Agenda Item No. 6
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: March 28, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: John Peters, Chief of Police
SUBJECT: Agreement with Hinderliter, de Llamas and Associates (HdL) for Cannabis Consultant Services
RECOMMENDATION
Adopt the Resolution authorizing the City Manager to enter a one-year agreement with Hinderliter, de Llamas and Associates (HdL) for Cannabis Consultant Services.
BACKGROUND
Hinderliter, de Llamas and Associates (HdL) began working with public agencies in California in 1983 conducting sales tax management and auditing programs. Since 1983, HdL has expanded their services nationwide and now includes revenue management services in areas of sales tax, property tax, lodging tax, business license tax, cannabis regulations and tax and economic development. Since 2016, Grover Beach has used HdL to assist staff with the reviewing applications, tax revenue auditing, and compliance inspection services for the City’s Cannabis Regulatory Program. HdL has been responsive to staff, has assisted in multiple on-site inspections and has been responsible for helping with the collection of overlooked cannabis tax revenues from cannabis businesses.
Recent staff conversations with HdL representatives discovered the current agreement is several years old with an outdated fee structure and a new agreement for consulting services should be implemented. Staff worked with HdL to develop a new agreement for services (Exhibit A) as well as a new fee structure for HdL’s services. The fee structure is broken down in the following table.
Scope of Services Current Fee New Fee
Cannabis Tax Revenue Audits (per business) $6,000 $7,500 Regulatory Compliance Inspections $1,000 $1,275
Technical Assistance and Subject Matter Expertise $250 / per hour No Change Travel Costs $600 / per day $400 / per day
The City’s Cannabis Regulatory Program includes one Cannabis Tax Revenue Audit and one Regulatory Compliance Inspection of each cannabis business per year. Staff also conducts other inspections and interactions with the cannabis businesses to ensure compliance and to handle inquiries from the businesses. The Cannabis Tax Revenue Audit fee is fully cost-recovered through billings to each cannabis business upon completion. Currently, the Grover Beach Master Fee Schedule lists this fee as $6,000, however staff will be requesting to amend the Master Fee Schedule which will include the new fee of $7,500 at the April 11th Council meeting.
Staff’s experience partnering with HdL for these consulting services has resulted in the collection of over $100,000 of cannabis tax revenues not yet paid along with some cases where businesses Staff Report: HdL Agreement for Cannabis Consultant Services Page 2 March 28, 2022
overpaid cannabis tax revenue resulting in a refund. Staff is recommending the continuation of this work by the authorization of this new agreement for services for $85,000 for the one-year term. Prior to the expiration of this new agreement, staff will conduct a Request for Proposals process to seek a new firm for these consulting and audit services since the City will have worked with HdL for several years and will need to obtain a new audit firm consistent with best practices.
FISCAL IMPACT
This year’s operating budget includes funding to cover the costs for the consulting services being provided by HdL.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Adopt the Resolution authorizing the City Manager to enter a one-year contract with Hinderliter, de Llamas and Associates (HdL) for Cannabis Consulting Services; or
2. Do not adopt the Resolution; or
3. Provide staff with alternative direction.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Resolution No. 22-XX
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER
BEACH, CALIFORNIA AUTHORIZING THE CITY MANAGER TO
ENTER A CONTRACT FOR CANNABIS CONSULTING SERVICES
WITH HINDERLITER, DE LLAMAS AND ASSOCIATES
WHEREAS, the City of Grover Beach has utilized the consulting services of Hinderliter, de Llamas and Associates (HdL) since 2016 to assist staff with reviewing cannabis applications, tax revenue auditing and compliance inspection services; and WHEREAS, a recent review of the HdL consulting contract determined it is outdated and a new fee schedule for consulting services should be implemented; and WHEREAS, the City Manager for the City of Grover Beach is authorized to execute on behalf of the City of Grover Beach the attached contract for consultant services, (Exhibit A) including any extensions or amendments thereof; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Grover Beach does hereby authorize the City Manager to execute the contract with Hinderliter, de Llamas and Associates for cannabis consultant services.
On motion by Council Member____________, seconded by Council Member__________, and on the following roll-call vote, to wit:
AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
the foregoing Resolution was PASSED, APPROVED and ADOPTED at a Regular Meeting of the City Council of the City of Grover Beach, California, this 28th day of March, 2022.
__________ ____
JEFF LEE, MAYOR
ATTEST:
___
WENDI SIMS, CITY CLERK
Attachment 1
1269745.1 Page 1 of 15
MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (this “Agreement”) is entered into as of _____________, 2022 (the “Agreement Date”) by and between Hinderliter de Llamas and Associates (“Consultant”), and City of Grover Beach (“Client”), which is located within the state of California (the “State”).
W I T N E S S E T H:
WHEREAS, Consultant is engaged in the business of providing consulting, software and other services that help public agencies understand and maximize their collection of sales, use and transactions taxes, business license taxes, property and lodging taxes, and other revenues, as well as their delivery of public services (collectively, “Consultant’s Business”); and WHEREAS, Client desires to contract with Consultant to obtain one or more of the services included within Consultant’s Business (as provided for in Schedule 1) upon the terms and conditions contained in this Agreement;
WHEREAS, Consultant desires to contract with Client to render such services upon the terms and conditions contained in this Agreement.
NOW THEREFORE, in consideration of the above WHEREAS provisions and all covenants and promises contained herein, Client and Consultant mutually agree as follows:
1. Services.
1.1 Consultant will perform those services included within Consultant’s Business that are described in any and all schedule(s) referencing this Agreement and signed by Client and Consultant as of the Agreement Date or hereafter (individually and collectively, the “Schedule(s)”), upon the terms and conditions contained in this Agreement (including Schedule 1 and 2 which are hereby incorporated by reference as if set out in full) (such services are, collectively, the “Services”). In performing the Services, Consultant is acting as an independent contractor (and not as an agent or employee of Client).
1.2 Client acknowledges and agrees that any other public agency (including, without limitation, any participating government agency) located within or outside of the State (e.g., city, municipality, county, district, public authority or other political subdivision) may procure services for fees and other terms and conditions that are substantially similar to any of the Services, Fees and other terms and conditions set forth in this Agreement, provided that such other public agency executes a separate agreement with Consultant wherein the services rendered to such other public agency, the fees payable by such other public agency, and the other terms and conditions of such separate agreement are the responsibility of Consultant and such other public agency and not Client. Consultant hereby agrees and warrants they will not enter into any other agreement with a public agency or any other entity that would constitute a conflict-of-interest with the Services defined within this Agreement or would be adverse to the interest of Client.
1.3 This Agreement does not limit the right of Consultant to enter into additional contracts with Client or to contract with third parties to provide them with merchandise or services Exhibit A
1269745.1 Page 2 of 15
of any kind whatsoever, including, but not limited to, services similar to the Services. During the Term of this Agreement, Client will not, directly or indirectly (except through Consultant), engage any third party to provide the Services or any services similar to the Services.
2. Fees. As compensation for performing the Services, Client will pay Consultant the fees, costs and expenses as described in the Schedules (individually and collectively these fees and costs are, the “Fees”). Consultant may perform the Services using professionals from its staff or Consultant’s affiliated entities, and such Services will be invoiced to Client under the same terms applicable to Consultant’s staff. Consultant may increase the Fees from time to time (including, without limitation, as may be described in Schedule 1). Other than a Fee increase as described in Schedule 1, Client may notify Consultant of a request that such Fee increase be modified or revoked and, if Consultant fails to do so to Client’s satisfaction within thirty (30) days after the receipt of such request, Client may terminate this Agreement without cause pursuant to Section
7.3. 3. Invoices; Payment.
3.1 Consultant will invoice Client for the Fees earned and/or incurred by Consultant pursuant to this Agreement.
3.2 Invoices are due and payable upon receipt. Interest will begin to accrue on the thirty-first (31st) day following the invoice date on all unpaid balances at a rate of one and onehalf percent (1½%) per month, or the maximum rate permitted by law, whichever is less. Payments will first be credited to interest and then to principal. In the event that Client disputes an invoice, only that portion so disputed in good faith will be withheld from payment, and the undisputed portion must be timely paid. Interest will accrue on any disputed portion of the invoice not timely paid and will be payable immediately if the disputed invoice is resolved in favor of Consultant.
3.3 If Client fails to fully pay an invoice within 30 days after the invoice date, Consultant may, after giving five (5) days’ prior written notice to Client, suspend the rendering of Services under this Agreement until said invoice is paid in full, together with all interest that has accrued thereon. In the event of such a suspension of Services, Consultant will have no liability to Client for any delays or damages arising therefrom.
4. Insurance.
4.1. Throughout the life of this Agreement, Consultant shall pay for and maintain in full force and effect all insurance as required in Schedule 2, which is incorporated into and part of this Agreement, with an insurance company(ies) either:
4.1.1 Admitted by the California Insurance Commissioner to do business in the State of California and rated no less than “A-VII” in the Best’s Insurance Rating Guide; or
4.1.2 As may be authorized in writing by Client’s Administrative Services Director, or his/her successor, or his/her designee at any time and in his/her sole discretion. The required 1269745.1 Page 3 of 15
policies of insurance as stated in Exhibit B shall maintain limits of liability of not less than those amounts stated therein.
4.2 If at any time during the life of the Agreement or any extension, Consultant or any of its subcontractors/sub-consultants fail to maintain any required insurance in full force and effect, all services and work under this Agreement shall be discontinued immediately, and all payments due or that become due to Consultant shall be withheld until notice is received by Client that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to Client. Any failure to maintain the required insurance shall be sufficient cause for Client to terminate this Agreement. No action taken by Client pursuant to this Provision 4 shall in any way relieve Consultant of its responsibilities under this Agreement.
The phrase “fail to maintain any required insurance” shall include, without limitation, notification received by Client that an insurer has commenced proceedings, or has had proceedings commenced against it, indicating that the insurer is insolvent.
4.3 The fact that insurance is obtained by Consultant shall not be deemed to release or diminish the liability of consultant, including, without limitation, liability under the indemnity provisions of this Agreement. The duty to indemnify Client shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Consultant. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of Consultant, its principals, officers, agents, employees, persons under the supervision of Consultant, vendors, suppliers, invitees, consultants, sub-consultants, subcontractors, or anyone employed directly or indirectly by any of them.
4.4 If Consultant should subcontract all or any portion of the services to be performed under this Agreement, Consultant shall require each subcontractor/sub-consultant to provide insurance protection, as an additional insured, to the Client and each of its officers, officials, employees, agents and volunteers in accordance with the terms of this section, except that any required certificates and applicable endorsements shall be on file with Consultant and Client prior to the commencement of any services by the subcontractor. Consultant and any subcontractor/subconsultant shall establish additional insured status for Client, its officers, officials, employees, agents and volunteers.
5. Client Support.
5.1 Client will promptly provide in writing to Consultant all data and other information relating to or which may be necessary for Consultant’s performance of the Services.
Without limiting the foregoing, Client will keep Consultant informed on a timely basis in writing as to the existence and amendments of the laws, ordinances and/or regulations under which Consultant is performing the Services (including any adopted by Client). Consultant will be permitted to rely on the accuracy, timeliness and completeness of the information provided by 1269745.1 Page 4 of 15
Client, and notwithstanding any other inconsistent provision of this Agreement Consultant will not be liable to Client or others as a result of such reliance on data and information supplied by Client.
5.2 Client will examine all of Consultant’s reports, specifications, notices, proposals and other documents. In the event that Consultant asks for a decision from Client in order for Consultant to perform the Services, Client will render such decision in writing in a timely manner.
5.3 Promptly following any request from Consultant, Client will adopt and maintain in full force and effect resolutions in forms acceptable to Client and in accordance with applicable law authorizing Consultant to examine the confidential sales tax and other relevant records of Client throughout the Term and, for so long as any Fees are still accruing pursuant to this Agreement, after the Term.
5.4 Client will assist Consultant in obtaining such licenses, permits and approvals as may be required by law for performing the Services, and Client will pay all fees, assessments and taxes related to the application, issuance and maintenance thereof.
5.5 The Services do not include services to support, prepare, document, bring, respond to subpoenas, act as a witness, defend or otherwise assist in litigation undertaken or defended by Client, which Consultant may be required by legal process or otherwise or requested by Client to provide (collectively, “Litigation Services”). To the extent not otherwise obligated in accordance with Provision 8, Indemnification, Client will promptly pay or reimburse Consultant for all of Consultant’s costs and expenses related to Litigation Services (including, without limitation, Consultant’s attorneys’ fees and costs) at Consultant’s actual cost, plus ten percent (10%) thereof (all of which are deemed to be additional Fees). Client’s obligations under this subsection are superseded by Provision 8 to the extent Consultant has any obligation under that provision to indemnify and hold Client harmless.
6. Confidentiality; Software Use and Warranty; Records.
6.1 Consultant will comply with the requirements of the applicable laws, ordinances and/or regulations of which it has been informed by Client pursuant to Section 5.1 concerning the confidentiality of tax records. Consultant may publicly state that it performs Services for Client.
6.2 As used herein, the term “proprietary information” means all information, techniques, processes, services or material that has or could have commercial value or other utility for Consultant or in Consultant’s Business, including without limitation, (i) software, computer or data processing programs; (ii) data processing applications, routines, subroutines, techniques or systems; (iii) desktop or web-based software; (iv) audit, tax or fee collection/administration or business processes, methods or routines; (v) marketing plans, analyses and strategies; (vi) materials, techniques and intellectual property used; and (vii) the Software and the Software’s documentation. Except as otherwise required by law, Client must hold in confidence and may not use (except as expressly authorized by this Agreement) or disclose to any other party any proprietary information provided, learned of or obtained by Client in connection with this 1269745.1 Page 5 of 15
Agreement. The terms of this Section 6.2 do not apply to information that is public information or information required by order of a court of law to disclose such information.
6.3 If access to any software which Consultant owns is provided to Client as part of the Services under this Agreement (including, without limitation, if Client chooses to subscribe to such software and/or related reports as part of the Services pursuant to Schedule 1 to this Agreement) (such Consultant-owned software is, collectively, the “Software”), Consultant hereby provides a limited, non-exclusive, non-transferable license to Client (including such of Client’s staff as may be designated from time to time by Client and approved by Consultant in writing) to use the Software pursuant to and during the Term of this Agreement.
6.4 The Software must only be used by such authorized Client staff, and Client must not sublicense, sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of the Software. The license granted hereunder does not imply ownership by Client or any of Client’s staff of the Software nor any rights of Client or any of Client’s staff to sublicense, transfer or sell the Software, or rights to use the Software for the benefit of others. Client may not create (or allow the creation of) any derivative work or product based on or derived from the Software or the Software’s documentation, nor modify (or allow the modification of) the Software or the Software’s documentation without the prior written consent of Consultant. In the event of a breach of this provision (and without limiting Consultant’s remedies), such modification, derivative work or product based on the Software or the Software’s documentation is hereby deemed assigned to Consultant. Upon termination of this Agreement or this Software license, this Software license will be deemed to have expired and Client must immediately deactivate, cease using and remove, delete and destroy all the Software (including, without limitation, from Client’s computers and network). Consultant warrants that the Software will perform in accordance with the Software’s documentation.
6.5 Notwithstanding anything to the contrary in this Agreement (including any Schedule hereto), if access to any software which Consultant does not own is provided to Client as part of the Services pursuant to this Agreement (including pursuant to any Schedule hereto), Client hereby agrees (i) to comply with all of the terms and conditions imposed on Client’s access to such software (including, without limitation, by Consultant, such software’s owner, and pursuant to applicable law), and (ii) Consultant has no obligation during the Term of this Agreement or thereafter to provide Client with access to such software.
6.6 All documents, preliminary drafts, communications and any and all other work product related to the Services and provided by Consultant to Client either in hard copy or electronically are the joint property of Client and Consultant. This does not include the Software or any other software, any programs, any methodologies or any systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by Consultant in the course of performing the Services that were not otherwise provided to Client in either hardcopy or electronic form, all of which may be protected by Consultant or third party copyrights or other intellectual property and remain Consultant’s or such third parties’ exclusive property (as the case may be). It is possible that any documents, drafts, communications or other work product provided to Client may be alleged to be public records under applicable law and/or may be discoverable through litigation. Within 10 calendar days of when Client may disclose such information in response to any request for public records, Client must notify Consultant in writing 1269745.1 Page 6 of 15
about the request and, Consultant shall at its discretion apply to the court for a protective order or other form of court order to establish an exemption from disclosure. If Consultant fails to file for a protective order or similar court order or fails to obtain such an order, the Client shall have no liability to release such data or information.
6.7 Subject to applicable law, Consultant is responsible for retaining all final documents and other final work product related to the Services for a period of not less than three (3) years from the date provided to Client. Retention of any other documents, preliminary drafts, communications and any and all other work product provided to Client by Consultant is the responsibility of Client. Consultant has no responsibility to retain any drafts, notes, communications, emails or other writings created or received by Client in the course of performing the Services (other than the final documents and other final work product related to the Services and provided to Client for the term of years referenced above).
7. Term and Termination.
7.1 The initial term of this Agreement commences as of the Agreement Date and, unless terminated earlier pursuant to any of this Agreement's express provisions, will continue in effect until twelve (12) months from such date (the “Initial Term”).
7.2 This Agreement may be terminated by either party for cause upon not less than forty-five (45) days’ prior written notice given to and received by the other party, if the other party has materially breached this Agreement through no fault of the notifying party and fails to (i) commence correction of such material breach within thirty (30) days of receipt of the abovereferenced written notice and (ii) diligently complete the correction thereafter.
7.3 In addition, either party may terminate this Agreement without cause upon not less than one hundred twenty (120) days’ prior written notice to the other party.
7.4 On termination, Client will pay Consultant for all Fees and other compensation (including for Litigation Services) earned and/or incurred through the termination date and will thereafter timely pay Consultant for all other Fees and compensation to which Consultant may be entitled pursuant to this Agreement (including the Schedules hereto).
8. Indemnification.
8.1 Indemnification and Defense for Professional Services: To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless Client and any and all of its officers, officials, employees, agents and volunteers (“Indemnified Parties”) from and against any and all claims, losses, liabilities, damages, costs and expenses, including attorney’s fees and costs, to the extent they arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant. Consultant’s duty to defend shall consist of reimbursement of defense costs incurred by Client in direct proportion to the Consultant’s proportionate percentage of fault.
Consultant’s percentage of fault shall be determined, as applicable, by a court of law, jury or arbitrator. In the event any loss, liability or damage is incurred by way of settlement or resolution without a court, jury or arbitrator having made a determination of the Consultant’s percentage of fault, the parties agree to mediation with a third party neutral to determine the Consultant’s 1269745.1 Page 7 of 15
proportionate percentage of fault for purposes of determining the amount of indemnity and defense cost reimbursement owed to the Client.
8.2 For All Other Liabilities: Notwithstanding the foregoing and without diminishing any rights of Client under this Provision, for any liability, claim, demand, allegation against Client arising out of, related to, or pertaining to any act or omission of Consultant, but which is not a professional service as defined in Schedule 1, CONSULTANT shall defend, indemnify, and hold harmless CITY, its officials, employees, and agents (“Indemnified Parties”) from and against any and all damages, costs, expenses (including reasonable attorney fees and expert witness fees), judgments, settlements, and/or arbitration awards, whether for personal or bodily injury, property damage, or economic injury, and arising out of, related to, any concurrent or contributory negligence on the part of the Client, except for the sole or active negligence of, or willful misconduct of the Client.
8.3 If Consultant should subcontract all or any portion of the services to be performed under this Agreement, Consultant shall require each subcontractor to indemnify, hold harmless and defend Client and each of its officers, officials, employees, agents and volunteers in accordance with the terms of the preceding paragraph.
8.4. Notwithstanding any other conflicting provision of this section or the Agreement, Consultant shall indemnify and defend the Client for any third party claims to the extent arising from Copyright or Trademark infringements arising from the use by Client of any Proprietary Information from Consultant.
This Provision shall survive termination or expiration of this Agreement.
9. Liability Limitations; Governing Law; Dispute Resolution.
9.1 To the maximum extent permitted by law and notwithstanding anything to the contrary in this Agreement:
9.2 The law of the State will govern the validity of this Agreement, its interpretation and performance, and any other claims related to it, without regard to the State’s conflict of laws rules. Venue for any legal action arising out of this Agreement will be proper only in the State courts or the federal courts located within the State. The parties hereby submit to the exclusive jurisdiction of such courts and waive any other venue to which either party might be entitled by domicile or otherwise.
9.3 If either party is required to bring legal action to enforce its rights under this Agreement or as the result of a breach of this Agreement, the costs and expenses of the prevailing party, including reasonable attorneys’ fees, will be paid by the non-prevailing party.
9.4 A breach of this Agreement by either party may cause the other party hereto irreparable harm, the amount of which may be difficult to ascertain, and therefore such other party will have the right to apply to a court of competent jurisdiction for specific performance and/or an order restraining and enjoining any further breach and for such other relief as such other party may deem appropriate. Such right is in addition to the remedies otherwise available to such other party at law or in equity. The parties hereto expressly waive the defense that a remedy in damages will 1269745.1 Page 8 of 15
be adequate and any requirement in an action for specific performance or injunction hereunder for the posting of a bond.
10. General Legal Provisions.
10.1 Authorization to Proceed. Each Schedule must be signed by both Client and Consultant before such Schedule will be binding on the parties hereto.
10.2 Force Majeure. Consultant is not responsible for damages or delay in performance caused by acts of God, strikes, lockouts, accidents, epidemics, pandemics or other health emergencies, or other events beyond the control of Consultant.
10.3 Amendment; Waiver. Any provisions of this Agreement (including, without limitation, any Schedules or provisions within any Schedules) may be amended or terminated if in writing and signed by both Client and Consultant. No waiver by any party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, will be deemed to be valid unless acknowledged by such party in writing, and such waiver will not extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
10.4 Severability and Survival. If any provision in this Agreement is held illegal, invalid or unenforceable, the enforceability of the remaining provisions will not be impaired thereby. Notwithstanding any other provisions of this Agreement (including, without
limitation, Section 7), Sections 3, 5.5, 6, 7, 8, 9 and 10 will survive the termination of this Agreement.
10.5 No Third-Party Beneficiaries; Services Limited to Agreement. Except as set forth in Section 8, this Agreement gives no rights or benefits to anyone other than Client and Consultant and has no third-party beneficiaries. The Services to be performed for Client by Consultant are defined solely by this Agreement (including the Schedules), and not by any other contract or agreement that may be associated with performing the Services.
10.6 Assignment. This is a bilateral personal services agreement. Neither party will have the power to or will assign any of the duties or rights or any claim arising out of or related to this Agreement, whether arising in tort, contract or otherwise, without the written consent of the other party. Any unauthorized assignment is void and unenforceable. This Agreement is binding on the 1269745.1 Page 9 of 15
successors and assigns of the parties hereto. Notwithstanding anything to the contrary, Consultant may, from time to time, utilize one or more third parties to provide certain of the Services (including, but not limited to, as may be set forth in one or more of the Schedules).
Notices. All notices under this Agreement must be in writing and will be deemed to have been given when such notice is received (i) from United States Postal Service First Class Certified Mail, Return Receipt Requested, (ii) by courier service, or (iii) by email; provided, however, that notices received on a weekend or holiday or on a business day after 4:00 p.m. local time will be deemed to have been received on the next business day. Notices will, unless another address is specified in writing, be sent to the addresses indicated below (each of which must include a street address and an email address): Consultant: 120 S. State College #200, Brea, CA 92821, Attn: David McPherson, Email: [email protected] ; and Client: 711 Rockaway Ave., Grover Beach, CA 93433, Attn: Chief John Peters, Email: [email protected].
10.8 Entire Agreement; Conflict. This Agreement (which includes any Schedules or amendments dated as of the Agreement Date or hereafter, including without limitation, amendments of the main body of this Agreement or the Schedules that may add to, subtract from, modify or clarify the Term, the scope of Services and/or the amount of Fees) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they relate in any way to the subject matter hereof. Should there ever be a conflict between the terms and conditions of any Schedules and the remainder of this Agreement as set forth in the main body of this Agreement, the terms and conditions of the remainder of this Agreement as set forth in the main body of this Agreement will prevail and be controlling; provided, however, that should there ever be a conflict between the terms and conditions of this Agreement (including any Schedules) and (i) any amendments hereof, the terms and conditions of the amendments hereof will prevail and be controlling, and (ii) the terms and conditions of any Schedule that expressly provides for them to supersede any terms and conditions of the main body of this Agreement, such terms and conditions of such Schedule will prevail and be controlling.
10.9 Counterparts; Electronic Signatures; Authority. This Agreement may be signed in any number of counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement. Any signed signature pages of this Agreement transmitted by email or other electronic means in a portable document format (PDF) or other clear and visible electronic format will have the same legal effect as an original. Each of the persons signing on behalf of a party hereto represents that he or she has the authority to sign this Agreement on such party’s behalf.
10.10 No Adverse Construction. Both parties acknowledge having had the opportunity to participate in the drafting of this Agreement. This Agreement will not be construed against either party based upon authorship. The section headings contained in this Agreement are 1269745.1 Page 10 of 15
inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement through their duly authorized representatives as of the Agreement Date.
CONSULTANT:
Hinderliter de Llamas and Associates
By:
R. Andrew Nickerson, President
CLIENT:
City of Grover Beach
By:
Name:
Its:
By:
Name:
Its:
[Any Schedule or Schedules may (but is/are not required to) be attached hereto] 120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com SCHEDULE 1
SCOPE OF SERVICES
The costs in the table below do 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.
Prices shall be honored for the first full year of this agreement. Any amendment or extension for additional years shall be subject to HdL’s prevailing price for such services at the time of the amendment.
Scope of Service Objectives Estimated Cost
Objective 1: Cannabis Revenue Audits $7,500
per business
Objective 2: Regulatory Compliance Inspections
Assumes 2 inspections per business/per year
at a cost of $1,275 each
$2,550
per business
per year
Objective 3: Technical Assistance and Subject Matter Expertise Up to 20 hours at $250/hour to be used as needed
$5,000
Travel Costs: For any additional travel not otherwise contemplated by this proposal
$400
per day
1269745.1 Page 12 of 15
SCHEDULE 2
INSURANCE REQUIREMENTS
Without limiting Consultant’s indemnification of Client, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to Client.
General liability insurance. Consultant shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.
Automobile liability insurance. Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.
Workers’ compensation insurance. Consultant shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000).
Note: Workers' compensation and employer's liability insurance requirements may be eliminated for certain sole proprietorships, partnerships, or corporations without employees.
Consultant shall submit to Client, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of Client, its officers, agents, employees and volunteers.
Umbrella or excess liability insurance. Consultant shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.
Other provisions or requirements
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Proof of insurance. Consultant shall provide certificates of insurance to Client as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by Client’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with Client at all times during the term of this contract. Client reserves the right to require complete, certified copies of all required insurance policies, at any time.
Duration of coverage. Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Work hereunder by Consultant, his agents, representatives, employees or subconsultants.
Primary/noncontributing. Coverage provided by Consultant shall be primary and any insurance or self-insurance procured or maintained by Client shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of Client before the Client’s own insurance or self-insurance shall be called upon to protect it as a named insured.
Client’s rights of enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, Client has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Client will be promptly reimbursed by Consultant or Client will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, Client may cancel this Agreement.
Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VI (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the Client’s Risk Manager.
Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against Client, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against Client, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
Enforcement of contract provisions (non estoppel). Consultant acknowledges and agrees that any actual or alleged failure on the part of the Client to inform Consultant of non-compliance with any requirement imposes no additional obligations on the Client nor does it waive any rights hereunder.
Requirements not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of 1269745.1 Page 14 of 15
any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the Client requires and shall be entitled to coverage for the higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Client.
Notice of cancellation. Consultant agrees to oblige its insurance agent or broker and insurers to provide to Client with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage.
Additional insured status. General liability policies shall provide or be endorsed to provide that Client and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.
Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to Client and approved of in writing.
Separation of insureds. A severability of interest’s provision must apply for all additional insureds ensuring that Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions.
Pass through clause. Consultant agrees to ensure that its subconsultants, subcontractors, and any other party involved with the project who is brought onto or involved in the project by Consultant, provide the same minimum insurance coverage and endorsements required of Consultant.
Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section.
Consultant agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the project will be submitted to Client for review.
Client’s right to revise specifications. The Client reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the Consultant ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the Consultant, the Client and Consultant may renegotiate Consultant’s compensation.
Self-insured retentions. Any self-insured retentions must be declared to and approved by Client.
Client reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by Client.
Timely notice of claims. Consultant shall give Client prompt and timely notice of claims made or suits instituted that arise out of or result from Consultant’s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. 1269745.1 Page 15 of 15
Additional insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work.