PUBLIC INTEGRITY DISCLOSURE FORM
BID FORMS -PAGE 20
Item 1U - 8
7. Owners/Investors
with
a
5%
beneficial
interest
in
the
Applicant
Entity
or
a
related
entity
A.
[name
of
owner/investor]
[name
of
official
with
whom
owner/investor
has
material
financial
relationship]
FOR
RELATIONSHIP
A,
EXPLANATION
OF
THE
RELATIONSHIP
:
B.
[name
of
owner/investor]
[name
of
official
with
whom
owner/investor
has
material
financial
relationship]
FOR
RELATIONSHIP
B,
EXPLANATION
OF
THE
RELATIONSHIP:
C.
[name
of
owner/investor]
[name
of
official
with
whom
owner/investor
has
material
financial
relationship]
FOR
RELATIONSHIP
C,
EXPLANATION
OF
THE
RELATIONSHIP:
I
DECLARE
UNDER
PENALTY
OF
PERJURY
UNDER
THE
LAWS
OF
THE
STATE
OF
CALIFORNIA
THAT
THE
FOREGOING
IS
TRUE
AND
CORRECT.
Signature
of
Disclosing
Party,
Printed
Name,
Title
4//~
Date
Ryan
Radebach-President
9-12-19
CITY
OF
PALM
SPRINGS-
PUBLIC
INTEGRITY
DISCLOSURE
APPLICANT
DISCLOSURE
FORM
DOWNTOWN
PARK
RE
-BID
CITY
PROJECT
NO
. 15
-07
July
2019
Page
2 of2
PUBLIC
INTEGRITY
DISCLOSURE
FORM
BID
FORMS
-PAGE
21 Randy Tyler
Richard Tyler
None
None
None
None
None
None
None
6 Item 1U - 9
1. Name
of
Entity
PUBLIC
INTEGRITY
DISCLOSURE
APPLICANT
DISCLOSURE
FORM
Rios
Clementi
Hale
Studios
2. Address
of
Entity
(Principle
Place
of
Business)
3101
W
Exposition
Place,
Los
Angeles,
CA
90018
3. local
or
California
Address
(if
different
than
#2)
NIA 4.
State
where
Entity
is
Registered
with
Secretary
of
State
California
If
other
than
California,
is
the
Entity
also
registered
in
California?
n
Yes
n
No
5. Type
of
Entity
[!]
Corporation
D
Limited
Liability
Company
D
Partnership
D
Trust
D
other
(please
specify)
6. Officers,
Directors,
Members,
Managers,
Trustees,
Other
Fiduciaries
(please
specify)
Note:
If
any
response
is
not
a
natural
person,
please
identify
all
officers,
directors,
members,
managers
and
other
fiduciaries
for
the
member,
manager,
trust
or
other
entity
_P_L_E_A_S_E_S_E_E_"E_X_H_IB_IT_A_"_A_T_T_A_C_H_E_D
___
Officer
Director
Member
Manager
[name]
D
General
Partner
D
Limited
Partner
Other
___________
_
_________________
_
D
Officer
D
Director
D
Member
D
Manager
[name]
D
General
Partner
D
Limited
Partner
Other
___________
_
________________
_
_ D
Officer
D
Director
D
Member
D
Manager
[name]
(Revised
05/16/19)
D
General
Partner
D
Limited
Partner
Other
______
__
____
_
CITY
OF
PALM
SPRINGS
-
PUBLIC
INTEGRITY
DISCLOSURE
APPLICANT
DISCLOSURE
FORM
Page
1 of
2 7
Item 1U - 10
7. Owners/Investors
with
a
5%
beneficial
interest
in
the
Applicant
Entity
or
a
related
entitv
EXAMPLE JANEDOE
50%,
ABC
COMPANY,
Inc.
[name
of
owner/investor]
[percentage
of
beneficial
interest
in
entity
and
name
of
entity]
A.
PLEASE
SEE
"EXHIBIT
A"
ATTACHED
[name
of
owner/investor]
[percentage
of
beneficial
interest
in
entity
and
name
of
entity]
B.
[name
of
owner/investor]
[percentage
of
beneficial
interest
in
entity
and
name
of
entity]
C.
[name
of
owner/investor]
[percentage
of
beneficial
interest
in
entity
and
name
of
entity]
D.
[name
of
owner/investor]
[percentage
of
beneficial
interest
in
entity
and
name
of
entity]
E.
[name
of
owner/investor]
[percentage
of
beneficial
interest
in
entity
and
name
of
entity]
I DECLARE
UNDER
PENAL
TY
OF
PERJURY
UNDER
THE
LAWS
·oF
THE
STATE
OF
CALIFORNIA
THAT
THE
FOREGOING
IS
TRUE
AND
CORRECT.
f Disclosing
Party,
Date
I 1/V.1
PENALTIES
Falsification
of
information
or
failure
to
report
information
required
to
be
reported
may
subject
you
to
administrative
action
by
the
City.
(Revised
05/16/19)
CITY
OF
PALM
SPRINGS
-
PUBLIC
INTEGRITY
DISCLOSURE
APPLICANT
DISCLOSURE
FORM
Page
1 of
2 ATTACHMENT B
Item 1U - 11
Item 1U - 12
City of Palm Springs
Development Services Department
Engineering Division
3200 East Tahquitz Canyon Way • Palm Springs, California 92262 Tel: (760) 323-8253 • Fax: (760) 322-8360 • Web: www.palmspringsca.gov April 18, 2022
Via Certified Mail Return Receipt Requested;
U.S. Mail
Mr. Ryan Radeback, President
Fast-Track Construction Corporation
5711 W. Slauson Ave. #170
Culver City, CA 90230
Mr. Holden F. Moore
Great American Insurance Group
301 E. Fourth Street
Cincinnati, OH 45202
Re: City of Palm Springs; Downtown Park City Project No. 15-07; Notice to Cure Default; Bond Number 2981949
Dear Messrs:
As you know, the City of Palm Springs ("City") and Fast-Track Construction Corporation's ("FTC") entered into a contract ("Contract") for the above-mentioned project ("Project"). The City considers FTC in default of the Contract and this letter serves as the City's written notice to FTC to cure the default.
According to Section 6-7.1 of the Standard Specifications, FTC shall be considered in default of the Contract when one or more of the following events occur prior to the acceptance of the Project.
• FTC becomes insolvent, assigns its assets for the benefit of creditors, is unable to pay its debts as they become due, or is otherwise financially unable to complete the work;
• FTC abandons the work by failing to report to the work site and diligently prosecute the work to completion;
• FTC disregards written instructions from the Engineer or materially violates provisions of the Contract Documents;
• FTC fails to prosecute the Work according to the schedule approved by the Engineer;
• FTC disregards laws or jurisdictions of any public body having jurisdiction; or • FTC commits continuous or repeated violations of regulatory or statutory safety requirements.
Item 1U - 13
For the reasons explained in this notice to cure letter, the City considers FTC in default.
For one, FTC has abandoned the Project by failing to report to the Project site and diligently prosecute the Project to completion. The City awarded the Project and entered into the Contract on October 2, 2019 with FTC. A notice to proceed ("NIP") was issued on November 20, 2019.
The planned duration of the Project was 365 calendar days with a completion date of November 20, 2020. The City approved time extensions amounting to 106 calendar days and extended the completion date to March 3, 2021. Over thirteen (13) months later, the Project remains incomplete.
The following is a list of the unfinished punchlists:
• Engineering -10-19-2021
• Architecture -10-13-2021
• Fluidity -10-4-2021
• Irrigation -10-11-2021
• Landscape -10-13-2021
• Lighting -10-19-2021
• MEP-10-13-2021
In addition to not completing the above-referenced punchlists, FTC has failed to complete the repair of the defective water feature. The City believes correcting the defects will require significant work and expense, as the water feature's mechanical equipment is located underground.
The City has done everything in its power to get FTC to complete the Project, repeatedly drawing their attention to remaining work and requesting meetings to discuss strategy, schedules, and commitments to complete the Project. But, FTC has been unable to maintain a consistent workforce on the Project, including subcontractors not showing up or bringing limited crews. The City has demanded FTC complete the Project in multiple letters and convening a meeting between the City and FTC on February 25, 2022 to discuss FTC's commitment to complete the Project, but the City has only received empty promises.
At this point, FTC has abandoned the Project. According to the Contractors State License Board's website, FTC's contractors' license is under suspension for failure to have a contractor's bond. American Contractors Indemnity Company cancelled FTC's contractor's bond (Bond No.
SC6350170) on March 16, 2022. Additionally, the City received notice from Fusco & Orsini Insurance Services, Inc. that FTC's workers compensation insurance was cancelled effective March 18, 2022, which is a material breach of the Contract. (See Contract, Special Provisions, Section 5-4.1.) Together, FTC is neither legally or contractually able to complete the Project.
Further, FTC is unable to pay its debts as they become due and apparently is financially unable to complete the work as the Contract remains encumbered by both liquidated damages and stop payment notices. At $5,400 per calendar day of delay and 411 calendar days of delay, FTC owes the City $2,219,400.00 in liquidated damages as of April 18, 2022, while liquidated damages continue to accrue. Additionally, the City is currently withholding $1,208,495.61 (125% of $966,796.49) because of the following thirteen (13) stop payment notices:
• Orange County Winwater Works -$32,369.64
Item 1U - 14
• Hydrology Group, Inc. -$138,262.47
• Shaw & Sons, Inc. -$303,528.84
• RT Contractor Corp. -$118,000.00
• Premierwest Landscape, Inc. -$132,096.90
• Gold Coast Erectors, Inc. -$77,913.62
• Walters Wholesale Electric -$36,445.94
• Horizons Construction Co. Int'l, Inc. -$36,357.83
• The Patterson Company -$25,000.00
• Everde Growers -$1,307.67
• T-Wall Enterprises -$36,379.69
• Construction Laborers Trust Funds -$6,650.45
• Villascape Landscape Contractor -$22,483.45
The current Project accounting is summarized below.
Original Contract Amount
Previously Executed Change Orders
Final Contract Amount
Amount paid to Contractor
Contract Balance
Withholding for Stop Payment Notices (125%
of amount)
Withheld/ Assessed Liquidated Damages
Amount Underwithheld
$7,600,000.00
$1.057 ,316.22
$8,657,316.22
$7,407,028.41
$1,250,287.81
($1,208,495.61)
($2,219 .400.00)
($2,177,607.80)
As you can see, the City has underwithheld funds on the Project and FTC is in debt to the City on the Project.
The City hereby formally demands that FTC cure the defaults noted in this notice to cure letter within five (5) working days after receipt of this letter. (See Contract, Standard Specifications, Section 6-7.2.) If, within five (5) working days after receipt of this notice to cure letter, FTC fails to commence satisfactory correction of the defaults, or to diligently continue satisfactory and timely correction of the defaults thereafter, then the City will recommend to the Item 1U - 15
City Council that FTC be found in default of the Contract and terminate FTC's right to perform under the Contract and to enforce the Project Performance Bond.
Nothing in this letter shall constitute a waiver of any rights, remedies or defenses on behalf of the City, including, but not limited to, seeking liquidated damages from FTC. l el Montalvo, MP A, PE
ity Engineer
cc: Justin Clifton, City Manager (via e-mail}
Jeffrey S. Ballinger, City Attorney
ATTACHMENT C
Item 1U - 16
Revised: 2.9.22
AMENDMENT NO. 3 TO THE PROFESSIONAL SERVICES
AGREEEMENT, DOWNTOWN PALM SPRINGS PARK,
CITY PROJECT NO. 15-07
BETWEEN THE CITY PALM SPRINGS AND RIOS CLEMENTI HALE
STUDIOS
1. Parties and Date.
This Amendment No. 3 to the Professional Services Agreement (A7071), Downtown Palm Springs Park, City Project No. 15 -07 is made and entered into as of this ____ day of _________, 2022, by and between the City of Palm Springs (“City”) Rios Clemente Hale Studi os, a California corporation with its principal place of business at 639 N. Larchmont Blvd., Suite 100, Lo s Angeles, CA 90004 (“Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”
2. Recitals.
2.1 Agreement. The City and Consultant have enter ed into a n agreement entitled Professional Services Agreement, Downtown Palm Springs Park, City Project No. 15 -07” dated January 16, 2018 (“Agreement” or “Contract” ) for the purpose of retaining the services of Consultant to provide professional services to prepare the Schematic Design, Design Development Documents, Construction Documents for biding related to the Palm Springs Park, City Project No. 15-07, (“Project”).
2.2 Amendment. The City and Consultant d esire to amend the Agreement to provide additional pro fessional landscape architectural and related design services through the extended construction schedule. The Parties have heretofore entered into that Amendment No. 2 dated December 15, 2020.
2.3 Amendment Authority. This Amendment No. 3 is authorized pursuant to Section 1.8 Additional Services and 2.3 Changes in Scope of the Agreement.
3. Terms.
3.1 Maximum Contract Amount . Section 2.1 of the Agreement is hereby amended to read as follows:
The Maximum Contract Amount is increased by $ 30,000 to a n ew Maximum Contract of $1,277,054.
3.2 Method of Payment . Section 2.2 of the Agreement is hereby amended to read as follows:
Item 1U - 17
Revised: 2.9.22
“Exhibit C” Schedule of Compensation is hereby revised by incorporating the additional fees for professional services outlined in the Consultants letter dated May 16, 2022, attached hereto and incorporated herein by reference
3.3 Term. Section 3.4 of the Agreement is hereby amended to read as follows:
“The City and Consultant desire to amend the Agreement to extend the term of the Agreement from January 16, 2021 to January 16, 2023.”
3.4 Continuing Effect of Agreement. Except as amended by this Amendment No. 3, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 3. From and after the date of this Amendment No.3, whenever the term “Agreement” or “Contract” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 3.
3.5 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 3.
3.6 Severability. If any portion of this Amendment No. 3 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
3.7 Counterparts. This Amendment No.3 may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
Item 1U - 18
Revised: 2.9.22
SIGNATURE PAGE TO AGREEMENT BY AND BETWEEN THE CITY OF PALM SPRINGS
AND RIOS CLEMENTI HALE STUDIOS
IN WIT NESS WHE REOF, the Parties have executed this Agreement as of the dates stated below.
CONSULTANT:
By: _______________________________________ By: _________________________________________ Signature Signature
(2nd signature required for Corporations)
Date: Date:
CITY OF PALM SPRINGS:
APPROVED BY CITY COUNCIL:
Date: _______ Item No.
APPROVED AS TO FORM: ATTEST:
By: ___________________________ By: _______________________________ Jeffrey S. Ballinger, Anthony Mejia,
City Attorney City Clerk
APPROVED:
By: _______________________________ Date:
City Manager – over $50,000
Deputy/Assistant City Manager – up to $50,000
Director – up to $25,000
Manager – up to $5,000
Item 1U - 19
Item 1U - 20
RIOS
3101 w. Exposition Place
Los Angeles , CA 90018
(323) 785-180 0
rios.com
May 16, 2022
Joel Montalvo, City Engineer/Development Services
City of Palm Springs
Palm Springs City Hall
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Sent via email: [email protected]
Additional Services Proposal #8
Extended Construction Observation Phase Duration
Palm Springs Downtown Park
Dear Joel,
We are pleased to provide you with this Additional Services Proposal to provide extended construction phase support for the Palm Springs Downtown Park project located in Palm Springs, CA.
Scope of Work
RIOS will provide extended Construction Observation Phase services to cover the ongoing negotiations to complete work by Fast Track Construction. This scope may include add itional trips to the site as required.
Fee Time & Materials Not to Exceed $30,000
Terms & Conditions
1. This proposal is conditioned by the existing agreement between Rios, Inc. and The City of Palm Springs, signed January 3, 2018. The terms and conditions of that agreem ent are incorporat ed into this agreement by reference .
Please call if you have any questions regarding this proposal. If it appears to be in order, please return a signed copy to this office. I look forward to working with yo u on this proje ct.
Sincerely,
RIOS Date: ___________ _
Nate Cormier, ASLA, PLA, LEED AP Accepted By: ___________ _ Managing Studio Director
Attachment D
Item 1U - 21
RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, FINDING THAT FAST -TRACK
CONSTRUCTION CORPORATION, A CALIFORNIA
CORPORATION, IS IN DEFAULT OF THE CONSTRUCTION
CONTRACT (AGREEMENT NO. 8395) FOR THE
DOWNTON PARK, CITY PROJECT NO. 15 -07;
AUTHORIZING ISSUANCE OF A NOTICE OF
TERMINATION OF F AST-TRACK CONSTRUCTION ’S
RIGHT TO PERFORM UNDER THE CONTRACT.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1.
The City Council finds and declares as follows:
A. Following a competitive and open public bid process, the City Council awarded a construction contract (Agreement No. 8395) (the “Contract ”), to Fast-Track Construction Corporation, a California corporation, (“ FTC”), in the amount of $ 7,600,000 for the Downtown Park, City Project No. 15 -07 (the “Project”).
B. On November 20, 2020, FTC was issued a notice to proceed with an allowable contract time of 365 calendar days. The City approved time extensions amounting to 106 calendar days and extended the completion date to March 3, 2021.
C. Construction of the Project suffered delays caused by the COVID pandemic and FTC failure to adequately administer the Project and manage its construction, including, but not limited to the following delays in preparing submittals; preparing and updating the construction schedule accurate timelines; ordering long-lead time materials; properly staffing the project; and monitoring subcontractors.
D. On March 8, 2021, the City, through its construction manager, Willdan Engineering (Willdan), issued a notice of contract time expiration and informed FTC that liquidated damages would be assessed beginning March 4, 2021. Liquidated damages continue to accrue on the Project.
E. Between March 4, 2021 and October 31, 2021, FTC was unable to provide and maintain realistic schedule for final completion of the Project. In October of 2021, six (6) distinct lists were provided to FTC of outstanding items required for final completion (“ Punch List”) of the Project. The Punchlist remains incomplete.
F. In addition to not completing the Punchlist, FTC has failed to complete the repair of the defective water feature. The City believes correcting the Item 1U - 22
Resolution No. _____
defects will require significant work and expense, as the water feature’s mechanical equipment is located underground.
G. On April 19, 2022, the City issued a Notice to Cure Default letter (“Notice Letter”) to FTC and Great American Insurance Group (“Great American”), FTC’s performance bond surety, demanding that FTC complete the Project.
For the reasons explained in Notice Letter, the City considered FTC in default for among other things, abandoning the Project by failing to report to the Project site and failing to diligently prosecute the Project to completion. The Notice Letter is incorporated herein by reference.
H. The Notice Letter allowed for five (5) working days for Fast Track to commence satisfactory correction of the defaults, or to diligently continue satisfactory and timely correction of the defaults. FTC failed to respond to the Notice Letter.
I. Upon adoption of this Resolution, the City will terminate FTC’s right to perform under the Contract by issuing a written notice of termination for default to FTC and Great American.
SECTION 2. Pursuant to Section 6-7.3 of the Special Provisions of the Contract, the City Council hereby finds that FTC is in default of the Contract.
SECTION 3. Upon adoption of this Resolution, the City will terminate FTC’s right to perform under the Contract by issuing a written notice of termination for default to FTC and Great American. Pursuant to Section 6-7.4 of the Special Provisions of the Contract, upon receipt of the written notice of termination for default, Great American shall immediately assume all rights, obligations, and liabilities of FTC under the Contract.
SECTION 4. This Resolution will become effective immediately upon adoption and remain effective unless superseded by a subsequent resolution.
ADOPTED THIS ___TH DAY OF ________________, _________.
JUSTIN CLIFTON
CITY MANAGER
ATTEST:
MONIQUE M. LOMELI,
INTERIM CITY CLERK
Item 1U - 23
Resolution No. _____
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, ANTHONY J. MEJIA, City Clerk of the City of Palm Springs, hereby certify that Resolution No. ____ is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on _______________________, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, _________.
MONIQUE M. LOMELI,
INTERIM CITY CLERK
Item 1U - 24
CITY COUNCIL STAFF REPORT
06/16/2022 1. V.
City Clerk -
SUBJECT
MEMORANDUM OF UNDERSTANDING WITH THE PALM SPRINGS POLICE OFFICERS’ ASSOCIATION
RECOMMENDATION:
Adopt a Resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A MEMORANDUM OF UNDERSTANDING RELATIVE TO WAGES, HOURS, AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT FOR EMPLOYEES IN THE PALM
SPRINGS POLICE OFFICERS’ ASSOCIATION FOR THE PERIOD OF JULY 1, 2022, THROUGH JUNE 30, 2025, SUBJECT TO ASSOCIATION’S EXECUTING THE MEMORANDUM OF UNDERSTANDING.”
1. Authorize the City Manager to execute the Memorandum of Understanding (MOU) and all documents necessary to effectuate the above action, including the allocation and compensation plans, agreements and contracts, and any non-substantial MOU language or reorganization.
2. Attachments
Item 1V
CITY COUNCIL STAFF REPORT
DATE: June 16, 2022 CONSENT CALENDAR
SUBJECT: MEMORANDUM OF UNDERSTANDING WITH THE PALM SPRINGS POLICE OFFICERS’ ASSOCIATION
FROM: Justin Clifton, City Manager
BY: Department of Human Resources
SUMMARY:
The City has reached a tentative Memorandum of Understanding (MOU) with the Palm Springs Police Officers’ Association (PSPOA). The City Council will consider adopting a Resolution approving the Memorandum of Understanding between the City and the Association.
RECOMMENDATION:
1. Adopt Resolution No. _____, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A MEMORANDUM OF
UNDERSTANDING RELATIVE TO WAGES, HOURS, AND OTHER TERMS AND
CONDITIONS OF EMPLOYMENT FOR EMPLOYEES IN THE PALM SPRINGS POLICE OFFICERS ’ ASSOCIATION FOR THE PERIOD OF JULY 1, 20 22 THROUGH JUNE 30, 202 5, SUBJECT TO ASSOCIATION ’S EXECUTING THE MEMORANDUM OF UNDERSTANDING.”
2. Authorize the City Manager to execute the Memorandum of Understanding (MOU) and all documents necessary to effectuate the above action, including the allocation and compensation plans, agreements and contracts, and any non - substantial MOU language or reorganization.
STAFF ANALYSIS:
The City and representatives of PSPOA have met and conferred in good faith and have reached an agreement on the terms and conditions of the MOU governing employees of the City represented by PSPOA for the period July 1, 2022 through June 30, 2025.
The three-year term agreement with PS POA includes increases of base salary of 4% effective the pay period including July 1, 2022, 4% effective the pay period including July Item 1V - 1
City Council Staff Report
June 16, 2022 -- Page 2
PSFA MOU
1, 202 3, and 3% effective the pay period including July 1 , 202 4. Additionally, the agreement includes a $5,000 lump sum payment for each member of the bargaining unit.
Other changes include an acknowledgment of the City’s built -in health care contribution increases, the addition of longevity pay, an additional step 8 which employees can achieve on their anniversary date one year after reaching step 7, and education incentive pay.
The agreement was reached through negotiations with PSPOA and the City’s Negotiation team, which jointly recommend City Council adoption of the MOU.
FISCAL IMPACT:
During the term of the three-year agreement, the anticipated additional annual cost is:
Year 1 - $1,430,123
Year 2 - $1,953,430
Year 3 - $2,410,246
REVIEWED BY:
Department Director: Stephanie George
Deputy City Manager: Jeremy Hammond
City Manager: Justin Clifton
ATTACHMENTS:
A. Resolution
B. Memorandum of Understanding
Item 1V - 2
RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS , CALIFORNIA, APPROVING A
MEMORANDUM OF UNDERSTANDING RELATIVE TO
WAGES, HOURS, AND OTHER TERMS AND
CONDITIONS OF EMPLOYMENT FOR EMPLOYEES IN
THE PALM SPRINGS POLICE OFFICERS’ A SSOCIATION
FOR THE PERIOD JULY 1, 20 22 THROUGH JUNE 30,
2025, SUBJECT TO ASSOCIATION EXECUTING THE
MEMORANDUM OF UNDERSTANDING.
WHEREAS, Resolution 16438 designates the City Manager (acting personally or through a delegee) with authority to meet and confer in good faith on matters within the scope of representation including wages, hours, terms, and other conditions of employment; and
WHEREAS, the City Negotiation Team has met and conferred in good f aith on wages, hours, terms, and other conditions of employment with the Palm Springs Police Officers’ Association (“PSPOA”); and
WHEREAS, as a result of such good faith negoti ations, the City Negotiation Team h ave reached agreement with PSPOA on the terms and conditions of a Memorandum of Understanding (“M OU”) go verning employees of the City of Palm Springs within such Association; and
WHEREAS, PSPOA and the City Negotiation Team jointly recommend adoption of such MOU by the City Council;
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the Memorandum of Understanding between PSPOA and the City, for the period July 1, 2022 through June 30, 202 5, on file with the City Clerk and incorporated herein by this reference, is hereby approved upon execution of said Memorandum of Understanding.
SECTION 2. T he City Manager is authorized and direct ed to fulfill any meet and confer process(es) in acc ordance with these changes and execute documents necessary to effectuate the above actions in a form acceptable to the City Attorney.
Item 1V - 3
Resolution No. _____
ADOPTED THIS 16TH DAY OF JUNE, 2022.
JUSTIN CLIFTON
CITY MANAGER
ATTEST:
MONIQUE LOMELI, CMC
INTERIM CITY CLERK
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, MONIQUE LOMELI , In terim City Clerk o f the C ity of Palm Springs, hereby certify that Resolution No. ____ is a full, true and correct copy, and was duly adopt ed at a regular meeting of the City Council of the City of Palm Springs on June 16, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF , I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this 16
th day of June, 2022.
M ONIQUE LOMELI, CMC
INTERIM CITY CLERK
Item 1V - 4
PALM SPRINGS POLICE
OFFICERS' ASSOCIATION
(PSPOA)
MEMORANDUM OF
UNDE
RSTANDING
July 1, 2022 – June 30, 2025
Item 1V - 5
2 The Palm Springs Police Officers’ Association
Memorandum of Understanding
July 1, 2022 – June 30, 2025
GENERAL PROVISIONS 3
ARTICLE 1, TERM ....................................................................................................................................... 3 ARTICLE 2, RECOGNITION ........................................................................................................................ 3 ARTICLE 3, FEDERAL AND STATE LAWS ............................................................................................... 3 ARTICLE 4, SOLE AND ENTIRE AGREEMENT ........................................................................................ 3 ARTICLE 5, COMPLETION OF MEET AND CONFER PROCESS ............................................................ 3 ARTICLE 6, SEPARABILITY PROVISIONS ............................................................................................... 4 COMPENSATIONS AND OTHER PAY 5
ARTICLE 7, WAGES .................................................................................................................................... 5 ARTICLE 8, SPECIAL COMPENSATION ................................................................................................... 5 ARTICLE 9, OVERTIME ............................................................................................................................... 9 ARTICLE 11, UNIFORM AND SAFETY EQUIPMENT ALLOWANCE ..................................................... 10 ARTICLE 12, MILEAGE REIMBURSEMENT ............................................................................................ 10 ARTICLE 13, PROBATIONARY PERIOD FOR POLICE OFFICERS ....................................................... 10 ARTICLE 14, CELL PHONE ALLOWANCE .............................................................................................. 11 ARTICLE 15, COURT APPEARANCES .................................................................................................... 11 BENEFITS 13
ARTICLE 16, HEALTH, DENTAL, VISION AND OTHER INSURANCE ................................................... 13 ARTICLE 17, RETIREE HEALTH INSURANCE ........................................................................................ 14 ARTICLE 18, RETIREMENT ...................................................................................................................... 15 ARTICLE 19, EDUCATIONAL REIMBURSEMENT .................................................................................. 16 WORK HOURS/LEAVE 17
ARTICLE 20, HOURS OF WORK .............................................................................................................. 17 ARTICLE 21, ANNUAL LEAVE ................................................................................................................. 18 ARTICLE 22, PAYMENT IN LIEU OF HOLIDAYS .................................................................................... 20 ARTICLE 23, SICK LEAVE AND LEAVE PURSUANT TO A WORKERS’ COMPENSATION INJURY OR ILLNESS .................................................................................................................................................................... 20 ARTICLE 24, REINSTATED EMPLOYEES ............................................................................................... 21 ARTICLE 25, ADVANCED OFFICER TRAINING SCHEDULE ................................................................. 21 ARTICLE 26, DETECTIVES AND DETECTIVE SERGEANTS ................................................................. 21 ARTICLE 27, LIGHT DUTY ASSIGNMENTS ............................................................................................ 21 EMPLOYER/EMPLOYEE RELATIONS 23
ARTICLE 28, DRUG POLICY/DRUG SCREENING .................................................................................. 23 ARTICLE 29, ANTI-NEPOTISM POLICY .................................................................................................. 23 ARTICLE 30, PROMOTIONAL PROCESS ................................................................................................ 23 ARTICLE 31, WEAPON REQUIREMENTS FOR NEWLY HIRED OFFICERS ......................................... 24 ARTICLE 32, WRITTEN REPORTS .......................................................................................................... 24 ARTICLE 33, GRIEVANCE PROCEDURE ................................................................................................ 24 ARTICLE 34, DISCIPLINARY APPEALS PROCESS ............................................................................... 26 ARTICLE 35, ASSOCIATION TIME ........................................................................................................... 30 ARTICLE 36, STRIKES AND WORK STOPPAGES ................................................................................. 30 ARTICLE 37, LAYOFF AND RECALL ...................................................................................................... 31 ARTICLE 38, CITY RESPONSIBILITIES AND RIGHTS ........................................................................... 31 ARTICLE 39, ASSOCIATION RIGHTS ...................................................................................................... 32 ARTICLE 40, MISCELLANEOUS PROVISIONS ....................................................................................... 32 EXHIBIT A - 700.00 TAKE HOME VEHICLES .......................................................................................... 33 EXHIBIT B - DRUG POLICY/DRUG SCREENING .................................................................................... 35
EXHIBIT C - SENIOR POLICE OFFICER, MASTER POLICE OFFICER AND SERGEANT II AND I II QUALIFICATIONS ..................................................................................................................................... 37
Item 1V - 6
3 MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN
THE CITY OF PALM SPRINGS
MUNICIPAL EMPLOYEE RELATIONS REPRESENTATIVE (MERR)
AND THE PALM SPRINGS POLICE OFFICERS' ASSOCIATION (PSPOA) July 1, 2022 – June 30, 2025
GENERAL PROVISIONS
ARTICLE 1, TERM
The term of this MOU shall be from July 1, 2022 through June 30, 2025.
ARTICLE 2, RECOGNITION
Pursuant to the provisions of the Meyers -Milias-Brown Act., Government Code Section 3500, et. seq., the City of Palm Springs (hereinafter called the "City") continues to recognize the Palm Springs Police Officers' Association (herein called the "Association") as the exclusively recognized employee organization for the employee unit of representation known as the Police Safety Unit, which is comprised of all employees in the Police Department in the following classifications:
Police Officer, Senior Police Officer, Master Police Officer, Police Sergeant, Police Sergeant II and Police Sergeant III.
ARTICLE 3, FEDERAL AND STATE LAWS
It is understood and agreed that this MOU is subject to all present and future applicable Federal and State laws and regulations. If any part of this MOU is in conflict or inconsistent with such applicable provisions of Federal or State laws or regulations, and has been held to be invalid or unenforceable by any tribunal of competent jurisdiction, such part or provisions shall be suspended and superseded by such applicable laws and regulations and the remainder of this MOU shall not be affected thereby and shall remain in full force and effect.
ARTICLE 4, SOLE AND ENTIRE AGREEMENT
It is the intent of the parties hereto that the provisions of this MOU shall supersede all prior agreements and memoranda of agreement, or memoranda of understanding, or contrary salary and/or personnel rules and regulations or administrative codes, provis ions of the City, oral and written, expressed or implied, between the parties, and shall govern the entire relationship and shall be the sole source of any and all rights which may be asserted hereunder. This MOU is not intended to conflict with Federal or State law or the City's Municipal Code. The Association and the City agree that all personnel rules not specifically included in the MOU shall be incorporated by reference herein. City reserves the right to add to, modify or delete from the Personnel Rules subject to its obligations under the Meyers-Milias-Brown Act.
ARTICLE 5, COMPLETION OF MEET AND CONFER PROCESS
The Association and the City agree that they had a full and unrestricted right to make, advance, and discuss all matters properly within the scope of meet -and-confer in accordance with State Item 1V - 7
4 laws and local ordinances and regulations. Each party agrees that it shall not attempt to compel negotiations during the term of this Agreement on matters that were raised during the negotiations that preceded this Agreement or matters that are specifically addressed in the Agreement. Except as expressly changed by this MOU, nothing contained herein shall be deemed to have changed any past practices in so far as known to either party.
ARTICLE 6, SEPARABILITY PROVISIONS
Should any provision of this MOU be found to be inoperative, void, or invalid by a court of competent jurisdiction, all other provisions of this MOU shall remain in full force and effect for the duration of this MOU, provided that if any such affected provisions invalidate or void any benefits of employees covered hereunder, the parties shall forthwith commence negotiations to replace the invalidated benefits with benefits of comparable value.
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5 COMPENSATIONS AND OTHER PAY
ARTICLE 7, WAGES
Effective the later of the pay period including July 1, 2022 or the pay period following City Council approval of this MOU, unit members shall receive a four percent (4.0%) base salary increase.
Effective the pay period including July 1, 2023, unit members shall receive a four percent (4.0%) base salary increase.
Effective the pay period including July 1, 2024, unit members shall receive a three percent (3.0%) base salary increase.
Effective the pay period including July 1, 2022, the City will add Step 8 to the salary schedule. All employees in the unit who have been at Step 7 for at least one year and whose last overall performance evaluation was a “meets standards” or better will move to Step 8 at that time. Other employees will move to Step 8 when they become eligible.
In addition to the above, each member of the bargaining unit employed on July 1, 2022 shall receive a lump sum payment of five thousand dollars ($5,000.00) which will be paid on the payday for the pay period including July 1, 2022.
For each classification represented by the Association, there is one range on the salary schedule.
ARTICLE 8, SPECIAL COMPENSATION
8.1 Motor Officer
Officers shall receive compensation of five percent (5%) while assigned as Motor Officers. The Police Department shall provide each Motor Officer with a helmet and jacket. The parties agree that to the extent permitted by law, Motor Officer pay is special compensation and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(4) Motor Officer Pay.
In addition, Motor Officers will receive three (3) hours of pay per month at the rate of fifteen dollars ($15) per hour for the off -duty responsibilities related to caring for their Motor Unit. The parti es acknowledge that the FLSA, which governs the entitlement to compensation for off -duty motor duties, entitles the parties to agree to a reasonable number of hours per month for the performance of off duty motor duties. The parties agree that the officers assigned to the Motor Program may work up to three (3) hours per month on off duty activities related to their motor. The hours derived at in this MOU were determined after an actual inquiry of the Officers assigned as Motor Officers as addressed by Leever v. City of Carson City , 360 F.3d 1014 (9th Cir. 2004). The parties also acknowledge that this pay is not compensation earnable and will not be reported to CalPERS.
8.2 Canine Officer
Officers assigned to the Canine Program shall receive compensation of five percent (5%) while assigned as Canine Officers. The City and Association understand and agree that the five percent (5%) compensation paid to Canine Officers is intended to compensate Canine Officers for their time on duty as Canine Officers. The parties agree that to the extent permitted by law, Canine Officer pay is special compensation and shall be reported as such pursuant to Title 2 CCR, Section Item 1V - 9
6 571(a)(4) Canine Officer/Animal Premium.
In addition, Canine Officers will receive fifteen (15) hours of pay per month at the rate of fifteen dollars ($15) per hour at time and one half for all off duty hours spent caring, grooming, feeding, and otherwise maintaining their canine unit, in compliance with the FLSA and interpretive cases and rulings. The parties acknowledge that the FLSA, which governs the entitlement to compensation for canine duties, entitles the parties to agree to a reasonable number of hours per month for the performance of off duty canine duties. The parties agree that the officers assigned to the Canine Program may work up to fifteen (15) hours per month in off duty activities related to their Canine. The hours derived at in this MOU were determined after an actual inquiry of the Officers assigned in the Canine Program as addressed by Leever v. City of Carson City, 360 F.3d 1014 (9th Cir. 2004). The parties also acknowledge that this pay is not compensation earnable and will not be reported to CalPERS.
It is th e intent of the parties through the provisions of this article to fully comply with the requirements of the FLSA. In addition, both parties believe that this article of the MOU does comply with the requirements of the FLSA.
8.3 Field Training Officers
Field Training Officers (FTO) designated as such by the Chief of Police shall hold that position for a period of four years. Officers designated FTO shall receive compensation of an additional 5% pay while assigned as Field Training Officers. Normally a FTO completing their four -year period will not be eligible for reassignment as an FTO until they has been out of the program for two years. Time requirements may be waived by the Chief of Police. Service time as an FTO may be extended by the Chief of Police. Eligibility for reassignment as an FTO may be waived. The Chief of Police shall determine the number of officers to be assigned as FTOs at any given time, but not less than eight FTOs. The Police Chief may remove with cause an officer from the duties of FTO.
The parties agree that to the extent permitted by law, Field Training Officer pay is special compensation and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(4) Training Premium.
8.4 Bilingual Pay
The following provisions on bilingual pay shall apply.
The parties agree that a minimum of twenty -one (21) officers shall be entitled to bilingual pay for their services as bilingual officers.
Employees hired prior to July 1, 2018, who become eligible for bilingual pay shall be eligible to receive up to five percent (5%) for bilingual pay. As each employee recertifies for eligibility for bilingual pay, employees will be required to take both a speaking and listening and a writing bilingual proficiency examination. Employees shall receive two and one half percent (2.5%) for passing the speaking and listening portion of the bilingual proficiency exam and an additional two and one half percent (2.5%) for passing the writing portion of the bilingual proficiency exam for up to a maximum of five percent (5%) of base salary.
Employees hired after to July 1, 2018, who become eligible for bilingual pay shall be eligible to Item 1V - 10
7 receive up to two hundred and fifty dollars ($250) per month for bilingual pay. As each employee recertifies for eligibility for bilingual pay, employees will be required to take both a speaking and listening and a writing bilingual proficiency examination. Employees shall receive one hundred and twenty-five dollars ($125) per month for passing the speaking and listening por tion of the bilingual proficiency exam and an additional one hundred and twenty-five dollars ($125) per month for passing the writing portion of the bilingual proficiency exam for up to a maximum of two hundred and fifty dollars ($250) per month.
The examinations shall be developed and administered by the City to demonstrate fluency in reading and writing, and speaking and listening the desired second language. All employees receiving bilingual pay must pass the prescribed examinations for each skill (one for speaking and listening and the other for writing) every two years to continue to receive bilingual pay for each skill.
The City will notify employees when they are required to re-test. An employee who passes one of the tests but not the other, will still be eligible to receive their respective bilingual pay (2.5% or $125 per month for the skill passed. In addition, the employee may take a recertification examination after waiting at least three (3) months after taking the recertification examination to which the employee did not pass. If the employee does not pass that recertification examination, the employee shall not be permitted to take the recertification examination for that skill until their two-year cycle to recertify has passed. The City will notify employees when they are required to re-test.
An employee receiving the pay who does not pass both recertification examinations is not qualified to receive bilingual pay. If this occurs, the employee may be replaced by another employee who has passed either examination. If there are no other employees who are certified to receive bilingual pay for either skill, the employee may take the recertification examinations in both skills after waiting at least three (3) months after taking the initial recertification examinations to which the employee did not pass. If the employee passes one of the two examinations, they shall the respective incentive pay (2.5% or $125 per month) for bilingual pay. If the employee does not pass either or both of those subsequent recertification examinations, the employee shall not be permitted to take the recertification examination(s) for that skill until their two-year cycle to recertify has passed. The Human Resources Department will coordinate the recertificatio n examination for each employee receiving bilingual pay.
In addition to the being recertified every two years, employees who are observed by a supervisor being deficient in the use of their bilingual skills shall, in order to continue to receive bilingual pay, be required to recertify their bilingual skills by taking and passing both (or only the one test if they receive on one of the bilingual pays) bilingual proficiency examinations within 30 days of the observation. If an employee fails one or both of the portions of the examination, they will need to wait until the next regularly scheduled recertification test(s) cycle to recertify for bilingual pay. If only one portion of the exam is passed, the employee will lose the pay for the other half (2.5% or $125 per month) until they take the recertification test again.
The Police Chief shall determine the language needs at time of reopening of position. In the event that there are more qualified officers who apply for bilingual pay than the maximum number of bilingual positions available, the selection of the officers receiving such positions shall be based upon seniority. Any officer who accepts a bilingual position shall be subject to scheduling at the discretion of the Police Chief and shall not be entitled to remain a part of the regular shift rotation, but such bilingual officers shall have a separate shift rotation by seniority among the bilingual officers.
Item 1V - 11
8 For any employees in the bargaining unit who receive bilingual pay, they must sign up to be present at, and prepared to use their bilingual skills at one City Council meeting per year. On the day of the Council meeting for which the employee signs up, they shall adjust their work schedule that day by starting four hours later than their regular start time so that they can be present at the Council meeting to utilize their bilingual skills.
The parties agree that to the extent permitted by law, Bilingual pay is special compensation and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(4) Bilingual Premium.
8.5 Longevity Pay
Effective the later of the pay period including July 1, 2022 or the pay period following City Council approval of this MOU, employees in this bargaining unit shall receive longevity pay set forth below based on their years of service in a full-time sworn law enforcement position with the City of Palm Springs or sworn law enforcement position with another law enforcement agency as follows:
10 years – 11 years and 364 days – 2.50%
12 years – 13 years and 364 days – 3.50%
14 years – 15 years and 364 days – 4.50%
16 years – 17 years and 364 days – 6.0%
18 years – 19 years and 364 days – 7.50%
20 years or more – 10.0%
The above percentages are of base pay and are paid for regularly scheduled hours, not overtime hours.
These pays are not cumulative. Once an employee becomes eligible for the next level of longevity pay, they shall qualify for that level and no longer receive the prior level.
The parties agree that to the extent permitted by law, longevity pay is special compensation and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(1) Longevity Pay.
8.6 Educational Incentive Pay
The City agrees to compensate members of the bargaining unit an additional 1.5% of base pay for an Associate's Degree, and 3.0% of base pay for a Bachelor's Degree. The pay will be paid for employee’s regularly scheduled hours, not overtime hours. The employee’s degree must be issued from a college or university accredited by either or both the Council for Higher Education Accreditation (“CHEA”) and/or the U.S. Department of Education (“USDE”). The pays for earning a degree are not are not cumulative. An employee can only receive one level of pay for a degree.
An employee will start to receive the pay on the pay period following their provision of proof of their degree to the Human Resources Department.
The parties agree that to the extent permitted by law, educational incentive pay is special compensation and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(2) Educational Incentive Pay.
Item 1V - 12
9 ARTICLE 9, OVERTIME
9.1 Policy
Employees are eligible to receive overtime pay or compensatory time off, but they shall not work overtime unless authorized in advance to do so by the Police Chief or an appropriate authorized supervisor. The Police Chief shall be responsible for keeping accurate records of all overtime worked by employees.
For contract overtime (i.e., special detail overtime work performed for a third party who is paying for the work as provided for in the Department of Labor regulations implementing the FLSA at 29 C.F.R. Section 553.227) the minimum amount of pay is four (4) hours.
Employees shall be compensated for overtime worked at time and one- half (1.5) for the time worked in excess of forty (40) hours per work week. For the overtime computation, the forty hours worked includes paid leaves of absence. Notwithstanding the work schedule utilized by the Department, the City has adopted the 28- day work period in accordance with Section 7(k) of the Fair Labor Standards Act. The City will pay overtime as it has historically paid in excess of the requirements of the FLSA.
9.2 Right to Receive Overtime Pay or Compensatory Time Off At the Police Chief's discretion, employees eligible to receive overtime pay may be permitted to accrue compensatory time off (earned at time and one half) in lieu of overtime pay.
9.3 Using Compensatory Time Off
The Police Chief or the Police Chief’s Designee shall approve a request to use compensatory time off as soon as operationally practical. Requests received with reasonable advance notice shall be approved as long as there is adequate staffing for that shift. Requests for time off will be considered in priority order in which they were received. The Police Chief or their designee may authorize overtime to fill shift vacancies created by comp time off requests. There shall be no obligation to grant all requests for time off should numerous requests be received simultaneously. The Department will hire back up to two employees per shift as long as replacement officers can be hired. No officer shall be compelled to work in order to grant another employee compensatory time off. The parties agree that the policies set forth in this article are consistent with the law on use of compensatory time off as set forth by the FLSA, its regulations and case law decided on this issue.
9.4 Maximum Accumulation of Compensatory Time Off
No employee shall accumulate compensatory time off in excess of one hundred and sixty (160) hours. An employee who has accumulated the maximum amount of compensatory time shall not accumulate additional compensatory time when working overtime until the employee’s accumulation has been reduced below 160 hours.
9.5 Using Compensatory Time Off for Paid Sick Leave
Accumulated compensatory time off may be used for paid sick leave purposes only if an employee has exhausted all accrued paid sick leave, has requested the use of compensatory time off, and has received the approval of the Police Chief.
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10 ARTICLE 10, CALL BACK
When an employee is called back to work while off duty, the employee shall receive a minimum of four (4) hours pay or four (4) hours of compensatory time. The Police Chief shall determine whether the employee receives pay or compensatory time. Employees who are called in to work less than four (4) hours prior to the start time of their regularly scheduled shift shall receive pay for the time actually worked but shall not be entitled to the minimum guarantee of four (4) hours provided in this article. Employees at work who are asked to stay at work shall receive overtime for actual hours worked, not call-back pay.
Employees called back to work shall be paid for actual travel time not exceeding one- half (1/2) hour which is included in the four (4) hour minimum.
ARTICLE 11, UNIFORM AND SAFETY EQUIPMENT ALLOWANCE
The City agrees to pay a uniform and safety equipment allowance to each Unit member as a reimbursement for expenses incurred for acquisition and maintenance of uniforms and safety equipment in an amount of one hundred and twenty-five dollars ($125) per month for the uniform allowance and ten dollars ($10) per month the safety equipment allowance. Motor officers shall receive one hundred and fifty dollars ($150) per month for the uniform allowance and ten dollars ($10) per month for the safety equipment allowance. The parties expressly agree that the payment each month of these allowances will cover the expenses of acquisition and replacement of all uniforms and safety equipment required for the various assignments of police officers and police sergeants, and that these allowances will meet any and all obligations the City has by law to provide, furnish, use, or provide for uniforms and safety equipment. Employees shall be required to buy their own required uniforms and safety equipment and to maintain and replace, when necessary, any of the said items, from moneys received from the allowance. In consideration of the City's agreement to pay these allowances, the PSPOA agrees not to commence any litigation or other proceeding in which it is contended the City is failing to comply with a legal obligation to provide safety equipment.
The parties agree that to the extent permitted by law, uniform allowance shall be reported to CalPERS as such pursuant t o Title 2, CCR section 571(a)(5) and the City will report as special compensation, the value of the uniforms for a unit member who is a classic member employee per the Public Employees’ Pension Reform Act of 2013 (PEPRA) “New members” as defined by the PEPRA will not have the value of the uniforms reported as special compensation.
ARTICLE 12, MILEAGE REIMBURSEMENT
Employees shall receive mileage reimbursement in accordance with existing City policy, at the prevailing IRS rate.
ARTICLE 13, PROBATIONARY PERIOD FOR POLICE OFFICERS
The probationary period for the position of Police Officer if hired as a new Police Officer whose first job is as a Police Officer with the City of Palm Springs, is eighteen (18) months. If hired as lateral Police Officer (a person who was a Police Officer at any other agency at the time of being hired by the City of Palm Springs) the employee’s probationary period is twelve (12) months.
Employees promoted to Police Sergeant shall serve a twelve (12) month probation.
Item 1V - 14
11 An employee on probation who uses any form of leave with the exception of vacation or compensatory time off, that exceeds a cumulative total of fourteen (14) work days during the probationary period shall have their probation extended by the length of the leave of absence. In addition, the City can extend an employee’s probation by up to a maximum of ninety (90) calendar days. Employees will be notified of the extension of their probation prior to the expiration of their initial probationary period.
Failure to successfully complete probation as a Police Officer shall result in the employee being released from employment with no right to an administrative appeal. The failure to successfully complete probation as a Police Sergeant will result in the employee’s return to the Police Officer classification (Police Officer, Senior Police Officer or Master Police Officer) from which the employee was promoted.
A probationary Police Officer who is a new (as opposed to a lateral) Police Officer may be eligible for a meri t increase at the sole discretion of the Chief of Police upon completion of twelve (12) months service. If the employee did not receive the merit increase at twelve (12) months and successfully completes their eighteen (18) month probationary period, the Police Officer shall receive their merit increase retroactively to twelve (12) months (i.e., they will receive their merit increases retroactively for six (6) months. The employee’s anniversary date for future merit increases shall be the twelve-month anniversary of the employee’s hire date.
ARTICLE 14, CELL PHONE ALLOWANCE
Employees shall be provided a cell phone allowance of $50 per month. It is the policy of the Department that each employee will be required to have a cellular telephone with text capabilities which are active for official Department business use. All employees shall provide the Department with their cell phone number and immediately report any changes to this number to the Office of the Chief of Police. The requirement to possess and use the cell phone in no way assumes a condition of “on call status” while off duty. Except in times of declared emergency and court, employees are not required to use the cell phone while off duty.
ARTICLE 15, COURT APPEARANCES
15.1 Compensation for Employees' Court Appearances
Employees who are subpoenaed to appear in court during non- working hours regarding official City business, shall be paid for actual court time with a minimum of four (4) hours pay for each day's appearance at time and one-half (1-1/2) times the officer's regular hourly rate of pay.
15.2 Cancelled Subpoenas
If a subpoena of the type referred to in section 15.1, above, is cancelled twenty-four (24) hours or more before the employee is scheduled to appear or by the end of the employee's last shift prior to the scheduled appearance time, whichever is later, no payment shall be due to the employee.
If the subpoena is cancelled less than twenty -four hours prior to the scheduled appearance or later than the end of the employee's last shift prior to the scheduled appearance time, whichever is later, the employee shall be paid a cancellation fee of Fifty Dollars ($50.00). Employees are required to call in to the court liaison officer or their backup to determine whether or not the Item 1V - 15
12 subpoena has been cancelled. If an employee fails to call in sufficient time to avoid a cancellation fee, no fee shall be paid if the subpoena had in fact been cancelled and the information was available from the liaison officer or their backup. Similarly, no court pay shall be paid under this article if the employee failed to call in and the subpoena had in fact been cancelled.
Item 1V - 16
13 BENEFITS
ARTICLE 16, HEALTH, DENTAL, VISION AND OTHER INSURANCE
This article sets forth various insurance benefits available to Unit members. The amounts provided by the City for health, dental and vision insurance for 202 2 are set forth below. In the event that the premium charges for the health, dental or vision benefits exceed the total premium costs for the prior year by 4% or more the amount of the excess shall be paid by the Unit member through a payroll deduction. Each calendar year, the City will pay up to a 4% increase above the prior year’s premium rates. The above explanation of the health, vision and dental contributions are described with the following example involving the 2020 -2022 rates:
The Association acknowledges that the City’s agreement to pay up to four percent (4%) of the increases for health, dental and vision insurance is a valuable benefit. The Association agrees that each year, once the increase in the costs of health, dental and vision is known, the amount that will be paid for by the City will be calculated based on the then current number of employees in the bargaining unit. The City will then inform the Association as to what those increased costs will be so that the Association is aware of how much more the City will be spending on these benefits in the following calendar year. The City will consider these increased costs in evaluating its positions in collective bargaining.
A. In 2020, the Blue Shield single party rate was $1,000.48.
B. In 2021, the rate decreased to $986.03.
C. In 2021, the employee paid no additional increase.
D. In 2022, that same rate went up to $1,018.36. The parties agree that it was the City’s responsibility to pay the first 4% of the 20 22 increase on top of the 20 21 premium. The employee pays no increase for 202 2 as the premium amount did not exceed the 4% that the City contributes.
Vision and Dental Insurance are calculated exactly the same way as described above for healt h insurance.
16.1 Health, Dental and Vision Insurance
The City agrees to contribute up to the amounts below for calendar years 2020 and 2021 for employees toward Health (including hospitalization, drug coverage through such program(s)), Dental and Vision insurance. Unit members will sign verification of dependent eligibility annually at open enrollment.
Item 1V - 17
14 January 1, 2022
Type of Coverage Health Dental Vision
Single Party $1,018.36 $38.37 $13.42
Two-Party $1,954.72 $56.20 $13.42
Family $2,071.37 $84.36 $13.42
The City of Palm Springs provides Domestic Partner Coverage to the current health, dental and vision insurance. The enrollee must provide a copy of the Declaration of Domestic Partnership, Proof of Domestic Partner Relationship as issued by a governmental agency, Statement of Financial Liability for Domestic Partnership, Statement of Financial Liability for Domestic Partner Health Benefits, and Affidavit of Eligibility for Economically Dependent Children to the City. The City will use the same enrollment policies for domestic partnerships as are currently used for traditional marriages or as provided by the requirements of the insurance carrier.
For medical coverage, if an employee elects to opt out of coverage offered by the City, they must provide proof of “minimum essential coverage” (as defined by the Affordable Care Act) through another source (other than coverage in the individual market, whether or not obtained through Covered California).
16.2 Term Life Insurance
The City agrees to provide ($50,000) Term Life Insurance coverage at no cost to the employee.
16.3 IRS 125 Plan
The City agrees to provide an IRS 125 reimbursement Plan (health care and dependent care) for employees. The Association agrees that member employees who subscribe to the plan shall pay the Plan Administrator's fees. Any IRS 125 supplemental plan benefit not being offered by the Plan Administrator during the enrollment period for the new plan year will become the responsibility of the employee to pay via direct billing.
ARTICLE 17, RETIREE HEALTH INSURANCE
For all employees hired prior to September 7, 2005, or who had already received a written offer of employment by that date, the City’s maximum contribution for its retired employees will be 75% of the insurance premium for retirees coverage upon completion of 20 continuous years of City service, and 100% payment for retirees coverage upon completion of 25 continuous years of City service. In the event of the employee’s death, the City’s contribution will end. The surviving spouse may remain on the plan as a retiree without a City contribution to the premium. Retired employees who have not completed 20 continuous years of City service shall be entitled to participate at their own cost in the Association’s health, hospitalization and drug coverage plan.
All employees who become eligible to receive Medicare must enroll in Medicare Part A and B to remain eligible to receive the above contributions.
For all employees hired after September 7, 2005, there will be no City contribution for retiree health benefits. The City will, however, make a $100.00 per month contribution to an employee Retiree Health Savings Plan and the associated fixed dollar cost of administration.
Item 1V - 18
15 ARTICLE 18, RETIREMENT
18.1 Retirement Formula
Unit members (and not “new members as defined by the Public Employees’ Pension Reform Act of 2013 - PEPRA) hired prior to June 17, 2011 are covered by the 3% @ 50 formula provided for by the Public Employees’ Retirement Law at Government Code section 21362. 2. These employees’ retirement will be calculated pursuant to the optional benefit (in the City’s contract with CalPERS) of single highest twelve-month period.
Unit members (and not “new members as defined by the Public Employees’ Pension Reform Act of 2013 - PEPRA) hired after June 17, 2011 are covered by the 3% @ 55 formula provided for by the Public Employees’ Retirement Law at Government Code section 21363.1. These employees’ retirement will be calculated pursuant to the optional benefit (in the City’s contract with CalPERS) of single highest twelve-month period.
Unit members who are defined as “new members” under the PEPRA, are covered by the 2.7% @ 57 formula provided for by the PEPRA at Government Code section 7522.25(d). These employees’ retirement will be calculated per the three- year average final compensation as provided for by the PEPRA.
18.2 Employee Contributions to the Retirement System
A. Employees subject to the 3%@50 and 3%@55 formula:
Employees in the Unit shall pay their nine percent (9%) member contribution.
These employees also pay an additional three percent (3%) of compensation earnable of the employer rate as cost sharing (per Government Code Section 20516(f)). If, at any time in the future, the Association informs the City that it no longer agrees to this cost sharing agreement, effective on the date of the elimination of the cost sharing (which would need to coincide with the expiration date of the MOU) the base salary of all employees in the bargaining unit will be reduced by three percent (3%).
The twelve percent (12%) employee contribution is 9% member and 3% cost sharing. The parties acknowledge that this 12% contribution to retirement satisfies the 2018 legislative goal of the Public Employees’ Pension Reform Act that safety employees pay up to 12% for their pensions.
B. Employees subject to the 2.7%@57 Formula – “New Members” as defined by PEPRA
Unit members who are defined as “new members” under the PEPRA, are covered by the
2.7%@ 57 formula provided for by the PEPRA at Government Code section 7522.25(d).
These employees’ retirement will be calculated per the three year average final compensation as provided for by the PEPRA per Government Code section 7522.32(a).
These employees shall pay the statutorily mandated employee contribution rate of one half of the total normal cost as determined each year by CalPERS in their annual valuation report.
Item 1V - 19
16 18.3 Adoption of IRS Code Section 414(h)(2) Resolution The City has adopted the CalPERS resolution in accordance wit h and as permitted by IRS Code section 414(h)(2) to ensure that the employees’ payment (i.e., “pick up” as that term is used in section 414(h)(2)) of their employee contribution is made on a pre-tax basis.
18.4 Optional Benefits
The City contracts with CalPERS for the following optional benefits:
A. Pre-retirement death benefits to continue after remarriage of survivor – Government Code section 21551
B. Death Benefit – Government Code section 21620
C. Post Retirement Survivor Allowance – Government Code sections 21624/26/28 and 21635
D. 1959 Survivor Benefit Level 4– Government Code section 21574
E. Military Relocation Credit - Government Code section 21024
F. Final Compensation Period One Year - Government Code section 20042 for classic members
G. 2% Cost of Living Allowance - Government Code section 21329
H. Prior Service - Government Code section 20055
ARTICLE 19, EDUCATIONAL REIMBURSEMENT
A member of the Unit shall receive educational reimbursement for courses either approved through the Tuition Reimbursement Program as set forth in Personnel Rule 18.2 or for other work- related courses approved in advance at the discretion of the Police Chief and the Human Resources Director. The maximum reimbursement shall be as follows: No employee shall receive more than $3,000 per fiscal year in educational reimbursement, subject to a $20,000 cap per fiscal year for all employees in the bargaining unit.
Item 1V - 20
17 WORK HOURS/LEAVE
ARTICLE 20, HOURS OF WORK
20.1 Work Week
The normal workweek is forty (40) hours during the seven (7) day period starting 12:01 a.m.
Sunday and ending 12:00 midnight of the following Saturday.
20.2 Schedule - Specified, Non-Patrol Employees
Employees assigned to patrol duty, motorcycle duty or detective duty, the Personnel & Training Sergeant, the Traffic Sergeant, and Canine patrol officers, but excluding the School Campus Officer, shall be allowed to work on a four (4) ten (10) schedule, with the understanding that such schedule can include weekends at the discretion of the Police Chief. It is also agreed that the Personnel & Training Sergeant, and the Traffic Sergeant shall be subject to a "flex schedule", in that their time worked would be adjusted to minimize overtime and provide flexibility in performing their duties, attending official events and functions at which their attendance is necessary.
However, the regular scheduled hours of these employee will include three (3) contiguous days off per week.
The parties also agree that employees in the unit assigned as Community Policing Officer patrol duty may be assigned to work a 3/12 work schedule. A 3/12 work schedule is illustrated by example as follows:
Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Officer 1 12 12 12 8 Off Off Off 12 12 12 Off Off Off Off Officer 2 Off Off Off Off 12 12 12 Off Off Off 8 12 12 12
In this example, the unit member working the 3/12 work schedule shall not receive overtime compensation for working their regularly scheduled hours because the workweek for purposes of receiving MOU overtime shall begin exactly four hours after the start time of the eight hour shift for each employee assigned that work schedule. Thus, the employee will be scheduled to work 40 hours in that workweek.
If the City desires to modify an employee’s 4/10 work schedule to a 3/12 work schedule (and vice versa) the City shall provide the Association with at least 14 days’ advanced notice. The Association shall have the right to request to meet with the City to discuss any impacts it believes the change in work schedule will have on any members of the unit.
The Police Chief has the discretion to have Police Officers (any of the three classifications of Police Officers) assigned to the Palm Springs Airport and scheduled to work a schedule consisting of three 12-hour shifts per week with an additional eight (8) hour shift every other week.
20.3 No Guarantee of Hours
Nothing contained in this MOU shall be construed to constitute a guarantee of hours of work per day or per workweek or of days of work per work week in the event that the City has a fiscal budget crisis declared by the City Manager.
Item 1V - 21
I I I I I I I I I I I I I I I
18 20.4 Shift Assignments
For shift selection purposes, the early and late day shifts shall be considered separate, as it pertains to the four (4) ten (10) schedule. If the Association wishes to address issues of shift selection, it may make such requests to the Police Chief.
20.5 Work Commuting
Any employee hired after July 1, 2000 shall live within an hour’s distance of the Police Department so that the officer is able to report to work within an hour.
20.6 – Travel to Classes/Training
An employee who travels from their place of residence to a training or class shall only be paid for the travel time that exceeds their regular home to work commute time. For example, if an employee’s normal home to work commute time is 30 minutes and the travel to the training is 50 minutes, the employee should only submit the additional 20 minutes as travel/work time.
ARTICLE 21, ANNUAL LEAVE
21.1 Definition
Annual leave is the period of approved absence with pay from regularly scheduled work that is not properly chargeable to some other category of leave.
21.2 Annual Leave Accrued While on Sick Leave
Annual leave shall accrue while an employee is on approved sick leave or occupational sick leave as provided in this MOU up to the maximum of four hundred (400) hours. Although employees have the ability to cash out annual leave as addressed below, once an employee accrues 400 hours, they will not accrue additional annual leave until their accrual drops below 400 hours.
21.3 Annual Leave for Reinstated Employees (Employees Previously Employed by the City) Notwithstanding other provisions of this MOU, for annual leave purposes only, reinstated employees shall receive service credit for their prior regular (non -temporary) employment and shall accrue annual leave commencing with the effective date of such reinstatement at the current accrual rate applicable to the service credit they received.
21.4 Annual Leave General Provisions
Employees may utilize their annual leave at the discretion of the Police Chief. Annual leave need only be used to cover shifts on regularly assigned days, not additional shifts. Annual leave shall be paid at the employee's straight time base hourly rate of pay in effect during the leave period.
21.5 Accrual Rates
Annual leave shall accrue and vest (and is thus, subject to cash out) on the basis of each full month worked in accordance with the following schedule:
Item 1V - 22
19 Years Of Service Hours Accrued And Vested For
Each Full Month Worked
0 Through 5 8
6 Through 10 10
11 12.67
12 13.34
13 14
14 14.67
15 15.34
16 16
17 16.67
Annual leave shall begin to accrue on the first day of the month following employment with the City.
21.6 Maximum Accrual
Annual leave shall accrue to a maximum of four hundred (400) hours. An employee whose accrual is at 400 hours shall not accrue additional annual leave unless and until they use such leave bringing his balance below 400 hours or cashes in such leave per article 21.7 of this MOU.
21.7 Annual Leave Cash-In
By December 15 of each year, employees may make an irrevocable election to cash out up to the maximum number of hours of annual leave which they can accrue per year which will be earned in the following calendar year (with a maximum of 160 hours) at the employee’s base salary rate of pay. In the following year, the employee can receive the cash for the annual leave they irrevocably elected to cash out in either two (2) separate increments of up to half their annual accrual cap (i.e., for those who accrue 13.34 hours per month - 160 hours per year, 80 hours each) or one (1) increment of up the maximum they can accrue in a year.
The employee would be paid one half of what they irrevocably elect to cash out hours on both the second pay day in July and the first pay day in December or the employee can elect to be paid their full amount they elected to cash out on the first pay day in December. However, if the employee’s annual leave balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of leave the employee has accrued at the time of the cash out.
If an employee makes an irrevocable election to cash out annual leave in the following calendar year and uses annual leave in that subsequent year, the annual leave used will come from annual leave the employee had earned prior to January 1 of the year the employee has elected to cash out annual leave. This is to ensure that assuming an employee had an annual leave balance prior to January 1, the annual leave used will not result in a reduction in the amount of annual leave the employee will be eligible to cash out.
In addition to the above, an employee who did not make an irrevocable election to cash out the maximum permitted above (i.e., up to 160 hours per year) may be able to do so if they have an “unforeseen emergency” (defined as an unanticipated emergency that is caused by an event beyond the control of the employee and that would result in severe financial hardship to the Item 1V - 23
20 employee if early withdrawal were not permitted). A determination as to whether an “unforeseen emergency” exists shall be determined by the Human Resources Director at their discretion and not subject to the filing of a grievance. If such a request is made and granted, the employee will be able to cash out annual leave as described above (i.e., up to 80 hours with the second pay day in July and the first pay day in December or the entire 160 hours with the first pay day in July).
Under no circumstances may an employee cash out more annual leave than the employee has accrued or more than the maximum allowed to be cashed out in this Section. An employee who irrevocably elected to cash out less than 160 hours of annual leave will have the ability to increase it to 160 hours if they have an unforeseen emergency.
21.8 Payment of Annual Leave at Separation From City Employment Upon separation, all unpaid accrued and vested annual leave will be paid at the employee's current base salary rate of pay. All unpaid accrued and vested annual leave of deceased employees shall be paid to the estate of said deceased except as otherwise provided by law.
ARTICLE 22, PAYMENT IN LIEU OF HOLIDAYS
In lieu of all City recognized holidays, employees shall be paid 4.00 hours per pay period (for the 24 pay periods when holiday in lieu pay is paid to employees) at their straight time base hourly rate.
The parties agree that to the extent permit ted by law, the compensation in this section is special compensation for those employees who are normally required to work on an approved holiday because they work in positions that require scheduled staffing without regard to holidays and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(5) holiday pay.
ARTICLE 23, SICK LEAVE AND LEAVE PURSUANT TO A WORKERS’ COMPENSATION
INJURY OR ILLNESS
23.1 Industrial Leave
Employees who are compelled to be absent from duty because of illness or injury covered by State of California Workers’ Compensation Insurance & Safety Act shall, in lieu of temporary disability compensation payable under the aforementioned Act, continue to be paid their normal salary and accrue other benefits in accordance with the provisions of Labor Code Section 4850 and court interpretations of that law.
Any period of time during which an employee is required to be absent from their position by reason of an industrial injury or industrial illness for which they are entitled to receive compensation, shall not be considered a break in continuous service for the purpose of their right to salary adjustment or to the accrual of annual/sick leave and seniority.
23.2 Sick Leave Maximum Accrual
Sick leave shall accrue to a maximum of three (3) months or five hundred and twenty (520) hours.
Sick leave shall begin to accrue on the first day of the month following employment with the City.
Employees who accumulate over 520 sick leave hours will have an opportunity to cash out the excess hours over the 520 sick leave hours on the second pay day of July. Employees will have Item 1V - 24
21 the option of depositing the excess hours into their deferred compensation account or converting the excess hours to taxable cash (as income). If an employee does not exercise the option to deposit the excess hours into their deferred compensation account or convert it to taxable cash, the hours will be converted to cash by the City. In addition to having the option to cash out or place sick leave hours above 520 hours into deferred compensation on the second pay day in July, following the final pay day in December of each year, unit members with more than 520 hours of accrued sick leave in their sick leave account shall be cashed out of that sick leave down to 520 hours. These employees have the right to inform payroll that they want these funds to be placed into their deferred compensation account.
23.3 Accrual Rates
For the first twelve (12) months of continuous service employees shall accrue sick leave at the rate of five (5) hours for each full month of service.
After completion of twelve (12) months of continuous service, employees shall accrue sick leave at the rate of ten (10) hours for each full month of service.
23.4 Disposition of Sick Leave upon Retirement
Unless converted to service credit, unit members shall be paid for accrued, vested and unused sick leave and excess sick leave (having been accrued at that time of the year) upon a public safety service or disability retirement. All unpaid accrued and ve sted sick leave of deceased employees shall be paid to the estate of said deceased except as otherwise provided by law.
ARTICLE 24, REINSTATED EMPLOYEES
An employee who leaves employment (i.e., not an employee on a leave of absence, but who is no longer a City employee) with the City and returns to work to a position in this Unit within one (1) year thereafter shall be treated in all respects as a new employee regarding shift assignments, scheduling of vacations and days off and with respect to promotions. Benefit accruals for such reinstated officers shall be governed by the existing benefit accrual rules.
ARTICLE 25, ADVANCED OFFICER TRAINING SCHEDULE
The Association agrees that City can change schedules three (3) times a year to accommodate Advanced Officer Training Schedule. Each schedule change not to exceed fourteen (14) days. If training occurs during Spring Break schedule, it will be considered Advanced Officer Training.
ARTICLE 26, DETECTIVES AND DETECTIVE SERGEANTS
The Police Chief shall determine the number of officers to be assigned as detectives at any given time and shall determine whether or not there is a continuing need to have any given officer work as a detective.
ARTICLE 27, LIGHT DUTY ASSIGNMENTS
The City and the Association agree that the Police Chief shall have complete discretion to decide whether or not light duty work can be made available to an employee who is unable to perform Item 1V - 25
22 their regular duties due to a non-work related illness or injury.
Item 1V - 26
23 EMPLOYER/EMPLOYEE RELATIONS
ARTICLE 28, DRUG POLICY/DRUG SCREENING
This policy is attached and incorporated by reference into this Agreement as Exhibit B. The parties acknowledge and agree that this topic is subject to meet and confer per the Meyers Milias Brown Act.
ARTICLE 29, ANTI-NEPOTISM POLICY
29.1 The PSPOA and the City agree that no persons related by blood may be employed in the Palm Springs Police Department at the same time. Consistent with the definition for non- spouse relatives in City Personnel Rule 9.4, related by blood shall include an employee’s child, parent, grandparent, brother, sister, grandchild, uncle, nephew, niece and first cousin. This Article does not apply to sibling relationships or parent/child relationships if the sibling, parent or child is within 24 months of normal retirement. Employees of the Palm Springs Police Department employed prior to July 1, 1998 and related by blood to another employee of the Palm Springs Police Department employee who was also employed prior to July 1, 1998, are exempted from the above, but in no case shall any employee be supervised by a person related by blood.
29.2 Consistent with City Personnel Rule 9.4, the initial employment of persons related by marriage to City employees will not be permitted within the Palm Springs Police Department unless specifically approved by the City Manager.
A. They shall not work the same patrol hours. For purposes of this regulation, motors will be viewed as a patrol assignment.
B. They shall not work on the same shift or any shift that overlaps with a shift that the other spouse works.
C. They shall not work any overtime or contract overtime at the same time.
D. They shall not work any special assignments at the same time, including task forces.
E. They shall not supervise one another at any time.
F. They shall not be assigned to investigate one another or in any manner participate in an investigation of an incident that involves a spouse, including but not limited to incidents where the spouse is an investigator, subject, victim or witness in the incident.
Supervisors may make exceptions to A. through D. only in emergency situations.
ARTICLE 30, PROMOTIONAL PROCESS
Whenever there is a promotion to the position of Police Sergeant, a Rule of 5, i.e., the top five Item 1V - 27
24 candidates (assuming there are at least five) on the eligibility list in ranked order, shall be presented to the Police Chief for consideration. If any of the candidates chosen for promotion to Police Sergeant are passed over by the Police Chief, i.e., the Police Chief does not pick the highest ranking person remaining on the list, the Chief will provide an explanation (orally or in writing) to the person passed over as to why another candidate was chosen for the promotion.
ARTICLE 31, WEAPON REQUIREMENTS FOR NEWLY HIRED OFFICERS Employees are precluded from carrying any weapon other than a weapon of the type or types prescribed by the Police Department and heretofore agreed upon with the Association.
ARTICLE 32, WRITTEN REPORTS
A unit member has the right to have an attorney present when preparing a written incident report for an officer -involved shooting. Such reports must be submitted to the watch commander or designated supervisor within three working days of the incident.
The attorney must be present when the report is submitted, in the event that the reviewing official needs further information.
ARTICLE 33, GRIEVANCE PROCEDURE
33.1 Definition of Grievance
A. A “Grievance” is a dispute of one or more employees or a dispute between one or more employees involving the interpretation, application or enforcement of the provisions of the MOU, or of the Personnel Rules and Regulations that are within the statutory sc ope of representation, and for which there is no specific method of review provided by federal, State or local law. A grievance may also be filed by the Association.
B. Personnel rules 4.3.3 or 7.7 are excluded from the grievance procedure as well as any other rules as specified and complaints involving harassment shall be handled by a separate procedure.
C. Release or lay -off of employees during an initial probationary period after hire, reinstatement, or reemployment is not subject to the grievance procedure.
33.2 Time Limits and Waivers
A. Working Days - For purposes of the Grievance Procedure, working days, further referred to as “days", are defined as the period from 8 a.m. to 6 p.m. City Hall working days, currently Monday-Thursday, excluding holidays.
B. Initiation - A Unit employee must initiate the grievance within fifteen (15) days of the occurrence of the event giving rise to the grievance or within fifteen (15) days after the grievant should, with reasonable diligence, have had knowledge of such occurrence, whichever is later.
C. Management Reply - Failure by management to reply to the employee's grievance within the time limits specified under the grievance procedure shall automatically grant the Item 1V - 28
25 employee the right to process the grievance to the next level of review.
D. Failure to Submit to Next Level - If a Unit employee fails to submit from one level to the next level within the time limits and in the manner provided under the grievance procedure, the grievance shall not be subject to further consideration and will be deemed resolved.
E. Waiver by Mutual Agreement - Any level of review or any time limits established in the procedure may be waived or extended by mutual agreement between the Unit employee and management, which must be confirmed in writing.
F. Outside of Authority - If the supervisor, manager, or department head designated by the grievance procedure below to receive the grievance determines that they do not have the authority to resolve it, that supervisor, manager, or department head, shall so inform the grievant and forward the grievance to the next higher level of supervision with authority to resolve it, if applicable, or advise the grievant in writing they may continue to the next level in the process.
33.3 Informal Resolution
A. The responsibility of a Unit employee with a bona fide grievance concerning terms and conditions of employment is to promptly inform and discuss the grievance with the department supervisor or designee in order to, in good faith, endeavor to resolve the matter expeditiously and informally.
B. If such informal discussion does not resolve the grievance to the Unit employee’s satisfaction, such employee may file a formal grievance in accordance with the procedure set forth in this section.
33.4 Procedure
A. The Unit employee shall provide the grievance in writing, with signature and date, and submit it to their immediate supervisor within fifteen (15) days of the initial commencement of the occurrence being grieved. The supervisor shall further consider and discuss the grievance with the Unit employee and such employee’s designated representative as deemed appropriate, and shall, within fifteen (15) days of having received the written grievance, submit a response thereto in writing to the employee and the employee’s representative, if applicable.
B. If the written response of the immediate supervisor does not result in a resolution of the grievance, the Unit employee may further submit the grievance, by presenting a written request, with date and signature, to the Unit employee’s department head within seven (7) days of the Unit employee’s receipt of the supervisor’s response. The department head may investigate the grievance and may set a meeting with the Unit employee, employee’s designated representative, and other persons as deemed appropriate to consider the grievance. Within thirty (30) days of receipt of the grievance by the department head, the department head shall submit a response to the grievance to the Unit employee and employee’s representative, if applicable.
C. If the response by the department head, does not result in a resolution of the grievance, Item 1V - 29
26 the Unit employee may further submit the grievance, by presenting a written request, with date and signature to the Human Resources Director, for submission to the Office of the City Manager, within seven (7) days of the unit employee’s receipt of the department head’s response. The City Manager or designated representative, may set a meeting with the Unit employee, employee’s designated representative, and other persons as deemed appropriate, to consider the grievance. Within thirty (30) days of receipt of the grievance the City Manager or designated representative shall submit a response to the Unit employee and employee’s representative, if applicable. The decision of the City Manager Office is final and binding.
D. This grievance procedure is the sole and exclusive method for alleging a violation, misinterpretation or misapplication of any provision of this MOU or for bringing any grievance as defined in Section 33.1A.
ARTICLE 34, DISCIPLINARY APPEALS PROCESS
The disciplinary appeals process is as follows:
34.1 Property Interest Discipline
A. Appeals Procedure
1. If an appeal of a dismissal, suspension, demotion or reduction in salary is filed with the Director of Human Resources within ten (10) days of receipt of a written notice of discipline, this process will be used which includes the use of a hearing officer.
2. The City and the employee or their representative may agree on the hearing officer. If they cannot agree, the hearing officer shall be chosen from a panel of seven (7) hearing officers from a list provided State Mediation and Conciliation Service. The parties shall alternately strike names until one hearing officer remains. The parties shall flip a coin with the winner of the coin flip getting to choose whether to strike the first name or the second name. Names will be struck until the hearing officer is selected.
3. The hearing officer shall submit an advisory decision setting forth findings, conclusions, and recommendations to the City Council.
B. Hearings
1. The hearing shall commence no more than ninety (90) calendar days from the date the hearing officer is selected provided that the parties may agree to a longer period to commence the hearing.
2. All disciplinary hearings shall be closed to the public unless the affected employee requests that the hearing be open to the public.
3. The hearing need not be conducted in accordance with technical rules relating to evidence and witnesses. Any relevant evidence shall be admitted if it is the sort of evidence on which reasonable persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule, which might Item 1V - 30
27 make improper admission of such evidence over objection in civil actions. Hearsay evidence may be used for the purpose of supplementing or explaining any direct evidence but shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions. The rules of privilege shall be effective to the same extent that they are now or hereafter may be recognized in civil and criminal actions, and irrelevant and unduly repetitious evidence shall be excluded. The hearing officer shall not be bound by technical rules of evidence. The hearing officer shall rule on the admission and exclusion of evidence.
4. Each party shall have these rights: to be represented by legal counsel or other person of their choice; to call and examine witnesses; to introduce evidence; to cross -examine opposing witnesses; to impeach any witness regardless of which party first called the witness to testify; and to rebut the evidence against them. If the employee appealing the discipline does not testify on their own behalf, they may be called and examined as if under cross-examination. Oral evidence shall be taken only on oath or affirmation. A court reporter will be engaged to record the hearing. The cost of the reporter will be paid for by the City. However, if the employee wants to order a transcript the City will not pay for the cost of that transcript. The cost of the hearing officer will be paid for by the City.
5. The hearing shall proceed in the following order, unless the hearing otherwise directs:
a. Opening statements shall be permitted with the City proceeding first.
b. The City shall proceed first in the hearing. If witnesses are called, the opposing party shall have the right to cross -examine the witnesses on any matter relevant to the issues, even though that matter was not covered on direct examination.
c. The parties may then, in order, respectively offer rebutting evidence only, unless the hearing officer for good reason permits them to offer evidence upon their original case.
d. Closing arguments and written briefs shall be permitted.
e. The hearing officer shall determine the relevancy, weight, and credibility of testimony and evidence. The hearing officer shall base findings on the preponderance of evidence. During the examination of a witness, all other witnesses, except the parties, shall be excluded from the hearing unless the hearing officer, for good cause, otherwise directs. The hearing officer, prior to or during a hearing, may grant a continuance for any reason believed to be important to reaching a fair and proper decision.
f. The hearing officer may recommend sustaining, rejecting or modifying the disciplinary action but not increasing the proposed discipline.
6. The hearing officer's findings, conclusion and recommendations shall be filed with the Director of Human Resources, who will forward them to the City Manager who then forward to the City Council. The City Council, in its sole discretion, may hear limited oral arguments and/or request written statements from either party on the hear ing officer’s advisory decision. The City Council shall inform the employee appealing the discipline of its decision regarding the appeal within sixty (60) calendar days of the receipt of the Item 1V - 31
28 hearing officer's report. The City Council may sustain, reject or modify the findings of the hearing officer but cannot increase the discipline proposed by the City. However, the City Council may extend the time to issue its decision beyond the sixty (60) calendar day period if it believes it is necessary. The decision of the City Council regarding the appeal shall be the final step in the administrative appeal process. However, any disciplinary action is deemed final as of the effective date. Copies of the City Council's decision, including the hearing officer's report shall be filed where appropriate, including the employee's personnel file. The City Council’s decision is subject to review by a superior court pursuant to Code of Civil Procedure Section 1094.6.
7. Subpoenas and subpoenas duces tecum pertaining to the h earing shall be issued at the request of either party, not less than ten (10) calendar days prior to the commencement of the hearing; after commencement, subpoenas shall be issued only at the discretion of the hearing officer.
8. The time limits specified at any step in this procedure may be extended or reduced by written agreement of the employee or representative and the representative for the City.
34.2 Appeals Procedures for Punitive Action for Which There Is No Property Interest A. Appeals Procedure:
In accordance with Government Code section 3304.5, the following procedure shall be used if an employee is subject to punitive action which does not implicate a property interest as defined by the Public Safety Officers Procedural Bill of Rights Act that does not involve termination from employment, demotion, suspension or a reduction of pay.
1. Appeal to the Police Chief or Designee
a. An employee who receives notice of a punitive action shall be entitled to appeal the action to the Police Chief prior to the effective date of the punitive action. The appeal is an opportunity for the employee to present written material and arguments why a punitive action should not occur or offer alternatives to the action.
b. Notice of Appeal: Within fourteen (14) calendar days of receipt by an employee of notification of a punitive action, the employee shall notify the Police Chief in writing of the intent to appeal the punitive action. The notice of appeal shall specify the action being appealed and the substantive and procedural grounds for the appeal.
Nothing in this section shall limit the right of the Department to institute disciplinary action, notwithstanding that an appeal may be pending.
2. Hearing
a. Hearing Officer: The Police Chief or designee shall act as the hearing officer. The Police Chief shall have twenty (20) days from receipt of the request to schedule an appeal hearing. The hearing shall take place within ninety (90) calendar days of the date the employee appealed the punitive action or such other time as may be agreeable by the parties.
Item 1V - 32
29 b. Burden of Proof:
(1) If the action being appealed does not involve allegations of misconduct (i.e., allegations that the officer has violated one or more federal, state, or local laws, and/or City or Police Department regulations, procedures, or rules) the limited purpose of the hearing shall be to provide the employee the opportunity to establish a record of the circumstances surrounding the action. The City’s burden shall be satisfied if the City establishes that the action was reasonable, even though reasonable persons might disagree about whether the action was the best one under the circumstances.
For example, if the Police Department affected a non- disciplinary transfer of an employee out of a premium pay assignment with the intent of affording other employees the opportunity to work in the assignment, the decision would not be subject to being overturned as long as it was reasonable, even if one or more persons might disagree with the decision.
(2) If the punitive action involves charges of misconduct, (i.e., allegations that the employee has violated one or more laws, regulations, procedures, or rules), the City shall have the burden of proving by a preponderance of the evidence the facts which form the basis for the charge of misconduct and the burden of persuasion that the punitive action was reasonable under the circumstances.
For example, if an employee received a written reprimand for unauthorized absence from work then the City would bear the burden of proving that the employee was absent from work without authorization and that a written reprimand was reasonable under the circumstances.
c. Conduct of Hearing:
The formal rules of evidence do not apply, although the Hearing Officer shall have discretion to exclude evidence which is incompetent, not relevant or cumulative, or the presentation of which will otherwise consume undue time. The rules of privilege shall be observed.
(1) The parties may present arguments through documents and statements.
(2) If the punitive action being appealed is a written reprimand, the parties will not be entitled to confront and cross-examine witnesses.
(3) Following the presentation of written material and statements, the involved parties may submit closing arguments orally or in writing for consideration by the hearing officer.
(4) Representation: The employee may be represented by an association representative or attorney of their choice.
d. Decision:
After the hearing, a decision will be submitted in writing within forty-five (45) calendar days. The decision shall be served by first class mail, postage pre -paid, upon the Item 1V - 33
30 employee as well as any attorney or representative, shall be accompanied by an affidavit or certificate of mailing, and shall advise the employee that the time within which judicial review of the decision may be sought is governed by Code of Civil Procedure § 1094.5.
ARTICLE 35, ASSOCIATION TIME
The Police Chief has the authority to grant the Association President, or their designee, time off with pay to attend conferences or other events not to exceed forty (40) hours in a calendar year (except as shall otherwise be provided by the Chief of Police).
The Association shall be provided with seven hundred and fifty (750) hours of paid release time annually to be used by Association Board members to conduct union business. The 750 hours are to be used for release from work. The 750 hours cannot be used by an employee during an employee’s off duty hours and then applied to work hours. The 750 hours must be tracked by use of a separate payroll code so that each time it is used it is specifically accounted for on the time sheet of the employee who uses it. Board members wishing to use this release time must seek approval from their supervisor in advance. Approval will be granted if reasonable notice is provided to address the work load or any operations issues caused by the Board member’s absence. However, the Department, through its supervisors, retains the discretion to deny a request to use such time for operational reasons but cannot and will not act unreasonably in granting a request to use such time. This release time does not accrue. Each January 1st there will be seven hundred and fifty (750) hours to be used for the calendar year. If any of the 750 hours are not used, they do not carry over to the next year. The POA President is responsible for keeping track of the hours used by the Association and will inform the Human Resources Director each quarter of the hours used by the Board members.
ARTICLE 36, STRIKES AND WORK STOPPAGES
36.1 Prohibited Conduct
The Association, its officers, agents, representatives and/or members agree that during the term of this MOU, they will not cause or condone any strike, sympathy strike, walkout, slowdown, sick-out, or any other unlawful job action or concerted activity by withholding or refusing to perform services.
Any employee who participates in any conduct prohibited in Article 36.1(A) above, may be subject to suspension, demotion or dismissal by the City.
In addition to any other lawful remedies or disciplinary actions available to the City, if the Association fails, in good faith, to perform all responsibilities listed below in Article 36.2, Association Responsibility, the City may suspend any and all rights and privileges accorded to the Association in this MOU, including but not limited to suspension of the Grievance Review Procedure and dues deduction.
36.2 Association Responsibility
In the event that the Association, its officers, agents, representatives, or members engage in any of the conduct prohibited in Article 36.1(A), Prohibited Conduct, the Association shall immediately instruct any persons engaging in such conduct that their conduct is in violation of this Agreement and unlawful, and they must immediately cease engaging in conduct prohibited in said Article Item 1V - 34
31 36.1(A) and return to work.
ARTICLE 37, LAYOFF AND RECALL
The Association agrees to Personnel Rule 13.3 Layoff and Recall, except that if a Police Sergeant bumps to Police Officer as a result of layoffs, the "Classification Seniority" in the position of Police Officer will be defined as the time in the classification of Police Officer plus the time in classification of Police Sergeant. Where Personnel Rule 13.3 indicates that job performance shall be considered, for members of the Police Safety Unit, an employee's final ranking of the eligibility list for the position will be considered instead.
ARTICLE 38, CITY RESPONSIBILITIES AND RIGHTS
In order to insure that the City is able to carry out its functions and responsibilities imposed by law, the City of Palm Springs has and will retain the exclusive right to manage and direct the performance of City services and the work force performing such services and therefore the following matters shall be within the exclusive discretion of the City:
A. To determine issues of public policy;
B. To determine the merits, necessity, or organization of any service or activity conducted by the City;
C. To determine and change the facilities, methods, means, and personnel by which City operations are to be conducted;
D. To expand or diminish services;
E. To determine and change the number of locations, relocations, and types of operations and the processes and materials to be employed in carrying out all City functions, including but not limited to, the right to subcontract any work or operations;
F. To determine the size and composition of the work force, to assign work to employees in accordance with requirements as determined by the City and to establish and change work schedules and assignments, and to determine the days and hours when employees shall work;
G. To relieve employees from duty because of lack of work or other non-disciplinary reasons;
H. To discharge, suspend, or otherwise discipline employees for proper cause in accordance with established personnel rules;
I. To determine job classifications;
J. To hire, transfer, promote, and demote employees for non-disciplinary reasons;
K. To determine policies, procedures and standards for selecting, training and promotion of employees;
L. To establish employee performance standards including but not limited to, quality and quantity standards;
M. To establish reasonable work and safety rules.
Item 1V - 35
32 The City, in exercising these rights and functions, will not discriminate against any employee because of membership or non-membership in any employee organization.
Except in emergencies, or where the City is required to make changes in its operations because of the requirements of law, whenever the contemplated exercise of Management's rights shall impact on a significant number of employees, the City and the Association agree to meet and confer in good faith with representatives of the Association regarding the impact of the contemplated exercise of such rights prior to exercising such rights, unless the matter of the exercise of such rights is provided for in this Agreement.
ARTICLE 39, ASSOCIATION RIGHTS
A. Deduction of dues and/or Association sponsored programs.
B. The Association shall have the right to use a Police Department bulletin board for communications with its members. Any communication shall be in accordance with applicable ordinances, statutes and laws.
C. The Association shall have the right and responsibility to use and maintain the “Officer/Employee of the Year Photo Display.”
ARTICLE 40, MISCELLANEOUS PROVISIONS
The parties will try to work cooperatively when handling claims against police officers and the City for the purpose having consistent positions to better handle such claims.
40.1 Joint Drafting
Each party has cooperated in the drafting and preparation of this MOU. Hence, in any construction to be made of this MOU, the same shall not be construed against any party.
40.2 Modification
This MOU may only be modified or amended by written agreement between the parties and must be subsequently approved by the City Council.
40.3 City Council Approval
The City and the Association have met and conferred in good faith on wages, hours, and other terms and conditions of employment for the employees represented by the Association and have reached agreements which are set forth in this MOU. This MOU constitutes a joint recommendation by the City and the Association, after ratification of the Association's membership, to be submitted to the City Council for its determination and approval by one or more resolutions, as the City Council may deem fit and proper. This MOU is of no force or effect unless or until ratified and approved by the City Council of the City.
40.4 Police Department Policy 700.00 – Take Home Vehicles This policy is attached and incorporated by reference into this Agreement as Exhibit A.
Item 1V - 36
33 EXHIBIT A - 700.00 TAKE HOME VEHICLES
POLICY
The City Manager shall authorize take home vehicles for patrol officers living within either the Palm Springs city limits, or in certain instances, within 33 miles of the Palm Springs city limits as determined by Google Maps or another map software agreeable to both parties.
Motor Officers will be eligible for a take home motorcycle.
Marked police vehicles will be assigned as take home vehicles by the Police Chief to sworn officers who reside within the city limits of Palm Springs based upon vehicle availability and seniority of the officer.
Marked vehicles may also be assigned to officers in critical assignments requiring an immediate response. Critical assignments are described as sergeants, SRT, K -9 and Traffic. Unmarked police vehicles will be assign ed to sworn officers in Detective, Traffic (except Motor officers) and administrative positions.
No officer will be eligible to participate in the take home program until they have successfully completed their FTO training.
Notwithstanding any provision of this policy, the City of Palm Springs is only obligated to purchase a maximum of five (5) new vehicles per year pursuant to this policy. This means that if a unit member is unable to be provided a vehicle (because there are an insufficient number of operable vehicles to provide a take home vehicle to every member of the unit who would qualify for a vehicle) they will not be provided as such. In such case, the determination as to who will qualify for a take home vehicle will be based on seniority.
USE OF CAR
The take home vehicle is to be used in a manner that facilitates immediate response of the officer in case of call out. Use of the vehicle is restricted to a 33-mile radius from the City of Palm Springs city limits. A unit member who is assigned a take home car may use the car to commute back and forth to work, including stopping on the normal route for personal purposes. However, the take home car is not to be used as the unit member’s personal car when not commuting to or from work. This includes, but is not limited to, that the unit member is not to use the car on days when they are not working as well as on work days if not commuting to or from work. For unmarked vehicles, the unit member may transport members of their immediate family in the unit if doing so during their normal commute to or from work.
Officers, who are assigned to attend training classes, responding to a City of Palm Springs job- related court subpoena, or attending any other Department sanctioned event outside the city of Palm Springs, may use their assigned vehicle to attend the event.
Officers who are not assigned a take home vehicle shall park their assigned vehicle at the police department. Those officers have the option of responding to court or other department sanctioned events outside the city of Palm Springs either from the department in their assigned vehic le, or from their home, using their own vehicles and putting in for mileage reimbursement.
Item 1V - 37
34 DUTY TO RESPOND
Officers driving a take home vehicle may not ignore stranded or disabled motorists, traffic collisions, or any hazardous conditions they observe. The officer must have the equipment necessary to respond and shall activate the radio, notify Dispatch of the situation and take action if deemed appropriate.
PARKING
Officers who are not assigned a take home vehicle shall park their assigned vehicle at the police department or other City of Palm Springs facility as directed by the Chief of Police.
MAINTENANCE
It is the responsibility of the employees to keep their vehicles clean. The City's contract car wash may be used as often as necessary to keep vehicles in a presentable condition.
It is the employee’s responsibility to make their assigned vehicle available to the City Shop for scheduled maintenance or when notified that additional service is required.
SUSPENSION OF PRIVILEGE
The take home privilege may be suspended if the officer has two or more preventable accidents within a three- year period, or if they fail to follow the guidelines set forth in this policy.
Item 1V - 38
35 EXHIBIT B - DRUG POLICY/DRUG SCREENING
The City of Palm Springs and the Association have a vital interest in maintaining safe, healthful and efficient working conditions. Being under the influence of a drug or alcohol on the job may pose serious safety and health risks not only to the user, but also to co- workers and the citizens of Palm Springs. The possession, use or sale of an illegal drug, marijuana or of alcohol on the job also poses unacceptable risks for safe, healthful and efficient operations. “On the job” means while on City premises, at work locations, or while on duty or being compensated on an “on call status.”
The City of Palm Springs and the Association recognize that their future is dependent on the physical and psychological well -being of all employees. The City and the Association mutually acknowledge that a drug and alcohol-free work environment benefits employees and citizens. The purpose of this Article is to define the City's drug and alcohol policy as well as the possible consequences of policy violation.
Section 1
Possession, sale, use or being under the influence of drugs or alcohol while on the job is strictly prohibited. This prohibition shall not apply to legitimate undercover activities of Police Officers that are undertaken in accordance with the direction of the Police Department. Being under the influence of drugs or alcohol shall mean having a blood alcohol content of .04% or higher and having any residue or metabolite of illegal drugs in the body.
Section 2
When the City has a reasonable suspicion that an employee is, or may be, impaired or affected on the job by alcohol, marijuana or illegal drugs, or that alcohol, marijuana or illegal drugs are, or may be, present in an employee’s body in violation of the rules set forth in this policy, the employee shall be required to submit to an blood alcohol/drug screen test immediately upon demand by the City.
Reasonable suspicion of controlled substance or alcohol use may be based on appropriate factors, including excessive absenteeism or attendance problems, poor work performance or erratic, threatening or violent behavior coupled with other conditions, including but no limited to the following: bloodshot or watery eyes, very large or very small pupils, runny nose, excessive perspiration, nausea and vomiting, lack of coordination, slurred s peech or unpredictable responses to ordinary requests.
Refusal to submit to such a test amounts to insubordination and shall be sufficient grounds for dismissal. Any employee failing such a test, or who tampers with the test specimen, shall be subject to dismissal from the City.
Section 3
Any manager or supervisor requesting an employee to submit to a substance screening shall document in writing the fact constituting reasonable suspicion and shall give the employee a copy.
This report must advise the employee of his right to representation. The employee shall be given an opportunity to provide additional facts. An employee who is then ordered to submit to a substance abuse screening may request to be represented. Because time is of the essence in drug and alcohol screening, there shall be no delay in the testing process based on an employee’s request to be represented.
Item 1V - 39
36 Section 4
The supervisor, or designee, shall transport the suspected employee to the testing facility for a blood test. Testing shall occur on City time and be paid for by the City.
Section 5
Any positive test for alcohol or drugs will be confirmed by a scientifically sound method. An employee who tests positive on a confirmatory test will be given the opportunity to discuss the results with a physician to be designated by the City. The employee should be prepared at that time to show proof of any valid medical prescription for any detected substance or to otherwise explain, if they so choose, a positive test result.
Section 6
While use of medically prescribed medications and drugs is not per se a violation of this policy, this policy shall establish that no employee shall operate a City vehicle or dangerous machinery or equipment while taking any kind of medication or drugs which are clearly marked that they may cause significant drowsiness or impair an employee's performance. An employee shall notify their supervisor, before beginning work, when taking such medications or drugs. In the event there is a question regarding an employee's ability to safely and effectively perform assigned duties while using such medications or drugs, clearance from a physician designated by the City may be required. The City reserves the right to send an employee home on sick leave under these circumstances.
Section 7
Employees with substance abuse problems are encouraged to participate voluntarily in the City - sponsored Employee Assistance Program (EAP). Assistance through the EAP may be sought by an employee with complete confidentiality and without adverse consequences to their employment. Employees should be aware, however, that a request for assistance through the EAP would not insulate the employee from disciplinary action already contemplated based on the employee’s violation of this policy.
Depending upon the facts surrounding the reasonable suspicion determination, positive test result, and/or other violation of this policy or other City/department rules and regulations, the City may refer an employee to the EAP. Such referral could, at the discretion of the City, be made available to the employee as an alternative to disciplinary action. Referral would be subject to agreement by the employee to enroll, participate in and successfully complete a rehabilitation and/or counseling program and other terms and conditions in a "Last Chance Agreement".
Item 1V - 40
37 EXHIBIT C - SENIOR POLICE OFFICER, MASTER POLICE OFFICER AND SERGEANT II
AND III QUALIFICATIONS
A Police Officer can be reclassified to the classifications of Senior Police Officer and Master Officer and a Sergeant can be reclassified to the classifications of Sergeant II and Sergeant III once the City certifies that the employee meets the minimum qualifications of the higher-level classification.
The minimum qualifications for each classification are as follows:
Senior Police Officer
A. Current or previous service of a minimum of two (2) years of experience within the past four (4) years as a Police Officer with a California law enforcement agency and have successfully completed a POST approved patrol field-training program.
B. Possession of, or ability to obtain, an appropriate, valid driver license with a satisfactory driving record
C. Possession of a California Intermediate P.O.S.T. Certificate or an approved California Intermediate P.O.S.T certificate application verified by the Administrative Services Sergeant of the Palm Springs Police Department
D. Possession of, or ability to obtain, an appropriate, valid C.P.R. Certificate.
Master Police Officer
A. Current or previous service of a minimum of three (3) years of experience within the past five (5) years as a Police Officer with a California law enforcement agency and have successfully completed a POST approved patrol field-training program.
B. Possessio n of, or ability to obtain, an appropriate, valid driver license with a satisfactory driving record.
C. Possession of a California Advanced P.O.S.T. Certificate or an approved California Advanced P.O.S.T certificate application verified by the Administrative Services Sergeant of the Palm Springs Police Department.
D. Possession of, or ability to obtain, an appropriate, valid C.P.R. Certificate.
Police Sergeant II
A. A minimum of one (1) year of experience as a Police Sergeant with the City of Palm Springs and currently on non-probationary status with the City of Palm Springs.
B. Possession of, or ability to obtain, an appropriate, valid driver license with a satisfactory driving record.
Police Sergeant III
A. A minimum of two (2) years of experience as a Police Sergeant with the City of Palm Item 1V - 41
38 Springs.
B. A current performance evaluation in which the employee was rated overall satisfactory or higher.
C. Possession of, or ability to obtain, an appropriate, valid driver license with a satisfactory driving record.
D. Possession of a California Supervisory P.O.S.T. Certificate or an approved California Supervisory P.O.S.T certificate application verified by the Administrative Services Sergeant of the Palm Springs Police Department.
To request reclassification to the next classification level, an employee must be actively at work, (i.e., not off on a leave of absence) complete a Reclassification Request form (including supporting documentation of required education or P.O.S.T Certification) and submit it for approval via the chain of command. If all qualifications are met, the Police Chief will authorize the Professional Standards Unit to generate a Personnel Action Form to initiate the reclassification.
The effective date of the reclassification is the beginning of the pay period after the Human Resources Department receives and certifies the employee has met all of the eligibility requirements. Upon reclassification, the employee will be placed at the same salary step as they are currently (i.e. upon reclassification, a Police Officer at Step 4 will be placed at Senior Police Officer Step 4). A reclassified employee will not be required to serve a new probationary period and the employee’s dates for performance evaluations and merit increases will remain on the same schedule.
Item 1V - 42
39 PALM SPRINGS POLICE OFFICERS’ ASSOCIATION REPRESENTATIVE Date:
By:
Lead Negotiator, Tiffany Moran Signature
By:
POA President, Joseph Cook Signature
By:
POA Vice President, Michael Torres Signature
By:
POA Treasurer, Jeff Burton Signature
By:
POA Secretary, Stephanie Sandoval Signature
CITY OF PALM SPRINGS
Date:
By: By:
City Manager Labor Attorney
Attest:
By: By:
City Clerk Director of Human Resources
Approved to form:
By:
City Attorney
Item 1V - 43
CITY COUNCIL STAFF REPORT
06/16/2022 1. W.
City Clerk -
SUBJECT
AMENDMENT NO. 2 TO AGREEMENT WITH TYSEN KNIGHT PRODUCTIONS
FOR REPAIRS AND MAINTENANCE SERVICES OF PUBLIC ARTS PROJECTS RECOMMENDATION:
Approve Amendment No. 2 to Agreement A8884 with Tysen Knight Productions for Public Arts projects repairs and maintenance services in the amount of $5,000 for a total contract amount of $15,000.
Attachments
1W
CITY COUNCIL STAFF REPORT
DATE: JUNE 16, 2022 CONSENT CALENDAR
SUBJECT: AMENDMENT NO. 2 TO AGREEMENT WITH TYSEN KNIGHT
PRODUCTIONS FOR REPAIRS AND M AINTENANCE SERVICES OF
PUBLIC ARTS PROJECTS
FROM: Justin Clifton, City Manager
BY: Community & Economic Development Department
______________________________________________________________________
SUMMARY:
This action approves Amendment No. 2 to Agreement No. 8884 with Tysen Knight Productions (Agreement) for repair and maintenance services for Public Arts projects, as recommended by the Public Arts Commission. This A mendment will extend the Agreement to December 31, 2022, for an additional amount not to exceed $5,000 and brings the total contract amount to $15,000.
RECOMMENDATION:
Approve Amendment No. 2 to Agreement No. 8884 with Tysen Knight Productions for Public Arts projects repairs and maintenance services in the amount of $5,000 for a total contract amount of $15,000.
BACKGROUND:
At their meeting of January 15, 2020, the City’s Public Arts Commission approved a Community Grant program for neighborhood associations and business districts. As part of that grant program, the Commission approved a pilot program for a Public Bench Art project in Downtown. The pilot program began in June 2020 and included the painting of City-owned public benches on North Palm Canyon Drive between Alejo Road and Andreas Road. The program was later expanded to include additional benches, for a total of approximately 50 City-owned public benches being painted as part of the Bench Art Project.
To maintain and repair Public Bench Art pieces, the Public Arts Commission approved an agreement with Tysen Knight in the amount of $5,000 for maintenance of and repairs to completed Public Arts projects through December 31, 2021. This agreement was amended in January 2022, to extend the term until June 30, 2022, for an additional cost Item 1W - 1
City Council Staff Report
June 16, 2022 – Page 2
Amendment No. 2 to Tysen Knight Productions Art Maintenance Agreement
of $5,000. Under the terms of the agreement, Tysen Knight repair s damage and graffiti to City benches painted as part of the Arts Commission’s Downtown Bench Art Program, as well as repair damage and graffiti to the Commission’s “Stop in the Name of Love” electrical utility box art project on an as-needed basis.
STAFF ANALYSIS:
The Public Arts Commission is requesting the Agreement with Tysen Knight be extended to December 31, 2022, for an additional amount not to exceed $5,000, bringing the total contract amount to $15,000.
It is recommended this extension be granted on a sole- source basis. Tysen Knight Productions has the very specific skill set which includes preparation, painting and sealing the benches, as well as being an artist able to do the required touch up t o the various artists' work as necessary. Tysen Knight was the original artist who did pilot project painting for the downtown benches. The City anticipates difficulty finding a vendor with the specific skill set required and the same combination of knowledge, experience in the method of cleaning required, graffiti removal, design restoration, and artistic skills.
Tysen Knight has provided artistic services to the Public Arts Commission since 2019 and has consulted on all three phases of the Bench Art Project. Due to the numerous occurrences of vandalism (graffiti and other damage) to the downtown benches and other public art, Mr. Knight has been utilized on an “on- call” basis to perform various repairs.
This agreement will allow Mr. Knight to respond quickly to vandalism issues and ensure that the public art is restored.
FISCAL IMPACT:
Amendment No. 2 is for an additional six-month term ending December 31, 2022, in the amount of $5,000. Sufficient funding is available in the Public Arts Fund, Fund 150.
REVIEWED BY:
Department Director: Jay Virata
Deputy City Manager: Flinn Fagg
City Manager: Justin Clifton
ATTACHMENTS:
1. Amendment No. 2
Item 1W - 2
) .
SECOND AMENDMENT TO CONTRACT SERVICES AGREEMENT
For
Public Art Maintenance and Service
(Tysen Knight Productions)
THIS FIRST AMENDMENT TO CONTRACT SERVICES AGREEMENT
(“Amendment") is made by and between Tysen Knight Productions “Contractor” and CITY OF PALM SPRINGS, a California charter city and a municipal corporation ("City"), effective July 1, 2022, and amends that certain Contract Ser vices Agreement dated as of July 1 , 2021, by and between Contractor and City ("Agreement' ). All terms defined in the Agreement shall have the same meaning when used herein.
RECITALS
A. Contractor has agreed to provide to City and City has agreed to purchase from Contractor the Services which are the subject of the Agreement.
B. Contractor and City now mutually desire to amend the Agreement as set forth below.
NOW THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged. Contractor and City mutually agree to amend the Agreement as follows:
AGREEMENT
1. Section 3.1 of the Agreement shall be replaced in its entirety and amended to read as follows:
3.1 Compensation of Contractor . Contractor shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit “A”. The total amount of Compensation shall not exceed $15,000.
2. Section 4.4 of the Agreement shall be replaced in its entirety and amended to read as follows:
4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect for a period of eighteen months, commencing on July 1, 2021, and ending on December 31, 202 2, unless extended by mutual writt en agreement of the Parties.
Item 1W - 3
3. Except as expressly provided herein, all other terms and conditions of the Agreement shall remain in full force and effect.
[End – Signatures on Next Page]
Item 1W - 4
IN WITNESS WHEREOF, Contractor and City have executed this Amendment as of the date first written above.
“CITY”
City of Palm Springs
Date: __________________________ By: _______________________________ Justin Clifton
City Manager
APPROVED AS TO FORM: ATTEST
By: ___________________________ By: _______________________________ Jeff Ballinger, Monique Lomeli
City Attorney Interim City Clerk
“CONTRACTOR”
Tysen Knight Productions
Date: __________________________ By: ______________________________ Tysen Knight
Item 1W - 5
TYSEN KNIGHT PRODUCTIONS
www.TysenKnight.com 1717 E Vista Chino Ste A7-122
[email protected] Palm Springs, CA 92262
6/16/21 310.359.3330
Palm Springs Public Arts Commission
Attn: Cindy Cairns
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Damage & Vandalism Repairs for The PSPAC
Scope of Work to be Performed:
Repair damage and graffiti on benches, electric boxes, etc. as directed by Public Arts Commission or Facilities Dept.
Pictures will be provided of repairs (before & after) to show the repairs that have been completed.
To be invoiced as projects are finished, at $50/hour
***Invoices will be submitted as repairs are needed.
TYSEN KNIGHT PRODUCTIONS - 2021
1 Item 1W - 6
CITY COUNCIL STAFF REPORT
06/16/2022 1. X.
City Clerk -
SUBJECT
APPROVE LICENSE AGREEMENT FOR EXHIBITION OF PUBLIC ART WITH THE PALM SPRINGS ART MUSEUM FOR THE “HISTORY OF SUSPENDED TIME” ARTWORK BY GONZALO LEBRIJA ON BLOCK H2 OF THE DOWNTOWN
PROJECT
RECOMMENDATION:
Approve License Agreement for Temporary Public Exhibition of Artwork with the Palm Springs Art Museum.
1. Authorize the City Manager to execute all necessary documents.2.
Attachments
Item 1X
CITY COUNCIL STAFF REPORT
DATE: June 16, 2022 CONSENT CALENDAR
SUBJECT: APPROVE LICENSE AGREEMENT FOR EXHIBITION OF PUBLIC ART WITH THE PALM SPRINGS ART MUSEUM FOR THE “HISTORY OF
SUSPENDED TIME” ARTWORK BY GONZALO LEBRIJA ON BLOCK H2
OF THE DOWNTOWN PROJECT
FROM: Justin Clifton, City Manager
BY: Community & Economic Development Department
______________________________________________________________________
SUMMARY:
The artwork, “History of Suspended Time” (Artwork), by Gonzalo Lebrija (Artist) has been on display on City property located at the Southeast corner of North Museum Drive and Museum Way on Block H2 of the Downtown Project ( Site, Attachment 1) since May 3, 2021. The term of the loan was for one year and is now expired. The Palm Springs Art Museum has requested that the City execute a new License Agreement for Temporary Public Exhibition of Artwork (Agreement , Attachment 2) to allow the Artwork to remain on Block H2 for one additional year. The Public Arts Commission has reviewed and approved this request. It is being recommended the City Council approve extending the term of the Agreement to June 30, 2023.
RECOMMENDATION:
1. Approve License Agreement for Temporary Public Exhibition of Artwork with the Palm Springs Art Museum.
2. Authorize the City Manager to execute all necessary documents.
BACKGROUND:
On October 10, 2019, the Public Arts Commission voted to recommend the Artwork for installation at the Site in partnership with the Palm Springs Art Museum.
On November 6, 2019, City Council approved placement of the Artwork at the Site for a period of one year. The City Council also approved the expenditure of $35,000 from the Public Art Fund for site preparation and maintenance of the Artwork for one year . A Construction Agreement to Support Temporary Public Artwork Installation (Agreement) Item 1X - 1
City Council Staff Report
June 16, 2022 – Page 2
History of Suspended Time Art Loan Agreement
with the Palm Springs Art Museum was executed on May 3, 2021, for installation of the Artwork. The Artwork was displayed subject to a License Agreement for Temporary Public Exhibition of Artwork.
The term of the initial License Agreement has expired, and the Palm Springs Art Museum has requested that the City execute a new A greement to allow the Artwork to remain on the Site for one additional year. The Public Arts Commission has reviewed and approved this request at its April 20, 2022, meeting and is recommending the City Council extend the term of the exhibition through June 30, 2023.
Below is an image of the Artwork on display on Block H2.
Under the terms of the Agreement, the Palm Springs Art Museum will be responsible for regularly scheduled cleaning, all removal costs and expenses, and packing and transportation costs to relocate the artwork and return it to the owner. However, t he Art Museum is requesting the City continue allowing the lights and water pump for the Artwork to utilize power supplied at the Block H2 Site.
ALIGNMENT WITH COUNCIL PRIORITIES AND STRATEGIES:
Section 2.24.050 of the Palm Springs Municipal Code requires the Public Arts Commission to, “Be responsible for a Palm Springs public arts program including policies and guidelines, oversight of development of art projects and maintenance of art collection.”
Item 1X - 2
City Council Staff Report
June 16, 2022 – Page 3
History of Suspended Time Art Loan Agreement
ENVIRONMENTAL IMPACT:
Section 21084 of the California Public Resources Code requires Guidelines for Implementation of the California Environmental Quality Act ("CEQA"). The Guidelines are required to include a list of classes of projects which have been determined not to have a significant effect on the environment and which are exempt from the provisions of CEQA.
In response to that mandate, the Secretary for Resources identified classes of projects that do not have a significant effect on the environm ent and are declared to be categorically exempt from the requirement for the preparation of environmental documents. In accordance with Section 15301 "Existing Facilities," Class 1 (c) projects consist of "Existing highways and streets, sidewalks, gutters, bicycle and pedestrian trails, and similar facilities," and approval of this item is considered categorically exempt from CEQA.
FISCAL IMPACT:
As noted above, according to the terms of the Agreement , the Artwork will be on loan to the City for no fee. The Art Museum will be responsible for regularly scheduled cleaning, all removal and site reconstruction costs and expenses, and packing and transportation costs to relocate the artwork and return it to the owner. The City will supply power for the lighting and water pump for the artwork at minimal cost.
REVIEWED BY:
Department Director: Jay Virata
Deputy City Manager: Flinn Fagg
City Manager: Justin Clifton
ATTACHMENTS:
1) Block H2 – Artwork Site
2) License Agreement for Temporary Public Exhibition of Artwork Item 1X - 3
ATTACHMENT 1
Block H2 – Artwork Site
X
Item 1X - 4
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ATTACHMENT 2
License Agreement for Temporary
Public Exhibition of Artwork
Item 1X - 5
LICENSE AGREEMENT FOR
TEMPORARY PUBLIC EXHIBITION OF ARTWORK
Thi
s License Agreement for Temporary Public Exhibition of Artwork (“Agreement”) is entered into this _____ day of _______ 2022, by and between the City of Palm Springs, a California charter city and municipal corporation, (“City”), and the Palm Springs Art Museum, Inc., a California corporation (“PSAM”), regarding the display of artwork entitled “History of Suspended Time” (“Artwork”) by artist Gonzalo Lebrija (“Artist”).
RECITALS
The P
alm Springs Public Art Commission and Palm Springs City Council have approved a temporary exhibition of the Artwork to be located on the southeast corner of Museum Drive and Museum Way at 120 Museum Drive, Palm Springs, California 92262 (“Site”), more specifically shown in the map attached hereto and incorporated herein by this reference as Exhibit “A.”
The Artwork was installed in May of 2021 at Site.
City and PSAM agree that PSAM will be give n a non -exclusive license to use the City - owned Site for display and maintenance of the Artwork.
THEREFORE, the City and PSAM agree as follows:
1. City’s Responsibilities.
Subject to the terms and conditions of this Agreement, the City hereby grants to PSAM a non-exclusive license to use the Site from July 1 , 2022 through June 30, 2023 (“Exhibition Period”) for the purpose of displaying and maintaining the Artwork more specifically shown in the depiction attached hereto and incorporated herein by this reference as Exhibit “B.” City will pay for ongoing utility costs associated with the Artwork (water/electric) during the Exhibition Period. At the mutual agreement of the Item 1X - 6
2 Parties, the Exhibition Period may be extended for such further period as evidenced by an amendment to this Agreement.
2. PSAM’s Responsibilities.
PSAM shall be responsible for transportation, installation, and maintenance of the Artwork, including maintenance of the gunite reflecting pool and pool equipment.
PSAM shall maintain the Artwork in first class condition and shall repair and/or replace any damage to the Artwork within seven (7) calendar days of such damage being discovered. In the event any graffiti is discovered on the Artwork, PSAM shall remove such graffiti on the day it is discovered. All such maintenance, repair, replacement, and restoration shall be at the sole cost of PSAM, without any expectation of contribution or reimbursement by City. PSAM shall remove Artwork at the end of the Exhibition Period.
If PSAM fails to remove Artwork within fourteen (14) days of the termination of the Exhibition Period, the City will remove Artwork as necessary and PSAM will reimburse the City for the reasonable cost for this removal. Upon removal, PSAM will return the Site to its condition existing prior to the Artwork installation.
3. Rights to Artwork.
Photographic materials of the Artwork, as currently displayed in front of PSAM, are available to scholars, educators, publishing companies, and commercial entities, with prior written approval from PSAM. Please contact [email protected] .
Although PSAM can provide photographic of the Artwork for reproduction, copyright must be cleared through the artist. Please contact Gonzalo Lebrija:
[email protected].
PSAM will be held harmless in the event of copyright infringement as a result of the requestor's use of any images obtained and assumes no responsibility for any legal action, royalties, or fees claimed by the copyright holder.
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3 4. Compliance with Law.
PSAM hereby agrees to comply with all applicable statutes, ordinances, orders, laws, rules and regulations, and the requirements of all federal, state, and municipal governments and appropriate departments, commissions, boards and offices t hereof, which may be applicable to the display of Artwork on the Site or to the use or manner of use of the Site. Without in any way limiting the foregoing, PSAM specifically and in perpetuity agrees to comply with The Visual Artists Rights Act of 1990 (17 U.S.C. 101, et seq.) as it applies and relates to the Artwork and all matters in this Agreement.
5. Insurance.
PSAM shall procure and maintain, at its sole cost and expense, in a form and content consistent with industry standards, with an insurer qualified to do business in California and rated “A” or better in the most recent edition of Best Rating Guide with a financial class category of Class VII or better, unless such requirements are waived by the City Attorney, during the entire term of this Agreement and at all times while the Artwork is located on the Site, the following policies of insurance:
(a) Comprehensive General Liability Insurance. A policy of comprehensive general liability insurance together with a Broad Form CGL Endorsement and insuring against contractually assumed liability which shall specifically insure PSAM’s indemnity obligation under Section 6, below. The policy of insurance shall have a combined single limit liability of One Million Dollars ($1,000,000.00).
(b) Workers’ Compensation Insurance. A policy of Workers’ Compensation Insurance in an amount as would fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both PSAM and the City against any loss, claim or damage arising from any injuries or occupational hazards or diseases occurring to any worker employed by or any Item 1X - 8
4 person retained by PSAM in the course of carrying out the obligations of this Agreement.
(c) Fine Arts Insurance. PSAM shall procure and maintain fine arts insurance on the Artwork an all risk form with limits not less than $200,000 and a deductible not to exceed ONE THOUSAND DOLLARS ($1,000.00) for each loss. The payment of any deductible amount shall be the responsibility of PSAM.
All of the above policies of insurance shall be primary insurance and shall name the City, its officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the City, its officers, employees and agents and their respective insurers. All such policies shall provide that such insurance may not be amended or canceled without providing thirty (30) days written notice by registered mail to the City. Cancellation clause shall read “SHOULD
ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY SHALL MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT”. In the event any of such policies are canceled, PSAM shall, prior to the cancellation date, submit new evidence of insurance in conformance with the requirements of this Section
5. PSAM shall provide the Commission with Certificates of Insurance evidencing the insurance coverages and policies required hereunder. PSAM agrees that the existence of any insurance shall not limit or otherwise affect PSAM’s obligations under this Agreement.
In the event the City Attorney determines that the work or services to be performed under this Agreement create an increased or decreased risk or loss to the City, PSAM agrees that the minimum limits of the insurance policies required by this Section 5 may be changed accordingly upon receipt of written notice from the Risk Manager, provided that the PSAM shall have the right to appeal a determination of increased coverage by the Risk Manager to the City Council of City within 10 days of receipt of notice from the Risk Manager.
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5 6. Indemnification.
To the fullest extent permitted by law, PSAM shall defend (at PSAM’s sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, agents, and volunteers (collectively the “Indemnified Parties”), from and against any and all liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively “Claims”), including but not limited to Claims arising from injuries to or death of persons (PSAM’s employees included), for damage to property, including property owned by City, from any violation of any federal, state, or local law or ordinance, and from errors and omissions committed by PSAM, its officers, employees, representatives, and agents, that arise out of or relate to PSAM’s performance under this Agreement. This indemnification clause excludes Claims arising from the sole negligence or willful misconduct of the City, its elected officials, officers, employees, agents, and volunteers. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit PSAM’s indemnification obligation or other liability under this Agreement. PSAM’s indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if an action is timely filed, until such action is final.
7. Enforcement of Agreement.
7.1 California Law and Venue. This Agreement shall be construed and interpreted both as to validity and as to performance of the Parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in Item 1X - 10
6 such County, and Contractor covenants and agrees to submit to the personal jurisdiction of such court in the event of such action.
7.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs.
7.3 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought. Any waiver by the Parties of any default or breach of any covenant, condition, or term contained in this Agreement, shall not be construed to be a waiver of any subsequent or other default or breach, nor shall failure by the Parties to require exact, full, and complete compliance with any of the covenants, conditions, or terms contained in this Agreement be construed as changing the terms of this Agreement in any manner or preventing the Parties from enforcing the full provisions.
7.4 Rights and Remedies Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
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7 6.5 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct, remedy or recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.
7.6 Attorney Fees. In the event any dispute between the Parties with respect to this Agreement results in litigation or any non- judicial proceeding, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to recover from the non-prevailing Party all reasonable costs and expenses. These include but are not limited to reasonable attorney fees, expert PSAM fees, court costs and all fees, costs, and expenses incurred in any appeal or in collection of any judgment entered in such proceeding. To the extent authorized by law, in the event of a dismissal by the plaintiff or petitioner of the litigation or non- judicial proceeding within thirty (30) days of the date set for trial or hearing, the other Party shall be deemed to be the prevailing Party in such litigation or proceeding.
8. Miscellaneous Provisions.
8.1 Patent and Copyright Infringement. To the fullest extent permissible under law, and in lieu of any other warranty by City or PSAM against patent or copyright infringement, statutory or otherwise:
A. It is agreed that PSAM shall defend at its expense any claim or suit against City on account of any allegation that any item furnished under this Agreement, or the normal use or sale arising out of the performance of this Agreement, infringes upon any presently existing U.S. letters patent or copyright and PSAM shall pay all costs and damages finally awarded in any such suit or claim, provided that PSAM is promptly notified in writing of the suit or claim and given authority, information and assistance at PSAM’s expense for the defense of same, and provided such suit or claim arises out of, pertains to, or is related to the negligence, recklessness or willful misconduct of PSAM.
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8 However, PSAM will not indemnify City if the suit or claim results from: (1) City's alteration of a deliverable, such that City’s alteration of such deliverable created the infringement upon any presently existing U.S. letters patent or copyright; or (2) the use of a deliverable in combination with other material not provided by PSAM when it is such use in combination which infringes upon an existing U.S. letters patent or copyright.
B. PSAM shall have sole control of the defense of any such claim or suit and all negotiations for settlement in the event City fails to cooperate in the defense of any suit or claim, provided, however, that such defense shall be at PSAM’s expense. PSAM shall not be obligated to indemnify City under any settlement that is made without PSAM’s consent, which shall not be unreasonably withheld. If the use or sale of such item is enjoined as a result of the suit or claim, PSAM, at no expense to City, shall obtain for City the right to use and sell the item, or shall substitute an equivalent item acceptable to City and extend this patent and copyright indemnity thereto.
8 .2 Notice. Any notice, demand, request, consent, approval, or communication that either Party desires, or is required to give to the other Party or any other person shall be in writing. All notices shall be personally delivered, sent by pre- paid First Class U.S. Mail, registered or certified mail, postage prepaid, return receipt requested, or delivered or sent by facsimile with attached evidence of completed transmission. All notices shall be deemed received upon the earlier of (i) the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (ii) five (5) business days after the date of posting by the United States Post Office if by mail; or (iii) when sent if given by facsimile. Any notice, request, demand, direction, or other communication sent by facsimile must be confirmed within forty -eight (48) hours by letter mailed or delivered. Other forms of electronic transmission such as e- mails, text messages, and instant messages are not acceptable manners of notice required hereunder. Notices or other communications shall be addressed as follows:
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9 To City: City of Palm Springs
Attention: City Manager & City Clerk
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
Telephone: (760) 323-8204
Facsimile: (760) 323-8332
To PSAM : Palm Springs Art Museum, Inc.
101 North Museum Drive
Palm Springs, CA 92262
Attention: ____________
Telephone: ____________
Email: ____________
8.3 Integrated Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, arrangements, agreements, representations, and understandings, if any, made by or among the Parties with respect to the subject matter in this Agreement.
8.4 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement by all Parties.
8.5 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision of this Agreement shall be determined to be invalid by a final judgment or decree of a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the reminder of that provision, or the remaining provisions of this Agreement unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.
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10 8.6 Successors in Interest. The obligations of PSAM under this Agreement shall be binding on PSAM’s successors and assigns.
8.7 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third- party beneficiary or otherwise, upon any entity or person not a party to this Agreement.
8.8 Recitals. The above- referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same.
8.9. Corporate Authority. Each of the unders igned represents and warrants that (i) the Party for which he or she is executing this Agreement is duly authorized and existing, (ii) he or she is duly authorized to execute and deliver this Agreement on behalf of the Party for which he or she is signing, (iii) by so executing this Agreement, the Party for which he or she is signing is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which the Party for which he or she is signing is bound.
8.10 Exhibits. The Exhibits attached to this Agreement are incorporated by this reference herein.
8.11 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto.
Item 1X - 15
11 8.12. Counterparts. This Agreement may be executed in counterparts which, when taken together, shall constitute one executed document as though all signatures appeared on one copy.
(Signatures on following page)
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12 CITY OF PALM SPRINGS
_______________________________________________ Dated: ______________ Justin Clifton, City Manager
ATTESTED BY:
_______________________________________________ Dated: ______________
Monique Lomeli, Interim City Clerk
APPROVED AS TO FORM:
_______________________________________________ Dated: ______________
Jeffrey Ballinger, City Attorney
PALM SPRINGS ART MUSEUM, Inc., a California corporation:
_______________________________________________ Dated: ______________
Signature
_______________________________________________
Printed Name/Title
Item 1X - 17
13 EXHIBIT “A”
Map of Exhibition Site
Exhibition Site - Southeast Corner of Museum Dr. and Museum Way
Item 1X - 18
14 EXHIBIT “B”
Depiction of Artwork
Item 1X - 19
CITY COUNCIL STAFF REPORT
06/16/2022 1. Y.
City Clerk -
SUBJECT
ADMINISTRATIVE CONTRACT MEMORANDUMS NO. 2 AND NO. 3 BETWEEN VEOLIA WATER WEST OPERATING SERVICES, INC., A DELAWARE
CORPORATION, AND THE CITY OF PALM SPRINGS REGARDING STREET
SWEEPING AND INFLUENT QUALITY AND QUANTITY SPECIFICATIONS RECOMMENDATION:
Receive and file administrative contract memorandum Nos. 2 and 3 regarding street sweeping and influent quality and quantity specifications.
Attachments
Item 1Y
CITY COUNCIL STAFF REPORT
DATE: June 16, 2022 CONSENT CALENDAR
SUBJECT: ADMINISTRATIVE CONTRACT MEMORANDUMS NO. 2 AND NO. 3 BETWEEN VEOLIA WATER WEST OPERATING SERVICES, INC. , A
DELAWARE CORPORATION, AND THE CITY OF PALM SPRINGS
REGARDING STREET SWEEPING AND INFLUENT QUALITY AND
QUANTITY SPECIFICATIONS
FROM: Justin Clifton, City Manager
BY: Engineering Division
SUMMARY:
The City and Veolia Water West Operating Services , Inc. (“Veolia”) entered into a wastewater services agreement for the operation and maintenance of the City’s Wastewater Treatment Plant (“WWTP”) on January 1, 2016. The terms of the agreement allow for periodic changes to the agreement through an Administrative Contract Memorandum. Administrative Contract Memoranda with no fiscal impact are reported back to the City Council as a “receive and file” item.
RECOMMENDATION:
Receive and File.
BACKGROUND:
On February 21, 2021, Administrative Contract Memorandum No. 1 was approved by the City Council to set the annual budget limit for Biosolids Services established at $200,000 effective January 1, 2021.
On September 20, 2021, Administrative Contract Memorandum No. 2 was ex ecuted by Staff to match the current street sweeping schedule. There was no fiscal impact for this item.
Administrative Contract Memorandum No. 3 will update the Waste Discharge Requirements (WDR) to reflect the current WDR permit issued by the California Regional Water Quality Control Board (CRWQCB) . The original agreement was executed on November 4, 2015, prior to the current WDRs that were adopted on September 17, 2017.
Veolia is currently maintaining the WWTP to the latest WDRs. This amendment will Item 1Y - 1
City Council Staff Report
June 16, 2022 -- Page 2
Amend Veolia Agreement
update the City’s influent requirements to match the current WDR permit we have with the CRWQCB. There is no fiscal impact for this item.
STAFF ANALYSIS:
For Administrative Contract Memorandum No. 2, Staff has reviewed the latest street sweeping schedule and the parties have agreed to update the Agreement. Terms for the Street Sweeping Schedule are set forth in Schedule U of Veolia’s Agreement with the City. Staff has prepared Administrative Memorandum No. 2, a copy of w hich is included as Attachment A. In preparing Administrative Contract Memorandum No. 3, Staff became aware that No. 2 did not go to City Council as a Receive and File item, therefore it is being brought forward now.
For Administrative Contract Memorandum No. 3, Staff has reviewed the latest WDR requirements, and the parties have agreed to update the Agreement that covers the “Influent Quality and Quantity Specifications.” Terms are set forth in Schedule M of Veolia’s Agreement with the City. Staff has prepared Administrative Memorandum No. 3, a copy of which is included as Attachment B.
ENVIRONMENTAL ASSESSMENT
:
None.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with City Council Priority “Community Infrastructure”, specifically 3A (Improve City Facilities).
FISCAL IMPACT:
There is no fiscal impact.
REVIEWED BY:
City Engineer: Joel Montalvo
Deputy City Manager: Flinn Fagg
City Manager: Justin Clifton
ATTACHMENTS:
A. Administrative Contract Memorandum No. 2
B. Administrative Contract Memorandum No. 3
Item 1Y - 2
Attachment A
Item 1Y - 3
Item 1Y - 4
ADMINISTRATIVE CONTRACT MEMORANDUM
This Administrative Contract Memorandum No. 2 is made as of the 20th day of September 2021, by Veolia Water West Operating Services, Inc., a Delaware corporation, ("Veolia"), and the City of Palm Springs, a California charter city and municipal corporation, ("City"). Veolia and City are collectively herein referred to as the "Parties." This Administrative Contract Memorandum No. 2 is made in reference to the following recitals.
WITNESSETH:
WHEREAS, Veolia and City entered into that certain Wastewater Services Agreement (O&M) dated as of November 4, 2015, commencing January 1, 2016, (the "Agreement"); and.
WHEREAS, Section 14.5 "Integration; Amendment," of the Agreement authorizes that where specifically authorized in the Agreement, this Administrative Contract Memorandum may be used as an amendment administratively approved by the Parties through approval by the Contract Officer and an authorized representative of Veolia without further formal action by the City Council; and WHEREAS, Section 7.4 section (g) (Street Sweeping) authorizes the annual budget limit for Street Sweeping to be adjusted by mutual approval of an Administrative Contract Memorandum; and
WHEREAS, the Parties have negotiated in good faith to amend the terms and conditions of the Agreement pursuant to this Administrative Contract Memorandum No.
2, as authorized by Section 14.5 of the Agreement.
NOW, THEREFORE, the Parties hereby agree to amend the Agreement as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS. For the purposes of this Administrative Contract Memorandum, the following words and terms shall have the respective meanings set forth as follows. Any other capitalized word or term used but not defined herein is used as defined in the Agreement.
Item 1Y - 5
SECTION 1.2. INTERPRETATION. In this Administrative Contract Memorandum, unless the context otherwise requires:
(A) References Hereto. The terms "hereto", "hereby", "hereof, "herein", "hereunder" and any similar terms refer to this Administrative Contract Memorandum, and the term "hereafter'' means after, and the term "heretofore" means before, the date of execution and delivery of this Administrative Contract Memorandum.
(8) Plurality. Words importing the singular number mean and include the plural number and vice versa.
(C) Persons. Words importing persons include firms, companies, associations, general partnerships, limited partnerships, trusts, business trusts, corporations and other legal entities, including public bodies, as well as individuals.
(D) Headings. The table of contents and any headings preceding the text of the Articles, Sections and subsections of this Administrative Contract Memorandum shall be solely for convenience of reference and shall not constitute a part of this Administrative Contract Memorandum, nor shall they affect its meaning, construction or effect.
(E) Entire Agreement. This Administrative Contract Memorandum constitutes the entire agreement between the Parties hereto with respect to the amendment(s) to the Agreement contemplated by this Administrative Contract Memorandum. Except as provided in the Agreement with respect to the City Indemnified Parties, nothing in this Administrative Contract Memorandum is intended to confer on any person other than the Veolia, the City and their permitted successors and assigns hereunder any rights or remedies under or by reason of this Administrative Contract Memorandum. (F) Counterparts. This Administrative Contract Memorandum may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Administrative Contract Memorandum. (G) Applicable Law. This Administrative Contract Memorandum shall be governed by and construed in accordance with the applicable laws of the State of California.
(H) Severability. If any clause, provision, subsection, Section or Article of this Administrative Contract Memorandum shall be ruled invalid by any court of competent jurisdiction, the invalidity of any such clause, provision, subsection, Section or Article shall not affect any of the remaining provisions hereof, and this Administrative Contract Memorandum shall be construed and enforced as if such invalid portion did not exist provided that such construction and enforcement shall not increase the Parties' liability beyond that expressly set forth herein.
Item 1Y - 6
(I) Approvals. All approvals, consents and acceptances required to be given or made by any party hereto shall be at the sole discretion of the party whose approval, consent or acceptance is required.
(J) Payments. All payments required to be made by the Parties hereunder shall be made in lawful money of the United States of America.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
SECTION 2.1.REPRESENTATIONS AND WARRANTIES.
The Parties hereby represent and warrant that:
(1) Existence and Powers. Veolia is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware, with the full legal right, power and authority to enter into and perform its obligations under this Administrative Contract Memorandum.
City is a charter city and municipal corporation, organized and existing in the County of Riverside, under and by virtue of the laws of the State of California, with the full legal right, power and authority to enter into and perform its obligations under this Administrative Contract Memorandum. (2) Due Authorization and Binding Obligation. This Administrative Contract Memorandum has been duly authorized, executed and delivered by all necessary corporate action of Veolia and authorization by the City, and constitutes the legal, valid and binding obligation of the Parties, enforceable against the Parties in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors' rights from time to time in effect and equitable principles of general application.
(3) No Approvals Required. In accordance with Section 14.5 of the Agreement, no approval, authorization, order or consent of, or declaration, registration or filing with, any Governmental Body is required for the valid execution and delivery of this Administrative Contract Memorandum by the Parties.
(4) No Legal Prohibition. The Parties have no knowledge of any Applicable Law in effect on the date as of which this representation is being made which would prohibit implementation of the amendment(s) to the Agreement contemplated by this Administrative Contract Memorandum. (7) Consent to Amendment. The Parties are fully aware of the terms and conditions of the Agreement to be amended by this Administrative
Item 1Y - 7
Contract Memorandum.
(8) Consideration. This Administrative Contract Memorandum is made in furtherance of the implementation of the Agreement, and the assumption by the Parties of their obligations hereunder will result in a material benefit to the Parties.
ARTICLE Ill
ADMINISTRATIVE AMENDMENT
SECTION 3.1. AMENDMENT. This Administrative Contract Memorandum hereby implements the following amendment to the terms and conditions enumerated herein.
Add the following paragraph to Item U.7 Street Sweeping Services Budget in Schedule U of the agreement:
The annual budget limit for Street Sweeping Services effective October 1, 2021 is hereby established at $375,000.
The following changes are made to Item U.5 (Extra Street Sweeping) in Schedule U of the agreement:
Additional street sweeping beyond that listed below in "Location of Work" when requested by Veolia shall be performed at the rate of $19.00 per curb mile.
Any additional sweeping of areas (not streets) requested by Veolia shall be completed for the rate of $70.00 per hour.
SECTION 3.2. NOTICE. All notices required or desired to be given hereunder to either party shall be effective if given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, by nationally recognized overnight delivery company, or by telecopy (if telecopy number is listed below, with telephone confirmation of receipt), if addressed or the following addresses or telecopy numbers:
If to Veolia:
Senior Vice-President
Veolia Water West Operating Services, Inc.
700 E. Butterfield Rd., Ste. 201
Lombard, IL 60148
With copies to:
General Counsel
Municipal and Commercial
Veolia North America
Page4
Item 1Y - 8
53 State Street,
14th Floor Boston, MA 02109
If to City:
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attention: City Manager
Phone: (760) 322-8350
Fax: (760) 323-8207
With copy to:
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attention: City Attorney
Phone: (760) 323-8205
Fax: (760) 323-8207
[SIGNATURES ON NEXT PAGE]
Item 1Y - 9
0 (
IN
WITNESS
WHEREOF,
the
Parties
have
executed
this
Administrative
Contract
Modification
as
of
the
date
first
stated
above.
APPROVED
AS
TO
FORM:
By:
g
~~
effr~mger City
Attorney
"CITY" City
of
Palm
Springs
By
:
Jusf City
ATTEST:
Corporations
require
two
notarized
signatures
.
One
signature
must
be
from
Chairman
of
Board,
President
, or
any
Vice
President.
The
second
signature
must
be
from
the
Secretary
,
Treasurer
, Assistant
Treasurer,
or
Chief
Financial
Officer
.
"VEOLIA" Veolia
Water
West
Operating
Services,
Inc.
By
:
By
:
Signature
Signature
Printed
Name
and
Title
Printed
Name
and
Title
Page6
Item 1Y - 10
IN WITNESS WHEREOF, the Parties have executed this Administrative Contract Modification as of the date first stated above.
APPROVED AS TO FORM:
By:
Signed in counterpart
Jeffrey S. Ballinger
City Attorney
"CITY"
City of Palm Springs
By:
Signed in counterpart
Justin Clifton
City Manager
ATTEST:
Signed in counterpart
By:---------
Anthony Mejia
City Clerk
Corporations require two notarized signatures. One signature must be from Chairman of Board, President, or any Vice President. The second signature must be from the Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer. "VEOLIA"
Veolia Water West Operating Services, Inc.
By: I,-=-CL - Sinilturie---
By: 9/~ ,-
Signature 7
Denis Chesseron
Executive Vice President, CFO and Treasurer
Printed Name and Title
Page6
Item 1Y - 11
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Proved to me on the basis of satisfactory evidence:
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Other
D Affiant(s) Thumbprint{s) O Describe:_
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Item 1Y - 12
ADMINISTRATIVE CONTRACT MEMORANDUM
This Administrative Contract Memorandum No. 3 is made as of the ___th day of ___________, 20 __, by Veolia Water West Operating Services, Inc., a Delaware corporation, (“Veolia”), and the City of Palm Springs, a California charter city and municipal corporation, (“City”). Veolia and City are collectively herein referred to as the “Parties.” This Administrative Contract Memorandum No. 3 is made in reference to the following recitals.
WITNESSETH:
WHEREAS, Veolia and City entered into that certain Wastewater Services Agreement (O&M) dated as of November 4, 2015, commencing January 1, 2016, (the “Agreement”); and.
WHEREAS, Section 14.5 “Integration; Amendment,” of the Agreement authorizes that where specifically authorized in the Agreement, this Administrative Contract Memorandum may be used as an amendment administratively approved by the Parties through approval by the Contract Officer and an authorized representative of Veolia without further formal action by the City Council; and
WHEREAS, the Parties have negotiated in good faith to amend the terms and conditions of the Agreement pursuant to this Administrative Contract Memorandum No. 3, as authorized by Section 14.5 of the Agreement.
NOW, THEREFORE , the Parties hereby agree to amend the Agreement as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS . For the purposes of this Administrative Contract Memorandum, the following words and terms shall have the respective meanings set forth as follows. Any other capitalized word or term used but not defined herein is used as defined in the Agreement.
SECTION 1.2. INTERPRETATION . In this Administrative Contract Memorandum , unless the context otherwise requires:
(A) References Hereto. The terms “hereto”, “hereby”, “hereof”, “herein”, “hereunder” and any similar terms refer to this Administrative Contract Memorandum , and the term “hereafter” means after, and the term “heretofore” means before, the date of execution and delivery of this Administrative Contract Memorandum. (B) Plurality. Words importing the singular number mean and include the plural number and vice versa.
Item 1Y - 13
(C) Persons. Words importing persons include firms, companies, associations, general partnerships, limited partnerships, trusts, business trusts, corporations and other legal entities, including public bodies, as well as individuals. (D) H eadings. The table of contents and any headings preceding the text of the Articles, Sections and subsections of this Administrative Contract Memorandum shall be solely for convenience of reference and shall not constitute a part of this Administrative Contract Memorandum, nor shall they affect its meaning, construction or effect. (E) Entire Agreement. This Administrative Contract Memorandum constitutes the entire agreement between the Parties hereto with respect to the amendment(s) to the Agreement contemplated by this Administrative Contract Memorandum . Except as provided in the Agreement with respect to the City Indemnified Parties, nothing in this Administrative Contract Memorandum is intended to confer on any person other than the Veolia, the City and their permitted successors and assigns hereunder any rights or remedies under or by reason of this Administrative Contract Memorandum. (F) Counterparts. This Administrative Contract Memorandum may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Administrative Contract Memorandum.
(G) Applicable Law. This Administrative Contract Memorandum shall be governed by and construed in accordance with the applicable laws of the State of California. (H) Severability. If any clause, provision, subsection, Section or Article of this Administrative Contract Memorandum shall be ruled invalid by any court of competent jurisdiction, the invalidity of any such clause, provision, subsection, Section or Article shall not affect any of the remaining provisions hereof, and this Administrative Contract Memorandum shall be construed and enforced as if such invalid portion did not exist provided that such construction and enforcement shall not increase the Parties ’ liability beyond that expressly set forth herein.
(I) Approvals. All approvals, consents and acceptances required to be given or made by any party hereto shall be at the sole discretion of the party whose approval, consent or acceptance is required.
(J) Payments. All payments required to be made by the Parties hereunder shall be made in lawful money of the United States of America.
Item 1Y - 14
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES . The Parties hereby represent and warrant that:
(1) Existence and Powers . Veolia is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with the full legal right, power and authority to enter into and perform its obligations under this Administrative Contract Memorandum.
City is a charter city and municipal corporation, organized and existing in the County of Riverside, under and by virtue of the laws of the State of California, with the full legal right, power and authority to enter into and perform its obligations under this Administrative Contract Memorandum.
(2) Due Authorization and Binding Obligation . This Administrative Contract Memorandum has been duly authorized, executed and delivered by all necessary corporate action of Veolia and authorization by the City, and constitutes the legal, valid and binding obligation of the Parties , enforceable against the Parties in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights from time to time in effect and equitable principles of general application. (3) No Approvals Required. In accordance with Section 14.5 of the Agreement, no approval, authorization, order or consent of, or declaration, registration or filing with, any Governmental Body is required for the valid execution and delivery of this Administrative Contract Memorandum by the Parties.
(4) No Legal Prohibition . T he Parties have no knowledge of any Applicable Law in effect on the date as of which this representation is being made which would prohibit implementation of the amendment(s) to the Agreement contemplated by this Administrative Contract Memorandum.
(7) Consent to Amendment . The Parties are fully aware of the terms and conditions of the Agreement to be amended by this Administrative Contract Memorandum.
(8) Consideration. This Administrative Contract Memorandum is made in furtherance of the implementation of the Agreement, and the assumption by the Parties of their obligations hereunder will result in a material benefit to the Parties.
Item 1Y - 15
ARTICLE III
ADMINISTRATIVE AMENDMENT
SECTION 3.1. AMENDMENT. This A dministrative Contract Memorandum hereby implements the following amendment to the terms and conditions enumerated herein.
Delete existing Schedule M and replace with updated Schedule M, of Schedule M of the agreement.
Item 1Y - 16
SECTION 3.2. NOTICE. All notices required or desired to be given hereunder to either party shall be effective if given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, by nationally recognized overnight delivery company, or by telecopy (if telecopy number is listed below, with telephone confirmation of receipt), if addressed or the following addresses or telecopy numbers:
If to Veolia:
Senior Vice-President
Veolia Water West Operating Services, Inc.
3731 Wilshire Boulevard, Suite 600
Los Angeles, California 90010
With copies to:
General Counsel
Municipal and Commercial
Veolia North America
53 State Street, 14th Floor
Boston, MA 02109
If to City:
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attention: City Manager
Phone: (760) 322-8350
Fax: (760) 323-8207
With copy to:
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attention: City Attorney
Phone: (760) 323-8202
Fax: (760) 323-8207
[SIGNATURES ON NEXT PAGE]
Item 1Y - 17
IN WITNESS WHEREOF , the Parties have executed this Administrative Contract Memorandum No. 3 as of the date first stated above.
“CITY”
City of Palm Springs
By: _______________________________
Justin Clifton
City Manager
APPROVED AS TO FORM: ATTEST
By: ___________________________ By: _______________________________ Jeffrey S. Ballinger Monique Lomeli
City Attorney Interim City Clerk
AUTHORIZED BY CITY COUNCIL:
Pursuant to Section 14.5 of Agreement No. A6804, dated as of November 4, 2015.
“VEOLIA”
Veolia Water West Operating Services, Inc.
By: By:
Signature (Notarized) Signature (Notarized)
Printed Name/Title Printed Name/Title
Item 1Y - 18
Schedule M
SCHEDULE M
INFLUENT QUALITY AND QUANTITY SPECIFICATIONS
M.1 Acceptable Influent
For the purposes of the Performance Guarantee, Acceptable Influent includes all influent with characteristics typical of municipal wastewater and within the historical ranges of the Influent data reported by Veolia pursuant to and concurrent with the Services previously provided to City under the terms of the Amended Agreement. Tables M-1 and M-2 set forth the range of Acceptable Influent flows and characteristics, respectively. The reference average dry weather design flow for Table M -1 is 7.0 million gallons per day (mgd).
Table M-1. Acceptable Influent Flow Peaking Factors
Peaking factor Value
Average annual flow 1.12
Average dry weather flow 1.00
Maximum month dry weather flow 1.19
Average wet weather flow 1.18
Maximum month wet weather flow 1.68
Peak day flow 2.69
Table M-2. Acceptable Influent Characteristics Ranges
Characteristic Annual Average
Limit
Range
BOD5, mg/l 245 200–500
TSS, mg/l 245 150–500
Settleable Solids, ml/l 21 5-21
TDS, mg/l 700 400-700
pH, standard pH units 7 6–9
Item 1Y - 19
Schedule M
An exceedance from the values set forth in Table M-2 is defined when the annual running average value exceeds the Annual Average Limit values.
M.2 Proposed Local Limits
To the extent that the City and Veolia establish the MIPP pursuant to Section 5.5, the following local limits shall be implemented:
Pollutant Units
Maximum Daily
Concentration Limit
Ammonia as N mg/L 570
Oil & Grease, animal/vegetable mg/L 100
Oil & Grease, petroleum mg/L 50
Arsenic, total mg/L 0.073
Cadmium, total mg/L 0.16
Chromium, total mg/L 0.62
Copper, total mg/L 1.1
Lead, total mg/L 1.1
Mercury, total mg/L 0.022
Molybdenum, total mg/L 9.5
Nickel, total mg/L 0.56
Silver, total mg/L 0.38
Zinc, total mg/L 0.77
Selenium, total mg/L 5.9
Cyanide, total mg/L 0.53
END OF SCHEDULE
Item 1Y - 20
CITY COUNCIL STAFF REPORT
06/16/2022 1. Z.
City Clerk -
SUBJECT
CONSENT AND REAFFIRMATION OF DESERT COMMUNITY ENERGY
GUARANTY
RECOMMENDATION:
Adopt a Resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A CONSENT AND REAFFIRMATION OF GUARANTY OF THE OBLIGATIONS OF DESERT
COMMUNITY ENERGY UNDER A CREDIT AGREEMENT WITH RIVER CITY BANK.”
1. Authorize the City Manager, in consultation with the City Attorney, to negotiate and take such actions necessary and appropriate to finalize and execute the Consent and Reaffirmation of Guaranty and associated documents.
2. Attachments
Item 1Z
CITY COUNCIL STAFF REPORT
DATE: JUNE 16, 2022 CONSENT CALENDAR
SUBJECT: CONSENT AND REAFFIRMATION OF DESERT COMMUNITY ENERGY
GUARANTY
FROM: Justin Clifton, City Manager
BY: Office of Sustainability
SUMMARY:
Desert Community Energy (DCE) is requesting the City consent to the First Amendment of Credit Agreement between DCE and River City Bank (RCB) and approve the Consent and Reaffirmation of Guaranty for the benefit of RCB. On February 11, 2022, DCE entered into a Credit Agreement with RCB to provide a Commercial Revolving Line of Credit and optional subsequent term loan facility in the amount of up to $8 million (Credit Agreement).
The City agreed to guaranty the obligations of DCE under the Credit Agreement pursuant to a Guaranty on behalf of RCB. The First Amendment of Credit Agreement will increase the maximum commitment of RCB from $8 million to $13 million, which will allow DCE to meet the financial security requirements with Southern California Edison pursuant to the rules established by the California Public Utilities Commission. The consent of the City as the guarantor is required for the First Amendment to Credit Agreement to take effect , including an acknowledgement of the City’s potential increased exposure to liability as the guarantor in the amount of $13 million.
RECOMMENDATION:
1. Adopt Resolution No. ______, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A CONSENT AND
REAFFIRMATION OF GUARANTY OF THE OBLIGATIONS OF DESERT
COMMUNITY ENERGY UNDER A CREDIT AGREEMENT WITH RIVER CITY BANK.”
2. A uthorize the City Manager, in consultation with the City Attorney, to negotiate and take such actions necessary and appropriate to finalize and execute the Consent and Reaffirmation of Guaranty and associated documents.
Item 1Z - 1
City Council Staff Report
June 16, 2022 -- Page 2
Consent And Reaffirmation of Desert Community Energy Guaranty
BACKGROUND:
Desert Community Energy (DCE) was created in October 2017 as a joint powers agency to provide a Community Choice Aggregation (CCA) program to member agencies, which are currently the cities of Palm Springs and Palm Desert. In June 2019, the City Council voted unanimously to move forward with Community Choice Aggregation (CCA) for Palm Springs. Palm Springs’ customers were enrolled in the 100% Carbon Free product and became DCE customers beginning April 1, 2020. Palm Desert has not moved forward with implementation; therefore, the City is currently the only member with residents and businesses, including the City of Palm Springs, who are served by DCE.
As further discussed in the attached staff report prepared for the City Council meeting of January 27, 2022, to address its short -term capital requirements DCE entered into a revolving line of credit (Credit Agreement ) agreement with River City Bank (RCB) for up to $8 million and up to three years . The Credit Agreement includes a requirement for an unconditional guaranty from the City of Palm Springs as the active member of DCE, which Council approved at its meeting of January 27, 2022. The Credit Agreement provides DCE flexibility to address fluctuations and volatility in the energy market, uncertainties in power prices, and likely future heat events related to the impacts of climate change, as DCE continues to build its reserves. As of May 31, 2022, DCE has drawn down approximately $3.4 million of the available $8 million under the Credit Agreement.
Under the rules of the California Public Utilities Commission (CPUC), CCAs such as DCE must post a financial security requirement (FSR) with the Investor-Owned Utility ( IOU) that serves them to cover increased costs the IOU may incur should there be an involuntary return of the CCA’s customers to the IOU because the CCA is no longer able to serve those customers. The FSR is recalculated each May 10 and November 10, with the FSR to be posted by the following July 1 and January 1. DCE is served by Southern California Edison (SCE), and the FSR is calculated according to SCE’s Rule 23, its tariff for CCAs in its service territory.
DCE’s required FSR posting has been the minimum, currently $147,000, and that amount was expected to continue when DCE arranged for the Credit Agreement for up to $8 million. However, on May 10, SCE filed with the CPUC an Advice Letter inform ing DCE and the other CCAs in its territory of very large increases in their FSRs to be posted by July 1 for the period through December 31, 2022. According to SCE’s May 10 filing, DCE’s FSR would increase to almost $5.2 million, and the total FSR for the CCAs in SCE territory is estimated at in excess of $120 million. The direct cause of this sudden astrono mic increase in the FSR amount is higher forecast wholesale energy prices during the six - month forward period of June – November 2022. I n its FSR calculation SCE relied on forward electricity prices quoted in April 2022, which were much higher than the March 2022 forward prices. The spike in forward prices is partly due to the Russian invasion of Ukraine and its direct effect on the worldwide price for natural gas, which is the benchmark for electricity prices.
Item 1Z - 2
City Council Staff Report
June 16, 2022 -- Page 3
Consent And Reaffirmation of Desert Community Energy Guaranty
Through its legal counsel, DCE filed a protest letter with the CPUC on May 31 to contest SCE’s FSR calculation as being inconsistent with CPUC decisions and SCE Rule 23.
DCE also asked the CPUC to require SCE to base its FSR calculation on the March 2022 forward energy process, to be consistent with the FSR calculations the other two IOUs, Pacific Gas & Electric and San Diego Gas & Electric, used for the CCAs in their service territories. Had SCE used the March prices, DCE’s FSR posting for the period of July 1 to December 31, 2022, would have remained at $147,000.
DCE is working with California Community Choice Association (CalCCA), the trade association for the CCAs, which also filed a protest letter, as did another CCA in SCE territory, Orange County Power Authority . In response to these protest letters, SCE agreed in a June 7 filing that it had misapplied its Rule 23 tariff and will lower DCE’s total FSR to approximately $4.5 million. CalCCA is also party to a CPUC proceeding to reform the FSR calculation methodologies that may remove some of their current volatil ity. A decision in that proceeding is expected in the first part of 2023.
On June 9, the CPUC Energy Division staff suspended SCE’s Advice Letter until October 6, 2022, for further consideration by the CPUC of the arguments raised by the parties .
However, the Energy Division staff could act on the Advice Letter before then. If DCE’s protest letter is ultimately unsuccessful, SCE’s proposed new FSR for DCE, together with expected drawings under the Credit Agreement, would require DCE to exceed the Credit Agreement $8 million commitment limit . Accordingly, DCE requested from RCB an increase in the Credit Agreement commitment from $8 million to $13 million. RCB requires that the increased commitment of up to $13 million be covered by the Guaranty of the City of Palm Springs. The Guaranty also states that any amendment of the credit agreement which would increase the amount of the commitment requires the prior written consent of the City as guarantor. RCB has agreed to offer a $5 million increase to DCE’s Credit Agreement, to be used specifically for the issuance of standby letters of credit such as the FSR. RCB will structure the line with an $8 million cash advance sublimit (equal to the existing commitment), and up to $13 million can be used for letters of credit. Any existing cash advances and letters of credit issued under the line will reduce the available commitment.
The DCE Board, at its June 20 meeting, will vote on approving the First Amendment of Credit Agreement with RCB (First Amendment) by resolution and authoriz ing the Executive Director, in consultation with DCE’s legal counsel, to take necessary actions to finalize and execute the First Amendment, pending the Consent and Reaffirmation of Guaranty from the City of Palm Springs. DCE staff is working with RCB to finalize the First Amendment for signature. DCE legal counsel , the C ity Attorney, and RCB legal counsel have worked together to prepare the Consent and Reaffirmation of Guaranty included in this agenda packet. T o issue the FSR, DCE needs to complete and execute the First Amendment and have the Consent and Reaffirmation of Guaranty issued.
Backing in the form of the Consent and Reaffirmation of Guaranty from the City of Palm Springs, with its long existing, high quality credit rating, is the key to making this process Item 1Z - 3
City Council Staff Report
June 16, 2022 -- Page 4
Consent And Reaffirmation of Desert Community Energy Guaranty
a success, allowing DCE to meet its FSR obligations to SCE and pro viding DCE the continued financial flexibility it requires over the next few years as it builds reserves.
Consent and Reaffirmation of Guaranty Key Elements:
The key elements of the Consent and Reaffirmation of Guaranty are unchanged from those of the initial Guaranty approved at the Council meeting of January 27, 2022, except that the total guaranty commitment is increased from $8 million to $13 million. These key elements include:
• Palm Springs is the Guarantor of any/all DCE borrowings pursuant to the revolving credit agreement and optional subsequent term loan facility between DCE and River City Bank.
• Palm Springs’ credit support obligations would commence only in the event that DCE defaults in any repayment obligations pursuant to the amended revolving line of credit agreement and optional subsequent term loan facility. • Palm Springs guaranty amounts are limited to any unpaid principal amounts that may be outstanding and due plus any reasonably incurred expenses by River City Bank which may be necessary to collect such amounts.
STAFF ANALYSIS:
The proposed Consent and Reaffirmation of Guaranty (Attachment 1) identifies the City of Palm Springs as the Guarantor and commits the city to guaranty all obligations of DCE as Borrower, in accordance with the terms of the Credit Agreement as modified by the First Amendment. The maximum and most unlikely risk for the C ity would result from a sudden and unexpected event that might cause the cessation of DCE’s power business operations and a subsequent default on the credit agreement. In this event, the risk to Palm Springs would be the requirement to repay any then outst anding balance owed pursuant to the amended credit agreement, after DCE has undertaken all available steps to repay any outstanding amounts through rate actions, sale of already procured power, or other available financial avenues. While there is risk associated with the proposed Consent and Reaffirmation of Guaranty, that risk is limited given the following mitigating factors:
• DCE being the default local electricity provider in Palm Springs, with a stable customer base and revenue stream.
• DCE’s ability to raise rates as may be necessary to enhance revenues to meet operating requirements.
• Projections that target over $20 million in net profits during the coming fiscal years. • DCE’s prudent fiscal policies, sound financial practices , and active risk management efforts.
Item 1Z - 4
City Council Staff Report
June 16, 2022 -- Page 5
Consent And Reaffirmation of Desert Community Energy Guaranty
There are also risks if the Consent and Reaffirmation of Guaranty required for DCE to secure the First Amendment is not consummated. Potential negative outcomes that would likely occur absent the proposed amended guaranty and line of credit include:
• Significant challenges for DCE to meet its FSR obligations, manage cash flow and reduced ability to accommodate the mismatch of timing between power procurement costs and receipt of revenues.
• Increased cost of credit which may translate to increased rates and higher cost of electricity for Palm Springs customers.
• Impacts to DCE’s ability to provide 100% carbon free electricity and the associated positive greenhouse gas emissions reduction and climate mitigating benefits made possible by Palm Springs and its residents and businesses.
As a start -up in the Community Choice Energy business, DCE has been particularly vulnerable to market volatility and energy price increases not evident since the California energy crisis of nearly 20 years ago. This volatility has further increased since the Russian invasion of Ukraine. The First Amendment, backed by Palm Springs’ guaranty, will be a significant positive step to help DCE build reserves to manage this volatility, revenue accrual swings, and uncertainty regarding factors out of DCE’s direct control , including the required amount of the FSR posting . In a time of challenging market conditions over the last two years, DCE has implemented strategies and taken other steps to reduce costs, manage volatility and promote rate stability for its customers, as detailed in the attached staff report prepared for the Council meeting of January 27, 2022. DCE remains on track in pursuing those strategies and steps.
ALIGNMENT WITH STRATEGIC PLANNING:
This agenda item aligns with the City Council Priority “Environmental Stewardship (2B)” relative to achieving reductions in greenhouse gas (GHG) emissions and maintaining and expanding outreach of DCE’s 100% carbon-free model. DCE’s carbon free product is a relatively cost-effective way for the city to help achieve GHG reduction goals. As noted at Mayor Middleton’s State of the City presentation on May 3, t he participation in DCE’s carbon free energy by the City and Palm Springs residents and businesses has helped the City meet its state -mandated goal of reducing 2020 GHG emissions levels below those of 1990. Approval of the Consent and Reaffirmation of Guaranty will provide DCE with additional financial stability so that it may offer new programs, with a particular focus on programs to benefit low -income customers. Programs may include electric vehicles and their charging stations, building electrification, energy storage, grid resiliency, energy efficiency, weatherization, and demand response. DCE is also working on a solar and energy storage pilot program that could create local jobs and investment, a new revenue source for DCE and enhance Palm Springs’ clean energy profile.
Item 1Z - 5
City Council Staff Report
June 16, 2022 -- Page 6
Consent And Reaffirmation of Desert Community Energy Guaranty
ENVIRONMENTAL ASSESSMENT:
The proposed action does not result in a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL ANALYSIS:
There is no immediate fiscal impact of the propose d Consent and Reaffirmation of Guaranty provided DCE meets its obligations as provided in the Credit Agreement as modified by the First Amendment and optional subsequent term loan facility with RCB.
Should DCE not meet its fiscal obligations then the City will be liable for such obligations as provided in the terms of the Consent and Reaffirmation of Guaranty . However, this potential liability risk is mitigated by DCE’s prudent management noted above.
It should also be noted that the City of Palm Springs is one of the largest power customers of DCE for the City’s electricity usage . The Consent and Reaffirmation of Guaranty will assist DCE in providing increased rate certainty for its customers, whereas failure to approve the Consent and Reaffirmation of Guaranty, thus precluding DCE from securing the First Amendment to cover its FSR obligations , could lead to increased rates and higher cost of electricity for Palm Springs customers, including the City of Palm Springs.
REVIEWED BY:
Deputy City Manager: Flinn Fagg
City Attorney: Jeffrey S. Ballinger
City Manager: Justin Clifton
ATTACHMENTS:
1. Draft Consent and Reaffirmation of Guaranty by City of Palm Springs
2. Draft Resolution
3. Staff Report for Council meeting of January 27, 2022 Item 1Z - 6
ATTACHMENT 1
DRAFT CONSENT AND REAFFIRMATION OF GUARANTY
Item 1Z - 7
RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, APPROVING A CONSENT
AND REAFFIRMATION OF GUARANTY OF THE
OBLIGATIONS OF DESERT COMMUNITY ENERGY
UNDER A CREDIT AGREEMENT WITH RIVER CITY BANK
WHEREAS, Desert Community Energy (“DCE”) is a joint powers authority established on October 30, 2017 for the purpose of implementing community choice aggregation programs under Public Utilities Code Section 366.2.0; and
WHEREAS, DCE currently provides clean energy for the residents and businesses of the City; and
WHEREAS, DCE entered into a Credit Agreement with River City Bank (“RCB”) to provide a Commercial Revolving Line of Credit in the amount of up to $8,000,000 on February 11, 2022 (“Credit Agreement”) to provide working capital and allow DCE to post collateral for energy procurement in the ordinary course of DCE’s provision of energy service to the City; and
WHEREAS, the City agreed to guaranty the obligations of DCE under the Credit Agreement pursuant to that certain Guaranty on behalf of River City Bank dated February 11, 2022 (“Guaranty”); and
WHEREAS, to facilitate the posting of collateral to Southern California Edison in connection with certain regulatory requirements imposed by the California Public Utilities Commission, DCE has negotiated an expansion of the line of credit in the Credit Agreement in the amount up to $13,000,000 pursuant to the terms of a First Amendment to Credit Agreement, and
WHEREAS, the consent of the City as the guarantor is required for the First Amendment to Credit Agreement to take effect, including an acknowledgement of the City’s potential increased exposure to liability as the guarantor in the amount of $13,000,000; and
WHEREAS, the City Attorney has reviewed and approved the attached form of Consent and Reaffirmation of Guaranty and the First Amendment to the Credit Agreement;
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AS FOLLOWS:
Section 1. Factual Findings. The true and correct recitals above are incorporated by this reference herein as the basis and foundation for the City’s adoption of this Resolution.
Item 1Z - 8
Resolution No. ______
Section 2. Approval of Consent and Reaffirmation of Guaranty. The City Council hereby consents to the First Amendment of Credit Agreement and approves the Consent and Reaffirmation of Guaranty for the benefit of River City Bank to provide working capital for the operations of Desert Community Energy in a principal amount not to exceed $13,000,000 and agrees that the City of Palm Springs will be liable to River City Bank for the payment of all amounts due to River City Bank in connection with the Credit Agreement, as amended by the First Amendment to Credit Agreement, upon the occurrence of an event of default by Desert Community Energy with respect to its obligations to River City Bank.
Section 3. Authority of City Manager . The City Manager is hereby authorized to finalize and execute the Consent and Reaffirmation of Guaranty, with the advice of the City Attorney, in substantially the form which is attached to this resolution.
Section 4. Effective Date. This Resolution will become effective immediately upon adoption and remain effective unless superseded by a subsequent resolution.
PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS ___ DAY OF __________, 2022.
JUSTIN CLIFTON, CITY MANAGER
ATTEST:
MONIQUE M. LOMELI, CMC
INTERIM CITY CLERK
Item 1Z - 9
Resolution No. ______
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, MONIQUE M. LOMELI, Interim City Clerk of the City of Palm Springs, hereby certify that Resolution No. _____ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on _____________, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, _________.
__
MONIQUE M. LOMELI, CMC
INTERIM CITY CLERK
Item 1Z - 10
ATTACHMENT 2
DRAFT RESOLUTION
Item 1Z - 11
CONSENT AND REAFFIRMATION OF GUARANTY
PAGE 1
CONSENT AND REAFFIRMATION OF GUARANTY
This Consent and Reaffirmation of Guaranty (this “Guarantor Consent”) is made effective as of June ___, 2022, by the City of Palm Springs (the “Guarantor”) in favor and for the benefit of Lender under the Credit Agreement (each as hereinafter defined).
RECITALS
A. Under that certain C redit Agreement dated as of February 11, 2022 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof in effect, the “Credit Agreement”) by and between Desert Community Energy (“Borrower”) and River City Bank (including its successors and assigns, “Lender”), Lender agreed to provide a revolving credit facility to Borrower with an initial Revolving Credit Commitment of $8,000,000.00. Capitalized terms not defined herein have the meanings ascribed to them in the Credit Agreement.
B. Borrower is a joint powers authority that serves energy to commercial and residential customers within the boundaries of Guarantor, and Guarantor is a member of Borrower.
C. To induce Lender to enter into the Credit Agreement , Guarantor executed and delivered to Lender that certain Guaranty dated as of February 11, 2022 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms, the “Guaranty”), to guaranty all of the Obligations of Borrower under the Credit Agreement.
D. Borrower and Lender have agreed to certain modifications of the Credit Agreement, including an increase in the Revolving Credit Commitment from $8,000,000.00 to $13,000,000.00, pursuant to the First Amendment to Credit Agreement (the “First Amendment”) dated as of the date hereof, between Borrower and Lender.
E. It is a condition precedent to the First Amendment that Guarantor execute and deliver this Guarantor Consent to Lender.
NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor hereby agrees, certifies and represents as follows:
1. Guarantor consents to the First Amendment and the transactions contemplated by it, including the increase in the Revolving Credit Commitment from $8,000,000.00 to $13,000,000.00.
2. The execution and delivery of this Guarantor Consent is a condition precedent to Lender’s obligations under the First Amendment.
3. All of the terms and conditions of the Guaranty are hereby reaffirmed by the undersigned as though made as of the date hereof. The Guaranty remains in full force and effect, enforceable Item 1Z - 12
CONSENT AND REAFFIRMATION OF GUARANTY
PAGE 2
against Guarantor in accordance with its terms. The Guaranty applies, with full force and effect, to the Obligations of Borrower to Lender as modified by the First Amendment.
4. All waivers, releases, and relinquishments of rights contained in the Guaranty are effective and continue to apply following the execution and delivery of the First Amendment and the performance of the transactions contemplated therein. Guarantor assumes full responsibility for keeping fully informed of the financial condition of Borrower and all other circumstances affecting Borrower’s ability to perform its Obligations to Lender.
5. All of the representations and warranties set forth in Section 7 of the Guaranty are true and correct as of the date hereof and are hereby remade.
IN WITNESS WHEREOF, the undersigned has executed this Guarantor Consent as of the year and date first set forth above.
City of Palm Springs
By:
Its:
Address:
Item 1Z - 13
ATTACHMENT 3
STAFF REPORT FOR COUNCIL MEETING OF JANUARY 27, 2022
Item 1Z - 14
CITY COUNCIL STAFF REPORT
DAT
E: January 27, 2022 NEW BUSINESS
SUBJECT: DESERT COMMUNITY ENERGY LINE OF CREDIT GUARANTY FROM: Justin Clifton, City Manager
BY: Department of Development Services, Office of Sustainability SUMMARY:
Des
ert Community Energy (DCE) is requesting the City enter into a Guaranty Agreement with River City Bank guaranteeing all obligations of DCE pursuant to a credit agreement between DCE and River City Bank for a revolving line of credit (RLOC) and subsequent option for term loan conversion. The RLOC will be utilized to augment cash flow for DCE during periods of power market volatility and at times when power supply payment obligations precede corresponding revenue realization. The funds will also allow DCE to enter into additional power purchase agreements to provide more locally produced, cleaner energy to residents and businesses in Palm Springs.
RECOMMENDATION:
1. Adop
t Resolution No. ______, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN UNCONDITIONAL
GUARANTY OF THE OBLI GATIONS OF DESERT COMMUNTY ENERGY
UNDER A CREDIT AGREEMENT WITH RIVER CITY BANK.”
2. Authorize the City Manager, in consultation with the City Attorney, to negotiate and take such actions necessary and appropriate to finalize and execute the Guaranty and associated documents.
BACKGROUND:
Des
ert Community Energy (DCE) was created in October 2017 as a joint powers agency to provide a Community Choice Aggregation (CCA) program to member agencies, which are currently the cities of Palm Springs and Palm Desert. In June 2019, the City Council voted unanimously to move forward with Community Choice Aggregation for Palm Springs. Palm Springs’ customers were enrolled in the 100% Carbon Free product and became DCE customers beginning April 1, 2020. Palm Desert has not moved forward with implementation, therefore, the City is currently the only member with residents and businesses who are served by DCE.
Item 1Z - 15
At th
e November 18, 2021, City Council meeting, DCE staff provided an update to the City Council on current DCE activities and future plans. Included in that report was expressed appreciation to the City Council, residents and businesses in Palm Springs for the significant progress made in reducing greenhouse gas emissions as a result of participation in Desert Community Energy. As a result of this participation by Palm Springs City Council, residents, and businesses, the City reduced 2020 greenhouse gas emissions by 16%, the equivalent of taking more than 25,000 cars off the road. The report also highlighted steps DCE has taken to benefit Palm Springs’ customers including DCE’s lower cost Desert Saver product , a bill-protection credit for low- income customers, and signing long-term contracts for carbon free and renewable power sources, including three wind projects within Palm Springs C ity limits. DCE offers additional benefits including more choice in electricity supply, local control, and promoting the transition to a cleaner, more efficient energy supply.
It is commonplace for electric energy enterprises, including CCAs like DCE, to experience fluctuations in cash flow a s a result of timing differences between when a CCA incurs energy and other operating expenses and collects corresponding revenues. T hese fluctuations are typically managed through the establishment of operating reserves that accumulate over time. Operating reserves also help a CCA to establish a good credit rating. Because DCE launched service in April 2020, it has not had sufficient time to accumulate such reserves, especially given the COVID pandemic and other challenges .
As noted later in this staff report, DCE project s more positive financial conditions during 2022, and an improved ability to build reserves. For the time being, however, DCE requires a buffer in the form of a revolving line of credit to address the inherent fluctuations in the power business, including market uncertainties, imposed regulatory fees and requirements, and other factors outside DCE’s direct control.
To address short term capital requirements, DCE sought proposals for a credit facility and recently completed a due diligence process with potential lenders . DCE was pleased to receive two competitive proposals , from current banking partner, River City Bank, and from Union Bank. Both proposals included a requirement for an unconditional guaranty from the City of Palm Springs as the active member of DCE. DCE staff and financial advisors completed a negotiation and evaluation process and determined that River City Bank’s proposal for an up to $8 million revolving line of credit for up to three years best matched DCE’s current needs. The amount of the line of credit was thoroughly evaluated, using financial projections and cash flow analysis over the next five years. DCE requires sufficient capital liquidity to pay energy suppliers, to fund operations, to provide customers with a reliable energy supply at stable rates, and to address uncertainty related to extreme weather events should they occur . While DCE is unlikely to need the full amount of available credit offered by River City Bank, the availability of a credit line up to $8 million (about 15% of DCE’s total annual revenues) allows flexibility to address fluctuations and volatility in the energy market, uncertainties in power prices, and likely future heat events related to the impacts of climate change.
Item 1Z - 16
The pas
t two years have been financially challenging for DCE, as well as for other CCAs throughout the state, due to impacts of the s ummer 2020 heat storm and related energy price spikes, COVID related power demand shifts, delinquent customer payments, and revenue implications, as well as natural gas shortages nationwide and associated power price increases in Summer 2021. The DCE Board has taken all necessary steps to address these challenges. In early 2021, DCE signed four long -term contracts for renewable energy which will further stabilize and control costs; however, three of these projects will not come on -line until 2023 and early 2024. The line of credit and guaranty will allow DCE to access such funds at favorable rates and thus manage market uncertainty until sufficient reserves can be accumulated.
Since inception, DCE’s Board has emphasized prudent fiscal management . F inancial policies include setting budgets and rates as necessary to meet operating costs, reserve targets, debt repayment, and DCE’s obligations under its power supply and other contracts, including future programs and projects. DCE’s risk management policy ensures that supply and operating risks are actively managed; a risk management team meets monthly to implement, maintain, and oversee compliance with th ese policies. These Board approved policies have been adhered to by the Board as it has historically exercised its responsibility to control costs and maintain necessary revenues by way of adopting rate revisions, including the flexibility to automatically adjust rates in response to unanticipated cost changes.
As reported at the November 2021 City Council meeting, the financial outlook for DCE in 2022 significantly improves and DCE does not anticipate the need for a rate increase . A five-year projection prepared by DCE consultants shows an encouraging picture. DCE is currently projecting net revenues close to $10 million in 2022 and $20 million in 2023 and expects to meet these targets with similar projections for subsequent years . DCE anticipates positive cash flow by mid -2022 coupled with the ability to build financial reserves during the second half of this year and beyond. Once DCE transitions to its longer-term fixed price renewable/carbon free power contracts over the next several years, it anticipates much greater financial and rate stability.
The DCE Board , at its January 10 meeting, unanimously voted to approve the credit facility by resolution and authorized the Executive Director, in consultation with DCE’s Legal Counsel, to take necessary actions to finalize and execute the credit agreement with River City Bank, consistent with the term sheet, and pending final credit approval and a guaranty from the City of Palm Springs. DCE staff is working with River City Bank to complete the credit approval process and finalize the credit agreement for signature.
DCE legal counsel, the C ity Attorney, and River City Bank legal counsel have worked together to prepare the guaranty included in this agenda packet. DCE would like to complete and execute the credit agreement as soon as feasible, potentially by the end of this month.
Item 1Z - 17
Bac
king in the form of a guaranty from the City of Palm Springs, with its long existing, high quality credit rating, is the key to making this process a success and providing DCE the financial flexibility it requires over the next few years as it builds reserves.
Credit Guaranty Key Elements:
Key
elements of the credit guaranty agreement include:
• Palm Springs becomes the Guarantor of any/all DCE borrowings pursuant to the revolving credit agreement and optional subsequent term loan facility between DCE and River City Bank.
• Palm Springs’ credit support obligations would commence only in the event that DCE defaults in any repayment obligations pursuant to the revolving credit agreement and optional subsequent term loan facility.
• Palm Springs guaranty amounts are limited to any unpaid principal amounts that may be outstanding and due plus any reasonably incurred expenses by River City Bank which may be necessary to collect such amounts.
STAFF ANALYSIS:
The pr
oposed guaranty ( Attachment 1 ) identifies the City of Palm Springs as the Guarantor and commits the city to guaranty all obligations of Desert Community Energy as Borrower, in accordance with the terms of the credit agreement with River City Bank .
The maximum and most unlikely risk fo r the C ity would result from a sudden and unexpected event that might cause the cessation of DCE’s power business operations and a subsequent default on the credit agreement. In this event, the risk to Palm Springs would be the requirement to repay any the n outstanding balance owed pursuant to the River City Bank revolving credit agreement, after DCE has undertaken all available steps to repay any outstanding amounts through rate actions, sale of already procured power, or other available financial avenues. While there is risk associated with the proposed guaranty, that risk is limited given the following mitigating factors:
• DCE being the default local electricity provider in Palm Springs, with a stable customer base and revenue stream.
• DCE’s ability to raise rates as may be necessary to enhance revenues to meet operating requirements.
• Revenue projections which target $10 million in net revenues during each of the next five years.
• DCE’s prudent fiscal policies, sound financial practices , and active risk management efforts.
There are also risks if the guaranty required for DCE to secure the line of credit is not consummated. Potential negative outcomes that would likely occur absent the proposed guaranty and line of credit include:
Item 1Z - 18
• Si
gnificant challenges for DCE to manage cash flow and reduce d ability to accommodate the mismatch of timing between power procurement costs and receipt of revenues.
• Increased cost of credit which may translate to increased rates and higher cost of electricity for Palm Springs customers.
• Impacts to DCE’s ability to provide 100% carbon free electricity and the associated positive greenhouse gas emissions reduction and climate mitigating benefits made possible by Palm Springs, its residents and businesses.
As a start -up in the Community Choice Energy business, DCE has been particularly vulnerable to market volatility and energy price increases not evident since the California energy crisis of nearly 20 years ago. The proposed line of credit, backed by Palm Springs’ guaranty, will be a significant positive step to help DCE build reserves to manage this volatility, revenue accrual swings, and uncertainty regarding factors out of DCE’s direct control. In a time of challenging market conditions over the last two years , DCE has implemented strategies and taken other steps to reduce costs, manage volatility and promote rate stability for its customers. DCE’s record includes:
Two years of successful business start-up and operations Stable customer base. Almost 85% of Palm Springs customers continue to be DCE customers and most are enrolled in DCE’s 100% Carbon Free plan. DCE is current on all accounts with all suppliers and service providers. Environmental benefits including effective greenhouse gas emissions reduction and climate supportive mission and products.
Hedging strategy of procuring fixed price energy on a forward basis over time which tempers most of the impact from volatile energy prices, as in summer 2021.
DCE continues to implement forward hedging practices for procurement of energy to serve customers in 2022, 2023, and beyond.
DCE Board approval of four, long- term contracts for renewable and carbon free energy projects will result in significant savings, added stability, and increased rate certainty for DCE customers. These long-term power sources (wind energy in north Palm Springs and a solar plus battery storage project in Tulare County) will lock in associated supply costs for roughly 60% of DCE’s portfolio by 2024. These Power Purchase Agreements ( PPAs) will also help DCE meet its program goals of building a carbon free and significantly renewable energy resource mix. At the time of signing the contracts in early 2021, the lifetime cost savings of these PPAs was estimated at $20 to $60 million.
Offering a lower cost product for its most price sensitive customers. DCE’s Desert Saver product continues to be offered at a discount of at least 0.5 percent less than Southern California Edison’s base rate. Customers can opt down to Desert Saver at any time and pay the lowest electricity prices available in Palm Springs .
DCE is conscious of the needs of lower income communities. Implementation of c onservative fiscal policies and limited overhead costs , including policies to fully recover all costs.
Demonstrated ability to adjust rates as warranted to meet revenue requirements.
Item 1Z - 19
Leader
ship by locally appointed elected officials who are directly responsible to local community and constituency.
Ability to take all necessary and responsible steps to meet all business costs in a timely manner, including any balances incurred pursuant to the River City Bank credit arrangement under consideration.
Successful repayment of the outstanding balance on a one year $2 million line of credit with River City Bank at the end of 2021.
Strong partnership with consultant team with many years’ experience in the public power business and Community Choice Energy, including The Energy Authority and energy consultant Don Dame.
Commitment to periodically report to the DCE Board, DCE’s members, and the City of Palm Springs about DCE activities and its financial health.
Among the founding principles for DCE is to reduce greenhouse gas emissions related to the use of power, develop and implement sustainable energy initiatives that reduce energy demand and advance the use of clean, efficient, and renewable resources, and stimulate and sustain the local economy by developing local clean energy jobs . As discussed at the DCE City Council presentation in November 2021, DCE’s carbon free product is a relatively cost -effective way for the city to help achieve greenhouse gas reduction goals. The participation in DCE’s carbon free energy by the C ity and Palm Springs residents and businesses has demonstrated benefits in addressing climate change. As it builds reserves, DCE staff is evaluating opportunities and potential funding sources so that DCE may o ffer new programs, with a particular focus on programs to benefit low-income customers. Programs may include electric vehicles and their charging stations, building electrification, energy storage, grid resiliency, energy efficiency, weatherization, and demand response.
ENVIRONMENTAL ASSESSMENT:
The pr
oposed action does not result in a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL ANALYSIS:
Ther
e is no immediate fiscal impact of the proposed guaranty provided DCE meets its obligations as provided in the credit agreement with respect to the RLOC and optional subsequent term loan facility with River City Bank. Should DCE not meet its fiscal obligations then the City will be liable for such obligations as provided in the terms of the Guaranty Agreement. However, this potential liability risk is mitigated by DCE’s prudent management noted above.
Item 1Z - 20
It should also be noted that the City of Palm Springs is one of the largest power customers of DCE for the City’s electricity usage. The guaranty will assist DCE in providing increased rate certainty for its customers, whereas failure to approve the guaranty, thus precluding DCE from securing the line of credit , could lead to increased rates and higher cost of electricity for Palm Springs customers, including the City of Palm Springs.
REVIEWED BY:
Department Director: Flinn Fagg
City Manager: Justin Clifton
ATTACHMENTS:
1. Guaranty by City of Palm Springs
2. Draft Resolution
Item 1Z - 21
CITY COUNCIL STAFF REPORT
06/16/2022 3. A.
City Clerk -
SUBJECT
APPROVE ANNUAL INSURANCE POLICY RENEWALS FOR THE CITY’S INSURANCE PORTFOLIO FOR FISCAL YEAR 2022-23
RECOMMENDATION:
Adopt a Resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AUTHORIZING KEENAN &
ASSOCIATES AS THE CITY’S BROKER OF RECORD, TO PURCHASE
PROPERTY, EARTHQUAKE/FLOOD (DIFFERENCE IN CONDITION), EXCESS LIABILITY, EXCESS WORKERS COMPENSATION, AIRPORT OWNERS AND OPERATORS LIABILITY, VILLAGE FEST LIABILITY, MULTIMEDIA LIABILITY, AIRCRAFT HULL LIABILITY, CRIME/FIDELITY, VILLAGE FEST, AND CYBER LIABILITY INSURANCE POLICIES FROM VARIOUS CARRIERS FOR POLICY YEAR 2022-2023, EFFECTIVE JULY 1, 2022.”
1. Ratify an agreement with New York Life Insurance Company to provide life, supplemental life, accidental death and dismemberment, short-term and long-term disability insurance to eligible city employees and their eligible dependents for the calendar year 2022.
2. Authorize staff to obtain an updated statement of values for future insurance program purposes.
3. Attachments
Item 3A
CITY COUNCIL STAFF REPORT
DATE: JUNE 16, 2022 BUSINESS AND LEGISLATIVE
SUBJECT: APPROVE ANNUAL INSURANCE POLICY RENEWALS FOR THE CITY’S INSURANCE PORTFOLIO FOR FISCAL YEAR 2022-23
FROM: Justin Clifton, City Manager
BY: Jeffrey S. Ballinger, City Attorney
SUMMARY:
The City is self -insured and annually purchases various lines of insurance coverage to minimize the adverse effects of accidental losses and claims against the City as well as for employee fringe benefits. This action would authorize the purchase of various lines of insurance for FY 2022-23.
RECOMMENDATION:
1) Adopt Resolution No. ____, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA , AUTHORIZING KEENAN & ASSOCIATES AS THE CITY’S BROKER OF RECORD, TO PURCHASE
PROPERTY, EARTHQUAKE/FLOOD (DIFFERENCE IN CONDITION), EXCESS
LIABILITY, EXCESS WORKER S COMPENSATION, AIR PORT OWNERS AND
OPERATORS LIABILITY, VILLAGE FEST LIABILITY, MULTI MEDIA LIABILITY,
AIRCRAFT HULL LIABILITY, CRIME/FIDELITY , VILLAGE FEST, AND CYBER
LIABILITY INSURANCE POLICIES FROM VARIOUS CARRIERS FOR POLICY YEAR 2022-2023, EFFECTIVE JULY 1, 2022.”
2) RATIFY AN AGREEMENT WITH NEW YORK LIFE INSURANCE COMPANY TO
PROVIDE LIFE, SUPPLEMEN TAL LIFE, ACCIDENTAL DEATH AND
DISMEMBERMENT, SHORT -TERM AND LONG -TERM DISABILITY
INSURANCE TO ELIGIBLE CITY EMPLOYEES AND THEIR ELIGIBLE DEPENDENTS FOR CALENDAR YEAR 2022.
3) AUTHORIZE STAFF TO OBTAIN AN UPDATED STATEMENT OF VALUES, FOR FUTURE INSURANCE PROGRAM PURPOSES.
Item 3A - 1
City Council Staff Report
June 16, 2022 – Page 2
Annual Insurance Renewals
STAFF ANALYSIS:
The City is self -insured for major risk programs such as property, liability, earthquake/flood, auto liability, and workers' compensation. In order to protect the assets of the City from potential loss, the City purchases various lines of insurance coverage for these risks. To assist in the purchase of various lines of insurance, the City entere d into an agreement with Keenan & Associates for professional insurance brokerage services.
The insurance market is in a state of flux, and has significantly hardened over the last year. This is due, in large part to the frequency and severity of natural disasters such as wildfires, “Winter Freezes”, hurricanes and tornadoes, as well as the results of increasing litigation, more plaintiff friendly legal decisions and larger compensatory jury awards. In addition, the landscape of Cyber Liability risk is another area that has experienced significant rate increases, due to the increase in cyber related incidents, ransomware and sophisticated data security breaches. Up until recently, near zero percent interest rates meant that insurance carriers were not getting a return on investment, so they are looking at increasing insurance rates in order to compensate for the loss.
Keenan & Associates has widely marketed the City’s insurance portfolio to multiple insurance carriers for the various policies required. Last year’s insurance program had a total cost of $2,044,428. The insurance program cost proposed in this staff report totals $2,408,818.32, for a difference of $ 364,390.32 (+17.82%) from the current year for substantially similar coverage for a full twelve months. While this amount of increase is not insignificant, it is less than last year’s renewal (30% increase over the previous year) and less than what was expected when Keenan and City staff undertook this years’ renewal, $2,661,632.96 (an increase of $617,2014.96 or 30%).
The following is a summary of last year’s premiums, what was originally projected to be next year’s premiums, and Staff’s recommendation for the July 1 renewal for Fiscal Year 2022-23:
Item 3A - 2
Item 3A - 3
.
PROJECTED INSURANCE COSTS FOR 22-23
ITEM DESCRIPTION 21-22 COSTS PROJECTED INCREASE 22-23 PROJECTED COSTS 22-23 ACTUAL COSTS DELTA 1 WORKERS COMP $ 236,101.00 10% $ 259 ,711.10 $ 261,36S.OO $ 1,6S3.90 2 EXCESS LIABILITY $ 699 ,828.00 SO% $ 1,049,742.00 $ 850,000.00 $ (199,742 .00) 3 EPLBUY DOWN $ 61,215.00 SO% $ 91,822.SO $ 68,S04.00 $ (23,318.SO) 4 MEDIA LIABILITY $ 6,028.7S 10% $ 602.88 $ 6,028.7S $ S,425.88 s AIRPORT LIABILITY $ 43,222.00 10% $ 47,544. 20 $ 47,543.00 $ (1. 20) 6 AIRCRAFT HULL & LIABILITY $ 3,794 .00 10% $ 4,173.40 $ 1,7SO.OO $ (2,423.40 ) 7 CYBER LIIIBILITY $ 26,721.00 130% $ 61,458. 30 $ Sl,960.00 $ {9,498.30 ) 8 PROPERiY All RISK $ 363 ,012.00 20% $ 43S ,614.40 $ 410,782.00 $ (24,832.40 ) 9 PROPERiY DIC AOL $ 276,173.10 20% $ 331,407.72 $ 302,782.69 $ (28,625.03) 10 PROPERiY DIC - WWTP $ 227,150.00 20% $ 272,S80.00 $ 297,814.30 $ 25,234.30 11 CRIME COVERAGE* $ S,S13.00 10% $ 6,064.30 $ 10, 732.00 $ 4,667.70 12 VILLAGE FEST $ 12,420.15 10% $ 13,662.17 $ 12,306.58 $ (1, 3SS.S9) SUBTOTAL $ 1,961,178.00 $ 2,574,382.96 $ 2,321,568 .32 $ {252,814.64 ) 13 MIC MANAGEMENT FEE $ 16,7SO.OO $ 16,7SO.OO $ 16,7SO.OO $ - 14 MICJPA ADMIN FEE $ 6,500 .00 $ 7,000.00 $ 7,000.00 $ - 15 KEENAN BROKERAGE FEE $ 60,000.00 $ 63,SOO.OO $ 63,SOO.OO $ - $ -
$ 2,044,4 28.00 29% $ 2,661,632.96 $ 2,408,8 18.32 $ {252,814 .64) • Alterna te Quotes Rece ived
$2MM lim its / $20,000 dedu ctib le
/ $7,415 prem ium
$SMM lim its / $50,000 dedu ctib le
/ $10,732 prem ium
EXCESS LIABILITY
The City’s liability program addresses claims arising from situations as common as “trip and fall” cases to interactions with law enforcement personnel. Because of the difficulty in procuring liability insurance by itself, the City has joined the Municipal Insurance Cooperative (MIC). MIC is a not -for-profit, non-risk sharing joint powers authority (JPA) that provides group purchasing power without the risks of standard JPAs. In addition, MIC offers a claim adjudication process and control remains with the members, and their broad coverage is specific to California public agencies.
During the past five fiscal years (not including the current fiscal year) the City incurred $21.1 million in liability losses. What makes this most challenging is that 88% or $18.6M is stemming from Law Enforcement Liability. There are two losses with a Total Incurred of $1.7M that remain in open claim status , arising from alleged civil rights violation and excessive force claims. The current liability insurance marketplace is extremely challenging due to volatility with civil unrest, and dramatically increasing losses seen industrywide caused by social inflation. Insurance carriers have dramatically increased retentions, reduced policy limits or ceased to underwrite public entities completely due to the hard market and nuclear verdicts, especially those with safety personnel.
Despite having to change the overall program structure in FY21- 22 to secure coverage, the Municipal Insurance Cooperative (MIC) has continued to be a solution in affording the coverage to protect the City from third party liability claims and law enforcement liability.
The renewal offer reflects no changes in terms and conditions with overall renewal premium increase of 20.84% or $150K from expiring, which given the City’s loss experience is current hard market is fair.
PROPERTY PROGRAM:
The City’s total insurable value (TIV) under property insurance is approximately $586 million for FY 22-23. Under the All Risk Property insurance program, coverage is provided for most perils with limits of $500M Per Occurrence, with the exception of earthquake and flood (which is covered under the Difference in Condition (DIC) policy, below) . The property coverage also incl udes wind and tree coverage, supplemental coverage for terrorism, a ll traffic signals, traffic poles, light poles, other transmission systems , a nd coverage for the airport runways . The California property market has been drastically changed by the wildfires over the last several years, which has hardened the market and significantly increased rates.
The City has incurred $683,313 in property losses over the last 5 years. Despite the City’s losses, coupled with the hardening insurance market, Affiliated FM has provided a renewal quote reflecting a 6.9 % rate increase (or $26,609.69) from last year, including Terrorism coverage. This is less than the 15% projection going into the renewal process.
Should the City decline the Terrorism coverage, the renewal premium would be reduced Item 3A - 4
City Council Staff Report
June 16, 2022 – Page 5
Annual Insurance Renewals
by $18,400, but the city would not be covered in the event of a Certified Act of Terrorism.
City staff recommends obtaining Terrorism coverage.
A reduction in the Property premium from $410,782 to $403,569 (- $7,213) can be obtained with a Terrorism Risk Insurance Act (TRIA) Stipulation. Such a stipulation would establish a sublimit to City buildings located within Wildland Fire-exposed locations. The sublimit would be their respective Total Insured Values, as listed on the City’s current Statement of Values. The following is a list of City buildings within Wildfire Exposure Locations:
• Memorial Library, 100 South Palm Canyon Dr.
• Parking Structure, 123 North Palm Canyon Dr.
• Plaza Theatre, 128 South Palm Canyon Dr.
• Village & Museum, 211-233 South Palm Canyon Dr.
• Parking Structure, 275 South Indian Canyon Dr.
• Fire Station 1, 277 North Indian Canyon Dr.
• Theater and Meeting Rooms, 538 North Palm Canyon Dr.
• Desert Art Center, 550 North Palm Canyon Dr.
Because the City has not obtained an undated appraisal of its properties in over five years, it would not be advisable to agree at this time to these sublimits, simply to save $7,213. Moreover, Keenan has advised the City that these sublimits may appear in future years’ quotes, due to the current underwriting criteria. Therefore, City staff would recommend that the City Council authorize City staff to procure an updated appraisal of City properties. Keenan has advised the City that such an appraisal can cost approximately $30,000. If the actual cost of an appraisal exceeds the City Manager’s contracting authority, staff would bring back a contract for City Council consideration.
DIFFERENCE IN CONDITION (DIC) PROGRAM:
The City is self-insured and purchases various lines of insurance each year for additional protection to the Property Program above. Difference in Condition (flood and earthquake coverage) (DIC) is almost always excluded from commercial property policies and m ay be purchased separately to enhance coverage.
It is highly unlikely that the City would have to replace every single facility in the event of an earthquake. However, a variety of city facilities could be damaged to varying degrees during a major seismic event. Twelve years ago, Council authorized the purchase of Differences in Condition (DIC) insurance to augment its property insurance policy.
The Wastewater Treatment Plant, due to its critical nature to the city’s infrastructure and the health and safety of the public has historically had a combined total of $25M in coverage. The proposed WWTP DIC program would include a primary limit of $5M, an excess policy of $10M, and a third excess policy of $ 10M. The three carriers combined have offered renewal quotes reflecting an overall program cost of 31.11% (or $70,664.30) Item 3A - 5
City Council Staff Report
June 16, 2022 – Page 6
Annual Insurance Renewals
increase from expiring cost. This premium is paid from the WWTP Enterprise Fund rather than the General Fund.
The City carries separate DIC coverage for all other C ity buildings, including the Airport.
The City’s DIC “All Other Locations” Total Insurable Values (TIV) increased 4.41% from expiring totaling $514.3M in TIV. The DIC “All Locations” program is structured wit h a limit of $10M Excess of $5M Self-Insured Retention (SIR) secured by Beazley Insurance Company. The rate increased 5% or $0.03 per $100/TIV, bringing the total premium cost to 9.64% increase (or $26,610) from the expiring policy.
EXCESS WORKERS’ COMPENSATION PROGRAM:
Excess Workers' Compensation insurance is important to protect the City from the negative financial consequences of work related injuries or deaths . The Workers’ Compensation costs are largely driven by medical costs and lost time wages. The City has a $1M per claim self-insured retention and purchases excess insurance above that for catastrophic type events.
During the past 12 months, the claim development increased by 187% or $2,442,875, and the current program year is trending to be higher in both frequency and severity than the previous year. Claim development in Workers’ Compensation is common, though this is significantly higher than industry trends. There are few markets willing to underwrite this coverage for public agencies, particularly for municipalities with safety personnel in California.
Despite significant loss experience, Keena n negotiated a rate increase of 5% with the incumbent carrier, Safety National. The City’s projected payroll increased by 5.42%, thereby bringing the overall premium cost to a 10.7% increase from expiring.
AIRPORT PROGRAM:
Airport Liability is currently one of the most difficult coverage areas within the insurance industry due to massive industry losses. This covers incidents such as injury to a person (e.g.: passenger slip and fall in terminal) or damage to a plane ( e.g.: airport equipment hits a plane) that occur on the premises. Aircraft Hull Liability is specifically for the 1974 Cessna Aero Squadron plane, covering the property itself and the City’s liability in the event of an accident. The City Council has authorized the transfer of that plane, which is being implemented by staff . Once the transfer is complete, the City will not need to maintain the Aircraft Hull Liability policy.
The City has been insured by ACE/Westchester since 2000 and despite the City’s uptick in claim frequency, the carrier has offered terms reflecting a renewal increase of 10% for the Airport Liability due to the City’s longstanding partnership with the carrier. The Aircraft Hull reflects a renewal premium decrease of 54% or ($2,044) due to reduc ing the coverage to remove “while in motion” coverage, given that the aircraft is in the process of being sold.
Item 3A - 6
City Council Staff Report
June 16, 2022 – Page 7
Annual Insurance Renewals
CYBER LIABILITY
The cyber liability insurance market continues to be extremely challenging, but especially for public entities. The pervasive threat of ransomware attacks and cyber extortion has created disruption for insurance renewals from both a premium and coverage standpoint with carriers issuing specific protocols that must be met in order to secure terms in addition to carriers leaving the insurance marketplace altogether due to no longer having capacity.
The incumbent carrier has offered a renewal quotation reflecting an overall premium increase of 94.45% or $25,239 from expiring, in addition to increasing the retention from $25K to $75K and changing specific terms. While this percentage increase is, by far, the largest this year, the overall amount ($25K) is not significant, given the City’s overall insurance program. In addition, it is expected that implementation by City staff of additional cyber security measures may result in a reduction, or at least not as much of an increase, in future years.
MISCELLANEOUS:
For VillageFest Liability, the City has had a long- standing partnership with Mesa Underwriters, which has proven to be beneficial, especially during the hard market conditions. The carrier has offered a flat renewal premium from the expiring term with no charge for an inspection fee, which is required every three years, resulting in an overall reduction of 1% or ($113.57) in cost savings.
Media Liability insurance provides protection for broadcasters and publishers who are at risk from substantial liability claims that can arise even when all necessary clearances have been sustained. The City broadcasts its various public meetings and maintains various social media platforms. The City has had a long stand standing partnership with Landmark American Insurance Company, who has offered terms reflecting a flat renewal with no changes to the premium, terms, and conditions.
Public Entity Liability provides coverage for liability arising from the vast array of employment laws, regulations and ongoing employment issues. Whether it involves employee discipline or termination, wage and hour, disability accommodation, failure to comply can have devastating impact. The City’s coverage, also known as the Employment Practices Liability retention Buy -Down was initially placed with Chubb Insurance Company during FY2021- 22 to reduce the City’s liability retention to $500K.
The carrier has offered terms reflecting an 11.91% increase or $7.3K from expiring cost, with no changes to terms and conditions.
Crime/Fidelity satisfies statutorily mandated bond requirements for public officials, known as faithful performance of duties , as well as protects against losses resulting from bad actors, such as employee theft , embezzlement or forgery. The incumbent carrier’s renewal premium came in with an overall total program cost increase of $641 with a policy Item 3A - 7
City Council Staff Report
June 16, 2022 – Page 8
Annual Insurance Renewals
added enhancement of Fraudulent Impersonation. Keenan has also secured a quote for options with coverage limits of $2M for an additional cost of $1,261 or $5M policy limit for an additional cost of $4,578 from the renewal premium. Staff would recommend that the Council obtain the $5M policy limit.
LIFE INSURANCE PROGRAM
As part of a robust fringe benefits program, the City provides eligible employees and their dependents life, supplemental life, short - and long-term disability and accidental death and dismemberment insurance. The insurance is a benefit that is enumerated in the various Memoranda of Understanding (MOU) for each employee association. Although in the past staff has viewed the Council action to approve the MOU to also approve procurement of the associated benefits in the MOU, to enhance transparency with these transactions, staff is bringing the specific contracts back for ratification. Going forward, these contracts for employee benefits will be approved by separate Council action or by incorporation into the Council approval of each MOU.
After taking this insurance policy to market using an insurance broker, it was determined to select New York Life Insurance Company (NYL) over the then incumbent, the Standard. NYL provides the same benefit at an annual cost of $277,434 and an annual savings $86,473. Council is asked to ratify a contract retroactively from January 1, 2022 through December 31, 2022.
BUSINESS PRINCIPAL DISCLOSURE AND NON-DISCRIMINATION
Keenan & Associates is a privately held company and a wholly owned subsidiary of Assured Partners, Inc. Per the company’s most recent filing with the Secretary of State, Keenan’s CEO is Sean K. Smith, its Secretary is Daniel Oshiro, its Chief Financial Officer is Suleman Moloo, and it has the following additional directors, J. Daniel Keenan, Sean Smith, and David Seres. Keenan’s authorized agent has completed the City’s public integrity applicant disclosure form, as well as the Non-Discrimination form, both attached.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (
CEQA) DETERMINATION:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT:
The total cost of staff recommended insurance coverage to replace expiring coverage to all funds for the 22-23 fiscal year is $ 2,408,818.32, which is less than the budgeted Item 3A - 8
City Council Staff Report
June 16, 2022 – Page 9
Annual Insurance Renewals
amount of $2,661,632.96. All premium costs will be allocated in the respective FY22-23 Risk Management and Enterprise Fund accounts, as appropriate.
REVIEWED BY:
Department Director: Jeffrey S. Ballinger
City Manager: Justin Clifton
ATTACHMENTS:
1) Resolution
2) Premium Summary and Marketing Results/ Keenan Summary 3) Public Integrity Disclosure Form
4) Non-Discrimination Form
Item 3A - 9
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA AUTHORIZING KEENAN AND ASSOCIATES,
AS THE CITY’S BROKER OF RECORD, TO PURCHASE PROPERTY
LIABILITY, EXCESS EARTHQUAKE/FLOOD LIABILITY (DIFFERENCE IN
CONDITION), EXCESS LIABILITY, EXCESS WORKERS
COMPENSATION, AIRPORT OWNERS AND OPERATORS LIABILITY,
VILLAGE FEST LIABILITY, MULTI MEDIA LIABILITY, AIRCRAFT HULL
LIABILITY, CRIME/FIDELITY LIABILITY, VILLAGE FEST, AND CYBER
LIABILITY INSURANCE POLICIES FROM VARIOUS CARRIERS FOR
POLICY YEAR 2022-2023, EFFECTIVE JULY 1, 2022.
The City Council of the City of Palm Springs, California, finds:
A. The City is self -insured for major risk programs, such as property, general liability, auto liability and workers' compensation.
B. The City annually purchases various lines of insurance coverage to minimize the adverse effects of accidental losses and claims against the City.
C. The City is located in the vicinity of several known active and potentially active earthquake faults, including the San Andreas, the San Jacinto and the Elsinore faults.
D. The topography of the City makes it prone to flooding, especially during times of heavy rainfall.
E. T he City purchases a primary earthquake and flood insurance policy.
F. T he City supplements its primary insurance policy with excess coverage to insure against losses arising from litigation, employee injuries and/or deaths arising from potential catastrophes, losses arising from the City’s Airport, and to properly protect public facilities from catastrophic loss from earthquake or flood.
G. The City Council has appointed a broker of record to purchase insurance policies for the City, and the City’s insurance broker has solicited proposals from various insurance companies for insurance coverage, and presented proposals to the City to ensure the best coverage obtainable based upon a reasonable expenditure of public resources with respect to premiums.
NOW, THEREFORE, the City Council resolves:
SECTION 1
: T he City Council of the City of Palm Springs, California based upon the true and correct recitals above incorporated herein by this reference as Item 3A - 10
Resolution No. _______
findings in support of this Resolution, hereby a uthorizes Keenan & Associates , as the City’s Broker of Record, to purchase the following insurance policies for Fiscal Year 2022-23:
SECTION 2. The City Manager is hereby authorized to accordingly adjust the budget and allocate the insurance expense to the appropr iate enterprise and other funds and may authorize any changes that result in lower premium costs for the same or better coverage that the broker may present between now and June 30, 2022.
SECTION 3.
The City Manager is hereby authorized to execute any
documents necessary to effectuate the authorized actions specified herein.
ADOPTED THIS 16th DAY OF JUNE, 2022.
Justin Clifton, City Manager
ATTEST:
Monique Lomeli
Item 3A - 11
PROJECTED INSURANCE COSTS FOR 22-23
ITEM DESCRIPTION 21-22COSTS PROJECTED INCREASE 22-23 PROJECTED COSTS 22-23 ACTUAL COSTS DELTA 1 WORKERS COMP $ 236,101.00 10% $ 259,711.10 $ 261,365.00 $ 1,653.90 2 EXCESS LIABILITY $ 699,828.00 50% $ 1,049,742.00 $ 850,000.00 $ (199,742.00) 3 EPL BUYDOWN $ 61,215.00 50% $ 91,822.50 $ 68,504.00 $ (23,318.50) 4 MEDIA LIABILITY $ 6,028.75 10% $ 602.88 $ 6,028.75 $ 5,425.88 5 A IRPORT LIA BILITY $ 43,222.00 10% $ 47,544.20 $ 47,543.00 $ (1.20) 6 A IRCRAFT HULL & LIABILITY $ 3,794.00 10% $ 4,173.40 $ 1,750.00 $ (2,423.40) 7 CYBER LIABILITY $ 26,721.00 130% $ 61,458.30 $ 51,960.00 $ (9,498.30) 8 PROPERTY ALL RISK $ 363,012.00 20% $ 435,614.40 $ 410,782.00 $ (24,832.40) 9 PROPERTY DIC AOL $ 276,173 .10 20% $ 331,407 .72 $ 302,782 .69 $ (28,625.03) 10 PROPERTY DIC - WWTP $ 227,150.00 20% $ 272,580.00 $ 297,814 .30 $ 25,234.30 11 CRIME COVERAGE' $ 5,513.00 10% $ 6,064.30 $ 10,732.00 $ 4,667.70 12 VILLAGE FEST $ 12,420. 15 10% $ 13,662.17 $ 12,306 .58 $ (1,355 .59) SUBTOTAL $ 1,961,178 .00 $ 2,574,382.96 $ 2,321,568 .32 $ (252,814.64) 13 M IC MANAG EM ENT FEE $ 16,750.00 $ 16,750.00 $ 16,750.00 $ 14 M ICJPA ADM IN FEE $ 6,500.00 $ 7,000.00 $ 7,000.00 $ 15 KEENAN BROKERAGE FEE $ 60,000.00 $ 63,500.00 $ 63,500.00 $ $
$ 2,044,428.00 29% $ 2,661,632.96 $ 2,408,818.32 $ (252,814.64) ,. Alternate Quotes Received
$2MM li mits / $20,000 de duct ible
I $7,415 prem ium
$5MM li mits / $50,000 de duct ible
/ $10,732 prem ium
Resolution No. _______
Interim City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, MONIQUE LOMELI, Interim City Clerk of the City of Palm Springs, hereby certify that Resolution No. ______ is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on June 16th, 2022 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Monique Lomeli
Interim City Clerk
City of Palm Springs, California
Item 3A - 12
Keenan & Associates | CA License No. 0451271
Presented By:
Vanessa Pena | Account Executive
4204 Riverwalk Parkway, Suite 400
Ri
verside, CA 92505
Phone: (951) 715-0190, ext. 1169
Fax: (951) 715-0166
E-mail: [email protected]
City of Palm Springs
Property & Casualty Insurance
Re
newal Proposal 2022 -2023
Item 3A - 13
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
i
Keenan & Associates | CA License No. 0451271
TABLE OF CONTENTS
TABLE OF CONTENTS ...................................................................................................... I EXECUTIVE SUMMARY .................................................................................................... 2 YOUR KEENAN TEAM ..................................................................................................... 6 PREMIUM SUMMARY ....................................................................................................... 8 EXCESS LIABILITY ........................................................................................................... 9 DIFFERENCE IN CONDITIONS - WWTP ........................................................................ 11 DIFFERENCE IN CONDITIONS – ALL OTHER LOCATIONS .............................................13 PUBLIC OFFICIALS & MANAGEMENT LIABILITY – RETENTION BUYDOWN ..................15 EXCESS WORKERS’ COMPENSATION ..............................................................................16 PROPERTY......................................................................................................................18 CYBER LIABILITY ...........................................................................................................21 GOVERNMENT CRIME .................................................................................................. 23 MEDIA LIABILITY ......................................................................................................... 25 AIRPORT LIABILITY ...................................................................................................... 27 AIRCRAFT & HULL LIABILITY ....................................................................................... 29 VILLAGEFEST LIABILITY ................................................................................................31 KEENAN PROFILE ......................................................................................................... 33 RISK MANAGEMENT SERVICES ..................................................................................... 34 CLAIMS ADMINISTRATION SERVICES ............................................................................ 38 DISCLOSURE STATEMENT ............................................................................................. 39 BIND ORDER ................................................................................................................ 40
Item 3A - 14
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
2 Keenan & Associates | CA License No. 0451271
EXECUTIVE SUMMARY
June 7, 2022
City of Palm Springs
Jeff Ballinger, City Attorney
3200 Tahquitz Canyon Way
Palm Springs, CA, 92262
RE: FY2022-2023 Property & Casualty Insurance Program Renewal Proposal We are pleased to present your 2022-2023 Property & Casualty Insurance Coverage Renewal Program. We are in the midst of a very hard insurance market. Industry losses are some of the highest in history, social inflation has increased the costs for liability settlements while outlandish jury verdicts and emerging risks such as California wildfires, cyber/ransom have transformed the insurance marketplace. In spite of the challenges, we’ve been able to secure favorable terms for the renewal. Following is a brief overview of the market conditions and challenges as well as various program highlights.
Insurance Marketplace Overview
Calendar year 2020 and 2021 had the highest two-year total of insured losses on record. Globally, there were record number of hurricanes, tornadoes, earthquakes, the “Winter Freeze” and raging wildfires. These claims amounted to over $270 Billion of insured Property losses. In addition, inflationary pressures have impacted the costs of materials and labor costs as well as higher Property appraisal trends.
The Liability market, particularly for public entities, is incredibly challenging. Social inflation and reptilian t
actics being used by plaintiff attorneys have drastically increased the costs of claims. We have seen tightening of terms and conditions around assault and battery (A&B), sexual misconduct/molestation liability (SML), wildfire and communicable disease. Carriers are shielding their exposure from potential “nuclear” verdicts by excluding cover in these areas.
Workers’ Compensation is another area that has been impacted by the insurance hard market, although not as significant as in other lines of casualty. There are, however, growing concerns including rate adequacy, rising medical costs, aging workforce and the impact of COVID-19 due to the presumption laws as well as overall changes in the workplace.
The landscape of Cyber Liability risk is another area that is experiencing rate increases due to the increased c
yber related incidents, ransomware, and sophisticated data security breaches. Despite three years of cyber insurance rate increases, we continue to see a continuing hard market in that space along with requirements of multi-factor authentication and endpoint protection as a prerequisite for being eligible for cyber insurance.
Item 3A - 15
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
3 Keenan & Associates | CA License No. 0451271
The global challenges are clearly significant. While capacity still exists in the insurance market, it’s being deployed more judiciously. The following is a summary of the renewals by line of coverage.
• Excess Liability: Du ring the past 5 fiscal years, not including the current fiscal year, the City incurred $21.1 million in losses. What makes this most challenging is that 88% or $18.6M is stemming from Law Enforcement Liability. There are 2 losses with a Total Incurred of $1.7M that remain in open claim status ranging from civil rights violation and excessive force. As you know, the current Liability insurance marketplace is extremely challenging due to volatility with civil unrest, and dramatically increasing losses seen industrywide caused by social inflation. Insurance carriers have dramatically increased retentions, reduced policy limits or ceased to underwrite public entities completely due to the hard market and nuclear verdicts, especially those with safety personnel. Despite having to change the overall program structure in FY21-22 to secure coverage, the Municipal Insurance Cooperative (MIC) has continued to be a solution in affording the coverage to protect the City from third party liability claims and law enforcement liability. The renewal offer reflects no changes in terms and conditions with overall renewal premium increase of 20.84% or $150K from expiring, which given the City’s loss experience is current hard market is fair. Also, while not included, we are working to secure options to increase the City’s limits of Liability and given the increasing verdicts against public agencies, will be sure to follow up with final terms.
• Public Entity Liability (EPL Buy-Down): Emp loyers today face a dizzying array of employment laws, regulations and ongoing employment issues. Whether it involves employee discipline or termination, wage and hour, disability accommodation, failure to comply can have devasting impact.
The City’s Public Entity Liability, also known as the Employment Practices Liability retention Buy- Down was initially placed with Chubb Insurance Company during FY2021-22 to reduce the City’s liability retention to $500K. The carrier has offered terms reflecting an 11.91% increase or $7.3K from expiring cost, with no changes to terms and conditions.
• DIC “All Other Locations”:
The City’s DIC “All Other Locations” Total Insurable Values (TIV) increased 4.41% from expiring totaling $514.3M in TIV. The DIC “All Locations” program is structed with a limit of $10M Excess of $5M Self-Insured Retention (SIR) secured by Beazley Insurance Company. The rate increased 5% or $0.03 per $100/TIV bringing the total premium cost to 9.64% increase (or $26,610) from expiring.
• DIC “Wastewater Treatment Plant”: The TIV for the “Wastewater Treatment Plant” increased
4.35% Total TIV of $66.1M. The expiring DIC “WWTP” program is structured with a primary limit of $5M provided by Arch Specialty and an excess layer of $20M provided by Westchester Insurance Company. Westchester Insurance Company limited their participation from $20M To $10M for the 22/23 renewal. Therefore, a 3rd layer at $10M was secured with Lloyds of London – Hiscox. The three c
arriers combined have offered renewal quotes reflecting an overall program cost of 31.11% (or $70,664.30) increase from expiring cost.
• Public Officials Management Liability Retention Buy-Dow n: The Public Officials Management and Employment Practices Liability, also known as the EPL retention buy-down to $500K for wrongful acts, in lieu of the City’s standard liability retention. The coverage was initially placed on July 1, 2021 and this is the first-year renewal with the incumbent carrier who’s offered renewal terms reflecting a 11.91% or $7,289 increase from expiring terms.
Item 3A - 16
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
4 Keenan & Associates | CA License No. 0451271
• Excess Workers Compensation: During the past 12 months, the 2020-21 fiscal year claim development increased by 187% or $2,442,875 and the current program year is trending to be higher in both frequency and severity than the previous year. Claim development in Workers’ Compensation is common, though this is significantly higher than industry trends. There are few markets willing to underwrite this coverage for public agencies, particularly for municipalities with safety personnel in California. Despite significant loss experience, we negotiated a rate increase of 5% with the incumbent carrier Safety National. The City’s projected payroll increased by 5.42% thereby bringing the overall premium cost to a 10.7% increase from expiring.
• Property: During the past 5 years, the City has incurred $683,313 in Property losses, resulting in an average loss ratio of 59.51%. Meaning, for every $1 dollar collected n premium, the carrier has paid out $0.60 in claim costs. Despite the City’s loss experience, coupled with the hardening insurance property market, Affiliated FM has provided renewal quotation reflecting a 6.9% rate increase or $0.0028 from expiring including Terrorism coverage. The City’s Total Insurable Values (TIV) have increased by 5.91% or $32.7M which resulted in an overall renewal cost of 13.16% increase from expiring. This is less than the 25-30% projection. Should the City reject Terrorism coverage, the renewal premium would be reduced by $18,400. The renewal quotation does reflect changes to certain deductibles and sub-limits from expiring terms that are outlined in the proposal.
• Cyber Liability: As
we’ve discussed during the renewal strategy meeting, the cyber liability insurance market continues to be extremely challenging, but especially for public entities. The pervasive threat of ransomware attacks and cyber extortion has created disruption for insurance renewals from both a premium and coverage standpoint with carriers issuing specific protocols that must be met in order to secure terms in addition to carriers leaving the insurance marketplace altogether due to no longer having capacity. The incumbent carrier has offered a renewal quotation reflecting an overall premium increase of 94.45% or $25,239 from expiring, in addition to increasing the retention from $25K to $75K and changing specific terms.
• Crime Employee Dishonesty: The incumbent carrier’s renewal premium came in with an overall total program cost increase of $641 with a policy added enhancement of Fraudulent Impersonation.
We’ve included alternative quotation options with coverage limits of $2M for an additional cost of $1,261 or $5M policy limit for an additional cost of $4,578 from the renewal premium.
• Airport & Aircraft Hull: T his continues to be a difficult exposure due to significant industry losses.
The City has been insured by ACE/Westchester since 2000 and despite the City’s uptick in claim frequency, the carrier has offered terms reflecting a renewal increase of 10% for the Airport Liability due to the City’s longstanding partnership with the carrier. The Aircraft Hull reflects a renewal premium decrease of 54% or ($2,044) due to reducing the coverage to remove while in motion given that the aircraft is in the process of being sold.
• Media Liability:
Media Liability insurance provides protection for broadcasters and publishers who are at risk from substantial liability claims that can arise even when all necessary clearances have been sustained. The City has had a long stand standing partnership with Landmark American Insurance Company who has offered terms reflecting a flat renewal with no changes to the premium, terms, and conditions.
Item 3A - 17
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
5 Keenan & Associates | CA License No. 0451271
• VillageFest Liability: Th e City has had a long-standing partnership with Mesa Underwriters which has proven to be beneficial, especially during the hard market conditions. The carrier has offered a flat renewal premium from the expiring term with no charge for an inspection fee, which is required every three years, resulting in an overall reduction of 1% or ($113.57) in cost savings.
The current insurance market conditions have made this a challenging renewal and look forward to discussing our proposal in more detail. On behalf of Keenan & Associates, it is truly a privilege and honor to serve the City and we appreciate all your support and confidence in our services.
Sincerely,
Vanessa Pena
V
anessa Pena
Ac
count Executive
Municipal Property & Casualty
This insurance document is furnished to you as a matter of information for your convenience. It only summarizes the listed proposed policies and is not intended to reflect all the terms and conditions or exclusions of such proposed policies. Moreover, the information contained in this document reflects proposed coverage as of the effective date(s) of the proposed policies and does not include subsequent changes. This document is not an insurance policy and does not amend, alter or extend the coverage afforded by the listed proposed policies. The insurance afforded by the listed proposed policies is subject to all the terms, conditions, and exclusions of such policies.
Item 3A - 18
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
6 Keenan & Associates | CA License No. 0451271
YOUR KEENAN TEAM
Office Locations and Telephone Numbers
Riverside Office: Corporate Office:
Keenan & Associates Keenan & Associates
4 204 Riverwalk Parkway, Suite 400 2355 Crenshaw Blvd., Suite 200 Riverside, CA 92505 Torrance, CA 90501
Phone (Main): (951) 788-0330 (310) 212-3344
Phone (Toll Free): (800) 654-8347 (800) 654-8102
Main Fax: (951) 715-0166 (310) 212-0300
Web Site: w
ww.keenan.com Corporate License No. 0451271
Service Team Members
Name Role Key Responsibilities Telephone E-mail
John Stephens
Sr. Vice President,
President
Practice
Leader
Practice Leader for
Property & Casualty
Public Agency
Division
Office:
(949) 940-1760
Ext. 5161
Cell:
(949) 337-2991
Fax:
(949) 369-0324
[email protected]
Vanessa Pena
Account Executive
Team Leader Responsible for
account management
including global risk
management
strategies.
Office:
(951) 715-0190 Ext. 1169
Cell:
(909) 815-3744
Fax:
(951) 715-0166
[email protected]
Monica Mojarro
Account Manager
Day-to-day
service/
Policy Admin.
Responsible for overall
account servicing
including coverage
questions, change
requests, invoicing,
renewal submission
preparation, and
contract insurance
requirements review.
Office:
(310) 212-0363 Ext. 2607
Cell:
(310) 218-2560
Fax:
(310) 212-0300
[email protected]
Lisa Valdez
Account Coordinator
Day-to-day
service/
Policy Admin.
Responsible for overall
servicing including
endorsements and
certificates of
insurance
Office:
(310) 212-0363
Ext. 2651
Fax:
(310) 212-0300
[email protected]
Marketing Team
Name Role Key Responsibilities Telephone E-mail
Jessica Blushi
Assistant Vice
President
Casualty
Marketing
Expert
Oversees Property &
Casualty Marketing
Department and
services
Office:
(310) 212-0363
Ext. 2329
Fax:
[email protected]
Item 3A - 19
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
7 Keenan & Associates | CA License No. 0451271
(310) 212-0300
Rena Svetic
Marketing Sr. Acct.
Manager
Property
Marketing
Expert
Responsible for overall
account servicing.
Negotiates terms and
conditions of policies
as it relates to coverage
Office:
(310) 212-0363
Ext. 2605
Fax:
(310) 212-0300
Loss Control Service Team Members
Name Role Key Responsibilities Telephone E-mail
Eric Preston
Vice President
Loss Control Services
Oversees Loss
Control
Division
Practice Leader for
Loss Control division
and oversees all loss
control consultants and
services.
Office:
(951) 715-0190
Ext. 2211
Fax:
(951) 788-8013
[email protected]
Dianna Poulin
Director, Loss Control
Services
Coordinates
and supervises
all client
services.
Provides Loss Control
Services and interacts
with clients to meet
Compliance Program
and Property/Liability
Safety Programs.
Office:
(951) 715-0190
Ext. 1154
Fax:
(951) 715-016
[email protected]
Dennis Burgess
Sr. Loss Control
Consultant
Provides Loss
Control
Services
Interacts with clients to
meet Compliance
Program and
Property/Liability
Safety Programs.
Office:
(951) 715-0190
Ext. 1017
Fax:
(951) 788-8013
[email protected]
Property & Liability Claims Administration Service Team Members Name Role Key Responsibilities Telephone E-mail
Eric Lucas
Vice President
PLCA Services
Oversees Loss
Control
Division
Practice Leader for
PLCA services
division and oversees
all loss claims
examiners and
services.
Office:
(916) 859-7160
Ext. 4167
Fax:
(916) 859-7167
[email protected]
Adolph Hernandez
Sr. Claims Examiner
Assigned
Liability Claims
Examiner
Interacts with client
on handling all third-
party liability claims
administration
services.
Office:
(310) 212-0363
Ext. 2224
Fax:
(310) 328-6793
[email protected]
Item 3A - 20
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
8 Keenan & Associates | CA License No. 0451271
PREMIUM SUMMARY
City of Palm Springs
2022-2023 Renewal Summary
Expiring Program
7/1/21-22
Renewal Program
7/1/22-23 % Change
General Liability $723,078 $873,750 20.84%
EPL & POL Retention Buy-Down $61,215 $68,504 11.91%
Workers' Compensation $236,101.00 $261,365.00 10.70%
Estimated Payroll $46,901,259.00 $49,444,831.00 5.42%
Rate per $100 Payroll $0.50 $0.53 5.01%
Property - All Risk $363,012.00 $410,782.00 13.16%
Total Insurable Values (TIV) $553,655,023.00 $586,358,082.00 5.91% Rate per $100 TIV $0.07 $0.07 6.85%
Property - DIC AOL $276,173.10 $302,782.69 9.64%
Total Insurable Values (TIV) $492,581,642.00 $514,326,194.00 4.41% Rate per $100 TIV $0.06 $0.06 5.00%
Property - DIC WWTP $227,150.00 $297,814.30 31.11%
Total Insurable Values (TIV) $63,414,381.00 $66,170,895.00 4.35% Rate per $100 TIV $0.36 $0.45 25.65%
Airport Liability $43,222.00 $47,543.00 10.00%
Aircraft Hull and Liability $3,794.00 $1,750.00 -53.87% Crime Coverage $5,513.00 $6,154.00 11.63%
Cyber Liability $26,721.00 $51,960.00 94.45%
Media Liability $6,028.75 $6,028.75 0.00%
Villagefest General Liability $12,420.15 $12,306.58 -0.91% Keenan Brokerage Fee $60,000.00 $63,500.00 5.83%
Grand Total Cost: $2,044,427.59 $2,404,240.32 17.60%
Item 3A - 21
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
9 Keenan & Associates | CA License No. 0451271
EXCESS LIABILITY
Expiring Pr oposed
Carrier Municipal Insurance Cooperative Municipal Insurance C ooperative AM Best Rating Not Applicable - Joint Powers Authority Not Applicabl e - Joint Powers Authority California Status Not Applicable - Joint Powers Authority Not Applicabl e - Joint Powers Authority Coverage Excess Liability, including:
G
eneral Liability
Automobile Liability
Employment Practices Liability
Public Officials Liability
Excess Liability, including:
General Liability
Automobile Liability
Employment Practices Liability
Public Officials Liability
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability $2,000,000 Per Occurrence
$2
0,000,000 Program Aggregate
$2,000,000 Per Occurrence
$20,000,000 Program Aggregate
Sublimits
Asbestos
Breach of Contract
Injunctive Relief
Uninsured/Underinsured
Motorists
$100,000
$5
0,000 Loss Adjustment Expenses only
$100,000 Loss Adjustment Expenses only
$2,000,000
$100,000
$50,000 Loss Adjustment Expenses only
$100,000 Loss Adjustment Expenses only
$2,000,000
Retention
Law Enforcement
Automobile
All Other
$3,000,000
$3
,000,000
$3,000,000
$3,000,000
$3,000,000
$3,000,000
Premium
Annual Premium $699,828 $8 50,000
MIC Pool Management Fee $16,750 $1 6,750
Budgeted Pool Admin Costs $6,500 $7,000
Total Cost $723,078 $8 73,750
Commission 0% 0%
Major Exclusions Damages for breach of contract
Da
mages for injunctive relief
Pollution
Workers' Compensation/Employers' Liability
Damages for breach of contract
Damages for injunctive relief
Pollution
Workers' Compensation/Employers' Liability
(see policy for complete list of
exclusions)
Item 3A - 22
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
10 Keenan & Associates | CA License No. 0451271
Hospital/Airport/Marina Operations/Water
Treatment/Wastewater Treatment/Power Generation
Operations
Damn Failure
Punitive Damages
Intentional Conduct
Nuclear Material
Inverse Condemnation
Initiative Process
Aircraft
Watercraft being used for commercial purposes
Failure to supply gas, water, electricity or sewage
Trampoline, rebound tumbling devices, bungee jumping or propelling activities
Off-Highway Vehicles used by non-employees
Private Firing Ranges
Refund of taxes, fees, service charges or assessments
Unentitled renumeration or financial gain
Asbestos
ADA/FEHA similar laws
ERISA/Omnibus Budget Reconciliation Act/Worker
Adjustment and Retraining Notification Act/FLSA
Lockout/Strike/Picket Line
Internal Administrative Hearings
Investment Failure
Hospital/Airport/Marina Operations/Water
Treatment/Wastewater Treatment/Power Generation
Operations
Damn Failure
Punitive Damages
Intentional Conduct
Nuclear Material
Inverse Condemnation
Initiative Process
Aircraft
Watercraft being used for commercial purposes
Failure to supply gas, water, electricity or sewage
Trampoline, rebound tumbling devices, bungee jumping or propelling activities
Off-Highway Vehicles used by non-employees
Private Firing Ranges
Refund of taxes, fees, service charges or assessments
Unentitled renumeration or financial gain
Asbestos
ADA/FEHA similar laws
ERISA/Omnibus Budget Reconciliation Act/Worker
Adjustment and Retraining Notification Act/FLSA
Lockout/Strike/Picket Line
Internal Administrative Hearings
Investment Failure
Item 3A - 23
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
11 Keenan & Associates | CA License No. 0451271
DIFFERENCE IN CONDITIONS - WWTP
Expiring Pr oposed
Carrier Primary: $5MM Arch Specialty Insurance Primary: $5MM Arch Specialty Insurance Excess: $20MM xs$5MM: Westchester Surplus Lines Exces s: $10MM xs$5MM: Westchester Surplus Lines Ex cess: $10MM xs$15MM: Certain Underwriter @ Lloyds
AM Best Rating Primary A+ / Excess Layer A++ Primary A+ / Excess La yer A++ / Excess Layer Financial Size Category XV ($2 Billion or greater) XV ($2 Billion or greate r) - All of the Above California Status Non-Admitted Non- Admitted -All of the Above Coverage DIC Including Flood & Earthquake: Buildings, Personal Property, Business Income, & Extra Expense
DIC Including Flood & Earthquake: Buildings, Personal Property, Business Income, & Extra Expense
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability $25,000,000 Ground Up $25,000,000 Ground Up Terms
Expediting Expenses: $100,000 Expediting Expenses: $1 00,000 Civil Authority 30 Days Civil Authority 30 Days
Debris Removal: 25% of Physical Damage Loss Debris Removal: 25% of Physical Damage Loss Ingress/ Egress: 30 Days Ingress/ Egress: 30 Days
Limited Additional Coverage for Fungus Limited Additional Coverage for Fungus Loss Adjustment Expenses $10,000 Loss Adjustment Expenses: $10,000 Ordinance or Law Coverage A: Included Ordinance or Law Coverage A: Included Ordinance or Law Coverage B&C: $20,000,000 Ordinance or Law Coverage B&C: $20,000,001 25% Minimum Earned Premium 25% Minimum Earned Premium
Loss or damage to locations not covered under this policy shall not erode the underlying limit
Loss or damage to locations not covered under this policy shall not erode the underlying limit
Warrant “All Risks” underlayer in place for the term of the DIC policy
Warrant “All Risks” underlayer in place for the term of the DIC policy
Retention
Earth Movement-5% of total insured value at time of l oss per location per unit insured subject to a minimum of
$50,000 per occurrence
Flood-$100,000 per occurrence
Earth Movement-5% of total insured value at time of loss per location per unit insured subject to a minimum of $50,000 per occurrence
Flood-$100,000 per occurrence
Total Insurable Values 63,414,381 66 ,170,895
Item 3A - 24
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
12 Keenan & Associates | CA License No. 0451271
Primary Arch $5MM
Annual Premium $120,000.00 $1 35,000.00
Surplus Lines Taxes and Fees $3,900.00 $4 ,387.50
Primary Premium Cost $123,900.00 $1 39,387.50
Westchester
Limits excess of $5MM $20,000,000 xs $5,000,000 10,000,000 xs $5,000,000 Annual Premium $100,000.00 $110,000.00
Surplus Lines Taxes and Fees $3,250.00 $3,575.00
Westchester XS Premium
Cost
$103,250.00 $113,575.00
Lloyds of London- Hiscox
Limits excess of $15MM N/A 10,000,000 xs $15,000,000
Annual Premium $42,940.00
Carrier Fee $500.00
Surplus Lines Taxes and Fees $1,411.80
VIKCO XS Premium Cost
$44,851.80
Total Premium Cost $227,150.00 $297,814.30
Commission
Keenan & Associates 0% 0%
Intermediary Broker 8% 8%
Major Exclusions
Flood in 100-year zones, A, V Flood in 100-year zone s, A, V All Risk Perils Al l Risk Perils
Asbestos Material Removal Limitation Asbestos Materia l Removal Limitation (see policy for complete list of
exclusions) Pollution and Contamination Pollution and Contamination Notes and Subject to
Terrorism in expiring program was declined. TRIA is offered for Additional Premiums: $135,000 Primary, $10,000 Westchester, $42,940 Lloyds If no TRIA is desired declines require signature and dating The total deductible for this risk is 5% of the Total Insured Value at the time of loss per location per unit insured to a min of $50,000 per occurrence.
Westchester Surplus Lines Insurance Company. Westchester is no longer able to offer the full $20,000,000 limit this year. They have had their capacity cut back to $10,000,000 and their pricing guidelines have increased.
The Westchester forms, terms and conditions are as expiring except for two new forms being added. this year – ACE1022 (5/21) – First Named Insured Conditions Endorsement and ACE1037 (8/21) – Appraisal.
VIKCO will use their excess follow form over the primary and first excess.
Item 3A - 25
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
13 Keenan & Associates | CA License No. 0451271
DIFFERENCE IN CONDITIONS – ALL OTHER LOCATIONS
Expiring Re newal
Carriers: Beazley Be azley Lloyd's Syndicate 2623 & 623 AM Best Rating A A
Financial Size Category XV ($2 Billion or greater) XV ($2 Billion or greater) California Status Non-Admitted Non- Admitted
Forms Specified Perils: Earth movement and Flood Specified P erils: Earth movement and Flood Coverage(s)
Real Property, Personal Property
Im
provements and Betterments
EDP Hardware, EDP Media, Valuable Papers
Business Income, Extra Expense
Ordinance Law A
Ordinance Law B &C - $5,000,000 Sublimit
Real Property, Personal Property
Improvements and Betterments
EDP Hardware, EDP Media, Valuable Papers
Business Income, Extra Expense
Ordinance Law A
Ordinance Law B &C - $5,000,000 Sublimit
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability $10,000,000 xs $5,000,000 SIR $10,000,000 xs $5,000,0 00 SIR Self-Insured Retention $5,000,000 $5 ,000,000
Deductible
Earth Movement-5% of total insured value at time of l oss per location per unit insured subject to a
minimum of $50,000 per occurrence
Flood-$100,000 per occurrence
Earth Movement-5% of total insured value at time of
loss per location per unit insured subject to a
minimum of $50,000 per occurrence
Flood-$100,000 per occurrence
Total Insurable Values Including Runway Inc luding Runway TIV $492,581,642 $5 14,326,194
Primary: $ 10M xs $5M SIR
Annual Premium $267,480.00 $2 93,252.00
Inspection Fee $0.00 $0 .00
Surplus Lines Tax 3.2% / 3.25% $8,693.10 $9,530.69
Primary Premium Cost $276,173.10 $302,782.69
Commission
Keenan & Associates 0% 0%
Intermediary Broker 8% 8%
Major Exclusions Flood in 100-year zones, A, V or Shaded X Flood in 10 0-year zones, A, V or Shaded X (see policy for complete list of exclusions) Notes:
Item 3A - 26
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
14 Keenan & Associates | CA License No. 0451271
The total deductible for this risk is the $5M SIR plus 5% of the Total Insured Value at the time of loss per location per unit insured to a min of $50,000 per occurrence.
Note this pricing does not include the newest location acquired. Requires direction to add/not add prior to bind (3589 McCarthy Road, Palm Springs) TRIA is available for additional premium of $21,994 plus taxes - Expiring Policy Declined Quote is subject to 25%/ 35% Minimum Earned Premium, TRIA Decision at time of binding, Notice of Cancellation 90/10, No material change to exposures prior to binding
Item 3A - 27
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
15 Keenan & Associates | CA License No. 0451271
PUBLIC OFFICIALS & MANAGEMENT LIABILITY – RETENTION BUYDOWN Expiring Pr oposed
Carrier ACE American Insurance Company ACE American Insurance Company AM Best Rating A++ (Excellent) A++ (Superior)
Financial Size Category XV ($2B or Greater) XV ($2B or Greater) California Status Admitted Ad mitted
Coverage Liability (Claims Made)
AC
E Municipal Advantage Public Entity Liability
Liability (Claims Made)
ACE Municipal Advantage Public Entity Liability
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability
Each Claim $3,000,000 $3 ,000,000
Defense (Outside the limit) $3,000,000 $3 ,000,000
Crisis Management Fund $25,000 $2 5,000
Deductible
Public Officials Liability $0 $0
Public Entity Reimbursement $500,000 $5 00,000
Public Entity Liability $500,000 $5 00,000
Employment Practices Liability $500,000 $5 00,000
Crisis Management $0 $0
Premium $61,215 $68,504
Terrorism Coverage Included Included
Extended Reporting Period 12 Months for 100% of last annual premium 12 Months for 100% of last annual premium Commission
0% 0%
Major Exclusions Network Security or Privacy ExclusionFalse Claims Ac
t ExclusionBond Exclusion
Network Security or Privacy ExclusionFalse Claims
Act ExclusionBond Exclusion (see quote for complete list of exclusions) Notes/Subjectivities EPL Assist and EPL Risk Management Services available at no additional charge.
EPL Assist and EPL Risk Management Services
available at no additional charge.
Item 3A - 28
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
16 Keenan & Associates | CA License No. 0451271
EXCESS WORKERS’ COMPENSATION
Expiring Pr oposed
Carrier Safety National Casualty Corporation Safety National C asualty Corporation AM Best Rating A++ Superior A+ + Superior
Financial Size Category Financial Size Category XV ($2B or greater) Financial Size Category XV ($2B or greater) California Status Admitted Ad mitted
Coverage Workers' Compensation and Employers' Liability Worker s' Compensation and Employers' Liability Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability
Workers' Compensation
Employers' Liability Per Occ &
Agg
$5
0,000,000
$1,000,000
$50,000,000
$1,000,000
Retention $1,000,000 $1 ,000,000
Estimated Payroll $46,901,259 $4 9,444,831
Waiver of Subrogation Included Inc luded
Services Included MAP Client Services. Risk control and claim services i
ncluding: Safety Essentials On-line; Workers' Comp Kit; Safety Training Source; Catastrophic Claims Consulting; Impartial Medical Review, Long-Term Claims Evaluation;
and Chronic Pain & Opioid Dependency Programs.
MAP Client Services. Risk control and claim services
including: Safety Essentials On-line; Workers' Comp Kit; Safety Training Source; Catastrophic Claims Consulting; Impartial Medical Review, Long-Term Claims Evaluation;
and Chronic Pain & Opioid Dependency Programs.
Major Exclusions Salaries, wages and remuneration
Fe
es to claims administrator
Punitive/Exemplary damages
Penalties for violation of any statute/regulation
Assessments levied by DIR/SIP
Serious and willful misconduct
Wrongful employment practices
Knowingly employing an employee in violation of the law Failure to comply with OSHA
Loss assumed under contract
Non-occupational disability benefits
Salaries, wages and remuneration
Fees to claims administrator
Punitive/Exemplary damages
Penalties for violation of any statute/regulation
Assessments levied by DIR/SIP
Serious and willful misconduct
Wrongful employment practices
Knowingly employing an employee in violation of the law
Failure to comply with OSHA
Loss assumed under contract
Non-occupational disability benefits
(see policy for complete list of exclusions)
Premium Rate $0.5034 per $100 of payroll $0.5286 per $100 of payrol l Aircraft Charge Included in rate; no separate charge Included in rate ; no separate charge Item 3A - 29
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
17 Keenan & Associates | CA License No. 0451271
Estimated Annual Premium $236,101 $2 61,365
Auditable Yes Ye s
Minimum Premium $212,291 $2 35,229
Commission
Keenan & Associates 0% 0%
Intermediary Broker 10.00% 10 .00%
Subjectivity
Confirmation of the status of the aircraft out of service after 7/1/2022 Notes
Alternate Option Secured: Retention: $1,500,000 Safety/$1,000,000 all Other - $0.4782 per $100 of payroll - Estimated Premium $236,445 - Minimum Premium $212,801
Item 3A - 30
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
18 Keenan & Associates | CA License No. 0451271
PROPERTY
Expiring Proposed
Carrier Affiliated FM Affiliated FM
AM Best Rating A+ Superior A+ Superior
Financial Size Category XV ($2B or greater) XV ($2B or greater) California Status Admitted Admitted
Coverage Pro AR 4100 All Risk Coverage Pro AR 4100 All Risk Co verage Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Policy Limits Per Occurrence - Total Limits $500,000,000 $500,000,000 Sub-Limits
Extra Expense $5,000,000 $5,000,000
Fire Trucks $4,405,082 $7,033,359
Business Interruption $73,226,293 $64,118,420 Lowered limits according to BI worksheets
Ordinary Payroll 30 Days 30 Days
Runway $80,000,000 $85,600,000
Pavements & Roadways other than Runway $500,000 $500,000 Library Books Periodicals $4,149,000 $4,439,430
Accounts Receivable $5,000,000 $5,000,000
Attraction Property $1,000,000 $1,000,000
Animal Coverage $1,000,000 Aggregate / $50,000 Per Animal $1,000,000 Aggregate / $50,000 Per Animal Communicable Disease $1,000 $1,000
Contractual Penalties $250,000 Reduction in limits $250,000 Crisis Management $100,000 30 consecutive days $100,000 30 consecutive days Data Restoration $500,000 $500,000
Debris Removal Policy Limit Policy Limit
Decontamination Cost Policy Limit Policy Limit
Demolition: Increased Cost of Construction Policy Limit Policy Limit Earthquake and Flood Not Covered Not Covered
Earthquake Sprinkler Leakage Included Included
Errors and Omissions $5,000,000 $5,000,000
Expediting Expenses $5,000,000 $5,000,000
Fine Arts $2,000,000 not to exceed $10k for irreplaceable $2,000,000 not to exceed $10k for irreplaceable Item 3A - 31
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
19 Keenan & Associates | CA License No. 0451271
Ingress/Egress $1,000,000 $1,000,000
Newly Acquired Property $10,000,000 $10,000,000
Off-Premises Service Interruption - Property
Damage $5,000,000 Now Combined with BI Below $5,000,000 Now Combined with BI Below Streetlights and Traffic Signals $1,000,000 not to exceed $3,300 per unit $1,000,000 not to exceed $3,500 per unit Transit $1,000,000 PD $250,000 BI $1,000,000 PD $250,000 BI Unnamed Property $10,000,000 $10,000,000
Valuable Papers and Records / Irreplaceable 10,000,000 / $10,000 10,000,000 / $10,000 Business Interruption Coverages $73,226,293 $64,118,420 Off-Premises Service Interruption - BI Now included as combination with PD above Now included as combination with PD above Rental Income $50,000,000 $64,118,420
Extra Expense $5,000,000 $5,000,000
Valuation
Building Replacement Values Replacement Values
Business Interruption and Rents Actual Loss Sustained Actual Loss Sustained Deductible Provisions
Boiler and Machinery Property Damage / BI $10,000 / BI ADV x1 $10,000 / BI ADV x1 Communicable Disease Property Damage / BI $10,000 /48 Hr./ DEQ x 2 * $10,000 /48 Hr./ DEQ x 2 * Data Restoration $10,000 /48 Hr./ DEQ x 2 $10,000 /48 Hr./ DEQ x 2 Data Service Provider $10,000 /48 Hr./ DEQ x 2 $10,000 /48 Hr./ DEQ x 2 Off-Premises Service Interruption Prop Damage/
BI $10,000 / 24 Hr. / DEQ x 1 $10,000 / 24 Hr. / DEQ x 1 Sprinkler Leakage for EarthQuake - New 2021 50,000 per location 50,000 per location Motor Vehicles on premises only $100,000 $100,000
Co-Generation- 201 North Cielo Road, PS 92262 $25,000 $25,000 Water Damage $10,000 $50,000
WildFire Exposed Locations Per Location Deductible $10,000* See list below
All Other Losses $10,000 $10,000
*DEQ: Day Equivalent Deductible *DEQ: Day Equivalent Deductible Waiting Period
Civil or Military Authority 24 Hr. 24 Hr.
Ingres/Egress 24 Hr. 24 Hr.
Total Insurable Values $553,655,023.00 $586,358,082.00
Premium
Annual Premium $344,612.00 $392,382.00
Engineering Fee Included in premium Included in premium Item 3A - 32
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
20 Keenan & Associates | CA License No. 0451271
Cost $344,612.00 $392,382.00
Terrorism Fee Optional $18,400.00 $18,400.00
Fire Following Certified Acts of Terrorism
Total Cost Fees & TRIA $363,012.00 $410,782.00
Commission
Keenan & Associates 0% 0%
Intermediary Broker N/A Direct N/A Direct
Major Exclusions Property Excluded: Golf Courses Property Excluded: Golf Courses Flood and Earthquake Flood and Earthquake
Builders Risk Fast Track Exclusion New 2021 Builders Risk Fast Track Exclusion New 2021 (see policy for complete list of exclusions) Transmission and Distribution Systems Unless scheduled
Transmission and Distribution Systems Unless
scheduled
Alternative Option
A reduction in Premium can be offered at $403,569 with TRIA. Stipulation to sublimit Wildland Fire exposed locations to their respective TIVs on the SOV.
Locations are listed below. If City is confident in the values this may be a viable option, as we may see this sublimit appear in the next term due to the current underwriting criteria.
Wildfire Exposure Locations:
Memorial Library 100 South Palm Canyon Drive
Parking Sructure 123 North Palm Canyon Drive,
Plaza Theater 128 South Palm Canyon Drive
Village & Museum 211-233 South Palm Canyon Drive
Parking Structure 275 South Indian Canyon Drive
Fire Station 1 277 North Indian Canyon Drive
Theater and Meeting Rms 538 North Palm Canyon Dr
Desert Art Center 550 North Palm Canyon Drive
Edom Hill North of I-10 & East of Gene Autry Trail,
Notes:
Premium includes the new TIV for Fire Trucks and location (3589 McCarthy Road, Palm Springs) Wildland Fire Per Location Deductible placed on the account for locations listed above @ $10,000 Each Edom Hill- Police Radio Telecommunication has been sublimited to the values reflected on the SOV of $3,815,804 Subject To
TRIA Form Election: Expiring policy included Terrorism.
Item 3A - 33
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
21 Keenan & Associates | CA License No. 0451271
CYBER LIABILITY
Expiring Proposed
Carrier Ace American Insurance Co Ace American Insurance Co AM Best Rating A++ (Superior) A++ (Superior)
Financial Size Category XV ( $2 Billion or greater)
Ad
mitted
XV ( $2 Billion or greater)
Admitted
California Status Admitted Admitted
Coverage Chubb Cyber Enterprise Risk Mgmt Policy
PF
-48169 (02/19)
Chubb Cyber Enterprise Risk Mgmt Policy
PF-48169 (02/19)
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability - Aggregate $1,000,000 $1,000,000
1st Party
Cyber Incident Response Team $1,000,000 $1,000,000
Non-Panel Response Provider $500,000 $500,000
Business Interruption Each Incident $1,000,000 $1,000,000 Business Interruption Contingent $1,000,000 $500,000
Digital Data Recovery $1,000,000 $1,000,000
Network Extortion $1,000,000 $1,000,000
3rd Party
Privacy & Network Security Liability Coverage $1,000,000 $1,000,000 Payment Card Loss $1,000,000 $1,000,000
Regulatory Proceedings $1,000,000 $1,000,000
Electronic, Social and Printed Media Liability Coverage $1,000,000 $1,000,000 Cyber Crime
Computer Fraud $250,000 $0
Funds Transfer Fraud $250,000 $0
Social Engineering $100,000 $0
Utility Fraud
Retention
All Other Losses $25,000 $75,000
Cyber Crime $25,000 $75,000
Item 3A - 34
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
22 Keenan & Associates | CA License No. 0451271
Business Interruption Income Loss, Dependent
(Contingent) BI Income Loss and Extra Expense: Each
Incident
18 hrs. BI / 24 hrs. Contingent BI 18 hrs. BI / 24 hrs. Contingent BI Retroactive Dates: 7/1/2015 7/1/2015
Services Available Offers loss mitigation services and access to tool
s and resources needed to address and
gauge key areas of cyber security risks.
Dashline bridge- a password management
application and Skillbridge which gives
insured access to 2 Cyber educational classes
for employees. Certain Loss Mitigation
services may be negotiated for a fee.
Same as Expiring
Major Exclusions
Fraudulent/Criminal Acts Fraudulent/Criminal Acts
Bodily Injury, or Property Damage Bodily Injury, or P roperty Damage Intentional or knowing violation of the law Intentiona l or knowing violation of the law Pollutants Pollutants
Wrongful refusal to hire, dismiss, or EPL
pr
actice
Wrongful refusal to hire, dismiss, or EPL
practice
Known compromised version of SolarWinds
Or
ion software
Known compromised version of SolarWinds
Orion software
Recent Microsoft exchange vulnerability Recent Micros oft exchange vulnerability Software that is out of date and no longer
su
pported
Software that is out of date and no longer
supported
Clarification Endorsement: For government
di
rective/shutdown
Clarification Endorsement: For government
directive/shutdown
(see policy for complete list of exclusions)
Premium
Annual Premium $26,721.00 $51,960.00
Surplus Lines Taxes and Fees $0.00 $0.00
Total Cost $26,721.00 $51,960.00
Item 3A - 35
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
23 Keenan & Associates | CA License No. 0451271
GOVERNMENT CRIME
Expiring Pr oposed
Carrier Fidelity and Deposit Company of Maryland Fidelity and Deposit Company of Maryland AM Best Rating A+ (Superior) A+ (Superior)
Financial Size Category XV ($2B or greater) XV ($2B or greater) California Status Admitted Ad mitted
Coverage Government Crime Coverage, Discovery Form,
inc
luding Faithful Performance of Duties
Government Crime Coverage, Discovery Form,
including Faithful Performance of Duties
Policy Form Discovery Form: CR0026 11-15 Discovery Form: CR0026 1 1-15 Policy Term July 1, 2020 to July 1, 2021 July 1, 2022 to July 1, 2 023 Limit of Liability
Employee Theft Per Loss $1,000,000 $1 ,000,000
Employee Theft Per Employee Not Covered Not Covered
Forgery or Alteration $1,000,000 $1 ,000,000
Theft of Money & Securities $1,000,000 $1 ,000,000
Robbery or Safe Burglary $1,000,000 $1 ,000,000
Outside of Premises $1,000,000 $1 ,000,000
Computer and Funds Transfer Fraud $1,000,000 $1 ,000,000 Money Orders & Counterfeit Paper $1,000,000 $1 ,000,000 Fraudulent Impersonation $0 $5 0,000
Faithful Performance $1,000,000 $1 ,000,000
Deductible
Employee Theft $10,000 $1 0,000
Forgery or Alteration $10,000 $1 0,000
Theft of Money & Securities $10,000 $1 0,000
Robbery or Safe Burglary $10,000 $1 0,000
Outside of Premises $10,000 $1 0,000
Computer and Funds Transfer Fraud $10,000 $1 0,000
Money Orders & Counterfeit Paper $10,000 $1 0,000
Fraudulent Impersonation $0 $1 0,000
Faithful Performance $10,000 $1 0,000
Item 3A - 36
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
24 Keenan & Associates | CA License No. 0451271
Major Exclusions
Confidential Information
Governmental Action
Indirect Loss
Legal Fees, Costs and Expenses
Nuclear Hazards
Pollution
War and Military Action
Inventory Shortage
Bonds for Employees are required to have Individual
Bonds Same as Expiring
Trading
Account/Arithmetical Errors or Omissions
Exchanges or Purchases
Fire
Money Operated Devices
Vandalism
Virtual Currency
Voluntary Parting of Title to or Possession of Property (see policy for complete list of exclusions)
Estimated Annual Premium $5,513 $6 ,154
Notes:
Added Fraudulent Impersonation
Alternate Quotes Received
$2MM limits / $20,000 deductible / $7,415 premium
$5MM limits / $50,000 deductible / $10,732 premium
Item 3A - 37
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
25 Keenan & Associates | CA License No. 0451271
MEDIA LIABILITY
Expiring Pr oposed
Carrier Landmark American Insurance Company Landmark American I nsurance Company AM Best Rating A+ (Superior) A+ (Superior)
Financial Size Category XIV ($1.5 Billion to $2 Billion) XIV ($1.5 Billion to $ 2 Billion) California Status Not Admitted Not Admitted
Coverage Media Perils Policy Film and Program Producer Liabili ty Media Perils Policy Film and Program Producer Liability Form RGS 51010 0903 RG S 51010 0903
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability $1,000,000 per occurrence/annual aggregate $1,000,000 per occurrence/annual aggregate Deductible $5,000 per claim $5 ,000 per claim
Covered Exposure Broadcast of City Council Meetings and Special Events over Time Warner Cable Television Only
Broadcast of City Council Meetings and Special Events over Time Warner Cable Television Only
Major Exclusions Breach of Contract
Pa
tent Infringement
Unfair or Deceptive Trade Practices
Employment Practices
False Advertising
Fraudulent/Criminal Acts
Actions or Proceedings by the Federal Trade Commission
or Federal Communications Commission
Bodily Injury/Property Damage
Merchandising
Automobile/Aircraft/Watercraft
Nuclear Energy
Violation of Consumer Protection Laws
Breach of Contract
Patent Infringement
Unfair or Deceptive Trade Practices
Employment Practices
False Advertising
Fraudulent/Criminal Acts
Actions or Proceedings by the Federal Trade Commission or Federal Communications Commission
Bodily Injury/Property Damage
Merchandising
Automobile/Aircraft/Watercraft
Nuclear Energy
Violation of Consumer Protection Laws
(see policy for complete list of
exclusions)
Premium
Annual Premium $5,500.00 $5 ,500.00
Intermediary Broker Fee $350.00 $3 50.00
Surplus Lines Taxes and Fees $178.75 $1 78.75
Total Cost $6,028.75 $6 ,028.75
Minimum Premium 25% 25 %
Commission
Item 3A - 38
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
26 Keenan & Associates | CA License No. 0451271
Keenan & Associates 0% 0%
Intermediary Broker 10% 10 %
Subject To
Signed and dated Surplus Lines Disclosure Form
Item 3A - 39
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
27 Keenan & Associates | CA License No. 0451271
AIRPORT LIABILITY
Expiring Pr oposed
Carrier Ace Property and Casualty Insurance Company Ace Prope rty and Casualty Insurance Company AM Best Rating A++ (Superior) A++ (Superior)
Financial Size Category XV ($2B or greater) XV ($2B or greater) California Status Admitted Ad mitted
Coverage Airport Owners and Operators Liability Airport Owners and Operators Liability Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability
Each Occurrence/Offense
Products/Completed Operations
Personal Injury/Advertising Injury
Malpractice
War, Hi-Jacking &Other Perils
Fire Damage
Medical Expense
Hangarkeepers not “in flight”
Hangarkeepers not “in flight”
Non-Owned Aircraft
Excess Automobile (off premises)
Excess Employers Liability (excluding disease)
$50,000,000
$5
0,000,000 Aggregate
$50,000,000 Aggregate
$50,000,000 Aggregate
$100,000
$5,000 Any One Person
$50,000,000 Any One Occurrence
$50,000,000 Any One Aircraft
$50,000,000
$50,000,000
$10,000,000 excess of any one occurrence /
$50,000,000
$10,000,000 excess of any one occurrence /
$50,000,000
$50,000,000
$50,000,000 Aggregate
$50,000,000 Aggregate
$50,000,000 Aggregate
$100,000
$5,000 Any One Person
$50,000,000 Any One Occurrence
$50,000,000 Any One Aircraft
$50,000,000
$50,000,000
$10,000,000 excess of any one occurrence /
$50,000,000
$10,000,000 excess of any one occurrence /
$50,000,000
Deductible
Each Occurrence
Annual Aggregate
$1,000
$5
,000
$1,000
$5,000
Major Exclusions Noise, Pollution and Other Perils
War, Hi-Jacking and Other Perils
Expected or Intended Injury
Contractual Liability
Liquor Liability
Workers’ Compensation/Employers Liability
Arising out of the Use/Ownership/Maintenance of:
Noise, Pollution and Other Perils
War, Hi-Jacking and Other Perils
Expected or Intended Injury
Contractual Liability
Liquor Liability
Workers’ Compensation/Employers Liability
Arising out of the Use/Ownership/Maintenance
(see policy for complete list of exclusions)
Item 3A - 40
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
28 Keenan & Associates | CA License No. 0451271
Aircraft, Watercraft, Auto (other than operating at
airport)
Mobile Equipment while being transported by an
auto
Racing/Airmeet/Contest or Exhibition
Swimming Pools or Lodging accommodations
Operation of a Control Tower
Damage to Your Property/Product/Work
Damage to Impaired Property
Recall of Products
Willful Violation of Law
of: Aircraft, Watercraft, Auto (other than
operating at airport)
Mobile Equipment while being transported by an
auto
Racing/Airmeet/Contest or Exhibition
Swimming Pools or Lodging accommodations
Operation of a Control Tower
Damage to Your Property/Product/Work
Damage to Impaired Property
Recall of Products
Willful Violation of Law
Premium
Annual Premium $38,419 $4 2,260
Terrorism $3,842 $4 ,226
War $961 $1 ,057
Total Cost $43,222 $4 7,543
Commission 0% 0%
Notes:
War and TRIA coverage may be rejected by the insured. Previous term coverage elected.
Item 3A - 41
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
29 Keenan & Associates | CA License No. 0451271
AIRCRAFT & HULL LIABILITY
Expiring Pr oposed
Carrier Westchester Fire Insurance Company Westchester Fire I nsurance Company AM Best Rating A++ (Superior) A+ + (Superior)
Financial Size Category XV ($2B or greater) XV ($2B or greater) California Status Admitted Ad mitted
Coverage Aircraft Hull and Liability Aircraft Hull and Liabili ty Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limit of Liability
$5
,000,000
$1,000 per person
$4,000 per occurrence
$40,000 - In Motion and Not in Motion Coverage
$5,000,000
$1,000 per person
$4,000 per occurrence
$40,000 - Not in Motion Only Coverage
Each Occurrence
Medical Payments
Medical payments
Hull
Deductible
None
$500
$100
None
$0
$0
Liability
Hull – In-Motion
Hull – Not-In-Motion
Covered Aircraft 1973 Cessna 182P – FAA # N47PS 1973 Cessna 182P – FAA # N47PS Location of Aircraft Palm Springs International Airport Palm Springs Inter national Airport Approved Pilots Any pilot approved by the City’s Chief Pilot and/or t heir designee. Max Seating: 4 including pilots
Any pilot approved by the City’s Chief Pilot and/or their designee. Max Seating: 4 including pilots
Territory United States (excluding Alaska), Canada and Mexico Sa me as expiring Major Exclusions Aircraft being flown by pilot not property certificat ed Unlawful Purpose
Aircraft being flown without Standard Airworthiness
Certificate
Nuclear
Date Recognition Failure (Y2K)
Pollution
Same as expiring
(see policy for complete list of
exclusions)
Premium
Annual Premium $3,493 $1,591
Terrorism/War $301 $159
Total Cost $3,794 $1,750
Item 3A - 42
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
30 Keenan & Associates | CA License No. 0451271
Subjectivities
TRIA election form and Advise when the Aircraft no longer requires coverage When the insured does plan on flying the aircraft while selling for inspections or to locate to another hangar, we will have to change hull coverage to “F” – Full Flight Coverage and additional premium will apply.
Item 3A - 43
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
31 Keenan & Associates | CA License No. 0451271
VILLAGEFEST LIABILITY
Expiring Pr oposed
Carrier Mesa Underwriters Specialty Insurance Company Mesa Und erwriters Specialty Insurance Company AM Best Rating A (Excellent) A+ (Superior)
Financial Size Category XIV ($1.5B to $2B) XV ($2B or greater) California Status Not Admitted Not Admitted
Coverage General Liability General Liability
Policy Term July 1, 2021 to July 1, 2022 July 1, 2022 to July 1, 2 023 Limits of Liability
Per Occurrence
Annual Aggregate
Personal and Advertising Injury
Products/Completed Operations
$1
,000,000
$2,000,000
$1,000,000
Excluded
$1,000,000
$2,000,000
$1,000,000
Excluded
Sublimits
Damage to Rented Premises
Medical Expenses
$100,000
$5
,000
$100,000
$5,000
Deductible $250 per claim $2 50 per claim
Rating Basis 52 events per year 52 events per year
Premium
$1
2,380
Annual Premium $12,380.00 $1 2,380.00
TRIA- Taxable $619.00 $6 19.00
Inspection Fee - Taxable $110.00 N/A year 2 of 3
Policy Fee - AmWins $250.00 $2 50.00
Surplus Lines Taxes and Fees $426.04 $4 22.47
Commission Rebate (10.5%) ($1,364.90) ($1,364.90)
Total Cost $12,420.15 $1 2,306.58
Minimum Premium 25% of annual premium 25% of annual premium Commission 10.5% (returned via rebate) 10.5% (returned via rebat e) Major Exclusions Employment-Related Practices
Pr
oducts Completed Operations Hazard
Pollution/Asbestos/Fungi or Bacteria
Employment-Related Practices
Products Completed Operations Hazard
Pollution/Asbestos/Fungi or Bacteria
(see policy for complete list of exclusions)
Item 3A - 44
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
32 Keenan & Associates | CA License No. 0451271
Silica or Silica-Related Dust
Professional Liability
Nuclear Energy Liability
Unscheduled Activities and Events
Pyrotechnicians or Fireworks
Animal Liability
Lethal Weapons
Participants
Assault or Battery
Lead Contamination
Punitive Damages
Earth Movement
Pre-Tender Legal Fee
Injury to Employees or Temporary Workers
Occupational Disease
Infringement of Intellectual Property
Expected or Intended Injury
Contractual Liability
Liquor Liability
Aircraft/Watercraft/Auto/Mobile Equipment
War
Silica or Silica-Related Dust
Professional Liability
Nuclear Energy Liability
Unscheduled Activities and Events
Pyrotechnicians or Fireworks
Animal Liability
Lethal Weapons
Participants
Assault or Battery
Lead Contamination
Punitive Damages
Earth Movement
Pre-Tender Legal Fee
Injury to Employees or Temporary Workers
Occupational Disease
Infringement of Intellectual Property
Expected or Intended Injury
Contractual Liability
Liquor Liability
Aircraft/Watercraft/Auto/Mobile Equipment
War
Subjectivities Signed Application
Si
gned TRIA form
Signed D1 Form
Item 3A - 45
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
33 Keenan & Associates | CA License No. 0451271
KEENAN PROFILE
OVERVIEW OF KEENAN
F
ounded in 1972, Keenan has experience consulting to cities, counties, special districts, community colleges, and public school districts. Statewide, Keenan provides services to more than 950 public sector entities including 65 trusts and joint power authority programs (JPAs). Because of Keenan’s niche focus on the unique requirements of public sector entities, we bring a comprehensive understanding of the customers and markets we serve.
In April 2017 Keenan joined the AssuredPartners, Inc. family of companies. AssuredPartners, Inc. acquires and invests in insurance brokerages across the United States, Canada and London. Since AssuredPartners’ founding in March 2011, it has grown to over 180 offices in 30 states and is currently ranked 13th largest U.S.
B
rokerage.
Keenan is AssuredPartners public entity leader providing national partners with public entity expertise. By joining AssuredPartners, Keenan has access to additional capital and a national footprint that will enable us to continue to negotiate the most favorable coverage terms and conditions for our clients, and allow us to provide an even broader spectrum of public entity risk management support services.
KEENAN PUBLIC AGENCY DIVISION
K
eenan’s Public Agency Division provides high quality , innovative products and services that add value, increase reliability and provide financial security for our clients’ property and liability, workers’ compensation, and employee benefits programs. As an organization, we place insurance covering more than $80 billion of insured property values and more than $50 billion in covered payroll.
We believe an integrated approach allows us to provide our clients with the highest level of consultation. To do so, we have developed a wide range of services, including • Risk Management Consultation
• Claims Administration
• Full Range of Insurance Brokerage
• JPA Management and Consulting
• Loss Control Consultation and Services
• Financial Analysis and Planning for Creative Funding Op tions
KEENAN OFFICES AND STAFFING
K
eenan has nine (9) offices throughout California, wi th more than 750 employees. This enables us to provide immediate service to our clients. It also gives us an understanding of California’s public agencies statewide.
Item 3A - 46
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
34 Keenan & Associates | CA License No. 0451271
RISK MANAGEMENT SERVICES
INTEGRATED SERVICE TEAM
Ou
r clients’ programs are only as good as the service team’s delivery on our commitments. Our commitment to customer service epitomizes the Keenan brand. Whether its prompt response in coverage analysis, effective claims oversight or results-oriented loss control service, our fully integrated business model with internal access to all necessary resources will either provide or oversee quality delivery of value added service to the City.
MUNICIPAL INSURANCE COOPERATIVE (MIC)
M
IC is a Joint Powers Authority formed to provide ins urance coverage and risk management services for public entities. MIC, although not an insurance company, provides its members, at their option, the opportunity to purchase coverages such as liability and workers’ compensation coverage on a group basis.
The unique design of MIC allows member agencies to obtain coverage that is more cost effective than they could buy on their own while avoiding the risks associated with joint and several liability.
MIC membership provides the following benefits:
• Broad coverage under a Memorandum of Coverage (MOC)
• F
ully reinsured
• Risk management services
• Cost effective access to loss control services
• Claims control
• Flexible member retentions and choice of coverage
As
a member of MIC, you have access to valuable resources not always available or affordable on your own.
MIC’s objective is to help you find the right blend of coverage and risk management services to lower your cost of risk:
• Loss Control and safety training specific to your los s drivers • Web-based training modules delivered on the award-win ning Keenan SafePersonnel ®
platform saving
y
ou time, money and employee productivity
• Claims oversight
• Contractual risk transfer assistance
• Access to P&C Bridge, a proprietary online technology portal that enables you to bridge compliance, communication, training, analytics and risk management in one secure platform • Company Nurse, a 24/7 injury triage and claims report ing service providing enhanced treatment, modified duty accommodation and return-to-work services Item 3A - 47
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
35 Keenan & Associates | CA License No. 0451271
LOSS CONTROL SERVICES
L
oss Control Services comprise a special blend of know ledge and expertise that can only be acquired by specialization. Our Loss Control Services personnel are specialists trained to identify and analyze loss exposure factors, develop necessary loss controls, recommend appropriate remedial actions and provide necessary services, including employee training, to help reduce the frequency and severity of your claims.
Addressing employee injuries and safety concerns is a critical component to achieving a strong safety culture.
A strong safety culture is essential to the success of your Risk Management program and ultimately the success of maintaining low claim numbers. Our trainings and assessment services have been provided to thousands of employees across California, and continue to be requested year after year from our clients. Minimal financial investments like this can result in tremendous benefits across a wide span of the City’s resources.
Keenan offers its complete Loss Control Service Schedule as an option for the City to augment loss control and safety training not otherwise provided by the carrier.
Partnering with an experienced, stable and flexible safety and loss control team is critical for customer satisfaction, consistency in service delivery and the execution of the City’s safety objectives. Our safety professionals average over 14 years of California Public Agency experience and possess the distinction of assisting clients in achieving significant reduction in claims and incidents. Their individual and collective expertise provide California Public Agencies with all the assessment, program development and training needs required of environmental and Cal/OSHA regulations. In our Public Agency book of business, Keenan Safety and Loss Control experts have achieved a consistent record of loss reduction (36% frequency rate drop over the last four years). Additionally, the Keenan team is noted to have specialized experts who possess the following certifications:
• Certified Safety Professionals (CSP) • Certified Forklift Trainers • Certified Ergonomists (CPE) • Hazardous Materials First Responders • Registered Environmental Assessors (REA) • Associates in Risk Management (ARM) • Certified Playground Inspectors (CPSI) • Certified Aerial Lift Trainers
Item 3A - 48
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
36 Keenan & Associates | CA License No. 0451271
P&C BRIDGE
P
&C Bridge is a web-based portal Keenan designed to a llow our clients 24/7 access to the tools necessary to manage their Property, Liability and Workers’ Compensation programs. P&C Bridge enables you to bridge Training, Compliance, Communication and Risk Management in one secure platform. P&C Bridge was built with the help of Risk Managers, Chief Business Officials, and Human Resources professionals as they told us specifically what they needed to bring safety, accountability and efficiencies to their organizations.
P&C Bridge Features:
• Keenan SafePersonnel Dashboard, online
tr
aining can help public agencies comply with
regulatory compliance and increase the safety
of their employees.
• Claim Related Alerts. How are you managing
yo
ur workers’ compensation program? P&C
Bridge claim related alerts offer more options
to assist your agency in managing important
claim milestones.
• What’s Trending? Stay on top of issues
imp
ortant to your peers. Quickly see content,
training and other resoures your peers are in and viewing. • Follow Content Important to You. Personalize your acc ount to follow topics that are most interesting to you and have the option to receive an email notification when new content on that topic is posted to P&C Bridge
• Keep Track of Important Meetings, Trainings and Event s. Use the calendar tool to easily see
meetings, trainings and events that are coming up and add them to your personal calendar. Customize your calendar view to only see events that matter most to you and your agency • User Friendly Format. The design of P&C Bridge makes i t easy to find what you are looking for.
Item 3A - 49
~ f&C Bridge
m T~r,g Ri5'<.A<Ms«lltnry Reports Tools&Resourcn Oi,cunioo, Ann We Recommend
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A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
37 Keenan & Associates | CA License No. 0451271
KEENAN SAFEPERSONNEL
K
eenan SafePersonnel – Web Based Online Training
Bu
ilt on technology extensively proven in public agencies and recognized with a 2013 Business Insurance Innovation Award, Keenan SafePersonnel has an established track
record with over 500,000 course completions.
The Keenan SafePersonnel courses have been specifically designed for California cities, counties, transit agencies and special districts. The content is newly updated and regularly reviewed to remain current.
Keenan SafePersonnel develops a strong safety culture for the City:
• Fosters a safe, healthy environment for agency
emp
loyees and helps protect your community.
• Cost effectively delivers training online with far le ss disruption to work schedules and reduced travel
expense.
• Courses align with your exposures, loss history and
re
inforce targeted prevention strategies.
• Interactive, visually-pleasing content engages employ ees with short, manageable modules. • Centralized, automated record of training for Cal/OSH A and risk management documentation.
Item 3A - 50
2018 Course Library
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A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
38 Keenan & Associates | CA License No. 0451271
CLAIMS ADMINISTRATION SERVICES
THE KEENAN ADVANTAGE
K
eenan is a full-service, multi-faceted Third Party A dministration (TPA) whose experience working with public agencies organizations is unmatched in the industry. Our TPA services for California public agencies, has yielded long-term fiscally sustainable solutions, which set the standard that other TPAs strive to achieve. • Commitment: F ounded in 1972, Keenan was the first insurance brokerage firm in California to specialize in workers’ compensation for public agencies. • Partnership: A s California’s largest privately held brokerage firm and third party administrator for schools, we offer you economy-of-scale savings no other firm can match. • Innovation: W e offer unparalleled experience in providing unique solutions to meet the dynamic changes within the workers’ compensation insurance market. Our “P&C Bridge” web portal is just the most recent example.
• Client Centered: W
e combine our statewide resources and experience with local offices and personalized attention to meet each client’s individual needs. • High Quality: W e constantly strive to make our established “best practices” even better. As a result, the most recently published State of California Division of Workers’ Compensation PAR audit findings (2006) rank Keenan as #4 in the State – the highest ranking Third Party Administrator on the list!
• Cost Effective: Ou r proprietary programs deliver savings that can’t be matched. In 2008, our medical cost containment program, PRIME, alone delivered savings of over $55 million to our clients.
Keenan’s expertise in workers’ compensation has allowed us to create and implement solutions for public agencies that are high quality, innovative, cost-efficient and comprehensive. Keenan & Associates maintains experienced claim processors and customer service representatives to provide prompt, efficient and accurate claim services.
Keenan’s Workers’ Compensation Claims department provides clients with:
• Medical cost containment
• Legal cost containment
• Fraud reduction efforts
• Automated injury reporting
• Accurate forecasting
• Quality control
• Medical Panels
Item 3A - 51
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
39 Keenan & Associates | CA License No. 0451271
DISCLOSURE STATEMENT
DISCLOSURE STATEMENT:
AssuredPartners agencies are licensed as insurance producers by the various States where we are transacting insurance, which includes the sale, solicitation, and servicing of insurance business, as well as advising on the relative benefits of certain insurance policies and risk management programs. Our agencies typically receive compensation from insurers in the form of commissions paid as a percentage of the premiums due the applicable insurance companies. Commissions can vary by insurance company, by volume of business placed with that company or the profitability thereof, and other factors. In other cases, depending on various State laws and the capacity in which our agency is acting, our agencies may receive other forms of compensation from insurers, insurance intermediaries, premium finance companies and other vendors; such as contingents, overrides, profit-sharing, premium finance fees, expense reimbursements, producer subsidies, award trips, meetings and other incentives. We also earn interest on premiums we hold until it is time to pay the applicable insurance companies.
Our overriding desire is to provide great customer service, having you, the customer, believe we have earned our compensation. We believe in full disclosure of our compensation. Accordingly, if you have any questions about the compensation we receive from your policies (including policies we propose to you), please just ask your account representative, who will gladly provide you a summary of our compensation arising from your policies (some estimation may be necessary, for example where contingents are involved).
This proposal provides a summary of coverages. In the event of a conflict, the actual terms, conditions, l
imitations and exclusions of the policy shall prevail.
Item 3A - 52
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
40 Keenan & Associates | CA License No. 0451271
BIND ORDER
I have reviewed and accept the attached Proposal. Please accept this as our authorization to bind coverage effective July 1, 2022. This proposal provides a summary of coverages. In the event of a conflict, the actual terms, conditions, limitations, and exclusions of the policy shall prevail.
Excess Liability:
Municipal Insurance Cooperative Annual Premium: $850,000 MIC JPA Management Fee: $16,750
Budgeted Pool Costs: $7,000 (Pending MIC Board Approval) Total Cost: $873,750
Public officials & Management Liability – Retention Buydown:
ACE American Insurance Company: $68,504.00
Property:
[ ] Affiliated FM Insurance Company: $410,782 includes Engineering Fees, and Terrorism @ $18,400 [ ] Affiliated FM Insurance Company: Stipulated Wildland Fire Exposed Locations $403,569 includes Engineering Fees, and Terrorism @ $18,400
Difference in Conditions – All Other Locations:
Beazley Lloyd's Syndicate 2623 & 623: $302,782.69
DIC Waste Water Treatment Plant:
[ ] Arch $5M: $139,387.50
[ ] Westchester $10M Excess Limits: $113,575.00
[ ] Lloyds of London - Hiscox $10M Excess Limits: $44,851.80
Excess Workers Compensation:
Safety National: $261,365.00
Airport Liability:
ACE: $47,543.00
Village Fest:
Mesa Underwriters: $12,306.58
Multimedia:
Landmark American Insurance Company: $6,028.75
Aircraft Hull:
ACE: $1,750.00
Crime:
[ ] Fidelity and Deposit Company of Maryland: $1M limits: $6,154 [ ] Fidelity and Deposit Company of Maryland: $2M limits: $7,415 Item 3A - 53
A IKeenan
City of Palm Springs
June 7, 2022
Property & Casualty
Renewal Proposal 2022 - 2023
41 Keenan & Associates | CA License No. 0451271
[ ] Fidelity and Deposit Company of Maryland: $5M limits: $10,732
Cyber / Data Breach:
[ ]Ace American Insurance Co $1M Limits $75K Retention: $51,960.00
Subjectivities:
• Property All Risk: Signed TRIA
• Property DIC: Signed TRIA AOL: Beazley rejection $10M xs SIR
• Property DIC: Signed TRIA WWTP ARCH rejection
• Property DIC: Signed D1 Westchester
• Village Fest: Signed TRIA, D1 Form & Currently Dated S igned Application • Aircraft Hull: Signed TRIA
• Airport: Signed TRIA
_
_______________________________________________ _________________________________ Signed by (Printed Name) Title
________________________________________________ _________________________________ Signature of Authorized Representative Date
Item 3A - 54
A IKeenan
ATTACHMENTS 3 AND 4 TO BE
PROVIDED WEDNESDAY, JUNE 15, 2022
Item 3A - 55
CITY COUNCIL STAFF REPORT
06/16/2022 3. B.
City Clerk -
SUBJECT
REVIEW OF A MODIFIED FRANCHISE AGREEMENT FOR SOLID WASTE
COLLECTION SERVICES BETWEEN THE CITY OF PALM SPRINGS AND PALM SPRINGS DISPOSAL SERVICE.
RECOMMENDATION:
Review the draft franchise agreement and provide direction to staff on changes and modifications.
1. Review the modifications to the rate proposal provided by PSDS and provide final direction to staff.
2. Attachments
Item 3B
CITY COUNCIL STAFF REPORT
DATE: JUNE 16, 2022 UNFINISHED BUSINESS
SUBJECT: REVIEW OF A MODIFIED FRANCHISE AGREEMENT FOR SOLID
WASTE COLLECTION SERVICES BETWEEN THE CITY OF PALM
SPRINGS AND PALM SPRINGS DISPOSAL SERVICE.
FROM: Justin Clifton, City Manager
BY: Office of Sustainability
SUMMARY:
The City of Palm Springs (City) has an exclusive franchise agreement (Agreement) with Palm Springs Disposal Services (PSDS) to provide solid waste and recycling collection services. Recent changes to state law relative to recycling and organic waste collection via the adoption of Senate Bill 1383 (SB 1383) have necessitated significant modifications to the existing A greement. City staff has elected to restate and update the entire Agreement rather than to simply amend it due to the extensive nature of the changes. As the state requirement for food waste collection will require PSDS to provide additional services, they have proposed modifications to the trash collection fee schedule to address those additional services. The City Council discussed the agreement and rate proposal at the meeting of May 26, 2022 and provided initial direction to staff; this staff report discusses proposed changes to the agreement and rate proposal based on Council direction and provides additional research for consideration.
RECOMMENDATION:
1. Review the draft franchise agreement and provide direction to staff on changes and modifications; and
2. Review the modifications to the rate proposal provided by PSDS and provide final direction to staff.
STAFF ANALYSIS:
At the meeting of May 26, 2022, the City Council reviewed an initial draft of a modified franchise agreement (Agreement) between the City of Palm Springs (City) and Palm Springs Disposal Service (PSDS), necessitated by recent changes in state law relative to organic waste collection. At the City Council meeting, initial direction was provided to staff regarding the term of the agreement and residential rates. Council members also requested that additional research and information be provided to assist with discussions of modifications to the Agreement. The following sections of this memorandum provide Item 3B - 1
City Council Staff Report
June 16, 2022 -- Page 2 of 4
Franchise Agreement for Solid Waste Collection Services
information on requested modifications and responses to questions raised at the May 26th meeting.
A. Term of Agreement: The current Agreement extends through March 2029 (6 years and 9 months). In addition to proposing a new rate structure to address the added service of organic waste collection for the current period of the Agreement, PSDS had proposed two options to extend the term as a means to amortize these additional costs over a longer period. Councilmember comments at the May 26 th
meeting suggested that there was inadequate support for extending the term of the Agreement; consequently, PSDS has revised their rate proposal to exclude any extension of the current term.
B. Base Residential Rate: PSDS has proposed a reduced base residential rate based on the comments received at the May 26
th City Council meeting; the updated
residential rate proposal is included as Attachment 1 . In reviewing the financial analysis provided by the City’s solid waste consultant (Sloan Vazquez McAfee or SVM) and in responding to the City Council request to reduce the proposed residential rate, PSDS has reevaluated their proposed rates and is offering a 1% reduction (from $26.61 to $25.93). This rate reduction is balanced with other increases that were not anticipated in the original rate proposal, including the City’s requirement for additional insurance coverage and the slight increase in the franchise fee percentage paid to the City.
C. Vacation Rental Rate: PSDS has proposed to increas e the monthly rate for vacation rental properties to $53.61 per month based on the additional service that is necessary for the use. PSDS has provided justification for the increased cost, based on the size and number of carts necessary to service vacation rental properties, the average occupancy, and the additional services PSDS must provide due to trash generation issues created by users. In providing further research into vacation rental uses, PSDS has clarified that home share properties will be exempt from the standard vacation rental rate and will only be charged the standard fee applicable to standard residential properties. A detail of the basis for the vacation rental rate increase and other background information relative to trash collection for vacation rental properties is provided in Attachment 2.
D. Comparison of Rates with Other Coachella Valley Cities: Staff has contacted other Coachella Valley jurisdictions and provided a list of residential solid waste collection rates, which is included as Attachment 3 . Three of the jurisdictions (Coachella, Indian Wells, Rancho Mirage) have yet to adopt new rates based on the implementation of SB 1383, so only the current rate information for those jurisdictions is provided. The City’s solid waste consultant, SVM, has cautioned against a direct comparison of rates due to a number of variables that must be considered in addition to the rate, including difference in franchise fees, variations in the number of residential customers versus commercial custom ers, cost of city services provided at no charge to the jurisdiction, and other similar factors. Based Item 3B - 2
City Council Staff Report
June 16, 2022 -- Page 3 of 4
Franchise Agreement for Solid Waste Collection Services
on these variables, it is difficult to make a direct comparison between rates. For that reason, SVM has provided an analysis of the rates proposed by P SDS (included as an attachment to the May 26
th City Council staff report) and concluded
that the rate proposal is within the expected range necessary to fund the collection of organic waste as required by SB 1383. PSDS has provided its own survey of solid waste contracts for Coachella Valley jurisdictions, which is included as Attachment 4.
E. Service Commencement Date: As noted in the May 26
th staff report, the start date
for the organic waste collection has been moved several times due to delays in the anticipated delivery date for the new trucks that will service the route. The new trucks were ordered in August 2021; PSDS has been informed that the expected delivery date for the trucks is now scheduled for January 2023. Rather than continuing to push the date for the start of the organic waste collection for residential customers, PSDS has been able to secure temporary vehicles so that collection can begin on October 31, 2022. PSDS has provided an updated implementation schedule, which is included as Attachment 5.
The rate modifications and other changes discussed above do not require any modifications to the draft Agreement; the limitation to the existing term of the Agreement remains unchanged, and the updated rate proposal will be attached as an exhibit. The draft Agreement is included as Attachment 6 to this memorandum.
ADOPTION SCHEDULE AND IMPLEMENTATION DATE:
The adoption schedule and implementation date has been modified slightly based on the changes discussed in the preceding sections of this memorandum. Please note the following dates for consideration of the Agreement and rates, public hearing notice deadline, final adoption of the Agreement, and implementation of organic waste collection:
Date Event Description
May 26, 2022 City Council
Meeting
Initial presentation of Draft Franchise
Agreement & Rate Schedule
June 16, 2022 City Council
Meeting
City Council Discussion #2 – Draft Franchise
Agreement & Rate Schedule
June 30, 2022 City Council
Meeting
City Council Discussion #3 – Draft Franchise
Agreement & Rate Schedule
July 11, 2022 Public Notice
PSDS to mail Prop. 218 notice to all
customers (Note: Mailing must be sent to
printer no later than 6/27/22)
September 1,
2022
City Council
Public Hearing
City Council approval of Prop. 218 rates and
Franchise Agreement
October 31, 2022 Implementation New rates and services take effect for residential and commercial customers
Item 3B - 3
City Council Staff Report
June 16, 2022 -- Page 4 of 4
Franchise Agreement for Solid Waste Collection Services
MAY 26, 2022 CITY COUNCIL STAFF REPORT:
This staff report is intended to provide updated information based on the Council discussion at the May 26
th City Council meeting and is not a complete analysis of the modified franchise agreement and rates. Complete information on the proposed agreement and additional backup information is available in the May 26 th City Council
staff report, which is provided as a link on the City website in Attachment 7 to this report.
REVIEWED BY:
Deputy City Manager: Flinn Fagg
City Manager: Justin Clifton
ATTACHMENTS:
1. Updated Rate Proposal from PSDS (Dated 6/6/22)
2. Vacation Rental Property Solid Waste Service Fact Sheet (Prepared by PSDS)
3. Solid Waste Rate Comparison (Prepared by City Staff)
4. Survey of Coachella Valley Solid Waste Franchise Practices (Prepared by PSDS)
5. Implementation Plan (Prepared by PSDS)
6. Draft Franchise Agreement (no changes from 5/26/22 document)
7. Link to May 26, 2022 Staff Report and Attachments
Item 3B - 4
ATTACHMENT #1
Updated Rate Proposal
from PSDS
Item 3B - 5
4690 East Mesquite Avenue | P.O. Box 2711 | Palm Springs, CA 92263 | 760-327-1351 June 6, 2022
Mr. Flinn Fagg
Deputy City Manager
Ms. Tracy Sheldon
Interim Sustainability Director
City of Palm Springs
3200 East Tahquitz Canyon Way
Palm Springs, CA 92263
Via Electronic Mail
Original Hand-Delivered
Dear Mr. Fagg and Ms. Sheldon:
RE: UPDATED RATE PROPOSAL
This letter amends our Rate Proposal dated February 1, 2022.
BACKGROUND
The City’s advisor on solid waste matters, Sloan, Vazquez, McAfee (“SVM”), evaluated our Rate Proposal, the findings of which were contained in an April 11, 2022 draft report included in the May 26, 2022 City Council meeting agenda packet.
In its report, SVM made findings regarding annual rate revenue by comparing the following:
(1) The ‘Computed Annual Rate Re venue’ ($15,076,538) being the product of individual proposed rates multiplied by the number of service units; compared to, (2) The ‘Rate Revenue Requirement’ ($14,763,634) being the sum of:
a. Projected 2021/2022 rate revenue ($12,130,921),
b. Rate revenue from 2022/2023 CPI adjustment ($551,500), and c. Rate revenue from SB 1383 Budget ($2,081,213).
We consider the Rate Revenue Requirement to be a ‘target’ for rate setting purposes.
Item 3B - 6
Mr. Flinn Fagg & Ms. Tracy Sheldon June 6, 2022
Re: UPDATED RATE PROPOSAL