RESOLUTION NO. 2020-111
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE CITY
MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO AND SCI CONSULTING
GROUP (SCI) FOR CANNABIS MONITORING AND FINANCIAL AUDIT
SERVICES
WHEREAS, on May 1, 2019, the Mayor and City Council directed staff to prepare and distribute a Request for Proposal (RFP) for Cannabis Monitoring and Financial Audit Services; and
WHEREAS, the City received seven (7) proposals from a wide range of consultants; and WHEREAS, the written proposals were evaluated by a selection committee comprised of City staff representing the Community & Economic Development Department; and selection committee due to its expemence and
development, implementation and enforcement.
BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.
SECTION 2. The City Manager is hereby authorized and directed to execute a Professional Services Agreement with SCI Consulting Group (SCI) attached hereto as Exhibit "A", in an amount not to exceed $419,000.00 for a term ending December 30, 2022 with two (2) one-year extensions.
SECTION 3. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.
SECTION 5. Effective Date. This Resolution shall become effective immediately.
APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 3 day of June, 2020.
John Valdivia, Mayor
City of San Bernardino
Attest:
ove achan
Genoveva Rocha, CMC , Acting City Clerk
Approved as to form:
P. Tre
for Sonia Carvalho, City Attorney
CERTIFICATION
STATE OF CALIFORNIA)
COUNTY OF SAN BERNARDINO) SS
CITY OF SAN BERNARDINO)
I, Genoveva Rocha, CMC, Acting City Clerk, hereby certify that the attached is a true co the flourion No. 2020-111, adopted at a regular meting held on the 3' day of June 2020 Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ
IBARRA
FIGUEROA
SHORETT
NICKEL
RICHARD
MULVIHILL
WITNESS my hand and official seal of the City of San Bernardino this 4* day of June 2020. -Genoveva Rocha, CMC, Acting City Clerk
PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO
AND SCI CONSULTING GROUP
and collectively as the "Parties."
RECITALS
A. City is a public agency of the State of California and is in need of professional services for the following project:
Cannabis Monitoring and Firancial Audit Services (hereinafter referred to as "the Project").
Consultant is duly licensed and has the necessary qualifications to provide such services.
C. The Parties desire by this Agreement to establish the terms for City to retain Consultant to provide the services described herein.
AGREEMENT
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
Incorporation of Recitals. The recitals above are true and correct and are hereby incorporated herein by this reference.
Scope or services iteshed hered as thibit ovi Services. Consultant shall provide the City with the services described in the Professional Practices. All professional services to be provided by Consultant pursuant to this Agreement shall be provided by personnel identified in their proposal. provide any services under this Agreement.
4. Compensation.
Subject to paragraph 4(b) below, the City shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit "A." 1 b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of $419,000.00. This amount is to cover all related costs, and the City will not pay any additional fees for printing expenses. Consultant may submit invoices to City for approval. Said invoice shall be based on the total of all Consultant's services which have been completed to City's sole satisfaction. City shall pay Consultant's invoice within forty-five (45) days from the date City receives said invoice. The invoice shall describe in detail the services performed and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order, where applicable, on all invoices.
5. Additional Work. If changes in the work seem merited by Consultant or the City, and informal consultations with the other party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the City by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall be prepared by the City and executed by both Parties before performance of such services, or the City will not be required to pay for the changes in the scope of work. Sucl amendment shall not render ineffective or invalidate unaffected portions of this Agreement.
6. Term. This Agreement shall commence on the Effective Date and continue through January 30, 2023, with Two (2) written one year extensions unless the Agreement is previously terminated as provided for herein."
7. Maintenance of Records: Audits.
a. Records of Consultant's services relating to this Agreement shall be maintained in accordance with generally recognized accounting principles and shall be made available to City for inspection and/or audit at mutually convenient times for a period of four (4) years from the Effective Date.
Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years from the date of final payment under the contract for inspection by City.
8. Time of Performance. Consultant shall perform its services in a prompt and timely manner and shall commence performance upon receipt of written notice from the City to proceed. Consultant shall complete the services required hereunder within Term.
Delays in Performance.
Neither City nor Consultant shall be considered in default of this other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint.
b Should such circumstances occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party 2 describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement.
10. Compliance with Law.
Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state, federal and local government, including Ca/OSHA requirements.
b. If required, Consultant shall assist the City, as requested, in obtaining and maintaining all permits required of Consultant by state and local regulatory agencies.
Standard of Care. Consultant's services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions.
Conflicts of Interest. During the term of this Agreement, Consultant shall at all times maintain a duty of loyalty and a fiduciary duty to the City and shall not accept payment from or employment with any person or entity which will constitute a conflict of interest with the City.
City Business Certificate. Consultant shall, prior to execution of this Agreement, obtain and maintain during the term of this Agreement a valid business registration certificate from the City pursuant to Title 5 of the City's Municipal Code and any and all other licenses, permits, qualifications, insurance, and approvals of whatever nature that are legally required of Consultant to practice his/her profession, skill, or business.
14. Assinment and Subconsultant. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination.
Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. Nothing contained herein shall prevent Consultant from employing independent associates and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder.
15. Independent Consultant. Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant shall become an employee of City. The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from City as herein provided.
16. Insurance. Consultant shall not commence work for the City until it has provided evidence satisfactory to the City it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section. 3 a. Additional Insured
The City of San Bernardino, its officials, officers, employees, agents, and volunteers shall be named as additional insureds on Consultant's and its subconsultants' policies of commercial general liability and automobile liability insurance using the endorsements and b. Commercial General Liability
(i) The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to (i) Coverage for Commercial General Liability insurance shall be at least as broad as the following:
Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent.
(iii) Commercial General Liability Insurance must include coverage for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injur
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX) exclusion deleted
(7) Contractual Liability with respect to this Contract (8) Broad Form Property Damage
(9) Independent Consultants Coverage
The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one excursi a cint ay there: (3) products/completed operations liability; or (4) contain any other The policy shall give City, its elected and appointed officials, officers, employees, agents, and City-designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured. 4 C. Automobile Liability
At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury anc roperty damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City.
Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).
The policy shall give City, its elected and appointed officials, officers, employees, agents and City designated volunteers additional insured status. (iv) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self insured retention.
d. Workers' Compensation/Employer's Liability
(i) Consultant certifies that he/she is aware of the provisions of section 3700 of the Calitornia Labor Code which requures every employer to be insured agains iability for workers' compensation or to undertake self-insurance in accordance with th provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement.
(ii) To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the "Workers' Compensation and Insurance Act," Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer's Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers' compensation coverage of the same type and limits as specified in this section.
e. Professional Liability (Errors and Omissions
At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. "Covered Professional Services" as designated in the policy must specifically include work performed under this Agreement. The policy must "pay on behalf of' the insured and must include a provision establishing the insurer's duty to defend.
5 £. Minimum Policy Limits Required
(i) The following insurance limits are required for the Agreement:
Combined Single Limit
Commercial General Liability $1,000,000 per occurrence / $2,000,000 aggregate for bodily injury, personal injury, and property
damage
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage
Employer's Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors and omissions)
(ii) Defense costs shall be payable in addition to the limits. (iii) Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement. g. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer's equivalent) signed by the insurer's representative and Certificate of Insurance (Acord Form 25- S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.
h. Policy Provisions Required
Consultant shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of the premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration.
The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant's policy is primary insurance and that any 6 insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss.
(іїї) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the All required insurance coverages, except for the professional ity, its oficials, offcers, employees, agents, i
Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
(v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.
Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant's indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
i. Qualifying Insurers
(i) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements:
(1) Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VIl and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
j. Additional Insurance Provisions
(i) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including, but not limited to, the provisions concerning indemnification.
(ii) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City 7 will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.
(iii) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (iv) Neither the City nor the City Council, nor any member of the City Council, nor any of the officials, officers, employees, agents or volunteers shall be personally responsible for any lability arising under or by virtue of this Agreement.
Subconsultant Insurance Requirements. Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the City that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the City as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.
17. Indemnification.
To the fullest extent permitted by law, Consultant shall defend (with counsel reasonably approved by the City, indemnify and hold the City, its elected and appointed officials, officers, employees, agents, and authorized volunteers free and harmless from any and all claims, demands, causes of action, suits, actions, proceedings, costs, expenses, liability, judgments, awards, decrees, settlements, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, (collectively, "Claims") in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's services, the Project, or this Agreement, including without limitation the payment of all consequential damages, expert witness fees and attorneys' fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to Claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.
Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, the City Council, members of the City Council, its employees, or authorized volunteers.
b. Additional Indemnity Oblizations. Consultant shall defend, with counsel of City's choosing and at Consultant's own cost, expense and risk, any and all Claims covered by this section that may be brought or instituted against the City, its elected and appointed officials, employees, agents, or authorized volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against the City, its elected and appointed officials, employees, agents, or authorized volunteers as part of any such claim, suit, action or other proceeding. Consultant shall also reimburse City for the cost of any settlement paid by the City, its elected and appointed officials, employees, agents, or authorized volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for the City's attorney's fees and costs, including expert witness fees. Consultant shall reimburse the 8 City, its elected and appointed officials, employees, agents, or authorized volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its elected and appointed officials, employees, agents, or authorized volunteers.
18. California Labor Code Requirements. Consultant is aware of the requirements of California Labor Code Sections 1720 et seg. and 1770 et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Consultant agrees to fully comply with such Prevailing Wage Laws, if applicable. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages, employment of apprentices, hours of labor and debarment of contractors and subcontractors.
If the Services are being performed as part of an applicable "public works" or "maintenance" project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such Services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. This Project may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant's sole responsibility to comply with all applicable registration and labor compliance requirements.
19. Verification of Employment Eligibility. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub-subconsultants to comply with the same.
Laws and Venue. This Agreement shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state, or federal court situated in the County of San Bernardino, State of California.
21. Termination or Abandonment
City has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days' written notice to Consultant. In such event, City shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. City shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of uch services, based on an amount mutually agreed to by City and Consultant of the portion o uch task completed but not paid prior to said termination. City shall not be liable for any cost other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work.
b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days written notice to City only in the event of substantial failure by City to perform in accordance with the terms of this Agreement through no fault of Consultant.
Attorneys' Fees. In the event that litigation is brought by any Party in connection with this Agreement, the prevailing Party shall be entitled to recover from the opposing Party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing Party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions, or provisions hereof. The costs, salary, and expenses of the City Attorney's Office in enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the purposes of this Agreement.
23. Responsibility for Errors. Consultant shall be responsible for its work and results under this Agreement. Consultant, when requested, shall furnish clarification and/or explanation as may be required by the City's representative, regarding any services rendered under thi Agreement at no additional cost to City. In the event that an error or omission attributable to Consultant's professional services occurs, Consultant shall, at no cost to City, provide all other services necessary to rectify and correct the matter to the sole satisfaction of the City and to participate in any meeting required with regard to the correction.
24. Prohibited Employment. Consultant shall not employ any current employee of City to perform the work under this Agreement while this Agreement is in effect.
25. Costs. Each Party shall bear its own costs and fees incurred in the preparation and negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein.
Documents. Except as otherwise provided in "Termination or Abandonment," abou, l or developed for the Froger pat, pon paymend in til for the servicos described in, this Agreement, be furnished to and become the property of the City.
Organization. Consultant shall assign David McPherson as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the City.
Limitation of Agreement. This Agreement is limited to and includes only the work included in the Project described above.
Notice. Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, 10 certified mail, return receipt requested, postage prepaid, addressed to the following addresses and shall be effective upon receipt thereof:
CITY: CONSULTANT:
City of San Bernardino SCI Consulting Group
/anir Tower, 290 North D Stree John Bliss
San Bernardino. CA 9240 4745 Mangels Blvd.
Attn: City Manager Fairfield, CA 94534
With Copy To:
City of San Bernardino
Community & Economic Development
201 North E Street, 3' Floor
San Bernardino, CA 92401
Att: Michael Huntley
30. Third Party Riphts. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant.
31. Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.
32. Entire Agreement. This Agreement, including Exhibit "A," represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each Party acknowledges that no representations, inducements, promises, or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This is an integrated Agreement.
Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement shall remain in full force and effect.
Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each Party to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void. 11 Non-Waiver.
performance or compliance by the other Party of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. 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. The waiver of any right or remedy with respect to any occurrence or event shall not be deemed a waiver of any right or remedy with respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver.
36. Time of Essence. . Time is of the essence for each and every provision of this Agreement.
37. Headings. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain, or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement.
38. Amendments. Only a writing executed by all of the Parties hereto or their respective successors and assigns may amend this Agreement.
39. City's Right to Emplov Other Consultants. City reserves its right to employ other consultants, including engineers, in connection with this Project or other projects.
40. Prohibited Interests. Consultant maintains and warrants that it has neither solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability.
For the term of this Agreement, no official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shal constitute one single Agreement
42. Authority. The persons executing this Agreement on behalf of the Parties hereto by dain hat they are dile auth are formalike but da is the proven on or this A greeties and that. [SIGNATURES ON FOLLOWING PAGE]
12 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO
AND SCI CONSULTING GROUP
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
CITY OF SAN BERNARDINO SCI CONSULTING GROUP
Approved By: I this
Ine ta che
Teri Ledoux
City Manager Nonu lu. Buss
Approved as to Form: Name
PRESIDENT
Gary D. Saenz Title
City Attorey
sted By:
for year tom, Mine e tenner
City Clerk
13 EXHIBIT A
14 PROPOSAL FOR THE
CITY OF SAN BERNARDINO
TO PROVIDE
CANNABIS MONITORING AND FINANCIAL AUDIT
SERVICES
JULY 17,2019
SUBMITTED BY:
SCIConsultingGroup
4745 MANGELS BOULEVARD
FAIRFIELD, CALIFORNIA 94534
PHONE 707.430.4300
FAX 707.430.4319
www.sci-cg.com
HUN GROUP
ACCOUNTANTS A ADVISORS
200 E, SANDPOINT AVE., SUITE 600
SANTA ANA, CA 92707
PHONE 949.777.8801
FAX 949.777.8850
www.pungroup.com
implifya
455 SHERMAN ST., SUITE 510
DENVER, CO 80203
PHONE 877.464.8398
www.simplifya.com
(This page intentionally left blank.)
SCIConsultingGroup
Public Finance Consulting Services
A. COVER LETTER
July 17, 2019
City of San Bernardino
290 North D Street
San Bernardino, CA 92401
Re: Cannabis Monitoring and Financial Audit Services, RFP No. F-19-53 Dear Purchasing Agent:
SCIConsultingGroup ("SCI"), The Pun Group LLP, and Simplifya (collectively known as the "SCI Team") are pleased to submit this proposal for cannabis-related services to the City of San Bernardino ("City") in response to its Request for Proposal for Cannabis Monitoring and Financial Audit Services. The SCI Team has reviewed the RFP and relevant information fully, and proposes to comprehensively provide all the services described in the Scope of Work.
PROJECT UNDERSTANDING We understand that at the November 2018 election, Ordinance MC-1503 (Measure X) and a Cannabis Tax Measure (Measure W) were approved by San Bernardino City voters, and accordingly, the City has been working to develop discretionary processes and administrative procedures, including monitoring and compliance oversight activities. The City seeks to engage a consulting team to provide cannabis -related services, including:
1. Facilitate yearly financial audits ensuring compliance with applicable laws
2. Monitor Compliance with City Ordinance, and State and Local Laws through Inspections
3. Background Checks
4. Plan Review Services
THE SCI TEAM Simply put, SCI will provide on-site inspections and monitor compliance with local and state laws, perform background checks and plan review; the Pun Group will facilitate annual financial audits and Simplifya will provide cloud-based, cannabis-related compliance tools.
CANNABIS SERVICE EXPERIENCE AND PHILOSOPHY SCI is widely recognized as one of the top local cannabis implementation consulting firms in California. SC! provides cannabis-related advice and broad consulting services to a variety of public agencies in California including community support analysis, ordinance development, fee studies, taxation, implementation, application process development, application review and scoring, monitoring and compliance inspections, business tax auditing, and community outreach.
SCi Consulting Group | 4745 Mangets Eld. | Fairheld, Califomia 94534 | (707; 430-4300 | www.sci-cg.com SCI maintains a network of relationships with government agencies and cannabis-related industry leaders, including attorneys, testing laboratories, cultivators, nursery owners, and retailers so we can provide expertise on all elements of the cannabis industry. SCI staff trains at the nation's premier cannabis educational entity, Oaksterdam University in Oakland, and jatted stateons learned and best practices regarding cannabis operations throughout the We are currently under contract to provide cannabis-related monitoring and auditing services to:
City of Coalinga City of San Carlos
City of Colfax City of Shasta Lake
City of Dunsmuir City of Woodlake
UNIQUE CANNABIS SERVICE PHILOSOPHY Our core philosophy and approach towards the implementation of local cannabis policy has been described as more broadly balanced than that of our competitors. Our philosophy is based upon our genesis as a solution-based are unsurpassed, we balance this with realistic approaches to real world challenge, fully understanding and supporting the City's challenging transition into a regulated and legal cannabis marketplace. Hence, SCI balances enforcement of local and state code along with the need to support viable cannabis businesses and to shepherd non-compliant businesses into the safe and regulated environment.
We have reviewed Attachment "Exhibit A Sample Agreement" and will sign it without modification. The proposal fee is valid for 180 days. We look forward to this opportunity in assisting the City of San Bernardino with this important project and stand ready to proceed. If you have any questions or require additional information, please do not hesitate to contact me.
I can be reached at (707) 430-4300 or via email at [email protected].
Sincerely,
John Bliss, P.E.
President
CrY OF SAN BERNARDING PAGE 2 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsulting Group, the Pun Group and Simplifya, July 2019
TABLE OF CONTENTS
B. Background and Project Summary ..
C. Methodology..
D. Staffing .......
E. Qualifications.......
F. Fee Proposal...
G. Insurance
H. Litigation.
I. Other Information ...........
J. Appendices Page 18
CRY OF SAN BERNARDINO PAGE 3 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES BY SCIConsulting Group, the Pun Group and Simplifya, July 2019 B. BACKGROUND AND PROJECT SUMMARY
PROJECT UNDERSTANDING
We understand that at the November 2018 election, Ordinance MC-1503 (Measure X) and a Cannabis Tax Measure (Measure W) were approved by San Bernardino City voters, and accordingly, the City has been working to develop discretionary processes and administrative procedures, including monitoring and compliance oversight activities.
The City seeks to engage a consulting team to provide cannabis-related monitoring compliance services, including:
1. Facilitate annual financial audits ensuring compliance with applicable laws
2. Provide technical and policy expertise and cannabis compliance
3. Monitor compliance with City Ordinance, and State and Local laws through onsite facility inspections for each cannabis business
4. Provide plan check services
5. Conduct background checks
KNOWLEDGE OF SAN BERNARDINO CoUNTY We have worked extensively throughout San Bernardino County and are providing, or have provided, consulting and engineering services to many public agencies in San Bernardino County including:
City of Colton West Valley Mosquito & Vector Control District San Bernardino County Fire District CalFire
Similarly, the Pun Group is reputable for its government and nonprofit practice in California. We currently provide professional services for cities such as Bell, Cerritos, Culver City, Gardena, Huntington Park, Industry, Lakewood, Monterey, Pomona, San Bernardino, Stockton and several other cities. Accordingly, we have a deep understanding of the current demographic and the economic environment, and the local laws and regulations.
KNOWLEDGE OF THE CITY OF SAN BERNARDINO The Pun Group is currently the Auditor for the City of San Bernardino. (Please refer to "I. Other Information" for additional content on this We believe our expert knowledge of the cannabis industry, coupled with our broad experience providing municipalities with regulation, revenue and administration consulting services, will serve the City well. We have also proposed an additional optional task, "Provide On-going Non-Compliant Businesses Mitigation Services" which is described in Section I.
CITY oF SAN BERNARDING PAGE 4 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 C. METHODOLOGY
PROJECT MANAGEMENT
The SCI Team will conduct a project kick-off meeting with City staff to establish project priorities and goals, communication protocols and timelines. Further, the SCI Team will gather and review all applicable information needed to perform the required tasks. The SCI Team will work with City staff to develop detailed processes including checklists, reports and other documentation. The SCI Team is well-experienced drafting decision documents including administrative decisions and staff reports/resolutions for public hearings, as well as presenting at public hearings, and will perform the following tasks:
1. Financial Audits: Conduct Annual Audits; Confirm Sales and Inventory Compliance; and Ensure Vendor Compliance with Business Tax Reporting, including Tax Returns
The SCI Team, led by the Pun Group for these tasks, will provide comprehensive annual cannabis audit and tax verification services, including documentation and reporting, in order to ensure that the City receives full payment of all local cannabis-related taxes, including Measure W taxes, and ensuring compliance with applicable laws.
The desired services to be performed for each legally operated cannabis facility in the City include but are not limited to:
• Review cannabis business tax returns submitted by the business and collected by the City and compare to each business's records for the time period identified by the City to determine:
Mathematical accuracy and timeliness of gross receipts returns filed with the City:
• Trace and verify the gross receipts reported on the
quarterly gross receipts returns prepared by the business to gross receipts recorded in the business's accounting records to verify that these were in accordance with the City's regulations;
• Verify compliance with San Bernardino Municipal Code.
Reasonableness of reported revenues of the cannabis businesses by performing additional procedures necessary to reach a conclusion.
Evaluate consistency between gross receipts and other information reported on financial statements to what was reported to the California Department of Tax and Fee Administration for sales and use tax, cannabis excise tax, and/or cultivation tax. In addition, evaluate consistency CITY OF SAN BERNARDINO PAGE 5 oF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES BY SCIConsultingGroup, the Pun Group and Simplitya, July 2019 between gross receipts reported on financial statements to gross receipts reported to the City.
The auditor shall have access to examine any of the following records or books, whenever necessary, to ascertain the amount of any tax due, as required by San Bernardino Municipal Code.
• Any point of sale (POS) inventory control and reporting system with the following capabilities:
• Accurately documents the present location, amounts, and descriptions of all cannabis goods for all stages of the growing, production, manufacturing, laboratory testing, distribution processes, sale, transfer, purchase, receipt, and delivery of cannabis goods, where applicable;
• Produces electronic shipping manifests, tracks all cannabis inventory in possession of the cannabis business,
promptly identifies any discrepancy in the stock, and
tracks cannabis from the customer back to its source;
• Produces historical transactional data for review by the City.
Legible, clear, adequate, and accurate books, records, and documentation maintained on the premises for a minimum of seven years, that demonstrates that all cannabis goods have been obtained from, and are provided to, other licensed cannabis businesses, and that details all the revenues and expenses, and A complete set of books of account, invoices, copies of orders and sales, shipping instructions, bills of lading, weigh bills, bank statements including cancelled checks and deposit slips and all other records necessary to show fully the business transactions of the cannabis business.
Provide subject matter expertise and assistance to City staff regarding interpretations of the San Bernardino Municipal Code and assist with questions that may arise from the imposition of business license taxes.
Following the completion of a business license tax audit of each cannabis facility, the auditor shall issue all reports to the City, in accordance with applicable standards from generally accepted auditing standards (GAAS).
CITY OF SAN BERNARDINO PAGE 6 OF 18
PROPOSAL FOR CANNABIS MONITOPING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 The auditor's report for each cannabis business license tax audit shall, at a minimum, include the following information:
Overall conclusion of whether or not the cannabis business paid all required business license taxes and fees for the time period specified. If the auditor determines that a business has remitted the incorrect business license tax amount to the City, the auditor shall calculate the amount of the under/over payment and any applicable penalties pursuant to San Bernardino Municipal Code and include the amounts with the report. The calculation shall be supported by documents obtained during the audit that will allow the City to initiate collection actions against, or provide tax refunds for, cannabis businesses.
• Any exceptions, errors, or areas of noncompliance that were identified as a result of the procedures performed. This includes any significant deficiency in the design or operation of the internal control structure, including but not limited to the following areas: cash handling, inventory control, point of sale systems, and any other areas that the auditor deems necessary for purposes of accurately reporting business license taxes due to the City;
• Express an opinion regarding the taxes remitted to the City by the cannabis business, or state that an opinion cannot be expressed in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report.
• Cannabis businesses will be provided the opportunity to challenge audit findings by the City through a formal appeal process, pursuant to San Bernardino Municipal Code. On a case by case basis, the City may require the auditor to defend a determination of under reporting or under payment of taxes or other non-compliance during administrative hearings or other forums of appeal. Whenever the City deems it necessary, the auditor shall attend administrative hearings or other forums of appeal when defending a determination of under reporting or under payment of taxes or other non-compliance.
2. Technical and Policy Expertise and Cannabis Compliance The SCl Team will provide the City with ongoing technical and cannabis policy expertise. The SCI team will monitor the evolving State regulations and provide policy updates and industry best practices to the City and cannabis businesses to ensure continued compliance with State and local law.
CITY OF SAN BERNARDING PAGE 7 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES BY SCIConsulting Group, the Pun Group and Simplifya, July 2019
3. Onsite Facility Inspections
SCi will provide comprehensive on-site facility inspections for each commercial cannabis business and report to the City the results of inspections relative to the levei of Health and Safety regulations consistent with City's local regulations and ordinances, staff-directed priorities and preferences, and State regulations. SCI monitoring and compliance efforts will satisfy the most rigorous requirements and at the same time, provide a successful platform for the cannabis business owner. SCI will provide the City with a written report detailing the results of the on-site inspection. SCI will provide follow-up support to the City and cannabis businesses to provide recommendations to address and correct any deficiencies.
Among the elements and activities SCI will monitor are:
» Product: Inventory management, seed-to-sale tracking, packaging and labeling verification, product testing protocols, etc.
» Record Retention: Review and confirm employee records, business records, tax information records, transportation manifests, video surveillance retention, equipment certifications, training programs and safety programs.
• Security and Surveillance: Verify video surveillance equipment, camera placement, alarm systems, locks, facility access control, security guards, occupational badges, and other security and safety processes. • Facility Compliance: Verify facility's operational compliance including waste management, odor control, pesticide and solvent storage, signage, cash handling procedures, product shipment/receival procedures, etc.
» Video Monitoring (optional): Monitor facilities remotely through video surveillance monitoring.
Deliverables:
• Conduct onsite facility inspections
• Provide written report detailing the findings of inspections Provide follow-up support and recommendations
• Conduct remote video monitoring (optional)
Timeline:
If conducting annual inspections, the inspections will take place mid-year for each cannabis facility. If additional inspections are requested, they will be scheduled proportionately throughout the year.
4. Plan Check Services
The SCI Team will perform Plan Check reviews as a part of Applicant Tenant Improvement Submittals and make recommendations as needed to comply with local and State laws and regulations.
CITY OF SAN BERNARDINO PAGE 8 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES BY SC ConsultingGroup, the Pun Group and Simplifya, July 2019 Timeline:
Plan checks will be completed as needed within two weeks of receiving the documentation.
Deliverables:
• Plan check services as needed, including reporting
5. Background Checks
The SCI Team will conduct background checks for the primary business owners and partners that are listed on the application and on an as needed basis for employees working at the business.
Timeline:
Plan checks will be completed as needed within a month of receiving the request.
Deliverables:
• Conduct Background Checks
D. STAFFING
If selected for this project, Kyle Tankard, Senior Consultant and Cannabis Business Leader at SCI, will serve as the project leader and day-to-day project manager for the SCI portion of the work including inspections and monitoring, plan checks and background checks. Chris Coulter and John Bliss will support Kyle's efforts. Ken Pun, of the Pun Group, will lead the financial audit work with support from Vanessa Burke, John Vardaman, of Simplifya, will ensure the auditing and inspection tools are efficient and effective.
PROJECT TEAM
KYLE TANKARD, CANNABIS CONSULTANT SCI
Kyle Tankard contributes experience in local cannabis policy, as well as local funding measure formation, feasibility and financial analysis services for public, private and non-profit sector organizations. Mr. Tankard has assisted municipalities with local cannabis implementation including taxation and cost recovery, health and safety regulations, and monitoring and compliance of cannabis in California. His expertise extends to include public opinion research projects, media and community educational outreach, data analysis and GIS mapping and database management. Mr. Tankard graduated from the University of California, Santa Cruz with a Bachelor of Arts in Environmental Studies with an emphasis on geographic information systems (GIS).
CHRIS COULTER, CANNABIS CONSULTANT SCI
Chris Coulter contributes experience in local cannabis policy, funding measure feasibility, data analysis, and financial analysis services for public, private and non-profit sector organizations to the SCI Team. Mr. Coulter specializes in rate study analysis and Proposition 218 formation of benefit assessment districts, community facility districts and tax rate structures. In addition, he is experienced in spatial and regional analysis, opinion research, public outreach, demographic CITY OF SAN BERNARDINO PAGE 9 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES BY SCIConsulting Group, the Pan Group and Simplifys, July 2019 studies and ballot measure development. Mr. Coulter is a graduate of the University of California at Berkeley with a Bachelor of Arts degree in English Literature.
JOHN BLISS, M.ENG. P.E. PRESIDENT. SCI
John Bliss, a professional engineer and President of the SCI Team, specializes in special tax consulting, assessment engineering, special and general benefit analysis, crafting legally compliant, robust engineer's reports, assessment administration, cost estimations and budgeting, database design and implementation, regulatory compliance, and revenue measure formations. He has over 16 years of experience in this field of expertise. Mr. Bliss graduated from Brown University with a bachelor's degree in Engineering and holds a master's degree in Civil Engineering from The University of California, Berkeley, where he was a Regent's Scholar. He is a licensed professional Civil Engineer in the State of California and is a LEED accredited professional.
KENNETH H. PUN, CPA, CGMA THE PUN GROUP
With over nineteen years of public accounting experience in the State and Local Government sector, Mr. Pun is the Managing Partner and an Assurance Partner at the Firm. Mr. Pun specializes in audits and management consulting for governmental organizations and has served as the Contract Deputy Finance Director for the City of San Marino in 2017. Mr. Pun also serves as the Chair of the California Society of CAs Governmental Auditing Accounting Committee. Mr. Pun will actively act as the Engagement Partner with the assigned task of directly overseeing the Engagement Team, engagement planning and fieldwork, review for quality, and approve work papers and reports. Mr. Pun will be responsible for the timely delivery of the Financial Audit services for the City of San Bernardino.
VANESSA I. BURKE, CPA, CPFO THE PUN GROUP
Vanessa Burke is an Assurance and Consulting Services Partner with 30 years of experience in providing audit and advisory services to local government agencies including cities, public pension plans, community colleges, college foundations, hospitals, school districts, county offices of education, special districts, and joint powers insurance authorities. not-for-profit organizations, and federal and state agencies. Vanessa will act as the Concurring Partner and provide second partner review of significant high-risk areas, audit reports, and in resolution of significant accounting, auditing, and reporting matters.
JOHN W. VARDAMAN, III SIMPLIFYA
John W. Vardaman, Ill is General Counsel and Chief Compliance Officer of Simplifya, a cannabis compliance software company that works with state-legal cannabis companies and financial institutions that serve them. Prior to joining Simplifya, Mr. Vardaman was General Counsel of Hypur, which provides AML/BSA compliance tools for financial institutions serving the cannabis industry.
From 2006 to 2016, Mr. Vardaman worked at the Department of Justice, first in the Office of Legal Policy, and then as Assistant Deputy Chief in the Asset Forfeiture and Money Laundering Section. In 2014, Mr. Vardaman drafted the DOJ policy regarding marijuana banking, known as the Cole Memorandum, which set forth enforcement parameters designed to enable banks to permissibly service marijuana-related businesses.
From 2001 to 2006, Mr. Vardaman served as Special Assistant to the General Counsel at the Department of the Treasury where he worked on a variety of money laundering and terrorist financing issues following the 9/11 terrorist attacks. From 2003-2004, Mr. Vardaman served as CITY OF SAN BERNARDINO PAGE 10 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 Associate General Counsel to the Coalition Provisional Authority in Baghdad, Iraq, where he oversaw an international campaign to locate and repatriate assets of Saddam Hussein and the Iraqi regime held around the world.
Mr. Vardaman was the recipient of the Joint Civilian Service Commendation Award from Department of Defense in 2004, and the Attorney General's Award for Distinguished Service from the Department of Justice in 2015.
Mr. Vardaman received his undergraduate degree from Vanderbilt University in 1993, and his law degree from Georgetown University in 1997.
E. QUALIFICATIONS
Established in 1985, SCI Consulting Group is a recognized public finance and urban economic consulting firm for public, nonprofit and private sector organizations. We leverage our limits the time and resources of our clients
REFERENCES FOR SCI
Some of SCI's most current and recent similar cannabis-related services were provided to:
City of Coalinga
Cannabis Services: Implementation Planning, Community Outreach and Stakeholder Engagement, Ordinance Review, Regulatory Fees and Monitoring and Compliance
Status: Ongoing monitoring and compliance
Project Start: September 2016
Approx. Budget: $10k-$20k per year
Contact: Sean Brewer, Community Development Director
[email protected]: (559) 935-1533, ext. 124
Key Staff: Arcelia Herrera, Cannabis Consultant
City of Shasta Lake
Cannabis Services: Implementation Planning, Community Outreach and Stakeholder Engagement, Ordinance Development and Review, Applicatior Process and Fees, Regulatory Fees and Tax Measure
Status: Ongoing monitoring and compliance
Project Start:
Approx. Budget: $15k-$30k per year
Contact: John Duckett, City Manager
[email protected]: (530) 275-7427
Key Staff: Kyle Tankard, Cannabis Consultant
CITY OF SAN BERNARDINO PAGE 11 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 City of Colfax
Cannabis Services: Application Review, Monitoring and Compliance Inspections and Financial Audits
Status: Ongoing
Project Start: February 2019
Approx. Budget: $60k
Contact: Wes Heathcock, City Manager
[email protected]: (530) 346-2313
Key Staff: Kyle Tankard, Cannabis Consultant
City of Woodlake
Cannabis Services: Ordinance Development and Review, Application Process and Fees, Regulatory Fees and Monitoring and Compliance
Status: Ongoing monitoring and compliance
Project Start:
Approx. Budget:
Contact:
[email protected]: (559) 564-8055
Key Staff: Arcelia Herrera, Cannabis Consultant
City of West Hollywood
Cannabis Services: Application Process, Scoring Methodology, and Application Review
Status: Ongoing
Project Start: June 2018
Approx. Budget: $100k
Contact: John Leonard, Community and Legislative Affairs Manager [email protected]; (323) 848-6446
Key Staff: Chris Coulter, Cannabis Consultant
Since 2016, SCI has been widely recognized as one of the top local cannabis implementation consulting firms in California. Additional clients for cannabis projects include:
City of Avalon City of San Carlos
City of Alameda City of Santa Ana
City of Davis City of Vallejo
City of Encinitas City of Yreka
City of Goleta County of Alameda
City of La Mesa County of San Luis Obispo
City of Lompoc County of Tuolumne
City of Richmond
Aside from our administrative staff, every employee is a database expert. We have developed in house, specialized programs to improve our levy administration services. We are also GIS and mapping experts. We invite you to compare, or better yet, test our database and technical expertise with the staff from any other firm.
CITY OF SAN BERNARDIND PAGE 12 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES BY SCIConsultingGroup, the Pun Group and Simplifya, July 2019 The City of San Bernardino filed a petition for Chapter 9 bankruptcy protection with the United States Bankruptcy Court in August 2012, the 3rd largest municipal bankruptcy at the time. As of June 15, 2017, the City is officially out of bankruptcy. However, the City projected a structural deficit of approximately $1.2 million (revenues were $2 million below projections; utility users tax revenue was overestimated by $1.5 million; water fund revenue was $674,000 under the adopted budget amount; and there was a substantial deficit in the gas fund) for the fiscal year 2019/2020.
A marijuana business tax was approved by the voters on November 6, 2018, approved an ordinance imposing a Cannabis Business Tax of up to $10 per square foot for cultivators and up to 6% of gross receipts on other businesses operating in the City of San Bernardino, estimated to initially raise between $810,000 to $2,475,000 annually.
With the superb services provided, the City of San Bernardino engaged The Pun Group to provide audit service for the years ended June 30, 2014, through 2017 due to the early termination of the contract from its predecessor firm.
Fiscal Stability Statement
SCI has been successfully and profitable in business for over 34 years, with sustained growth and has yet to implement a reduction in force plan. Tax returns can be made available upon request.
F. FEE PROPOSAL
In consideration for the work accomplished, as outlined in this proposal, SCI shall be compensated as detailed below:
Annual Financial Audits $ 6,500-$10,000 per audit
Technical and Policy Expertise and No additional charge Cannabis Compliance
*Periodic Facility and Operations Inspections $ 2,500 per inspection Plan Check $ 200 per hour
Background Check $ 600 per check
**On-going Non-Compliant Mitigation Services $ 6,000 per year (All costs associated with this task to be fully reimbursed to City through regulatory fees; *costs for video monitoring available upon request, #* can be fully reimbursed to the City through cannabis fees/taxes)
Hourly rates are shown in the table below:
CITY OF SAN BERNARDINO PAGE 13 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsulting Group, the Pun Group and Simplifya, July 2019 SCI Staff Hourly Rate
John Bliss, President $ 250
Kyle Tankard, Cannabis Consultant $ 200
Chris Coulter, Cannabis Consultant $ 200
Support Staff $ 65
The Pun Group Staff Hourly Rate
Ken Pun, Managing Partner $ 250
Vanessa Burke, Partner $ 250
Incidental costs incurred by for the purchase of travel and other out-of-pocket expenses will be reimbursed at actual cost, with the total not to exceed $5,000 without prior authorization from CITY OF SAN BERNARDINO PAGE 14 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 G. INSURANCE
SCI has reviewed the insurance requirements as described in "Exhibit A" and can fully comply.
ACORD DATE (MOONYYY
CERTIFICATE OF LIABILITY INSURANCE
4/24/2018
THIS CERTIFICATE IS ISSUED AB A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS
CERTICATE DOES NOT AFFRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIPICATE OF INSURANCE DOER NOT CONSTTTUTE A CONTRACT BETWEEN THE ISSUNG INSURERS) AUTHORIZED REPRESENTATIVE OR PRODUCER AND THE CERTIFICATE HOLDER.
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COVERAGES CERTIFICATE NUMBER: 1113337489 REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWTHSTANDING ANY REQUIEMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
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TYPE OF WESURANCE POLICY NUMIFE I
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CARTS ASDE 151.000,000
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PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES Br SCIConsulting Group, the Pun Group and Simplifya, July 2019 H. LITIGATION
The SCI Team has no claims filed by or against our team over the last five years.
I. OTHER INFORMATION
Demonstration of Record of Staffing Tasks Efficiently and Completing Projects on Time and Within the Allocated Budget (SCI Consulting Group)
Low Overhead/Low Cost Provider
We understand levy administration services must be provided cost effectively, particularly to keep the City's costs within budget constraints. For this reason, we maintain the lowest overhead and leanest structure in the industry. While other firms maintain multiple offices, hierarchical administration and much higher overhead costs, we operate more effectively and with much lower overhead out of one central office located in an economically favorable business area.
Unmatched Responsiveness and Customer Service
SCI invites you to call our toll-free property owner assistance line at (800) 273-5167 and compare our level of service and responsiveness with any other firm. We answer calls directly with knowledgeable levy administration staff. We also provide the highest level of customer service and responsiveness for all our clients, including responding to all of our clients within the same day.
Demonstration of Record of Staffing Tasks Efficiently and Completing Projects on Time and Within the Allocated Budget (The Pun Group)
Our Commitment to Quality
The Pun Group is committed to providing piece of mind to our clients by providing the highest quality of professional services. The Firm is a member of the AICPA Governmental Audit Quality Center and has demonstrated our commitment to audit quality, including those performed under Government Auditing Standards and the Uniform Guidance. In addition, we are a recipient of the Single Audit Resource Center's Award for Excellence for 2017. This award is based on the positive feedback results from our clients in an independent survey, demonstrating our Firm's highest commitment to quality and client satisfaction. To further enhance our performance and quality, the Firm continually invests substantial resources in human capital and technology, incorporating the use of Artificial Intelligence technology into our audit process.
Recognized Leader in the Governmental Industry
The Pun Group is a proven leader in professional services to the government sector. Currently, The Pun Group is the firm of choice for 40 cities, 45 special districts, 5 transportation agencies, and 10 medical centers throughout California. Since 2012, both bankrupted cities, Stockton and San Bernardino, selected The Pun Group as their primary auditor because we had the capacity, knowledge, and experience to assist them in auditing their complicated transactions.
GITY OF SAN BERNARDINO PAGE 16 OF 18
PROPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVICES By SCIConsultingGroup, the Pun Group and Simplifya, July 2019 As a result, our engagement team was able to catch up and complete their long overdue audits within a short timeframe. We would credit part of our success to our professional's participation with various professional organizations, bringing to our clients unparalleled knowledge of regulatory agencies and standard setters such as AICPA, FASB, GASB, GAO, ASCPA, CaICPA, GFOA, League of California Cities, among many others. Such experience is critical to address emerging accounting and auditing issues within the government environment.
The Pun Group and all key engagement team members are licensed by the State of California to practice as Certified Public Accountants, and meet the Continuing Professional Education requirements under U.S. GAO's Goverment Auditing Standards to perform the proposed audits.
Description of Community Involvement
At SCI, we are proud to actively participate and provide support to our local community. We show our corporate responsibility in various ways, including the following:
• Annual monetary donations to over two dozen nonprofit entities • Membership in the local Chamber of Commerce
• Employee volunteer days during which we participate in projects for Habitat for Humanity, the local food bank, and other charitable organizations • Energy Star recipient for an energy efficient office
In 2005, SCI Consulting Group established the "Joseph Shilts Memorial Scholarship" in honor of our founder Joseph Shilts. This scholarship is awarded annually to a number of graduating high school students in our local community who have applied, interviewed, and will be studying engineering in college.
Description of Previous Involvement with the City
The Pun Group is currently the Auditor for the City of San Bernardino. The City of San Bernardino filed a petition for Chapter 9 bankruptcy protection with the United States Bankruptcy Court in August 2012, the 3rd largest municipal bankruptcy at the time. With the superb services provided, the City of San Bernardino engaged the Firm to provide audit service for the years ended June 30, 2014, through 2017 due to the early termination of the contract from its predecessor firm. Mr. Kenneth H. Pun has been assigned as the engagement partner no facilitated the audit process since then. The engagement team has successfully complete he audits and issued the audit reports for the years ended June 30, 2014 and 2015 within th one-year timeframe.
Conflict of Interest Statement
The SCI Team has no known past, ongoing or potential conflicts of interest for working with the City, performing the Scope of Work or any other service for this Project Additional Information
Employment Policies
The SCI Team does not and shall not discriminate against any employee in the workplace or against any applicant for such employment or against any other person because of race, CITY OF SAN BERNARDINO PAGE 17 OF 18
PROPOSAL FOR CANNABIS MONTORING AN FINANCIAL AUDIT SERVICES BY SCIConsultingGroup, the Pun Group and Simplifya, July 2019 religion, sex, color, national origin, handicap, or age or any other arbitrary basis. The SCI Team ensures compliance with all civil rights laws and other related statutes.
Additional Scope of Work
In the event the City elects to request optional, additive scope of work, the SCI Team will work with the City to negotiate compensation for these additional tasks and execute an Addendum to the agreement for these additional services.
Responsibilities of City
The SCI Team will make every effort to minimize the workload on the City, but may need assistance, iteratively, with project overview and history, scheduling and budgeting.
Coordination With City
The SCI Team will coordinate services with City staff through frequent and concise communications including face-to-face meetings, telephone calls and e-mail.
J. APPENDICES
Optional Proposed Scope: Provide On-Going Non-Compliant Businesses Mitigation Services
The mitigation of non-compliant businesses is one of the more challenging aspects of any commercial cannabis implementation, and is essential to the long term success for any commercial cannabis compliance business environment. Although, code compliance and law enforcement are the most critical elements of efforts to address non-compliant businesses, other mitigation services can be very effective, save costs and reduce community disruptions.
The SCI Team will work closely with the City including code compliance, law enforcement, legal, finance and others, to develop and implement a Non-Compliant Business Mitigation Policy.
Most likely the policy will include strategies and processes to communicate with and educate non-complaint businesses with the goal to affirmatively and safely shepherd them into compliance.
Deliverables:
• Develop and implement Non-Complaint Businesses Mitigation Policy • Establish, maintain and report on third-party anonymous tip-line (website, phone line, etc.)
• Provide monthly non-compliant activity reports
• Conduct individual and workshop support to Non-Compliant Businesses CITY OF SAN BERNARDINO PAGE 18 OF 18
OPOSAL FOR CANNABIS MONITORING AN FINANCIAL AUDIT SERVIC 1 SCIConsulting Group, the Pun Group and Simplifya, July 20:
SCIConsultingGroup
Public Finance Consulting Services
AMMENDED FEE PROPOSAL
In consideration for the work accomplished, as outlined in this proposal, SCI shall be compensated as detailed below:
Technical and Policy Expertise and No additional charge Cannabis Compliance
Annual Financial Audits $ 5,000 per business
*Annual Facility and Operations Inspections $ 2,500 per business Plan Check $ 500 per business
(Estimated 2.5 hours)
Total Annual Fee $ 8,000 per business
Background Check $ 600 per check
**OPTIONAL: On-going Non-Compliant Mitigation Services $ 6,000 per year (All costs associated with this task to be fully reimbursed to City through regulatory fees; *costs for video monitoring available upon request; **can be fully reimbursed to the City through cannabis taxes)
Hourly rates are shown in the table below:
SCI Staff Hourly Rate
John Bliss, President $ 250
Kyle Tankard, Cannabis Consultant $ 200
Chris Coulter, Cannabis Consultant $200
Support Staif $ 65
The Pun Group Staff Hourly Rate
Ken Pun, Managing Partner $250
Vanessa Burke, Partner $250
Incidental costs incurred by for the purchase of travel and other out-of-pocket expenses will be reimbursed at actual cost, with the total not to exceed $5,000 per year without prior authorization from the City.
SCi Consulting Group | 4745 MangetiB.vd. |Fal-field.Caliomia 54534 | (707) 430-4300 | www.scicg.com