1 THIRD MODIFICATION OF AGREEMENT NO. 10071 (CCS)
This Third Modification of Agreement Number10071 (CCS) (“Third Modification”), entered into as of _________________(“Execution Date”), by and between the City of Santa Monica (“City”), a California municipal corporation, and Vector Airport Systems (“Vector”) is made with reference to the following:
RECITALS
A. On or about July 31, 2015 , the City and Vector entered into Agreement Number 10071 (CCS) (“Original Agreement”) for the administration of the Santa Monica Airport’s (“SMO”) landing fee program, including providing for the photo capture of aircraft operations, data management and report generation services, and for billings and collections. The Original Agreement includes compensation for Vector Airport Systems in an amount based on either 18% or 21% of gross monthly receipts, which depends on the gross revenue realized during a particular month. The Original Agreement also includes two one-year renewal options to extend the Original Agreement’s term on the same terms and conditions through FY2019-20.
B. On or about October 15, 2015, the City and Vector entered into a First Modification of Agreement Number 10017 (CCS) (“First Modification”) which amended the commencement date of the Original Agreement from July 31, 2015 to July 1, 2015.
C. On or about December 7, 2017, the City and Vector entered into Second Modification of Agreement Number 10017 (CCS) (“Second Modification”) which expanded the scope of services to be performed by Vector and increased the contract price for those additional services for a total contract price not to exceed $1,240,484.
D. The City and Vector now desire to further modify the Original Agreement to extend the contract term; include additional services to be performed by Vector, and to increase the contract price to pay for those additional services. Any terms or conditions not specifically amended or provided for herein shall have the meanings given to such terms and conditions as understood by the parties through their execution of the Original Agreement, First Modification, and Second Modification. The term “Agreement” where used in this Third Modification shall hereafter refer to the Original Agreement, as amended by the First Modification, Second Modification, and by this Third Modification.
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 6/30/2020
2 TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Agreement as follows:
1. Section 1 of the Agreement entitled “Term” shall be deleted in its entirety and replaced with the following paragraph:
“1. Term. This Agreement begins on July 1, 2015 and terminates on June 30, 2021 (“Term”) unless terminated earlier in the manner provided for in the Agreement or extended by the City as set forth herein. The City shall have four (4) one-year options to extend the Agreement Term for an additional year (“Option Year”). The exercise of an Option Year under this Agreement shall be at the City’s sole discretion. The City shall send Vector written notice of its intent to extend the Term of the Agreement by exercising an Option Year no less than 30 days prior to the expiration of the Term.”
2. Section 2 of the Agreement entitled “Vector Airport Systems Services” (as amended by section 1 of the Second Modification) shall be deleted and replaced with the following:
“ 2. VECTOR Services. VECTOR shall perform and provide to City all of the services (“Services”) described in Exhibit A-3 “Scope of Services”. VECTOR shall complete the Services in the manner set forth in, and in accordance with Exhibit B-3 “Budget”.”
3. Section 4 of the Agreement entitled “Compensation” (as amended by section 2 of the Second Modification) shall be deleted and replaced with the following:
“4. Compensation. The City shall compensate VECTOR for the Services performed under this Agreement and provided to the City in an amount that is based on either 18% or 21% of gross monthly receipts of gross revenue realized by the City for each month in the manner set forth in Exhibit B-3. Compensation paid to VECTOR for the final year of the Agreement Term, and for each Option Year if exercised by City, shall not exceed $105,000. The total amount of compensation paid to VECTOR during the entire Term of this Agreement and for all exercised Option Years shall not exceed $1,765,484.”
4. Exhibits A, A-2, B and B-2 of the Agreement are hereby deleted and shall be replaced and superseded by Exhibits A-3 and B-3, respectively. Copies of Exhibits DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 3 A-3 and B-3 are attached to this Third Modification and are incorporated into the Agreement.
5. Except as expressly modified by this Third Modification, all other terms and conditions of the Agreement shall be and remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Third Modification as of the date and year first written above.
ATTEST:
______________________________
DENISE ANDERSON-WARREN
City Clerk
APPROVED AS TO FORM:
______________________________
LANE DILG
City Attorney
CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________
RICK COLE
City Manager
VECTOR Corporation
#VENDOR
By: _______________________________
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 George S. Cardona
6/24/2020
Interim City Attorney
Pete Coleton Vector
6/30/2020
President
PC
6/30/2020
Interim City Manager
Lane Dilg
6/30/2020
Denise Anderson-Warren
City Clerk
4 Exhibit A-3
Scope of Additional Services
Contractor, Vector Airport Systems (VECTOR) shall perform and provide the following services to the City:
1. AIRCRAFT IDENTIFICATION EQUIPMENT: VECTOR is responsible the installation, maintenance, and management of existing onsite aircraft identification equipment.
2. THRESHOLD ID PODS: VECTOR’s installed system should be capable of immediately detecting activity beyond the threshold and relaying it to a real-time alert system with video capture and playback capabilities via the Vector Airport Portal. The system shall also provide the capability for airport staff to export video to an external storage device. The Threshold ID Pods will connect a directly to an electrical power source (120-volt AC) supplied by the contractor responsible for the City’s runway-shortening project. Should it ever become necessary to relocate the equipment installed under this Agreement, VECTOR shall develop a system deployment plan including proposed equipment locations and a price quote for relocating the equipment.
3. NETWORK: VECTOR will use the existing Airport internet connection to com municate data off-airport. VECTOR will furnish and install any additional equipment required to extend the network to the Threshold ID PODS.
4. CAPTURE: VECTOR will not require any additional infrastructure to install the systems. A single standard AC outlet in the network closet will be sufficient.
Vector will install some antenna components on the roof of the Airport Administration building and connect Ethernet cabling within the building.
5. CAPTURE: Capture and identify all fixed wing aircraft departures 24/7/365 and automatically feed these identified activities into VECTOR's airport portal for airport staff viewing and into Vector’s Fight Rev billing system.
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 5 6. CAPTURE: Accept biweekly data download from Airport's existing noise managem ent system, import this data into VECTOR's FlightRev software, and cross correlate this data with all aircraft activity data captured by VECTOR's three (3) existing aircraft tracking technologies.
7. BILLING: Use aircraft operation data to calculate charges, determine which aircra ft to bill/exempt, apply aircraft model/weight, and implement Airport's specific fee structure that might change from time to time.
8. BILLING: Identify the actual aircraft operator (not owner) for each aircraft and m ake sure that aircraft is included in an aircraft operator account within VECTOR's FlightRev system. Transfer aircraft when necessary as indicated by customer service interactions.
9. BILLING: Produce aircraft operator bills by the 10th of each month and mail or ot herwise deliver them to aircraft operators.
10. CUSTOMER SERVICE: Operate live aircraft operator support line (tollfree 888 line) and email customer support line during business hours (9am EST to 5pm EST).
11. CUSTOMER SERVICE: Operate a web-based Customer Self Service System that will allow aircraft operators to view aircraft charges, request invoice and state ment copies, and pay online by credit card.
12. CUSTOMER SERVICE: Track all interactions with aircraft operators (calls, mail, invoices sent, statements sent, payments) and all actions taken on aircraft operator accounts (aircraft transfers, invoice adjustments, address changes, aircraft model c hanges, based aircraft additions, other aircraft exemptions).
13. COLLECTIONS: Actively manage operator AR balances, identify operators whose accounts are becoming delinquent, send out reminder notices, make live payment reminder calls, make live collection calls, send out collections letters, provide AR reports to the Airport on a monthly basis depicting accounts that are more than 120 days delinquent, report potential bad debt balances and bankruptcies to the City. City at its own discretion will assume collection efforts against operators that are more than 180 days delinquent. Upon notice from the City, VECTOR must provide the City will all background information regarding the delinquent account including all pertinent communication between VECTOR and the aircraft operator. Delinquencies collected by the City will not be imposed the percentage due to VECTOR as specified in Exhibit B-3 Budget as long as those amounts are not paid into the Vector-run lockbox. The City will notify Vector of all amounts paid into other accounts so that Vector may maintain a proper accounting of AR balances in Vector’s billing/collection system.
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 6 14. REPORTS: Manage billing adjustments on a monthly basis and provide a report to City of all adjustments. City may either elect to review and approve adjustment s before they are made or simply allow Vector to approve adjustments and City may review adjustments after-the-fact.
15. PAYMENTS: Operate a lockbox system for the receipt of aircraft operating fee payments collected by VECTOR on behalf of the City. VECTOR will provide the City with monthly activity statements for collected fee payments which will include a collections report. The lockbox used may, at Vector’s discretion, be the combined airport lockbox propose most recently to the City and agreed to by the City. This is a change from the previous practice of using a lockbox dedicated to the City. The reasons for this change are outlined in the 2020 Vector proposal.
16. REMITTANCE: Setup an electronic transfer mechanism in order to quickly transfer funds to the City from the lockbox according to VECTOR's post-month remittance policy. VECTOR will request basic information for automatic remittance (ACH) from the City and notify the City when automatic remittances occur (usually 3-5 days after month-end). Remittance information and history will be contained in monthly Deposit Detail Report.
17. REMITTANCE: Perform post-month end transfers: remittance to City and collection fee payment for Vector after approval of Vector Collections Report. Notify City via e-mail of these transfers as they occur.
18. PAYMENTS: Receive payments in the City lockbox and allocate those payments to aircraft operator accounts and keep an accurate balance of charges, adjustments, and payments for each aircraft operator on a daily basis. Credit card payments, which are made via VECTOR's online customer self-service system, will be applied to customer accounts at least twice monthly. Pending credit card payments will be viewable by aircraft operators for their account via the online self-service system.
20. REPORTS: Report AR balances Payment/Allocation Deposit Details, Monthly Bil ling Details, and Aircraft Activity Capture details to City via emailed reports and vi a Vector's web-based airport portal. VECTOR will coordinate with City to determine how many users City will need to have access to the Vector Airport Portal and which City staff members should receive certain reports. VECTOR will make aircraft activity data available to City for at least 5 years via the airport portal.
21. REPORTS: The Vector Airport Portal allows for query searches for various reports. The most common reports are by airport, by month, all activities. Other queries allow filter by arrivals/departures, by weight, by engine type (piston, turbojet).
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 7 22. AUDIT: VECTOR will respond to any audit requests on-demand within 30 days but probably much sooner to help City get the information they need to verify VECTOR's performance in managing the City's Santa Monica Airport Landing Fee Program.
23. REPAIR: All systems owned by Vector or the City at the Airport will be continuously monitored by VECTOR’s automated systems and VECTOR will be alerted to any system failure/outage lasting longer than 5 minutes. System repairs will be made within 72 hours and is the responsibility of VECTOR. City will be notified if there are any problems with meeting this timeframe.
24. MAINTENANCE: The City retains ownership of all equipment. This cost covers the remote operation of the system, processing the data produced by the system, constant remote monitoring or the system, and maintenance of the system, which includes troubleshooting, remote support of level 1 tasks performed by airport staff, any level 2 or level 3 support required, and any spare parts required to keep the systems functioning. OPMM does not cover any maintenance or repairs of damage caused by non-standard occurrences such as vandalism, collision, severe weather (i.e., tornados, etc.), flying objects, earthquakes, or any other unusual event that might damage the equipment. Vector will repair damage of this kind on a time & material basis and will provide a cost estimate to the City prior to commencing this work. If the City or Airport make any changes to Airport layout that necessitate the relocation of equipment (As has happened in the past with the runway threshold displacement (December 2017), Vector may be entitled to additional compensation to cover this relocation of equipment. Vector will provide the City/Airport a proposed cost estimate and negotiate in good faith for the completion of the work.
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811 8 Exhibit B-3
Budget
Compensation for Landing Fee Billing & Collection Services Compensation due to VECTOR for Landing Fee Billing and Collection Services to be paid by City shall be based on the gross monthly receipts of landing fee revenue billed and collected by VECTOR on behalf of the City for each month. If for any given month, gross monthly revenues are equal to or greater than $83,333.33, the VECTOR compensation rate will be 18%. If the gross billed and collected monthly revenue is less than $83,333.33, the VECTOR compensation rate for that month will be 21%. Compensation paid to VECTOR for the final year of the Agreement Term, and for each Option Year if exercised by City, shall not exceed $105,000. The total amount of compensation paid to VECTOR during the entire Term of this Agreement and for all exercised Option Years shall not exceed $1,765,484.
The following chart illustrates the agreed upon compensation schedule:
SMO Gross Landing Fee Monthly
Revenue
Vector Fee %
Equal to or greater than $83,333.33 18%
Less than $83,000,000 21%
Compensation for installation of landing fee & Threshold ID equipment VECTOR will bill for the following items as they are completed:
• Equipment ($54,750 plus $5,612 tax payable by Vector): billed after equipment is built, shipped, and arrives at SMO awaiting installation. • Labor, Project Management ($4,062.50): billed after equipment is built, shipped, and arrives at SMO awaiting installation.
• The remainder ($44,050) to be billed after equipment is installed and tested. • Annual recurring OPMM ($5,000) will be billed annually in advance as soon as the equipment is placed in service and is operational until June 30, 2019. • Any contingency funding will be billed after mutual agreement between Vector and City of Santa Monica staff on the exact amount of additional costs and the timing of the billing for those costs.
DocuSign Envelope ID: 8E4AC453-BFE3-4C91-B8C3-53E5D57D6811