Agenda packet — Modesto City Council, September 24, 2024 (part 3 of 5)

and remaining unclaimed after advertisement. These advertisements were posted in the Modesto Bee throughout the fiscal year for public notice, and the 45-day waiting period required by State law has since passed. Small amounts that did not meet the $15 threshold totaled $1,697. The remaining balance of $21,178 is associated with the Modesto Police Department unclaimed funds from Property and Evidence. The Property and Evidence funds were not included in the advertisement, because the owner of the property is not identified.

FISCAL IMPACT:

The unclaimed funds transferred to the General Fund will increase the fund balance by $56,975.

At this time the City will not be appropriating these funds for any specific use.

COMMITTEE RECOMMENDATION:

The Finance Committee approved the Surplus Personal Property Report for Fiscal Year 2023- 2024 at their August 26,2024 meeting and recommended forwarding to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the Fiscal Year 2023-2024 unclaimed funds of $56,975 held in the City’s Trust Fund for more than three years and authorizing the transfer to the General Fund.

Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Modesto BEE Affidavit of Publication
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2024-
RESOLUTION APPROVING THE FISCAL YEAR 2023-2024 UNCLAIMED FUNDS OF $56,975 HELD IN THE CITY’S TRUST FUND FOR MORE THAN THREE

YEARS AND AUTHORIZING THE TRANSFER TO THE GENERAL FUND
WHEREAS, the City issues checks from time to time that remain uncashed by the payee, and such checks that are not cashed remain in the accounting records as Outstanding Checks; and
WHEREAS, California Government Code Sections 50050-50053 and 50055 establishes provisions for the escheatment of such unclaimed money to the City’s General Fund; and
WHEREAS, State law requires unclaimed funds in the amount of $15 or more, held in the City’s Trust fund, be published in a newspaper of general circulation in the City of Modesto, for two successive weeks; and
WHEREAS, after a forty-five day period from the date of the first publication any funds that are not claimed become the property of the City of Modesto.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves $56,975 in Fiscal Year 2023-2024 unclaimed funds to be transferred to the General Fund.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to take the necessary steps to implement the provisions of this Resolution. #11..
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2 The foregoing resolution was introduced at a special meeting of the Council of the City of Modesto held on the 24th day of, September 2024, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ________________________
DIANA NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
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NOTICE OF CITY OF MODESTO UNCLAIMED TRUST DEPOSITS

THE FOLLOWING UNCLAIMED FUNDS HAVE BEEN HELD BY THE CITY OF MODESTO IN ITS TRUST FUND IN EXCESS OF THREE (3) YEARS AND WILL

BECOME THE PROPERTY OF THE CITY OF MODESTO IF A VERIFIED CLAIM IS NOT MADE PRIOR TO JUNE 30, 2024. AUTHORITY: CALIFORNIA GOVERNMENT CODE, SECTION 50050-50053. FURTHER INFORMATION MAY BE OBTAINED FROM THE CITY OF MODESTO, FINANCE DEPT. CALL ACCOUNTS RECEIVABLE 209-577-5303 FOR A CLAIM FORM.

GUY SMITH $293.00 ARROYO, CECILIA $58.45 JOSE FRANCISCO VEGA LOPEZ $163 OPUS WELLNESS SPA INC $100 OPUS MEDICAL GROUP INC $100 OPUS MEDICAL GROUP INC $54 OPUS PRACTICE MANAGEMENT INC $54 OPUS WELLNES SPA INC $54 A PERFECT TAN $54.01 ESCROW TODAY $75 FIDELITY NATIONAL TITLE CO $75 PLATINUM ONLINE PROMOTIONS $100 MODESTO VILLAGE MART $100 OPUS PRACTIVE MANAGEMENT INC $100 RICHARD CASTRO $548 LONNIE LOVE $25 SAMUEL CARDENAS $393 ANSWER AMERICA $96.85 SPERRY, EDWARD $266.25 AMERICAN CAR HAULER $100 RELAXING MASSAGE $100 ALL VALLEY CONTROLS $100 BROKLEG CLOTHING $100 MERLOV DESIGN $100 THE RABLENDZ $100 LUCKY DRAGON MASSAGE $100 GREEN HARMONY $100 R J FUHS CONSTRUCTION $100 HALLORAN JANICE $73 WYATT, KALLAN DEAN $26 GRAVES, HEATHER $299.99 SELENE FINANCE $1,950 CHARLES E & LINDA j WOOD $100 HUMBERTO BANUELOS SALDIVAR $54.69 S & K PAINTING $18.77 ANDRES GONZALES $390 SOMANY SOK $21 RONNELL J COX $100 PONCIANO, VIZCAINO $305 GALLIDON, PIERRE $40 ECHAVARRIA, ROBERT $62 ALVARADO, ANTHONY $116 REYES LOPEZ MAGANA $61 JUAN GUEVARA $32 SHERI KUCERA $40.99 DAVID VANGORDER $100 MARTINA GRATTON $85 CARLOS SOTO $1,565 JENNIFER TROWBRIDGE $20 DANIEL TRAMEL $110 ADRIEANNE BERGARA $526 WILLIAM GARRETT $69 ROMELA HIDALGO $306 CODY ACKERSON $738 DOUGLAS HUNTER $317 PRISCILLA AMARAL $85 JOSE AGUILAR $3,119 MICHALE MORGAN $129 GUY SMITH $124 MARCO FERNANDEZ $123 INSTANT ATM INC $100 UMAC & ASSOCIATES $100 STANISLAUS FLEET CARE $100. DAO, LISA $300.60 GATES, PINKY $147 OWEN, PHILLIP $187.68 OGUENDO, ROBERTO $166 BATEY, KEVIN $340 SAVAGE, KEVIN $20 GUZMAN, XAVIER $739.25 J&K ELECTRICAL $80 WOODRUFF, JULIE $433.50 GUERRERO, SHARON $35 CORONA, MARICRUZ $35 HARRIS, JAYDEN $17 NORAT, ELIAS $94 GL BEAUTY INC LIONESSE $97.60 GL BEAUTY INC $86.76 JOVANNA LOVE $100 GENERAL DYNAMICS INFORMATION TECH $165 RAMIREZ, BRENDA $41 OWINGS, SANDRA $17.33 DENDY, SEAN $24 BARRIENTOS, MELISSA $79 WOMACK, CLAUDE $16.46 GRAFTON, MICHAEL$139 KING, HIRAM $169.22 CUTCHAL, DAVINA $20 CARRANZA, JOSE $579 GRIFFIN, TIMOTHY $166.12 STAY BLESSED HAIR STUDIO $95.60 STELLA S BERATLIS $73 YESENIA CETINAOLIDE $25 KRISTEN DOBBINS $219 VINEQUITIES INC $100 VARGAS CHILD & FAMILY COUNSELING $100 JOSEPH F CERATTI $540 RENTERIA, FELIX $409 GONZALEZ, DOMINIC $30.15 LOPEZ, ANTHONY $394 CASTILLO, SERGIO $138 WILLBURN, DAUKI $6 CAFÉ KIMI $100 CHARLENE ROSE $66.56
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

September 24, 2024
Date: September 4, 2024
TO: Mayor and City Council

THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: 2023-2024 Accounts Receivable Write-offs and Adjustments CONTACT: Vanessa Ferrel, Financial Analyst, [email protected], 209-571-5174 DESCRIPTION:

Consider accepting the Fiscal Year 2023-24 Write-off and Adjustments reports through fiscal year-end June 30, 2024, in the total amount of $415,908. (Funding Source: Various Funds) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

The City’s Department of Finance maintains the billing system that records and tracks monies owed to the City. Occasionally, the responsible party does not pay the City as required. It is the City’s policy to actively pursue collection of past-due accounts and write-off amounts deemed to be uncollectible. The City employs different means of collecting monies owed including collection letters, collection phone calls, skip tracing, property liens, tax refund interceptions, third party collection agency referrals and any available legal remedies recommended by the City Attorney. An account is considered uncollectible after the above applicable collection procedures have been exhausted and/or the debt has been discharged through various legal actions (bankruptcy or court judgement). This determination may occur in the same or in a different fiscal year from when the monies were determined to be due to the City. Although write-offs occur semi-annually, and are reported during the following fiscal year, collection efforts continue until the statute of limitations expires for collection actions. California Code of Civil Procedure Section 337 restricts the City’s collection actions after four (4) years. State law prevents the City from using a tax or property lien to collect certain delinquent fees from owneroccupied dwellings (such as nuisance abatement fines and fees, zoning code violations, and certain Housing and Building Code fines and fees).
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City Council, September 24, 2024
2023-2024 Accounts Receivable Write-offs and Adjustments

Page 2 of 3 ends

DISCUSSION:

The Modesto Municipal Code section 2-3.406 requires that when a fee or charge in excess of twenty-five thousand dollars ($25,000) is incorrectly levied or found to be uncollectible, such accounts will be referred to the City Manager who will promptly report them to the City Council with his/her recommendation. Where a fee or charge of twenty-five thousand dollars ($25,000) or less is incorrectly levied or found to be uncollectible, the City’s Write-off of Uncollectible Accounts Receivable policy requires the following approval authority:
 The Director of Finance is authorized to approve the write-off of accounts with an outstanding balance due of up to $5,000.
 The City Manager is authorized to approve the write-off of accounts with an outstanding balance in excess of $5,000 and up to $25,000.  Write-off of accounts with an outstanding balance due in excess of $25,000 must be approved by action of the City Council.

In FY 2018-19, the Finance Department established Administrative Directive 7.20, Accounts Receivable Adjustment Policy, and determined the Accounts Receivable, Utility Billing, Parking Citations and Business License adjustments should be incorporated into the annual report. This policy is reviewed annually to incorporate any updates to the policies.

In early 2023, an update was made to Administrative Directive 7.18 Write-Off of Uncollectible Accounts Receivables, aligning all divisions with the write off uncollectible timeline of four years as stated in the State of California Code of Civil Procedures. Based on this change, the Utility Billing Division did not have any new uncollectible accounts for this write off period.

The Director of Finance approved write-offs and adjustments with an outstanding balance of up to $5,000 in the amounts below. Adjustments may include a one-time courtesy of fees, penalties, or to address initial citations assessed in effort to bring the customer account balance up to date.

Write-offs Adjustments Totals
Miscellaneous Receivables $321,039 $236 $321,275
Utilities Receivables $0 $5,621 $5,621
Parking Citations $33,247 $600 $33,847
Business License $0 $48,739 $48,739
TOTAL $354,286 $55,196 $409,482
The City Manager approved write-offs with an outstanding balance in excess of $5,000 and up to $25,000 for the following type of receivables:

Write-offs Adjustments Totals
Miscellaneous Receivables $6,426 $0 $6,426
TOTAL $6,426 $0 $6,426
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City Council, September 24, 2024
2023-2024 Accounts Receivable Write-offs and Adjustments

Page 3 of 3 ends

The write-off memos approved by the Director of Finance and City Manager for $415,908 have been included as part of the attachment to this report.

The value of $415,908 that is being written-off accounts for less than 1% of receivables. The amount due as of June 30, 2024, is $5,649,337 for Miscellaneous Receivables and $13,113,236 for Utilities Receivables.

FISCAL IMPACT:

The amounts to be written off of $409,482 for amounts under $5,000 and $6,426 for amounts over $5,000 will not impact recognized revenue for Fiscal Year 2023-24 due to an annual adjustment that is recorded on the City’s financial statements to record any allowance for uncollectible accounts.

COMMITTEE RECOMMENDATION:

The Finance Committee approved the 2023-2024 Accounts Receivable Write-Offs and Adjustments at their August 26, 2024, meeting and recommended forwarding to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the 2023-2024 Write-Off and Adjustments reports through fiscal year end June 30, 2024, in the total amount of $415,908 and directing a report of disposition to be filed with the City Clerk.

Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Write-off Uncollectible account memos
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2023-
RESOLUTION APPROVING THE 2023-2024 WRITE-OFF AND ADJUSTMENTS REPORTS THROUGH FISCAL YEAR END JUNE 30, 2024 IN THE TOTAL AMOUNT OF $415,908 AND DIRECTING A REPORT OF DISPOSITION TO BE

FILED WITH THE CITY CLERK
WHEREAS, the Finance Department maintains a billing system to track monies owed to the City, and
WHEREAS, occasionally the responsible party does not pay the City as required, and WHEREAS, it is the City’s policy to actively pursue collection of past-due accounts and write off amounts deemed to be uncollectible, and
WHEREAS, the City employs various different means of trying to collect past-due accounts, and
WHEREAS, collection efforts continue until the legal statute restricts the City’s collections actions, and
WHEREAS, the City’s Write-off of Uncollectible Accounts Receivable policy, as allowed under by Section 2-3.406 of Article 4 of Title 2 of the Municipal Code, requires the following approval authority: the Director of Finance is authorized to approve the write-off of accounts with an outstanding balance due of up to $5,000, and the City Manager is authorized to approve the write-off of accounts with an outstanding balance due in excess of $5,000 and up to $25,000; and
WHEREAS, in Fiscal Year 2018-2019, the Finance Department established Administrative Directive 7.20, Accounts Receivable Adjustment Policy, and determined the Accounts Receivable, Utility Billing, Parking Citations and Business License adjustments should be incorporated into the annual report, and
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2 WHEREAS, the following amounts with an outstanding balance less than $5,000 have been approved for write-off by the Director of Finance for the Fiscal Year 2023-2024 and as such all available collection remedies have been exhausted: (1) Miscellaneous Receivables- $321,275, (2) Utilities Receivables - $5,621, (3) Parking Citations - $33,847, (4) Business License - $48,739 and
WHEREAS, for the write off and adjustment amounts in excess of $5,000 and up to $25,000 the City Manager is authorized to approve, for Miscellaneous Receivables was ; $6,426; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the 2023-2024 Write-Off and Adjustments reports through Fiscal Year end June 30, 2024 in the total amount of $415,908, and approve a report of disposition be filled with the City Clerk.
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3 The foregoing resolution was introduced at a special meeting of the Council of the City of Modesto held on the 24th day of, September 2024, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _________________________
DIANA NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
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Uncollectable accounts under $5000 $ 205,205.79
Uncollectable over $5000 $ 6,426.20
UUT less than $50 $ 6,553.08
Parking Citations less than $5000 $ 18,145.00
UUT less than $50 $ 17,667.90
Uncollectable accounts under $5000 $ 91,611.45
Parking Citations less than $5000 $ 15,102.00
Adjustments $ 55,196.46
TOTAL $ 415,908
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CITY OF MODESTO

FINANCE DEPARTMENT

ACCOUNTS RECEIVABLE DIVISION
1010 Tenth Street, Suite 5200 • Modesto, CA • 95354
Mailing Address: P.O. Box 3441 • Modesto, CA • 95353
209.577.5303 / fax 209.491.5992
DATE: January 25, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Vanessa Ferrel
Financial Analyst – Accounts Receivable
RE: Write-Off Uncollectable accounts $5,000 and below
DeAnna, I need your approval to do the necessary adjustments. All internal and external efforts to collect have been exhausted and the accounts are deemed uncollectible. Attached you will find the list of accounts that need to be written off in Accounts Receivable.

AIRPORT CHARGES 4,703.93
CAO/COST RECOVERY 987.94
COMPOST 92.96
FINANCE FEES 15,165.76
HR BENEFITS 1,634.99
HR MEDICARE DEBT OBLIGATION 2,284.35
HR SICK LEAVE REIMBURSE 4,957.63
MFD FIRE REINSPECTION 956.00
MFD-CASHOUT HOLIDAY 3,429.65
MFD-FIRE PREVENTION BUREA 3,615.00
MFD-VACATION LEAVE 4,112.35
NPU ADMINISTRATIVE COSTS 374.52
NPU CITATIONS 7900.00
PD ADMIN CITE 1500.00
PD ADMIN CITE / ANIMAL 31,654.50
PD ADMIN CITE / CANNABIS 2,390.00
PD ADMIN CITE / FIREWORKS 21,103.56
PD DUI 79.00
PD SECURITY-OUTSIDE WRK1951 4,767.79
PD SHELTER RECOVERY 22,929.5
PD SUBPOENA FEES 183.28
RISK DAMAGE/HYDRANT 1,079.48
RISK ELECTRICAL DAMAGE 32,657.91
RISK FLEET - DAMAGES 4,634.38
RISK STREETS SIGNS 4,942.60
RISK TREE DAMAGES 477.78
SALES TAX 2.76
SW COMPLIANCE ORDER 5,900.00
SW GREEN CAN VIOLATION 6,550.00
SW HEARING COST - STAFF TIME 226.57
SW ILLEGAL DUMPING VIOLATION 11,615.00
UUT 2,016.60
WQ ADMINISTRATIVE CITATION 280.00
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CITY OF MODESTO

FINANCE DEPARTMENT

ACCOUNTS RECEIVABLE DIVISION
1010 Tenth Street, Suite 5200 • Modesto, CA • 95354
Mailing Address: P.O. Box 3441 • Modesto, CA • 95353
209.577.5303 / fax 209.491.5992
TOTAL $205,205.79
Approval:

DeAnna Christensen Date
Director of Finance
1/27/24
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CITY OF MODESTO

FINANCE DEPARTMENT

ACCOUNTS RECEIVABLE - CUSTOMER SERVICES DIVISION
1010 Tenth Street, Suite 2100 • Modesto, CA • 95354
Mailing Address: P.O. Box 3441 • Modesto, CA • 95353
209.577.5303 / fax 209.491.5960
DATE: January 22, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Vanessa Ferrel
Financial Analyst – Accounts Receivable
RE: Write off for over $5,000 – Police Security Services Please approve a write-off in the amount of $6,426.20 for Christian Santillan, dba Santillan Entertainment due to charges for Police security services.

Three invoices totaling $6,426.20 were created in the Accounts Receivable system in July, November and December of 2019 due to outside work agreements for Modesto Police Department. Several attempts were made to collect, including working with PD to ensure they did not issue any more entertainment permits to this vendor.

The customer is not a property owner therefore we cannot place a lien on the property. After several months of attempting to collect on these invoices, this account was forwarded to our collection agency vendor in February 2020. There has been no payment or movement on the account to date. Based upon the inability to collect, the Accounts Receivable Division is requesting to write the debt off.

DeAnna Christensen, Director of Finance Date
Joseph P. Lopez, City Manager Date
Jan 29, 2024
Jan 29, 2024
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CITY OF MODESTO

FINANCE DEPARTMENT

Each month, as part of the reporting requirements, Pacific Gas& Electric (PG&E) sends a secured email that has a number of reports, including the report “Utility Users’ Tax (UUT) Adjustments to the City of Modesto”. PG&E is notifying the City that the amount submitted for UUT to the City is being reduced due to these accounts being considered uncollectible. The accounts listed as uncollectible are six months old and the amount due the City will not remitted to an outside collection agency by PG&E in behalf of the City. This list includes the customer name, service address, and amount of the bad debt.

For amounts listed on this report that are over $50.00, the City will begin to pursue collection of the outstanding UUT. For amounts listed on this report that are under the $50.00 threshold, these accounts will be included in the Accounts Receivable write-off process.

Please approve the following write-offs. The backup documentation is attached.

Adjustments: January 2023 $ 168.26
Adjustments: February 2023 $ 629.73
Adjustments: March 2023 $ 2,054.99
Adjustments: April 2023 $ 2,004.02
Adjustments: May 2023 $ 788.56
Adjustments: June 2023 $ 907.52
Total $ 6,553.08
Approval:

DeAnna Christensen Date
Director of Finance
1/27/23
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DATE: January 18, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Jennifer Martin
Revenue Collections & Compliance Manager
RE: Write-off of amounts less than $5,000 & below
Please approve the following write-offs, each less than $5,000. The City has exhausted all internal methods of recovery and where applicable these accounts have been submitted to the City’s outside collection agency. The collection agency has been unsuccessful in collection of the debt owed. Based on the inability to collect, the Citation Processing Division is requesting to write the debt off.

Attached you will find the list of parking citations deemed uncollectible in accordance with the City’s *Write Off of Uncollectible Accounts Receivable Policy.

Type of account # of accounts Amount for Write Off
Parking Citations FY 17/18 27 $6,998.00
FY 18/19 47 $11,147.00
Total Write Off
74 $18,145.00
*Clean-up of uncollectible citations for FY 17/18 and FY 18/19 _____________________________________________________________________________ DeAnna Christensen Date
Director of Finance

FINANCE DEPARTMENT
P.O. Box 767
Modesto, California 95353
209.577.5395
Modestogov.com
1/21/24
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CITY OF MODESTO

FINANCE DEPARTMENT

ACCOUNTS RECEIVABLE DIVISION
1010 Tenth Street, Suite 5200 • Modesto, CA • 95354
Mailing Address: P.O. Box 3441 • Modesto, CA • 95353
209.577.5303 / fax 209.491.5992
DATE: July 24, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Vanessa Ferrel
Financial Analyst - Accounts Receivable
RE: Write-Off UUT accounts less than $50
DeAnna, I need your approval to do the necessary adjustments.

Please approve the following write-offs. The backup documentation is attached.

Adjustments: July 2023 $ 1,409.22
Adjustments: August 2023 $ 1,514.54
Adjustments: September 2023 $ 1,784.44
Adjustments: October 2023 $ 7,565.43
Adjustments: November 2023 $ 2,484.54
Adjustments: December 2023 $ 2,909.73
Total $ 17,667.90
Approval:

DeAnna Christensen Date
Director of Finance
7/25/24
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CITY OF MODESTO

FINANCE DEPARTMENT

ACCOUNTS RECEIVABLE DIVISION
1010 Tenth Street, Suite 5200 • Modesto, CA • 95354
Mailing Address: P.O. Box 3441 • Modesto, CA • 95353
209.577.5303 / fax 209.491.5992
DATE: July 18, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Vanessa Ferrel
Financial Analyst – Accounts Receivable
RE: Write-Off Uncollectable accounts $5,000 and below
DeAnna, I need your approval to do the necessary adjustments. All internal and external efforts to collect have been exhausted and the accounts are deemed uncollectible. Attached you will find the list of accounts that need to be written off in Accounts Receivable.

AIRPORT FEES 1454.92
CAO/COST RECOVERY 1162.99
CLERKS CANDIDATE STMNT 379.39
COMPOST 430.50
CONSTRUCTION PERMIT 2263.80
FINANCE FEES 5103.25
HR BENEFITS 2897.03
MFD FIRE INSPECTION 701.00
MFD-FIRE PREVENTION BUREA 412.00
NPU CITATIONS 350.00
PARKS MISC CHARGES 363.00
PD ADMIN CITE / ANIMAL 5300.00
PD FIREWORKS CITATION 8000.00
PD SHELTER RECOVERY 8425.00
RISK ELECTRICAL DAMAGE 26125.47
RISK STREET DAMAGE 3166.65
SW COMPLIANCE ORDER 23913.82
UUT 1062.63
WQ ADMIN CITATION 100.00
TOTAL $91,611.45
Approval:

DeAnna Christensen Date
Director of Finance
7/25/24
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DATE: July 24, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Jennifer Martin
Revenue Collections & Compliance Manager
RE: Write-off of amounts less than $5,000 & below
Please approve the following write-offs, each less than $5,000. The City has exhausted all internal methods of recovery and where applicable these accounts have been submitted to the City’s outside collection agency. The collection agency has been unsuccessful in collection of the debt owed. Based on the inability to collect, the Citation Processing Division is requesting to write the debt off.

Attached you will find the list of parking citations deemed uncollectible in accordance with the City’s *Write Off of Uncollectible Accounts Receivable Policy.

Type of account # of accounts Amount for Write Off
Parking Citations FY 18/19 58 $15,102.00

Total Write Off
58 $15,102.00
*Uncollectible citations for FY 18/19
_____________________________________________________________________________ DeAnna Christensen Date
Director of Finance

FINANCE DEPARTMENT
P.O. Box 767
Modesto, California 95353
209.577.5395
Modestogov.com
7/28/24
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CITY OF MODESTO

FINANCE DEPARTMENT

ACCOUNTS RECEIVABLE DIVISION
1010 Tenth Street, Suite 5200 • Modesto, CA • 95354
Mailing Address: P.O. Box 3441 • Modesto, CA • 95353
209.577.5303 / fax 209.491.5992
DATE: August 01, 2024
TO: DeAnna Christensen
Director of Finance
FROM: Vanessa Ferrel
Financial Analyst - Accounts Receivable
RE: Receivable Adjustments on accounts
DeAnna, I need your approval to do the necessary adjustments.

A total of $55,196.46 in adjustments was made to customer’s accounts from July 1, 2023 through June 30, 2024. These adjustments were made as one-time courtesy of fees, penalties, or to address initial citations assessed in effort to bring the customer’s account balance up to date.

These adjustments were related to charges in the Accounts Receivable, Utility Billing, Parking Citation and Business License systems.

Accounts Receivable Adjustments $ 236.25
Business License Adjustments $ 1,042.74
Business License Citation Waivers $ 16,574.00
Business License Audit Waivers $ 31,122.32
Parking Citation Adjustments $ 600.00
Utility Billing Adjustments $ 5,621.15
TOTAL $ 55,196.46
Approval:

Deanna Christensen Date
Director of Finance
8/1/24
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

September 24, 2024
Date: August 27, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
Jessica Hill, Director of Community and Economic Development SUBJECT: Cannabis Consultant Agreement
CONTACT: Dianne Love, Purchasing Manager, [email protected], 209-571-5164
DESCRIPTION:

Consider approving the Agreement for Cannabis Consulting Services with Avenu Insights and Analytics, LLC, Centreville, VA for a total amount not to exceed $77,300 over two years. (Funding Source: Cannabis Administration Permit Fee)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

The passage of Proposition 64, The Adult Use of Marijuana Act, in November 2016 ended the prohibition on adult-use of cannabis in California and created a statewide regulatory structure for adult-use cannabis businesses. Proposition 64 gave local governments control of taxes and fees associated with cannabis businesses operating within their jurisdictions.

In November 2017, the City Council placed before the voters a ballot measure, “Measure T,” allowing the City Council to implement an excise tax on cannabis businesses within the City.

Modesto voters approved Measure T, with 82.5% voting in favor of it.

On January 16, 2018, the Modesto City Council adopted Ordinance No. 3684-C.S. which permitted certain commercial cannabis uses, subject to land use and zoning criteria.

City staff recognized that expert consultant assistance would be necessary to review and evaluate cannabis business applications, and to assist City staff in establishing tax rates and an annual permit fee. Therefore, a Request for Proposal (RFP) was issued. Three proposals were received as a result of the RFP process. Hinderliter, de Llamas & Associates (HdL) was selected due to their experience and expertise related to cannabis business permitting, #13..
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financial, and regulatory processes.

On June 13, 2023, under Resolution 2023-274, Council approved the Agreement with HdL, Brea, CA by utilizing the City of Hesperia Agreement for Cannabis Consulting Services for a two (2) year Agreement with one (1) one-year extension option, for an annual estimated amount of $261,350 and a total amount not to exceed $784,050 over three years.

DISCUSSION:

Over the last couple of years, City staff has seen an increase in non-retail cannabis businesses and anticipates up to four (4) additional non-retail cannabis businesses being added based on the efforts with the Cannabis Equity program. Currently, the City has eight (8) retail and six (6) non-retail cannabis permitted businesses. With the volume of inspections and audits required, City staff recommend adding a secondary cannabis consulting firm to ensure the audits and inspections are completed on a timely basis.

Due to the number of cannabis financial audits required to be completed each fiscal year, it became evident that relying on a single consulting firm, HdL, may lead to delays. The current approach risks extending the audit process throughout the fiscal year, potentially impacting the City’s reporting schedules and timelines. To address this issue and ensure that all audits are completed in a timely manner, staff proposes engaging services with a secondary Cannabis Consulting firm. This strategic and proactive move will distribute the workload more effectively, enhance overall audit quality, and mitigate potential delays, ultimately supporting the City’s commitment to maintaining rigorous compliance and operational standards.

On July 17, 2024, the Purchasing Division issued Informal Request for Proposals (INF RFP) 25- 02 for Cannabis Consulting and reached out to five cannabis consulting firms utilized by public agencies. Prospective bidders were notified via email of the bid opportunity.

On July 31, 2024, proposals were due from all prospective proposers. Three (3) companies chose to respond, and there were no local proposals received.

An evaluation committee comprised of four (4) City staff members which included a Deputy City Manager, Business Analyst, Financial Analyst and Police Lieutenant evaluated the proposals.

The evaluation was based on experience, qualifications and understanding of the services.

Based on being ranked highest in total evaluation criteria, the evaluation committee recommends the award of proposal for the Cannabis Consulting Services to Avenu Insights and Analytics, LLC.

Modesto Municipal Section 8-3.203 requires all purchases which meet or exceed $100,000 for material, equipment or contractual services to be formally bid. In accordance with Modesto Municipal Code 8-3.204(a), “Exceptions to Formal Bidding Requirements,” Agreements for Professional Services are exempt from the bidding requirements of Modesto Municipal Code 8-

3.203 if competitive quotations or proposals have been sought informally from at least three (3) qualified entities. The approval for the Cannabis Consulting Services to Avenu Insights and Analytics, LLC conforms to Modesto Municipal Code 8-3.204, subsection (a) as they are providing professional services and three informal proposals were obtained based on the informal RFP performed by City staff. Although the proposed contract is for less than $100,000, because staff proposes to allow the Finance Director to adjust agreement totals between both #13..
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consultants the ultimate amount received by Avenu Insights and Analytics, LLC may exceed $100,000.

FISCAL IMPACT:

Financial audit reviews are typically completed on businesses with twelve (12) months of tax reporting data. The City anticipates a majority of the fourteen (14) currently permitted retail and non-retail businesses will be eligible for inspections and financial audits within the next three (3) years, thus increasing the cost of the annual agreement.

The proposed agreement is established under a two-year agreement to align with the termination date with the HdL agreement. The current spending for the HdL agreement for the first year of the agreement is $147,610.

Below is a summary of the combined total of the current agreement with HdL and proposed secondary agreement with Avenu Insights and Analytics.

Contractor Name Year 1 Year 2 Year 3 Total
HdL $ 261,350 $ 261,350 $ 261,350 $ 784,050
Avenu Insights and Analytics $ - $ 38,650 $ 38,650 $ 77,300 Total $ 261,350 $ 300,000 $ 300,000 $ 861,350
COMMITTEE RECOMMENDATION:

This item was not presented at a Council Committee. Due to the urgency of completing the inspection and financial audits, the City must expedite the approval of an additional consultant in anticipation of the renewal of the commercial cannabis retail permits scheduled to expire on June 30, 2025.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the Award of Proposal and Agreement for Cannabis Consulting Services to Avenu Insights and Analytics, LLC, Centreville, VA for a one (1) year Agreement with a oneyear extension option, for an annual estimated amount of $38,650 and a total amount not to exceed $77,300 over two years; and authorizing the City Manager, or his designee to execute the Agreement; and authorizing the Director of Finance to adjust agreement totals between both vendors based on contractor’s availability and department’s needs, ensuring the combined total amount of $861,350 does not change.

Approved by: _____
DeAnna Christensen, Director of Finance
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Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Avenu Insights and Analytics Agreement

3. Exhibit A-Scope of Services and Cost Schedule

4. Informal RFP Document

5. Scoring Abstract

6. HDL Agreement
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2024-

RESOLUTION APPROVING THE AWARD OF PROPOSAL AND

AGREEMENT FOR CANNABIS CONSULTING SERVICES TO AVENU
INSIGHTS AND ANALYTICS, LLC, CENTREVILLE, VA FOR ONE (1) YEAR

AGREEMENT WITH A ONE-YEAR EXTENSION OPTION, FOR AN ANNUAL ESTIMATED AMOUNT OF $38,650 AND A TOTAL AMOUNT NOT TO
EXCEED $77,300 OVER TWO YEARS; AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE TO EXECUTE THE AGREEMENT; AND

AUTHORIZING THE DIRECTOR OF FINANCE TO ADJUST AGREEMENT TOTALS BETWEEN BOTH VENDORS BASED ON CONTRACTOR’S
AVAILABILITY AND DEPARTMENT’S NEEDS, ENSURING THE COMBINED TOTAL AMOUNT OF $861,350 DOES NOT CHANGE
WHEREAS, the passage of Proposition 64, The Adult Use of Marijuana Act, in November 2016 ended the prohibition on adult-use of cannabis in California and created a statewide regulatory structure for adult-use cannabis businesses; and WHEREAS, Proposition 64 gave local governments control of taxes and fees associated with cannabis businesses operating within their jurisdictions; and WHEREAS, in November 2017, the City Council placed before the voters a ballot measure, “Measure T,” allowing the City Council to implement an excise tax on cannabis businesses within the City. Modesto voters approved Measure T, with 82.5% voting in favor of it; and
WHEREAS, on January 16, 2018, the Modesto City Council adopted Ordinance No. 3684-C.S. which permitted certain commercial cannabis uses, subject to land use and zoning criteria; and
WHEREAS, on June 13, 2023, under Resolution 2023-274, Council approved the Agreement with HdL, Brea, CA by utilizing the City of Hesperia Agreement for Cannabis Consulting Services for a two (2) year Agreement with one (1) one-year #13..
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2 extension option, for an annual estimated amount of $261,350 and a total amount not to exceed $784,050 over three years; and
WHEREAS, over the last couple of years, City staff has seen an increase in nonretail cannabis businesses and anticipates up to four (4) additional non-retail cannabis businesses being added based on the efforts with the Cannabis Equity program; and WHEREAS, we have eight (8) retail and six (6) non-retail cannabis permitted businesses and with the volume of inspections and audits required, City staff recommend adding a secondary cannabis consulting firm to ensure we are completing these audits and inspections on a timely basis; and
WHEREAS, on July 17, 2024, the Purchasing Division issued Informal Request for Proposals (INF RFP) 25-02 for Cannabis Consulting and reached out to five cannabis consulting firms utilized by public agencies and prospective bidders were notified via email of the bid opportunity; and
WHEREAS, three (3) companies chose to respond, there was no local proposals received; and
WHEREAS, an evaluation committee comprised of four (4) City staff members which included Deputy City Manager, Business Analyst, Financial Analyst and Police Lieutenant who evaluated the proposals and the evaluation was based on experience, qualifications and understanding of the services; and
WHEREAS, based on being ranked highest in total evaluation criteria, the evaluation committee recommends the award of proposal for the Cannabis Consulting Services to Avenu Insights and Analytics, LLC; and
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3 WHEREAS, Modesto Municipal Section 8-3.203 requires all purchases, which meet or exceed $100,000 for material, equipment or contractual services to be formally bid; and
WHEREAS, although the proposed contract is for less than $100,000, because staff proposes to allow the Finance Director to adjust agreement totals between both consultants the ultimate amount received by Avenu Insights and Analytics, LLC may exceed $100,000; and
WHEREAS, in accordance with Modesto Municipal Code 8-3.204(a), “Exceptions to Formal Bidding Requirements,” Agreements for Professional Services are exempt from the bidding requirements of Modesto Municipal Code 8-3.203 if competitive quotations or proposals have been sought informally from at least three (3) qualified entities; and
WHEREAS, the approval for the Cannabis Consulting Services to Avenu Insights and Analytics, LLC conforms to Modesto Municipal Code 8-3.204, subsection (a) as they are providing professional services and three informal proposals were obtained based on the informal RFP performed by City staff.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Award of Proposal and Agreement for Cannabis Consulting Services to Avenu Insights and Analytics, LLC, Centreville, VA for a one (1) year Agreement with a one-year extension option, for an annual estimated amount of $38,650 and a total amount not to exceed $77,300 over two years.

BE IT FURTHER RESOLVED, the Director of Finance, or her designee is authorized to adjust agreement totals between vendors based on contractor’s availability #13..
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4 and department’s needs, ensuring the combined total amount of $861,350 does not change.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the Agreement, in a form approved by the City Attorney. #13..
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5 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of September, 2024, by Councilmember _______, who moved its adoption, which motion being duly seconded by Councilmember _________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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1 STANDARD CONSULTANT AGREEMENT
This agreement, hereinafter called AGREEMENT, made and entered into in the City of Modesto, State of California, this ____ day of _________, 2024, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and AVENU INSIGHTS & ANALYTICS, LLC, a limited liability company having a principal office located at 5860 Trinity Parkway, Suite 120, Centreville, VA 20120, hereinafter called CONTRACTOR.

This Agreement is made with regard to the following recitals:

A. The City has determined that there is a continued need for the administration of cannabis business activities.

B. Consultant represents that it is qualified, willing and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Consultant shall undertake and complete the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" on an on-call basis as directed by the City. Any #13..
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2 changes to the services identified in Exhibit A (hereafter the “Services”) shall be mutually agreed upon both parties and codified by a dually executed amendment to this Agreement.

2. TERM OF AGREEMENT.

The term of the Agreement shall be for a period of one (1) year, with one (1) one-year extension option that may be exercised at the sole discretion of CITY, for a total of up to two (2) years.

Year 1: Notice to Proceed through December 31, 2024
Year 2: January 1, 2025 through December 31, 2025
Price increases year two shall not exceed the Consumer Price Index (CPI) for West Urban Area and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONSULTANT in writing, ninety (90) days prior to the Year 2 start date listed above. This Agreement is effective as of the dates listed above and will continue in effect until City’s acceptance of and payment for all services authorized by City and performed by Consultant, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

3. COMPENSATION.

The compensation payable to Consulting under this Agreement shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant for Services rendered on a time and materials basis be billed at the hourly rates set forth in Exhibit “A” attached hereto. The not-to-exceed amount/maximum compensation authorized for Services hereunder is $77,300.00, which may be modified by mutual written agreement of the Parties. Consultant shall submit monthly invoices to City which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any reimbursable expenses paid by Consultant and identified in Exhibit “A” or approved by the City in writing.

City shall pay Consultant Net 45 Days via manual check. #13..
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3 4. OBLIGATIONS OF CONSULTANT
Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. Consultant represents that it has the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities, and other resources necessary to provide the City with the Services contemplated by this Agreement. Consultant further represents that it will follow the generally accepted, and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

5. PERFORMANCE BY KEY EMPLOYEE
Consultant has represented to City that Michael Portis, CPA will be the person primarily responsible for overseeing the performance of the Services referred to in this Agreement. City has entered into this Agreement in reliance on that representation by Consultant.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA
Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract. It is understood and agreed that the documents and #13..
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4 other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use.

All materials, documents, data or information obtained from the City data files or any City medium furnished to Consultant in the performance of this Agreement will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Consultant after termination of this Agreement without written consent of the City.

7. NEWS AND INFORMATION RELEASE
Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from the City Manager.

8. CONFLICT OF INTEREST
Consultant warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would create a “conflict of interest”, as that term is defined in the Political Reform Act (Gov. Code § 81000 et seq), for the Consultant in the peformance of this Agreement. . Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest. Consultant understands that, if this Agreement is made in violation of Government Code § 1090 et seq., the entire Agreement is void and Consultant will not be entitled to any compensation for services performed. Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so required at the option of City.

9. AMENDMENTS
This Agreement, including the Exhibits attached hereto, may be amended only by a writing signed by both Parties.City will not be responsible to pay any charges Consultant may incur in performing services not identified in Exhibit ‘A’ unless first authorized by the City in writing. #13..
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5 10. INDEPENDENT CONTRACTOR
All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Except as City may specify in writing, Consultant has no authority to bind or incur any obligation on behalf of City. Consultant has no authority or responsibility to exercise any rights or power vested in the City. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture.

Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

Consultant shall determine and control the method, details and means of performing the work and services to be provided by Consultant under this Agreement. Consultant shall be responsible to City only for the requirements and results specified in this Agreement, and, except as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement.

If in the performance of this Agreement any third persons are employed by Consultant, such persons shall be entirely and exclusively under the direction, supervision, and control of Consultant. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the Consultant.

It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever. It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel. #13..
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6 11. ASSIGNMENT
Neither this Agreement nor any portion thereof shall be subcontracted or assigned, other than noted in Exhibi ‘A’, without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS
Unless otherwise expressly provided in the contract, Consultant shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this Agreement. Consultant shall furnish a warranty of such right to use to City at the request of City.

13. NOTICES
Notice required by this Agreement shall be given in writing and shall be deemed given and effective upon delivery provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery; (b) overnight courier service which obtains confirmation of delivery; or (c) certified pail, return receipt requested, if delviery is confirmed by a return reciept; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:

FOR CONSULTANT: Name: Avenu Insights & Analytics, LLC
Address: 5860 Trinity Parkway, Suite 120
Centreville, VA 20120
Attention: Mike Melka, CFO
Phone: (435) 557-1347
FOR CITY: Name: City of Modesto
Address: P.O. Box 642
Modesto, CA 95353
Attention: Jessica Hill,
Director of Community and Economic Development
Phone: (209) 577-5321
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7 14. INSURANCE REQUIREMENTS.

The Consultant shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the City as may be required by the Risk Manager of the City. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the City via PINS Advantage Insurance Program, for all of the following stated insurance policies.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the Consultant shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days’ notice of the cancellation on the policies of insurance required hereunder (10 days’ notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice. The Consultant shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled.
(a) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations as applicable.
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8 (b) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(c) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (d) Professional Liability insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claim made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Consultant shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the Consultant to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated. Failure of the Consultant to obtain and/or maintain any required insurance shall not relieve the Consultant from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Consultant concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by Consultant for the City. The Consultant's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:

VII or with approval of the Risk Manager. The Consultant must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed. #13..
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9 CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

For any claims related to this project, the CONSULTANT’S insurance coverage shall be primary insurance as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the CONSULTANT’S insurance and shall not contribute with it.

15. TERMINATION OF AGREEMENT.

Within 10 days after receipt of notification, the breaching party shall correct any non-performance to the reasonable satisfaction of the non-breaching party, or such other time as may be identified in the notice. Failure to correct any non-performance shall allow the non-breaching party to terminate this AGREEMENT for cause.

Termination by City for Convenience
City may cancel this Agreement upon 30-day written notification to Consultant.

Post-Termination Procedure
Upon receipt of a written notice of termination, the Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination; b. Terminate all orders and Subcontractors except as necessary to complete any portion of the work that is not terminated;
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10 c. If directed in writing by the City to do so, assign all right, title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the City all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the Consultant in performing the work whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of City; f. Complete performance of such part of the Project as has not been terminated; g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Project and/or property related to the Project;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project.
i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date.

City will pay Consultant for work actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to #13..
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11 the Consultant after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as subconsultant agreements or contracts for materials; b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

16. INDEMNITY AND LIMITATION OF LIABILITY.

The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, relating to or arising out of any third-party claim brought against the City caused by any negligent act or intentional omission of Consultant, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

EACH PARTY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO

THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, SHALL NOT EXCEED THE TOTAL OF THE AMOUNTS PAYABLE TO CONSULTANT PURSUANT TO THIS AGREEMENT. NOTWITHSTANDING

ANYTHING TO THE CONTRARY HEREIN, THE LIABILITY CAP SET FORTH IN THIS PARAGRAPH SHALL NOT APPLY WITH RESPECT TO CONSULTANT’S LIABILITY FOR INDEMNIFIED CLAIMS PURSUANT TO SECTION 16(a), FOR WHICH THE AGGREGATE LIABILITY OF CONSULTANT SHALL NOT EXCEED $1,000,000.00.
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12 Consultant's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

17. PREVAILING WAGES & DIR REGISTRATION.

If the Consultant is performing “public work” as defined in Labor Code Section 1720 et seq. (the “Prevailing Wage Laws”), Consultant shall pay, and shall require its subconsultants and subcontractors to pay, not less than the prevailing rate of per diem wages for work of a similar character in the locality in which the Project is to be performed. The Consultant shall keep accurate payroll records in accordance with Labor Code Section 1776 and shall comply with all other applicable requirements of the Prevailing Wage Laws. Consultant shall require its subconsultants and subcontractors to comply with the Prevailing Wage Laws as may be required by law. Consultant shall waive, indemnify, hold harmless, and defend City concerning any liability arising out of Consultant, or its subconsultants or subcontractors, failure to comply with the applicable Prevailing Wage Laws. If the Consultant is preforming “public work” as defined in the Prevailing Wage Laws, Consultant shall be currently registered with the Department of Industrial Relations and qualified to perform public work consistent with Labor Code section 1725.5, except in limited circumstances as set forth in Labor Code section 1771.1. Consultant agrees, in accordance with Section 1771.4 of the California Labor Code, that if the work under this Agreement qualifies as public work, it is subject to compliance monitoring and enforcement by the Department of Industrial Relations.

18. DISPUTE RESOLUTION.
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13 Venue for all claims, controversies, or disputes arising out of, or relating to the formation of this Agreement, or the breach, termination execution, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this contract provision shall be in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California.

19. 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, the prevailing party may be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

20. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. All previous proposals, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement.

21. PARTIAL INVALIDITY.

If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

22. WAIVER.

The waiver by any party to this Agreement of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

23. AUDIT.
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14 The City's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Consultant's charges to City under this Agreement.

Consultant agrees to retain reports, records, documents, and files related to charges under this Agreement for a period of four (4) years following the date of final payment for Consultant services. City's representative shall have the right to reproduce any of the aforesaid documents.

24. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

25. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

26. COMPLIANCE WITH LAWS.

Consultant shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

27. CITY BUSINESS LICENSE.

Consultant shall have a City of Modesto business license. #13..
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15 IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attested by its City Clerk under authority of Resolution No. 2024-_______, adopted by the Council of the City of Modesto on the _____________ day of _____________________, 2024 and _____________________has caused this Agreement to be duly executed.
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2 CITY OF MODESTO, CA

COMMERCIAL CANNABIS COMPLIANCE INSPECTION

AND FINANCIAL AUDIT SERVICES

REVISED COST PROPOSAL

INF RFP 25-02
A. COST PROPOSAL
Avenu is pleased to offer our revised cost proposal below:

Activity 1: Regulatory Inspection (per audit)
Description: Onsite facility inspection
Item Cost Expected Time
Pre-visit communications / scheduling $150.00 1 hour
Travel to onsite facility $150.00 2-3 hours
Onsite walk through / inspection $150.00 1-2 hours
Inspection Report completion $150.00 2-3 hours
Total Cost for Activity 1: $900 -$1,350
Activity 2: Financial Audit (per audit)
Description: Review of books and records to determine appropriate local tax reporting.

Item Cost Expected Time
Communications (i.e. calls, emails, etc.) to schedule audit and subsequent follow ups during audit process $150 1-2 hours
Travel to onsite facility $150 2-3 hours
Onsite visit $150 1 hour
Review of books and records $150 25-35 hours
Audit Report completion $150 3-5 hours
Total Cost for Activity 2: $4,800 - $6,900
Activity 3: Travel Expenses - Per Onsite Trip (not per audit) Description: Estimate Costs to travel to City and conduct the onsite visits.

Item Cost
Airfare $700
Lodging $1,200
Rental Car $650
Meals $600
Total Cost for Activity 2: $3,150
Summary of Costs
Low High
Total Cost for Activity 1: Per Audit $900 $1,350
Total Cost for Activity 2: Per Audit $4,800 $6,900
Total Cost for Activity 3: Per visit to the City $3,150 $3,150 #13..
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3 CITY OF MODESTO, CA

COMMERCIAL CANNABIS COMPLIANCE INSPECTION

AND FINANCIAL AUDIT SERVICES

REVISED COST PROPOSAL

INF RFP 25-02
A.1 PRICING NOTES
General Notes:

The amount of time spent on each activity is subject to change based on the records provided by the cannabis business and their willingness to cooperate with the audit. Some audits are able to be completed quicker than others based on numerous conditions, so the expected times to complete each task in Activity 1 and 2 have been presented in ranges.

As noted above, Activities 1 and 2 are on a per audit basis, whereas Activity 3 is on a per visit basis.

Travel expenses in Activity 3 are estimates based on staying within the City for a full week (5 nights in hotel, 5 days for meals and rental car, etc.). If a full week is not warranted, then this amount would be reduced.

To conduct both the financial and regulatory review at the same time for each business, it is estimated that two (2) - three (3) businesses could be visited within a given day (10 -15 businesses in five (5) day period).

All work performed will be completed by an Avenu employee (no-sub contractors) Employees are reimbursed by salary.

Additions, Modifications, or Exceptions
Avenu requests no additions, modifications, or exceptions to the City’s Scope of Work Subcontractors
Avenu will not be using any subcontractors for this project. #13..
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6 CITY OF MODESTO, CA

COMMERCIAL CANNABIS COMPLIANCE INSPECTION

AND FINANCIAL AUDIT SERVICES
INF RFP 25-02
Avenu Deliverables
The audit analysis can include, but is not limited to the following tasks:
► Review applicable provisions of the City's municipal code and resolutions adopted by the City. ► Review business records filed with the City such as applications, operating agreements, compliance documents, and tax returns.
► Initiate communication with businesses to establish appropriate business contacts and to get an initial understanding of the business’ Point of Sales systems (POS), product inventory and tracking systems, accounting data systems, physical operation procedures, and methodology. ► Examination of business operations and financial data to verify the accuracy of reported tax returns and compliance with City’s regulatory and administrative policies. ► Prepare a draft audit report for each business entity. The report will identify any tax deficiencies with a summary explaining how the deficiencies were discovered and suggestions on a resolution to ensure future compliance. This report will also present to the City a regulatory compliance overview identifying any areas that need corrective action.
► The draft report will first be discussed with City and then presented to the business entity, upon the City’s approval. The business entity will be provided with an appropriate amount of time to review the audit report and respond to any of the audit findings.
► Prepare a final audit report summarizing the findings. The audit report will include information about the specific aspects of the business in compliance, those that were not in compliance, and recommendations for corrective actions. If relevant, we will also include areas for continued monitoring. ► Prepare an audit summary report upon completion of all the initial audits. The audit summary report will provide recommendations to the City for possible administrative, technical, and/or regulatory policy modifications that may be considered to improve compliance with the City’s operating and reporting requirements.

Assistance from the City
► City will provide Avenu with the records of those taxpayers authorized by the City for examination, including but not limited to business name, business’s physical address, mailing address, and contact person’s name, email, and phone number.
► City agrees to return the signed authorization letter on City letterhead within thirty (30) days of the effective date of the agreement.
► City agrees to timely sign documents and correspondence, as required. ► City agrees to provide Avenu with its ordinances, codes, and tax rates within thirty (30) days of the effective date of the agreement, and notice of any changes thereafter in the ordinances, codes, and tax rates levied by the City.
► City will provide payment history records for the taxpayers set up for examination. #13..
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INF RFP 25-02 Request for Proposals:

COMMERCIAL CANNABIS COMPLIANCE INSPECTION AND

FINANCIAL AUDIT SERVICES
Proposal Release: Wednesday, July 17, 2024
Proposal Due: Wednesday, July 31, 2024, at 5:00 pm (PST) #13..
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PROJECT OVERVIEW
The City of Modesto’s Community and Economic Development and Finance Department (City) are seeking proposals from qualified cannabis industry consultants (consultant) to provide on-call financial audits and on-site compliance reviews (inspections) of cannabis businesses operating within the City. The term of the agreement will be one-year, with one (1) one-year extension option ending on June 30, 2026.

Response to this Request for Proposals (RFP) must arrive no later than 5:00 pm (PST) on Wednesday, July 31, 2024, to [email protected]. It is the sole responsibility of proposing firms to ensure that proposals are received prior to the submittal deadline, as late submittals will be rejected, Physical copies of the proposal are not required to be submitted.

All inquiries, questions, and requests for information related to this Request for Proposals should be directed to Sean M. Rando, Business Analyst, at [email protected] no later than Thursday, July 25th by 5 p.m. (PST).

TRANSMITTAL LETTER
Proposer shall provide a letter containing an expression of the proposer's interest in the work, a summary statement regarding the qualifications of the proposer to do the work, and a brief summary of any information about the project team or the proposer that may be useful or informative to the City.

The proposal should be signed by an officer authorized to bind the proposing firm. Indicate the name of the organization submitting the proposal, its mailing address, telephone number, and identify the primary point of contact.

Acknowledge that the proposer agrees to be bound by the representations in their proposal during the term of the agreement in addition to a statement that the proposal is valid for a period of 90 days.

SCOPE OF WORK
Provide professional services as needed to conduct onsite compliance inspections and financial audits of operational commercial cannabis businesses within the City to determine compliance with State and Modesto Municipal Code (MMC).

The detailed Scope of Service is provided in Exhibit C

PROPOSAL EXPECTATIONS

CITY OF MODESTO EXPECTATIONS
The City reserves the right to amend, withdraw and cancel this RFP. The City reserves the right to reject all responses to this RFP at any time prior to contract execution. The City reserves the right to request or obtain additional information about any and all proposals.

The selected Consultant is expected to have a complete understanding of City, State, and Federal procedures and manuals and all applicable laws and regulations necessary to complete the Scope of Work.
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This RFP provides guidance but may not represent the exact form of the final project scope, pending negotiations between the selected Consultant and the City. Experience in performing similar services will be a heavily weighted factor in the selection process. Quality of performance on public relation and marketing services, ability to meet schedules and budgets, and ability to communicate effectively with City staff, other consultants, community members and the public will be some of the attributes and factors considered.

COST OF RFP PREPARATION
The City shall not be liable for any pre-contractual expenses incurred by any consultant preparing a submittal or portions thereof or by any selected consultant. Each consultant shall protect, defend, indemnify, and hold harmless the City from any and all liability, claims, or expenses whosoever incurred by, or on behalf of, the entity participating in the preparation of its response to this RFP. Pre-contractual expenses are defined as expenses incurred by consultants, if any, in:
 Preparing the Proposal and related information in response to this RFP.  Negotiations with the City of any matter related to this procurement.  Costs associated with interviews, meetings, travel, or presentations.  All other expenses incurred by a proposer/consultant prior to the date of award and a formal notice to proceed.

PROPOSAL FORMAT
Proposals should be submitted via electronic mail to [email protected] The Proposal shall contain an acknowledgment of receipt of all amendments and/or addenda to the RFP.

PROPOSAL EXPECTATION
The City requires the proposer to submit a concise proposal clearly addressing all the requirements outlined in this RFP; it must contain information covering the following topics:

COVER LETTER
The cover letter shall be signed by a person authorized by the Proposer to execute a contract with the City. It shall include: the legal name of the company; the name, address and telephone number of the principal person representing the firm; the firm’s current annual dollar volume of work; and a summary of the Proposal, including a brief description of the proposed team. It shall make a commitment to accept the terms and conditions in the RFP and the Standard Agreement for Professional Services (Attachment A), including acknowledgment of receipt of all amendments and/or addenda to the RFP.

The letter shall also identify a single person for possible contact during the RFP review process regarding contract language.

PROJECT UNDERSTANDING AND APPROACH
This section should demonstrate an understanding of the scope of services. It should describe the general approach, organization, and staffing required for the services requested. Also, describe the firm’s understanding of key issues and its approach to resolving those issues. All sub-consultants and their roles must be identified. The consultant shall include an organizational chart identifying key personnel responsible for accomplishing all aspects of the work. #13..
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QUALIFICATIONS OF CONSULTANT STAFF AND SUBCONSULTANT STAFF This section should include a list of key personnel to be assigned to the proposed RFP and qualifications for each person to be used, including sub-consultant personnel. An organizational chart or similar graphic shall also be provided that clearly shows the function each person will be expected to fulfill. It is imperative that the key personnel providing the requested services have the background, experience, and qualifications to provide the services described in this RFP. The City reserves the right to approve all key personnel individually and all subconsultants for work on this contract.

If sub-consultants or joint consultants are proposed, describe any relevant association with the proposed sub-consultants. Provide examples of past projects on which the lead firm has worked with each sub-consultant. Indicate the percentage of the fee allocated for each participating consultant and/or sub-consultant.

After the contract is signed, the consultant may not replace key staff without written agreement by the City.

EXPERIENCE OF FIRM
This section should include the relevant experience of the principal firm. Include project descriptions, status of the services, costs and dollar value of services provided. Clearly identify the role of key staff identified herein and identify a minimum of three (3) current and recent client references including contact information (phone numbers and emails). The focus shall be on experience, analysis, and documentation for similar services. Only recent similar services completed in the past ten years should be included in this section. During evaluation of proposals, completed services on which the key staff proposed for this RFP had a significant role in the project will be considered to have more weight than those that did not include such personnel. Any other details that the principal firm wishes to convey about itself or its proposed subcontractors should be placed in this section.

COST, SCHEDULE & DEADLINES COST, SCHEDULE & DEADLINES
The following elements shall be included in describing the budget allocation in the Consultant Proposal:
 An overall cost proposal, including a breakdown of costs by Activity listed in the scope of work section of this RFP;
 Person hours allocated to each step and total hours allocated for services objectives and overall services (including sub-contractors), or flat costs by tasks with a “not to exceed” figure for each task;
 A breakdown of the employees and professionals to be assigned to each project objective and the hourly rates and person-hour costs assigned (please indicate total number of hours for each project team member along with total hours for each project objective and the entire project), or flat costs by tasks with a “not to exceed” figure for each task;
 Personnel charge rates of the firm;
 Classification as to whether or not employees are reimbursed by hourly rate or salary; and,
 List of any subcontractors who may provide technical or other assistance and breakdown of hours/costs associated with the sub-consultants; #13..
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 Any proposals for additions to, modifications of or exceptions from the Scope of Work shall be clearly stated in the proposal and fully explained in the appropriate section(s), with costs specifically broken out in this section. The City is open to innovative and/or customized measures, but reserves the right to evaluate such proposals in full prior to execution of a contract in order to ensure that all the needs of the project and the City are met; and,
 A detailed schedule, listing sufficient activities to demonstrate an understanding of the process involved in delivering the services of this type.

SAMPLE CITY AGREEMENT
A sample of the City agreement is included in Exhibit A which defines the City’s terms and conditions for these contractual services. Include in your proposal any proposed changes to these terms and conditions as part of your proposal.

INSURANCE REQUIREMENTS
Insurance Type or Requirement Requirement
General Liability $1,000,000
Automobile $1,000,000
Worker’s Compensation (if there are
employees of the business)
$1,000,000
Professional Liability or Errors and
Omissions
$1,000,000 and $2,000,000 aggregate
Waiver of Subrogation Form Required
Additional Insured Endorsement Additional Named Insured language required: The City of Modesto, its officers,
officials, employees, agents and volunteers
are to be covered as additional insureds.

FINANCIAL INTEREST DISCLOSURE AND FINANCIAL REVIEW
Any contract award to result from this RFP process and Proposer’s submission of a Proposal therewith will require approval by a majority vote of the City of Modesto’s City Council. In order to have full transparency in any City of Modesto commercial actions, the City Council may not approve an agreement between the City and the Proposer until all persons with a direct or indirect financial interest of greater than $2,000 in the Proposer are identified by name.

Proposer must therefore complete this Financial Interest Disclosure form located under Exhibit B, listing by name all parties that have a material financial interest in the agreement, contract, or development right. This signed form must be submitted with the final proposal.

PLEASE NOTE, any Council action that requires a Financial Interest Disclosure cannot be considered by the City Council until the required reporting is made. That means that City Council agenda items without the disclosure will be removed from the Council agenda.

City staff will request financial statements from the proposer whose proposal is determined to best meet the City’s needs, as determined by the selection committee. Within two (2) business days of City request, proposer shall provide a copy of their company’s most recent professionally prepared Financial Statements (Income Statement and Balance Sheet). These statements, if un-audited, shall be accompanied by a cover letter that states the name and title of the preparer, the basis of the financial statement presentation (cash or accrual) and whether #13..
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these statements have been prepared in accordance with Generally Accepted Accounting Principles for the most recent fiscal year end of the proposer. Audited financial statements shall be submitted in their entirety, including the auditor’s opinion and notes to the financial statements.

CONFIDENTIALITY
If any of the submittals, or any portion of the submittals, are considered confidential by the respondent, such documents should be submitted with a single copy in a separate sealed envelope clearly marked “Confidential” on the outside of the envelope.

All information and documents, excluding the confidential financial information, submitted in response to this RFP are subject to the California Public Records Act, https://www.ftb.ca.gov/your-rights/california-public-records-act.html, California Government Code §§ 6250 through 6276.48) (“CPRA”), which mandates the disclosure of documents in the possession of the City upon the request of any person, unless the content of the document falls within a specific exemption category of the CPRA. On each page that contains information that the respondent believes is exempt from mandatory disclosure under CPRA, respondent shall include the following separate legend:
“CONFIDENTIAL – NOT FOR PUBLIC DISTRIBUTION”
“THIS PAGE CONTAINS INFORMATION THAT IS EXEMPT FROM

MANDATORY DISCLOSURE UNDER THE CALIFORNIA PUBLIC
RECORDS ACT.”
Should the City receive a request to review confidentially labeled information, the City will notify the respondent of the request and delay the access to the materials for seven (7) days after notification to respondent to allow respondent to act in protection of its labeled information.

Failure to so act shall constitute a complete waiver.

All responses will be considered public records that are subject to public disclosure. In the event a respondent considers its submittal as a proprietary trade secret or otherwise exempt from disclosure under the CPRA, the respondent must designate its submittal as confidential. The City will withhold designated applications from public disclosure only if permitted by applicable law. The City will not be responsible or liable for disclosure of any information, including without limitation those marked confidential, if disclosure is deemed by the City to be required by law, or by a court of competent jurisdiction.

EVALUATION CRITERIA
The following is an outline of the procedures the City will use in the selection process:
 Establish a Screening and Selection Committee.
 Screening and Selection Committee reviews and evaluates the proposals submitted by the prospective consultants.
 Proposers may be required to participate in an oral interview. The oral interview will be a panel comprised of members of the selection committee.  Negotiations may take place with the primary firm on the final scope of work, the final contract proposal, and the proposal price.
 If a contract cannot be negotiated for this service, the negotiations with the designated consultant shall be terminated in writing and negotiations shall be #13..
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started with the next highest rated consultant.
 The selection committee will make a recommendation to the awarding authority.

CONSULTANT EVALUATION CRITERIA
The City intends to engage the most qualified consultant available for this assignment. It is imperative the consultant’s proposal fully address all aspects of the RFP. It must provide the City staff with clearly expressed information concerning the consultant’s understanding of the City’s specific requirements and qualifying the proposer to conduct this study in a thorough and efficient manner.

The following criteria shall be used in evaluation of the proposer’s offer of services:
 Experience. The consultant’s general experience working with cannabis businesses, municipal clients; familiarity with local ordinances and issues.  Personnel Qualifications. The background, experience and qualifications of individual team members is a key element for consideration. The designated personnel should possess experience with similar projects.  Understanding of Services. The City will be looking for a clear and concise understanding of the proposed project.

The selection committee will make a recommendation to the awarding authority. The acceptance of the proposal will be evidenced by email Notice of Award from the City’s Director of Community and Economic Development to the successful Proposer.

PROPOSED TIMELINE
Release of Request Wednesday, July 17, 2024
Questions Due by: Thursday, July 25, 2024, at 5:00 pm PST Proposals Due by: Wednesday, July 31, 2024 at 5:00 pm PST Selected Firm Notification (Estimated) Wednesday, August 7, 2024 at 5:00 pm PST Anticipated Contract (Estimated) Tuesday, August 27, 2024 The City of Modesto assumes no responsibility for delay in email delivery of any proposal(s). All costs associated with the preparation and delivery of any proposal(s) shall be borne by the proposer(s).

Each proposal shall be submitted electronically by email on Wednesday, July 31, 2024 no later than 5:00PM.

Should you have any questions, please direct them to [email protected]. All questions will be gathered and issued out to all parties in the form of an addendum to this request for proposal.

I hope this opportunity will be of interest to you and look forward to your response. #13..
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Sincerely,

Sean M. Rando
Business Analyst
Attachment:

Exhibit A – Sample City Agreement
Exhibit B – Financial Interest Disclosure
Exhibit C – Scope of Work
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STANDARD AGREEMENT

FOR CONSULTANT SERVICES
THIS AGREEMENT made and entered into in the City of Modesto, State of California, this day of , 202X, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and (CONSULTANT), a California corporation, hereinafter referred to as "Consultant".

This Agreement is made with regard to the following recitals:

A. The City has determined that a should be prepared
for the City to .

B. Consultant represents that it is qualified, willing, and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Consultant shall undertake and complete the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A". Any services in addition to those identified in Exhibit C may be performed upon mutual agreement of both parties.

2. TERM OF AGREEMENT.

The term of the agreement shall be for a period of one (1) year, with one (1) oneyear extension options at the sole discretion of CITY, for a total of up to two (2) years.

Year 1: XXXX through XXXXX
Year 2: XXXX through XXXXX
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Price increases for subsequent agreement years, three, four and, five shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one agreement year and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONSULTANT in writing, ninety (90) days prior to the annual anniversary date of the agreement to be effective for the subsequent year. This Agreement is effective as of the dates listed above in Year 1 and Year 2 and will continue in effect until City’s acceptance of and payment for all services authorized by City and performed by Consultant, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

3. COMPENSATION.

Consultant agrees to accept a sum not to exceed $__________ (maximum compensation) as full remuneration for performing all services and furnishing all staffing and materials for Modesto in accordance with Exhibit "A”, except that additional services may be compensated as described below.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant on a time and materials basis for Consultant’s actual costs for all work called for in Exhibit “A” to this Agreement. All work to be performed under this Agreement shall be billed at the hourly rates set forth in Exhibit “B” attached hereto. Consultant shall submit monthly invoices to City which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any reimbursable expenses paid by Consultant and identified in Exhibit “B” or approved by the City in writing.

City shall pay Consultant [TO BE DETERMINED BY RFQ RESPONSE IN FINAL AGREEMENT, EITHER “Net 30 terms via CITY’s ePay Program” or “Net 45 Days via manual check”.]
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4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. Consultant warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities, and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further warrants that it will follow the best current, generally accepted, and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that will be
the person primarily responsible for the performance of the services referred to in this Agreement. City has entered into this Agreement in reliance on that representation by Consultant.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to #13..
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this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use.

All materials, documents, data, or information obtained from the City data files or any City medium furnished to Consultant in the performance of this Agreement will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Consultant after termination of this Agreement without written consent of the City.

7. NEWS AND INFORMATION RELEASE.

Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from the City Manager.

8. CONFLICT OF INTEREST.

Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest. Consultant understands that, if this Agreement is made in violation of Government Code § 1090 et seq., the entire Agreement is void and Consultant will not be entitled to any compensation for services performed. Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so required at the option of City.

9. AMENDMENTS.

This Agreement, including the Exhibits attached hereto, may be amended only by a writing signed by both Parties. City will not be responsible to pay any charges Consultant may incur in performing services not identified in Exhibit ‘A’ unless first authorized by the City in writing

10. INDEPENDENT CONTRACTOR.
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All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Except as City may specify in writing, Consultant has no authority to bind or incur any obligation on behalf of City. Consultant has no authority or responsibility to exercise any rights or power vested in the City. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture. Consultant, its agents, officers, and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

Consultant shall determine and control the method, details, and means of performing the work and services to be provided by Consultant under this Agreement. Consultant shall be responsible to City only for the requirements and results specified in this Agreement, and, except as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement.

It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the #13..
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City to any obligation whatsoever. It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned, other than noted in Exhibit ‘A’, without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

Unless otherwise expressly provided in the contract, Consultant shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this Agreement. Consultant shall furnish a warranty of such right to use to City at the request of City.

13. NOTICES.

Notice required by this Agreement shall be given in writing and shall be deemed given and effective upon delivery provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery; (b) overnight courier service which obtains confirmation of delivery; or (c) certified mail, return receipt requested, if delivery is confirmed by a return receipt; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:

FOR CONSULTANT: Name:

Address:

Attention:

Phone: ( )
Facsimile: ( )
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FOR CITY: Name: City of Modesto
Address: P.O. Box 642
Modesto, CA 95353
Attention:

Phone: (209)
Facsimile: (209)

14. INSURANCE REQUIREMENTS.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the Consultant shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days’ notice of the cancellation on the policies of insurance required hereunder (10 days’ notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice. The Consultant shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled. (a) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability #13..
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Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations as applicable. (b) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(c) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (d) Professional Liability insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claim made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Consultant shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the Consultant to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated. Failure of the Consultant to obtain and/or maintain any required insurance shall not relieve the Consultant from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Consultant concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by Consultant #13..
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for the City. The Consultant's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A: VII or with approval of the Risk Manager. The Consultant must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed.

CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

15. TERMINATION OF AGREEMENT.

Termination for Default
In the event either party fails to perform under this AGREEMENT or breaches any condition contained herein, the other party shall notify in writing the breaching party of the nonperformance. Within 10 days after receipt of notification, the breaching party shall correct any nonperformance to the reasonable satisfaction of the non-breaching party, or such other time as may be identified in the notice. Failure to correct any non-performance shall allow the non-breaching party to terminate this AGREEMENT for cause.

Termination by City for Convenience
City may cancel this Agreement at any time, with or without cause, upon written notification to Consultant.
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Post-Termination Procedure
Upon receipt of a written notice of termination, the Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subcontractors except as necessary to complete any portion of the work that is not terminated;
c. If directed in writing by the City to do so, assign all right, title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the work not completed or undertaken, including materials not delivered;
d. Deliver or otherwise make available to the City all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the Consultant in performing the work whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of City; f. Complete performance of such part of the Project as has not been terminated;
g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Project and/or property #13..
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related to the Project;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project.
i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date.

City will pay Consultant for work actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the Consultant after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as subconsultant agreements or contracts for materials;
b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

16. INDEMNITY.

The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or #13..
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property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of Consultant, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

Consultant's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

17. PREVAILING WAGES & DIR REGISTRATION.

If the Consultant is performing “public work” as defined in Labor Code Section 1720 et seq. (the “Prevailing Wage Laws”), Consultant shall pay, and shall require its subconsultants and subcontractors to pay, not less than the prevailing rate of per diem wages for work of a similar character in the locality in which the Project is to be performed. The Consultant shall keep accurate payroll records in accordance with Labor Code Section 1776 and shall comply with all other applicable requirements of the Prevailing Wage Laws. Consultant shall require its subconsultants and subcontractors to comply with the Prevailing Wage Laws as may be required by law. Consultant shall waive, indemnify, hold harmless, and defend City concerning any liability arising out of Consultant, or its subconsultants or subcontractors, failure to comply with the applicable Prevailing Wage Laws. If the Consultant is preforming “public work” as defined in the Prevailing Wage Laws, Consultant shall be currently registered with the #13..
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Department of Industrial Relations and qualified to perform public work consistent with Labor Code section 1725.5, except in limited circumstances as set forth in Labor Code section 1771.1. Consultant agrees, in accordance with Section 1771.4 of the California Labor Code, that if the work under this Agreement qualifies as public work, it is subject to compliance monitoring and enforcement by the Department of Industrial Relations.

18. DISPUTE RESOLUTION.

Venue for all claims, controversies, or disputes arising out of, or relating to the formation of this Agreement, or the breach, termination execution, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this contract provision shall be in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California.

19. 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, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled.

The court may set such fees in the same action or in a separate action brought for that purpose.

20. ENTIRE AGREEMENT.

21. PARTIAL INVALIDITY.
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If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

22. WAIVER.

23. AUDIT.

The City's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Consultant's charges to City under this Agreement.

24. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

25. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

26. COMPLIANCE WITH LAWS.

Consultant shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. #13..
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Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

27. CITY BUSINESS LICENSE.

Consultant shall have a City of Modesto business license. #13..
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IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attestation by its City Clerk under authority of Resolution No. 202X- ___ , adopted by the Council of the City of Modesto on the day of ________________ , 202X, and (CONSULTANT) has caused this agreement to be duly executed as of the Effective Date.

CITY OF MODESTO, (CONSULTANT),
a municipal corporation a California corporation*
By ___________________________ By ________________________________ JOSEPH P. LOPEZ, City Manager Name Title
By ________________________________
Name Title
ATTEST: (Seal)
By ___________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
Consultant’s Federal ID #______________
APPROVED AS TO FORM:

By ________________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

By ________________________________
CHRISTINA ALGER, Director of Human Resources
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EXHIBIT B - FINANCIAL INTEREST DISCLOSURE
Any contract award to result from this RFP process and Proposer’s submission of a Proposal therewith will require approval by a majority vote of the City of Modesto’s City Council. In order to have full transparency in any City of Modesto commercial actions, the City Council may not approve an agreement between the City and the Proposer until all persons with a direct or indirect financial interest of greater than $2,000 in the Proposer are identified by name.

Proposer must therefore complete this Proposal Form F – Financial Interest Disclosure, listing by name all parties that have a material financial interest in the agreement, contract or development right.

Financial Interest Disclosure to City of Modesto
Proposer shall identify any person with a financial interest in the Proposer by name, below.

For the purposes of this disclosure, a “Financial Interest” shall have the meaning contained in Modesto Municipal Code section 2-10.02.

Persons having an aggregate economic interest in the Proposer less than two thousand dollars ($2,000.00) at all times prior to final Council action of the proposed contract are not required to be listed on the Financial Interest Disclosure.

Notwithstanding the foregoing, a Financial Interest Disclosure is not required for a Proposer meeting the financial criteria for listing on the New York or the Pacific Stock exchanges unless it is reasonably foreseeable that a City Council decision will increase or decrease that entity's gross revenues or expenses by one million dollars ($1,000,000) or more and the requirements of Modesto Municipal Code Section 2-10.03(h) are satisfied.

It is the legal obligation of all applicants for approval of an agreement or of an application for development rights to verify in writing, under penalty of perjury, that the identity of each person having a material financial interest in the Proposer is true, correct and complete. By signing below, the applicant understands that this information is provided under penalty of perjury, and that intentionally supplying misinformation or deception may result in either invalidation of the agreement or application, or criminal prosecution for misdemeanor violation of the Modesto Municipal Code, or both. Negligent provision of misinformation shall be grounds for invalidation.

In accordance with the Modesto Municipal Code, each applicant has a continuing obligation to maintain the truth, accuracy and completeness of the financial interest disclosure information provided below until after final consideration by the City Council of any matter arising out of or relating to the agreement or application.
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Print Names of Persons Having a Financial Interest in Proposer Receiving this Agreement:

First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
By signing this document, I agree to the information contained within.

Proposer Company Name:

Name of Proposer Signatory:

Signature of Proposer Representative:
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EXHIBIT C – SCOPE OF WORK

SCOPE OF WORK
The Cannabis Consulting Firm will be conducting the following services for up to five (5) cannabis businesses located within the City of Modesto (City).

Conduct Compliance Inspections
Consultant will conduct one (1) on-site compliance inspection annually, as requested by the City, for each permitted cannabis business that is operational to determine compliance with State and/or local laws. If Consultant identifies any non-compliant activities, they will provide the City with a recommended appropriate action to address the deficiency and to ensure future compliance by the permittee.

The scope for these services includes all of the following:
 Notifying permittee of pending inspection
 Phone, email and other communications to prepare for, schedule and coordinate the inspections.
 On-site inspection to ensure that each operational business complies with all State and Local laws and regulatory protocols including but not limited to:
o Inventory management
o Cash handling procedures
o Access control
o Video surveillance
o Product safety
o Alarm system maintenance and safety
o Lock standards
o Packaging and labeling
o Waste management
o Transportation documentation
o Surveillance equipment maintenance
o Employee badges
o Business records
o Other items as necessary to ensure compliance with laws and regulations  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 Consultant will prepare a notice to comply as an included part of the report.
 Follow-up re-inspection or review of any supplemental documents provided to address or contest any findings of non-compliance.
 Preparation of a supplementary inspection report following the submittal of additional documentation requested.
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 The supplementary report shall also document the dates and times of all requests for information from permittees.
 Preparation of final inspection report.
 Providing a recommendation to the City for enforcement action should there be any findings left unaddressed by the permittee.

Conduct Financial Audits
Consultant will conduct a financial revenue audit of each cannabis business to verify the accuracy of the revenue reported and remitted to the City during the review period are in compliance with the Modesto Municipal Code (MMC). Consultant will recommend a tax assessment or tax credit should the audit reveal any unreported/overreported revenue. As part of the audit process, Consultant will conduct a review of each business 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 Consultant with a list of licensed cannabis businesses subject to audit. Consultant shall work with the City to determine the appropriate review period for each business and to develop a schedule for conducting the audits. As the time for each audit approaches, Consultant 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 and METRC where applicable. The City will send the notification letter to communicate the Consultant’s authority to conduct the audit and to encourage cooperation by the business.

The full financial 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 merchant statements
o Sales receipts
o Monthly Profit and Loss Statements
o Seller’s Permit
o Other financial documents as needed
 Identify any variances or over/under reporting
 Calculate any taxes or fees due to the City or credits due to the business  Prepare and issue draft and final report
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Cannabis Retail, Microbusiness (Retail), Microbusiness (Manufacturing – Whoelsale), Microbusinesses (Cultivation – Wholesales), Distribution, Manufacturing, Testing Labs, Cultivation (Indoor Only), and Cultivation (Nursery) are taxed at a percentage tax of gross receipts, the audit shall include the applicable review listed under ‘The Full Financial Audit Shall Include’ section.

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.

Consultant shall provide a copy of the draft audit report to the City for review before issuing the draft to the cannabis business. The audit draft shall allow the business 14 calendar days to respond or appeal the report. Consultant will review any documentation provided by the business to dispute the findings and will adjust the tax assessment as necessary prior to issuing the final report to the City and the cannabis business.

The financial audit assumes a standard 12-month review period. This may be increased up to of 24 months, in accordance with the statute of limitations for tax audits. #13..
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INF RFP 25-02 Commercial Cannabis Compliance Inspection And Financial Audit Services
Max
Score
Global Go LLC
SCI Consulting
Group
Avenu Insights &
Analytics, LLC
Requirements - Primary Selection Criteria - 100 total points possible Experience: The consultant’s general experience working with cannabis businesses, municipal clients; familiarity with local ordinances and issues. 50 34 31 41 Personnel Qualifications: The background, experience and qualifications of individual team members is a key element for consideration. The designated personnel should possess experience with similar projects. 20 16 18 16 Understanding of Services: The City will be looking for a clear and concise understanding of the proposed project. 30 21 25 21
Total Score 100 71 73.75 78.75
Ranking 3 2 1
The Score for each is the AVERAGE of all committee member's scoring. #13..
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AGREEMENT TRANSMITTAL SHEET
Subject of Agreement:

Vendor Name: Division:

Contact Person: Extension:

Attorney Reviewer Name:

The attached agreement is the final agreement approved by Council on and pulled from Unity for routing via DocuSign.

The attached agreement is the final version approved through the under $50,000 Unity Workflow review and pulled from Unity for routing via DocuSign.

PINS Approval Business License
Council Agenda Report 700 Form (for Consultants)
Signed or Unsigned Resolution W-9
Council Meeting Minutes (Only if unsigned
Resolution is provided)
DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 X
75369
X
Finance
Alex Mog
6/13/2023
X
X
Hinderliter, de Llamas & Associates (HdL)
Agreement for Cannabis Consulting Services
Juana Lynch
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1 STANDARD CONSULTANT AGREEMENT
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2023, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and Hinderliter De Llamas & Associates, a California corporation, hereinafter referred to as "Consultant".

This Agreement is made with regard to the following recitals:

A. The City has determined that there is a continued need for the administration of cannabis business activities.

B. Consultant represents that it is qualified, willing and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Consultant shall undertake and complete the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" or "Project". Any services in addition to those identified in Exhibit A and B may only be performed upon mutual agreement of both parties.

2. TERM OF AGREEMENT.

DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 June
13th
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2 The term of the Agreement shall be two (2) years with one (1) one-year extension option by mutual agreement, subject to Paragraph 9 below, for a total of up to three (3) years.

Year 1: July 1, 2023 through June 30, 2024
Year 2: July 1, 2024 through June 30, 2025
Year 3: July 1, 2025 through June 30, 2026
Pricing as set forth in Exhibit B shall remain firm for the first two (2) years of the AGREEMENT. Price increases for any subsequent AGREEMENT years following the second year, shall not exceed the percentage change in the Consumer Price Index (CPI) for the City of Modesto West Urban Area in any one AGREEMENT year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONTRACTOR in writing, 90 days prior to the annual anniversary date of the AGREEMENT to be effective for the subsequent year. This Agreement is effective as of the dates listed above in Years 1 through Years 3 and will continue in effect until City's acceptance of and payment for all services authorized by City and performed by Consultant, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

City hereby gives Consultant notice to proceed with the preparation of the Project, as of July 1, 2023. Consultant shall diligently proceed with the completition of the Project within the time period set forth in Exhibit "A".

3. COMPENSATION.

Consultant agrees to accept a sum not to exceed $784,050 for performing all services and furnishing all staffing and materials for Modesto in accordance with Exhibit "A" , except that additional services may be compensated as described below.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant on a time and materials basis for Consultant’s actual costs for all work called for in Exhibit “A” to this Agreement. All work to be performed under this Agreement shall be billed at the rates set forth in Exhibit “B” attached hereto. Consultant shall submit monthly invoices to City DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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3 which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any reimbursable expenses paid by Consultant and identified in Exhibit “B” or approvd by the City in writing.

City shall pay Consultant for work performed as authorized by the City. All consulting work shall be billed: 1) on the rate set forth in Exhibit “B”, attached hereto, After the two year term, any increase to the rates shown in Exhibit “B” shall be negotiated through the Purchasing Division by the Consultant in writing 90 days in advance of the term date and be approved by City.

Consultant shall submit monthly invoices to City which include a detailed description of completed tasks, hours worked, and billable rates.

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. Consultant warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that Ajay Kolluri will be the person primarily responsible for the performance of the services referred to in this Agreement. City has entered into this Agreement in reliance on that representation by Consultant.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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4 may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use.

7. NEWS AND INFORMATION RELEASE.

8. CONFLICT OF INTERST.

Consultant warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would create a “conflict of interest”, as that term is defined in the Political Reform Act (Gov. Code § 81000 et seq), for the Consultant in the peformance of this Agreement. . Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest. Consultant understands that, if this Agreement is made in violation of Government Code § 1090 et seq., the entire Agreement is void and Consultant will not be entitled to any compensation for services performed. Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so required at the option of City.

DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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5 9. AMENDMENTS.

This Agreement, including the Exhibits attached hereto, may be amended only by a writing signed by both Parties.City will not be responsible to pay any charges Consultant may incur in performing services not identified in Exhibit ‘A’ unless first authorized by the City in writing

10. INDEPENDENT CONTRACTOR.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Except as City may specify in writing, Consultant has no authority to bind or incur any obligation on behalf of City. Consultant has no authority or responsibility to exercise any rights or power vested in the City. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture. Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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6 It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever. It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned, other than noted in Exhibi ‘A’, without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

13. NOTICES.

Notice required by this Agreement shall be given in writing and shall be deemed given and effective upon delivery provided that such are delivered in accordance with the provisions of this Section.

Notices shall be delivered either by: (a) personal delivery; (b) overnight courier service which obtains confirmation of delivery; or (c) certified pail, return receipt requested, if delviery is confirmed by a return reciept; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:

FOR CONSULTANT: Name: Hinderliter, de Llamas and Associates Address: 120 S State College Blvd, Suite #200, Brea, CA 92821 Attention: Andrew Nickerson
Phone: (714) 879-5000
FOR CITY: Name: City of Modesto
DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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7 Address: P.O. Box 642
Modesto, CA 95353
Attention: Dianne Love
Phone: (209) 571-5164

14. INSURANCE REQUIREMENTS.

The Consultant shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the City as may be required by the Risk Manager of the City. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the City by certified mail, return receipt requested, for all of the following stated insurance policies.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the Consultant shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days notice of the cancellation on the policies of insurance required hereunder (10 days notice if the policies are cancelled for nonpayment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice. The Consultant shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled.
(a) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (b) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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8 project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations as applicable.
(c) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(d) Professional Liability insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claims made basis it shall be maintained for at least three (3) years following completion of the work.

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9 CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

15. TERMINATION OF AGREEMENT.

Termination for Convenience
City may cancel this Agreement at any time, with or without cause, upon written notification to Consultant. Consultant may cancel this Agreement at any time, with or without cause, upon 90 days written notification to City.

Post-Termination Procedure
Upon receipt of a written notice of termination, the Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination; DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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10 b. Terminate all orders and Subcontractors except as necessary to complete any portion of the Work that is not terminated;
c. If directed in writing by the City to do so, assign all right, title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the City all data, drawings, specifications, reports, estimates,summaries and such other information and material as mayhave been accumulated by the Consultant in performing the Work whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of City; f. Complete performance of such part of the Project as has not been terminated; g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Project and/or property related to the Project;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project.
i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date.

City will pay Consultant for work actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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11 the Consultant after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as subconsultant agreements or contracts for materials; b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

16. PREVAILING WAGES & DIR REGISTRATION.

If the Consultant is performing “public work” as defined in Labor Code Section 1720 et seq. (the “Prevailing Wage Laws”), Consutlant shall pay, and shall require its subconsultants and subcontractors to pay, not less than rhw prevailing rate of per diem wages for work of a similar character in the locality in which the Project is to be performed. The Consultant shall keep accurate payroll records in accordance with Labor Code Section 1776, and shall comply with all other applicable requirements of the Previaliang Wage Laws. Consultantshall require its subconsultants and subcontractors to comply with the Previaling Wage Laws as may be required by law.

Consultant shall waive, indemnify, hold harmless, and defend City concerning any liability arising out of Consultant, or its subconsultants or subcontractors, failure to comply with the applicable Previlainge Wage Laws. If the Consultant is preforming “public work” as defined in the Prevailing Wage Laws, Consultant shall be currently registered with the Department of Industrial Relations and qualified to perform public work consistent with Labor Code section 1725.5, except in limited circumstances as set forth in Labor Code section 1771.1. Consultant agrees, in accordance with Section 1771.4 of the California Labor Code, that if the work under this Agreement qualifies as public work, it is subject to compliance monitoring and enforcement by the Department of Industrial Relations.

17. INDEMNITY.

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12 The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of Consultant, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

18. DISPUTE RESOLUTION.

19. ATTORNEYS’ FEES.

20. ENTIRE AGREEMENT.

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13 This Agreement and its exhibits contain the entire understanding between Consultant and City. All previous proposals, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. .

20. PARTIAL INVALIDITY.

21. WAIVER.

22. AUDIT.

23. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

24. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

25. COMPLIANCE WITH LAWS.

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14 Consultant shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

26. CITY BUSINESS LICENSE.

Consultant will have a City of Modesto business license.

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15 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attestation by its City Clerk under authority of Resolution No. 2023- , adopted by the Council of the City of Modesto on the day of , 2023, and (CONSULTANT) has caused this agreement to be duly executed in duplicate as of the Effective Date.

DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 274 13th June
#13..
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CITY OF MODESTO,
a municipal corporation
BY: ____________________________
JOSEPH P. LOPEZ, City Manager
ATTEST:
(Seal)
BY: ____________________________
For DIANE NAYARES-PEREZ, CMC,
City Clerk
________________________________
BY: ____________________________
By _____________________________
Name Title
BY: ____________________________
By _____________________________
Name Title
APPROVED AS TO FORM:

BY: ____________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

BY: ____________________________
JOE F. RODRIGUEZ, Risk Manager
Federal ID # ___________
DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 Hinderliter de Llamas & Associates
President/CEO
33-0008507
R. Andrew Nickerson
6/23/2023
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06/13/2023/Finance/GBrown/Item 7 1 2023-274

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-274

RESOLUTION APPROVING AN AGREEMENT WITH HINDERLITER, DE LLAMAS & ASSOCIATES, BREA, CA BY UTILIZING THE CITY OF HESPERIA AGREEMENT FOR CANNABIS CONSULTING SERVICES FOR A TWO (2) YEAR AGREEMENT WITH ONE (1) ONE-YEAR EXTENSION OPTION, FOR AN ANNUAL ESTIMATED AMOUNT OF $261,350 AND A TOTAL AMOUNT NOT TO EXCEED $784,050 OVER THREE YEARS; AND AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE, TO

EXECUTE THE AGREEMENT
WHEREAS, the passage of Proposition 64, The Adult Use of Marijuana Act, in November 2016 ended the prohibition on adult-use of cannabis in California and created a statewide regulatory structure for adult-use cannabis businesses, and WHEREAS, on January 16, 2018, the Modesto City Council adopted Ordinance No. 3684-C.S. which permitted certain commercial cannabis uses, subject to land use and zoning criteria, and
WHEREAS, on July 9, 2018, the City entered into a Professional Services Agreement (PSA) with HdL for cannabis consulting services not to exceed $49,750, and WHEREAS, on December 4, 2018, by Resolution No. 2018-539, Council approved an increase and extension to the HdL’s Consulting agreement by $1,114,500, from $49,750, to $1,164,250 over a two-year period, with three one-year extensions for a total term of five years, and
WHEREAS, the term of the current Agreement between the City of Modesto and HdL is due to expire on July 8, 2023 and
WHEREAS, on March 10, 2022, the City of Hesperia, California issued an RFP for Cannabis Audit Services and received four proposals; three City of Hesperia staff members evaluated and ranked the proposals based on qualifications, experience, and approach to the scope of work and based on the cumulative scores from the panel; HdL was DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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06/13/2023/Finance/GBrown/Item 7 2 2023-274
the top-rated consultant, and
WHEREAS, HdL has effectively met the City’s cannabis consulting needs by providing consistent and satisfactory service, and
WHEREAS, to continue receiving the various services currently being provided by HdL, the City will ‘piggy-back’ off the City of Hesperia’s competitive bid process and “access the terms” of the Agreement between the City of Hesperia and HdL, and WHEREAS, HdL will continue to conduct Annual Cannabis Financial Audits, Annual Compliance Inspections, and provide subject matter expertise consulting at the rates listed on Exhibit B, and
WHEREAS, optional services such as Non-competitive Application Review Process and Competitive Application Review (Application and Interviews), will be billed at the consultant staff’s hourly rate listed on Exhibit B Page 2 and performed upon mutual agreement by both parties, and
WHEREAS, background checks and badges for cannabis owners, managers, and employees will continue to be provided by HdL and paid by the cannabis business, and WHEREAS, Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment, or contractual services to be formally bid; however, exceptions to the formal bidding process are granted in MMC 8-3.204(d) “where the Purchasing Manager, in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality,”and
WHEREAS, in addition, MMC 8-3.202(d) encourages the Purchasing Manager to DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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06/13/2023/Finance/GBrown/Item 7 3 2023-274
utilize the ‘piggybacking’ from a competitive bid process with City of Hesperia when the best cost savings interest of the City would be served; here, this exemption is satisfied because Hinderliter, de Llamas (HdL) Associates, has continually met the City’s cannabis consulting needs, and
WHEREAS, the charges related to the annual financial audits, the annual inspection to ensure compliance, and other consulting fees directly related to the permitted businesses are reimbursed by the annual permit fee charged and paid by the permitted cannabis businesses and any other consulting provided by HdL not directly related to the permitted businesses would be funded by the General Fund.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an Agreement with Hinderliter, de Llamas & Associates, Brea, CA by utilizing the City of Hesperia Agreement for Cannabis Consulting Services for a two (2) year Agreement with one (1) one-year extension option, for an annual estimated amount of $261,350 and a total amount not to exceed $784,050 over three years.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the agreement, in a form approved by the City Attorney.

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DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

June 13, 2023
Date: May 21, 2023
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: Hinderliter, de Llamas & Associates (HdL) Agreement CONTACT: Gina Brown, Revenue & Collections Compliance Manager, [email protected], 209-577-5381
DESCRIPTION:

Consider approving an Agreement with Hinderliter, de Llamas & Associates (HdL), Brea, CA for Cannabis Consulting Services for a total amount not to exceed $784,050 over three (3) years. (Funding Source: Cannabis Business Permit Fee and Various Funds) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

In November 2017, the City Council placed before the voters a ballot measure, “Measure T,” allowing the City Council to implement an excise tax on cannabis businesses within the City.

Modesto voters approved Measure T, with 82.5% voting in favor of it.

On January 16, 2018, the Modesto City Council adopted Ordinance No. 3684-C.S. which permitted certain commercial cannabis uses, subject to land use and zoning criteria.

Staff and Council recognized that expert consultant assistance would be necessary to review and evaluate cannabis business applications, and to assist City staff in establishing tax rates and an annual permit fee. Therefore, a Request for Proposal (RFP) was issued. Three proposals were received as a result of the RFP process. HdL was selected due to their DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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City Council, June 13, 2023
Hinderliter, de Llamas & Associates (HdL) Agreement

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experience and expertise related to cannabis business permitting, financial, and regulatory processes.

On July 9, 2018, the City entered into a Professional Services Agreement (PSA) with HdL for consulting services not to exceed $49,750. The PSA scope of work authorized HdL to review, score, and rank cannabis dispensary applications, and to determine the Annual Permit Fee for permitted businesses’ on-going compliance inspections.

On December 4, 2018, by Resolution No. 2018-539, Council approved an increase and extension to the HdL’s Consulting agreement. The agreement was increased by $1,114,500, from $49,750, to $1,164,250 over a two-year period, with three one-year extensions for a total term of five years.

Currently, HdL performs annual compliance inspections and financial audits on the City of Modesto’s permitted cannabis businesses, as well as, cannabis consulting services for the City of Modesto. HdL conducts background checks of cannabis business employees and issues identification badges to cannabis employees. The background checks and badges are billed directly to the cannabis businesses.

DISCUSSION:

On March 10, 2022, the City of Hesperia, California issued an RFP for Cannabis Audit Services and received four proposals. Three City of Hesperia staff members evaluated and ranked the proposals based on qualifications, experience, and approach to the scope of work. Based on the cumulative scores from the panel; HdL was the top-rated consultant.

On July 1, 2022, the City of Hesperia entered into an Agreement with HdL for a three-year (3) Agreement with one (1) one-year extension option for a total of four (4) years. The initial term of the Agreement is effective July 1, 2022, through June 30, 2025.

The term of the current Agreement between the City of Modesto and HdL is due to expire on July 8, 2023. HdL has effectively met the City’s cannabis consulting needs by providing consistent and satisfactory service. To continue receiving the various services currently being provided by HdL, the City will ‘piggy-back’ off the City of Hesperia’s competitive bid process and “access the terms” of the Agreement between the City of Hesperia and HdL. HdL will continue to conduct Annual Cannabis Financial Audits, Annual Compliance Inspections, and provide subject matter expertise consulting at the rates listed on Exhibit B. Optional services such as Non-competitive Application Review Process and Competitive Application Review (Application and Interviews), will be billed at the consultant staff’s hourly rate listed on Exhibit B Page 2 and performed upon mutual agreement by both parties. Background checks and badges for cannabis owners, managers, and employees will continue to be provided by HdL and paid by the cannabis business.

Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204(d) “where the Purchasing Manager, in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality.” In addition, MMC 8-3.202(d) encourages the Purchasing Manager to utilize the ‘piggybacking’ from a competitive bid process with City of DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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City Council, June 13, 2023
Hinderliter, de Llamas & Associates (HdL) Agreement

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Hesperia when the best cost savings interest of the City would be served. Here, this exemption is satisfied because Hinderliter, de Llamas (HdL) Associates, has continually met the City’s cannabis consulting needs.

FISCAL IMPACT:

The charges related to the annual financial audits, the annual inspection to ensure compliance, and other consulting fees directly related to the permitted businesses are reimbursed by the annual permit fee charged and paid by the permitted cannabis businesses. Any other consulting provided by HdL not directly related to the permitted businesses would be funded by the General Fund.

Financial audit reviews are typically completed on businesses with twelve (12) months of tax reporting data. During the first four years of the contract, only six (6) of the fifteen (15) retail and non-retail businesses currently permitted had commenced business and had twelve (12) months of tax reporting data. The City anticipates a majority of the fifteen (15) currently permitted retail and non-retail businesses will be eligible for inspections and financial audits within the next three (3) years, thus increasing the cost of the annual agreement.

In addition, HdL has conducted an internal review of staff time and costs associated with cannabis audits and compliance services. Their findings indicate their initial estimates were understated and must be adjusted to ensure time and cost recovery for the services they provide. These new rates allow HdL to continue to provide high-quality audit and compliance services, including the any necessary consulting such as that provided for the cannabis equity program.

Below is a five (5) year history of the spending activity under the current Agreement.

Fiscal Year
(FY)
FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
YTD*
Expenditures $80,275 $35,650 $49,525 $45,300 $48,579
*Through 1/31/22.

Below are the three (3) year estimate costs.

Year 1 Year 2 Year 3 Total
$211,600 $261,350 $311,100 $784,050
COMMITTEE RECOMMENDATION:

This item was considered by the Finance Committee on May 22, 2023, and recommended forwarding to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving an Agreement with Hinderliter, de Llamas & Associates, Brea, CA by utilizing the City of Hesperia Agreement for Cannabis Consulting Services for a two (2) year Agreement with one (1) one-year extension option, for an annual estimated amount of $261,350 and a total amount not to exceed $784,050 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.

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Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Standard Agreement - HdL

3. City of Hesperia Agreement

4. Exhibit A – Scope of Work

5. Exhibit B – Pricing Schedule
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1. SCOPE OF WORK
Education, Subject Matter Expertise and Technical Support:

HdL will provide general consulting in the form of technical assistance and subject matter expertise on an as-needed basis throughout the term of the agreement. Such assistance may be used best practices for the City and permittees to ensure proper oversight and compliance with all regulatory and financial reporting requirements. Such hours may also be used to provide 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.

HdL shall initially provide 2 hours of such general consulting assistance as a part of this proposal, with additional assistance to be provided on an hourly basis as needed or requested by the City.

Conduct Compliance Inspections
HdL will conduct one (1) on-site compliance inspection 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 these services includes all of the following:
 Notifying permittee of pending inspection
 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
o Video surveillance
o Product safety
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 DocuSign Envelope ID: 002199B9-9C18-4157-BAD1-0C427AEEF596 #13..
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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
 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.

Conduct Financial 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 toproduce 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 notification letter be sent by the City to communicate HdL’s authority to conduct the audit and to encourage cooperation by the business.

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 merchant statements
o Sales receipts
o Other financial documents as available
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 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, CDFA or other agencies, where available. Where cannabis cultivation is taxed at a percentage tax of gross receipts, the audit shall include the applicable review listed under ‘The Full Annual Audit Shall Include’ section.

HdL will provide a draft audit report to the commercial cannabis business. The business willbe 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. This may be increased up to a maximum of 24 months, in accordance with the statute of limitations for tax audits. This cost also assumes reasonable cooperation from the licensee. Non-cooperation by thelicensee 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.

Tax Analytical Remittance Reports (TARR) Summary (Optional) HdL has developed a quarterly revenue monitoring system that provides a risk-based assessment of each cannabis business to identify outliers or possible errors that may warrant further investigation. Our proprietary Tax Analytical Remittance Report (TARR) uses specially designed algorithms to analyze confidential data from each cannabis business and make recommendations to the City to address tax/fee liability deficiencies or other financial compliance issues.

Our TARR process gathers operator data from a variety of sources and compares the revenue and volume of sales to the amounts reported to the City. Our analysis identifies any variances between amounts reported to the City and amounts reported elsewhere and provides a report to the City highlighting any high-risk businesses and making recommendations for performing a full revenue audit where indicated.

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HdL shall begin the process by collecting data from the following sources:
 METRC or other inventory track-and-trace program
 Business point-of-sale (POS) systems
 Questionnaire to be completed by each business
 Cannabis Business Tax Returns
 CDTFA1 excise and cultivation tax returns
 Other data sources or reports as requested or required by the City HdL’s TARR system will cross-analyze data from these various sources and identify any internal inconsistencies or errors. Our system also utilizes our proprietary CATSTM software to generate estimates for average wholesale price, projected harvest yield and value, and projected sales for each business for the time period reviewed. Our system identifies any outliers, where data provided by a business falls outside the normal range for similar businesses. Variances of greater than 10% (or as determined in consultation with the City) shall trigger further investigation.

Specific reports to be generated by our TARR program may include any or all of the following:

Sales Reported in METRC vs. Sales Reported to the City
 METRC vs. City Cannabis Business Tax Returns
 Over or Under-Reported Revenues
Projected Sales vs. Sales Reported in METRC
 Projected Sales vs. Actual Sales Reported in METRC
 Variance Between Projected Sales and Actual Sales
Sales Analysis
 Pounds Sold per METRC vs. Pounds Reported on CDTFA Tax Returns  Total Sales vs. Canopy Used (Cultivation)
Wholesale Price Analysis
 Average Sales Price by Operator by Quarter
Harvest Analysis (Cultivation)
 Projected vs. Actual Pounds Harvested
 Projected vs. Actual Pounds Harvested by Operator
 Variance Between Projected and Actual Pounds Harvested  Pounds Harvested per Square Foot by Operator
 Pounds Harvested per Square Foot by License Type
 Pounds Harvested per Harvest Cycle by Operator
 Pounds Harvested per Harvest Cycle by License Type
Canopy Usage Analysis (Cultivation)
 Canopy Used vs. Canopy Allowed per License
 Total Canopy Used vs. Total Pounds Harvested
1 California Department of Tax and Fee Administration
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Destroyed/Waste Product Analysis
 Harvest Destroyed or Waste
Sales Trends
 Quarter Over Quarter Change
 Quarterly Sales by Operator
 Quarterly Sales by License Type
 Total Sales by Operator
HdL can also create additional reports upon request by the City. Reports can also be provided in a non-confidential format utilizing information gathered from cannabis businesses throughout the state, region and City to create regional or statewide comparisons. HdL will continue to modify and develop our TARR program as new data sources become available or to address changes in the cannabis industry. HdL will work with the City to determine the best suite of reports to be provided based on the number and type of cannabis businesses within the City.

Additional Optional Services
Any services in addition to those identified in this exhibit (Exhibit A) or Exhibit B may only be performed upon mutual agreement of both parties.

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2. EXPERIENCE
Company Profile
Founded in 1983, HdL is a consortium of three companies established to maximize local government revenues by providing audit, compliance, economic development, consulting services and software products. Our audit and consulting services include sales, use and transaction taxes, property taxes, transient occupancy taxes, and a Cannabis Management Program. The firm also provides a variety of enterprise software processing tools for business licensing, code enforcement, animal control, building permits and tracking/billing of false alarms.

HdL’s systematic and coordinated approach to revenue management and economic data analysis is currently being utilized by over 600 agencies in six states. The firm currently serves 49 counties, 311 cities and 132 transactions tax districts in California.

HdL’s key staff has extensive experience serving local government and many have previously held positions in city management, finance, planning, economic development or revenue collection. HdL is a Corporate Partner of the League of California Cities and California State Association of Counties and works extensively with the County Auditor’s Association of California, California Society of Municipal Finance Officers (CSMFO) and California Municipal Revenue and Tax Association (CMRTA) on anticipation and planning of programs to strengthen local government revenues.

This close understanding of local government needs coupled with extensive databases and advanced methodology provides for the most relevant, productive and responsive revenue recovery; forecasting; and economic services available.

Our team of professionals has over 80 years of direct experience establishing and implementing cannabis regulatory and taxation programs, including establishing land-use regulations, permit processes, staffing plans, and cost recovery fees; structuring cannabis business tax fees; regulatory compliance; financial audits; and law enforcement training. Our team has conducted over 11,000 cannabis compliance inspections and investigations in California, Colorado and Nevada.

Key Personnel
Ajay Kolluri; Director of Cannabis Services
Ajay Kolluri is the Director of Cannabis Services for HdL. Ajay is responsible for overseeing the cannabis team and the daily operations of HdL’s Cannabis Division.

Ajay previously served as Manager for the Office of Cannabis Oversight (OCO) at City of Long Beach. Working within the City Manager’s Office, Ajay was responsible for the licensing, regulation and enforcement of all commercial cannabis activity in the City, encompassing one of the largest legal cannabis markets in the state.

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During his tenure with the OCO, Ajay oversaw the issuance over 200 cannabis business licenses, generating over $10 million in annual revenue for the City. Ajay has experience in all aspects of cannabis oversight, including public health and education, planning and zoning, building inspections, enforcement, fee development, economic analysis and revenue projections.

Prior to overseeing the OCO, Ajay worked in public finance, serving as Budget Analyst for the Department of Financial Management in the City of Long Beach. Ajay holds a Bachelor’s degree in business economics from the University of California, Santa Barbara, and a Master’s degree in public policy from the University of Michigan.

Matt Eaton; Deputy Compliance Director
Matt Eaton is the Deputy Compliance Director at HdL and plays a critical role in implementing the Cannabis Compliance Program for local agencies. Prior to joining the firm, he was a progressive law enforcement professional with 30 years’ experience conducting criminal/regulatory investigations, and corporate/individual background investigations.

While working as a Supervisory Investigator at the Colorado Department of Revenue in the Marijuana Enforcement Division (MED), Matt managed criminal investigators and civilian staff in the Denver Metro and Longmont field offices. During his six-year tenure at the MED, he conducted approximately 10,000 criminal investigations and compliance reviews, including regulatory and financial investigations. He is a subject matter expert on track and trace systems and understands the complexity of reviewing data to ensure businesses are in compliance with state and local regulations. Matt was responsible for planning, developing and implementing report and field inspection protocols for the agency. He also played an instrumental role in recommending changes to current regulations and identifying essential language for new legislation in Colorado. Matt is well known for his ability to maintain working relationships with cannabis industry leaders and external stakeholders in resolving issues.

Matt received his Bachelor of Science Degree from Biola University and maintained Police Officer Service Training (POST) certification for over 30 years in California and Colorado. He has also served as an adjunct instructor teaching law enforcement principle related to criminology, correctional processes, procedural law, interviews, interrogations and criminal evidence at AIMS Community College in Greeley, Colorado.

Mark Lovelace; Senior Policy Advisor
Mark Lovelace has 23 years of broad experience in public policy, community engagement and advocacy and is recognized as a leader in advancing the statewide discussion of medical and recreational cannabis as a legitimate policy issue in California. Mark served on the Humboldt County Board of Supervisors from 2009 through 2016 where he was instrumental in developing a comprehensive approach to regulating cannabis, including a voter-approved tax on commercial cultivation and an innovative track and trace pilot program. Mark established and co-chaired the Cannabis Working Group for the California State Association of Counties (CSAC) and helped draft CSAC’s cannabis legislative platform.

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Mark has worked extensively with public agencies and statewide organizations on cannabis issues and has led numerous presentations, workshops and panel discussions. Prior to his time on the Board, he worked for many years as a respected advocate on land use, planning, development, resource management and environmental issues. Mark received his Bachelor of Science degree in Industrial Design from San Jose State University.

David Ross; Senior Compliance Inspector
David Ross is a Certified Fraud Examiner with 7 years of experience conducting gaming and non-gaming audits and investigations of tribal gaming facilities. David’s experience includes conducting forensic accounting investigations into cash larceny, expense reimbursement fraud, check fraud, credit card fraud, payroll fraud, wire fraud, insider trading, construction fraud in addition to litigation support.

David previously worked as Surveillance Officer and Internal Auditor for the Shingle Springs Tribal Gaming Commission, where he was responsible for analyzing financial statements for a facility with revenues exceeding $20 million per month. David also analyzed internal controls and established policies and procedures to ensure compliance with federal, state and local regulations. In addition, David conducted surveillance reviews and investigations into criminal activity including check and credit card fraud, skimming, money laundering, drug activity and other violations.

David holds a Bachelor’s Degree in Business Administration from Vanguard University in Costa Mesa and a Master’s Degree in Finance from California State University San Bernardino. He is a member of the Association of Certified Fraud Examiners.

Michelle Shaw; Compliance Inspector
Michelle conducts onsite inspections, examinations and other actions to monitor compliance with established standards for local licensed cannabis businesses. Prior to joining HdL, she was a Compliance Specialist Officer at a large, multinational bank where she managed, validated and oversaw the effectiveness and accuracy of numerous compliance issues within the consumer retail space. Throughout her eight years of experience at the bank, she performed assessments of affiliate businesses to determine compliance/non-compliance of their processes and procedures pursuant to bank standards and state regulations.

A graduate of Cypress College, Michelle holds a Foundations of Banking Risk certificate from the Global Association of Risk Professionals and a paralegal certificate from the Southern California College of Business and Law.

Teresa Schneider; Compliance Inspector
Teresa Schneider served for 28 years with the Montclair Police Department, including 12 years in the Background Investigations Unit. In this capacity, Teresa was responsible for conducting background investigations of all City business license applicants, as well as all sworn and non-sworn positions within the police and fire departments and of civilians requesting access to police department records.

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Theresa previously served 4 years in the U.S. Army’s nursing program at Fort Campbell, Kentucky. During this time she attended college at the University of Kentucky and Austin Peay State University. After receiving an Honorable Discharge in 1990, Teresa was hired by the Montclair Police Department. During her 28-year career, she worked numerous assignments, including patrol, K9, detective bureau, court liaison, volunteer coordinator, and red-light automated enforcement. Teresa received many awards throughout her career, including Officer of the Year.

Elizabeth Eumurian; Audit Manager
Elizabeth Eumurian is the Audit Manager for HdL. Her primary role is to oversee and review the audits conducted by team members to assure accuracy and consistency. She also conducts financial audits, evaluates cannabis applications and conducts background checks.

As part of the audit program, she will be conducting and preparing analytical information through the CATS™ program to prepare Tax Analytical Remittance Reports (TARR) summaries to evaluate under reporting or anomalies in the remittance of tax payments to local jurisdictions.

Elizabeth previously worked as a senior auditor in the entertainment industry. In this role, she executed testing procedures for targeted audit programs, analyzed findings and prepared audit and compliance reports. She also has experience working for a large financial institution analyzing data for reporting anomalies and performing internal audits. Elizabeth has recently done work for Blythe, California City, Coachella, Cotati, Desert Hot Springs, Long Beach, Mammoth Lakes, Moreno Valley, Perris, San Bernardino, and Vallejo.

Elizabeth earned her Bachelor of Arts degree in History from California State University and holds a certificate in CannaBusiness from Oaksterdam University.

Valerie Carter; Senior Auditor
Valerie Carter works as an Auditor for HdL’s Cannabis Management Team. Valerie has over 5 years of public sector work experience focusing on public policy, auditing and revenue tax implementation. She was a Tax Auditor II for the City of Oakland’s Revenue Management Bureau and an Assistant Management Analyst for the City of Berkeley’s Transportation division. Valerie earned a Bachelor’s Degree in Business Administration from Cal Poly Pomona, with an emphasis on Finance, Real Estate, and Law.

Pam Davis; Auditor
Pam Davis conducts revenue audits of licensed cannabis businesses as a member of HdL’s Cannabis Management Team. Prior to joining HdL, Pam served as the Director for the Richland County (South Carolina) Business Service Center for over 15 years, where she was responsible for auditing businesses to ensure accurate reporting and remittance of a variety of local taxes. Pam also conducted research and rate impact analyses and developed policies, procedures and user manuals to ensure business and governmental compliance.

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Pam received a Master’s of Public Administration degree from the University of Georgia and a Bachelor’s Degree in Political Science from Clemson University. She also holds a certificate in CannaBusiness from Oaksterdam University as well as numerous other certifications, Odette Mikhail; Auditor
Odette Mikhail conducts cannabis revenue audits at HdL. Odette previously worked as a senior auditor at public accounting firms. In this role, she executed testing procedures for audit and review engagements, identified accounting issues, reviewed internal controls, and prepared financial reports and statements. Odette earned her Bachelor of Science degree in Accounting and Business Administration from Ain Shams University in Cairo, Egypt.

Tao Lu; Auditor
Tao Lu works as an Auditor for HdL’s Cannabis Management Team. Tao has two and a half years’ experience as an accountant with an emphasis in information technology and food manufacturing industries. He also has public audit work experience at RSM China. Tao was born and raised in China. He earned a Bachelor’s Degree in Accounting and Finance from Syracuse University in New York before relocating to Southern California with his family.

Eric Magana; Auditor
Eric Magana works as an Auditor for HdL’s Cannabis Management Team, conducting revenue audits of licensed cannabis businesses to ensure they are accurately reporting their revenues and remitting the proper amount of fees or taxes. Prior to joining HdL, Eric worked as a Loan Specialist for the U.S. Small Business Administration, where he processed over 5,000 business loans and grant applications. Eric holds a Bachelor’s Degree in Economics and Administrative Studies from University of California at Riverside.

Tonson Chieng; Audit Analyst
Tonson Chieng is an Auditor for HdL’s Cannabis Management Team, conducting revenue audits of licensed cannabis businesses to ensure they are accurately reporting their revenues and remitting the proper amount of fees or taxes. Tonson previously worked as an accountant for Release Point, a business services company in Claremont, California, where he was responsible for generating and reviewing financial reports for in depth analysis along with other accounting and bookkeeping functions. Tonson also brings experience as a staff accountant for the CPA firm of MMB & Co.

Tonson received a Bachelor of Science degree in Accounting from California Polytechnic State University at Pomona in 2020.

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Jennifer Erwin; Audit Analyst
Jennifer Erwin is an Audit Analyst for HdL’s Cannabis Management Team. Jennifer conducts revenue audits of licensed cannabis businesses to ensure they are reporting and remitting the proper amount of cannabis tax revenue to their host jurisdiction. Jennifer previously served as Finance Director for the City of Perris, California and as Assistant Controller for the Morongo Band of Mission Indians. Jennifer brings extensive experience with complex financial analyses, fee studies, cost accounting procedures and collections.

Jennifer is a Certified Public Accountant (CPA #108992) and received her Bachelor of Science degree in Business Administration from the University of Phoenix.

Dante Chegini; Audit Analyst
Dante Chegini conducts revenue audits as a member of HdL’s Cannabis Management Team to ensure that licensed cannabis businesses are reporting and remitting the proper amount of cannabis taxes to their host jurisdiction. Dante previously worked as a financial analyst at a public finance investment banking firm in Los Angeles, where he was lead analyst on over 30 deals with a total value exceeding $1 billion. Dante brings experience with organizing and analyzing large volumes of financial data to determine accurate revenues and debts.

Dante received a Bachelor of Science degree in Business Administration from the University of Southern California, Marshall School of Business in May of 2022 with a focus on financial and managerial accounting and business finance.

Kristi Lervold; Administrative Assistant
Kristi is the Administrative Assistant for HdL’s cannabis team. In this role she supports individual team members, coordinates internal processes, and assists with client requests, contracts, billing reconciliation and invoicing. Kristi’s 18-year career includes ten years as the administrative assistant to HdL’s CFO, handling various operational responsibilities and supporting financial functions, as well as experience in the occupational health industry, facilitating services for federal, state, and local government clients. Kristi holds a Bachelor’s of Science degree in Business Management with a minor in Business Administration.

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Exhibit B Page 1 of 2
Exhibit B - City of Modesto Fee Schedule
The Consultant's fees shown here 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 do they include any assistance with the appeal of any enforcement action by the City. Any costs associated with such additional services would be billed at Consultant's hourly rate for the assigned staff person.

Scope of Services Cost
Education, Subject Matter Expertise, and Technical Support - 2 hours included at a reduced rate of 50% for each business subject to both audits and compliance inspections in each year of the contract. Any additional hours shall be billed at Consultant's standard hourly rate for the assigned staff person.1See Rate Chart Conduct Compliance Inspections $2,000 per inspection
Conduct Financial Audits $10,000 per audit
Tax Analytical Remittance Reports (TARR) Summary (Optional) $2,500 per business per year Travel (if and as needed for meeting attendance) $400 per day Optional Additional Services: Billed at hourly rate*
*For hourly rate, see Hourly Rate for Consultant’s Staff chart below.

1 The total number of hours at this discounted rate shall not exceed 24 hours for any one year.

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Exhibit B Page 2 of 2
Hourly Rate for Consultant's Staff
The prices are based on the hourly rates for Consultant's staff as shown in the chart below. Any additional services requested by the City that are not specifically described in this proposal would be billed at the standard rate for the assigned staff person.

Staff Person Title
Hourly
Rate
Matt Eaton Deputy Compliance Director $250
Ajay Kolluri Director $250
Mark Lovelace Senior Policy Advisor $250
Elizabeth Eumurian Audit Manager $195
Odette Mikhail Auditor $195
Tao Lu Auditor $195
Valerie Carter Auditor $195
Pamela Davis Auditor $195
Eric Magana Auditor $195
Dante Chegini Audit Analyst $195
Tonson Chieng Audit Analyst $195
Jennifer Irwin Audit Analyst $195
Michelle Shaw Compliance Inspector $195
Teresa Schneider Compliance Inspector $195
Cheryl Lee Business Application Reviewer $195
Jeff Burris Business Application Reviewer $195
Kristi Lervold Administrative Assistant $120
All Cannabis business information will be kept confidential by Consultant and will not be shared internally beyond those Consultant employees who are required to have access for purposes of conducting the work contemplated herein, or for administrative purposes as necessary.

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THIS LICENSE SHALL NOT ENTITLE LICENSEE TO OPERATE THIS BUSINESS

WITHOUT COMPLYING WITH ALL REQUIREMENTS OF THE MODESTO MUNICIPAL CODE AND ALL STATE, FEDERAL, LOCAL AND ANY OTHER APPLICABLE LAWS.

IT HAS BEEN ISSUED WITHOUT VERIFICATION THAT THE LICENSEE IS SUBJECT TO OR EXEMPT FROM LICENSING BY THE STATE OF CALIFORNIA.

City of Modesto
P.O Box 3442
Modesto, CA 95353
Business License Certificate

DIRECTOR OF FINANCE
DeAnna Christensen

THIS LICENSE IS EVIDENCE THAT THE FEES REQUIRED UNDER TITLE VI OF

THE MUNICIPAL CODE HAVE BEEN PAID TO THE CITY OF MODESTO FOR THE

CONDUCT AND OPERATION OF THE BUSINESS AT THE PREMISES, AND BY THE PERSON OR FIRM INDICATED BELOW.
* MUST BE DISPLAYED IN PUBLIC VIEW

INFORMATIONAL

NON-TRANSFERABLE - VOID IF ALTERED
Account Number 1297848 Expiration Date 12/31/2023

MATTHEW KINGSTON

HINDERLITER DE LLAMAS ASSOCIATES/HD
120 S STATE COLLEGE BLVD # 200
BREA, CA 92821-5807
Business Type
Business Location
Owner(s)
* NOT AN ENDORSEMENT BY THE CITY

CONSULTING

HINDERLITER DE LLAMAS & ASSOCIATES/HDL
* VOID IF TAX PAYMENTS NOT KEPT CURRENT
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

September 24, 2024
Date: August 30, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Christina Alger, Director of Human Resources
SUBJECT: First Amendments for Executive Level Recruitment Services CONTACT: Christina Alger, Director of Human Resources
[email protected], 209-571-5126
DESCRIPTION:

Consider approving the First Amendments with Ralph Andersen & Associates, Rocklin, CA; CPS HR Consulting, Inc. Sacramento, CA; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA; Koff and Associates, a Gallagher Company, Berkeley, CA; and Neher and Associates, Sacramento, CA for Executive Level Recruitment Services to increase the amount by $207,000 for all five Agreements and the new total amount not to exceed $550,000. (Funding Source: Various Funds)
STRATEGIC PLAN ELEMENT:

This item supports the 2020-2025 Strategic Plan’s Quality of Life Goals and Strategies— Improve Community Safety and Invest in Beautification Efforts and the 2020-2025 Strategic Plan’s Service and Delivery Goals & Strategies – Promote Trust and Engagement and Build a High-Performance Organization.

BACKGROUND:

Local governments across the state, including the City of Modesto, are experiencing persistent challenges attracting and retaining talent in managerial and leadership roles. Consequently, the City is confronted with operating without key leadership for intermittent periods while the recruitment and selection process occurs.

Talent for these positions is highly sought after as most local governments compete for the same highly qualified candidates. This results in a highly competitive, time-consuming and difficult recruitment process. While the City’s Human Resources Department supports and maintains most all recruitment needs, it is necessary to utilize the services of professional recruitment firms for high level searches.

On September 12, 2023, by Resolution 2023-407, Council approved Professional Services Agreements with Ralph Andersen & Associates, Rocklin, CA in the amount of $150,000; CPS #14..
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City Council Agenda Report, September 24, 2024
First Amendments for Executive Level Recruitment Services

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Executive Recruitment Firm
Original Agreement
Amount
Fiscal Year
2023/2024 Spend
Estimated Fiscal
Year 2024/2025
Total
Ralph Andersen & Associates $ 150,000.00 $ 150,000.00 $ 114,000.00 $ 264,000.00 CPS-HR Consulting $ 54,000.00 $ 54,000.00 $ 27,000.00 $ 81,000.00 GVP Ventures, dba Bob Murray &
Associates
$ 53,000.00 $ 53,000.00 $ 26,000.00 $ 79,000.00
Koff- Gallagher $ 50,000.00 $ 50,000.00 $ 25,000.00 $ 75,000.00 Neher & Associates $ 36,000.00 $ 36,000.00 $ 15,000.00 $ 51,000.00 $ 343,000.00 $ 207,000.00 $ 550,000.00
HR Consulting, Inc., Sacramento, CA in the amount of $54,000; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA in the amount of $53,000; Koff and Associates, a Gallagher Company, Berkeley, CA in the amount of $50,000; and Neher and Associates, Sacramento, CA in the amount of $36,000, unless additional remuneration is otherwise approved by the City Manager or his designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed $343,000 over five years.

DISCUSSION:

The City has determined that the existing agreements for Executive Level Recruitment Services should be amended to increase the amounts for all five agreements by $207,000 in order to allow flexibility in choice of firm, should services be needed prior to the next full RFP. In addition, this amount captures expenditures in the amount of $19,802.48 that were necessary to complete recruitments critical to City business. It is not anticipated that the full amendment will be utilized.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204 (f) “Where the Purchasing Manager, in his or her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, in order to increase efficiency and avoid delays or disruptions to City projects or services. Due to several Executive Level vacancies in 2023-2024, the City exceeded the established budget for these vendors. Consequently, the City has decided to increase the amounts for all agreements to cover outstanding payments and add funding for Year Two.

FISCAL IMPACT:

For the current agreements, the City has expended over $343,000 in Fiscal Year 2023-2024.

Below is a table summarizing the spending activity for Fiscal Years 2023-2024 and the estimated spending activity for Fiscal Year 2024-2025 in which time the HR Department will conduct another RFP for Executive Level Recruitment Service Firms for Fiscal Years 2025-2026 through 2025-2030.

The new not-to-exceed amount for these agreements is $550,000 for all services for the full term of the agreements. The City does not anticipate it will use the total increased amount of $207,000. However, the increase will allow the City to select a recruiter at will when an Executive Level Recruitment occurs while also giving the City time to complete a new Request for Qualifications.
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City Council Agenda Report, September 24, 2024
First Amendments for Executive Level Recruitment Services

Page 3 of 3 ends

COMMITTEE RECOMMENDATION:

This item was presented to the Finance Committee on August 26, 2024, and was recommended to be forwarded to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the First Amendments with Ralph Andersen & Associates, Rocklin, CA; CPS HR Consulting, Inc. Sacramento, CA; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA; Koff and Associates, a Gallagher Company, Berkeley, CA; and Neher and Associates, Sacramento, CA for Executive Level Recruitment Services to increase the amount by $207,000 for all five Agreements and the new total amount not to exceed $550,000 and authorizing the City Manager or their designee to execute the Amendments.

Christina Alger, Director of Human Resources
Joseph P. Lopez, City Manager
Attachments:

1. Resolution-First Amendments to Agreements for Executive Level Recruitment Services

2. First Amendments to Agreements for Executive Level Recruitment Services (5)

3. Original Executive Level Recruitment Services Signed Agreements (5)

4. Resolution 2023-407 Adopting the 2023 Executive Level Recruitment Services Pool #14..
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09/24/2024/HR/CAlger/Item XXX 1 2024-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2024-XX

RESOLUTION APPROVING THE FIRST AMENDMENTS WITH RALPH
ANDERSEN & ASSOCIATES, ROCKLIN, CA; CPS HR CONSULTING, INC., SACRAMENTO, CA; GVP VENTURES, INC. DBA BOB MURRAY AND
ASSOCIATES, ROSEVILLE, CA; KOFF AND ASSOCIATES, A GALLAGHER COMPANY, BERKELEY, CA; AND NEHER AND ASSOCICATES,

SACRAMENTO, CA FOR EXECUTIVE LEVEL RECRUITMENT SERVICES TO INCREASE THE AMOUNT BY $207,000 FOR ALL FIVE AGREEMENTS AND THE NEW TOTAL AMOUNT NOT TO EXCEED $550,000 AND

AUTHORIZING THE CITY MANAGER OR THEIR DESIGNEE TO EXECUTE

THE AMENDMENTS
WHEREAS, on August 12, 2023 by Resolution 2023-407, the Council approved Professional Services Agreements with Ralph Andersen & Associates, Rocklin, CA in the amount of $150,000; CPS HR Consulting, Inc., Sacramento, CA in the amount of $54,000; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA in the amount of $53,000; Koff and Associates, a Gallagher Company, Berkeley, CA in the amount of $50,000; and Neher and Associates, Sacramento, CA in the amount of $36,000, unless additional remuneration is otherwise approved by the City Manager or his designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed $343,000 over five years for Executive Level Recruitment Services; and
WHEREAS, the City experienced multiple Executive Level vacancies in various City Departments in 2023-2024 and the City has spent over the not-to-exceed amount of $350,000 in just one year. There are currently two invoices totaling $19,802.48 that are still outstanding; and
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09/24/2024/HR/CAlger/Item XXX 2 2024-XXX
WHEREAS, the City has determined that the existing agreements for Executive Level Recruitment Services should be amended to increase the amounts for all five agreements in order to allow flexibility in choice of firm, should services be needed prior to the next full RFP. However, it is not anticipated that the full amendment will be utilized; and
WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204 (f) “Where the Purchasing Manager, in his or her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, in order to increase efficiency and avoid delays or disruptions to City projects or services; and
WHEREAS, the new not-to-exceed amount for these agreements is $550,000 for all Executive Level Recruitment Services for the full term of the agreements by increasing all five agreements by $207,000; and
WHEREAS, the City has drafted First Amendments Professional Services Agreements with Ralph Andersen & Associates, Rocklin, CA in the amount of $114,000; CPS HR Consulting, Inc., Sacramento, CA in the amount of $27,000; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA in the amount of $26,000; Koff and Associates, a Gallagher Company, Berkeley, CA in the amount of $25,000; and Neher and Associates, Sacramento, CA in the amount of $15,000 with a new not-to-exceed #14..
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09/24/2024/HR/CAlger/Item XXX 3 2024-XXX
amount for these agreements is $550,000 for all services for the full term of the agreements; and
WHEREAS, the City does not anticipate it will use the total increased amount of $207,000. However, the increase will allow the City to select a recruiter at will when an Executive Level Recruitment occurs while also giving the City time to complete a new Request for Qualifications.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the First Amendments with Ralph Andersen & Associates, Rocklin, CA; CPS HR Consulting, Inc. Sacramento, CA; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA; Koff and Associates, a Gallagher Company, Berkeley, CA; and Neher and Associates, Sacramento, CA for Executive Level Recruitment Services to increase the amount by $207,000 for all five Agreements and the new total amount not to exceed $550,000.

BE IT FURTHER RESOLVED, that the City Manager or his designee, are hereby authorized to execute the Amendments, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of September, 2024, by Councilmember XXX, who moved its adoption, which motion being duly seconded by Councilmember XXX, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: XXX
NOES: Councilmembers: XXX
ABSENT: Councilmembers: XXX
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09/24/2024/HR/CAlger/Item XXX 4 2024-XXX
ATTEST: _____________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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FIRST AMENDMENT TO

AGREEMENT FOR SERVICES

WITH CONSULTANT
This First Amendment (“Amendment”) is made to the Agreement entered into between the CITY OF MODESTO, a municipal corporation of the State of California (hereinafter the “City”) and GVP Ventures, Inc. dba BOB MURRAY & ASSOCIATES, California Corporation hereinafter referred to as the “Consultant.” entered into by the parties on _____________ _ day of _____________________, 2024, (the “Agreement”), hereinafter referred to as “Original Agreement.”
This First Amendment is made with regard to the following recitals:

WHEREAS, On September 12, 2023, the City and Consultant entered into a Standard Agreement for Consultant Services (“Original Agreement”) for recruitment services for various executive level positions for all departments on an as needed basis for a term of two years with the option to extend on an annual basis for up to three (3) additional years at the sole discretion of the City, unless terminated earlier in accordance with the provisions of the termination clause of the Agreement.

WHEREAS, City and Consultant desire to amend Section 3, COMPENSATION, of the Original Agreement.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. Section 3, Paragraph 1, COMPENSATION of the Original Agreement is deleted in its entirety and replaced with: Consultant agrees to accept an amount not to exceed SEVENTY-NINE THOUSAND DOLLARS ($79,000) as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit “A” and for performance by Consultant of all #14..
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of its duties and obligations under the term of this Agreement unless additional remuneration is otherwise approved by the City Manager or designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed the total amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) for the term of this Agreement.

2. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect.

FIRST AMENDMENT TO

STANDARD AGREEMENT FOR

CONSULTANT SERVICES
This First Amendment, made and entered into in the City of Modesto, State of California, this ________ day of ___________, 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and KOFF AND ASSOCIATES, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC., a Delaware Corporation, hereinafter referred to as "Consultant".

This First Amendment is made with regard to the following recitals:

WHEREAS, City and Consultant desire to amend Section 3, COMPENSATION, of the Original Agreement.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. Section 3, Paragraph 1, COMPENSATION of the Original Agreement is deleted in its entirety and replaced with: Consultant agrees to accept an amount not to exceed SEVENTY FIVE – THOUSAND DOLLARS ($75,000) as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit “A” and for performance by Consultant of all of its duties and obligations under the term of this Agreement unless #14..
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additional remuneration is otherwise approved by the City Manager or designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed the total amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) for the term of this Agreement.

2. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect.

FIRST AMENDMENT TO

STANDARD AGREEMENT FOR

CONSULTANT SERVICES
THIS FIRST AMENDMENT, made and entered into in the City of Modesto, State of California, this _ __ day of ____________________, 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and CPS HR CONSULTING , a California Joint Powers Authority, hereinafter referred to as "Consultant".

This First Amendment is made with regard to the following recitals:

WHEREAS, City and Consultant desire to amend Section 3, COMPENSATION, of the Original Agreement.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. Section 3, Paragraph 1, COMPENSATION of the Original Agreement is deleted in its entirety and replaced with: Consultant agrees to accept an amount not to exceed EIGHTY-ONE THOUSAND DOLLARS ($81,000) as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit “A” and for performance by Consultant of all of its duties and obligations under the term of this Agreement unless #14..
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additional remuneration is otherwise approved by the City Manager or designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed the total amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) for the term of this Agreement.

2. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect.

FIRST AMENDMENT TO

STANDARD AGREEMENT FOR

CONSULTANT SERVICES
THIS FIRST AMENDMENT, made and entered into in the City of Modesto, State of California, this ________ day of ____________, 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and NEHER & ASSOCIATES, a Limited Liability Company, hereinafter referred to as "Consultant".

This First Amendment is made with regard to the following recitals:

A. On September 12, 2023, the City and Consultant entered into a Standard Agreement for Consultant Services (“Original Agreement”) for recruitment services for various executive level positions for all departments on an as needed basis for a term of two years with the option to extend on an annual basis for up to three (3) additional years at the sole discretion of the City, unless terminated earlier in accordance with the provisions of the termination clause of the Agreement.

WHEREAS, City and Consultant desire to amend Section 3, COMPENSATION, of the Original Agreement.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. Section 3, Paragraph 1, COMPENSATION of the Original Agreement is deleted in its entirety and replaced with: Consultant agrees to accept an amount not to exceed FIFTY-ONE THOUSAND DOLLARS ($51,000) as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit “A” and for performance by Consultant of all of its duties and obligations under the term of this Agreement unless #14..
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additional remuneration is otherwise approved by the City Manager or designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed the total amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) for the term of this Agreement.

2. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect.

FIRST AMENDMENT TO

STANDARD AGREEMENT FOR

CONSULTANT SERVICES
THIS FIRST AMENDMENT, made and entered into in the City of Modesto, State of California, this __ _ day of ______________, 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and RALPH ANDERSEN & ASSOCIATES, a California Limited Liability Company, hereinafter referred to as "Consultant".

This First Amendment is made with regard to the following recitals:

WHEREAS, City and Consultant desire to amend Section 3, COMPENSATION, of the Original Agreement.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. Section 3, Paragraph 1, COMPENSATION of the Original Agreement is deleted in its entirety and replaced with: Consultant agrees to accept an amount not to exceed TWO-HUNDRED AND SIXTY-FOUR THOUSAND DOLLARS ($264,000) as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit “A” and for performance by Consultant of all of its duties and obligations under the term #14..
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of this Agreement unless additional remuneration is otherwise approved by the City Manager or designee based on City recruitment needs so long as the total executive recruitment needs citywide does not exceed the total amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) for the term of this Agreement.

2. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attested by its City Clerk under authority of Resolution No. 2024-_______, adopted by the Council of the City of Modesto on the _____________ day of _____________________, 2024 and _____________________has caused this Agreement to be duly executed.
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09/12/2023/HR/Calger/Item 15 1 2023-407

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-407

RESOLUTION APPROVING AGREEMENTS WITH RALPH ANDERSEN &
ASSOCIATES, ROCKLIN, CA; CPS HR CONSULTING, INC. SACRAMENTO, CA; GVP VENTURES, INC. DBA BOB MURRAY AND ASSOCIATES,
ROSEVILLE, CA; KOFF AND ASSOCIATES, A GALLAGHER COMPANY, BERKELEY, CA; AND NEHER AND ASSOCIATES, SACRAMENTO, CA TO

CONDUCT CITYWIDE EXECUTIVE LEVEL RECRUITMENT SERVICES, ON AN AS NEEDED BASIS, FOR A TWO (2) YEAR AGREEMENT WITH THREE (3) ONE-YEAR EXTENSION OPTIONS, AT THE SOLE DISCRETION OF THE CITY, FOR AN ANNUAL ESTIMATED AVERAGE AMOUNT OF $81,366 IN AN AMOUNT NOT TO EXCEED $343,000 OVER FIVE YEARS FOR THE

COMBINED TOTAL OF ALL AGREEMENTS
WHEREAS, local governments across the state, including the City of Modesto, are experiencing persistent challenges attracting and retaining talent in managerial and leadership roles; and
WHEREAS, talent for these positions is highly sought after as most local governments compete for the same highly qualified candidates; and WHEREAS, this results in a highly competitive, time consuming and difficult recruitment process; and
WHEREAS, while the City’s Human Resources Department is able to keep up with most recruitment needs, it is necessary to utilize the services of professional recruitment firms for high level searches; and
WHEREAS, executive recruitment firms have the skill, ability and focus needed to conduct highly competitive, time consuming and difficult recruitments. These firms have wide networks of followers and an overall wide reach in the labor market. These qualifications enhance the City’s ability to attract and hire the right talent for key positions; and
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09/12/2023/HR/Calger/Item 15 2 2023-407
WHEREAS, in an effort to streamline the City’s time to hire and be more efficient in its hiring process, the Human Resources Department is seeking to establish a list of executive recruitment firms that can be used immediately; and WHEREAS, the City Manager authorized the Human Resources Department to issue a Request for Qualification (RFQ) for the furnishing of executive and high-level management recruitment services; and
WHEREAS, Human Resources sent the RFQ for Executive Recruitment Services to thirteen (13) prospective proposers; and
WHEREAS, following the request, five search firms presented proposals to conduct these recruitments. Five (5) companies provided responsive and responsible proposals; and
WHEREAS, in accordance with Modesto Municipal Code Sec. 8-3.204(a), Exceptions to Formal Bidding Requirements, the Agreement is for Professional Services and, therefore, exempt from the bidding requirement. The approval for the recruitment services to various recruitment firms conforms to Modesto Municipal Code 8-3.204, subsection (a) as they are providing Professional Services for executive recruitments, and WHEREAS, the award of proposals for the furnishing of executive level recruitment services for Citywide use to Ralph Andersen & Associates, Rocklin, CA; CPS HR Consulting, Inc., Sacramento, CA; GVP Ventures, Inc., dba Bob Murray and Associates, Roseville, CA; Koff and Associates, a Gallagher Company, Berkeley, CA and Neher and Associates, Sacramento, CA conforms to Modesto Municipal Code 8-

3.103.
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09/12/2023/HR/Calger/Item 15 3 2023-407
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves Agreements with Ralph Andersen & Associates, Rocklin, CA; CPS HR Consulting, Inc. Sacramento, CA; GVP Ventures, Inc. dba Bob Murray and Associates, Roseville, CA; Koff and Associates, a Gallagher Company, Berkeley, CA; and Neher and Associates, Sacramento, CA to conduct Citywide Executive Level Recruitment Services, on an as needed basis, for a two (2) year Agreement with three (3) one-year extension options, at the sole discretion of the City, for an annual estimated average amount of $81,366 in an amount not to exceed $343,000 over five years for the combined total of all Agreements.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the agreements, in a form approved by the City Attorney. #14..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

September 24, 2024
Date: September 3, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jeremy Rogers, CPRE, Director of Parks, Recreation and Neighborhoods SUBJECT: Modesto Forward Grant Agreement with the Stanislaus County Library CONTACT: Diane Sheatsley, Administrative Analyst II, [email protected], 209-577-5418
DESCRIPTION:

Consider approving the City of Modesto Pandemic Recovery Strategy – Modesto Forward Grant Agreement with the Stanislaus County Library, for $500,000 in American Rescue Plan Act Funding. (Funding Source: American Rescue Plan Act Funds) STRATEGIC PLAN ELEMENT:

This item supports each of the initiatives in the City’s 2020-2025 Strategic Plan.

BACKGROUND:

In April 2021, President Biden signed into law the American Rescue Plan Act (ARPA), a $1.9 trillion emergency relief measure intended to provide relief to address the impact of COVID-19.

Key allocations from the American Rescue Plan that have been made available directly from the federal government for the community included direct support for businesses, homeowners, renters, and restaurant/bar owners.
,
This legislation made a historic investment into local governments that included making $45,897,056 available to the City of Modesto to help address the local impact of COVID-19. The $45.89 million is being made available by the U.S Treasury directly to the City in two tranches:
50 percent was made available in May 2021, and the remaining 50 percent was received on June 6, 2022. The deadline to obligate funds is December 31, 2024, and the deadline to expend the funds is December 31, 2026.

The Modesto Forward strategy was approved by Resolution 2021-194 on May 25, 2021, and it included various allocations of funding, which are attached to this item identified as the Year 1 strategy. Further, under Resolution 2022-237 on July 12, 2022, the Year 2 expenditure plan was approved based on soliciting priorities from the public and the Council at the three standing City Council Committees: Economic Development, Safety and Communities, and Finance. Staff identified this plan by soliciting a 10-question survey intended to gauge the priority areas of the community and received approximately 700 responses to the survey. With the passing of #15..
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City Council, September 24, 2024
Modesto Forward Grant Agreement with
Stanislaus County Library

Page 2 of 3 ends

Measure H and new grant funding sources, Council approved under Resolution 2023-251, several ARPA programs to be reallocated to new or existing ARPA programs based on these new funding sources available for these programs.

As the Treasury obligation deadline of December 31, 2024, is closely approaching, City staff determined several ARPA programs would not be unable to meet the obligation deadline or new funding sources have been identified to fund these programs. As a result, staff recommended the reallocation of this funding for other eligible ARPA programs and funding contributions, including a $500,000 contribution to the Stanislaus County Library. On June 4, 2024, by Resolution No. 2024-194, Council approved the reallocation of $500,000 in ARPA funding to the Stanislaus County Library (Recipient).

DISCUSSION:

The Stanislaus County Library is a system of 13 libraries located in cities and unincorporated areas throughout Stanislaus County. The Modesto Library, located at 1500 I Street in downtown Modesto, is the largest library in the system, and accounts for approximately one third of the library system’s usage. The Modesto Library builds community by engaging all members of the community and offering access to information, knowledge, and the tools for innovation and personal development.

The Modesto Library opened in 1973 and houses the Library’s Administration and Finance units. The Modesto Library is funded by a 1/8-cent sales tax which represents approximately 89% of the Library’s total operating revenue to support its operation. Currently, the Stanislaus County Library is engaged in an $18M refurbishment project for the Modesto Library. The funded project includes asbestos abatement; significant American Disability Act (ADA) corrections; ceiling tile replacement and light-emitting diode (LED) lighting upgrade; improvements to heating, ventilation, and air conditioning (HVAC) system and security systems and more.

The City of Modesto’s $500,000 contribution in ARPA funding will allow the Modesto Library to upgrade furnishings, fixtures and equipment, creating an exceptional city library that will draw users from Modesto and the surrounding County. The renovations will provide a space that is welcoming, comfortable, and accessible. Upon completion, foot traffic and usage are expected to increase yielding a positive contribution to Modesto’s economy. Renovations at other California libraries yield a $3-$6 return on investment for every $1 invested.

FISCAL IMPACT:

Finance will process any budget adjustments necessary to remit the $500,000 payment to the Stanislaus County Library. The organization is required to expend funding on or before December 31, 2026, in compliance with the terms and conditions of the Grant Agreement.

COMMITTEE RECOMMENDATION:

This item was considered on April 17, 2024, by the Finance Committee at the FY 2024-2025 Budget Hearings. The allocation of ARPA funding for the Stanislaus County Library was approved by Council on June 4, 2024, by Resolution No. 2024-294. #15..
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City Council, September 24, 2024
Modesto Forward Grant Agreement with
Stanislaus County Library

Page 3 of 3 ends

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the City of Modesto Pandemic Recovery Strategy – Modesto Forward Grant Agreement with the Stanislaus County Library for $500,000 in American Rescue Plan Act Funding, and authorizing the City Manager, or his designee to execute the Agreement.

Approved by:

Jeremy Rogers, CPRE
Director of Parks, Recreation & Neighborhoods
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Agreement
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09/24/2024PRND/ROGERS 1 2024-?

MODESTO CITY COUNCIL
RESOLUTION NO. 2024-

RESOLUTION APPROVING THE CITY OF MODESTO PANDEMIC
RECOVERY STRATEGY – MODESTO FORWARD GRANT AGREEMENT
WITH THE STANISLAUS COUNTY LIBRARY FOR $500,000 IN AMERICAN

RESCUE PLAN ACT FUNDING, AND AUTHORIZING THE CITY MANAGER,

OR HIS DESIGNEE TO EXECUTE THE AGREEMENT
WHEREAS, in April 2021, President Biden signed into law the American Rescue Plan Act (ARPA), a $1.9 trillion emergency relief measure intended to provide relieve from the impact of COVID-19; and
WHEREAS, the legislation made a historic investment into local governments, include $45,894,056 to the City of Modesto to address the local impact of COVID-19; and
WHEREAS, by Resolution No. 2021-194, Council approved the Pandemic Recovery Strategy – Modesto Forward (Modesto Forward), a comprehensive spending plan designed to support the local recovery from the pandemic; and WHEREAS, by Resolution No. 2024-294, Council approved the reallocation of APRA funding to new or existing ARPA programs, including $500,000 in funding to the Stanislaus County Library (“Recipient”); and
WHEREAS, the Recipient is engaged in an $18M refurbishment project for the Modesto Library located at 1500 I Street; and
WHEREAS, the Recipient will utilize the ARPA funding to upgrade furnishings, fixtures, and equipment to create an exceptional city library that will draw users from Modesto and the surrounding County; and
WHEREAS, all funds must be obligated by December 31, 2024 and expended by December 31, 2026.
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09/24/2024PRND/ROGERS 2 2024-?
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the City of Modesto Pandemic Recovery Strategy – Modesto Forward – Grant Agreement with the Stanislaus County Library, in an amount not to exceed $500,000 in ARPA funds.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is authorized to execute the Agreement, approved as to form by the City Attorney. #15..
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09/24/2024PRND/ROGERS 3 2024-?
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of September, 2024, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ________________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________
JOSE M. SANCHEZ, City Attorney
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 1 CITY OF MODESTO PANDEMIC RECOVERY STRATEGY - MODESTO FORWARD

GRANT AGREEMENT
This Modesto Forward Grant Agreement (“Agreement”) is entered into in the City of Modesto, State of California, this ____ day of ____________ 2024 (“Effective Date”) by and between the City of Modesto, a California municipal corporation (“City”), and the County of Stanislaus (“Recipient”). The City and the County of Stanislaus shall be collectively referred to hereinafter as the “Parties”.

This Agreement is made with regard to the following recitals:

WHEREAS, the City received an allotment of funds from the United States Department of Treasury through the Coronavirus Local Fiscal Recovery Fund established by the American Rescue Plan Act (“ARPA”); and
WHEREAS, on June 22, 2021, by Resolution No. 2021-194, Council approved the Pandemic Recovery Strategy – Modesto Forward, hereinafter referred to as “Modesto Forward”, to support local recovery from the pandemic; and WHEREAS, in alignment with the City’s 5-Year Strategic Plan, Modesto Forward includes three post pandemic funding initiatives to help the community exit the pandemic period and focused on Economic Vitality, Governance and Service Delivery, and Quality of Life; and WHEREAS, Economic Vitality initiatives are intended to improve the economic vitality of the community; Governance and Service Delivery initiatives are intended to improve the organization and service delivery for residents; and Quality of Life initiatives are intended to improve the quality of life for residents; and
WHEREAS, Modesto Forward includes a comprehensive spending plan, which may include ARPA funding, to programs supporting the post pandemic initiatives; and WHEREAS, on June 4, 2024, the City Council adopted Resolution No 2024-194, awarding a grant of Five Hundred dollars ($500,000) to Recipient for the purposes set out in Exhibit A, subject to the terms and conditions set out in this agreement.

NOW THEREFORE, the City and Recipient agree as follows:

1. Term
The term of this Agreement (the “Term”) shall commence upon the effective date and shall terminate upon the Recipient’s completion of all requirements of this Agreement. #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 2 2. Grant Award
A. The City shall provide Recipient with a grant of Five Hundred Thousand ($500,000) (the “Grant”) for the purposes and activities further specified in Exhibit A, attached hereto and incorporated by reference (the “Activities”). Disbursement of the Grant is dependent upon Recipient providing all records and documentation reasonably required by the City.

B. Recipient shall expend the Grant solely on the Activities, as specified in Exhibit A.

Recipient shall not use the Grant for any other purpose or activity without the prior written consent of the City.

C. The Recipient shall operate within the territorial limits of the City of Modesto and the beneficiaries, if any, of the Activities shall be the residents of the City of Modesto or persons visiting or temporarily in Modesto.

D. Recipient shall expend the entirety of the Grant by no later than December 31, 2026.

Any portion of the Grant that has not been expended by December31, 2026 shall be returned to the City no later than January 10, 2027.

3. Recipient’s Obligations
A. Throughout the Term of this Agreement, the Recipient shall obtain and maintain all licenses, permits, qualifications and approvals legally required to conduct business.

The Recipient warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to perform the Activities specified by this Agreement. Recipient shall perform the Activities requires pursuant to this Agreement according to the standards observed by a competent practitioner of the profession in which Recipient is engaged.

B. The Recipient shall provide appropriate acknowledgement of the Grant by using the City’s logo or making a written acknowledgement in its publicity, promotional materials, information materials, press materials, at public occasions relating to the Activities, and on any website maintained by the Recipient.

4. Department of Treasury Reporting Requirements
Recipient shall comply with the Department of the Treasury’s “Compliance and Reporting Guidance – State and Local Fiscal Recovery Funds” and submit reports to the City as scheduled and identified in Exhibit B, attached hereto and incorporated herein by reference, unless waived by the City’s Finance Director in writing. #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 3 5. Annual Reporting Requirements
Recipient shall submit an annual report to the City within 180 days of the end of the Recipient’s fiscal year. The annual report shall be in addition to the reporting required by Section 4, and shall include:

A. Summary of activities and accomplishments, mandate and/or mission of the organization;
B. List of Board Directors with title, contact information and mandate term of each Director;
C. Organizational Chart;
D. Project/Program Expenditures-to-date (including receipts) ; E. Any other information reasonably requested by the City.

6. Audit Requirements
A. In addition to all other reports and records required by this Agreement, the Recipient shall keep and make available proper books of account and records of the financial management of the Grant provided under this agreement, in accordance with generally accepted business and accounting practices. Such records shall include, but not be limited to, records providing a full description and accounting of each activity undertaken.

B. Recipient agrees to keep all necessary books and records required by this Agreement for five (5) years following the end of this Agreement, and shall document all transactions so that all expenditures may be properly audited.

C. Recipient agrees that City or any authorized representative has access to and the right to examine all records, books, papers, or documents related to the project.

Recipient shall allow the City or any authorized representative access to all records, books, papers, or documents related to the project within forty-eight (48) hours of a request to examine.

7. Preservation of Assets
Any assets purchased with the Grant, the cost of which exceed $5,000, shall be preserved by the Recipient and shall not be sold, leased, given away or otherwise disposed of prior to the end of the useful life of the asset without prior written consent of the City .

8. Termination, Suspension and/or Repayment of Grant
The City may terminate, suspend and/or require repayment of the Grant in the event of any of the following circumstances, after notice from the City and a reasonable opportunity to cure:

A. The Recipient fails to provide the Activities, or any portion of the Activities, described in Exhibit A of this Agreement or substandard performance of the Activities;
B. The Recipient suspends or fails to carry on and continuously conduct its operations, or there is a disruption on the performance of the Activities; #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 4 C. The Recipient has a partisan political affiliation and/or participates in partisan political activities.

D. The Recipient uses the Grant for a purpose or activity other than those specified in Exhibit A.

E. The Recipient becomes bankrupt or insolvent, goes into receivership or becomes subject to the provisions of any bankruptcy, insolvency, or any other Act for the benefit of creditors, or makes a general assignment for the benefit of its creditors or otherwise acknowledges its insolvency;
F. The Recipient fails to provide to the City with any report, record, or documentation required by this Agreement, or t fails to provide any documentation requested by the City in accordance with the terms of this agreement;
G. The Recipient has made any material misrepresentation to the City or its representatives with respect to any of the matters contained herein and/or in the Recipient’s funding submission/proposal/application for the Grant, or which have been made or may be made in the future surrounding these matters; H. The Recipient breaches any term of this Agreement, after notice from the City and a reasonable opportunity to cure the breach;

9. Compliance with Applicable Laws
Recipient shall carry out, and cause its contractors, consultants, employees and agents to carry out, the Activities, in compliance all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation and to the extent applicable, the prevailing wage provisions of the federal Davis-Bacon Act and implementing rules and regulations and state prevailing wages pursuant to Labor Code Section 1770 et seq.

10. Non-Assignment
The Recipient shall not assign this Agreement, the Grant, or any part thereof, without the Prior written consent of the City. Any assignment in violation of this section shall require an immediate repayment of the Grant to City by the Recipient.

11. Indemnity and Liability
A. The Recipient shall indemnify , defend with counsel acceptable to City, and hold harmless the City, its officials, officers, employees, and agents (“Indemnitees”) from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which, directly or indirectly, arises out of or relates to this Agreement or the performance of the Activities, except to the extent the Claims arise from the gross negligence or willful misconduct of City. #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 5 B. The City shall not be liable to the Recipient or any other party in relation to the Grant and/or the services provided by the Recipient pursuant to the terms of this agreement. The Recipient shall be solely responsible for the payment of any individuals employed, engaged or retained by the Recipient for the purpose of assisting it in the fulfilment of its obligations under this agreement.

12. Insurance
The Recipient shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the City as may be required by the Risk Manager of the City. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the City by certified mail, return receipt requested, for all of the following stated insurance policies.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the Recipient shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days’ notice of the cancellation on the policies of insurance required hereunder (10 days’ notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice.

The Recipient shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled. (a) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000.
(b) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent The Recipients and subcontractors; products and completed operations as applicable.
(c) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage . This #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 6 insurance shall cover any automobile for bodily injury and property damage.

If at any time any of said policies shall be unsatisfactory to the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Recipient shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the Recipient to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated. Failure of the Recipient to obtain and/or maintain any required insurance shall not relieve the Recipient from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Recipient concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by The Recipient for the City. The Recipient's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager. The Recipient must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed.

THE RECIPIENT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, THE RECIPIENT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

For any claims related to this project, the RECIPIENT’S insurance coverage shall be primary insurance as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the RECIPIENT’S insurance and shall not contribute with it.

13. Non-Discrimination
Recipient shall not discriminate, on the basis of a person’s race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Recipient under this Agreement. Recipient shall comply with all applicable federal, state, and local laws, policies, rules, and #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 7 requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Recipient, including but not limited to the satisfaction of any positive obligations required of Recipient thereby.

14. NOTIFICATION
Any notice, communication, amendment, addition or deletion to this Agreement, including change of address of either Party during the term of this Agreement, which Recipient or City shall be required or may desire to make shall be in writing and may be personally served or, alternately, sent by prepaid first class mail to the respective Parties as follows:

To City:

City of Modesto
Attn: Director of Parks, Recreation & Neighborhoods
1010 10th Street
P.O. Box 642
Modesto, CA 95353
To Recipient:

Stanislaus County Library
Attn: Sarah Dentan, County Librarian
1500 I Street
Modesto, CA 95354

15. DISPUTE RESOLUTION
All claims, controversies, or disputes arising out of, or relating to the formation of this Agreement, or the breach, termination execution, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this contract provision shall be determined by binding arbitration in Modesto, California by one arbitrator, except as otherwise specified in this Agreement. The American Arbitration Association shall administer the arbitration under its Arbitration Rules then in effect, subject to the modifications of those rules contained in this paragraph. This agreement to arbitrate shall be specifically enforceable under the prevailing law of any court having jurisdiction, and the award rendered by the arbitrator may be entered in any court having jurisdiction. The appropriate venue for any arbitration or court proceeding relating to or arising out of this provision shall be in Stanislaus County, California.

This paragraph is not intended to and does not waive the claim filing requirements found in California Government Code section 900 et seq. In the event that a timely and legally sufficient, arbitrable claim is filed by the Recipient with City, and the claim is rejected in whole or in part by City, this paragraph shall result in the conclusive, final, #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 8 and binding resolution of all the issues presented in the claim by The Recipient so long as any issues presented by the claim are arbitrable. Claims rejected by City or by operation of law, shall be submitted by the Recipient to arbitration pursuant to the Arbitration Rules of the American Arbitration Association within ninety (90) days after mailing of the written rejection by City to the Recipient. Otherwise, the claim or claims shall be deemed waived in their entirety.

The “fast track’ rules of the American Arbitration Association shall apply to any claim or counterclaim less than ONE HUNDRED FIFTY THOUSAND AND 00/100 ($150,000.00) DOLLARS. In arbitration not proceeding under the “fast track” rules, the arbitrator shall have the power to order that depositions be taken and other discovery be made. Both City and the Recipient shall have the right, upon written notice, to take no more than three (3) depositions of the other as a matter of right in an arbitration proceeding under the “fast track” rules.

Whether or not City and the Recipient may be engaged in interstate commerce, any controversy or dispute mentioned above shall be determined by, and the parties shall be bound by, the substantive law of the State of California, and not the Federal Arbitration Act at 9 USC Section 1 et seq.

The arbitrator may grant any remedy or relief deemed by the arbitrator just and equitable under the circumstances, whether or not such relief could be awarded in a court of law. The arbitrator shall be empowered to award monetary sanctions against a party for failure of cooperation in the arbitration. The arbitrator shall, in written award, allocate all the costs of the arbitration, including the fees of the arbitrator and the reasonable attorney fees of the prevailing party, against the party who did not prevail.

The prevailing party shall be the party in whose favor the majority of the central issues in the case are resolved.

Notwithstanding anything in this provision to the contrary, the arbitrator shall have no power to award punitive damages or other damages not measured by the party’s actual damages (excluding litigation costs and fees) against any party. This limitation of the arbitrator’s powers under this Agreement shall not operate as an exclusion of the issue of punitive damages from this Agreement to Arbitrate sufficient to vest jurisdiction in a court with respect to that issue.

The Recipient shall include in all subcontracts a specification whereby the subcontractor consents to being joined in an arbitration between City and The Recipient involving the work of the subcontractor to be joined. The Recipient’s failure to do so shall be a breach of this Agreement.
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 9 The parties hereby waive any rights provided by Title 9.2 of the California Code of Civil Procedure, Section 1296. The arbitrator’s award shall be deemed final, conclusive and binding to the fullest extent allowed by California law.

16. INDEPENDENT PARTIES
Nothing in this Agreement is intended to or shall establish the Parties as partners, coventurers, or principal and agent with one another. At all times during the term of this Agreement, Recipient and City shall be independent parties, and Recipient shall not be an employee of the City. Except as Recipient may specify in writing, Recipient shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Recipient shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever. At all times during the term of this Agreement, Recipient and

17. ENTIRE AGREEMENT
This Agreement, including the exhibits attached hereto, represents the entire and integrated agreement between City and Recipient ant and supersedes all prior negotiations, representations, or agreements, either written or oral. No amendment of any of the terms or provisions of the Agreement shall be deemed valid unless it is in writing and signed by both Parties.

18. GENERAL PROVISIONS
A. Binding Agreement. This agreement shall be binding on and inure to the benefit of the City, the Recipient and their respective successors and assigns. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder.

B. Waiver. The fact that the City refrains from exercising a remedy it is entitled to exercise under this agreement shall not be considered to be a waiver of such right and, furthermore, partial or limited exercise of a right conferred upon the City shall not prevent the City in any way from later exercising any other right or remedy under this agreement or other applicable law. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving Party
C. Business License. Recipient will have a valid City of Modesto Business License.

D. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding chose of law rules.

E. Construction of Agreement. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since all of the Parties have participated in the negotiation and drafting of this Agreement, #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 10 this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if all Parties had prepared it.

F. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. The persons executing this Agreement on behalf of Parties have been duly authorized to do so.
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 11 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attestation by its City Clerk under authority of Resolution No. 2024- , adopted by the Council of the City of Modesto on the __ day of ________ , 2024, and the County of Stanislaus has caused this agreement to be duly executed in duplicate as of the Effective Date.

CITY OF MODESTO, COUNTY OF STANISLAUS,
a municipal corporation
By ___________________________ By ________________________________ JOSEPH P. LOPEZ, City Manager JODY L. HAYES, Chief Executive Officer ATTEST:

By ___________________________
DIANA NAYARES-PEREZ, City Clerk
(Seal)
APPROVED AS TO FORM:

By ________________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

By ________________________________
MATT BRALEY, Risk Manager
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 12 EXHIBIT A – SCOPE OF WORK
Recipient: Stanislaus County Library
Business
Information: 1500 I Street
Modesto, CA 95354
(209) 558-7801
Sarah Dentan, County Librarian
[email protected]
www.stanislauslibrary.org
 Corporate profile
The Stanislaus County Library is a system of 13 libraries located in cities and unincorporated areas throughout Stanislaus County. The Library also provides services at pop-up libraries at the Juvenile Justice Center and the Grayson Community Center.

In Fiscal Year 2023, Stanislaus County Libraries were visited by 647,000 people and circulated 1.2 million items.

The Modesto Library is the largest library in the system, and accounts for approximately one third of the library’s usage. The building, opened in 1973, also houses the Library’s Administration, Finance, and other support units.

The Library is primarily funded by a voter-approved 1/8-cent sales tax, representing approximately 89% of the Library’s total operating revenue to support Library operations in Fiscal Year 2024. The voter-approved 1/8-cent sales tax was extended for 12 years when Measure S passed in the November 7, 2017 election.  Mission statement
Stanislaus County Library builds community by engaging all members of the community and offering access to information, knowledge, and the tools for innovation and personal development.
 Amount of City of Modesto’s Contribution - $ 500,000
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 13  Use of Contribution as it relates to project/program’s overall budget The Stanislaus County Library is engaged in an $18M refurbishment project for the Modesto Library. The funded project includes asbestos abatement; significant ADA corrections; ceiling tile replacement and LED lighting upgrade; improvements to HVAC system and security systems and more.

The City of Modesto’s $500,000 contribution will allow the Library to upgrade furnishings, fixtures and equipment, creating an exceptional city library that will draw users from Modesto and the surrounding County.
 Project/Program Manager responsible for Contribution
Marco Sepulveda, [email protected]
 Outcomes expected as a result of the Contribution
The City of Modesto’s $500,000 contribution will allow the Library to upgrade furnishings, fixtures and equipment, creating an exceptional city library that will draw users from Modesto and the surrounding County.

The enhanced Modesto Library will provide residents a space that is welcoming, comfortable, and accessible. A renovated library attracts both existing and new visitors, and foot traffic and usage are expected to increase. More community members will access the library to support their families’ development and literacy, as well as their own personal and professional development.

The renovated Modesto Library will contribute to the economy of downtown Modesto, as research indicates every $1 invested in California library improvements commonly yields between $3 and $6 in return to the local economy. #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 14 EXHIBIT B
U.S. DEPARTMENT OF THE TREASURY

CORONAVIRUS LOCAL FISCAL RECOVERY FUND

AWARD TERMS AND CONDITIONS

1. Use of Funds.
a. Recipient understands and agrees that the funds disbursed under this award may only be used in compliance with section 603(c) of the Social Security Act (the Act), U.S.

Department of Treasury’s (“Treasury”) regulations implementing that section, and guidance issued by Treasury regarding the foregoing.
b. Recipient will determine prior to engaging in any project using this assistance that it has the institutional, managerial, and financial capability to ensure proper planning, management, and completion of such project.

2. Period of Performance. The period of performance for this award begins on the date hereof and ends on December 31, 2026. As set forth in Treasury’s implementing regulations, Recipient may use award funds to cover eligible costs incurred during the period that begins on March 3, 2021, and ends on December 31, 2026.

3. Reporting. Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award.

4. Maintenance of and Access to Records
a. Recipient shall maintain records and financial documents sufficient to evidence compliance with section 603(c) of the Act, Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the foregoing. b. The Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, shall have the right of access to records (electronic and otherwise) of Recipient in order to conduct audits or other investigations. c. Records shall be maintained by Recipient for a period of five (5) years after all funds have been expended or returned to Treasury, whichever is later.

5. Pre-award Costs. Pre-award costs, as defined in 2 C.F.R. § 200.458, may not be paid with funding from this award.

6. Administrative Costs. Recipient may use funds provided under this award to cover both direct and indirect costs.

7. Cost Sharing. Cost sharing or matching funds are not required to be provided by Recipient.

8. Conflicts of Interest. Recipient understands and agrees it must maintain a conflict of interest policy consistent with 2 C.F.R. § 200.318(c) and that such conflict of interest policy is applicable #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 15 to each activity funded under this award. Recipient and subrecipients must disclose in writing to Treasury or the pass-through entity, as appropriate, any potential conflict of interest affecting the awarded funds in accordance with 2 C.F.R. § 200.112.

9. Compliance with Applicable Law and Regulations.
a. Recipient agrees to comply with the requirements of section 602 of the Act, regulations adopted by Treasury pursuant to section 602(f) of the Act, and guidance issued by Treasury regarding the foregoing. Recipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and Recipient shall provide for such compliance by other parties in any agreements it enters into with other parties relating to this award.
b. Federal regulations applicable to this award include, without limitation, the following:
i. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart F – Audit Requirements of the Uniform Guidance, implementing the Single Audit Act, shall apply to this award. ii. Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference.
iii. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference.
iv. OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart B) that the award is subject to 2 C.F.R. Part 180 and Treasury’s implementing regulation at 31 C.F.R. Part 19. v. Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference.
vi. Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20. vii. New Restrictions on Lobbying, 31 C.F.R. Part 21.
viii. Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations.
ix. Generally applicable federal environmental laws and regulations. c. Statutes and regulations prohibiting discrimination applicable to this award include, without limitation, the following:
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 16 i. Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) and Treasury’s implementing regulations at 31 C.F.R. Part 22, which prohibit discrimination on the basis of race, color, or national origin under programs or activities receiving federal financial assistance;
ii. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.), which prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability; iii. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability under any program or activity receiving federal financial assistance;
iv. The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.), and Treasury’s implementing regulations at 31 C.F.R. Part 23, which prohibit discrimination on the basis of age in programs or activities receiving federal financial assistance; and
v. Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101 et seq.), which prohibits discrimination on the basis of disability under programs, activities, and services provided or made available by state and local governments or instrumentalities or agencies thereto.

10. Remedial Actions. In the event of Recipient’s noncompliance with section 602 of the Act, other applicable laws, Treasury’s implementing regulations, guidance, or any reporting or other program requirements, Treasury may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.R. § 200.339. In the case of a violation of section 602(c) of the Act regarding the use of funds, previous payments shall be subject to recoupment as provided in section 602(e) of the Act and any additional payments may be subject to withholding as provided in sections 602(b)(6)(A)(ii)(III) of the Act, as applicable.

11. Hatch Act. Recipient agrees to comply, as applicable, with requirements of the Hatch Act (5 U.S.C. §§ 1501-1508 and 7324-7328), which limit certain political activities of State or local government employees whose principal employment is in connection with an activity financed in whole or in part by this federal assistance.

12. False Statements. Recipient understands that making false statements or claims in connection with this award is a violation of federal law and may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in federal awards or contracts, and/or any other remedy available by law.

13. Publications. Any publications produced with funds from this award must display the following language: “This project [is being] [was] supported, in whole or in part, by federal award number SLFRP2096 awarded to County of Stanislaus by the U.S. Department of the Treasury.”

14. Debts Owed the Federal Government.
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 17 a. Any funds paid to Recipient (1) in excess of the amount to which Recipient is finally determined to be authorized to retain under the terms of this award; (2) that are determined by the Treasury Office of Inspector General to have been misused; or (3) that are determined by Treasury to be subject to a repayment obligation pursuant to sections 602(e) and 603(b)(2)(D) of the Act and have not been repaid by Recipient shall constitute a debt to the federal government.
b. Any debts determined to be owed the federal government must be paid promptly by Recipient. A debt is delinquent if it has not been paid by the date specified in Treasury’s initial written demand for payment, unless other satisfactory arrangements have been made or if the Recipient knowingly or improperly retains funds that are a debt as defined in paragraph 14(a). Treasury will take any actions available to it to collect such a debt.

15. Disclaimer.
a. The United States expressly disclaims any and all responsibility or liability to Recipient or third persons for the actions of Recipient or third persons resulting in death, bodily injury, property damages, or any other losses resulting in any way from the performance of this award or any other losses resulting in any way from the performance of this award or any contract, or subcontract under this award. b. The acceptance of this award by Recipient does not in any way establish an agency relationship between the United States and Recipient.

16. Protections for Whistleblowers.
a. In accordance with 41 U.S.C. § 4712, Recipient may not discharge, demote, or otherwise discriminate against an employee in reprisal for disclosing to any of the list of persons or entities provided below, information that the employee reasonably believes is evidence of gross mismanagement of a federal contract or grant, a gross waste of federal funds, an abuse of authority relating to a federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal contract (including the competition for or negotiation of a contract) or grant. b. The list of persons and entities referenced in the paragraph above includes the following:
i. A member of Congress or a representative of a committee of Congress; ii. An Inspector General;
iii. The Government Accountability Office;
iv. A Treasury employee responsible for contract or grant oversight or management;
v. An authorized official of the Department of Justice or other law enforcement agency;
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 18 vi. A court or grand jury; or
vii. A management official or other employee of Recipient, contractor, or subcontractor who has the responsibility to investigate, discover, or address misconduct.
c. Recipient shall inform its employees in writing of the rights and remedies provided under this section, in the predominant native language of the workforce.

17. Increasing Seat Belt Use in the United States. Pursuant to Executive Order 13043, 62 FR 19217 (Apr. 18, 1997), Recipient should encourage its contractors to adopt and enforce on-the-job seat belt policies and programs for their employees when operating company-owned, rented or personally owned vehicles.

18. Reducing Text Messaging While Driving. Pursuant to Executive Order 13513, 74 FR 51225 (Oct. 6, 2009), Recipient should encourage its employees, subrecipients, and contractors to adopt and enforce policies that ban text messaging while driving, and Recipient should establish workplace safety policies to decrease accidents caused by distracted drivers.

ASSURANCES OF COMPLIANCE WITH CIVIL RIGHTS REQUIREMENTS ASSURANCES OF COMPLIANCE WITH TITLE VI OF THE CIVIL RIGHTS ACT OF 1964 As a condition of receipt of federal financial assistance from the Department of the Treasury, the recipient named below (hereinafter referred to as the “Recipient”) provides the assurances stated herein. The federal financial assistance may include federal grants, loans and contracts to provide assistance to the Recipient’s beneficiaries, the use or rent of Federal land or property at below market value, Federal training, a loan of Federal personnel, subsidies, and other arrangements with the intention of providing assistance. Federal financial assistance does not encompass contracts of guarantee or insurance, regulated programs, licenses, procurement contracts by the Federal government at market value, or programs that provide direct benefits.

The assurances apply to all federal financial assistance from or funds made available through the Department of the Treasury, including any assistance that the Recipient may request in the future.

The Civil Rights Restoration Act of 1987 provides that the provisions of the assurances apply to all of the operations of the Recipient’s program(s) and activity(ies), so long as any portion of the Recipient’s program(s) or activity(ies) is federally assisted in the manner prescribed above.

1. Recipient ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents.

2. Recipient acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP).

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Funding Contribution Agreement –$500,000 / Stanislaus County Library 19 because of LEP is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations. Accordingly, Recipient shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities. Recipient understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Recipient’s programs, services, and activities.

3. Recipient agrees to consider the need for language services for LEP persons when Recipient develops applicable budgets and conducts programs, services, and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov.

4. Recipient acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Recipient and Recipient’s successors, transferees, and assignees for the period in which such assistance is provided.

5. Recipient acknowledges and agrees that it must require any sub-grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances 1-4 above, and agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Recipient and the Recipient’s sub-grantees, contractors, subcontractors, successors, transferees, and assignees:

The sub-grantee, contractor, subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this contract or agreement.

6. Recipient understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Recipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal 6 6. 7. 8. 9.

10. financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Recipient for the period during which it retains ownership or possession of the property.

7. Recipient shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations. Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. The Recipient shall comply with information requests, on-site compliance reviews and reporting requirements.
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 20 8. Recipient shall maintain a complaint log and inform the Department of the Treasury of any complaints of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome. Recipient also must inform the Department of the Treasury if Recipient has received no complaints under Title VI.

9. Recipient must provide documentation of an administrative agency’s or court’s findings of noncompliance of Title VI and efforts to address the non-compliance, including any voluntary compliance or other agreements between the Recipient and the administrative agency that made the finding. If the Recipient settles a case or matter alleging such discrimination, the Recipient must provide documentation of the settlement. If Recipient has not been the subject of any court or administrative agency finding of discrimination, please so state.

10. If the Recipient makes sub-awards to other agencies or other entities, the Recipient is responsible for ensuring that sub-recipients also comply with Title VI and other applicable authorities covered in this document State agencies that make sub-awards must have in place standard grant assurances and review procedures to demonstrate that that they are effectively monitoring the civil rights compliance of subrecipients.

The United States of America has the right to seek judicial enforcement of the terms of this assurances document and nothing in this document alters or limits the federal enforcement measures that the United States may take in order to address violations of this document or applicable federal law.

Under penalty of perjury, the undersigned official(s) certifies that official(s) has read and understood the Recipient’s obligations as herein described, that any information submitted in conjunction with this assurances document is accurate and complete, and that the Recipient is in compliance with the aforementioned nondiscrimination requirements.
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 21 EXHIBIT C

ANNUAL REPORTING REQUIREMENTS
Recipient shall use Exhibit C to provide an annual performance report.

The initial report will cover the period from the date the contract was executed to the following June 30, and will be due to the City within 15 days after the end of the reporting period. Thereafter, the report will cover a 12-month period and contractors will be required to submit the report to City within 15 days after the end of the 12-month period (by July 15).

Notes on using this template
All contractors that are recipients of State and Local Fiscal Recovery Funds (SLFRF) awards are required to produce an Annual Report. The Annual Report provides information on the contractor’s project and how they plan to ensure program outcomes are achieved in an effective and equitable manner.

The initial Annual Report will cover the period from the date of award to the following June 30 and must be submitted to Recipient within 15 calendar days after the end of the reporting period. Thereafter, the Annual Report will cover a 12-month period and contractors will be required to submit the report to Recipient within 15 calendar days after the end of the 12-month period (by July 15).

Annual Report Period Covered Due Date
1 Award – June 30, 2022 July 15, 2022
2 July 1, 2022 – June 30, 2023 July 15, 2023
3 July 1, 2023 – June 30, 2024 July 15, 2024
4 July 1, 2024 – June 30, 2025 July 15, 2025
5 July 1, 2025 – June 30, 2026 July 15, 2026
6 July 1, 2026 – December 31, 2026 January 15, 2027
Instructions:

Contractors should consult the SLFRF Guidance on Recipient Compliance and Reporting Responsibilities (Reporting Guidance) located at https://home.treasury.gov/system/files/136/SLFRF-Compliance-andReporting-Guidance.pdf for detailed guidance on the submission of this report or contact county staff for assistance with completing this exhibit.

Recipient recommends the use of infographics, tables, charts, pictures, case studies, and other explanatory elements in describing their programs.

Text in italics represents the requirements from the Reporting Guidance and is meant to serve as a reference as contractors prepare their Annual Report. This instructions page and the text in italics should be removed before the final transmitted report is published and submitted to Recipient. #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 22 RECIPIENT
202X Annual Report

GENERAL OVERVIEW
Uses of Funds
Describe in further detail contractor’s intended and actual uses of the funds, such as how contractor’s approach would help support a strong and equitable recovery from the COVID-19 pandemic and economic downturn. Describe any strategies employed to maximize programmatic impact and effective, efficient, and equitable outcomes. Given the broad eligible uses of funds and the specific needs of the jurisdiction, explain how the funds would support the communities, populations, or individuals in the County. Address how you are promoting each of the following Expenditure Categories, to the extent they apply:
a. Evaluation and Data Analysis
Promoting equitable outcomes
If applicable, describe how contractor’s planned or current use of funds prioritizes economic and racial equity as a goal, names specific targets intended to produce meaningful equity results at scale, and articulates the strategies to achieve those targets. Explain how contractor’s overall equity strategy translates into the specific services or programs offered by Contractor in the following Expenditure Categories:
a. Negative Economic Impacts (EC 2): assistance to households, small businesses, and nonprofits to address impacts of the pandemic, which have been most severe among low-income populations. This includes assistance with food, housing, and other needs; employment programs for people with barriers to employment who faced negative economic impacts from the pandemic (such as residents of low-income neighborhoods, minorities, disconnected youth, the unemployed, formerly incarcerated people, veterans, and people with disabilities); and other strategies that provide disadvantaged groups with access to education, jobs, and opportunity.
b. Services to Disproportionately Impacted Communities (EC 3): services to address health disparities and the social determinants of health, build stronger neighborhoods and communities (e.g., affordable housing), address educational disparities (e.g., evidence-based tutoring, community schools, and academic, social-emotional, and mental health supports for high poverty schools), and promote healthy childhood environments (e.g., home visiting, child care).

If applicable, describe contractor’s efforts to date and intended outcomes to promote equity using qualitative and quantitative data on how the jurisdiction’s approach achieved or promoted equitable outcomes or progressed against equity goals. Describe any constraints or challenges that impacted #15..
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 23 project success in terms of increasing equity.

Describe the geographic and demographic distribution of funding, including whether it is targeted toward traditionally marginalized communities.

Community Engagement
Describe how contractor’s planned or current use of funds incorporates written, oral, and other forms of input that capture diverse feedback from constituents, community-based organizations, and the communities themselves. Where relevant, this description must include how funds will build the capacity of community organizations to serve people with significant barriers to services, including people of color, people with low incomes, limited English proficiency populations, and other traditionally underserved groups.
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Funding Contribution Agreement –$500,000 / Stanislaus County Library 24 EXHIBIT D

QUARTERLY PROJECT AND EXPENDITURE REPORT REQUIREMENTS
Recipient shall use Exhibit D to provide a quarterly project and expenditure report.

The initial report will cover the period from the date the contract was executed through the end of the quarter, and will be due to the City within 15 days after the end of the reporting period. Thereafter, the report will cover one quarter and contractors will be required to submit the report to Recipient within 15 days after the end of the quarter.

ARPA QUARTERLY PROJECT AND EXPENDITURE REPORT
Reporting on State and Local Fiscal Recovery Funds (SLFRF) Name of Entity: Project Name:

Reporting Period Start Date: Reporting Period End Date:

Expenditure Category:
[PLEASE SELECT ONE]
Please provide a brief description of the activities conducted:

Category Cumulative
Expenditures to
date ($)
Cumulative
Obligations to
date ($)
Current Period
Expenditures
Current Period
Obligations
[PLEASE SELECT ONE]

PROJECT

EXPENDITURES

PROJECT STATUS
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

September 24, 2024
Date: August 14, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Axon Enterprise, Inc – Fusus Real-Time Public Safety Operations Solution CONTACT: Cathy McFadon, Police Civilian Manager, [email protected] 209-572-9500
DESCRIPTION:

Consider approving an Agreement with Axon Enterprise, Inc., Scottsdale, AZ, for Fusus RealTime Public Safety Operations Solution for a total amount not to exceed $410,000. (Funding Source: Police Grants, Supplemental Law Enforcement Services Fund) STRATEGIC PLAN ELEMENT:

The item is related to the 2020-2025 City of Modesto Strategic Plan’s goal of improving community safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues.

BACKGROUND:

The Modesto Police Department (MPD) implemented a Real Time Crime Center (RTCC) in 2016 to enhance the real-time support and delivery of police and public safety services for the community. The RTCC processes and analyzes calls for service, intelligence, and data from multiple sources in real-time, utilizing a video wall with live feeds from the City’s camera networks. Centralizing all data sources into a single interface is crucial for improving the operational efficiency of RTCC staff and the response capabilities and situational awareness of field officers.

On February 28, 2023, the MPD entered into a Professional Services Agreement (PSA) with Fusus to evaluate their ability to add more robust and additional benefits not currently available with the department’s current software. This included, but was not limited to:
 Full Integration with Axon Body 4™ Body-Worn Cameras (BWCs) – including capabilities unique to Fusus for correlation of Officer location, BWC recording status, access to BWC live streaming video, user authentication and correlation to other video and alerting assets through the platform.
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City Council, 9/24/2024
Axon Enterprise, Inc – Fusus Real-Time Public Safety Operations Solution

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Modesto City CouncilSeptember 24, 2024

Modesto City Council
September 24, 2024