Amendment No. 3 to Professional Services Agreement No. 2018-125 with Hinderliter, De Llamas and Associates

1 Agenda Item A.11

CONSENT CALENDAR
Meeting Date: October 3, 2023
Melody0224!

TO: Mayor and Councilmembers

FROM: Luke Rioux, Finance Director

CONTACT: Cecilia Rubio, Finance Management Assistant

SUBJECT: Amendment No. 3 to Professional Services Agreement No. 2018-125 with Hinderliter, De Llamas and Associates

RECOMMENDATION:

Authorize the City Manager to execute Amendment No. 3 to Professional Services Agreement No. 2018 -125 with Hinderliter, De Llamas and Associates for ongoing professional consulting, monitoring and compliance services related to cannabis businesses, increasing the maximum contract amount by $60,000 for a total not-to-exceed amount of $384,000, and to extend the term of the agreement to June 30, 2025.

BACKGROUND:

In December 2018, the City Manager executed Agreement 2018 -125 between the City and Hinderliter, De Llamas and Associates (HDL) to provide professional cannabis consulting services and expertis e in development and revision of cannabis ordinances and program implementation. Services also include ongoing assistance with regulatory compliance licensing review, and optional compliance inspection and financial and taxation audit services. The agreeme nt with HDL was in the amount not -to-exceed $30,000 and due to expire June 30, 2019. On June 4, 2019, the City Council authorized Amendment No. 1 , extending the term of Agreement 2018 -125 to June 30, 2021, and increased the total not -to-exceed amount to $154,000 and transitioned the project manager from the Neighborhood Services Director to the Finance Director. On June 15, 2021, the City Council authorized Amendment No. 2, extending the term of the agreement to June 30, 2023, and increased the total not-to-exceed amount to $324,000. Attachment 2 to this report incorporates all prior agreements.

DISCUSSION:

The City’s current agreement with HDL for cannabis consulting services was set to expire June 30, 2023. The agreement was inadvertently allowed to expire, but the City can retroactively extend the date of the contract. Their expertise and cannabis consulti ng 1 2
services are necessary to supplement Finance staff for ongoing application review, on - site inspections, monitoring and compliance and financial audits of cannabis business.

The processing of cannabis business licenses is a multi -departmental work effort , involving Finance, HR/Risk Management, Planning, Code Compliance, Building and Safety. Contracting with HDL provides the supplemental staffing support and expertise needed for proper review for compliance with State and local law. HDL will continue to assist with reviewing application packages and provide preliminary and final site inspections that are necessary to comply with Goleta Municipal Code Chapter 5.09 regulating commercial cannabis businesses. In addition, HDL will continue to provide support with annual site inspections and financial audits, and on-call technical assistance and subject matter expertise as it relates to cannabis.

Staff is recommending that the City Council authorize the City Manager to execute Amendment No. 3 to Professional Services Agreement No. 2018-125 with Hinderliter, De Llamas and Associates, increasing the contract authority by $60,000 and extending the term of the agreement to June 30, 2025 (Attachment 1).

FISCAL IMPACTS:

The costs associated with the contract amendment are borne by the applicants and supported through annual user fees and charges that are assessed on the cannabis business license applicants, which include the ongoing monitoring and compliance and financial audit component.

Reviewed By: Legal Review By: Approved By:
___________________ ___________________ _________________ Kristine Schmidt Megan Garibaldi Robert Nisbet
Assistant City Manager City Attorney City Manager
ATTACHMENT:

1. Amendment No. 3 to Agreement No. 2018-125 with Hinderliter, De Llamas and Associates

2. Professional Services Agreement 2018 -125 with Hinderliter, De Llamas and Associates, Amendment No. 1, and Amendment No. 2
2 ATTACHMENT 1

Amendment No. 3 to Agreement No. 2018-125 with Hinderliter, De Llamas and Associates

3 City of Goleta
Amendment No. 3 to Agreement No. 2018-125

Page 1 of 3 ends

AMENDMENT NO. 3

TO A PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF GOLETA

AND HINDERLITER, DE LLAMAS AND ASSOCIATES

This Amendment No. 3 to the Professional Services Agreement by and between the City of Goleta , a municipal corporation (“City”) and Hinderliter, De Llamas and Associates (“Consultant”) dated January 4, 2019 (“Agreement,” Agreement No. 2018- 125) is made on this 3 day of October 2023.

SECTION A. RECITALS

1. This Agreement is for the professional cannabis consulting services; and

2. This Agreement has been amended to provide for additional compensation for continued services, change the Project Manager, and extend the termination of the agreement (Amendment No. 1, and 2.); and

3. The Agreement currently provides in Exhibit A entitled “Scope of Services”; and

4. The parties desire to amend Exhibit A of the Agreement so as to update the description of services, attached as Exhibit “A-2”; and

5. The Agreement currently provides in Section 3 Subsection (a) for the total compensation amount not to exceed $324,000; and

6. The parties desire to amend the Agreement so as to provide additional compensation in the amount of $60,000 for continued cannabis consulting services; and

7. The Agreement currently provides in Exhibit B entitled “Hourly Rates and Service Charges”; and

8. The parties desire to amend Exhibit B of the Agreement, so as to update the hourly rates and cost schedule, attached as Exhibit B-2 entitled “Cost Schedule”; and

9. The Agreement currently provides in Section 6 for the termination of the Agreement on June 30, 2023; and

10. The parties desire to retroactively amend this Agreement so that this Amendment is effective as of June 30, 2023 and the term of the Agreement extends to June 30, 2025; and

11. The City Council approved this Amendment No.3, on this 3rd day of October 2023.

DocuSign Envelope ID: F2958068-FB15-4E26-9ACC-77E375C716CA 4 City of Goleta
Amendment No. 3 to Agreement No. 2018-125

Page 2 of 3 ends

SECTION B. AMENDED TERMS

Now therefore City and Consultant agree as follows that the Agreement be, and hereby is, amended as follows:

1. Subsection (a) of Section 5. COMPENSATION AND PAYMENT of the Agreement is amended to add an additional authorized amount of $60,000 and to read in its entirety:

(a) Maximum and Rate. The total compensation payable to SERVICE PROVIDER by CITY for the services under this AGREEMENT SHALL NOT EXCEED the sum of $384,000 (herein "not-to-exceed amount") and shall be earned as the work progresses.

Consultant shall provide the Base Services as described in the Scope of Services, attached as Exhibit “A-2”.

Hourly at the hourly rates and with reimbursement to CONSULTANT for those expenses set forth in CONSULTANT's Schedule of Fees marked Exhibit B-2, attached, and incorporated herein. The rates and expenses set forth in that exhibit shall be binding upon CONS ULTANT until June 30 2025, after which any change in said rates and expenses must be approved in writing by CITY's Project Manager as described in Section 10 (CITY is to be given 60 days’ notice of any rate increase request), provided the not to exceed amo unt is the total compensation due CONSULTANT for all work described under this AGREEMENT.

2. Section 6. TERM, PROGRESS AND COMPLETION of the Agreement is amended to extend the term for an additional 24 months to read in its entirety.

The term of this Agreement is from the date first written above to June 30, 2025, unless the term of this Agreement is extended, or the Agreement is terminated as provided for herein.

CONSULTANT shall not commence work on the services to be performed until (i) CONSULTANT furnishes proof of insurance as required by Section 10 below, and (ii) CITY gives written authorization to proceed with the work provided by CITY’s Project Manager. All services shall be completed within the term of this Agreement following the notice to proceed.

DocuSign Envelope ID: F2958068-FB15-4E26-9ACC-77E375C716CA 5 City of Goleta
Amendment No. 3 to Agreement No. 2018-125

Page 3 of 3 ends

3. This Agreement is amended to delete and replace in its entirety: Exhibit A “Scope of Services” with Exhibit A-2 “Scope of Services” attached hereto and incorporated herein.

4. This Agreement is amended to delete and replace in its entirety: Exhibit B “Hourly Rates and Service Charges” with Exhibit B-2 “Cost Schedule” attached hereto and incorporated herein.

5. Except as otherwise specifically provided herein, all other provisions of the Agreement shall remain in full force and effect.

In concurrence and witness whereof, this Amendment No. 3 has been executed by the parties effective on the date and year first above written.

CITY OF GOLETA CONSULTANT

____________________________ ______________________________ Robert Nisbet, City Manager Andrew Nickerson, President/CEO

ATTEST:

_____________________________ ______________________________ Deborah Lopez, City Clerk Richard Park, CFO

APPROVED AS TO FORM:

MEGAN GARIBALDI, CITY ATTORNEY
_____________________________
Scott Shapses, Deputy City Attorney
DocuSign Envelope ID: F2958068-FB15-4E26-9ACC-77E375C716CA 6 120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

EXHIBIT A

SCOPE OF SERVICES

Objective 1: Attendance, Support or Presentations at Meetings or Workshops HdL shall provide attendance or presentations at meetings or workshops as needed or requested to help inform ongoing discussion of the City’s cannabis ordinance and associated regulatory program. It is anticipated that this objective may include meetings with Council Members, public meetings of the City Council and/or Planning Commission, community workshops or other public meetings as may be requested. The use and scheduling of these meetings would be determined in consultation with City staff. This objective assumes that all meeting attendance would be virtual. Physical attendance would incur an additional travel charge.

Objective 2: Review Permit Renewal Applications
HdL shall review and evaluate all applications for annual cannabis business permit renewals. The City shall notify HdL upon receipt of an application for a cannabis business permit renewal and shall forward all renewal application materials. HdL’s reviewers shall evaluate whether the application is complete and provides all necessary and requested information as required by the City. Reviews shall include narrative comments noting any deficiencies. If an application is deemed incomplete, the applicant shall be given an opportunity to submit supplemental information to address any deficiencies.

Each renewal application evaluation shall be completed within 60 days of the HdL receiving the application. Permit renewals are conditioned upon satisfactory completion of regulatory compliance inspections. If the inspection identifies any changes to the physical layout of the facility, then the permit renewal may also require a site plan evaluation (Objective 4).

Objective 3: Supplemental Background Checks
HdL shall provide background checks of all owners, principals, managers and employees of cannabis businesses. Our background checks supplement the State-required Live Scan fingerprint check, which will only disclose Department of Justice (DOJ) records regarding arrests or convictions. California’s licensing agencies are only allowed to consider convictions for certain “red line” offenses such as serious or violent felonies, or certain felonies involving fraud, minors or drug trafficking, as automatic disqualifiers before granting or denying a license.

Our supplemental background checks expand upon the Live Scan information to identify other factors that local governments may wish to consider before granting discretionary business licenses or permits. These considerations may include other felony offenses, misdemeanor convictions, arrest records, civil judgements, restraining orders, the terrorist screening database, the national sex offender registry, delinquent child support payments, bankruptcies, employment and credit records, and more. Our search includes up to 5 variations on the subject’s name and will alert if additional aliases are found which might warrant further investigation.
7 Our comprehensive background process checks the subject’s name and social security number against over 200 million datasets nationwide, including all of the following1:
 7 yr. unlimited county courts and criminal records search  Social Security, name and address comparison
 DMV search
 National Criminal Court report
 National Sex offender registry
 Federal criminal history
 State Department of Public Safety
 State Department of Corrections
 Terror watch list
 Bankruptcy, lien and judgments
 Delinquent child support payments
 Employment credit report
o Financial summary
o Personal information comparison
o Address comparison
o Employment comparison
o Credit bureau report / credit history
o Public records search
Any felony convictions that would be automatic disqualifiers pursuant to B&P 26057 (Violent and Serious Felony Convictions) must be confirmed through the Live Scan process. The degree to which other records may be used to inform the approval or renewal of a local business license or permit is subject to local ordinance requirements.

HdL offers separate rates for owners, principals or managers of cannabis businesses and for regular employees or line staff. We also offer a lower rate for annual renewals after the initial background check has been completed. Our rates include an HdL-designed employee identification badge with the city or county logo which meets all State regulatory requirements.

HdL provides an online portal for applicants to submit their application and authorization for background checks and all necessary documentation. Applicants provide their payment directly to HdL through the portal, so there is no cost to the City.

Prices valid as of the date of this proposal and subject to change without notice.

1 Renewals and background checks for employees include a lesser level of investigation.

Background Checks Owner, principal
or manager
Employee or
line staff
Initial background check $300 $100
Annual renewal $100 $75
Reissue lost or stolen badge $10 $10
8 Objective 4: Site Plan Evaluations
HdL shall review the premises diagram for each commercial cannabis business as needed or requested by the City to assist with the review of any permit renewal applications. The review shall ensure that any changes or modifications to the physical layout of the facility are compliant with state law and local regulations and are properly reflected in the site diagram. The review shall specifically address all cannabis-related interior and exterior physical site security requirements including entrances and exits, product and customer flow, limited access areas, locks and alarm systems, surveillance camera locations, safes, signage, and other criteria.

HdL shall provide the City with a report identifying any variances from the premises diagram as previously approved and detailing any deficiencies or recommended changes that need to be addressed prior to permit renewal.

Objective 5: Pre-License Site Visits
HdL shall review the premises diagram and conduct a site visit of each cannabis business prior to issuance of a certificate of occupancy. Site visits shall complement the final building inspection by verifying all interior and exterior physical site security requirements have been addressed in accordance with the application and all State and local requirements.

Site visits shall examine all entrances and exits, limited access areas, locks and alarm systems, access control procedures, surveillance camera locations, safes and cash management procedures, signage, operational protocols and administrative privileges associated with the license type(s) being sought, and other requirements as necessary.

The HdL inspector may be accompanied on the inspection by the City’s building inspector or representatives from the Police Department and Fire Department, if desired by the City.

The cost for this service includes an initial premises diagram review and report, coordination and arrangements with the business and other agencies, site visit, post- inspection report and any follow-up. This cost assumes 10-days advance notice for scheduling and travel arrangements. Travel will be charged at HdL hourly rates.

Objective 6: Regulatory Compliance Inspections
HdL will conduct a series of up to four on-site compliance inspections annually, as requested by the City, for each permitted cannabis business to determine compliance with State and/or local laws. If HdL identifies any non-compliant activities, we will provide the City with a recommended appropriate action to address the deficiency and to ensure future compliance by the permittee. The cost for this service includes all of the following:
 Notifying permittee of pending inspection
 Full on-site inspection to ensure that each business complies with all State and local laws and regulatory protocols for all of the following:
o Inventory management
o Cash handling procedures
o Access control
9 o Video surveillance
o Alarm system maintenance and safety
o Lock standards
o Packaging and labeling
o Waste management
o Transportation documentation
o Surveillance equipment maintenance
o Occupational badges
o Business records
o Other items as necessary to ensure compliance with laws  Preparation of a draft report detailing the findings of the inspection and providing recommendations for improvement where needed. If the inspection identifies any violations of law or other non-compliance issues, then HdL will prepare a notice to comply as an included part of the report.
 All travel costs associated with the inspection, assuming a minimum of four inspections per day. If fewer than four inspections are requested, HdL will charge for travel based upon hourly rates.
 All phone, email and other communications involved in preparing for, scheduling and coordinating the inspections and providing the report.

The cost for this service does not include any follow-up re-inspection or review of any supplemental documents provided to address or contest any findings of non-compliance, nor does it include any assistance with the appeal of any enforcement action by the City.

Any costs associated with such additional services would be billed at HdL’s hourly rate.

Objective 7: Cannabis Revenue Audits
HdL will conduct an annual revenue audit of each cannabis business to verify the accuracy of the revenue reported and remitted to the City during the review period and will recommend a tax assessment should the audit reveal any unreported revenue. As part of the audit process, HdL will conduct a risk-based review of each business using our proprietary Cannabis Analytical Testing System (CATS™). CATS was designed by HdL to address the unique challenges associated with auditing the cannabis industry. CATS allows audit staff to cross-analyze multiple business records to identify reporting variances, discrepancies and outliers to produce the most accurate measure of gross receipts on behalf of the City.

To initiate the process, the City shall provide HdL with a list of all licensed cannabis businesses subject to audit. HdL shall work with the City to determine the appropriate review period for each business and to develop a schedule for conducting all audits. As the time for each audit approaches, HdL will prepare a notification letter informing the licensee of the impending audit and providing a list of all records and documentation the business is required to provide, including remote access to the business’s point-of-sale (POS) system where applicable. HdL recommends that the letter be sent by the City to communicate HdL’s authority to conduct the audit and to encourage cooperation by the business. 10 The full annual audit shall include:
 Review Point-of-Sale (POS) system structure
 Review inventory system (subject to METRC data)
 Analyze and compare POS data with other available data sources, including:
o City cannabis tax returns
o State tax returns
o Federal tax returns
o METRC sales and inventory data
o CDTFA data
o Bank statements
o ATM or other merchant statements
o Sales receipts
o Other financial documents as available
 Identify any variances or over/under reporting
 Calculate any taxes or fees due to the City
 Prepare and issue report
Where cannabis cultivation is taxed on a square-footage basis, the audit shall include one annual site inspection to verify compliance with maximum permitted canopy area. Square footage audits may also consider documented findings from inspections by the City, DCC or other agencies, where available.

A business that holds multiple state cannabis licenses shall be considered a single business for audit purposes, provided that all licenses are held and operated under the same name, ownership, location, and a single tax ID number. Any variation may indicate separate business entities requiring separate audits. Any such determination shall be made on a case-by-case basis in consultation with the City.

HdL will provide a draft audit report to the commercial cannabis business. The business will be given an appropriate opportunity to respond or appeal the report in accordance with the City ordinance. HdL will review any documentation provided by the business to dispute the findings and will adjust the tax/fee assessment as necessary prior to issuing the final report to the City.

The cost for this service assumes a standard 12-month review period. The cost for a longer term shall be increased per each additional 6-month period (2 fiscal quarters). Pricing available upon request. This cost also assumes reasonable cooperation from the licensee.

Non-cooperation by the licensee may result in additional charges at HdL’s hourly rate, or in termination of the audit and potential enforcement action by the City. Any such action or additional charges would be determined in consultation with the City.

The cost does not include assistance with administrative appeals or enforcement of audit findings, cannabis tax policy questions or guidance, or other services not directly associated with preparing the revenue audit report. Any costs associated with such additional services would be billed at HdL’s hourly rate.

11 Objective 8: Technical Assistance and Subject Matter Expertise HdL will provide additional hours of general consulting to be utilized on an as-needed basis at the City’s request. Such assistance may include technical assistance, subject matter expertise, education, monitoring of changes to State laws and regulations, participation in conference calls, responding to staff inquires via phone and email, reviewing staff reports to the City Council, assisting with responses to inquiries from the public, or other issues yet to be determined as requested by the City. All technical assistance shall be mutually agreed upon by both parties prior to performing services.

Objective 9: Quality Assurance Application Reviews
HdL staff will conduct an initial screening of all applications for completeness based upon an objective checklist of required documentation. This initial screening shall allow for some limited discretion in determining whether submitted documents are substantively complete but shall not otherwise consider the quality of the submissions. Applications deemed incomplete will be disqualified and those applicants will not be allowed to submit any supplemental information.

Applications which have been deemed complete will move forward for a full review, including quality assurance scoring. Applicants must provide detailed information on how they plan to meet the required criteria. An applicant’s point score shall be based on their demonstrated ability to meet or exceed minimum requirements in each category. Scoring shall be in conformance with the criteria established by the City.

Reviews shall include narrative comments that identify any weaknesses, deficiencies or areas of concern for each application. Reviews shall be adequately detailed to inform the subsequent selection process but shall not contain any recommendations for approval or denial, other than a numerical score.

Proposed actions described in the applications shall be considered binding conditions of any resulting permit. Failure to meet or comply with any such requirements after a permit has been granted may subject the applicant to penalties and/or revocation proceedings.

This objective assumes a non-competitive quality assurance process where applications are reviewed only to ensure that they have adequately addressed all required criteria. This objective is offered here as an optional service. Engagement by HdL in any application reviews would require mutual agreement on the process in advance.

12 1

EXHIBIT B

COST SCHEDULE

Once under contract, prices shall be honored for the first full year, with successive years subject to an annual increase based upon the Consumer Price Index for the Los Angeles- Long Beach-Anaheim region.

Scope of Service Objectives

Estimated
Cost
Objective 1: Attendance or Presentations at Meetings
Includes planning and preparation of a presentation

Hourly Rate
Objective 2: Review Permit Renewal Applications

Hourly Rate

Objective 3: Supplemental Background Checks
Cost paid directly to HdL by applicant
No Charge
to City
Objective 4: Site Plan Evaluations $1,000 per
evaluation
Objective 5: Pre-license Site Visits

$2,250
Objective 6: Regulatory Compliance Inspections
One or more inspections per year as requested
$2,250
Objective 7: Cannabis Revenue Audits

$10,000
per audit
Objective 8: Technical Assistance and Subject Matter Expertise

Hourly Rate
Objective 9: Quality Assurance Application Reviews (Optional) Requires mutual agreement on process in advance
$5,000
per application
Travel (as needed for pre-license site visits and/or meeting attendance) Hourly Rate* ESTIMATE OF TOTAL COSTS (assumes 2-year term)
Site Plan Evaluations (assumes 5)
Pre-License Site Visits (assumes 6)
Regulatory Compliance Inspections (assumes 24)
Cannabis Revenue Audits (assumes 10)
Subject Matter Expertise (assumes 80 hours @ $300/hr))

$5,000
$13,500
$54,000
$100,000
$24,000

TOTAL NOT TO EXCEED $196,500
*Or at a flat rate to be negotiated with the City.

13 2

This proposal does not include any additional services that are not specifically enumerated herein. The proposal assumes HdL will not be asked to review any supplemental information provided by applicants, and that HdL will not be a part of any enforcement action, appeal, arbitration, or civil litigation resulting from the findings of an inspection and/or audit. Any such additional reports, documentation or assistance that may be required would be in addition to the costs shown in the table above and shall be billed at HdL’s hourly rate. This includes assistance with administrative hearings and/or civil litigation involving cannabis applicants or licensees.

Hourly Rates for HdL Staff
The prices in this proposal are based on the hourly rates for HdL staff as shown in the chart below. Any additional services requested by the client that are not specifically described in this proposal would be billed at the standard rate for the assigned staff person.

HdL Staff Person Title Hourly Rate
Ajay Kolluri Director $300
Matt Eaton Deputy Director of Compliance $300
Mark Lovelace Senior Policy Advisor $300
Elizabeth Eumurian Audit Manager $300
David Ross Senior Compliance Inspector $250
Michelle Shaw Compliance Inspector $235
Valerie Carter Senior Auditor $250
Tao Lu Auditor $235
Pamela Davis Auditor $235
Eric Magana Auditor $235
Tonson Chieng Audit Analyst $225
Dante Chegini Audit Analyst $225
Jennifer Erwin Audit Analyst $225
Kristi Lervold Administrative Assistant $150
All rates current as of the date of this proposal
14 ATTACHMENT 2

Professional Services Agreement No. 2018 -125 with Hinderliter, De Llamas and Associates, Amendment No. 1, and Amendment No. 2

15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
31 32
33 34

DOCUMENT ROUTING AND APPROVAL FORM
Requires Council Approval:
☐NO
☐YES
Meeting Date:

Requires Vendor Set -up:
☐NO
☐YES
If no, Vendor Number:

Director Level Approval:
☐NO
☐YES
Site Authority:

Provide summary of agreement below:

Document Name and Type: Project Name :

Vendor Name:

Contact Person:

Address:

Phone Number:

Email Address:

Business License Number:

City Project Manager:

Contact Number:

Email Address:

AMOUNT NOT TO EXCEED : ON CALL SERVICES? : ☐NO ☐YES*
*On call s ervices require one spreadsheet to track multiple PO’s COUNCIL APPROPRIATION NEEDED : ☐NO ☐YES*
*May requ ire Purchasing Officer ’s override to input Requis ition

ROUTING PROCESS DESCRIPTION DATE INITIAL
Department Head
Initiation
Authority to initiate agreement
Risk Manager Staff to initiate review of insurance provision in agreement City Attorney Contract review/A pprove as form
Finance Director,
Purchasing Officer
Funding Methods Approved/
Authorized, Purchase
Requisition reviewed.

Requisition Number:

Vendor Staff sends agreement to vendor via DocuSign for electronic signature and requests Insurance documents.

Staff (DocuSign User) Staff receives electronically signed agreement and insurance documents from vendor.

Risk Manager Risk Management shall rate Insurance and provide documents to Project Manager upon approval
City Manager City Manager will approve and sign the agreement.

City Clerk City Clerk will approve and sign the agreement.

FINALIZED ON: INITIAL RESOLUTION NO
(IF APPLICABLE)
Staff Routing Agreement:

Contact Number:

Email Address:

Vendor Staff will assign the vendor to receive a fully executed copy of the agreement via DocuSign.

PLEASE RETURN SIGNED DOCUMENTS TO THE CITY CLERK’S OFFICE

BELOW FOR CITY CLERK PROCESSING ONLY

FILE NUMBER
June 15, 2021
002767
Council Approved
Ongoing Cannabis Management Services
(including monitoring and compliance)
Amendment No. 2 to Professional Services Agreement 2018-125 Cannabis Management Services
Hinderliter, De Llamaas and Associates
Hinderliter, De Llamas and Associates
$324,000 (previous $154k + $170k)
Maria Soto-Sanchez
714-879-5000
[email protected]
13809
Luke Rioux
805-562-5508
[email protected]
Luke Rioux
805-562-5508
[email protected]
22FI002
DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816 8/5/2021
8/5/2021
8/5/2021
8/5/2021

City of Goleta
Amendment No. 2 to Agreement No. 2018-125

Page 1 of 2 ends

AMENDMENT NO. 2

TO A PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF GOLETA
AND

HINDERLITER, DE LLAMAS AND ASSOCIATES

This Amendment No. 2 to the Professional Services Agreement by and between the City of Goleta , a municipal corporation ( “City”) and Hinderliter, De Llamas and Associates, a California Corporation (“Consultant”) dated January 4th, 2019__ (“Agreement,” Agreement No. 2018-125) is made on this 15th day of June, 2021.

RECITALS
WHEREAS, this Agreement is for professional cannabis consulting services; and WHEREAS, on June 4, 2019, the Agreement was amended to amend the amount and extend the term of the Agreement (“Amendment No.1”); and WHEREAS, the Agreement currently provides in Section 3 Subsection (a) for the total compensation amount not to exceed $154,000; and
WHEREAS, the parties desire to amend the Agreement so as to provide for additional compensation in the amount of $170,000 for continued cannabis consulting services; and
WHEREAS, the Agreement currently provides in Section 6 for the termination of the Agreement on June 30, 2021; and

WHEREAS, the parties desire to amend the Agreement so as to extend the termination of the Agreement to June 30, 2023; and

WHEREAS, the City Council approved this Amendment No. 2, on this 15th day of June, 2021.

AMENDED TERMS

Now therefore City and Consultant agree as f ollows that the Agreement be, and hereby is, amended as follows:

1. Subsection (a) of Sect ion 3. COMPENSATION AND PAYMENT of the Agreement is amended to add an additio nal authorized amount of $170,000 and to read in its entirety:
(a) Maximum and Rate . The total compensation payable to CONSULTANT by CITY for the services under this AGREEMENT

DocuSign Envelope ID: 898451B3-7C0D-4424-935A-21EFDC5DF6BB DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816 2018-125.2
36 City of Goleta
Amendment No. 2 to Agreement No. 2018-125

Page 2 of 2 ends

SHALL NOT EXCEED the sum of $324,000 (herein "not-to-exceed amount") and shall be earned as the work progresses.

2. Section 6. TERM, PROGRESS AND COMPLETION of the Agreement is amended to extend the term for an additional 24 months to read in its entirety.

The term of this Agreement is from the date first written above to June 30, 2023, unless the term of this Agreement is extended or the Agreement is terminated as provided for herein.

3. Except as otherwise specifically provided herein, all other provisions of the Agreement shall remain in full force and effect

In concurrence and witness whereof, this Amendment No. 2 has been executed by the parties effective on the date and year first above written.

CITY OF GOLETA CONSULTANT

____________________________ _________ _____________________ Michelle Greene, City Manager Andrew Nickerson, President

A T T E S T :

_____________________________ ______________________________ Deborah Lopez, City Clerk Gary Lott, Chief Operating Officer

APPROVED AS TO FORM:

MICHAEL JENKINS, CITY ATTORNEY

_____________________________
Winnie Cai, Assistant City Attorney

DocuSign Envelope ID: 898451B3-7C0D-4424-935A-21EFDC5DF6BB DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816 37 1

EXHIBIT B: Hourly Rates and Service Charges
HdL shall provide all services under this agreement in accordance with the rates described below. Prices shall be honored for the first full year of the agreement, with successive years subject to an annual increase based upon the Consumer Price Index for the Los Angeles- Long Beach-Anaheim region.

Optional Service #1: Cannabis Business Application Reviews HdL’s Cannabis Management Team can review and evaluate cannabis business applications to ensure they meet or exceed all state and local regulatory requirements.

Cannabis Business Application Reviews: $2,500 each

Optional Service #2: Permit Renewal Application Reviews HdL’s Cannabis Management Team can review and evaluate cannabis business applications to ensure they meet or exceed all state and local regulatory requirements. Should the City need assistance conducting application reviews, HdL can provide this service at the rate of $2,500 per application.

Permit Renewal Application Reviews: Hourly Rate

Optional Service #3: Premises Site Plan Review
HdL shall review the premises diagram of each cannabis business prior to issuance of building permits for site improvements to ensure all proposed cannabis-specific improvements are in compliance with all State and local requirements. The cost for this service includes an initial premises diagram review and report.

Premises Site Plan Review: Hourly Rate

Optional Service #4: Pre-License Site Visits
HdL shall conduct a site visit of each cannabis business prior to issuance of a certificate of occupancy to verify compliance with all cannabis-specific State and local requirements. The cost for this service includes coordination and arrangements with the business and other agencies, site visit, post-inspection report, all travel costs and any follow up.

Pre-License Site Visits: $1,275 each

Optional Service #5: Regulatory Compliance Reviews
HdL will conduct a series of up to four on-site compliance inspections annually, or as otherwise requested by the City, for each permitted cannabis business to determine compliance with State and/or local laws.

Regulatory Compliance Reviews: $1,275 each

DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816 38 2

Optional Service #6: Cannabis Revenue Audits
HdL will conduct an annual revenue audit of each cannabis business to verify the accuracy of the revenue reported and remitted to the City during the review period and will recommend a tax assessment should the audit reveal any unreported revenue.

Cannabis Revenue Audits: $7,000 each

Optional Service #7: Background Checks
HdL provides an online portal for applicants to submit their application and authorization for background checks and all necessary documentation. Applicants provide their payment directly to HdL through the portal, so there is no cost to the City.

Background Checks Owner, principal
or manager
Employee or
line staff
Initial background check $300 $100
Annual renewal $100 $75
Reissue lost or stolen badge $10 $10
HdL Staff Person Title Hourly Rate
David McPherson Compliance Director $250
Matt Eaton Deputy Compliance Director $250
Ajay Kolluri Deputy Audit Director $250
Mark Lovelace Senior Policy Advisor $250
Kami Miller Senior Compliance Inspector $195
Michelle Shaw Compliance Inspector $195
Elizabeth Eumurian Senior Auditor $195
Odette Mikhail Auditor $195
Tao Lu Auditor $195
Valerie Carter Auditor $195
Mark Brogan Auditor $195
Teresa Schneider Business Application Reviewer $195
$ Cheryl Lee Business Application Reviewer $195
$ Jeff Burris Business Application Reviewer $195
Kristi Lervold Administrative Assistant $195
All rates current as of the date of this proposal
DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816 39 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

INSURER(S) AFFORDING COVERAGE
INSURER F :

INSURER E :

INSURER D :

INSURER C :

INSURER B :

INSURER A :

NAIC #
NAME:

CONTACT
(A/C, No):

FAX
E-MAIL
ADDRESS:

PRODUCER
(A/C, No, Ext):

PHONE

INSURED
REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

OTHER:
(Per accident)
(Ea accident)
$
$
N / A
SUBR
WVD
ADDL
INSD

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $
$
$PROPERTY DAMAGE
BODILY INJURY (Per accident)
BODILY INJURY (Per person)

COMBINED SINGLE LIMIT

AUTOS ONLY

AUTOSAUTOS ONLY

NON-OWNED

SCHEDULEDOWNED

ANY AUTO

AUTOMOBILE LIABILITY
Y / N

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
DESCRIPTION OF OPERATIONS below
If yes, describe under

ANY PROPRIETOR/PARTNER/EXECUTIVE
$
$
$
E.L. DISEASE - POLICY LIMIT
E.L. DISEASE - EA EMPLOYEE
E.L. EACH ACCIDENT
ER
OTH-

STATUTE
PER

LIMITS(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY)

POLICY EFF

POLICY NUMBERTYPE OF INSURANCELTR
INSR
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

EXCESS LIAB
UMBRELLA LIAB $EACH OCCURRENCE
$AGGREGATE
$
OCCUR

CLAIMS-MADE
DED RETENTION $
$PRODUCTS - COMP/OP AGG
$GENERAL AGGREGATE
$PERSONAL & ADV INJURY
$MED EXP (Any one person)
$EACH OCCURRENCE

DAMAGE TO RENTED
$PREMISES (Ea occurrence)

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR
GEN'L AGGREGATE LIMIT APPLIES PER:

POLICY PRO-

JECT LOC

CERTIFICATE OF LIABILITY INSURANCE

DATE (MM/DD/YYYY)

CANCELLATION

CERTIFICATE HOLDER
The ACORD name and logo are registered marks of ACORD
HIRED

AUTOS ONLY
5/27/2020
Woodruff Sawyer
2 Park Plaza, Suite 500
Irvine CA 92614
Audrey Curtis
949.435.7345
949.476.3118
[email protected]
National Fire Insurance Company of Hartford
20478
HDLCOMP-01
Continental Insurance Company
35289
Hinderliter de Llamas & Associates
HdL Software, LLC.
120 S State College Blvd., Suite 200
Brea CA 92821
Continental Casualty Company
20443
Lloyds of London
Federal Insurance Company
20281
732950572
A
X
1,000,000
X
1,000,000
15,000
1,000,000
2,000,000
X
Y
6056953483
5/26/2020
5/26/2021
2,000,000
A
1,000,000
X
X
6056953466
5/26/2020
5/26/2021
B
X
X
3,000,000
6056953502
5/26/2020
5/26/2021
3,000,000
X
10,000
B
B
X
6056953497
6056677063
5/26/2020
5/26/2020
5/26/2021
5/26/2021
1,000,000
1,000,000
1,000,000
D
C
E
Professional Liability/Claim Made
Cyber Liability
Crime
MPL1007920
6078657761
82556901
5/26/2020
5/26/2020
5/26/2020
5/26/2021
5/26/2021
5/26/2021
Each Claim/Aggregate
Cyber Limit
Crime Limit
$2,000,000
$2,000,000
$1,000,000
City of Goleta, its employees, officials, agents and member agencies are included as additonal insured as respects to the General Liability per attached forms.

City of Goleta, its employees, officials, agents and member agencies
130 Cremora Drive, Ste. B
Goleta CA 93117
APPROVED 6/4/21
DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816 40 CNA Paramount
Additional Insured - Designated Person
or Organization Endorsement
Policy No:

Endorsement No: TBD
Effective Date:

CNA74745XX (1-15)
Page1 of 1
PolUWCompany - CNA Paramount
Insured Name: HdL Companies
Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission.

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

SCHEDULE
Name Of Additional Insured Person Or Organization:

Information required to complete this Schedule, if not shown above, will be shown in the Declarations.

It is understood and agreed that the section entitled WHO IS AN INSURED is amended with the addition of the following:

A. The person or organization shown in the Schedule is an Insured, but only with respect to such person or organization’s liability for bodily injury, property damage or personal and advertising injury caused in whole or in part, by: the Named Insured’s acts or omissions, or the acts or omissions of those acting on the Named Insured’s behalf:

1. in the performance of the Named Insured’s ongoing operations; or

2. in connection with premises owned by or rented to the Named Insured.

B. However, if coverage for the additional insured is required by written contract or written agreement, subject always to the terms and conditions of this policy, including the limits of insurance, the Insurer will not provide such additional insured with:

1. coverage broader than required by such contract or agreement; or

2. a higher limit of insurance than required by such contract or agreement.

C. The coverage granted by this endorsement does not apply to bodily injury or property damage included within the products-completed operations hazard.

Any coverage granted by this endorsement shall apply solely to the extent permissible by law.

All other terms and conditions of the Policy remain unchanged.

This endorsement, which forms a part of and is for attachment to the Policy issued by the designated Insurers, takes effect on the effective date of said Policy at the hour stated in said Policy, unless another effective date is shown below, and expires concurrently with said Policy.

City of Goleta, its employees, officials, agents and member agencies 130 Cremora Drive, Ste. B
Goleta, CA 93117
6056953483
5/27/2020
DocuSign Envelope ID: 919532D5-A3B1-4C21-B915-F4CC3009D816

Goleta City CouncilOctober 3, 2023

Goleta City Council
October 3, 2023