasks to be completed. The Community Development and Administrative Services Departments meet monthly to review the status of funding required and available for development project reimbursements.Based on the City’s practice of requiring reimbursement for consultant services related to processing a development application, the City has established an effective process. The process involves a monthly meeting of key personnel from the Community Development and Finance Departments to review activity related to development reimbursements. Our interviews indicated this is a smooth Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 7 process leading to effective tracking of available funding for reimbursement, the status of project expenditures, and the ability to communicate with developers about project activity. Invoices submitted by SP2 were generally consistent with the information included in its May 5, 2012 services agreements. However, certain invoicing requirements were not applicable to the work being provided.We reviewed invoices from FY 2014-15, tested them against Section 2.1 of the services agreement, and noticed language that did not directly apply to the type of work being conducted by SP2.As an example, the services agreement requires a task summary containing the original contract amount, the amount of prior billings,a balance and percent of completion,which creates a running total/balance for the expenditure of hours. However, this type of accounting is inconsistent with the type of as-needed work provided and therefore,was not applicable to the preparation of invoices.The concern with this issue is not with lack of compliance, but assuring that contract language is specific to the service provider and the type of work being completed. On another matter, the services agreement with SP2 requires SP2 to include a separate notice when the total number of hours of work by consultant, employee, agent,or subcontractor reaches or exceeds 800 hours. We did not see a record of this notice. In other aspects,though,the invoicing was consistent with the services agreement. The format of SP2 invoices submitted prior to December 29, 2015 was designed in a manner that allowed City staff to review work completed and prepare invoices for reimbursement from developers on a project-by-project basis. The format of invoices prior to December 29, 2015 (when at City direction they were amended), highlighted hours expended and type of work completed for each individual development project (each of which has a corresponding account number)serviced by SP2. This format was advantageous because it allowed Community Development Department staff to effectively review and evaluate work completed on a project-by-project basis, which is an important component of project monitoring. This project-based reporting was also effective for the Finance Department, which is responsible for invoicing developers for work completed on each individual development project. During our interviews, City staff indicated they received full reimbursement from developers for work performed by SP2 and this is attributable, in some part, to the fact that the invoicing effectively identified services provided by development project. The format of SP2’s invoices submitted prior to December 29, 2015 did not adequately provide for an efficient review of daily service hours.Because the formatting of invoices prior to December 29, 2015 highlighted services hours by project, tracking daily service hours was cumbersome and most likely led to lack of emphasis on total activity by day. As an example, invoice Number 00997 dated August 11, 2015 (Appendix 2)consists of individual billing information for 20 separate development projects.For the City to calculate the daily hours billed, it would have had to examine development activity for each of these projects and then extract and calculate daily hours billed in a separate spreadsheet. Because the City’s focus was on reviewing the appropr iateness of the total hours billed for each serviced development project and the total services provided, this step did not Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 8 occur. In addition, due to staff’s focus on reviewing the type and total amount of services provided and the emphasis on allocating these services to a specific development project, undertaking the task of calculating service hours by day was not viewed as critical to the overall review process. It should be noted that SP2’s service agreement does not require providing a daily total of services provided. City staff has implemented a change in the format and content of consultant invoices that will meet its objectives of obtaining more detailed billing information. Our interviews with City staff and SP2 indicated that in December 2015 the City instructed SP2 to modify the formatting and content of SP2 invoices to include a summary of service hours by day and a total of daily service hours for each SP2 employee providing service to the City. This action was followed with the city manager’s February 16, 2016 Administrative Action requiring all consultants to include this detail. We reviewed SP2 invoices since December 29, 2015 and verified they are consistent with City direction to include service hours of each employee assigned to each project by day and by activity. As such, the City now has an effective method of identifying daily service hours provided. In addition, the City now requires a summary of services provided by day. This should also improve its overall contract administration. A sample of this revised invoice is included as Appendix 3. It would be difficult for the City to determine if SP2 service hours billed on a specific day prior to December 29, 2015 were in error or misappropriated from another day of activity.The City identified that some SP2 invoices included excessive billing hours on a number of specific days. During our interviews, SP2 recognized this concern and indicated that the amount of service hours recorded for these days were in error. In response, it submitted revised invoices correcting the billing irregularities by reassigning billed service hours to other days.However, regardless of this response,the City and SP2 have not adopted a system for tracking and recording the amount of daily hours worked on a specific day. Therefore, determining the actual number of hours worked and the days when they occurred is dependent on the SP2’s informal notes and records.Further, prior to 2013,the City did not require SP2 to provide invoices with daily billing hours as it was focused on the reasonableness of the bi-weekly project billing. However, in 2013, SP2 changed its billing practice to include daily billing records. Recommendations Based on our review, we have identified eight recommendations to improve the City’s current contract administration practices.These recommendations build on the February 16, 2016 Administrative Action already in place, which as indicated, represents a significant step toward addressing the goal of establishing best practice procedures that can be incorporated fully into the City’s day-to-day operations. 1.The City’s Purchasing Procedures Manual includes important information about processes for the acquisition of services and goods. However, considering the City’s reliance on cons ultant services, this document would be improved by adding a section related to administering contract service activities. Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 9 Recommendation 1.Amend the City’s Purchasing Procedures Manual and/or the City Municipal Code to incorporate contract administration procedures. To implement Recommendation 1, we have identified five specific actions below. a)Differentiate between contract services performing project-specific tasks and consultant services performing as-needed staff augmentation work. Adopt separate policies for both types of services. b)Incorporate monitoring and approval procedures by the management employee most familiar with the consultant’s work and the department head consistent with Recommendation 6. c)Establish an annual cap of consultant service hours and provide a process for considering an adjustment to it and approving or denying an adjustment to the original cap. d)Incorporate the city manager’s February 16, 2016 Administrative Action. e)Include a solicitation process for securing consultant services. 2.The current May 15, 2012 services agreement with SP2 includes standard contract terms that clearly identify critical contract administration requirements for invoicing requirements, scope of work, fees, etc. However, if this agreement is to be used as a model or master agreement for similar consulting service agreements, it should be amended to reflect applicable policies from the city manager’s February 16, 2016 Administration Action and additional language to be consistent with the City’s amended Purchasing Procedures Manual. Recommendation 2.Amend the City’s standard consultant service agreements for as-needed staff augmentation services. To implement Recommendation 2, we have identified six specific actions below. a)Require consultants providing as-needed staff augmentation services to provide a total of daily service hours for each consultant providing service to the City and grand total of all service hours detailed by day and billing period. b)Require consultants providing as-needed staff augmentation services to provide more detail concerning its scope of work to clearly identify specific expectations and service scope . c)Establish the total dollar amount of the contract. d)Include a cap on the maximum number of annual service hours to an amount determined appropriate to retain independent consultant status and be consistent with city policy. Where possible,fix service to a specific project of task and require separate tracking. e)Include either a clearly identified consultant service fee escalator or a process for the consultant to request service fee adjustments. (This inclusion would apply to contracts with a term in excess of two years.) f)When applicable, include contract performance monitoring provisions. 3.Because it is most likely impractical to unilaterally amend existing consultant service agreements to be in full compliance with Recommendation 2, at a minimum the City should take action to inform consultants of its invoicing procedures. Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 10 Recommendation 3.Inform all consultants in writing of the City’s new invoicing requirements and request their immediate adoption. 4.Our interviews identified the high quality of services received by using as-need consultant services and the flexibility and advantages this usage brings to the City operations. Further, the retention of an individual consulting firm over time also brings advantages to the City because of the familiarity and experience the consultant gains with the community and work product expectations. However, the term of the SP2 services agreement is for one year with automatic renewals unless the agreement is terminated by the City. It is a best practice to establish a reasonable limit on the length of agreements for consultant services.When the term limit is reached, the City should pursue a consultant solicitation process to gain assurance that services are consistent with market conditions and to be transparent in its selection process. Based on research, determining the ideal length of a contract is dependent on the types of services provided.Therefore, staff should evaluate this matter prior to preparing individual services agreements. Recommendation 4.Adopt a policy requiring consultant services agreements to include a reasonable term limit based on an evaluation of service needs. 5.Section IX (C) of the City Purchasing Procedures Manual establishes that the City’s Purchasing Agent is authorized to approve consultant or professional service agreements that are less than $45,000. City Council approval is required for these agreements over $45,000.Due to the unique nature of as-needed consultant services agreements for staff augmentation work,staff should review this threshold limit. The purpose of the review would be to gain assurance that the amount provides and appropriate level of transparency and to assure that the City Council and community are fully aware of these services. While we have seen City Council approval required for consultant services as low as $20,000, it would be best if City staff evaluates its ongoing needs and activities and determines an appropriate amount.Approval of a new limit should be subject to City Council approval. Recommendation 5.Conduct a review of current Purchasing Agent authorization limits for approving as-needed services agreements for staff augmentations services. 6.While we observed that City staff provided adequate oversight of consultant activities, our interviews identified an opportunity to improve the overall contract administration process for consultants providing as-needed staff augmentation services. This can be achieved by requiring written work plans that clearly identify expectations and establish a record of activity performed. This process would also help both the City and the consultant when preparing and reviewing services performed and invoicing.In general, a work plan would include identification of service hours by task (when applicable) performance testing, and a method for tracking daily service hours. Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 11 Recommendation 6.Develop a work plan identifying project specific assignments and performance expectations before entering into a consultant service agreement for as-needed staff augmentation work. 7.It is important for the City to establish a policy and process consistent with Internal Revenue Service and California Public Employees Retirement System requirements to determine a consultant’s independent contractor status.While we understand that this has occurred to some degree, we did not see reference to this testing in the Purchasing Procedures Manual or other information received and therefore,we assume that it is not part of an existing administrative policy and/or ongoing contract administration process. Recommendation 7.Establish a policy detailing requirements and testing procedures for determining independent contractor status, particularly for those consultants performing as-needed staff augmentation work. 8.While our interviews indicated the City generally issues a purchase order for each service contract, it was not determined whether this was a standard City policy or that it was always adhered to. Recommendation 8.Require issuance of a purchase order annually for all consultant service contracts with an amount equal to the maximum value of the service contract. Best Practices The following practices enable an organization to manage consultant services in the most effective manner.These practices require proactive management and coordination across departments. Although a number of these practices may already be in place, they are provided as a comprehensive guideline rather than an evaluation of practices currently in place and are offered for reference and future planning. Conduct Regular Testing to Determine Independent Contractor Status.Assuring that consultants engaged in as-needed staff augmentation duties retain independent contractor status is an important analytical process that should be pursued when relying on contract services. Therefore, regular testing by a City’s Human Resources Department is critical.Consultant services activities and work practices should be managed to ensure consistency with independent contractor status. Maintain an Internal Committee Responsible for Monitoring Developer Reimbursement Agreements for Development Application Processing.A growing community relies on reimbursements from developers of new development projects to offset the cost of project processing and inspection. It is important that the City regularly track this activity to ensure compliance with the individual reimbursement agreements and funding. Avoid Consultant Agreements that are Open Ended in Terms of Cost, Service Hours,and Contract Term.While it may be difficult to estimate service hours for as-needed consultant service agreements,all agreements should specify a maximum number of service hour and fee limits. Review of the City of Dublin’s Contract Administration Policies, Practices, and Procedures for Consultant Services Page 12 Service in addition to the originally stated hours should be approved only through an amendment to the agreement. The term limit of the contract should be clearly defined. Establish Procedures for Contract Monitoring.A clearly defined policy for administering consultant agreements is an important element for assuring that individual departments are uniformly administering contracts. For best results, supervisory employees closest to the work being completed should be most active in developing work plans, performance testing, estimating required service hours, general oversight, and the tracking of service hours.Monitoring should also include the consultant’s use of its employees, sub-consultants,and agents. Upper management is typically involved with approval of work plans and financial matters. Establish Uniform Consultant Invoicing Requirements that Meet the City’s Needs and are Transparent.Invoices should include summary as well as detailed information demonstrating consistency with service scope and billable hours. All service hours billed for on-site services should be consistent with daily logs maintained by the contract administrator. Contractors should be informed regularly of invoicing requirements, which should also be part of their service agreements. Regularly Monitor Contract Activity to Ensure Consistency with City Financial Policies.Utilize the Internal Committee to monitor reimbursement agreements to review conformance with financial policies. This will improve contract monitoring effectiveness. Monitoring may include conformance with issued purchase orders, appropriate payment approvals, expense reimbursements, and appropriate documentation verifying consultant service hours or activities that may appear to be inconsistent with contract terms. Conclusion The City has taken significant steps to improve its contact administration practices and has requested a review to receive observations and recommendations on further developing its practices and policies. This memorandum provides one source of additional information and is intended to assist the City with this process. We are available to meet with you to discuss our observations and recommendations. Attachments Attachment A –Management Partners’Engagement Letter Dated March 2, 2016 Appendix 1 –Consulting Services Agreement between the City of Dublin and Stevenson, Porto & Pierce, Inc. for On-Call Contract for Planning Services dated May 15, 2012 Appendix 2 –Stevenson, Porto & Pierce Invoice dated August 11, 2015 Appendix 3 –Stevenson, Porto & Pierce Invoice dated December 29, 2015 Management Pa rtners March 2,201.6 Ms. Linda Smith Assistant City Manager City of Dublin 100 Civic Center Plaza Dublin, CA 95468 Dear Ms. Smith: Thank you for this opportunity to assist the City of Dublin with the development of an amended policy for the preparation and administration of service contracts for specialty services. We understand that in a recent meeting with the City Council staff indicated they would seek professional consulting services to assist with this effort and we are prepared to respond in an effective and expedited manner. We recognize that the City of Dublin has a history of using contract services for a range of administrative needs, including planning and community development and that this approach has been effective in addressing the City's service delivery needs. We also understand that periodically it is necessary to review the procedures used to administer service contracts, (particularly those that have been in place for an extended period), to assure they comply fully with best practices. Management Partners has the skills needed to provide this consulting assistance, and we would be pleased to do so. Understanding of the Engagement To ensure that the City of Dublin is administering its service contracts consistent with best practices for contract m.rnagemen! the City has identified the need to review the procedures used to develop, draft and administer them. We understand that the City has historically relied on service contracts for a wide range of services, including those related to development application reviews, field inspections, architectural reviews, engineering services, and other specialized administration functions. There are many factors to determine service contract effectiveness, including identifying service contract needs, legal requirements, cost efficiency and the requirements of the service provider. Further, because service providers are often relied on to provide time-critical and labor intensive services, it is important that there are checks and balances that can be used to track activity effectively and accurately during times of high demand. 1730 Mrorsoru Rono . Clrucrrunarr, OH 45206 . 513 861 5400 . Frx 513 8613480 MANAGEMENTPARTNERS.coM 2107 NonrH FrRsr SrnErr, SutrE 470 . SAN JosE, Cnuronrutn 95131 . 408 437 5400 . Fax 408 453 6191 3152ReoHILLAvrruur,SutrE21O. CosrAMesn,Cnuronung2526 .949222LO82. Fnx4084535191 Ms. Linda Smith Page2 In discussing this engagement, you expressed specific interest in reviewing contract administration procedures related to the Community Development Department, which is responsible for processing development applications, among other things. Further, you indicated that City staff has already begun an intemal review of past contractor billings, and they have prepared an amended draft set of contract administration procedures. Considering this activity to date, our proposed scope of services would include: . Review existing service contracts to determine their overall effectiveness in addressing the City's needs as well as compliance with intemal procedures; o Review the City-prepared draft amended contract administration procedures; o Interview the City's Community Development and Administrative Services directors to determine the department's specific needs and expectations from service contract providers; e Review the City's policies for awarding and administering service contracts, including contract extensions and amendments; . Conduct research into best practices for service contracting including standards for billing submittals and review; and o Review current billing and accounts payable procedures related to payments for service contracts. To make this project most usefuL we will have ongoing communications with you (or the City's project manager) and designated staff to ensure we are accurately portraying existing practices, and that our recorunendations and solutions are feasible within existing administration and capabilities. Because we recognize that City staff members are busy with the ongoing work of the organizatiory we will coordinate all scheduling and contacts through your office to minimize any disruption. As you know, the City has an active hourly services agreement with Management Partners, so we anticipate this additional work can be authorized with acceptance of this proposal and issuance of an expanded purchase order, as necessary. However, we will rely on your direction for the requirements needed to commence work. Our team will be led by Special Advisor Steven Bocian, a former assistant city manager and communitlz development director, and with assistance from Hossein Golestan, a special advisor with particular expertise in finance and financial procedures. Biographical information for both team members is attached. It is anticipated that this work will take between 40 and 50 hours to complete. The hourly rate for Steven and Hossein is $190 per hour, plus expenses. Therefore/ we suggest an hourly contract not to exceed $10000. We estimate the work can be done in between four and six weeks, subject to additional direction and requests from the City. Ms. Linda Smith We appreciate the opportunity to be of assistance to the City of Dublin. Please feel free to contact me at (513) 313-0503 if you have any questions about this proposal. Sincerely, Page 3 Gerald E. Newfarmer President and CEO Accepted for the City of Dublin by: Ms. Linda Smith Page 4 Attachment - Consultant Bio graphies SrnvuN R. BocmN Steven Bocian, Special Advisor, brings over 30 years of municipal management experience through his work with the cities of Arcadia and Pleasanton, Califomia. Over his career, he directed significant projects to meet the needs of a growing community and region, including those related to service enhancements, staff development and community planning. During 27 years in Pleasanton as assistant city manager, Steven was responsible for directing a full range of complex community projects. Some examples include establishing a municipal library, planning for a 123-acre mixed-use developmen! developing a 105-unit affordable assisted living facility with 19 memory-care units, developing an inclusionary housing zoning ordinance, and developing numerous park projects. He brings significant expertise in the areas of affordable housing capital improvement budgeting and programming policy development, refuse and recycling programs, rates and franchise agreements, and project management for both large and small city capital projects. Recently, Steven completed planning for a 54-acre community park with three all-weather lighted multi-purpose sports fields and a large open space area with trails. In addition to a full range of community-based projects, Steven has significant experience with administrative functions. These include labor negotiations, purchasing and capital management budgeting policy analysis, animal control services, and program evaluation. Steven graduated from Califomia State University, Hayward (now California State University, East Bay) with a master's degree in Public Administration. He has served as a board member for several non-profit housing organizations. Ms. Linda Smith Page 5 HossuN Gomsreu Hossein Golestan, Special Advisor, has over 30 years of combined municipal financial management public accounting and corporate financial management experience. His expertise in all aspects of municipal finance includes capital financing, accounting, auditing, budgeting treasury, purchasing and fleet management. He also has experience in the selection and implementation of financial software and GASB implementation. During his career, Hossein was known for his critical thinking and ability to produce creative solutions to complex and challenging problems. Hossein's experience started in England lr:.1,972 when he worked for four years in a firm of Chartered Accountants as part of the required training to become a Chartered Accountant in that country. He also worked in Iran as a finance and investment manager in an investrnent banking firm for five years prior to immigrating to the United States in 1983. Hossein worked for the City of San Mateo for approximately 25 years/ in progressively responsible positions, concluding with five years as finance director before retiring from that clty in 2010. Prior to his appointrnent as finance director, Hossein served as a staff accountant and accounting manager in San Mateo, and as assistant financial services director for the City of Fremont. As finance director in San Mateo, he oversaw the Finance Deparhnent's 15 employees, annual budget of $140M and inveshent portfolio of $100M. He was responsible for budgeting preparing a two-year business plan, and the following functions: accounting, financial reporting inveshnents, business license tax, payroll, accounts payable, accounts receivable, debt administration, purchasing and fleet management. Since his retirement from San Mateo, he has been providing consulting services with Management Partners to municipal agencies. Hossein also has received training in interest-based negotiations and process reengineering. He has extensive experience working with acfuarial reports for retirement, workers compensation, and liability. Hossein holds a bachelor's degree in economics from Tehran University, Iran, and is a Chartered Accountant from England. CONSULTINGSERVICES AGREEMENT BETWEEN THE CITY OF DUBLIN AND STEVENSON PORTO& PIERCE, INC. ON-CALL CONTRACT FOR PLANNINGSERVICES THIS AGREEMENT for consultingservices is made by and betweenthe City of Dublin ("City") and Stevenson Porto & Pierce, Inc. ("Consultant")as of May 15, 2012. Section 1. SERVICES. Subject to the terms and conditionsset forth in this Agreement, Consultant shall provide to City theservices described in the Scope of Services attached as Exhibit A at the time and place and in the mannerspecified therein. In the event of a conflict in or inconsistency between the terms ofthis Agreement and Exhibit A, the Agreement shall prevail.. 1.1 Term of Services. Thetermofthis Agreement shallbegin on July 1, 2012 and shallend one year thereafter, except that the Agreement shall be automatically extended from year to year unless the Agreement is otherwiseterminated, as provided for in Section 8. 1.2 Standard of Performance. Consultant shallperform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices its profession. Consultant shall prepare all work products required by this Agreement in a substantial, first-class manner andshall conform to the standards of quality normally observed by a person practicing in Consultant's profession. 1.3 Assignment of Personnel. Consultant shallassign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time duringthe term of this Agreement, desires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons. 1.4 Time. Consultant shall devote such time to the performance of servicespursuant to this Agreement as may be reasonably necessary to meet thestandardofperformance provided in Section 1.2 above andto satisfy Consultant's obligations hereunder. Section 2. COMPENSATION. Cityherebyagreesto pay Consultant the hourly sum set forth in the Compensation Schedulecontained in Exhibit B, notwithstanding any contraryindications that may be contained in Consultant's proposal, for services to be performed and reimbursable costsincurred underthis Agreement. In the event of a conflict between this Agreement and Consultant's proposal, attached as Exhibit A, regarding the amount of compensation, the Agreement shallprevail. City shall pay Consultant for services renderedpursuant to this Agreement at the time and in themanner set forth herein. The paymentsspecified belowshall be the only payments fromCity to Consultant for services rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by morethan one person. Consultant and City acknowledge and agree that compensation paid by City to Consultant under this Agreement is based upon Consultant's estimatedcosts of providing theservices required hereunder, includingsalaries and benefits of employees and subcontractors of Consultant. Consequently, the parties further agree that compensation hereunder is intended to include the costs of contributions to any pensions and/or annuities to which Consultant and its employees, agents, and subcontractorsmay be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement. Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto & Pierce, Inc. Page 1 of 11 2.1 Invoices. Consultant shallsubmit invoices, not more oftenthan once a monthduring the termof this Agreement, based on the cost for services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information: Serial identifications ofprogress bills; i.e., Progress Bill No. 1 for the firstinvoice, etc.; The beginning and ending dates of the billing period; A Task Summary containing theoriginal contractamount, the amount of prior billings, the total due this period, the balance availableunder the Agreement, and the percentage of completion; At City's option, for each work item in each task, a copy of theapplicable time entries or time sheets shall be submittedshowing thename of the persondoing thework, the hoursspent by each person, a brief description of thework, and each reimbursable expense; The total number of hours ofwork performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing services hereunder, as well as a separate noticewhen the total number of hours of work by Consultant and any individual employee, agent, or subcontractor of Consultantreaches or exceeds 800hours; The Consultant's signature. 2.2 Monthly Payment. City shallmake payments, based on invoices received,for services satisfactorily performed, and for authorized reimbursable costs incurred. City shall have 30 days fromthereceipt of an invoice that complies with all ofthe requirements above to pay Consultant. 2.3 'Reserved.' 2.4 Total Payment. City shall pay for the services to be rendered by Consultant pursuant to this Agreement. City shall not payany additional sum for any expense or cost whatsoever incurred by Consultant in rendering services pursuantto thisAgreement. City shallmake no payment for any extra,further, or additional servicepursuant to this Agreement. In no event shall Consultantsubmit any invoice for an amount in excessof the maximumamountof compensation provided above either for a task or for the entire Agreement, unless the Agreement is modified prior tothesubmissionof such an invoice by a properly executedchange order or amendment. 2.5 Hourly Fees. Fees forwork performed by Consultant on an hourly basis shall not exceed the amounts shown on the Compensation Schedule contained in Exhibit B. 2.6 Reimbursable Expenses. Payment shall be limited to the hourly rates contained in Exhibit B. No reimbursable expenses shall be paid. 2.7 Payment of Taxes. Consultant is solelyresponsible for the payment ofemploymenttaxes incurred under this Agreement and any similar federal or statetaxes. 2.8 Payment upon Termination. In the event thattheCity or Consultantterminates this Agreement pursuant to Section 8, the City shall compensate the Consultant for all outstandingcosts and reimbursableexpenses incurred for work satisfactorily completed as of the date of written notice of Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto& Pierce, Inc. Page 2 of 11 termination. Consultant shall maintain adequate logs and timesheets in order to verify costs incurred to thatdate. 2.9 Authorization to Perform Services. The Consultant is not authorized to performany services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator. Section 3. FACILITIES AND EQUIPMENT. Except as set forthherein, Consultant shall, at its solecost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement. City shallmake available to Consultant only the facilities and equipment listed in this section, and only under theterms and conditions set forth herein. City may furnishphysical facilities such as desks, telephone service, filing cabinets, and conference space, as may be reasonably necessary for Consultant's use while consulting with City employees and reviewing records and the information in possession of the City. The location, quantity, and time of furnishing those facilities shall be in the sole discretion of City. Section 4. INSURANCEREQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, shall procure "occurrence coverage" insuranceagainst claims for injuries to persons or damages to property that may arise from or in connection with the performance of thework hereunder by the Consultant and its agents, representatives, employees, and subcontractors. Consultant shall provide proof satisfactory to Cityof such insurance that meets the requirements of this section and underforms of insurance satisfactory in all respects to the City. Consultant shall maintain the insurance policiesrequired by this section throughout the termof this Agreement. The cost of such insurance shall be included in the Consultants bid. Consultant shall notallow any subcontractor to commence work on any subcontract until Consultant has obtained all insurance required herein for the subcontractor(s) and provided evidence thereof toCity. Verification of the required insurance shall be submitted and made part of this Agreement prior to execution. 4.1 Workers' Compensation. Consultant shall, at its sole cost and expense, maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any andall persons employed directly or indirectly by Consultant. The StatutoryWorkers' CompensationInsurance and Employer's LiabilityInsurance shall be providedwith limits of not lessthan ONE MILLION DOLLARS 1,000,000.00) peraccident. In the alternative, Consultant may rely on a self-insurance program to meet those requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the standardsof the Labor Code shall be solely in the discretion of theContract Administrator. The insurer, if insurance is provided, or theConsultant, if a programof self-insurance is provided, shall waive all rights of subrogation against the City and its officers, officials, employees, and volunteers for loss arisingfrom work performed under this Agreement. An endorsement shall state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. Consultant shall notify City within 14 daysof notificationfrom Consultant's insurer if such coverage is suspended, voided or reduced in coverage or in limits. 4.2 Commercial General and Automobile Liability Insurance. Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto& Pierce, Inc. Page 3 of 11 . 4.2.1 General requirements. Consultant, at its own cost and expense,shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial GeneralLiabilityInsurance or an Automobile Liabilityform or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreementor thegeneral aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claimsarisingfrom bodily and personalinjury, includingdeath resulting therefrom, and damage to propertyresultingfrom activities contemplatedunder this Agreement, including the use of owned andnon-owned automobiles. 4.2.2 Minimum scope of coverage. Commercial generalcoverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG0001. Automobile coverage shall be at least as broad as InsuranceServices Office Automobile Liability form CA 0001 Code 1 ("any auto"). No endorsement shall be attached limitingthe coverage. 4.2.3 Additional requirements. Each ofthe following shall be included in the insurance coverage or added as an endorsement tothe policy: a. City and its officers, employees, agents, and volunteers shall be covered as insureds with respect to each of thefollowing: liability arising out of activities performed by or on behalf of Consultant, including theinsured's generalsupervision of Consultant; products and completed operations of Consultant; premises owned, occupied, or used by Consultant; and automobiles owned, leased, or used by the Consultant. Thecoverage shallcontain no special limitations on the scope of protection afforded to City or its officers, employees, agents, or volunteers. b. The insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis. c. An endorsement must state that coverage is primaryinsurance with respect to the City and its officers, officials, employees and volunteers, and that no insurance or self-insurance maintained by the City shall be called upon tocontribute to a loss under the coverage. d. Any failure ofCONSULTANTto comply withreporting provisions of thepolicy shall not affect coverage provided to CITY and its officers, employees, agents, and volunteers. e. An endorsement shall state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified mail, return receipt requested, hasbeen giventotheCity. Consultant shall notify City within 14 days of notification from Consultant's insurer if such coverage is suspended, voided or reduced in coverage or in limits Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto& Pierce, Inc. Page 4 of 11 4.3 Professional Liability Insurance. Consultant, at its owncost and expense, shall maintain for the periodcovered by this Agreement professionalliability insurance for licensed professionals performing work pursuant to this Agreement in an amount notless than ONE MILLION DOLLARS 1,000,000)coveringthe licensed professionals'errors and omissions. 4.3.1 Any deductible or self-insuredretention shall not exceed $150,000 per claim. 4.3.2 An endorsement shall state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits, exceptafterthirty(30)days' prior written notice by certified mail, return receiptrequested, has been given to the City. 4.3.3 The policy must contain a crossliability or severabilityofinterest clause. 4.3.4 The following provisions shall apply if the professional liability coverages are written on a claims-made form: a. The retroactive date of the policymust be shown and must be before the dateof the Agreement. b.Insurancemust be maintained and evidence of insurance must be provided for at leastfive years after completion ofthe Agreement or thework, so long as commercially available at reasonable rates. c.If coverage is canceled or not renewed and it is not replacedwith another claims- madepolicyform with a retroactive date that precedesthedateofthis Agreement, Consultant mustprovide extended reporting coverage for a minimum of five years after completionofthe Agreement or the work. The Cityshall have the right to exercise, at the Consultant's solecost and expense, any extended reporting provisions of the policy, if the Consultant cancels or does not renew the coverage. d. A copy of theclaim reporting requirements must be submitted to theCity prior tothe commencement of any work under this Agreement. 4.4 All Policies Requirements. 4.4.1 Acceptabilityof insurers. Allinsurance required by this section is to be placedwith insurers with a Bests' ratingof no less than A:VII. 4.4.2 Verification of coverage. Prior to beginning any work under this Agreement, Consultant shall furnish City with certificates ofinsurance and with original endorsements effecting coverage required herein. The certificates and endorsements for each insurancepolicy are to be signed by a person authorized by that insurer tobind coverage on its behalf. TheCity reserves the right to require complete, certifiedcopiesof all requiredinsurance policies, at anytime. 4.4.3 Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnishseparate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto & Pierce, Inc. Page 5 of 11 4.4.4 Variation. The City may approve a variation in the foregoinginsurance requirements, upon a determination thatthe coverages, scope, limits, and forms of such insurance are either not commercially available, or thatthe City's interests are otherwisefully protected. 4.4.5 Deductibles and Self-Insured Retentions. Consultant shall disclose toand obtain the approval of City for the self-insuredretentions and deductibles beforebeginningany of the services or work called for by any termof this Agreement. Duringtheperiod covered by thisAgreement, only upon theprior express written authorization of Contract Administrator, Consultant may increase such deductibles or self- insured retentions with respect to City, its officers, employees, agents, and volunteers. The Contract Administrator may condition approvalof an increase in deductible or self-insured retention levels with a requirement that Consultant procure a bond, guaranteeing paymentof losses and related investigations, claimadministration, and defense expenses that is satisfactory in all respects to each of them. 4.4.6 Notice of Reduction in Coverage. In the event that any coverage required by this section is reduced, limited, or materiallyaffected in any othermanner, Consultant shall provide written notice to City at Consultant's earliest possible opportunity and in no case later than fivedaysafter Consultant is notified ofthechange in coverage. 4.5 Remedies. In addition to any otherremedies City may have if Consultant fails to provide ormaintain any insurancepolicies or policy endorsements to the extent and within the timeherein required, City may, atits sole optionexercise any ofthe following remedies, which are alternatives toother remedies City mayhave and are not the exclusive remedy for Consultant's breach: Obtain such insurance and deduct andretainthe amount of the premiums for such insurance from any sums due under the Agreement; Order Consultant to stop work under thisAgreement or withhold any payment that becomes due to Consultant hereunder, or both stop work and withhold anypayment, until Consultant demonstratescompliance with the requirements hereof; and/or Terminate this Agreement. Section 5. INDEMNIFICATION ANDCONSULTANT'S RESPONSIBILITIES. Consultant shall indemnify, defend with counselselected by the City, andhold harmless the City and its officials, officers, employees, agents, and volunteersfrom and against any andall losses, liability, claims, suits, actions, damages, and causes of action arising out of any personalinjury, bodily injury, loss of life, or damage to property, or any violation of any federal, state, or municipal law or ordinance, to the extent caused, in whole or in part, by thewillful misconduct or negligent acts oromissions of Consultant or its employees, subcontractors, or agents, by acts for which theycould be held strictly liable, or by the quality or character of theirwork. The foregoing obligation of Consultant shall not apply when 1) the injury, loss of fife, damage to property, or violation of lawarises whollyfrom thenegligence or willful misconduct of theCity or its officers, employees, agents, or volunteers and (2) the actions of Consultant or its employees, subcontractor, or agentshave contributed in no part to the injury, loss of life, damage to property, or violation of law. It is understoodthatthe duty of Consultant to indemnify andhold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance certificates and Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto& Pierce, Inc. Page 6 of 11 endorsements required under this Agreement does notrelieve Consultant fromliability under thisindemnification and hold harmless clause. This indemnification andhold harmlessclause shall apply to any damages orclaims for damages whetheror not such insurance policies shall have been determined to apply. By executionofthis Agreement, Consultant acknowledges and agrees to the provisions of this Section and that it is a material element of consideration. In the event thatConsultant or any employee, agent, or subcontractor of Consultant providing services underthis Agreement is determined by a court of competent jurisdiction or the CaliforniaPublic Employees RetirementSystem PERS) to be eligible for enrollment in PERS as an employee of City, Consultantshallindemnify, defend, andhold harmless City for the payment of any employee and/or employercontributionsfor PERS benefits on behalf of Consultant or its employees, agents, orsubcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City. Section 6. STATUS OF CONSULTANT. 6.1 Independent Contractor. At alltimes during the termofthis Agreement, Consultant shall bean independent contractor and shall not bean employeeof City. City shall have the right to control Consultant onlyinsofar as the results of Consultant's servicesrenderedpursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3; however, otherwise City shall nothave theright to control the means by which Consultant accomplishesservices rendered pursuant to this Agreement. 6.2 Waiver of Employee Benefits. Notwithstanding any other City, state, orfederalpolicy, rule, regulation, law, or ordinance tothe contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualifyfor or becomeentitled to, and hereby agree towaive any andall claims to, any compensation, benefit, oranyincident of employment by City, includingbutnot limited to eligibility to enroll in the CaliforniaPublicEmployees Retirement System(PERS) as an employee of City and entitlement to any contribution to be paid by City foremployercontributions and/or employeecontributions for PERS benefits. 6.3 Consultant No Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement tobind City to any obligation whatsoever. Section 7. LEGAL REQUIREMENTS. 7.1 Governing Law. The laws of the State of California shall govern this Agreement. 7.2 Compliance withApplicable Laws. Consultant and any subcontractors shall comply with all laws applicable to the performanceoftheworkhereunder. 7.3 Other Governmental Regulations. To the extent that this Agreement may be fundedbyfiscal assistance from another governmental entity, Consultant and anysubcontractors shall complywith all applicable rules and regulations to whichCity is bound by the terms of such fiscal assistance program. Consulting Services Agreement between May 15,2012 City of Dublin and Stevenson Porto& Pierce, Inc. Page 7 of 11 7.4 Licenses and Permits. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors haveall licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. Consultant represents and warrants to City thatConsultant and its employees, agents, any subcontractors shall, at their solecost and expense, keep in effect atall timesduringtheterm of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintainduring the term of thisAgreement valid Business LicensesfromCity. 7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person's race, religion, color, nationalorigin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexualorientation, against any employee, applicant foremployment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programsprovided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provisionof any servicesthat are the subject of this Agreement, includingbut not limited to thesatisfaction of any positive obligations required of Consultant thereby. Consultant shall include the provisions ofthis Subsection in any subcontractapproved by the Contract Administrator or this Agreement. Section 8. TERMINATION AND MODIFICATION. 8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Consultant. Consultant may cancel thisAgreement upon thirty (30) days' written notice to City and shall include in such notice the reasons for cancellation. In the event of termination, Consultant shall be entitled to compensation for services performed to theeffectivedateof termination; City, however, may conditionpayment of such compensation upon Consultant delivering to City any or all documents, photographs, computer software,video and audio tapes, and othermaterials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement. 8.2 Extension. Citymay, in its sole and exclusive discretion, extendthe end date of this Agreement beyondthat provided for in Subsection 1.1. Any such extension shall require a written amendment tothis Agreement, as provided for herein. Consultant understands and agreesthat, if City grants such an extension, City shall have no obligation to provide Consultant with compensation beyondthe maximum amount provided for in this Agreement. Similarly, unless authorized by theContract Administrator, City shall have no obligation to reimburse Consultantfor any otherwise reimbursable expenses incurred duringthe extension period. 8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties. 8.4 Assignment and Subcontracting City and Consultantrecognize and agreethatthis Agreement contemplates personal performance by Consultant and is basedupon a determination of Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto &Pierce, Inc. Page 8 of 11 Consultant's uniquepersonal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence ofConsultant. Consultant may notassign this Agreement or any interest therein without the prior written approval oftheContract Administrator. Consultant shallnot subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior writtenapproval of theContract Administrator. 8.5 Survival. All obligations arising prior tothe termination of thisAgreement and all provisions of this Agreement allocatingliability between City and Consultant shall survive the termination of this Agreement. 8.6 Options uponBreach by Consultant. If Consultant materially breaches any of the terms of this Agreement, City's remedies shallincluded, but not be limited to,thefollowing: 8.6.1 Immediately terminate the Agreement; 8.6.2 Retainthe plans, specifications, drawings, reports, designdocuments, and any other work productprepared by Consultant pursuant tothis Agreement; 8.6.3 Retain a different consultant to completethe work described in Exhibit A not finished by Consultant; or 8.6.4 Charge Consultant the difference between thecost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City wouldhave paid Consultant pursuant to Section 2 if Consultant had completed the work. Section 9. KEEPING AND STATUS OF RECORDS. 9.1 Records Created as Part of Consultant's Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, orany other documents or materials, in electronic or any otherform, thatConsultant preparesor obtains pursuant to this Agreement and thatrelate to thematters covered hereunder shall be the property of theCity. Consultant herebyagrees to deliver those documents to the City upon termination of the Agreement. It is understood and agreed that the documents and other materials, includingbut not limited to those described above, prepared pursuant to this Agreement areprepared specifically for the City and are not necessarilysuitablefor any future or other use. City and Consultant agreethat, until final approval by City, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both parties. 9.2 Consultant's Books and Records. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documentsevidencing or relating to charges forservices or expenditures and disbursements chargedto the City under this Agreementfor a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement. 9.3 Inspection and Audit of Records. Any records or documentsthat Section 9.2 ofthis Agreement requires Consultant tomaintain shall be made available for inspection, audit, and/or copying at any Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto & Pierce, Inc. Page 9 of 11 time during regular business hours, upon oral or writtenrequest of theCity. Under California Government CodeSection 8546.7, if the amount ofpublic funds expended under this Agreement exceeds TEN THOUSAND DOLLARS ($10,000.00), the Agreement shall be subject to the examination and auditof theState Auditor, at the request of City or as part of any audit of the City, for a period of three(3)years after final payment under the Agreement. Section 10 MISCELLANEOUS PROVISIONS. 10.1 Attorneys' Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, theprevailing party shall be entitled to reasonable attorneys' fees in addition to any other relief to which thatparty may be entitled. The courtmay set such fees in the same action or in a separate action brought for that purpose. 10.2 Venue. In the eventthat either party brings any action against the other underthis Agreement, the parties agree that trial of such action shall be vested exclusively in thestate courts of California in the County of Alameda or in the United States District Court for the Northern District of California. 10.3 Severability. If a court of competent jurisdiction finds or rules that anyprovision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provisionofthis Agreement. 10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of anyother breach of thatterm or any other termofthis Agreement. 10.5 Successors and Assigns. The provisions of this Agreement shallinure to thebenefit of and shall apply toandbind the successors and assignsoftheparties. 10.6 Use of Recycled Products. Consultant shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper. 10.7 . Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, wouldplace Consultant in a conflict of interest," as that term is defined in thePolitical Reform Act, codified at California Government Code Section81000 et seq. Consultant shall not employ any City official in thework performedpursuant to this Agreement. No officer or employee of City shall have any financialinterest in this Agreement that would violate California Government Code Sections 1090 et seq. Consultanthereby warrants that it is notnow, nor has it been in the previoustwelve (12) months, an employee, agent, appointee, orofficial of the City. If Consultant was an employee, agent, appointee, or official of the City in the previoustwelve months, Consultant warrants that it did notparticipate in any manner in the forming ofthis Agreement. Consultant understands that, if this Agreement is made in violation of Government Code §1090 et.seq., theentire Agreement is void and Consultant will not be entitled to any compensation forservices performed pursuant to this Agreement, including reimbursement of expenses, and Consultant will be required to reimburse the City for any sums paid Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto& Pierce, Inc. Page 10 of 11 10.12 Integration. This Agreement, includingthe scope of workattached hereto and incorporated herein as Exhibit A, represents the entire and integratedagreement between City and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral. CITY OF DUBLIN CONSULTANT tat ni Pattillo, City Manager Michael Porto, Principal Attest: CX/l/tN 1. ' Caroline Soto, CityClerk Approved as to Form: Bakker, City Attorney Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto & Pierce, Inc. Page 11 of 11 EXHIBIT A SCOPEOF SERVICES Provision of Planning, Public Works, and other development services including, but not limited to, environmental, architectural, landscape architectural, ecological and/or biological consulting services to theCity of Dublinregarding: o Processing of developmententitlements o Processing City of Dublinprojects Said services shall be performed at the direction of the CommunityDevelopment Director on an as-needed basis. Adjustment of Rates Hourly rates shall be thoseset forth in Exhibit B (CompensationSchedule). Consulting Services Agreement between May 15, 2012 City of Dublin and Stevenson Porto& Pierce, Inc. I Exhibit A Page 1 of 1 EXHIBIT B COMPENSATION SCHEDULE Cityhereby agrees to pay Consultant a sumnot to exceed 100.00 per hour forwork completed during Fiscal Year 11- 12(July 1, 2011 through June 30, 2012). Cityhereby agrees to pay Consultant a sumnot to exceed $103.50 per hour for workcommencing Fiscal Year 12-13 July 1, 2012). Consultant shall not bill for any reimbursableitems. 1854375.1 Consulting Services Agreement between May 15,2012 City of Dublin and Stevenson Porto & Pierce, Inc. I Exhibit B Page 1 of 1 ORIGHI. DUE FROMPREVIOUSINVOICE(S): TOTAL DUE TODATE THIS CONTRACT: $17,687.50 $21,250.00SP21NVOICE NO.00996DATED 07128/2015 $38,937.50 TOTAL AMOUNT DUETHIS INVOICE: -1\rkCS \I.._",It1-__._.-.----' AUG 13 2015 .~'-c!\'ED -.01 IN LOCATION HOURS HOURS FISCALYEAR 201~2016 THJSPERlOD YEAR-TQ.OATE MICHAEL A PORTO CITY OF DUBLIN 118.50 381.50 ROBERTAJ.BUCHANAN SP2,INC.10.00 84.00 SARAHC.RHEE SP2,INC.13.00 41.50 OTAlS:141.50 507.00 PLANNINGSERVICESPERATIACHEDDETAIL(S)s 17,687.50 PERIOD ENDING:08/07/2015 :08/1112015 :96002 :VARIOUSPLANNINGPROJECTS DUBLIN,CALIFORNIA cAv~aLE UPON R!:C'E.::lT INVOICEDATE JOB NO. LOCATION CITYOFDUBLIN ATIN:PLANNINGDEPARTMENT 100 CIVICPLAZA DUBLIN,CALIFORNIA94568 STEVENSON,PORTO &PIERCE,INC.5519A YONAVENUE.IRWINDALE.CAUFORNIA 91706--2057 CIVILENGINEERS.LANDPLANNERS.LANDSURVEYORS&ENVIRONMENTALPLANNERS T:626.385.3980 F:626.385.3983 INVOICE NO.00997