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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF thereby incorporated by reference. Contractor shall only perform services under this Agreement pursuant to a Task Order approved and executed by the City.
6. CONTRACTOR'S DUTIES
6.1. Services. Contractor shall perform the services identified in the Task Order. City shall have the right to request, in writing, changes to the Task Order. Any such changes mutually agreed upon by the parties, and any corresponding increase or decrease in compensation, shall be incorporated by written amendment to the Task Order or this Agreement.
6.2. Coordination with City. In performing services under this Agreement, Contractor shall coordinate all contact with City through its Agreement Administrator.
6.3. Business License. Contractor shall obtain and maintain in force a City business license for the duration of this Agreement.
6.4. Professional Standards. Contractor shall perform all work to the highest standards of Contractor's profession and in a manner reasonably satisfactory to City. Contractor shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules, and regulations in any manner affecting the performance of this Agreement, including all Cal/OSHA requirements, the conflict of interest provisions of Government Code § 1090 and the Political Reform Act (Government Code § 81000 et seq.).
6.5. Appropriate Personnel. Contractor has, or will secure at its own expense, all personnel required to perform the services identified in the Scope of Services. All such services shall be performed by Contractor or under its supervision or by subcontractor(s) of Contractor, and all personnel engaged in the work shall be qualified to perform such services. Matt Coumans shall be Contractor's project administrator and shall have direct responsibility for management of Contractor's performance under this Agreement. No change shall be made in Contractor's project administrator without City's prior written consent.
6.6. Prevailing Wages. This Agreement is subject to the prevailing wage law as more fully set forth in Section 9 (Labor Code), for all work performed under this Agreement for which the payment of prevailing wages is required under the California Labor Code. In particular, Contractor acknowledges that prevailing wage determinations are available for work performed under this Agreement.
6.7. Unauthorized Delay. Contractor shall complete all services associated with the Task Order within the time period specified therein, or within seven (7) work days after execution thereof if no time is specified, as directed by the Agreement Administrator.
If Contractor fails to complete such services to the satisfaction of City within the designated time period, Contractor agrees to forfeit and pay City the amount of fifty Approved for Use 11.15.16
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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF dollars ($50.00) per day for each and every day of unauthorized delay beyond the designated time period, which shall be deducted from any monies due Contractor. This payment shall be considered liquidated damages. Contractor agrees that such liquidated damages are reasonable under the circumstances existing at the time of execution of the Task Order, that such liquidated damages are to compensate City for losses that are difficult to measure, and that such damages are not a penalty.
6.8. Unforeseeable Delay. Contractor shall not be deemed in breach of this Agreement or any Task Order, and no forfeiture due to delay shall be made, because of any delays in the completion of a Task Order due to unforeseeable causes beyond the control and without the fault or negligence of Contractor provided Contractor requests from the Agreement Administrator an extension of time in writing. Unforeseeable causes of delay beyond the control of Contractor shall include acts of God, acts of a public enemy, acts of the government, acts of City, or acts of another contractor in the performance of a contract with City, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and weather, or delays of subcontractors due to such causes, or delays caused by failure of the owner of a utility to provide for removal or relocation of existing utility facilities. Delays caused by actions or negligence of Contractor or its agents, servants, employees, officers, subcontractors, directors, or of any party contracting to perform part of all of the Scope of Services or to supply any equipment or materials shall not be unforeseeable delays. Unforeseeable delays (those beyond Contractor's control) shall not entitle Contractor to any additional compensation beyond the Maximum Amount. The sole recourse of Contractor shall be to seek an extension of time from the Agreement Administrator.
6.9. Defective Work. All work which is defective in its construction or deficient in any of the requirements set by City Reference Specifications shall be remedied or replaced by Contractor in an acceptable manner at its own expense. Defective work shall not entitle Contractor to any additional compensation beyond the Maximum Amount.
6.10. Permits and Approvals. Contractor shall obtain, at its sole cost and expense, all permits and regulatory approvals necessary for Contractor's performance of this Agreement. This includes, but shall not be limited to, professional licenses, encroachment permits and building and safety permits and inspections.
6.11. Notification of Organizational Changes. Contractor shall notify the Agreement Administrator, in writing, of any change in name, ownership or control of Contractor's firm or of any subcontractor. Change of ownership or control of Contractor's firm may require an amendment to this Agreement.
6.12. Records. Contractor shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to Contractor under this Agreement. All such documents Approved for Use 11.15.16
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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of City. In addition, pursuant to Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds ten thousand dollars, all such documents and this Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of City, for a period of three (3) years after final payment under this Agreement.
7. SUBCONTRACTING AND ASSIGNMENT
7.1. General Prohibition of Assignment. This Agreement covers construction services of a specific and unique nature. Except as otherwise provided herein, Contractor shall not assign or transfer its interest in this Agreement or subcontract any services to be performed without amending this Agreement.
7.2. Contractor Responsible. Contractor shall be responsible to City for all services to be performed under this Agreement.
7.3. Subcontracting. Contractor shall not subcontract any portion of the performance contemplated and provided for herein including any Task Order unless (1) such subcontracting is specifically described in the proposal attached hereto or (2) the City provides prior written approval. In any event, Contractor shall supervise all work subcontracted by Contractor in performing the Services and shall be responsible for all work performed by a subcontractor as if Contractor itself had performed such work.
The subcontracting of any work shall not relieve Contractor from any of its obligations under this Agreement with respect to any Task Order. Contractor is obligated to ensure that any and all subcontractors performing any services shall be fully insured in all respects and to the same extent as set forth under Section 13, to City's satisfaction.
7.4. Compensation for Subcontractors. Contractor shall be liable and accountable for any and all payments, compensation, and federal and state taxes to all subcontractors performing services under this Agreement. City shall not be liable for any payment, compensation, or federal and state taxes for any subcontractors.
8. COMPENSATION
8.1. General. City agrees to compensate Contractor for the services provided under this Agreement, and Contractor agrees to accept payment, the fees identified in the Task Order and in accordance with Exhibit B to this Agreement in full satisfaction for such services. Compensation shall not exceed the fees identified in Exhibit B to this Agreement, nor shall the total amount of compensation under this Agreement exceed the Maximum Amount. Contractor shall not be reimbursed for any expenses unless provided for in this Agreement and authorized in the Task Order.
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8.2. Retention. City may retain up to 5% of each payment until project completion.
Contractor may at its own expense substitute securities equivalent to the amount withheld as retention (or the retained percentage) in accordance with Public Contract Code 22300. At the request and expense of Contractor, securities equivalent to the amount withheld shall be deposited with City, or with a state or federally chartered bank in this state as the escrow agent, who shall then pay those moneys to City. Upon satisfactory completion of this Agreement, the securities shall be returned to Contractor.
8.3. Invoices. Contractor shall submit to City an invoice within 30 days of completion of each Task Order. Each invoice shall identify the Task Order amount as well as the total amount paid to the Contractor under prior Task Orders and invoices.
8.4. Taxes. City shall not withhold applicable taxes or other payroll deductions from payments made to Contractor except as otherwise required by law. Contractor shall be solely responsible for calculating, withholding, and paying all taxes.
8.5. Disputes. The parties agree to meet and confer at mutually agreeable times to resolve any disputed amounts contained in an invoice submitted by Contractor.
8.6. Additional Work. Contractor shall not be reimbursed for any expenses incurred for work performed beyond that identified in a Task Order unless prior written approval is given by the City on a time-and-materials basis pursuant to a new or amended Task Order. Contractor shall not undertake any such work without prior written approval of the City. A new or amended Task Order shall be in accordance with the fees identified in Exhibit B to this Agreement.
9. LABOR CODE
9.1. Prevailing Wage Law. This Agreement is subject to the requirements of the prevailing wage laws, including, but not limited to, Labor Code Section 1720 et seq., and Labor Code Section 1770 et seq., as well as Code of Regulations, Title 8, Section 16000 et seq., which require payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. Contractor shall defend, indemnify, and hold harmless City, and its officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of failure or alleged failure of Contractor to comply with such prevailing wage laws.
9.2. Payment of Prevailing Wages. Contractor shall pay the prevailing wage rates for all work performed under this Agreement. When any craft or classification is omitted from the general prevailing wage determinations, the Contractor shall pay the wage rate of the craft or classification most closely related to the omitted classification.
9.3. Forfeiture. Contractor shall forfeit as a penalty to City Two Hundred Dollars ($200.00), or any greater penalty provided in the Labor Code, for each calendar day, or Approved for Use 11.15.16
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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF portion thereof, for each worker paid less than the prevailing wage rates for any work done under this Agreement employed in the performance of the Scope of Services by Contractor or by any subcontractor of Contractor in violation of the provisions of the Labor Code. In addition, the difference between such prevailing wage rates and the amount paid to each worker for each calendar day, or portion thereof, for which each worker was paid less than the prevailing wage rate shall be paid to each worker by Contractor.
9.4. Apprentices. Contractor shall comply with the prov1s1ons of Labor Code 1777.5 concerning the employment of apprentices on public works projects. Contractor shall be responsible for ensuring compliance by its subcontractors with Labor Code 1777.5.
9.5. Payroll Records. Pursuant to Labor Code 1776, Contractor and any subcontractor(s) shall keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by Contractor in connection with this Agreement. Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following: (1) The information contained in the payroll record is true and correct; and (2) The employer has complied with the requirements of Labor Code 1811 and Labor Code 1815 for any work performed by his or her employees on the public works project. The payroll records shall be certified and shall be available for inspection at all reasonable hours as required by Labor Code 1776.
9.6. 8-Hour Work Day. This Agreement is subject to 8-hour work day and wage and hour penalty laws, including, but not limited to, Labor Code 1810 and Labor Code 1813.
Contractor and any subcontractor(s) of Contractor shall strictly adhere to the provisions of the Labor Code regarding 8-hour work day and 40-hour work week requirements, and overtime, Saturday, Sunday, and holiday work. Pursuant to the Labor Code, eight hours' labor shall constitute a legal day's work. Work performed by Contractor's employees in excess of eight hours per day, and 40 hours during any one week, must include compensation for all hours worked in excess of eight hours per day, or 40 hours during any one week, at not less than one and one-half times the basic rate of pay.
Contractor shall forfeit as a penalty to City $25.00, or any greater penalty set forth in the Labor Code, for each worker employed in the execution of the work by Contractor or by any subcontractor(s) of Contractor, for each calendar day during which such worker is required or permitted to the work more than eight hours in one calendar day or more than 40 hours in any one calendar week in violation of the Labor Code.
9.7. Registration with DIR. Contractor and any subcontractor(s) of Contractor shall comply with the provisions of Labor Code 1771 and Labor Code 1725.5 requiring registration with the Department of Industrial Relations (DIR).
10. PUBLIC CONTRACT CODE.
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10.1. Prompt Payment. This Agreement is subject to the prov1s1ons of Article 1.7 (commencing at § 20104.50) of Division 2, Part 3 of the Public Contract Code regarding prompt payment of contractors by local governments. Article l. 7 mandates certain procedures for the payment of undisputed and properly submitted payment requests within 30 days after receipt, for the review of payment requests, for notice to the contractor of improper payment requests, and provides for the payment of interest on progress payment requests which are not timely made in accordance with this Article. This Agreement hereby incorporates the provisions of Article 1.7 as though fully set forth herein.
10.2. Public Works Claims Less Than $375,000. To the extent applicable, this Agreement is further subject to the provisions of Article 1.5 (commencing at Section 20104) of Division 2, Part 3 of the Public Contract Code regarding the resolution of public works claims of less than $375,000. Article 1.5 mandates certain procedures for the filing of claims and supporting documentation by the contractor, for the response to such claims by the contracting public agency, for a mandatory meet and confer conference upon the request of the contractor, for mandatory non binding mediation in the event litigation is commenced, and for mandatory judicial arbitration if the parties fail to resolve the dispute through mediation. This Agreement hereby incorporates the provisions of Article 1.5 as though fully set forth herein.
I 0.3. Ineligible Subcontractor(s). This Agreement is further subject to the provisions of Public Contracts Code 6109 which prohibits Contractor from performing work on this project with a subcontractor who is ineligible to perform work on the project pursuant to Labor Code 1777 .1 or Labor Code 1777. 7.
I 0.4. Assignment of Actions. Contractor and any and all subcontractors shall offer and agree to assign to City all rights, title, and interest in and to all causes of action it/they may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 4) or under the Cartright Act (Chapter 2 [ commencing with Section 16700] of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services, or materials pursuant to this Agreement. This assignment shall be made and become effective at the time City tenders final payment to Contractor, without further acknowledgment by the parties.
11. OWNERSHIP OF WRITTEN PRODUCTS
All reports, documents or other written material ("written products" herein) developed by Contractor in the performance of this Agreement shall be and remain the property of City without restriction or limitation upon its use or dissemination by City except as provided by law. Contractor may take and retain copies of such written products as desired, but no such written products shall be the subject of a copyright application by Contractor.
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12. RELATIONSHIP OF PARTIES
12.1. General. Contractor is, and shall at all times remain as to City, a wholly independent contractor.
12.2. No Agent Authority. Contractor shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise to act on behalf of City as an agent. Neither City nor any of its agents shall have control over the conduct of Contractor or any of Contractor's employees, except as set forth in this Agreement. Contractor shall not represent that it is, or that any of its agents or employees are, in any manner employees of City.
12.3. Independent Contractor Status. Under no circumstances shall Contractor or its employees look to the City as an employer. Contractor shall not be entitled to any benefits. City makes no representation as to the effect of this independent contractor relationship on Contractor's previously earned California Public Employees Retirement System ("Ca!PERS") retirement benefits, if any, and Contractor specifically assumes the responsibility for making such a determination. Contractor shall be responsible for all reports and obligations including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation, and other applicable federal and state taxes.
12.4. Indemnification of CalPERS Determination. In the event that Contractor or any employee, agent, or subcontractor of Contractor providing services under this Agreement claims or is determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in CalPERS as an employee of the City, Contractor shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for Ca!PERS benefits on behalf of Contractor or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.
13. INDEMNIFICATION
13.1. Definitions. For purposes of this Section 12, "Contractor" shall include Contractor, its officers, employees, servants, agents, or subcontractors, or anyone directly or indirectly employed by either Contractor or its subcontractors, in the performance of this Agreement. "City" shall include City, its officers, agents, employees and volunteers.
13.2. Contractor to Indemnify City. To the fullest extent permitted by law, Contractor shall indemnify, hold harmless, and defend City from and against any and all claims, losses, costs or expenses for any personal injury or property damage arising out of or in connection with Contractor's alleged negligence, recklessness or willful misconduct or other wrongful acts, errors or omissions of Contractor or failure to comply with any provision in this Agreement.
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13.3. Scope of Indemnity. Personal injury shall include injury or damage due to death or injury to any person, whether physical, emotional, consequential or otherwise, Property damage shall include injury to any personal or real property. Contractor shall not be required to indemnify City for such loss or damage as is caused by the sole active negligence or willful misconduct of the City.
13.4. Attorneys Fees. Such costs and expenses shall include reasonable attorneys' fees for counsel of City's choice, expert fees and all other costs and fees oflitigation. Contractor shall not be entitled to any refund of attorneys' fees, defense costs or expenses in the event that it is adjudicated to have been non-negligent.
13.5. Defense Deposit. The City may request a deposit for defense costs from Contractor with respect to a claim. If the City requests a defense deposit, Contractor shall provide it within 15 days of the request.
13.6. Waiver of Statutory Immunity. The obligations of Contractor under this Section 12 are not limited by the provisions of any workers' compensation act or similar act.
Contractor expressly waives its statutory immunity under such statutes or laws as to City.
13.7. Indemnification by Subcontractors. Contractor agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this Section 12 from each and every subcontractor or any other person or entity involved in the performance of this Agreement on Contractor's behalf.
13.8. Insurance Not a Substitute. City does not waive any indemnity rights by accepting any insurance policy or certificate required pursuant to this Agreement. Contractor's indemnification obligations apply regardless of whether or not any insurance policies are determined to be applicable to the claim, demand, damage, liability, loss, cost or expense.
14. INSURANCE
14.1. Insurance Required. Contractor shall maintain insurance as described in this section and shall require all of its subcontractors, Contractors, and other agents to do the same.
Approval of the insurance by the City shall not relieve or decrease any liability of Contractor. Any requirement for insurance to be maintained after completion of the work shall survive this Agreement.
14.2. Documentation oflnsurance. City will not execute this agreement until it has received a complete set of all required documentation of insurance coverage. However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor's obligation to provide them. Contractor shall file with City:
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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF • Certificate of Insurance, indicating companies acceptable to City, with a Best's Rating of no less than A:VII showing. The Certificate of Insurance must include the following reference: Al Fresco Dining and Retail Pilot Program Traffic Managment
• Documentation of Best's rating acceptable to the City. • Original endorsements effecting coverage for all policies required by this Agreement.
• City reserves the right to obtain a full certified copy of any required insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of the right to exercise later.
14.3. Coverage Amounts. Insurance coverage shall be at least in the following minimum amounts:
• Professional Liability Insurance:
• General Liability:
• General Aggregate:
• Products Comp/Op Aggregate
• Personal & Advertising Injury
• Each Occurrence
• Fire Damage (any one fire)
• Medical Expense (any l person)
• Workers' Compensation:
• Workers' Compensation
• EL Each Accident
• EL Disease - Policy Limit
• EL Disease- Each Employee
• Automobile Liability
• Any vehicle, combined single limit
$2,000,000 per occurrence,
$4,000,000 aggregate
$4,000,000
$4,000,000
$2,000,000
$2,000,000
$ 100,000
$ I 0,000
Statutory Limits
$1,000,000
$1,000,000
$1,000,000
$1,000,000
Any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements or limits shall be available to the additional insured.
Furthermore, the requirements for coverage and 1 imits shall be the greater of (I) the minimum coverage and limits specified in this Agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured
14.4. General Liability Insurance. Commercial General Liability Insurance shall be no less broad than ISO form CG 00 0 I. Coverage must be on a standard Occurrence form.
Claims-Made, modified, limited or restricted Occurrence forms are not acceptable.
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14.5. Worker's Compensation Insurance. Contractor is aware of the provisions of Section 3700 of the Labor Code which requires every employer to carry Workers' Compensation (or to undertake equivalent self-insurance), and Contractor will comply with such provisions before commencing the performance of the work of this Agreement. If such insurance is underwritten by any agency other than the State Compensation Fund, such agency shall be a company authorized to do business in the State of California.
14.6. Automobile Liability Insurance. Covered vehicles shall include owned if any, nonowned, and hired automobiles and, trucks.
14.7. Professional Liability Insurance. If the Contractor is performing any surveying, engineering, architectural, or other design work for the project, Contractor shall provide proof of Professional Liability insurance in the amounts described above. If such work is not included in the Scope of Services, or required by the Task Order, Professional Liability Insurance shall not be required.
14.8. Claims-Made Policies. If any of the required policies provide coverage on a claimsmade basis the Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work. Claims-Made Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Contractor must purchase "extended reporting" coverage for a minimum of five (5) years after completion of contract work.
14.9. Additional Insured Endorsements. The City, its City Council, Commissions, officers, and employees of South Pasadena must be endorsed as an additional insured for each policy required herein, other than for Professional Liability if required, for liability arising out of ongoing and completed operations by or on behalf of the Contractor. Contractor's insurance policies shall be primary as respects any claims related to or as the result of the Contractor's work. Any insurance, pooled coverage or self-insurance maintained by the City, its elected or appointed officials, directors, officers, agents, employees, volunteers, or Contractors shall be non-contributory. All endorsements shall be signed by a person authorized by the insurer to bind coverage on its behalf. General liability coverage can be provided using an endorsement to the Contractor's insurance at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10 and CG 20 37.
14.10. Failure to Maintain Coverage. In the event any policy is canceled prior to the completion of the project and the Contractor does not furnish a new certificate of insurance prior to cancellation, City has the right, but not the duty, to obtain the required insurance and deduct the premium(s) from any amounts due the Contractor under this Agreement. Failure of the Contractor to maintain the insurance required by this Approved for Use 11.15.16
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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF Agreement, or to comply with any of the requirements of this section, shall constitute a material breach of this Agreement.
14.11. Notices. Contractor shall provide immediate written notice if (1) any of the required insurance policies is terminated; (2) the limits of any of the required policies are reduced; (3) or the deductible or self-insured retention is increased. Contractor shall provide no less than 30 days' notice of any cancellation or material change to policies required by this Agreement. Contractor shall provide proof that cancelled or expired policies of insurance have been renewed or replaced with other policies providing at least the same coverage. Such proof will be furnished at least two weeks prior to the expiration of the coverages. The name and address for Additional Insured Endorsements, Certificates of Insurance and Notices of Cancellation is: City of South Pasadena, Attn: Planning and Community Development Department, South Pasadena, CA 95945.
14.12. Contractor's Insurance Primary. The insurance provided by Contractor, including all endorsements, shall be primary to any coverage available to City. Any insurance or self-insurance maintained by City and/or its officers, employees, agents or volunteers, shal I be in excess of Contractor's insurance and shall not contribute with it.
14.13. Waiver of Subrogation. Contractor hereby waives all rights of subrogation against the City. Contractor shall additionally waive such rights either by endorsement to each policy or provide proof of such waiver in the policy itself.
14.14. Report of Claims to City. Contractor shall report to the City, in addition to the Contractor's insurer, any and all insurance claims submitted to Contractor's insurer in connection with the services under this Agreement.
14.15. Premium Payments and Deductibles. Contractor must disclose all deductables and self-insured retention amounts to the City. The City may require the Contractor to provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within retention amounts. Ultimately, City must approve all such amounts prior to execution of this Agreement.
City has no obligation to pay any premiums, assessments, or deductibles under any policy required in this Agreement. Contractor shall be responsible for all premiums and deductibles in all of Contractor's insurance policies. The amount of deductibles for insurance coverage required herein are subject to City's approval.
14.16. Duty to Defend and Indemnify. Contractor's duties to defend and indemnify City under this Agreement shall not be limited by the foregoing insurance requirements and shall survive the expiration of this Agreement.
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15. MUTUAL COOPERATION
15.1. City Cooperation in Performance. City shall provide Contractor with all pertinent data, documents and other requested information as is reasonably available for the proper performance of Contractor's services under this Agreement.
15.2. Contractor Cooperation in Defense of Claims. If any claim or action is brought against City relating to Contractor's performance in connection with this Agreement, Contractor shall render any reasonable assistance that City may require in the defense of that claim or action.
16. NOTICES
Any notices, bills, invoices, or reports required by this Agreement shall be deemed received on: (i) the day of delivery if delivered by hand, facsimile or overnight courier service during Contractor's and City's regular business hours; or (ii) on the third business day following deposit in the United States mail if delivered by mail, postage prepaid, to the addresses listed below ( or to such other addresses as the parties may, from time to time, designate in writing).
If to City
Joanna Hankamer
City of South Pasadena
Planning and Community Development
Department
1414 Mission Street
South Pasadena, CA 91030
Telephone: (626) 403-7240
Facsimile: (626) 403-7241
With courtesy copy to:
Teresa L. Highsmith, Esq.
South Pasadena City Attorney
Colantuono, Highsmith & Whatley, PC
790 E. Colorado Blvd., Ste. 850
Pasadena, CA 91101
Telephone: (213) 542-5700
Facsimile: (213) 542-5710
17. SURVIVING COVENANTS
If to Consultant
Matt Coumans
Right of Way, Inc.
150 East Arrow Highway
San Dimas, CA 91773
Telephone: (626) 930-9292
Facsimile: (626) 930-9220
Master On-Call Services Agreement
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DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF The parties agree that the covenants contained in paragraph 6.12 (Records), paragraph
12.4 (Indemnification of CalPERS Determination), Section 13 (Indemnification), paragraph 14.8 (Claims-Made Policies), paragraph 15.2 (Contractor Cooperation in Defense of Claims), and paragraph 20.1 (Confidentiality) of this Agreement shall survive the expiration or termination of this Agreement, subject to the provisions and limitations of this Agreement and all otherwise applicable statutes of limitations and repose.
18. TERMINATION
18.1. City Termination. City may terminate this Agreement for any reason on five calendar days' written notice to Contractor. Contractor agrees to cease all work under this Agreement on or before the effective date of any notice of termination. All City data, documents, objects, materials or other tangible things shall be returned to City upon the termination or expiration of this Agreement.
18.2. Contractor Termination. Contractor may terminate this Agreement for a material breach of this Agreement upon 30 days' notice.
18.3. Compensation Following Termination. Upon termination, Contractor shall be paid based on the work satisfactorily performed at the time of termination. In no event shall Contractor be entitled to receive more than the amount that would be paid to Contractor for the full performance of the services required by this Agreement. The City shall have the benefit of such work as may have been completed up to the time of such termination.
18.4. Remedies. City retains any and all available legal and equitable remedies for Contractor's breach of this Agreement.
19. INTERPRETATION OF AGREEMENT
19 .1. Governing Law. This Agreement sh al I be governed and construed in accordance with the laws of the State of California.
19.2. Integration of Exhibits. All documents referenced as exhibits in this Agreement are hereby incorporated into this Agreement. In the event of any material discrepancy between the express provisions of this Agreement and the provisions of any document incorporated herein by reference, the provisions of this Agreement shall prevail. This instrument contains the entire Agreement between City and Contractor with respect to the transactions contemplated herein. No other prior oral or written agreements are binding upon the parties. Amendments hereto or deviations herefrom shall be effective and binding only if made in writing and executed on by City and Contractor.
Approved for Use 11. 15 .16
Master On-Call Services Agreement
DocuSign Envelope ID: 1648ACA7-F352-4E91-AF61-24EBD64F2C1F 14 - 26
DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF
19.3. Headings. The headings and captions appearing at the commencement of the sections hereof, and in any paragraph thereof, are descriptive only and for convenience in reference to this Agreement. Should there be any conflict between such heading, and the section or paragraph thereof at the head of which it appears, the language of the section or paragraph shall control and govern in the construction of this Agreement.
19.4. Pronouns. Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein in which the context requires such substitution(s).
19.5. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, then such term or provision shall be amended to, and solely to the extent necessary to, cure such invalidity or unenforceability, and shall be enforceable in its amended form. In such event, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
19.6. No Presumption Against Drafter. Each party had an opportunity to consult with an attorney in reviewing and drafting this agreement. Any uncertainty or ambiguity shall not be construed for or against any party based on attribution of drafting to any party.
20. GENERAL PROVISIONS
20.1. Confidentiality. All data, documents, discussion, or other information developed or received by Contractor for performance of this Agreement are deemed confidential and Contractor shall not disclose it without prior written consent by City. City shall grant such consent if disclosure is legally required. All City data shall be returned to City upon the termination or expiration of this Agreement.
20.2. Conflicts of Interest. Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Agreement. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Contractor further agrees to file, or shall cause its employees or subcontractor to file, a Statement of Economic Interest with the City's Filing Officer if required under state law in the performance of the services. 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 member, 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.
Approved for Use 11.15.16
Master On-Call Services Agreement
Page16of21
DocuSign Envelope ID: 1648ACA7-F352-4E91-AF61-24EBD64F2C1F 14 - 27
DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF
20.3. Non-assignment. Contractor shall not delegate, transfer, subcontract or assign its duties or rights hereunder, either in whole or in part, without City's prior written consent, and any attempt to do so shall be void and of no effect. City shall not be obligated or liable under this Agreement to any party other than Contractor.
20.4. Binding on Successors. This Agreement shall be binding on the successors and assigns of the parties.
20.5. No Third-Party Beneficiaries. Except as expressly stated herein, there is no intended third-party beneficiary of any right or obligation assumed by the parties.
20.6. Time of the Essence. Time is of the essence for each and every provision of this Agreement.
20.7. Non-Discrimination. Contractor shall not discriminate against any employee or applicant for employment because of race, sex (including pregnancy, childbirth, or related medical condition), creed, national origin, color, disability as defined by law, disabled veteran status, Vietnam veteran status, religion, age (40 and above), medical condition ( cancer-related), marital status, ancestry, or sexual orientation. Employment actions to which this provision applies shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; or in terms, conditions or privileges of employment, and selection for training. Contractor agrees to post in conspicuous places, available to employees and applicants for employment, the provisions of this nondiscrimination clause.
20.8. Waiver. No provision, covenant, or condition of this Agreement shall be deemed to have been waived by City or Contractor unless in writing signed by one authorized to bind the party asserted to have consented to the waiver. The waiver by City or Contractor of any breach of any provision, covenant, or condition of this Agreement shall not be deemed to be a waiver of any subsequent breach of the same or any other provision, covenant, or condition.
20.9. Excused Failure to Perform. Contractor shall not be liable for any failure to perform if Contractor presents acceptable evidence, in City's sole judgment that such failure was due to causes beyond the control and without the fault or negligence of Contractor.
20.10. Remedies Non-Exclusive. Each right, power and remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise shall be cumulative and shall be in addition to every other right, power, or remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise. The exercise, the commencement of the exercise, or the forbearance from the exercise by any party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by such party of any or all of such other rights, powers or remedies.
Approved for Use 11.15.16
Master On-Call Services Agreement
DocuSign Envelope ID: 1648ACA7-F352-4E91-AF61-24EBD64F2C1F 14 - 28
DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF
20.11. Attorneys' Fees. If legal action shall be necessary to enforce any term, covenant or condition contained in this Agreement, each party shall pay its own costs, including any accountants' and attorneys' fees expended in the action.
20.12. Venue. The venue for any litigation shall be Los Angeles County, California and Contractor hereby consents to jurisdiction in Los Angeles County for purposes of resolving any dispute or enforcing any obligation arising under this Agreement.
TO EFFECTUATE THIS AGREEMENT, the parties have caused their duly authorized representatives to execute this Agreement on the dates set forth below.
Printed: Stephanie DeWolfe
Title: City Manager
9/10/2020
Date:
----------
Attest:
!J DocuSigned by:
By: L!::ts!:4~~
Evelyn G. Zneimer, City Clerk
Date:9/10/2020
Approved as to form:
By, 7U;h-c~tL
Teresa L. Highsmith, City Attorney
Date: 9-10-2020
"Consultant"
Right of Way, Inc.
By:]na;(±-~UhUl,;t.d.,
Signature
Printed: Matt Coumans
Title: General Manager
Date: 09/09/2020
Master On-Call Services Agreement
Approved for Use 11.15.16
DocuSign Envelope ID: 1648ACA7-F352-4E91-AF61-24EBD64F2C1F 14 - 29
DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF EXHIBIT A and B
Scope of Work and Budget
Right of\Vay, Inc.
150 E. Arro,-,.· Hv.y Estimate
San Dimas. CA 91773 Date Estimate#
Pb.o~ : ti:!6-930-9292 Fa.st . 626-930-92~0
Billi g Address:
South Pil:iadma Managemem Departmut
Attn: Maruret Lm
1414 ~OD Stre:t
SouthPil:iad!!!.!, CA 9103 0
Desoriiption
Project Location.: Ci!y of SO'U1b Pa3ade!lil
- Diamond Avmu.':! B~tll,een :Missi001 Street and El Ceotro Sttr2et - El Ce.!!.tro Stte-:r Betwe,e,n Gl&.don. Wa,· ai:.li Mmiii.m A\·eoue - 1,fosioo. Stre-et Between Mernfuo. A,.......l1lle ac.d Faini e'i!i· Avenue - ~h;sioc 5~ Between Fau Oak; AWI!.u.e i!ll,i MOUlld A\,;mue Projea Descripri.oo. Al Fresco Dimlillg anli RetuJ: Program -K-Rail Rmtll wi1b PlaO!IDell! i!ll.d R.mlo.al.FetS
Cra.hCushlon-AttmMtorTmn:m.al- (OptioI!.!lCo,t) •
lOfi Con~ K-!wls - (Fmt Momh;i
20ft COll.~te K-Rilfils - (E.!ch Addit!ion.!l :MOOl!l!.) 10ft Conm!!~ K-Rails - (Fmt M-omh.)
!Oft Cl>n~1e K-P.iifu - (Each Addi'l!i!!'IL!l !.{()nth) Crane illlii Rig:gmg Fee~ ln:,,a]! lUllf R..a:Jw-.'al -(Ba5ed on 8 Hour.) •• Fr~1 ai:.d TruckiD5 F!':!, _ (Move-Il!.:)•fove-Out) •
Traffic Cootro !n..-ell and F.i!IIlOru - (Ba.;ed OJ!. g HoUIS} •• •Prt.ce5 are e~ll!d an.d rutject 10 dlilOge
Customer Contact:
S:omh Pa.adena Mal!ageneit Depi!Itlill!I!.t
Attn: Mcl:!,JRt Lm
1414 M"!inon Street
Somh P~ildeaa, CA 91030
Elllilil: mlm::il:!50uthpasad.eni1G1.g<1\'
Map Page Rep
Qty Rate
0 600.00
44 g5_00
44 4-t50
3 6'.HlO
3 40_(•0
2 2.300.00
16 805 00
2 1,850.00
Subtotal
Sales Tax (9.0%)
Total
Master On-Call Services Agreement
Approved for Use 11.15.16
P.O No.
To.1a1
0.00 0 CtlJ
3.740.00
Il,95R 00
186.00
~2D 00
4.600.00
12.SSO.OO
3.700.00
DocuSign Envelope ID: 1648ACA7-F352-4E91-AF61-24EBD64F2C1F 14 - 30
DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF ~Right of ,vay, Inc.
, 150 E. Arrow HViy
Estimate
San Dimas, CA 91773 Date Es.timate #
Fa.-.. : 6'.:::6-930-9::!'.!0
Billi g Addre.-ss: Cus.torner Contact
South Pa;adma Management Department
.At1n: Mar!,arct Lil!.
South Pa.adem Management Depl!Itl!W!.t
Atto: ~ l m
1414 !\f.i:sioc. Str~ 1414 Mi:5ion StEet
South Pil.sadma. CA 9103 0 South Paiadena, CA 91030
Email: ml.m@;outhpa:2demica.go'l.1
Description
•• Traffic Control Ol.'Enime Rate Conmt of The Regular Pay and One Half•• •• All Traffic Coll.£I01 labor for Sunday o.r That fac.e-edm:!: 12 HOUI5 or More Will ~ Billed at Double Toe Ri!~ \li'age; • • -
• No1:. Please allow a I!ricimum of (5-7) busine;; ~ pr.or to thl5 proJect. for sch-elfuling. pe:m:il proces.; and or ~ ord.~r; Thli project may reqt1ire coomimtion aim ~A. mghE 'llill'Ik lll!d ooi;e ~e appro'l.'il~. f2es md promsmg 1mli! icay "~'- The Vilriou; Ci'l)'s May R.eq_ltire Add.iriotlll1 Sue ~t~e a.oli or Sec'Jru'\'-Estimate Ex.c.htd.e; After Hour, Site ~..amtenaoce Sen.ices. PlS2oe Call fur R.nes All penoil; arui drl!Wiog; are subject to ch:ll!.ge ilnli C-l!ty approra All projecr."site d?.anges Dlil)" ef:fact :rat:5 An.y d.m:a;e-;i or l1m equipm.em •a;ill be billed to Je,s;eekomraccor at replacemeDt value~ AC:dm.onal mO\i-e, inf~; ma}' vaiy p~ labor re~~ Labor & Pemrit :Rz.tes for .Sati1r1w;. S11Dda,· m<l. or Holidays DlilV\'an·.
ACCEPTANCE.OFPROPOSAL: - - -
ltigbt of Way Inc.. ii lweby aumarized to perfi>mi the sen.ice; de;m~d in the abo'ie propo.al for wmcb the tmrlmipled agrees to pay the amoum mted m said :propo;al. m,d ammii:ng co the telmi- th&emn:
Dau!: _________________ _
PrimAu'lhoriud~mt l 'r~: _________ _
Sig:nz.lllii!: _______________ _
Project I Job No _____________ _ .lrcha..e Order No ____________ _ Coot2ctNo ______________ _
•• This propoiill is valid for 60 days from the bid date a b<we. •• Map P3ge Rep
Qty Rate
Subtotal
Sales Tax (9.0%)
Approved for Use 11 .15 .16
Total
Master On-Call Services Agreement
29496
P.O No.
To
0.00 0.00
i27.1S4.00
S0.00
$27.1S4.00
DocuSign Envelope ID: 1648ACA7-F352-4E91-AF61-24EBD64F2C1F Stephanie DeWolfe
09/10/2020
14 - 31
DocuSign Envelope ID: 2565FA6E-472A-4C26-A254-F801A88382EF
EXHIBIT C
TASK ORDER NO. 1
TO MASTER PROFESSIONAL SERVICES AGREEMENT (2015)
This Task Order No. 1 ("Task Order") is made and entered into by and between the City of South Pasadena, a municipal corporation ("City"), and [Contractor] ("Contractor").
RECITAL
A. City and Contractor entered into an agreement entitled Master On-Call Services Agreement ("Agreement") by which the Contractor agreed to perform traffic control services in accordance with Task Orders issued by the City.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. INCORPORATION BY REFERENCE. This Task Order hereby incorporates by reference all terms and conditions set forth in the Agreement.
2. SCOPE OF TASK ORDER. Contractor shall perform the following services in accordance with the terms and conditions of the Agreement:
Traffic control services for the Al Fresco Dining and Retail Pilot Program, including management plans, installation, and removal of the necessary traffic control management devices on a month to month basis.
3. PAYMENT. For services performed by Contractor in accordance with this Task Order, City will compensate Contractor in accordance with the terms and conditions of the Agreement based on the Fee Schedule, attached thereto as Exhibit Band incorporated herein by reference.
The total cost of this project is to be no more than $50,000.00, as estimated based on the Approved Fee Schedule.
4. SIGNATURES. The individuals executing this Task Order represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Task Order on behalf of the respective legal entities of the Contractor and the City.
IN WITNESS WHEREOF, the City and Contractor do hereby agree to the full performance of the terms set forth herein.
CITY OF SOUTH PASADENA CONTRACTOR
By: Stephanie DeWolfe
Title: City Manager
Date:
Approved for Use 11.15.16
By: Matt Coumans
Title: General Manager
Date: 09/09/2020
Master On-Call Services Agreement
15 15 - 1
DATE:
FROM:
City Council
Agenda Report
August 17, 2022
Armine Chaparyan, City Manager {tl
PREPARED BY: H. Ted Gerber, Director of Public Works
ITEM NO.
SUBJECT: Award of a Contract for Professional Services to Conduct a Water and Wastewater Service Rates Study
Recommendation
It is recommended that the City Council:
1) Award a professional services agreement to Raftelis Financial Consultants, Inc. (Raftelis) to conduct a comprehensive rate study for water and wastewater services; and
2) Authorize the City Manager to execute an agreement with Raftelis for a not-toexceed amount of $79,990, including $74,990 for the proposed amount, and a $5,000 contingency.
Background
Raftelis has assisted the City in several similar rate studies in the past, the most recent contract was awarded by the City Council in 2016. South Pasadena Municipal Code section 2.99-29 allows contracts for services of specially trained and professional persons or businesses to be exempt from bidding. Staff recommend proceeding with Raftelis as the consultant to provide services with respect to the study scope. The proposed project team includes the same principal members that have assisted the City in the past, and a similar scope to previous rate studies, including incorporation of longterm capital improvements, necessary funding for debt issue and long-term liabilities, and increases in the cost of purchased and produced/treated water. In addition, the study will include an evaluation of the current and potential alternative rate structures, Proposition 218 compliance considerations, and the minimization of customer impacts while maintaining adequate water and sewer reserves.
Raftelis' project team lead has over 40 years of experience and will support this effort with a staff of more than 130 utility rate, financial, technical, and management consultants. The company has performed rate studies for the City of Orange, City of St.
Helena, City of Torrance, Otay Water District, Padre Dam Municipal Water District, Valley County Water District, Olivenhain Municipal Water District, Carpinteria Sanitary District, Ojai Valley Sanitary District, Antelope Valley-East Kern Water Agency, Santa Ynez River Water Conservation District, and El Toro Water District.
Contract for Water and Wastewater Service Rates Study
August 17, 2022
Fiscal Impact
City Council had previously appropriated $80,000 from Public Works Water Distribution Professional Services Account No. 500-6010-6710-8170-000 in the Fiscal Year 2021- 2022 Annual Budget for a Water Rate Study, and previously appropriated $50,000 from the Public Works Sewer Maintenance Professional Services Account No. 210-6010- 6501-8170-000 in the Fiscal Year 2021-2022 Mid-Year Budget Update for a Sewer Rate Study. These funds will be transferred into the respective expenditure accounts for Fiscal Year 2022-2023 to fund the Water and Wastewater Service Rates Study.
Public Notification of Agenda Item
The public was made aware that this item was to be considered this evening by virtue of its inclusion on the legally publicly noticed agenda, posting of the same agenda and reports on the City’s website.
Attachment
Draft Professional Services Agreement
15 - 2
ATTACHMENT
Draft Professional Services Agreement with
Raftelis Financial Consultants, Inc.
15 - 3
Professional Services Agreement – Consultant Services
PROFESSIONAL SERVICES AGREEMENT
FOR CONSULTANT SERVICES
(City of South Pasadena / Raftelis Financial Consultants, Inc.)
1. IDENTIFICATION
This PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is entered into by and between the City of South Pasadena, a California municipal corporation (“City”), and Raftelis Financial Consultants, Inc. (“Consultant”).
2. RECITALS
2.1. City has determined that it requires the following professional services from a consultant: Study on Water and Wastewater Service Rates.
2.2. Consultant represents that it is fully qualified to perform such professional services by virtue of its experience and the training, education and expertise of its principals and employees. Consultant further represents that it is willing to accept responsibility for performing such services in accordance with the terms and conditions set forth in this Agreement.
2.3. Consultant represents that it has no known relationships with third parties, City Council members, or employees of City which would (1) present a conflict of interest with the rendering of services under this Agreement under Government Code Section 1090, the Political Reform Act (Government Code Section 81000 et seq.), or other applicable law, (2) prevent Consultant from performing the terms of this Agreement, or (3) present a significant opportunity for the disclosure of confidential information.
NOW, THEREFORE, for and in consideration of the mutual covenants and conditions herein contained, City and Consultant agree as follows:
3. DEFINITIONS
3.1. “Scope of Services”: see Exhibit A
3.2. “Agreement Administrator”: The Agreement Administrator for this project is H. Ted Gerber, Public Works Director. The Agreement Administrator shall be the principal point of contact at the City for this project. All services under this Agreement shall be performed at the request of the Agreement Administrator. The Agreement Administrator will establish the timetable for completion of services and any interim milestones. City reserves the right to change this designation upon written notice to Consultant
3.3. “Approved Fee Schedule”: Consultant’s compensation rates are set forth in the fee schedule attached hereto as Exhibit B and incorporated herein by this reference. This 15 - 4
Professional Services Agreement – Consultant Services
fee schedule shall remain in effect for the duration of this Agreement unless modified in writing by mutual agreement of the parties.
3.4. “Maximum Amount”: The highest total compensation and costs payable to Consultant by City under this Agreement. The Maximum Amount under this Agreement is Seventy-Nine Thousand, Nine-Hundred and Ninety Dollars ($79,990), including $74,990 for the proposed work, and $5,000 as a contingency.
3.5. “Commencement Date”: August 17, 2022.
3.6. “Termination Date”: June 30, 2023.
4. TERM
The term of this Agreement shall commence at 12:00 a.m. on the Commencement Date and shall expire at 11:59 p.m. on the Termination Date unless extended by written agreement of the parties or terminated earlier under Section 18 (“Termination”) below. Consultant may request extensions of time to perform the services required hereunder. Such extensions shall be effective if authorized in advance by City in writing and incorporated in written amendments to this Agreement.
5. CONSULTANT’S DUTIES
5.1. Services. Consultant shall perform the services identified in the Scope of Services. City shall have the right to request, in writing, changes in the Scope of Services. Any such changes mutually agreed upon by the parties, and any corresponding increase or decrease in compensation, shall be incorporated by written amendment to this Agreement.
5.2. Coordination with City. In performing services under this Agreement, Consultant shall coordinate all contact with City through its Agreement Administrator.
5.3. Budgetary Notification. Consultant shall notify the Agreement Administrator, in writing, when fees and expenses incurred under this Agreement have reached eighty percent (80%) of the Maximum Amount. Consultant shall concurrently inform the Agreement Administrator, in writing, of Consultant’s estimate of total expenditures required to complete its current assignments before proceeding, when the remaining work on such assignments would exceed the Maximum Amount.
5.4. Business License. Consultant shall obtain and maintain in force a City business license for the duration of this Agreement.
5.5. Professional Standards. Consultant shall perform all work to the standards of Consultant’s profession and in a manner reasonably satisfactory to City. Consultant shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules, and regulations in any manner affecting the performance of this Agreement, 15 - 5
Professional Services Agreement – Consultant Services
including all Cal/OSHA requirements, the conflict of interest provisions of Government Code § 1090 and the Political Reform Act (Government Code § 81000 et seq.).
5.6. Avoid Conflicts. During the term of this Agreement, Consultant shall not perform any work for another person or entity for whom Consultant was not working at the Commencement Date if such work would present a conflict interfering with performance under this Agreement. However, City may consent in writing to Consultant’s performance of such work.
5.7. Appropriate Personnel. Consultant has, or will secure at its own expense, all personnel required to perform the services identified in the Scope of Services. All such services shall be performed by Consultant or under its supervision, and all personnel engaged in the work shall be qualified to perform such services. Sudhir Pardiwala shall be Consultant’s project administrator and shall have direct responsibility for management of Consultant’s performance under this Agreement. No change shall be made in Consultant’s project administrator without City’s prior written consent.
5.8. Substitution of Personnel. Any persons named in the proposal or Scope of Services constitutes a promise to the City that those persons will perform and coordinate their respective services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. If City and Consultant cannot agree as to the substitution of key personnel, City may terminate this Agreement for cause.
5.9. Permits and Approvals. Consultant shall obtain, at its sole cost and expense, all permits and regulatory approvals necessary for Consultant’s performance of this Agreement. This includes, but shall not be limited to, professional licenses, encroachment permits and building and safety permits and inspections.
5.10. Notification of Organizational Changes. Consultant shall notify the Agreement Administrator, in writing, of any change in name, ownership or control of Consultant’s firm or of any subcontractor. Change of ownership or control of Consultant’s firm may require an amendment to this Agreement.
5.11. Records. Consultant shall maintain ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such documents shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of City. In addition, pursuant to Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds ten thousand dollars, all such documents and this Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of City, for a period of three (3) years after final payment under this Agreement. 15 - 6
Professional Services Agreement – Consultant Services
6. SUBCONTRACTING
6.1. General Prohibition. This Agreement covers professional services of a specific and unique nature. Except as otherwise provided herein, Consultant shall not assign or transfer its interest in this Agreement or subcontract any services to be performed without amending this Agreement.
6.2. Consultant Responsible. Consultant shall be responsible to City for all services to be performed under this Agreement.
6.3. Identification in Fee Schedule. All subcontractors shall be specifically listed in the Scope of Work, Exhibit A, and their billing rates identified in the Approved Fee Schedule, Exhibit B. Any changes must be approved by the Agreement Administrator in writing as an amendment to this Agreement.
6.4. Compensation for Subcontractors. City shall pay Consultant for work performed by its subcontractors, if any, only at Consultant’s actual cost plus an approved mark-up as set forth in the Approved Fee Schedule, Exhibit B. Consultant shall be liable and accountable for any and all payments, compensation, and federal and state taxes to all subcontractors performing services under this Agreement. City shall not be liable for any payment, compensation, or federal and state taxes for any subcontractors.
7. COMPENSATION
7.1. General. City agrees to compensate Consultant for the services provided under this Agreement, and Consultant agrees to accept payment in accordance with the Fee Schedule in full satisfaction for such services. Compensation shall not exceed the Maximum Amount. Consultant shall not be reimbursed for any expenses unless provided for in this Agreement or authorized in writing by City in advance.
7.2. Invoices. Consultant shall submit to City an invoice, on a monthly basis or as otherwise agreed to by the Agreement Administrator, for services performed pursuant to this Agreement. Each invoice shall identify the Maximum Amount, the services rendered during the billing period, the amount due for the invoice, and the total amount previously invoiced. All labor charges shall be itemized by employee name and classification/position with the firm, the corresponding hourly rate, the hours worked, a description of each labor charge, and the total amount due for labor charges.
7.3. Taxes. City shall not withhold applicable taxes or other payroll deductions from payments made to Consultant except as otherwise required by law. Consultant shall be solely responsible for calculating, withholding, and paying all taxes.
7.4. Disputes. The parties agree to meet and confer at mutually agreeable times to resolve any disputed amounts contained in an invoice submitted by Consultant. 15 - 7
Professional Services Agreement – Consultant Services
7.5. Additional Work. Consultant shall not be reimbursed for any expenses incurred for work performed outside the Scope of Services unless prior written approval is given by the City through a fully executed written amendment. Consultant shall not undertake any such work without prior written approval of the City.
7.6. City Satisfaction as Precondition to Payment. Notwithstanding any other terms of this Agreement, no payments shall be made to Consultant until City is satisfied that the services are satisfactory.
7.7. Right to Withhold Payments. If Consultant fails to provide a deposit or promptly satisfy an indemnity obligation described in Section 11, City shall have the right to withhold payments under this Agreement to offset that amount.
8. PREVAILING WAGES
Consultant is aware of the requirements of California Labor Code Section 1720, et seq., 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. Consultant shall defend, indemnify, and hold the City, tis elected officials, officers, employees, and agents free and harmless form any claim or liability arising out of any failure or alleged failure of Consultant to comply with the Prevailing Wage Laws.
9. OWNERSHIP OF WRITTEN PRODUCTS
All reports, documents or other written material (“written products” herein) developed by Consultant in the performance of this Agreement shall be and remain the property of City, where City may reuse and modify the written products without the action for additional compensation to Consultant; any reuse or modification of written product shall be at the sole risk of the City. Consultant may take and retain copies of such written products as desired, but no such written products shall be the subject of a copyright application by Consultant.
10. RELATIONSHIP OF PARTIES
10.1. General. Consultant is, and shall at all times remain as to City, a wholly independent contractor.
10.2. No Agent Authority. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise to act on behalf of City as an agent. Neither City nor any of its agents shall have control over the conduct of Consultant or any of Consultant’s employees, except as set forth in this Agreement. Consultant shall not represent that it is, or that any of its agents or employees are, in any manner employees of City.
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Professional Services Agreement – Consultant Services
10.3. Independent Contractor Status. Under no circumstances shall Consultant or its employees look to the City as an employer. Consultant shall not be entitled to any benefits. City makes no representation as to the effect of this independent contractor relationship on Consultant’s previously earned California Public Employees Retirement System (“CalPERS”) retirement benefits, if any, and Consultant specifically assumes the responsibility for making such a determination. Consultant shall be responsible for all reports and obligations including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation, and other applicable federal and state taxes.
10.4. Indemnification of CalPERS Determination. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement claims or is determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in CalPERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for CalPERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.
11. INDEMNIFICATION
11.1 Definitions. For purposes of this Section 11, “Consultant” shall include Consultant, its officers, employees, servants, agents, or subcontractors, or anyone directly or indirectly employed by either Consultant or its subcontractors, in the performance of this Agreement. “City” shall include City, its officers, agents, employees and volunteers.
11.2 Consultant to Indemnify City. To the fullest extent permitted by law, Raftelis Financial Consultants, Inc. shall indemnify, hold harmless, and defend City from and against claims, losses, costs or expenses for any personal injury or property damage allegedly proximately caused by Consultant’s alleged negligence, recklessness or willful misconduct or other wrongful acts, errors or omissions of Consultant or failure to comply with any provision in this Agreement.
11.3 Scope of Indemnity. Personal injury shall include injury or damage due to death or injury to any person, whether physical, emotional, consequential or otherwise, Property damage shall include injury to any personal or real property. Consultant shall not be required to indemnify City for such loss or damage as is caused by the sole active negligence or willful misconduct of the City.
11.4 Attorneys Fees. Such costs and expenses shall include reasonable attorneys’ fees approved by the City, expert fees and all other costs and fees of litigation. Consultant shall not be entitled to any refund of attorneys’ fees, defense costs or expenses in the event that it is adjudicated to have been non-negligent. 15 - 9
Professional Services Agreement – Consultant Services
11.5 Waiver of Statutory Immunity. The obligations of Consultant under this Section 11 are not limited by the provisions of any workers’ compensation act or similar act.
Consultant expressly waives its statutory immunity under such statutes or laws as to City.
11.6 Indemnification by Subcontractors. Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this Section 11 from each and every subcontractor or any other person or entity involved in the performance of this Agreement on Consultant’s behalf.
11.7 Insurance Not a Substitute. City does not waive any indemnity rights by accepting any insurance policy or certificate required pursuant to this Agreement. Consultant’s indemnification obligations apply regardless of whether or not any insurance policies are determined to be applicable to the claim, demand, damage, liability, loss, cost or expense.
12. INSURANCE
12.1. Insurance Required. Consultant shall maintain insurance as described in this section and shall require all of its subcontractors, consultants, and other agents to do the same.
Approval of the insurance by the City shall not relieve or decrease any liability of Consultant Any requirement for insurance to be maintained after completion of the work shall survive this Agreement.
12.2. Documentation of Insurance. City will not execute this agreement until it has received a complete set of all required documentation of insurance coverage. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. Consultant shall file with City:
• Certificate of Insurance, indicating companies acceptable to City, with a Best's Rating of no less than A:VII showing. The Certificate of Insurance must include the following reference: Study on Water and Wastewater Service Rates • Documentation of Best’s rating acceptable to the City. • Original endorsements effecting coverage for all policies required by this Agreement.
• City reserves the right to obtain a full certified copy of any Insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of the right to exercise later.
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Professional Services Agreement – Consultant Services
12.3. Coverage Amounts. Insurance coverage shall be at least in the following minimum amounts:
• Professional Liability Insurance: $2,000,000 per occurrence, $2,000,000 aggregate
• General Liability:
• General Aggregate: $2,000,000
• Products Comp/Op Aggregate $2,000,000
• Personal & Advertising Injury $2,000,000
• Each Occurrence $2,000,000
• Fire Damage (any one fire) $ 100,000
• Medical Expense (any 1 person) $ 10,000
• Workers' Compensation:
• Workers' Compensation Statutory Limits
• EL Each Accident $1,000,000
• EL Disease - Policy Limit $1,000,000
• EL Disease - Each Employee $1,000,000
• Automobile Liability
• Any vehicle, combined single limit $1,000,000
Any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements or limits shall be available to the additional insured.
Furthermore, the requirements for coverage and limits shall be the greater of (1) the minimum coverage and limits specified in this Agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured
12.4. General Liability Insurance. Commercial General Liability Insurance shall be no less broad than ISO form CG 00 01. Coverage must be on a standard Occurrence form.
Claims-Made, modified, limited or restricted Occurrence forms are not acceptable.
12.5. Worker’s Compensation Insurance. Consultant is aware of the provisions of Section 3700 of the Labor Code which requires every employer to carry Workers' Compensation (or to undertake equivalent self-insurance), and Consultant will comply with such provisions before commencing the performance of the work of this Agreement. If such insurance is underwritten by any agency other than the State Compensation Fund, such agency shall be a company authorized to do business in the State of California.
12.6. Automobile Liability Insurance. Covered vehicles shall include owned if any, nonowned, and hired automobiles and, trucks. 15 - 11
Professional Services Agreement – Consultant Services
12.7. Professional Liability Insurance or Errors & Omissions Coverage. The deductible or self-insured retention may not exceed $50,000. If the insurance is on a Claims-Made basis, the retroactive date shall be no later than the commencement of the work.
Coverage shall be continued for two years after the completion of the work by one of the following: (1) renewal of the existing policy; (2) an extended reporting period endorsement; or (3) replacement insurance with a retroactive date no later than the commencement of the work under this Agreement.
12.8. Claims-Made Policies. If any of the required policies provide coverage on a claimsmade basis the Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work. Claims-Made Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work.
12.9. Additional Insured Endorsements. The City, its City Council, Commissions, officers, and employees of South Pasadena must be endorsed as an additional insured for each policy required herein, other than Professional Errors and Omissions and Worker’s Compensation, for liability arising out of ongoing and completed operations by or on behalf of the Consultant. Consultant’s insurance policies shall be primary as respects any claims related to or as the result of the Consultant’s work. Any insurance, pooled coverage or self-insurance maintained by the City, its elected or appointed officials, directors, officers, agents, employees, volunteers, or consultants shall be noncontributory. All endorsements shall be signed by a person authorized by the insurer to bind coverage on its behalf. General liability coverage can be provided using an endorsement to the Consultant’s insurance at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10 and CG 20 37.
12.10. Failure to Maintain Coverage. In the event any policy is canceled prior to the completion of the project and the Consultant does not furnish a new certificate of insurance prior to cancellation, City has the right, but not the duty, to obtain the required insurance and deduct the premium(s) from any amounts due the Consultant under this Agreement. Failure of the Consultant to maintain the insurance required by this Agreement, or to comply with any of the requirements of this section, shall constitute a material breach of this Agreement.
12.11. Notices. Contractor shall provide immediate written notice if (1) any of the required insurance policies is terminated; (2) the limits of any of the required policies are reduced; (3) or the deductible or self-insured retention is increased. Consultant shall provide no less than 30 days’ notice of any cancellation or material change to policies required by this Agreement. Consultant shall provide proof that cancelled or expired policies of insurance have been renewed or replaced with other policies providing at 15 - 12
Professional Services Agreement – Consultant Services
least the same coverage. Such proof will be furnished at least two weeks prior to the expiration of the coverages. The name and address for Additional Insured Endorsements, Certificates of Insurance and Notices of Cancellation is: City of South Pasadena, Attn: Risk Management, 1414 Mission St., South Pasadena, CA 91030.
Telephone: (626) 403-7230.
12.12. Consultant’s Insurance Primary. The insurance provided by Consultant, including all endorsements, shall be primary to any coverage available to City. Any insurance or self-insurance maintained by City and/or its officers, employees, agents or volunteers, shall be in excess of Consultant’s insurance and shall not contribute with it.
12.13. Waiver of Subrogation. Consultant hereby waives all rights of subrogation against the City. Consultant shall additionally waive such rights either by endorsement to each policy or provide proof of such waiver in the policy itself.
12.14. Report of Claims to City. Consultant shall report to the City, in addition to the Consultant’s insurer, any and all insurance claims submitted to Consultant's insurer in connection with the services under this Agreement.
12.15. Premium Payments and Deductibles. Consultant must disclose all deductibles and self-insured retention amounts to the City. The City may require the Consultant to provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within retention amounts. Ultimately, City must approve all such amounts prior to execution of this Agreement.
City has no obligation to pay any premiums, assessments, or deductibles under any policy required in this Agreement. Consultant shall be responsible for all premiums and deductibles in all of Consultant’s insurance policies. The amount of deductibles for insurance coverage required herein are subject to City’s approval.
12.16. Duty to Defend and Indemnify. Consultant’s duties to defend and indemnify City under this Agreement shall not be limited by the foregoing insurance requirements and shall survive the expiration of this Agreement.
13. MUTUAL COOPERATION
13.1. City Cooperation in Performance. City shall provide Consultant with all pertinent data, documents and other requested information as is reasonably available for the proper performance of Consultant’s services under this Agreement.
13.2. Consultant Cooperation in Defense of Claims. If any claim or action is brought against City relating to Consultant’s performance in connection with this Agreement, Consultant shall render any reasonable assistance that City may require in the defense of that claim or action.
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Professional Services Agreement – Consultant Services
14. NOTICES
Any notices, bills, invoices, or reports required by this Agreement shall be deemed received on: (i) the day of delivery if delivered by hand, facsimile or overnight courier service during Consultant’s and City’s regular business hours; or (ii) on the third business day following deposit in the United States mail if delivered by mail, postage prepaid, to the addresses listed below (or to such other addresses as the parties may, from time to time, designate in writing).
If to City
H. Ted Gerber
City of South Pasadena
1414 Mission Street
South Pasadena, CA 91030
Telephone: (626) 460-6392
Facsimile: (626) 403-7241
If to Consultant
Sudhir Pardiwala
Raftelis Financial Consultants, Inc.
445 S. Figueroa Street, Suite 1925
Los Angeles, CA 90071
Telephone: (626) 583-1894
With courtesy copy to:
Andrew L. Jared
South Pasadena City Attorney
Colantuono, Highsmith & Whatley, PC
790 E. Colorado Blvd. Ste. 850
Pasadena, CA 91101
Telephone: (213) 542-5700
Facsimile: (213) 542-5710
15. SURVIVING COVENANTS
The parties agree that the covenants contained in paragraph 5.11 (Records), paragraph
10.4 (Indemnification of CalPERS Determination), Section 11 (Indemnity), paragraph
12.8 (Claims-Made Policies), paragraph 13.2 (Consultant Cooperation in Defense of Claims), and paragraph 18.1 (Confidentiality) of this Agreement shall survive the expiration or termination of this Agreement, subject to the provisions and limitations of this Agreement and all otherwise applicable statutes of limitations and repose.
16. TERMINATION
16.1. City Termination. City may terminate this Agreement for any reason on five calendar days’ written notice to Consultant. Consultant agrees to cease all work under this Agreement on or before the effective date of any notice of termination. All City data, documents, objects, materials or other tangible things shall be returned to City upon the termination or expiration of this Agreement.
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Professional Services Agreement – Consultant Services
16.2. Consultant Termination. Consultant may terminate this Agreement for a material breach of this Agreement upon 30 days’ notice.
16.3. Compensation Following Termination. Upon termination, Consultant shall be paid based on the work satisfactorily performed at the time of termination. In no event shall Consultant be entitled to receive more than the amount that would be paid to Consultant for the full performance of the services required by this Agreement. The City shall have the benefit of such work as may have been completed up to the time of such termination.
16.4. Remedies. City retains any and all available legal and equitable remedies for Consultant’s breach of this Agreement.
17. INTERPRETATION OF AGREEMENT
17.1. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California.
17.2. Integration of Exhibits. All documents referenced as exhibits in this Agreement are hereby incorporated into this Agreement. In the event of any material discrepancy between the express provisions of this Agreement and the provisions of any document incorporated herein by reference, the provisions of this Agreement shall prevail. This instrument contains the entire Agreement between City and Consultant with respect to the transactions contemplated herein. No other prior oral or written agreements are binding upon the parties. Amendments hereto or deviations herefrom shall be effective and binding only if made in writing and executed on by City and Consultant.
17.3. Headings. The headings and captions appearing at the commencement of the sections hereof, and in any paragraph thereof, are descriptive only and for convenience in reference to this Agreement. Should there be any conflict between such heading, and the section or paragraph thereof at the head of which it appears, the language of the section or paragraph shall control and govern in the construction of this Agreement.
17.4. Pronouns. Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein in which the context requires such substitution(s).
17.5. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, then such term or provision shall be amended to, and solely to the extent necessary to, cure such invalidity or unenforceability, and shall be enforceable in its amended form. In such event, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 15 - 15
Professional Services Agreement – Consultant Services
17.6. No Presumption Against Drafter. Each party had an opportunity to consult with an attorney in reviewing and drafting this agreement. Any uncertainty or ambiguity shall not be construed for or against any party based on attribution of drafting to any party.
18. GENERAL PROVISIONS
18.1. Confidentiality. All data, documents, discussion, or other information developed or received by Consultant for performance of this Agreement are deemed confidential and Consultant shall not disclose it without prior written consent by City. City shall grant such consent if disclosure is legally required. All City data shall be returned to City upon the termination or expiration of this Agreement.
18.2. Conflicts of Interest. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working 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. Consultant further agrees to file, or shall cause its employees or subcontractor to file, a Statement of Economic Interest with the City’s Filing Officer if required under state law in the performance of the services. 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 member, 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.
18.3. Non-assignment. Consultant shall not delegate, transfer, subcontract or assign its duties or rights hereunder, either in whole or in part, without City’s prior written consent, and any attempt to do so shall be void and of no effect. City shall not be obligated or liable under this Agreement to any party other than Consultant.
18.4. Binding on Successors. This Agreement shall be binding on the successors and assigns of the parties.
18.5. No Third-Party Beneficiaries. Except as expressly stated herein, there is no intended third-party beneficiary of any right or obligation assumed by the parties.
18.6. Time of the Essence. Time is of the essence for each and every provision of this Agreement.
18.7. Non-Discrimination. Consultant shall not discriminate against any employee or applicant for employment because of race, sex (including pregnancy, childbirth, or related medical condition), creed, national origin, color, disability as defined by law, disabled veteran status, Vietnam veteran status, religion, age (40 and above), medical condition (cancer-related), marital status, ancestry, or sexual orientation. Employment actions to which this provision applies shall include, but not be limited to, the 15 - 16
Professional Services Agreement – Consultant Services
following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; or in terms, conditions or privileges of employment, and selection for training. Consultant agrees to post in conspicuous places, available to employees and applicants for employment, the provisions of this nondiscrimination clause.
18.8. Waiver. No provision, covenant, or condition of this Agreement shall be deemed to have been waived by City or Consultant unless in writing signed by one authorized to bind the party asserted to have consented to the waiver. The waiver by City or Consultant of any breach of any provision, covenant, or condition of this Agreement shall not be deemed to be a waiver of any subsequent breach of the same or any other provision, covenant, or condition.
18.9. Excused Failure to Perform. Consultant shall not be liable for any failure to perform if Consultant presents acceptable evidence, in City’s sole judgment, that such failure was due to causes beyond the control and without the fault or negligence of Consultant.
18.10. Remedies Non-Exclusive. Each right, power and remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise shall be cumulative and shall be in addition to every other right, power, or remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise. The exercise, the commencement of the exercise, or the forbearance from the exercise by any party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by such party of any or all of such other rights, powers or remedies.
18.11. Attorneys’ Fees. If legal action shall be necessary to enforce any term, covenant or condition contained in this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs expended in the action.
18.12. Venue. The venue for any litigation shall be Los Angeles County, California and Consultant hereby consents to jurisdiction in Los Angeles County for purposes of resolving any dispute or enforcing any obligation arising under this Agreement.
TO EFFECTUATE THIS AGREEMENT, the parties have caused their duly authorized representatives to execute this Agreement on the dates set forth below. “City”
City of South Pasadena
By:________________________________
Signature
Printed: Arminé Chaparyan
Title: City Manager
Date:______________________
“Consultant”
Raftelis Financial Consultants, Inc.
By:________________________________
Signature
Printed:_____________________________
Title:_______________________________
Date:______________________
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Professional Services Agreement – Consultant Services
Attest:
By:_________________________
Yolanda Chavez
Interim City Clerk Records Specialist
Date:________________________
Approved as to form:
By:_________________________
Andrew L. Jared, City Attorney
Date:________________________
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EXHIBIT A
Scope of Work
Raftelis Financial Consultants, Inc.
Project Team:
Project Manager: Sudhir Pardiwala, PE
Technical Reviewer: Nancy Phan
Staff Consultants: Jonathan Jordan
Lindsay Roth
Nick Kennedy
Task 1: Project Management, Administration, and Initiation Task 1.1: Ongoing Project Management and Quality Assurance/Quality Control Process General administrative duties including client correspondence, billing, project documentation, and administration of the Study.
Task 1.2: Project Initiation, Kick-Off Meeting, and Data Collection Perform due diligence to ensure that project stakeholders agree to the project’s goals, approach, work plan, schedule, and the Study’s priorities. As part of the meeting, Raftelis will:
• Discern the major drivers for the Study
• Work with City staff to identify and prioritize pricing objectives • Discuss reserves and reserve policies
• Discuss debt policies for capital funding and capital projects • Review the data request list and pinpoint data gaps or questions A detailed data request list will be provided prior to the kick-off meeting and will be reviewed and amended if necessary. The Project Team will study this data diligently to understand the City’s revenue streams, operating and capital expenditures, water supply conditions, and customer base and usage patterns to perform the Study in line with the City’s overall objectives.
Meeting: One (1) kick-off web meeting with City staff
Deliverables: Data request list, kick-off meeting agenda and minutes 15 - 19
Task 2: Financial Plan Development
After the data has been compiled and analyzed, Raftelis will begin the process of developing a five-year financial plan for both water and wastewater which will involve projecting demand for accounts and consumption and forecasting revenue requirements. Raftelis will develop a detailed forecast model that will serve as the initial module of the Financial Plan and Rate Model (Model). Once completed, the Models will serve as a comprehensive yet flexible planning tool that will incorporate the City’s capital improvement plan, capital financing plan, forecasted demand projections, revenue requirements, detailed cost and revenue projections, and reserve balances.
The Project Team will itemize costs from the City’s budget into appropriate cost categories and determine a five-year cost forecast based on inflation assumptions provided by City staff. In addition, Raftelis will project non-rate revenues such as late fees, interest, miscellaneous fees, etc. that may be used to offset rate increases. Another important element of our financial plan is the development of reserves for operating, capital, rate stabilization, and emergency purposes. Raftelis will take into consideration the City’s risk management and financial policies to recommend appropriate reserve targets.
Ultimately, the Project Team will project how much cash needs to be collected through water and wastewater rates to meet projected revenue requirements while minimizing sharp rate fluctuations. The Model will determine the capability of the City’s existing and scheduled water and wastewater rates to support operations, and if necessary, propose revenue adjustments that will allow the City to effectively meet its financial obligations. Projecting revenue adjustments over a long planning horizon can illustrate future rate impacts and potential challenges to the City’s financial situation in both the short-term and long-term. This will allow the City to plan expenses, reserve balances, and/or capital project schedules to smooth rate impacts and to maintain financial stability throughout the five-year planning horizon.
Raftelis will create customized computer models to develop revenue requirements, perform financial planning, and calculate water and wastewater rates based on a standardized approach to meet the City’s specific needs. Key model features include:
• Revenue adjustments required for the next five (or more) years to meet debt coverage and target reserve balance(s)
• Projected operating costs and revenue streams
• Reserve balances and target levels according to the City’s fiscal policies • Different funding sources of CIP (rate or debt financed) • Spin buttons (dynamic selection options) for scenario analyses Meetings: Two (2) web meetings with City staff
Deliverables: Two (2) draft financial plan models in Microsoft Excel 2013 or later 15 - 20
Task 3: Cost-of-service Analysis
For the water system, the cost-of-service analysis is based on industry standards and methodologies approved by the American Water Works Association (AWWA) and described in the Manual M1:
Principles of Water Rates, Fees and Charges, 7th Edition (Manual M1) (which was co-authored by Raftelis staff). Cost allocations among customer classes will be based on the AWWA-approved BaseExtra Capacity approach which focuses on the different usage patterns, or peaking factors, demonstrated by each customer class.
Based on the revenue requirement identified in the financial plan, water expenses are allocated to cost components, including capacity-related costs, commodity costs, conservation costs, and other direct and indirect costs consistent with industry standards. The end goal of this task is to distribute the cost components to customer classes based on the cost responsibility of each. The result is the total cost to serve each customer class which is used as the basis to develop rates.
For the wastewater system, Raftelis will use the methodologies set forth by the Water Environment Federation (WEF) in their Manual of Practice No. 27, Financing and Charges for Wastewater Systems (which was co-authored by Raftelis staff, including Sudhir Pardiwala). Cost allocations among customer classes will be based on the flow of each class.
Meeting: One (1) web meeting with City staff
Deliverable: Draft cost-of-service analysis models in Microsoft Excel Task 4: Rate Development and Customer Impacts Analysis
Task 4.1: Rate Calculation and Development
After conducting the cost-of-service analysis, Raftelis will calculate water and wastewater rates under the current rate structures. Providing affordability in the first tier will be one of the objectives of the rate structure. The Models will also have the built-in capability to conduct various scenario analyses to address different issues such as water usage reduction, wastewater flows, etc. to calculate water and wastewater rates under each scenario. The rate dashboard, which displays key variables and results instantaneously.
Task 4.2: Customer Impacts Analysis
Raftelis will determine the potential financial impact on customers that result from the proposed rates.
The customer impact analysis will include a series of tables and figures that show projected rate impacts by customer class at various levels of usage.
Meeting: One (1) web meeting with City staff
Deliverables: Draft rate models and Draft customer impacts analysis models – both in Microsoft Excel 15 - 21
Task 5: Draft and Final Report Preparation
Raftelis will prepare a detailed report for both water and wastewater explaining the nexus between costs and rates clearly identified step by step in an administrative record. Raftelis will prepare a Draft Report which will include an executive summary highlighting the major issues and decisions reached during previous meetings with City staff. The main body of the reports will include a brief physical description of each utility system and service areas and an overview of operations and maintenance expenses, capital projects, financial plan, and a detailed description of the cost-of-service analysis and proposed rates. They will also contain a discussion on rate structure selection, rate design assumptions, and analysis and methodologies used to develop the rates. The Reports will clearly show the nexus between the City’s costs and proposed rates.
City staff will provide comments for incorporation into the Final Reports. Following the submission of the Draft Reports and input from City staff, Raftelis will prepare the Final Reports.
Meeting: One (1) web meeting with City staff
Deliverables: Draft Report in Microsoft Word, Final Report in Microsoft Word, Draft Presentation in Microsoft PowerPoint, Final rate models in Microsoft Excel, and Final customer impacts analysis in Models in Microsoft Excel
Task 6: City Council Meeting/Public Hearing
Raftelis will conduct up to two meetings with the City Council, including a Public Hearing. The meetings will present the proposed financial plan and resulting rates of the Study. Raftelis will prepare a presentation to accompany the Final Report, which will be presented at a Public Hearing.
Meetings: One (1) City Council meeting and one (1) Public Hearing Deliverable: Final presentation for Public Hearing
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EXHIBIT B
Project Fees and Hourly Billing Rates
15 - 23
WATER
·- ;::::::===== HOURLY RATES ·=·
Hours Requirements
$350 $250 $160 $80
Ongoing Project Management and
1.1 Quality Assurance/Quality Control 6 4 2 2 14 $3,720 Process
1.2 Project Initiation, Kick-Off Meeting,
and Data Collection 4 0 12 0 16 $3,480
2 Financial Plan Development 2 10 8 32 0 50 $11,120
3 Cost of Service Analysis 3 2 12 0 17 $3,640
4.1 Rate Calculation and Development 8 2 16 0 26 $6,120
4.2 Customer Impact Analysis 2 0 6 0 8 $1 ,740
5 Draft and Final Report Preparation 10 2 44 2 58 $11,780 6 Public and Council Meetings 2 16 8 24 $7,870
TOTAL ESTIMATED MEETINGS I HOURS 6 II 2 59 18 132 4 213
PROFESSIONAL FEES
-
-- $20,650 $4,500 $21,120 $320 $46,590
PM - Sudhir Pardiwala, Project Manager Total Fees
-
$46,590
TR • Nancy Phan, Technical Reviewer Total Expenses $2,880 SC • Staff Consultant TOTAL FEES & EXPENSES $49,470
WASTEWATER
■ lllll1m111m11111m11ammmlll
1.1 Project Initiation and Management
1.2 Data Collection and Review
2 Financial Plan Development 2
3 Cost of Service Analysis
4 Calculate Wastewater Rates and
Impacts
5 Prepare Final Deliverables
6 Public and Council Meetings
TOTAL ESTIMATED MEETINGS I HOURS 5 I
PROFESSIONAL FEES -
PM • Sudhir Pardiwala, Project Manager
TR • Nancy Phan, Technical Reviewer
SC • Staff Consultant
$350
4 2
2 3
3 8
2 4
I 0 26
- $9,100
$250 $190 $80
2 2 8 $2,020
6 8 $1,920
6 20 28 $6,280
8 12 $2,940
8 12 $2,940
2 20 2 32 $7,580
2 6 $1,840
10 66 4 106
$2,500 $12,540 $320 $24,460
-
TotalFffs
-
$24,460
Total Expenses $1,060
TOTAL FEES & EXPENSES $25,520
16 16 - 1
City Council
Agenda Report
DATE: August 17, 2022
FROM: Armine Chaparyan, City Manager ~
PREPARED BY: Brian Solinsky, Chief of Police
Thomas Jacobs, Police Lieutenant
ITEM NO. --
SUBJECT: Consideration of Approval for the Relocation of Peafowl and the Creation of a South Pasadena Peafowl Management Plan Recommendation
It is recommended that the South Pasadena City Council:
1. Consider the removal of Peafowl; and
2. Creation of a Peafowl Management Plan (PMP).
Background
In the late nineteenth century, a small peafowl flock commonly referred to as a pride, was imported into the San Gabriel Valley by a resident to roam freely. The intent behind importing the fowl was thought to beautify the region with the exotic birds. Since then, the peafowl population has grown exponentially, and the fowl have migrated out to surrounding areas, with South Pasadena becoming home to a large population.
Since 2017, residents in the Monterey Hills area have raised concerns regarding the peafowl nuisance, including damage to residential properties and vehicles, peafowl scat containing disease, and disruptive screeching in the early morning hours.
The issue was brought before the Animal Commission to address the community's concerns, which proposed educational programs. In 2019, the Pasadena Humane Society (PHS) conducted two educational programs focused on coexisting with wildlife.
The wildlife topics included both peafowl and coyotes. Unfortunately, education did not reduce the growing peafowl challenges, and complaints have continued.
In June 2021 , PHS conducted a peafowl census count to determine the size of the current population. After several days, PHS reported that 36 peafowl were making their home in the Monterey Hills. Given the number of peafowl compared with surrounding cities, PHS recommended continuing with public education and outreach.
On July 20, 2022, during the public comment portion of the regularly scheduled council meeting, several residents voiced strong concern about increased peafowl nuisances.
The Council directed staff to research and bring a proposed PMP to the August 17, 2022, City Council Meeting.
Approval of Peafowl Management Plan
August 17, 2022
Analysis
Staff recommends the Council direct staff to create a PMP to humanely manage the peafowl population within the City and provide further direction on the scope of a PMP.
This is achieved by eliminating the peafowl population citywide. A PMP can support these efforts by:
● Encouraging public education and deterrent measures;
● Prohibit the feeding of peafowl; and
● Humanely trapping and relocating the entire peafowl population in the City.
Trapping the entire pride, as opposed to only a partial number, would remove the peafowl problem almost immediately and reduce ongoing expenses to manage a PMP.
It is anticipated that a census would need to be conducted for the first few years following the implementation of the PMP and PHS has provided this service free of charge as part of our continuing contract.
The initial trapping should be conducted between the months of September through April, prior to the breeding season, which occurs from May through August. A no feeding ordinance will be brought before Council on September 7, 2022.
Cities with Existing Peafowl Management Plans
● La Cañada Flintridge developed a PMP that seeks to limit the peafowl population through limited trapping and removal. To manage these efforts, an annual census is conducted to determine the peafowl population. The PMP specifies maintaining a population of nine, which contains two males and seven female birds. When the number of peafowl exceeds the authorized amount, the fowl are trapped and removed. ● Rancho Palos Verdes' PMP is similar to La Cañada's in that it too seeks to limit its peafowl population to a specific number. Rancho Palos Verdes PMP requires no more than 134 birds are allowed, regardless of gender. A peafowl census is conducted on a bi-annual basis to determine the current size of the population. In their most recent census, 150 peafowl were removed.
● The PMP for San Marino mirrors the others with community education and trapping.
San Marino's management plan also seeks to limit the peafowl population. San Marino is reducing their peafowl population by 25 birds per year.
All the cities listed above use the services of Raptor Events, LLC (Raptor), a highly regarded and recognized trapping organization specializing in peafowl removal and humane relocation. Once trapped, Raptor removes the peafowl to one of several sanctuaries throughout Southern California.
During staff's research, all other regional trappers contacted do not offer the same humane services that Raptor offers. It should be noted that of the trappers contacted, 16 - 2
Approval of Peafowl Management Plan
August 17, 2022
none of them contracted with municipalities for peafowl removal. Upon City Council’s direction staff will execute a contract for the services of Raptor.
In contracting with the City, Raptor would provide all services at a cost of $250 per bird.
Raptor requires the assistance of residents who volunteer to have traps placed in their backyards. Setting the traps in private yards reduces the opportunity for vandalism and damages from those who oppose removal, a common occurrence in surrounding areas.
Raptor has indicated that the current peafowl flock could be captured with one trap moved to multiple locations depending on the peafowl habitat and their mobility patterns. The peafowl traps consist of 10-foot by 12-foot chain-link fencing that provides food and water. Raptor will respond with a 24-hour pick-up service when the homeowner notifies the company of a trapped bird.
Upon City Council’s direction staff will execute a contract for the services of Raptor.
Raptor keeps a detailed list of where the birds are relocated and determines who is approved to foster the fowl. The company's goal is to ease residents' concerns while reducing the overpopulation of these birds through humane relocation.
A proposed PMP will include an educational component. The Community Services Department is the contact for community education regarding peafowl and coexisting with wildlife. Staff will provide education through the City's website, social media platforms, flyers, and community forums.
Fiscal Impact
It is estimated that the fiscal impact of removing and relocating peafowl is $9,000. There are currently 36 peafowl in South Pasadena with a cost of $250 per bird to remove. With Council's approval, an appropriation of $9,000 will need to be allocated from General Fund reserves to the 101-4010-4011-8180 Contract Services account.
Alternatives Considered
1. Continue to provide a community education-only approach.
2. Consider a reduction in peafowl pride size instead of complete removal, based on a population count and a male-to-female ratio determined by the Council.
Peafowl are polygynous, meaning that a dominant male will mate with several females in a season. Therefore, a partial removal would not destroy a pride.
Community Outreach
Community Services staff has provided community outreach through flyers, social media posts, and information on the City's website. On August 9, 2022 a Town Hall meeting was held to discuss co-existing with wildlife, including the peafowl population within the City. Lauren Hamlett, PHS Director of Wildlife Education and Services, provided a presentation highlighting proper protocols, in order to increase community 16 - 3
Approval of Peafowl Management Plan
August 17, 2022
awareness on interacting with wildlife and peafowl. Staff received public comment from three residents expressing a desire to remove the peafowl due to property damage and disturbances.
Commission Review and Recommendation
The Community Services Commission did not review this matter.
Environmental Analysis
The action being considered does not constitute a "project" within the meaning of the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines section 15061(b)(3) as it has no potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
Attachments:
1. Rancho Palos Verdes PMP
2. La Cañada Flintridge PMP
3. San Marino PMP
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ATTACHMENT 1
Peafowl Management Plan From Rancho Palos Verdes
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PEAFOWL MANAGEMENT PLAN
City of Rancho Palos Verdes
Community Development Department 30940 Hawthorne Boulevard Rancho Palos Verdes, CA 90275
Tel: 310-544-5228
www.rpvca.gov
City Council Adopted:
RA!iCHO FALos VERDES
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ACKNOWLEDGEMENTS
City Council
Mayor Knight
Mayor Pro-tern Brooks
Councilman Campbell
Councilman Duhovic
Councilman Misetich
City Staff
Doug Willmore, City Manager
Carolynn Petru, Deputy City Manager Carol Lynch, City Attorney David Snow, Assistant City Attorney
Joel Rojas, Community Development Director Ara Mihranian, Deputy Community Development Director Daniel Pitts, Code Enforcement Officer Additional Recognition
Mike Maxcy, Wildlife Animal Services
Jacob Washburn, Planning Intern (Spring 2015}
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PFAFOWl MANAGEMENT PLAN Page l
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.TABLE OF CONTENTS
PURPOSE ................... ..... .......................................... 3 GOALS .. ................................................. ................... 3 PEAFOWL BACKGROUND ........................................... 4 PEAFOWL CENSUS TRENDS ................. .... ................. .. 5 GENERAL PEAFOWL INFORMATION ................................ 6 MANAGEMENT STRATE GIES ........................................ 8
1. DETERRENT MEASURES AND PUBLIC EDUCATION .. 8
2. TRAPPING & RELOCATION .................................... 10
APPENDICES
PLANT LIST .......... .................... ............................ 13 NEIGHBORHOOD MAPS ........... ... ... .......... .. ............ 14 INITIAL STUDY/ NEGATIVE DECLARATION .............. 19
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PEAFOWL MANAGEMENT DLAN l',,gf- 7
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PLAN PURPOSE
The purpose of this Management Plan is to humanely manage the peafowl population within the boundary limits of the City of Rancho Palos Verdes.
GOAL
The goal of this Management Plan is to reduce and maintain the peafowl population within certain City neighborhoods to levels Identified in the 2000 Peafowl Census Report and to create an environment that supports the coexistence of peafowl within the semt- rural character of the City. This goal will be achieved by Implementing the following two strategies:
1) Deterrent Measures & Public Education
2) Humane Trapping & Relocation of up to 150 birds in a calendar year in order to maintain the 2000 peafowl population.
PEAFOWL MANAGEMENT PLAN
The intent of this Management Plan is to provide educational guidance for City Staff and residents on how to deal with and manage the peafowl population in the City of Rancho Palos Verdes. The guidelines and provisions of this Plan do not supersede federal, state and county regulations or policies.
The City will update and modify the Plan as needed on a biennial basis based on the frequency of resident complaints and survey data conducted periodically by professional wildlife stewards.
PEAFOWL MANAGEMENT PLAN . IJd~e
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PEAFOWL BACKGROUND
'. ·.
EARLY HISTORY
Peafowl have a long, storied history in Rancho Palos Verdes and on the Palos Verdes Peninsula. The peacock originally comes from India, Sri Lanka, and Burma. However, the original peacock colony on the Palos Verdes Peninsula is a result of a gift of 16 birds from the daughter of William Wrigley, Jr. to Frank Vanderlip, Sr. from Mr. Wrigley's aviary on Catalina Island.
These birds were maintained at the Vanderlip Estate In Portuguese Bend for years. It Is also suspected that some of the birds were introduced to Palos Verdes Estates by former mayor Fred Roessler sometime in the period from 1960-65. There are now numerous peacock flocks in various neighborhoods in Rancho Palos Verdes including the Crestridge, Vista Grande, and the Portuguese Bend areas, as well as in the Lunada Bay and Malaga Cove areas of Palos Verdes Estates.
RECENT HISTORY
Due to an increase In resident complaints about the City's peafowl population and the impacts experienced by those who live in close proximity to peafowl flocks, such as noisy calls, excessive animal waste and damage to private property (i.e. yards, roofs, vehicles, etc.), in October 2000, the City Council enlisted the professional services of Dr. Francine Bradley of U.C. Davis to study the City's peafowl population and to provide recommendations to manage the population.
Between October 2000 and January 2001, Dr. Bradley conducted workshops to educate the public on how to humanely trap peafowl and to increase public awareness on how to coexist with peafowl and minimize impacts caused by the birds. Additionally, Dr. Bradley conducted field visits to observe the City's peafowl presence, flock behavior and to conduct a population count. A total of 134 peafowl were counted in the Crestridge (also referred to as Ridgecrest), Portuguese Bend, and Vista Grande neighborhoods. In response, In February 2001, the City Council approved a program to humanely trap and relocate up to 50 peafowl in an effort to reduce the City's peafowl population in the Crestrldge (Ridgecrest), Portuguese Bend and Vista Grande neighborhoods. However, only 19 birds were trapped and relocated due to routine sabotage to the traps by peafowl enthusiasts. · In 2008, the City conducted another peafowl census which concluded that the overall peafowl population grew by 53% since 2000/01 with the majority of the growth occurring in the Vista Grande neighborhood. This was attributed to the abundance of food, prime habitat and lack of predatory animals in the area. In response, in May 2009, the City Council approved another trapping and relocation program, and adopted Ordinance No. 488 to prohibit the feeding of, and interference with efforts to trap and relocate, peafowl. - - -
PEMOWL MANAGEMENT PLAN P;igp
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Due to the substantial peafowl population growth in the Vista Grande neighborhood, in June 2009, the City Council approved the reduction of the peafowl population in this neighborhood by approximately 60 birds. Trapping in the Vista Grande neighborhood occurred between August 2009 and January 2010 resulting in 71 birds being trapped and relocated to approved locations in California.
In 2014, the City began to once again experience an Increase in resident complaints regarding peafowl. The majority of the complaints were once again coming from the Vista Grande neighborhood. In response, a census was conducted in June and October 2014 which revealed that the peafowl population had significantly increased in some City neighborhoods since the first census in 2000. As a result, in November 2014, the City Council directed Staff to develop a Peafowl Management Plan intended to reduce and manage the City's peafowl population, particularly in the 5 neighborhoods where previous census reports were conducted, since 2000.
CITY OF RANCHO PALOS VERDES PEAFOWL POPULATION CENSUS DATA TABLE •2kti1,~ I ~ Oi;tob'i ~ie~ I zoo, 20' · ill ~. 2~
2~~
r 20li\ ·~ I '! Coinpalr•, !. 67 75 70 97 74 . 85 +15 +22% 29 89 40 71 71 71 +31 +76%
38 30 27 33 50 41 +14 +52%
0 11 25 38 90 64 +39 +156%
134 205 162 239 285 261 +99 +62"
n/a n/a 3 n/a n/a n/a n/a n/a
n/a n/a n/a 14 20 14 n/a n/a
134 205 16S 253 305 276 +114 +69%
PEAFOWL. MANAGFMf NT PLAN -- - -
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GENERAL PEAFOWL INFORMATION
The Peafowl (pavo cristatus)
Males are referred to as peacocks and females are referred to as peahens, and are collectively known as peafowl. However, the term "peacock" Is commonly used to refer to birds of both sexes There are two common peafowl species: Indian or blue peafowl and green peafowl. Most people, including residents of Rancho Palos Verdes, are familiar with the Indian peafowl, since that Is the kind found in many zoos and parks.
Peafowl Characteristics
Peafowl are large, colorful pheasants (typically blue and green). The males are known for their Iridescent tails. These tail feathers, or coverts, spread out in a distinctive train that is more than 60 percent of the bird's total body length and boast colorful "eye" markings (ocelli) of blue, gold, red, and other hues. The large train is used in mating rituals and courtship displays. It can be arched into a magnificent fan that reaches across the bird's back and touches the ground on either side. Females are believed to choose their mates according to the size, color, and quality of these outrageous feather trains.
When a peacock is in his second year, he grows his first train, but it has no ocelli and is not as long as a full-grown male's. The train gets longer and more elaborate every year after that. At about five or six years of age, it reaches Its maximum splendor. The peacocks that are the toughest-those that are able to survive long enough to have a really impressive train-are the ones that have the most mates and offspring. The coveted blue-eyed feathers of the train are dropped once a year; new feathers immediately begin growing and are completed a few months later.
Peahens seem to prefer males with the longest trains and biggest displays. In fact, the peacock's female-attraction power Is directly related to the perfection of his spectacular train, including its overall length, the !'!umber of iridescent "eyes" that are present, and even the symmetry of their patterning.
Normally, when a peacock is just walking around, his train trails behind him but held just above the ground. But when he wants to show off for a peahen, he props up the train with his shorter, stiffer tail feathers and unfolds it like a fan into a semicircle 6 to 7 feet (1.8 to 2.1 meters) wide! If the peahen seems interested, he quivers, making his feathers shimmy and flash to entice her further. -
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Peafowl Daily Routine
Peafowl follow a certain routine every day. They roost overnight in large groups In tall, open trees. That way they are safe from predators during the night, and the males can travel through the branches. In the morning, they break up into small groups. In the nonbreeding season, these are usually groups of all peacocks or all peahens; but during the breeding season, there are groups of one peacock and several peahens or all bachelors. These groups forage on the ground for food. During midday, peafowl drink, preen their feathers, rest in the shade, or take dust baths. Once it cools down, they go back to foraging for food before taking one last drink and returning to their roost for the night.
Where do Peafowl Live
Peacocks are very unique animals. They can live anywhere there is shelter and food/water. Extreme environments with very high temperatures are not ideal for the birds.
What do Peafowl Eat
Peacocks are ground feeders. They hunt for small animals, like spiders, reptiles (snakes) and amphibians in tall grasses, and minnows in shallow streams. They also eat plant parts, such as flower petals, seeds, berries, figs, leaves, and seeds.
As Loud as a Peacock
Peafowl have 11 different calls, but the peacocks are the ones that really yell. They have a call that carries for a long distance and sounds like "may-AWE, may-AWE." Some say the call sounds like a human crying for help! Peacocks call in the early morning and late evening, and practically all day during the breeding season. Because peacocks make so much noise in the early morning or late evening, some consider them a real nuisance! Other animals don't mind, though. With their sharp eyes, peafowl are likely to be the first to see a predator and call out a loud alarm.
Breeding & Nesting Season
Generally, nesting/hatching season takes place between April and May. During this period, a peahen makes a scrape in the ground and lines it with sticks, where she lays three to eight light green or tan eggs. She sits on them almost constantly for about four weeks. The peachicks are able to walk and forage on their owri right after they hatch, but they are very vulnerable. It takes two weeks before they can flap up into a tree for safety, where they crowd on both sides of their mother and are covered by her wings. At four weeks, the young grow crests, and at two months they look just like their mother (both males and females) but are only half her size. It is not until their second year that the males achieve their mature coloring. Only half of the chicks that hatch, survive to join the rest of the group. The typical lifespan of peafowl is 15 years. -
PE:Af-OWL MI\NAGE:MENT PLAN !',lC(· I
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MANAGEMENT STRATEGIES
The discussion on the following two management strategies is Intended to be used by the City and its residents to humanely manage the peafowl population In the City of Rancho Palos Verdes:
1. Deterrent Measures & Public Education
2. maintain
Humane Trapping & Relocation of up to 150 birds in a calendar year in order to the 2000 peafowl population.
1. Deterrent Measures and Public Education
Deterrent Measures
Based on information gleaned from various resources, the City has been advised that in one
situations where residents are adversely impacted by peafowl, the implementation of or the combination of the following deterrent measures may help discourage peafowl from returning. The success of the listed deterrent measures is dependent on residents working together and consistency. • Peafowl do not like water.
Water is one of the best known deterrents for peafowl. During non-drought conditions, the intermittent use of sprinklers or a hose with a jet nozzle will act as a negative reinforcement for the birds. Or consider a motion sensor activated water spray, such as the Scarecrow, that is battery operated and covers an area of about 35 feet and can be connected to your garden hose. It's available on..tine or at home improvement and garden stores. • Peafowl are afraid of dogs. Walk your dog around the property and neighborhood. Additionally, keeping your dog in the backyard will also serve as a deterrent. • Peafowl will avoid certain repellents.
an
Cat repellent and mothballs around planting beds, porches, and along walkways may be effective means of repelling peafowl. Caution should be used so as not to allow young children or animals to ingest the repellents. • Trim or Remove Large Trees
Since peafowl prefer to roost in large overhanging trees, trimming or removing said trees will help deter peafowl. The Canary Island Pine is a favorite resting spot for peafowl because of its sturdy horizontal limbs. and ample cover. Albeit a short-term, balloons in trees can deter peafowl from roosting In trees. - 1PFAFOWI MANAGEMENT - PLAN
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• Be cautious when composting. Avoid open compost and manure sacks as they tend to attract peafowl because they love to take dirt baths. If you wish to compost, use a covered compost bin and keep the composting area clean. • Peafowl like to eat wild birdseed, bread and pet food. These are delectable treats to peafowl. Once they're hooked, it's difficult to wean them. It's a good idea to remove any leftover pet food immediately, feed pets indoors, or cover/enclose animal food bowls. • Peafowl like to eat seeds and plants
Avoid planting young tender seedlings in areas you do not want peafowl to visit or cover the plants until they are well established. Additionally, certain plants are favored by peafowl while other plants are disliked. See Appendix A for a list of plants peafowl like and dislike, and follow the suggested list when landscaping. Peafowl like to take dally dust baths irrespective of the type of plants found in a garden and this can be destructive. It is suggested that gardens be covered with gravel or rocks to prevent peafowl from digging plants up to create loose soil for bathing purposes. • Prohibition of Feeding Peafowl
The availability of food will cause peafowl to return. Thus, the City's Municipal Code prohibits the feeding of peafowl. Speclfically, Section 6.04.020 of the Rancho Palos Verdes Municipal Code (RPVMC) enacts by reference Los Angeles County Code Section 10.84.010 which states the following:
Providing food for certain animals. Except as otherwise provided for In Section 10.84.020 of Los Angeles County Code, no person shall feed or in any manner provide food to any peafowl, crow, pigeon, seagull, non-domesticated rodent, including tree squirrels or ground squirrels, or to a non-domesticated mammalian predator, including coyotes, foxes, opossums, skunks and raccoons.
It is an infraction if any resident is caught feeding peafowl in violation of this ordinance which could result in penalty fines for each violation.
Public Education
Over the years, the City has received numerous complaints from residents expressing frustration with the destruction peacocks cause to their property, such as damaging roofs, plants, walkways, and vehicles. Nuisance complaints revolve around noise, fecal material, and emotional angst caused by peacocks. Thus, in an attempt to assist residents to minimize impacts caused by the peacocks, listed above are a number of deterrent measures to discourage peafowl from visiting private property. Because the effectiveness of these deterrent measures relies on cooperation among neighbors, a PEAFOWl MANAGEMENT PLAN Pdf;P y
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public education campaign will occur on an as-needed basis using the following methods to disseminate infonnation to the public:
• Website Updates (see Community Development Department Homepage under Code Enforcement) • List-serve messages to the Peafowl notification subscribers • Articles with helpful tips in the City's quarter1y newsletter • Speaking at:
o Council of Homeowner's Association (CHOA) meetings
o Homeowners Association Meetings
• Public Service Announcement on Channel 33
• Communicating and sharing information with neighboring cities • Preparing and distributing educational leaflets
2. Trapping and Relocation
In an effort to humanely maintain the peafowl population to the levels reported in the 2000 census, this section of the Management Plan describes a citywide trapping and relocation program. The program proposes the trapping and relocating of up to 150 birds per year in order to maintain the 2000 peafowl population level. The trapping and relocation program consists of the following 5 stages which are described below:
• Peafowl Census
• Selection of Trapping Vendor
• Seasonal Trapping
• Trapping Protocol
• Relocation
Stage 1 : Peafowl Census
Every year, the City will conduct a census survey to assess the peafowl population trends based on past census reports. The census will occur in February and/or March in the Portuguese Bend, Crestridge, Sunnyside Ridge, Grandview and Vista Grande neighborhoods along with other neighborhoods where significant peafowl complaints or sightings have been documented since the previous census. Neighborhoods may be added, deleted or modified for future census years based on previous census results or the success of previous trapping efforts. The census will be used to determine whether to proceed with any trapping in the subject calendar year. If trapping is deemed necessary, the census will dictate the number of birds (up to 150 In a calendar year) to be trapped.
Stage 2: Selection of Trapping Vendor Based on ihe outcome of the census report, if the City determines trapping is necessary to control the peafowl population, if a service agreement is not in effect, the City will go through the Request for Proposal (RFP) process to select an outside vendor. In PFAFOWL MANAGEME[\JT PLAN . - - Poge l
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considering a vendor, the City will factor experience, capability and cost. The City Council will enter into a Service Agreement with the selected vendor.
Stage 3: Seasonal Trapping Generally, the nesting/hatching season takes place during April and May when chicks flock with their peahen before being able to function on their own. This is not considered a humane time period to conduct trapping of peahen. Therefore, seasonal trapping of peahens (female) will take place July 151h through December 31 51• Since peacocks (males) can be trapped all year long, if deemed necessary by the City, the trapping of peacock (males) may occur outside the July 15th and December 31st trapping window.
Stage 4: Trapping Protocol
The neighborhoods selected for trapping will be determined by the City based on peafowl population trends memorialized in the biennial census reports, as well public input (See Appendix B for neighborhood boundary maps identified for trapping). The humane trapping of peafowl will occur as follows:
• Traps will be made from chicken wire, or other similar material deemed acceptable by the City. • Traps will generally be approximately 8'(l) x 6'(H) in size intended to hold approximately 6-8 birds at a time. • Traps will be placed on City property or private property based on agreements between the City and the property owner. Private property will be selected by the City based on input from the trapper. • Traps will be serviced on a regular basis, but no less than once a week by the City's trapping vendor. • Traps will be maintained and monitored in accordance to the State of California Department of Fish and Game and the U.S. Department of Wildlife and Fish standards.
• Traps occupied by peafowl will be serviced within 24 hours. The property owner where the traps are placed will be required to notify the City and the trapping vendor within 24 hours of the trap being occupied by peafowl. • The trapping vendor will also be able to gather peafowl using large, soft hand- held "fishing" style nets as this method is considered a very effective and quick way to quickly and humanely remove the young and fearless birds from the trapping regions. .
• The trapping vendor will be required to provide the City with dated photo documentation of each bird trapped, as well as information as to its relocation destination.
Stage 5: Relocatf on
Once peafowl are trapped by the vendor or removed from a trap by the vendor they become the property of the trapping vendor. Trapped peafowl will be relocated off the Palos Verdes Peninsula to homes that have been screened by the trapping vendor and reviewed by the City to ensure the individuals adopting the peafowl have some avian - PEAFOWL MANAGEMEI\IT PlAN P1ge 1 1
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experience and have adequate space for peafowl to roam freely. The location and contact information (name and phone number) of the individual(s) accepting the trapped peafowl will remain confidential to protect their privacy. Under no circumstances will the trapped peafowl be euthanized or treated inhumanely.
Sabotaging Peafowl Cages
Pursuant to Section 6.04.070 of the RPVMC, no person shall prevent or interfere with the trapping or relocation of peafowl, either on public or private property, by releasing any captured peafowl or by damaging, disabling or disengaging any peafowl trap or enclosure.
If an individual is caught interfering with peafowl trapping, they will be subject to an infraction which will result in penalty fees for each violation.
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Appendix A - Plant List The following is a list of plants that peafowl like and dislike. It is suggested as an added deterrent measures that the following plants be considered when landscaping. It should be noted that peafowl take daily dust baths irrespective of the type of plants found in a garden and this can be destructive. It is not uncommon for residents to think peafowl are eating plants when in fact they are digging plants up to create loose soil for bathing purposes.
Peafowl dislike these plants: Agapanthus
Azalea
Baby's Breath
Bee Balm
Bird of Paradise
Blazing Star liatris
Bouganvillea Butterfly Plant
Cactus
Camellia
Cannas
Clivia
Columbine
Coneflower
Fems
Fuchsia
Galllardia
Gardenia
Geranium
Giant Columbine
Gladiola
Gloriosa Daisy Hen & Chicken
Hibiscus
Hardy lavender
Hostas
Iris
Ivy
Lantana
Lavender
Marigold
Mint
Mum
Oleander
Painted OalSV
Periwinkle
~~nies
Phlox
Pink Ledv
Plumbago
Poinsettia
Pyracantha Rhododendron
Rose
Shasta Daisy Snap Dragon Sunburst Coreopsls Welgela
Peafowl like these plants:
Amaryllis
Begonia
Broccoli
Brussel Sprout Cabbage california Poppy Cauliflower
Chive
Holly Berries
Impatiens
Kale
Kohlrabi
Lettuce
Nasturtium
Pansy
Petunia
Primrose
Stock
Stock cauliflower
Sweet A\yssum
Tomato
water Stock
Young Spinach and Any young plants
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RANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
MEETING DATE: 06/19/2018
AGENDA HEADING: Regular Business
AGENDA DESCRIPTION:
Consideration and possible action to resume the City's Peafowl Trapping Program for 2018.
RECOMMENDED COUNCIL ACTION:
( 1) Receive and file a final summary report on the 2017 Peafowl Trapping Program; and, (2) Review the 2018 Peafowl Census Report, and direct Staff to resume the humane trapping and relocation of up to 150 peafowl for 2018.
FISCAL IMPACT: Resuming the trapping of peafowl for 2018, which will occur after July 15, 2018, has been included in the draft FY18-19 budget under the Code Enforcement program.
Amount Budgeted:
Additional Appropriation:
Account Number:
$136,000 ($37,000 for Peafowl Trapping Program)
N/A
101-400-4180-5101
ORIGINATED BY: Kevin Le, Code Enforcement Officer t"L
REVIEWED BY: Ara Mihranian, AICP, Director of Community Development k APPROVED BY: Doug Willmore. City Manager ~ BACKGROUND AND DISCUSSION:
On August 4, 2015, the City Council adopted the Peafowl Management Plan (PMP), which is a City-initiated plan to humanely manage the peafowl population within the City. This is achieved by reducing and maintaining the peafowl population to the levels identified In the 2000 Peafowl Census Report (134 total birds, citywide). The PMP supports the coexistence of peafowl within the semi-rural character of the City by:
• Encouraging public education and deterrent measures;'and, • Humanely trapping and relocating up to 150 birds per year in order to maintain the 2000 peafowl population.
At that same meeting, in response to the uptick in the City's peafowl population (based on the 2014 census) and the increase and tenor of residents' complaints, the City Council directed Staff to begin the trapping of up to 150 peafowl within the following five neighborhoods: Portuguese Bend, Crestridge, Sunnyside Ridge, Grandview, and Vista Grande. The trapping and relocation of peafowl has subsequently occurred annually. 1 16 - 21
2017 Peafowl Trapping Program
On September 14, 2015, the City began implementing its Peafowl Trapping Program. The five City-owned traps, one for each of the five neighborhoods participating in the program, are placed in the enclosed rear yard of a private residence for approximately a two-week period, and afterwards relocated to another property within the same neighborhood. For 2017, trapping occurred between July 2017 and March 2018, and included the Monaco neighborhood In response to resident requests and the high number of birds observed in the area. The table below summarizes and compares the number of birds trapped by neighborhood between the 2015 and 2017 trapping periods.
The 112 birds trapped during 2017 included 42 males, 51 females, 16 juveniles, and 3 broods. This year's program resulted in fewer birds trapped partly because the City was unable to secure volunteer properties to set up traps, as well as the effectiveness of the program over the past 2 years and some trapping occurring in neighboring cities. As stated in the PMP, the birds trapped were collected by the City's vendor (Wildlife Services) within 24 hours and relocated to ranches in San Diego, Ventura, and Santa Barbara counties. Per the City Council-adopted PMP, Staff approved the locations to which the birds were relocated. 1 2018 Peafowl Census Report
Pursuant to the PMP, each year the City is required to conduct a census survey to assess the current peafowl population trends, and based on past census reports, determine whether trapping should resume. This year's peafowl census survey was , conducted between April 1 and April 8, 2018, by Wildlife Services. The census was conducted based on two types of observations. The first was counting roosting peafowl in trees at sunrise, and the second was using a systematic grid pattern during the late afternoon to evening hours. Attached to this report is a detailed description of the census count (Attachment A). It should be noted that there may be an undercount of approximately 10% due to breeding females and limited physical access. Similar to last year, this year's census includes the Monaco neighborhood because of the volume of peafowl-related complaints in this area. The table below summarizes the results of the ' This information is kept confkienUal to protect the privacy of the property owners receiving the relocated birds. 2 16 - 22
recent census, tracks the annual census results since 2014, and compares the 2018 census with the 2014 baseline census. 24 75
13 55
1 40 3 3 46 37 130
0 42 9 22 40 37 150
4 82 13 n/a 52 57 208
17 71 41 n/a 85 64 278
-16 -31 -38 3 -39 -27 -148
-94% -44% -92% n/a -46% -42% -53%
As depicted above, there has been an overall 53% reduction in the City's peafowl population, compared to the baseline census conducted in 2014 (a census did not occur in 2015). The reduction can be attributed to the trapping that occurred last year.
Due to the current peafowl population in the surveyed neighborhoods, the anticipated increases after the mating season, and the concerns expressed by residents in these neighborhoods, Staff recommends that the Council resume trapping for 2018 up to the 150-bird capl. If resumed, the humane trapping will begin on August 15th, after the nesting and hatching season has ended, and when chicks are able to function on their own. Similar to the program conducted for 2017, the City will reach out to the community for volunteer properties where the traps can be located. The City will also resume its public outreach and education program, including attending a Rancho Palos Verdes Council of Homeowners' Associations (CHOA) meeting in the near future. Lastly, the trapping services will continue to be provided by the Wildlife Services, who has been extremely cooperative and responsive to the City's needs. The City's 'Contract with Wildlife Services expires on December 31, 2018, at which time the City Council will be asked to consider either renewing the contract or seeking new proposals.
It should be noted that the City continues to receive requests from both the Monaco and Mira Vista neighborhoods for trapping occur in these neighborhoods. The City intends 2 The trapping cap cannot be increased unless additional environmental review Is conducted, in accordance with the California Environmental Quality Act (CEQA). 3 16 - 23
to continue to trap in these neighborhoods intermittently during the trapping period to help control the overall peafowl population in the City.
ADDITIONAL INFORMATION:
In the past, the City Council inquired about using a form of avian birth control as an alternative to trapping and managing the peafowl population. The referenced birth control is known in the industry as "OvoControl." According to Wildlife Services, this product is only approved for use in pigeons, and there may be some major issues that would make this product ineffective for peafowl birth control and potentially detrimental to native bird species. In addition to the fact that the pellets are only meant to be consumed by pigeons, the product must be consumed on a daily basis during breeding season, which would be difficult to control. Further, according to the manufacturer, the pellets can only be placed on a flat cement surface. For these reasons, it is still not recommended as an alternative to trapping peafowl.
CONCLUSION:
The success of the 2017 peafowl trapping program and the collection of data for the 2018 peafowl census was largely the result of the community participation. Based on the 2018 census count and continued resident concerns in affected neighborhoods, Staff recommends resuming trapping for 2018 up to the 150~bird cap.
ALTERNATIVES:
In addition to the Staff recommendations, the following alternative actions (or some combination thereof} are available for the City Council's consideration:
1. Identify alternatives to trapping for Staff to research, and for the City Council to consider at a future meeting.
2. Direct Staff to initiate an amendment to the City Council-adopted Negative Declaration in order to increase the 150-bird trapping cap. 3. Reduce the number of birds to be trapped for 2018 to fewer than 150.
4. Direct Staff not to trap birds for 2018.
4 ATTACHMENT 2
Peafowl Management Plan from La Cañada Flintridge
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Agenda Item 4
~~l\ fUNTRIDGE
CM Review:~
Fiscal Review:
CITY COUNCIL AGENDA REPORT
MEETING DATE: November 7, 2011
SUBJECT: Peafowl Management Plan Update
PRESENTER: Kevin M. Chun, Director of Administrative Services REQUESTED ACTION: Receive and file report ASCAL IMPACT: No fiscal impact with the requested action.
BACKGROUND:
Over the last three years, the City has diligently implemented the Peafowl Management Plan {''Plan'') with modifications authorized by the Oty Council. Modifications to the Plan, as well as changes to the City's census and trapping/relocation methodology, were made due to concerns from both anti and pro-peafowl residents, and include the following:
2008-09
• The maximum peafowl flock size was reduced from 18 to 14 • A census and trapping/relocation methodology was implemented to ensure an accurate counting of the flock and proper treatment of captured peafowl 2009-10
• The maximum peafowl flock size was reduced from 14 to 12 • Non-seasonal trapping was allowed as a measure to help individual residents capture problematic peafowl on their property
2010-11
• The maximum peafowl flock size was reduced from 12 to 9 2011-12 PEAFOWL MANAGEMENT PLAN IMPLEMENTATION:
As in previous years, staff continues to implement the Plan and has recently concluded the annual peafowl census. The census was again conducted by animal experts from the Pasadena Humane Society and the Los Angeles Zoo. Based on this process, it was determined that there are 25 peafowl currently in the Haskell and Vista Lejana environs.
The "environs" is the area of La caiiada Flintridge most regularly inhabited by peafowl and includes the following streets: Haskell Street north of Vista Del Valle Road, El Vago Street, White Deer Drive, Ridgecliff Lane, Big Briar Way, and Vista Lejana Lane north of Vista Del Valle Road. It should be noted that peafowl are elusive creatures and are difficult to count precisely over a wide area with many places to take cover. The census represents staff's best effort to count the peafowl during different times and over several different days. 1327 Foothill Boulevard • La Canada Flintridge • Caliromia 91011-2137 • (818) 790-8880 • FAX: {818) 790-7536 16 - 26
City Council, Peafowl Management Plan Update
November 7, 2011
This year's census shows a three-year leveling trend in the peafowl proliferation rate as compared to 4 years ago when the peafowl population reached a high of 40 (see Table 1 below). The stability in the peafowl population size is largely due to the City's ongoing and regular trapping and relocation efforts. Annual thinning of the peafowl flock has resulted in a smaller or equal census count in each successive year since 2008.
Table 1 - Peafowl Census Trend
Year Peafowl Census
2008 40 2009 28 2010 25 2011 25
Of the 25 peafowl counted in the 2011 census, there are approximately 5 peacocks (males), 14 peahens (females), and 6 juveniles (gender not determined). Based on this count, staff intends to trap 16 total peafowl, inclusive of: 2 peacocks and a combination of 14 peahens and juveniles. This trapping process should reduce the flock size to 9 peafowl.
Mike Maxcy, Principal Animal Keeper with the Los Angeles Zoo will be contracted to perform the peafowl trapping and relocation. The trapping will be performed in a humane fashion with the same large walk-in traps used in previous years. The traps will be monitored by Mr. Maxcy to protect the peafowl from over exposure. Food and water will also be provided in the traps. In addition, when the traps cannot be monitored (e.g., over the weekends or when time does not permit), the traps will be closed in order to prevent any peafowl from entering. Trapped peafowl will be relocated by Mr. Maxcy in large K-9 crates to private residences outside of La Canada Flintridge with properties of one acre or more in size.
UPDATE:
Over the last 12 months, staff has fielded approximately 6 contacts from in and around the peafowl environs. The majority of the contacts were from residents complaining about loud and constant peacock squawking during the mating season (April - August). According to Mr. Maxcy, peacocks are known to squawk during mating season as a means for marking their territory with other peacocks. The peafowl complaints subsided after August seemingly due to the end of the mating season. Staff was also contacted by two residents outside of the environs about peafowl roaming their neighborhoods. This was only a temporary problem as the peafowl eventually left those areas.
While the City's annual trapping and relocation program provides relief from peafowl related issues, anti-peafowl residents in the environs remain steadfast in their position advocating the elimination of all peafowl in La Canada Flintridge. The pro-peafowl residents are generally less vocal through the year, but are just as staunch in their position for preserving the peafowl flock.
Unless directed otherwise, staff will continue to implement the Peafowl Management Plan (attached) and will commence with the annual trapping and relocation program from November 2011 - March 2012. Staff will also assist residents after March in need of nonseasonal trapping of peafowl on their property.
OPTIONS:
16 - 27
City Council, Peafowl Management Plan Update
November 7, 2011
1. Receive and file report
2. Provide alternative direction to staff.
RECOMMENDATION:
Option 1 - Receive and file report.
ATTACHMENT:
1. 2010 Peafowl Management Plan
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City of La Canada Flintridge
Administration Deparbnent
Updated - November 2010
PEAFOWL-MANAGEMENT PLAN
OUTLINE
I. PEAFOWL GENERAL INFORMATION
a. Appearance
i. Male (peacocks) - characterized by their long colorful plumage .
ii. Female (peahens) - characterized by their duller plumage and less elaborate tail feathers
b. Breeding
i. Once per year (between April and August)
ii. Chicks are hatched between April and August
iii. Peahens lay approximately 5-8 eggs. Of those,
approximately 2-5 will hatch
iv. Peafowl make loud screeching noises during the breeding months
v. Peacocks reach sexual maturity at 3 years of age; hens after 1 year
vi. Peahens do not build nests
c. Lifespan - Approximately 15 years
d. Molting -July through October
e. Feeding
i. Diet consists of vegetation and insects
ii. Prefer certain types of vegetation
iii. Like animal food (i.e., dog and cat food)
iv. Will eat small reptiles and mice
f. Deterrents
i. Water (hoses)
ii. Plants/flowers peafowl do not consume
iii. Enclosure of animal food bowls
iv. Securing compost
v. Balloons in trees (short-term effectiveness)
vi. Coyote urine (short-term effectiveness)
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City of La Canada Flintridge
Administration Department
Updated-November 2010
PEAFOWL MANAGEMENT PLAN IMPLEMENTATION
STEP 1: Survey, Review and Analyze Flock
• Contract with animal experts to monitor and manage the program • Conduct an annual census of the peafowl population
• Annual census must be longer than one day; tagging may be necessary if no other method of identification is feasible
• The animal experts will determine the number and male-female ratio necessary for a sustainable flock (standard used: flock sizes 9 peafowl; ratio 2 males to 5 females [approx.])
STEP 2:
Education Program - Encourage use of a combination of deterrents • Plant vegetation that peafowl do not like nor consume • Secure animal food or compost so that it is inaccessible to peafowl • Spray peafowl with water
Brochure
• Provide a brochure outlining peafowl deterrents and explaining ~ommon peafowl activities/habits
STEP 3:
Seasonal Trapping
• Trapping and Relocation - If it is determined that the peafowl flock exceeds the City standard for sustainability, the City will be responsible for the trapping and relocation of excess peafowl based on the annual census final count determined by the animal experts
• Humane Treatment - Trapped peafowl will be treated humanely (will not l;>e left without water and food for an extended period of time; will not be exposed to extreme heat) ·
STEP4:
Non-Seasonal Trapping
• Following the seasonal trapping performed by the City, residents experiencing ongoing peafowl problems may rent a City-owned trap (coyote size) to catch additional peafowl. Residents would be responsible for the relocation of these peafowl based on the City's instruction.
STEPS:
Voluntary Cessation of Feeding
• Residents will, voluntarily, cease the feeding of peafowl in their neighborhoods
STEP 6:
Annual Meetings
• Conduct annual meetings with animal experts and neighborhood members to discuss Peafowl Management Pfan effectiveness
16 - 30
City of La Canada Flintridge
Administration Department
Updated - November 201 0
ACTION SCHEDULE
STAGE ACTION TIMETABLE
STAGE 1 Release peafowl management brochures to the September general public; include in brochure methods of - ·October deterring peafowl -
STAGE2 Consult with animal experts on feasible methods of November conducting an accurate peafowl census
STAGE3 Conduct annual census NovemberDecember STAGE4 Following the annual census, trapping and relocation Decembermay begin if there are excess peafowl. No City March trapping will be conducted during the breeding and
molting seasons. A determination will be made by
the animal experts on the number of peafowl to be
trapped and relocated based on the .annual census
and the City's standard for a sustainable flock.
STAGES After the City's trapping and relocation process, · residents with persisting problems may trap additional After March
peafowl.
ATTACHMENT 3
Peafowl Management Plan from San Marino
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TO:
FROM:
BY:
City of San Marino
AGENDA REPORT
MAYOR AND CITY COUNCIL
MARCELLA MARLOWE, PH.D., CITY MANAGER
ALDO CERVANTES, PLANNING AND BUILDING
DIRECTOR
DATE: FEBRUARY 13, 2019
SUBJECT: DISCUSSION REGARDING THE PROPOSED PEAFOWL
ABATEMENT PROGRAM
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
• Engaged and Connected Residents • Efficient, Responsive, and Effective City Services • Safe Community
BACKGROUND
Steven W. Huang, DDS. Mayor
Gretchen Shepherd Romey, J/ice-Mayor
Swan Jakubowski, Council Member Steve Tait, Council Member Ken Ude, Council Member
The City of San Marino has recently seen an increase in the peafowl population. Concerns from the public included reports that the peafowl population in the City are hostile and creating damage to public property.
In response to the growing concerns of the residents, city staff began to research for possible mitigation measures and solution. As a result, the City Council approved $38,000 for development of a Peafowl Abatement Program.
Rancho Palos Verdes & Rolling Hills Estates Programs
The initial intention was to mirror the existing process adopted by the City of Rancho Palos Verdes (RPV).
For the past few years, RPV has been administering peafowl abatement by means of a trapping and relocation plan. They began with a census in 2000, by contracting with a local university to perform a count of the local peafowl population. The census not only allows for Rancho Palos Verde to understand the scope of the program, but to establish a baseline level. At that time (2000), Rancho Palos Verdes counted 134 peafowl, which were located within six (6) neighborhoods. In October of 2014, the population had grown to 305 peafowl. As part of the ongoing program,. Rancho Palos Verdes focuses on keeping the peafowl population to the 2000 census count level (approximately 134 peafowl), which means that the contracted vendor is only allowed to trap and relocate a specific number of peafowl each year.
AGENDA ITEM NO. 14
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Page2of4
Rancho Palos Verdes has contracted with one vendor to provide the trapping and relocation service. It was crucial for the City to ensure that trapping and relocation efforts are humane and meet any standards pursuant to the People for the Ethical Treatment of Animals (PET A). The City of Rancho Palos Verdes maintains a budget of $25,000 to $35,000 a year for this program. According to the vendor, the trapping and relocation of any peafowl runs approximately $175 per bird. The Rancho Palos Verdes program began with the trapping and relocation of only 50 birds. That number has grown to 150 birds currently.
As mentioned above, Rancho Palos Verdes is not looking to eliminate the bird from their City, but to only control the population. The City of Rancho Palos Verdes not only provides financial support through the program; they also provide a great deal of education to the public. As part of the program, the City requests voluntary trapping and relocation by the residents before involving the City through its program. If the resident decides to utilize the City's program, the City begins the process by entering into a contract with the private resident.
This allows the City and the approved vendor to gain access onto the property to set the traps. Once the agreement is signed, the owner is responsible for coordinating with the vendor moving forward. With all these efforts of the City, their staff have reported a decrease in their peafowl population.
The City of Rolling Hills Estates also provides their residents with a similar resource. In Rolling Hills Estates, the owners are required to apply using the Peafowl Trap and Removal Permit application and pay a fee of $55 per bird. The fee{s) are assessed through an invoice that is sent to the applicant once the bird is trapped. Rolling Hills uses the Los Angeles County Animal Control Department to trap and remove the peafowl.
San Marino Assessment
The first step in determining what program would be appropriate for our community is to understand the magnitude of the situation. Staff conducted a multi-week field survey, including interviews with residents who have experienced and dealt with peafowl. As a result of the windshield surveys and interviews, City staff can account for approximately 30 peafowl in the City. This includes one property on Fairfield Place that contained 19 peafowl in the front yard area. This specific flock seems to travel along Fairfield Place as well as on Santa Anita Avenue. Based on staff's findings, it appears that the existing peafowl nest and feed in specific neighborhoods in the City, specifically Fairfield, Shakespeare, Devenport and Gainsborough. There were reports of a flock on Lorain Road near the intersection of Lorain Road and San Gabriel Boulevard; however, to date, staffhas not been able to find any evidence or locate this specific flock of peafowl. As a result of the data gathered and anecdotal information, we are able to conclude the current population is no greater than 40 peafowl within San Marino.
DISCUSSION
Given the funds allocated in the FYI 9 budget, staff could simply proceed with the relocation plan contemplated originally and expend the $38,000. However, over the course of this fiscal year, the City 16 - 34
Page3 o/4
Council has repeatedly demonstrated its desire for staff to look for more cost-effective methods for all projects, even when the City Council has previously approved an expenditure amount. Although this makes it more challenging for staff to implement programs quickly and efficiently, it sometimes results in smart cost savings. To the end, prior to simply implementing the peafowl relocation program, staff considered whether this approach appropriately matches the scope of the San Marino circumstances and whether there might be a more cost-effective way to improve the situation. As a result of this re-consideration, staff realized that, although there has been much discussion of the Rancho Palos Verdes program, the magnitude of their situation (a peafowl population that exceeded 300 with the goal of keeping the number around 150) is exponentially larger than our situation (a total peafowl population that might approach 40, which isn't even one-third of the number that RPV is content with).
With that knowledge, as well as having infonnation about some of the challenges associated with the RPV program, and knowing that the City Council's preference is to reduce expenditures even when funds are budgeted, staff moved to consider other alternatives that would not place the City as the lead agency for contract management for animal control and relocation. In all the research found, which includes literature, other City programs, and the surveys performed by staff, staff came up with two new "out of the box" ideas for implementing said programs.
There are cost-savings associated with each of the new options; in the alternative, the City Council could simply direct staff to implement the original program, a relocation contract to mirror the RPV program (noted here as "Option 3").
Option 1
Direct staff to develop a program where education becomes the focus. Such program can include best management practices for dealing with peafowl. As listed in the attachment labeled "lnfonnation on Peafowlt the City can launch an educational campaign that provides information on peafowl abatement and deterrents in the following fonnats:
• Website Updates
• List-serve messages to the peafowl notification subscribers • Articles with helpful tips in the City's quarterly newsletter • Public Service Announcement
• Communicating and sharing infonnation with neighboring cities • Preparing and distributing educational leaflets
In addition to the above-mentioned approach, the Planning and Building Department would generate a list of qualified vendors who are capable of providing the residents with a humane trapping and relocation service so that the residents who are more directly affected can choose how to proceed for themselves. 16 - 35
Page4of4
This reduces City expenditures, since the vendors will contract directly with the resident and staffs time will be minimal - limited to drafting the vendor list and education materials, and conducting an educational workshop. Our hope would be that our residents feel empowered to handle the situation in appropriate ways.
Option 2
Proceed with a similar program as Rancho Palos Verdes, but only for one year. In RPV, the program has become a sort of "evergreen" program, meaning that funds are necessary every year as an ongoing cost.
In this Option, staff would still do all of the educational steps noted above; the difference would be that in Year 1, the City would fund the relocation of peafowl; after one year, however, the residents would take ownership of the issue (as noted in Option 1). This would put the City in the position of taking the initial lead, but alleviating any ongoing cost.
Option 3
Implement the relocation program, similar to the Rancho Palos Verdes program, to be funded by the City on an ongoing basis. This option would require the Council to appropriate funds during the budget process each year and would represent a continuing and recurring cost.
FISCAL IMPACT
The annual cost to implement the peafowl relocation program is $38,000. If the City Council directs Option 3, the cost will be approximately $38,000 every year. If the City Council directs Option 2, the cost will be $38,000 in FY19 only, with no continuing costs. If the City Council directs Option 1, there will be minimal fiscal impact to the City, save for staff time to develop the materials and printing/distribution costs.
RECOMMENDATION
Given the City Council's preference for cost-effective solutions, as well as a comparison of our conditions versus the conditions in Rancho Palos Verdes, staff recommends that the City Council select Option 1 - the creation of a Peafowl Abatement Plan Guide.
"I move to direct staff to prepare a Peafowl Abatement Plan Guide."
ATTACHMENTS
1. 2018 Peafowl Census Map
2. Plant List - List of Plants Peafowl like or dislike
3. Information on Peafowl
17 17 - 1
City Council
Agenda Report
DATE: August 17, 2022
FROM: Armine Chaparyan, City Manager ·fr(/
PREPARED BY: Ken Louie, Deputy City Manager - Finance
ITEM NO.
SUBJECT: Discuss 2022 Finance Ad Hoc Committee Report
Recommendation
It is recommended that the City Council:
1) Review and discuss the 2022 Finance Ad Hoc Committee (FAHC) Report; --
2) Not pursue a forensic audit/internal auditor in light of current and improved fiscal practices; and
3) Receive and file the 2022 Finance Ad Hoc Committee Report.
Background
The Finance Ad Hoc Committee was formed by the City Council in September 2020 in an effort to review the fiscal year 2020-2021 budget, the Annual Comprehensive Finance Report (ACFR) for fiscal year 2018-2019, and to address concerns of oversight and management of the City's budget process under the purview of the previous leadership and administration at City Hall. The Ad Hoc Committee was tasked with making recommendations to improvements to the City's process, including timely completion of various milestones.
In February 2022, the City Manager's Office evaluated the tasks and responsibilities of the City's numerous commissions, boards, and committees, including a review of the scope of work and expected work product for each ad hoc committee. In conversations with the previous representatives of the Finance Ad Hoc Committee, it was agreed that the Committee intended to submit a report summarizing their findings to the City Manager, at which point that Committee would have completed their scope of work and would be dissolved. The City Council approved this timeline.
At the regularly scheduled City Council meeting of June 15, 2022, the City Council reviewed the Finance Ad Hoc Committee's report as attached, voted to receive and file the report and take no further action, and the Ad Hoc Committee was dissolved. At the regularly scheduled City Council meeting of July 20, 2022, Councilmember Zneimer requested the item be brought back, with a second from Mayor Cacciotti, for a final discussion, as the review completed on June 15, 2022 was part of a lengthy City Council agenda. While there are no changes to the FAHC report, Councilmember Zneimer requested additional disclosures be brought forth in tonight's report. 289192.v l
Finance Ad Hoc Report
August 17, 2022
289192.v1
The additional information requested, and provided in the revised attached report, is as follows:
• Listing of each committee member
• Dates of FAHC meetings
• Disclosure of documents used for determinations
Analysis
The Report summarizes the previous administration’s budget processes and oversights.
It highlights shortcomings of those efforts, as well as areas of improvement, detailing:
1. Unexplained changes between proposed budgets for review,
2. The City Council’s consideration of the budget ahead of the completion of timely audits,
3. The lead up to the creation of the Finance Ad Hoc Committee and its specific scope of work, and
4. The concerns of the lack of internal controls, transparency and timeliness of reporting.
The Report calls for a forensic audit and/or the hiring of and internal auditor that reports directly to the City Council. However, the Report states that the need for these recommended measures (forensic audit and internal auditor) would no longer exist if strong corrective measures are put into place in the next 12 months. It also acknowledges that there has been a significant changeover in staff and such measures would create an undue labor and financial burden on already taxed staff. Finally, the report acknowledges that many of the concerns have already been remedied or are in the remedial process.
The major items of concern that have already been remedied or are in the remedial process are:
• Policies and Procedures: Finance Policies and Procedures were reviewed and recommended for approval by the Finance Commission in May 2022, and the City Council reviewed and discussed the draft document at their June 1, 2022 meeting. Staff will present the final draft for Council’s consideration and adoption at the City Council meeting of September 7, 2022.
• Timely reports and transparency: The current administration has worked diligently to address these issues including a timely Midyear Report, Monthly Investment Reports and a successfully adopted Annual Budget in June of 2022.
Staff looks forward to its first quarterly update for the Quarter ended September 30, 2022. With the hiring of a permanent Finance Director and Deputy Director/Controller (previously Accounting Manager), the City Manager anticipates bringing quarterly, then monthly budget reports to City Council. 17 - 2
Finance Ad Hoc Report
August 17, 2022
289192.v1
• Timely audits: The City has already scheduled the 2021-2022 audit for November 2022 – a full six months earlier than last year’s audit commencement. The City will be working with Rogers, Anderson, Malody & Scott (RAMS) for the upcoming audit, as we are in a three-year audit contract. Upon the completion of the current contract, the City will go out to bid for a new audit contract. • Proper staffing levels/morale: Greater employee training and retention, as well as incorporation of better and best practices into our processes and service to the community. A planned Finance department staffing review based on the FAHC concerns and the auditor’s declaration that the department is understaffed by at least 2 full-time positions not including current vacancies. A recruiter has been retained to host an active recruitment for the Finance Director position, which is set to commence on August 14, 2022. In addition, tonight’s agenda includes the reclassification of the Accounting Manager to Deputy Finance Director/Controller.
Once these top level positions are filled, the City Manager will work with the management team to complete a thorough staffing assessment. • Legal: The settlement of the A. Smith case based on policy decision and direction from City Council.
In response to the recommendations identified for City Staff on page 11 of the attached Report, staff would like to highlight the following:
1. Instituting a New, Independent Auditor Position Reporting to the City Council Due to measures established or in-progress improvements listed above, it is staff’s recommendation to not pursue a forensic audit or internal auditor, and to rather focus efforts and resources on the corrective measures.
2. Contracted City Attorney Service
The City Attorney will continue providing all legal services for the City in accordance with the Agreement for Legal Services and the City’s Municipal Code.
3. RFP for City Attorney Services
In September 2021, a discussion took place at the City Council meeting regarding an RFP for a new contract for attorney services. Given the timing, staff capacity and workload, the City Manager was given an opportunity to bring this item back at a future date. The City Manager does not recommend pursuing this at this time given staffing levels, outstanding projects and overall workload. It will be extremely challenging changing the City Attorney firm in the midst of all of the current and ongoing organizational challenges.
4. Determine Legal Liability Position
It is the City Council’s role to provide ultimate policy decisions on existing, pending and threatened litigation. The City Attorney’s office and Risk Management staff will continue to diligently apprise the City Council of existing, pending and threatened risks, and associated costs thereof.
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Finance Ad Hoc Report
August 17, 2022
289192.v1
5. Increase Financial Reporting on Legal Expenses
The current process complies with all matters of reporting of legal expenses in a manner that does not jeopardize defense of the City. Administrative Staff reviews all legal bills, and the City Council has the opportunity to review all legal bills, prior to placing them on the Warrants register. The fluctuating nature and amount of legal expenses is based on case activity, staff needs, and the relative complexity of each legal manner.
6. Provide Quarterly Updates to the Finance Commission and City Council on Efforts As part of the quarterly budget updates to the Finance Commission and City Council, staff can include updates on these recommended improvements.
Next Steps
The City Manager commits to ongoing improvements to internal controls and establishing solid policies and procedures. The Finance Department will work closely with the City Manager in bringing timely and regular reporting to the City Council.
Additionally, the City Manager is working with a recruiter to assist with efforts to hire a permanent Finance Director focused on carrying forward and building upon these efforts. With a vacancy in the Finance Department, Council is also considering the reclassification of a position to a Deputy Finance Director/Controller position to elevate the Accounting Manager position, and to provide further oversight and management of the department. It is under the City Council’s purview to direct staff on any further action in response to the findings or recommendations within the Report.
Fiscal Impact
There is no fiscal impact associated with receiving and reviewing this report.
Commission Review
The Finance Commission received and filed the 2022 Finance Ad Hoc Committee Final Report at their June 9, 2022 meeting.
Attachment:
Revised 2022 Finance Ad Hoc Committee Final Report
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ATTACHMENT
2022 Finance Ad Hoc Committee Final Report
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Page i
2020-2022 Finance Ad Hoc Committee (“FAHC”)
Final Report and Recommendations of the FAHC
DATE: August 10, 2022
FROM: 2020-2022 Finance Ad Hoc Committee (the “FAHC”)
PREPARED BY: Jack Donovan, City Councilmember District 2 Jon Primuth, City Councilmember District 3
Fred Findley, Finance Commission Member
Peter Giulioni, Finance Commission Member
Gregory Chun, Resident
Stephen Rossi, Resident
William Cullinane, Resident
SUBJECT: Presentation of Findings and Final Recommendations to Staff by the 2020-2022 Finance Ad Hoc Committee
Background
At the request of Councilmember Zneimer, and after additional discussion with Interim Finance Director Ken Louie, the FAHC is resubmitting the committee’s report, the Final Report and Recommendations of the Finance Ad Hoc Committee (the “Report”), dated June 4, 2022 and originally submitted directly to City Manager Chaparyan on June 5, 2022 and accompanied by the following cover email:
From: Stephen Rossi
Subject: Final Report and Recommendations of the Finance Ad Hoc Committee Date: June 5, 2022 at 11:01:25 AM PDT
To: Armine Chaparyan <[email protected]>
Cc: Jon Primuth <[email protected]>, Jack Donovan <[email protected]>, Fred Findley, "William (Bill) Cullinane", Gregory Chun, Edward Corey, Peter Giulioni Jr
Armine,
I am happy to announce that the Finance Ad Hoc Committee held their final meeting yesterday. At that meeting the members in attendance (Jon Primuth, Jack Donovan, Fred Findley, Peter Giulioni, Bill Cullinane, Greg Chun, and myself) reviewed and approved the attached Final Report and Recommendations of the Finance Ad Hoc Committee for submission to City Staff. Please take this email and report submission as the committee’s final action, and, in keeping with the City Council’s recent decisions, the FAHC is now dissolved.
As always, please reach out if you have any questions regarding the report contents and follow up items. I know Jon and Jack will also be reaching out to you directly to help walk you through the report as well.
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Thank you again to all copied on this email for your hard work and dedication to getting this report finalized and up to the City!
Best,
Steve
For clarity, seven fully-voting members of the FAHC attended the final FAHC meeting on June 4, 2022, and subsequent to additional discussion and deliberation regarding the various content of the Report, the seven members present voted unanimously to approve, and submit, the Report directly to City Manager Chaparyan as directed by Councilmember Primuth. Per the original cover email from the Report submission, the seven fully-voting members present on June 4, 2022 were as follows: City Councilmember Jack Donovan, City Councilmember Jon Primuth, Finance Commission member Fred Findley, Finance Commission member Peter Giulioni, and residents Gregory Chun, William Cullinane, and Stephen Rossi.
In total, the FAHC held meetings on the following dates:
• Zoom: 10/13/2020
• Zoom: 11/5/2020
• Zoom: 12/10/2020
• Zoom: 1/25/2021
• Zoom: 4/1/2021
• Zoom: 9/22/2021
• In Person Meeting: 9/25/2021
• In Person Meeting: 9/26/2021 (Peter Giulioni and Stephen Rossi) • Recorded Zoom: 10/5/2021
• Recorded Zoom: 3/5/2022
• Phone Call: 3/23/2022 (Jon Primuth and Stephen Rossi) • Zoom: 5/27/2022 (Jon Primuth and Stephen Rossi)
• In Person Meeting: 6/4/2022
Additionally, between 9/25/2021 and 6/5/2022, there were in excess of 60 email exchanges between members of the FAHC to facilitate Report drafts, comments, deliberation, and meeting logistics.
Recommended Actions
It was not within the scope of the FAHC to make any conclusions as to whether any inappropriate activities had occurred or the intentions behind any individual activities described in this report. The FAHC has not made, nor does it infer, any such conclusions. Rather, it was the task of the FAHC to investigate whether red flags existed that would indicate inappropriate activities may have occurred. It is the opinion of the FAHC that the red flags discussed throughout this report do, on their surface, warrant a further review by specialists via a forensic audit.
However, given the number of years that have transpired since the bulk of these actions took place, the significant financial cost associated with such an endeavor, and the prior removal/resignation of many then-acting City officials potentially involved, such a step may not be practical for the City at this time. The FAHC instead recommends the City take the additional actions outlined below to help ensure similar activities are not tolerated or allowed to exist in the future. This conclusion was based, in no small part, upon the assumption that City Staff, the Finance Commission, and the City Council will continue to implement the many recommendations provided in both this report and previously provided throughout the FAHC’s work. In the event the City does not follow through on the recommendations provided in the next 12 months, it is the belief of the FAHC that a forensic audit, designed to look into the numerous findings discussed in this report, is not only warranted, but necessary. 17 - 7
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It is further recommended that City Staff:
• Review and prepare an analysis to the Finance Commission and City Council regarding the viability of instituting a new, independent internal auditor position within the City of South Pasadena. As discussed elsewhere in this report, the existing City policies and procedures, had they been properly followed, would have helped prevent or eliminate many of the FAHC’s findings. However, as the position of City Manager is the only City Staff member reporting directly to the City Council who is also under the Council’s direct and sole supervision, a potential for conflict of interest is created. An Internal Auditor, hired by, reporting to, and having compensation determined directly by the City Council, would act independently of the City Manager and Finance Departments, helping to ensure ongoing compliance with stated City codes, policies, and procedures without fear of intimidation or retaliation by the City Manager.
This internal auditor could support the City Council in their responsibility for oversight by providing institutional knowledge and an additional level of security regarding stewardship of funds for the citizens of South Pasadena;
• In order to comply with best practices for contract attorneys as described by the League of California Cities and the City of South Pasadena’s own code of ethics requiring the elimination of even the “appearance” of a conflict of interest, it is recommended the City codify as policy that the City cannot retain one law firm to provide both (i) contract City Attorney services, and (ii) litigation services; • Immediately proceed with an RFP for a new contract City Attorney law firm (as already motioned by Councilmember Zneimer and seconded by Councilmember Cacciotti in open session during the September 1, 2021 council meeting) to be acted upon, and any awards determined, by the newly constituted City Council after the November 2022 elections;
• Determine its estimated legal liability position in accordance with GASB, as required by local and State regulation, and after a full review of a fulsome economic risk analysis of all existing, pending, or threatened litigation outstanding for the relevant time-period, prepared by the City Attorney and reviewed by the Finance Department, Finance Commission, City Manager, and the City Council prior to inclusion in any City budget or CAFR;
• Increase financial reporting of highly fluctuating, cumulatively large legal expenses, including an immediate return to providing semi-annual reports on expenses for all lawyers, consultants, and lobbyists; and
• Provide a quarterly update to the Finance Commission to update both that body and, in turn through Finance Commission and City Council Liaison reports, the City Council as to Staff’s progress on implementing the recommended actions.
The opinion is based on the FAHC’s work on the operational matters described above; its review of documents and other information provided by Staff during the FAHC’s work; agenda reports, presentations, and discussions at open meetings of the Finance Commission and City Council; and other related, publicly accessible materials – many of which have been cited throughout this report in support of the FAHC’s findings and recommendations.
The FAHC did not consider, and did not have access to, City Council closed session materials, or other information protected from disclosure to the public by the attorney-client or other privileges. Nevertheless, the FAHC believes that the current members of the City Council, in consultation with current City senior management, should conduct its own assessment of the necessity for and scope of any additional audits (including a forensic audit if deemed warranted), using relevant materials that may be outside the scope of the FAHC’s work or protected from public disclosure.
For the purpose of transparency to Staff, the City Council, and City residents, much of the FAHC’s discussions regarding the final scope item, to “Assess whether it is advisable for staff to recommend a forensic audit be conducted for the period of July 2019 through the current period [September 2020],” can be found in publicly available emails and Zoom meeting video recordings (for the final two meetings of the FAHC). Videos can be found on the City’s YouTube channel (https://youtu.be/EBod1BSaoQY and https://www.youtube.com/watch?v=qkCj65QccE). 17 - 8
June 4, 2022
FINAL REPORT AND RECOMMENDATIONS OF
THE FINANCE AD HOC COMMITTEE
I. HISTORY OF THE FORMATION OF THE AD HOC FINANCE COMMITTEE On September 28, 2020, the City Council voted unanimously to form the Finance Ad Hoc Committee (the “FAHC”). The FAHC was originally proposed to the City Council on September 2, 2020, and ultimately approved by the City Council, in response to concerns raised by residents, the Finance Commission, and a former City Finance Director about the proposed fiscal year 2020-2021 budget and the delayed Comprehensive Annual Financial Report (“CAFR”) for fiscal year 2018-2019.
A. Residents’ Discovery of Major Undisclosed Changes to the Proposed 2020-2021 City Budget A draft 2020-2021 budget was presented to the Finance Commission on May 26, 2020, by the then-acting Finance Director Karen Aceves. The commission voted 5-0 to recommend that the City Council approve the draft budget, and a presentation of the draft budget to the City Council was scheduled to occur at a City Council meeting on June 3, 2020.
However, the draft budget in the City Council agenda packet, posted online on May 29, 2021, was different from the budget originally presented to the Finance Commission 3 days earlier. Changes totaling approximately $14 million had been made to revenue and expenditure line items. The gross sum of changes made by Staff over the course of 3 days was an amount equal to 28% of the City’s total $51 million revenue budget.
Further, significant changes had also been made to various general fund reserve balances and special revenue fund balances. The breadth of the changes was neither disclosed nor explained in the agenda report for the June 3, 2020, City Council budget presentation.
1 The June 3, 2020 City Council meeting was continued, and, in the following days and weeks, irregularities in the draft budget and other concerns and questions about the City’s financial reporting were brought to the attention of City residents and leadership, largely through two reports, one authored by Sheila Rossi and FAHC member, Stephen Rossi, and the other by a former City Finance Director.
B. The Dispute Over the Adoption of a Resolution of Continuing Appropriations At this point, the City Council requested that the new draft budget be reviewed by the Finance Commission. On its review of the new draft budget, the Finance Commission voted 4-1 to recommend that the City Council adopt a resolution of continuing appropriations, with review of the draft 2020-2021 budget postponed until completion of delayed 2018-2019 Comprehensive Annual Financial Report (“CAFR”).2
Later, during a Special Meeting held on June 24, 2020, Staff presented the City Council with the Finance Commission’s recent recommendation to delay review of the 2020-2021 budget. The first item on the agenda included a Staff report recommending that the City Council approve Finance Commission’s proposal. However, citing a supposed $3.5 million revenue shortfall expected due to the Covid pandemic3 , Staff (led by Ms. Aceves and
the then-acting City Manager, Ms. Stephanie DeWolfe), along with Councilmembers Ms. Khubesrian and Ms.
Mahmud, spoke against the Staff’s recommendation, instead suggesting the City Council adopt the new draft budget.4
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After stating the report’s characterization that the Finance Commission had “originally approved [the budget] unanimously” was a “misdirection” on the part of Staff, then-sitting City Councilmember Schneider commented further, “Let me remind you what the item on the agenda is. It says, ‘Approve a Resolution to Continue Appropriations of the FY 19/20 Budget…That is the Staff recommendation, and now they’re arguing against it.” 5 Following the City Attorney’s conclusion that adopting a new budget that evening would be a violation of the Brown Act, the City Council adopted the recommended resolution of continuing appropriations.
C. Councilmember Khubesrian’s Emails Utilizing False Identities and Intimidation to Quell Resident, Former Employee, and City Official Questions Regarding the Budget By way of additional background color leading to the formation of the FAHC, when the resolution of continuing appropriations was before the City Council for consideration, then-sitting City Councilmember Khubesrian not only dismissed residents who had raised questions regarding the budget, characterizing them as complainers “criticizing without looking for solutions,”6 but also submitted public comments via email under false identities. These emails advocated for adoption of the controversial draft budget; expressing support for the thenacting City Manager’s and Finance Director’s performance in connection with the 2020-2021 budget process; and making allegations of improprieties against the former City Finance Director who authored one of the critical reports.7
Furthermore, Ms. Khubesrian used these same false identities (also via emails) to pressure her colleague, Councilmember Cacciotti to stop asking questions about the City’s financials and claimed additional improprieties against yet another resident who had previously been critical of both Ms. Khubesrian and the 2020-2021 budget process.
8 After these inappropriate actions were discovered and exposed by a resident, Ms. Khubesrian admitted authoring the pseudonymous emails and resigned her position in mid-August 2020. The public fallout that followed these discoveries weighed heavily in the City Council’s decision to form the FAHC.
D. Formation of the FAHC to Assist Finance Department Staff and Make Recommendations On September 2, 2020, the FAHC was formed as an advisory committee to provide recommendations to, and consultation with, the City Finance Department on operational matters to promote the timeliness, accuracy, and transparency of the City’s financial reporting as well as to form a recommendation, based on the FAHC’s review, regarding whether a forensic audit would be warranted. The FAHC’s scope of work was limited to the following items:
9 (i) Ensuring the completion of the delayed fiscal year 2018-2019 Comprehensive Annual Financial Report (“CAFR”);
(ii) Ensuring the timely completion of the fiscal year 2019-2020 CAFR; (iii) Management and oversight of the fiscal year 2020-2021 budget; (iv) Updating the City’s financial policies and procedures; (v) Making a recommendation to the Finance Commission regarding the frequency and timing of financial reporting; and
(vi) Assess the necessity of, or scope of any additional audits, depending on the summation of the [FAHC’s] work, up to and including a forensic audit where the situation warrants additional review.
II. SUMMARY OF RESULTS OF OPERATIONAL CHANGES
As of the date of this summary report, the FAHC was comprised of six members – one Finance Commission member and five residents with various backgrounds in accounting, audit, business operations, finance, municipal finance, and restructuring – plus two City Council liaisons.10 From the date of the FAHC’s inception until approximately July 2021, the FAHC assisted Finance Department Staff in accomplishing the following. More detail on each of these items can be found in Exhibit A to this report. (i) On October 26, 2020, the City Council voted 4-1 to receive the final 20189/19 Comprehensive Annual Financial Report (“CAFR”), ahead of the November 3, 2020 election11; 17 - 10
(ii) On July 21, 2021, the City Council voted to receive the final 2019/20 Annual Comprehensive Financial Report (“ACFR”)12;
(iii) On April 27, 2021, the City Council voted 5-0 to receive the Annual Budget for 2020/21; (iv) Completed researching and make recommendations (through Staff) regarding best practices for financial policies and procedures; and
(v) Completed researching and make recommendations (through Staff) regarding best practices for monthly and quarterly reporting.
From approximately July 2021 until the date of this report, the FAHC focus has been the final remaining item included in the FAHC’s scope, as directed by the City Council:
(vi) Assess the necessity of, or scope of any additional audits, depending on the summation of the [FAHC’s] work, up to and including a forensic audit where the situation warrants additional review.
The remainder of this report, and the accompanying exhibits and endnotes (which are an integral part of the FAHC’s recommendations), provides highlights of the FAHC’s discussions and deliberations on whether conducting a forensic audit is recommended. With the delivery of this report, the FAHC’s work has been completed.
III. RECOMMENDATION REGARDING A FORENSIC AUDIT
Before providing a recommendation as to whether a forensic audit is warranted at this time, it was the determination of the FAHC members that both Staff and the casual reader be presented with the following information:
• What is the purpose of a forensic audit?
• What are the red flags that indicate a forensic audit is warranted? • A discussion of the relevant findings by the FAHC.
A. What is the Purpose of a Forensic Audit?
A forensic audit differs significantly from a regularly scheduled, annual audit like the CAFR. There are numerous whitepapers that explain in detail the scope and procedures contained within a typical forensic audit, however, a more simplified description can be found on Investopedia, “Forensic audits cover a wide range of investigative activities. A forensic audit is often conducted to prosecute a party for fraud, embezzlement, or other financial crimes.”13
Further, according to the American Journal of Business Education (“AJBE”), “Forensic accountants and auditors share some goals similar to traditional accountants and auditors. They have different roles, knowledge and skills. Forensic accountant investigations include identification of fraud. This is different from Certified Public Accountant (CPA) investigations that are not responsible for identifying fraud.”14 B. What are the Red Flags that Indicate a Forensic Audit is Warranted? The red flags highlighted by the AJBE include, but are not limited to, the following…” • Weak internal control processes; and
• Management style that pressured employees to take actions beyond financial statement management to manipulation to outright misrepresentation which is fraud.
The AJBE goes on to state, “Personnel-related practices allowing financial statement misrepresentation include low employee morale that is possibly due to inadequate compensation, high turnover and inexperienced 17 - 11
managers…An organization that loses financial records may have lost their financial records on purpose to hide fraud. Fraud is easier to commit when there is no strong accounting information system.” 15 Further, Investopedia highlights how fraud can manifest in actual practice16:
• Conflicts of Interest: “when a fraudster uses their influence for personal gains to the [City’s] detriment.”
• Extortion: “the wrongful use of actual or threatened force, violence, or intimidation…” • Asset Misappropriation: which can include, but is not limited to, activities such as embezzlement, providing contracts/not charging fees to third-parties due to personal relationships, and misuse of Staff time or other City resources,
• Financial Statement Fraud: “The goal of presenting fraudulent numbers may be to…ensure that Clevel executives continue to receive bonuses, or cope with the pressure to perform.” C. Findings of the FAHC
For the reader’s convenience, the relevant FAHC findings have been categorized according to the potential red flags indicating the possibility or threat of fraud outlined previously in this report.
1. Management failures in managing and hiring Finance Department personnel led to high staff turnover and new, relatively inexperienced and, in some cases, unqualified staff.
Finding 1.1 A Finance Department reorganization led to a significant reduction in Finance Department staffing levels: On November 7, 2018, then-acting City Manager, Ms. Stephanie DeWolfe initiated the reorganization of the Finance Department.17 This reorganization ultimately resulted in a 44% reduction in department staffing levels, from a historical level of 9 staff members to 5. The reductions included the elimination of two senior accounting clerk positions and the outsourcing of business licenses and payroll functions. Potential Red Flags: Low employee morale, high turnover, inexperienced managers, weak internal controls, and incomplete financial reporting.
Finding 1.2 The reorganized Finance Department had inexperienced leadership.
Departed staff were replaced with new, underqualified or inexperienced staff members.
Although then City Manager DeWolfe had received the recommendation to hire strong leadership for the Finance Direction position,18 the acting Finance Director did not have any management experience in finance department operations. It is important that City employment policies and job descriptions for all positions within the Finance Department, especially that of the Finance Director, adhere to appropriate educational or equivalent experience requirements during recruitment. Potential Red Flags: Low employee morale, high turnover, inexperienced managers, weak internal controls, and incomplete financial reporting.
2. The Finance Department reorganization and the procurement of the Citygate Report were undertaken in circumstances that give rise to questions about a possible lack of transparency, possible attempt to cover-up alleged asset misappropriation, and potential existence of a conflict of interest by City Manager DeWolfe.
Finding 2.1 Questionable circumstances surrounded the timing of, and the process undertaken, to engage Citygate: Of note, one of the main items used by Ms. DeWolfe to support the Finance Department reorganization, was a report (the “Citygate Report”) provided by Citygate Associates, LLC (“Citygate”).19 According to the staff report to the City Council recommending hiring Citygate, an organizational assessment report was needed to prepare for the retirement of the finance director who had been on leave of absence. The report was 17 - 12
initiated by City Manager DeWolfe while the City was actively recruiting for a new finance director. The stated purpose of the report was to provide an “organizational review” and “best practices” in a confidential report to be used as a “resource and management tool” for the new finance director. However, in the two years that followed the report, the City had completed only 1 of the 43 items that the report recommended be implemented within the first 12 months.
Further, the FAHC finds that the existence of allegations by Lauren Rubin going back to March 2018, approximately a month before City Manager DeWolfe entered into a contract with Citygate, and other circumstances, raise concerns which should be discussed:
DeWolfe Engages Citygate for an Organizational Review of the Finance Department: Starting in March 2018, Lauren Rubin, a member of the Finance Department staff, sent then-Human Resources Manager Miriam Lee Ko and Karen Aceves messages regarding “financial irregularities and mishandling of a substantial amount of government and public monies,”20 however no response was received by Rubin. Approximately one month later, on April 19, 2018, a consulting contract between Citygate and the City of South Pasadena was signed by Ms. DeWolfe, including a not-to-exceed contract total of $69,420.00. The proposal had been presented to, and approved by, the City Council the prior evening on April 18, 2018. 21 A review of the City Clerk files on the City’s website did not find any evidence of a competitive bidding process as per the City’s typical procedures. Further, it was not disclosed, either in the presentation to the City Council by Staff nor in the contract with Citygate itself, that the Senior Consultant who would be performing the organizational review was former Pasadena Finance Director, Mr. Andrew Green. Mr. Green had previously worked with Ms. DeWolfe in the City of Pasadena for three years (2009-2012) 22, but
later departed the City of Pasadena in January 2015 amidst an investigation into the embezzlement of $6.4 million from a city fund overseen by Mr. Green.23 Questionable Circumstances Regarding the Rubin Case and Citygate: The Citygate report became a central piece in the subsequent wrongful termination lawsuit by Lauren Rubin claiming that DeWolfe commissioned the Citygate report, through her personal relationship with Green and without any competitive bidding process, in an attempt to invent cause to terminate Rubin and hide Rubin’s claims of financial improprieties from the City Council. 24 Rubin was terminated by
the City in November 2018, three months after Citygate issued the final, August 16, 2018 report.
It is unclear to the members of the FAHC whether the prior messages alleging “financial irregularities and mishandling…of…monies,” sent by Rubin to Ko and Aceves, were ever disclosed to the City Council prior to the commissioning of the Citygate report, the dismissal of Rubin by the City, or the filing of Rubin’s legal claim.
Per Ms. DeWolfe’s LinkedIn profile, since June 2021, approximately 2 months after a final settlement was reached in the Rubin case and nine months after DeWolfe’s separation from her position as City Manager of South Pasadena, Citygate hired Ms. DeWolfe as a Management & Leadership Consultant.
Potential Red Flags: Conflict of interest, management style that pressured employees to take actions beyond financial statement management to manipulation to outright misrepresentation which is fraud, potential asset misappropriation…providing contracts to third-parties due to personal relationships, misuse of Staff time or other City resources, and specific claims of financial irregularities made by Rubin.
Finding 2.2 The City Council appeared to have used, extensively and inappropriately, closed session City Manager performance reviews to conduct other business unrelated to the City Manager: For reference, the position of the City Manager reports to the South Pasadena City Council, and periodic performance evaluations of the City Manager are conducted by the City Council in closed session. A summary analysis, based on a review of the City Council closed 17 - 13
session agendas from January 2018 through August 2020, of the various dates these closed session performance evaluations occurred is included in the chart below:
Most cities and companies provide at least one performance review annually. Some private companies even perform regular reviews on a quarterly basis. Therefore, the existence of 12 performance reviews over an approximate 2-year span (or one performance review every 2.1 months on average) seems unusual in the absence of a performance improvement plan.
However, upon closer inspection of the dates in question, it is clear that there was no regular cadence to the closed session performance reviews. Rather these reviews come in three main spurts with large gaps between each grouping, including one grouping which contained three separate closed session performance reviews within the same 28-day period.
Potential Red Flags: Conflicts of interest, weak internal control processes, potential Brown Act violations
3. The Finance Department did not have, and did not follow, important internal controls, policies, and processes.
Finding 3.1 The Finance Department failed to reconcile bank accounts timely. While it is best practice to reconcile bank accounts and close monthly financials within 30 days of each month end, the Finance Department was as much as twelve (12) months behind in reconciling the City’s bank accounts and closing monthly financials, directly leading to the delay in starting/completing the 2018/19 CAFR. Potential Red Flags: Weak internal control processes
Finding 3.2 The City lacked controls or procedures to alert management to the Department’s unreconciled accounts. The City’s failure to have “procedures in place to ensure that all relevant accounts are reconciled” at year end was a “material weakness” finding by the auditor in the 2018/19 CAFR audit letter. (As outlined in more detail in Exhibit A of this report, in conjunction with the delivery of the 2018-2019 CAFR, the City’s outside audit firm, RAMS, highlighted several “material weaknesses” in the City’s internal control processes that negatively affected the timely delivery of financial reporting. These included, but were not limited to, monthly bank reconciliations being as much as 12 months delayed; an inability to properly review numerous financial statement accounts and a failure to maintain an adequate 17 - 14
Date of Closed Session Days Slnce Last Eval Total Days In Grouping # of Eva ls In Grouping Avg Months per Eval February 21. 2018 N/A N/A 1.0 N/A
r 2 July 18, 2018 147 !
! 3 August 15, 2018 28 !
! 4 October 17, 2018 63 203_0 !
I 5 Decem!M!r 19, 2018 63 6·
0 l.l3 I
j 6 January 16. 2019 28 j
j_ _____ 7 ·-·-February6,2019 ·-·-·-·-·-·-· 21 _·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-· ~---------------------------------------------------------------------------------------•-•J ' 8 August 21, 2019 196 ' 1 9 September 11, 2019 21 28.0 3.0 0.31 1
~---· 10 ___ September 18, 2019 ·-·-·-·-·-·-· 7-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·- r 11 January 15, 2020 119 !
I 12 March 18, 2020 63 63·
0 2·0 l.OS I
~------------------------------------------------------------------------------------------· TOTAL DATA SET: 756.0 u .o 2.10
year end closing process; and (noted as a “significant deficiency”) the failure of the Finance Department to maintain an updated accounting policies and procedures manual for Staff to reference. RAMS also noted that the root cause of these issues was the City’s inability to maintain adequate Staffing levels in the Finance Department. Potential Red Flags: Weak internal control processes
Finding 3.3 The Finance Department failed to prepare forward looking projections of the City’s cash position nor was the Monthly Liquidity Report certified by the City Treasurer as required by the City’s Investment Policy. The City’s Investment Policy (as voted on by the City Council each year) requires the City Treasurer to certify “as to the availability of cash to meet the City’s expenditures over the next six months…. based on cash flow projections provided by the Finance Department.” As of the date this FAHC was created, the City Treasurer’s monthly report was the only interim financial report regularly presented directly to the City Council. The City’s Investment Policy required the City Treasurer to certify the City’s liquidity position based on the forward-looking projections of the Finance Department.
Had the City Treasurer report and certification highlighted the Finance Department’s failure to provide the forward-looking statements, the City Council would have been directly alerted to the issue. The City Council would have been on notice as to the issues within the Finance Department, potentially as much as a year prior to the contentious budget discussions that occurred in June 2020. Potential Red Flags: Weak internal control processes
4. The City did not comply with its own purchasing policy.
Finding 4.1 The prior City Manager used her authority to undermine the spirit of the City’s purchasing policy requiring City Council approvals of major contracts. City purchasing policies include various provisions outlining authority levels required by the total size of expenditure. These policies state, among other things, that any contract, amendment, or followon contract, that results in a cumulative possible expenditure more than $25,000.00 requires approval by the City Council.
25 Included in the sample selections reviewed by RAMS as part of the 2018-2019 CAFR, approximately 18 contracts (provided to the FAHC directly by RAMS) were found to be in potential violation of the City’s purchasing policies, including at least 2 contracts that, on their surface, should have gone to the City Council for approval. Both were executed by then-acting City Manager DeWolfe and then-acting City Attorney Highsmith (contracted through Colantuono, Highsmith, and Whatley).26 Potential Red Flags: Weak internal control processes, asset misappropriation
5. The City did not have policies or procedures for administering its legal liability reserve.
Finding 5.1 The City did not have a policy or practice of accruing an actual reserve against its legal liability. Based on the FAHC’s review of the October 26, 2020, City Council meeting and follow up discussions with staff, the City did not maintain a legal liability reserve and had no policies or procedures for doing so. First, the $500,000 “reserve” amount which appeared on the City’s balance sheet remained constant over years, without any accounting entries of expenditures or accruals to reflect activity in the liability. Second, as elicited by FAHC member Rossi in the question-and-answer session with the auditor representative at the October 26, 2020, City Council meeting, the account was for all practical purposes an inactive placeholder account within the larger general reserve and there was no true legal liability reserve accrual maintained within the City’s balance sheet. Third, there was no method of review utilized by the City to determine the City’s true, outstanding legal liability to be reflected in the annual audit and financial statements as required by GASB. Instead the City relied exclusively on the City Attorney’s general, but inaccurate, belief that all litigation claims are covered by the City’s 17 - 15
insurance risk pool and therefore not required to accrue for properly. Potential Red Flags:
Weak internal control processes, conflict of interest, asset misappropriation, financial statement fraud
Finding 5.2 Official representations that the litigation liability reserve was an actual accrual for anticipated liability expenses were based on inaccurate statements made by City Attorney Highsmith and Councilmember Mahmud with no internal review process by the Finance Department, Finance Committee, City Manager, City Council, or the City’s outside audit firm, resulting in the filing of a potentially inaccurate 2018-2019 CAFR. At the October 26, 2020 council meeting, City Attorney Highsmith and Councilmember Mahmud represented that the annual designation of a legal liability reserve was a reserve against reasonably anticipated legal expenses, and 100% of all litigation expenses beyond the policy’s deductible would be covered by the City’s insurance pool making further discussion on the topic unnecessary.
However, during the same council meeting,
27 the City’s outside auditor affirmed: 1) there was no actual accrual in the City’s financials for litigation expenses; 2) despite the CAFR being conducted for the period ending June 30, 2019, given the date the CAFR was being delivered to the City Council, October 26, 2020, a review of all existing, pending, or threatened litigation outstanding at any time from June 30, 2019 through effectively September 30, 2020 would be necessary in order for the CAFR to be correct28; and 3) the auditors’ sole source of information regarding potential litigation claims against the City was a letter provided by then-acting City Attorney, Ms.
Theresa Highsmith, a partner at Colantuono, Highsmith, and Whatley. The representations by City Attorney Highsmith are further in direct contradiction to notification previously received by the City’s insurance provider, and available to the City Attorney prior to the October 26, 2020 council meeting and finalization of the 2018-2019 CAFR as outlined in Finding 5.3 below. As such, no oversight or review of the City Attorney’s methodologies, analysis, or conclusions was conducted by any member of City Staff, Finance Commission, or the City Council prior to a vote to receive the CAFR. The City Council voted 4-1 to receive and file the 2018-2019 CAFR on October 26, 2020. Potential Red Flags: Weak internal control processes, conflict of interest, asset misappropriation, financial statement fraud
Finding 5.3 The City filed and received the 2018-2019 audit report containing a legal liability estimate without adequate due diligence. Even if most claims against the City are covered by the City’s risk pool coverage, the City is still required, for both the purpose of presenting accurate financial reports as well as ensuring proper accountability for, and execution of, the City’s fiduciary responsibilities, to accurately estimate the amount of reserve needed for claim liabilities and for legal expenditures exceeding its annual legal expense budget. In the context of the City Council adoption of the 2018-2019 CAFR on October 26, 2020, it should be noted, that per emails provided to this FAHC and included as Exhibit B to this report, both City staff and Colantuono, Highsmith, and Whatley were made aware, at least 5 months prior to the October 26, 2020 Council meeting, that the City had been notified by its insurance company that at least one ongoing litigation may not be covered under the policy (“Case 2”). On May 27, 2020, City staff attempted to raise an alarm to the City Council that additional funds would be required to cover potential litigation costs, stating, “We need to go to Council for sure, can we discuss ASAP.” Upon a review of subsequent City Council meeting agendas, this topic was never brought before the City Council. FAHC finds this course of action does not demonstrate a good faith effort to accurately reserve against the City’s liability position or accurately present the City’s financial position and performance to the public. FAHC recommends that the City determine its estimated legal liability position in accordance with GASB, as required by local and State regulation, and after a full review of a fulsome economic risk analysis of all existing, pending, or threatened litigation outstanding for the relevant time-period, prepared by the City Attorney and reviewed by the Finance Department, Finance Commission, City Manager, and the City Council prior to inclusion in any City budget or CAFR.
17 - 16
As of the October 26, 2020 City Council meeting, ”Case 2” was still being tried on behalf of the City by litigators employed by Colantuono, Highsmith, and Whatley. Notification of potential non-coverage by the City’s insurance company appears to be in direct contradiction to the information provided by then-acting City Attorney Highsmith, in writing to the City’s outside auditors, and directly to the City Council during open session, and may have negatively impacted the accuracy of the financial information included in the 2018-2019 CAFR. Potential Red Flags:
Weak internal control processes, conflict of interest, asset misappropriation, financial statement fraud
Finding 5.4 The City’s potentially inadequate due diligence or policies regarding litigation risk assessment and risk management led to approximately $600,000 of litigation and settlement costs born by taxpayers. Below is an example of a litigation issue with potential inadequate risk management. On May 20, 2022, the SouthPasadenan reported that the Hanscom Drive sewer litigation (referred to by the City as “Case 2”) had been settled for $200,000. This settlement was in regard to a two-day sewer overflow that occurred on January 11th and January 12th, 2018.29 Included in the settlement agreement is the City’s first public acknowledgement that the sewer blockage (found by work crews on January 12, 2018) actually resided in the City’s mainline sewer system. In January 2018, the resident initially requested approximately $40,000 to pay for environmental remediation of the soil as well as replacement of damaged personal property from the overflow caused by a blockage in the City’s sewer mainline. The City decided not to accept the request. The resident hired a lawyer in early 2018. In October 2019, the resident again made a settlement offer to the City through then Mayor Khubesrian for $80,000 to cover the environmental remediation, replacement of damaged personal property, and incurred legal costs through that date. The settlement offer was not accepted by the city.
Litigation continued until a final settlement offer was executed in mid-May 2022. Based on the legal billings presented in open session City council meetings plus third-party expert costs including but not limited to engineering, soil testing, Transtech inspections, and the final settlement cost itself, the City spent approximately $600,000 in hard costs regarding Case 2, not including soft costs associated with City staff and Council time as well. Please see below for additional detail on legal billings and timeline of key events:
17 - 17
General Servlc:es
LITIGATION (UNIDENTIFIED)
Case 2 (SMITHI
Case 1 (Fox)
Case !Bemonl)
Other Identified Uti ation Cases
Transportation P l O issues)
Labor & Employment
Special Projecu
TJix & Assessment
Water & Utilities
COVID-19
Gardena V RWQCB
Mii;ceUaneoos
Subtotal
%Gro'NlhYoV
Subtotal • Litigation (All)
Subtotal • Litigat ion (Identified as Smith Case)
Case 2 {Smith) as" of total lit igation Expense by Period (as Identified In Billings) Subtotal • Litigation (Identified Smith~ Pro Forma for Undesijlnated Billings) FV2015-2016 FV:Z016-2017 FV2017-:Z011 FYZ017-:Z011 FY:ZOll-2019 FY:Z019-2010 FYZ010-:ZOZ1 FV2011·Z012 SVNtT~ 193,569.00 241,457.00 47,661.44 95,322.88 105,763.72 " 99,376.28 107,083.94 100,008.30 507,SSS.12 21,604.00
9,354.00
1,998.00
226,SZS.OO
N/A
2,SlS.00
8,461.00
1,onoo 253,466.00
11.9"
16,921.31
22,089.81
2,396.50
11,727.00
18,256.00
1,611.50
1,457.00
1,871.00
ll3,991.S6
39,011.12
33,842.62
44,179.62
4,793.00
23,454.00
36,512.00
3,223.00
2,914.00
3,742.00
247,983.lZ
•2.2%
78,022.24
116,341.18
5,263.50 " 114,175.53 156,648.38 35,5S6.4fl
116,341.18
311,643.89
16,738.50
SS,786.94
218,805.69
14, 775.SO 1,963.00
21,944.32
44,337.65
~::!;:: ,, 80,950.57 "
11,280.00 ,,
7,520.00 ,,
3,681.SO "
1,903.SO
333,300.16
34.4%
75,029.06
8,941.00
52,509.19
96,759.87
5,724.50
5,694.50
10,392.00
8,346.15
600.00
479,511.08
43.9%
191,167.59
51.649.01
12,208.57
B,527.00
116,843.80
4,336.50
10,734.50
8,042.00
2,608.00
3,610.35
857.50
50,892.00
158,185.58
318.50
16,377.SO
144.50
28,327.57
194,734.69
489,251.82
24,882.50
43,240.50
18,434.00
18,522.15
(415.10) 33,639.44 35,727.84
503,166.60 SlS,931.33 2,079,992.39
5.0%
203,297.39
2.5"
155,508.01 719,316.20
5,263.SO 114,175.53 156,648.38 35,556.48 311,643.89
6.1" 59.7% 7S.2% 22.9" 43.3%
5,263.50 114,175.53 156,648.38 116,948.55 393,035.96
Case 2 {Smith) as" of total litigation Expense by Period (Pro Forma fOJ Undeslgnated Billings) 6.1% 59.7% 75.2% 7S.2% 54.6% CITY CA.SE 2 LITIGATION EXPENSE DETAIL BASED ON KEV TIME LINE OF EVENTS Key Items and DJitts
Original $40K Cl.11im from Resident for ProP-@rty Remedi.11tion and Repl.11cement Costs lnltl.111 $80+( Senlement Offer from Resident and Dat e of City Press Conference First Mediation
Judge Kralik Rules Ag.11inu City in 51..APP Case
Mandatory Settlement Conference
City Files ApP-@als Brief in SLAPP litigation
First Formal Offer of ~ttlement From the City to ReslMnt DATE
Jan-18
Oct-19
Jun-20
J.;in-21
Jun-21
Nov-21
Dec:•21
# OF MONTHS
N/A
21.27 8.13
7.13 S.03
5.10 $ hpenses CumulJitlve $"s Cumulat ive"
01)%
11,825.86 11,82S.86 2.0%
107,613.17 119,439.03 20.1%
61,6&1.42 181,120.45 30.S"
94,966.96 276,087.41 46.6" s
71,011.40 147,098.81 58.5%
347,098.81 58.S"
Settlement hecuted Between City and Resident May-22 6.03 45,937.15 393,0lS.96 66.3" -"~"="~Ag~,~•e<=$2=00K="="'=•m~•~"'~'°="~'~=Clty=IN~••~'~~'"='~••~;"~•~rni~"•~'"="~m=be=~~''°=~I ---------~""~'~-•~• ----------~•=oo~,ooc = .oo~ 593,0lS.96 100.0% Cumul.;itlvf, Total Expense lhc:ludlnf Thifd Party Fffs i.. Tu,rutech, e'!inffrs. etc) 52. 70 593,0lS.'Mi Tot.11 Cost to the City Since l osing !he SLAPP Judgement Total Cost to the City Since First Mediation D.11te
Tot.Ill Cost to the City Since $80K Settlement Proposal Made by Resident Total Cost to the City Since Orijlinal $401( Cl.11im M.11de by Resident Jan-21
Jun-20
Oct-19
Jan-18
411,915.51
473,S96.93
581,210.10
593,035.96
Ched<
Approximately $600,000 of litigation costs came after the resident’s initial request of $40,000.00.
The City Attorney at that time, Highsmith, is employed directly by Colantuono, Highsmith, and Whatley, the firm hired to litigate Case 2. As noted by the California League of Cities white paper on City Attorney ethics30, there is a potential conflict of interest for a partner in a law firm, serving as a contract city attorney, to advise a city council on litigation work conducted by other members of the same law firm. Potential Red Flags: Weak internal control processes, conflict of interest, asset misappropriation
6. The City decreased its financial transparency by reducing the detail and frequency of its financial reporting to Council.
Finding 6.1 The City discontinued its semi-annual report on expenses for attorneys, consultants, and lobbyists. Historically, and to track total expenditures more readily for each group by category, a consolidated summary of expenses spent during the year on attorneys, consultants, and lobbyists was provided twice a year to the City Council. Without the provided consolidation, it is difficult to track total expenses by category as expenses can be distributed across multiple departments and Fund accounts making it impossible for the City Council to trace the impact of litigation, staffing, or outsourcing decisions – and thereby significantly reducing the ability for oversight from both the City Council and residents. While this report was historically provided twice per year, at the time the FAHC was created, the last issuance of such a report was in February 2018. Please note that these legacy reports had been available online via the Finance Department website until sometime in mid to late 2020. They have since been removed.
Potential Red Flags: Weak internal control processes, conflict of interest, asset misappropriation, financial statement fraud
Finding 6.2 The City reduced the detail provided in its Legal Billing Disclosures amidst resident concerns regarding conflicts of interest regarding the City Attorney’s employment by Colantuono, Highsmith, and Whatley As far back as the 1990’s (the oldest available files archived in the City’s online document database) legal expenses included in the warrant register presented, and approved for payment by the City Council were summarized by matter with each matter assigned a specific identifier (either a matter name or case number).31 Starting with the legal expenses billed for the month of July 2021 by Colantuono, Highsmith, and Whatley (the firm which employs the City’s contract City Attorney among providing other legal services), and presented to the City Council for inclusion in the warrant register to be approved on October 6, 2021,32 these identifiers have been removed.
It should be noted that, while discussion by the City Council during the October 6th meeting concluded that the shift in billing practice was to mitigate any potential “advantage” that an 17 - 18
LrTIGATION(UNI0lNTlfl!0f
C... 2(SMmif
~ l lfc•f
~l!l«uonll
Olher~nt,lle<IU . !loflC...s
LrTIGATION(UNI0(NTlfl!0f
C... 2(SM!l'Hf
Tran'flOCl• llon (1l0;.w,.)
L.>bof& (~t
'is>Kl>IProttct<
h,&.....,WMn!
Wa!e< &IJ!ili!iff
001'10·19
2,086.SO IUOO 1,081.00 1,848.00 107.00 2,112.40
6,78S.SO 1,997.SO 4,2Sl.SO 1,431.SO lOS.SO 1,011.00
10,300.26 J,413.05 J,067.00 16,lll.74 S,470.SS 141.00
s.721.78 4.714.00 J.407.SO 4,840.SS 21.854.30 7,000.SO
188.00
446.SO 4.U6.00
l,:!00.SO
7.261.SO 13,641.00
24.SO
8,711.00
634.SO
Sl7.00
S,898.SO
1, ISG.00 2,Sll.SO
36.81S.SO I S.SM.SO
1:!0.SO
l,7l9.SO
2.4:!0.SO l .'JSO.SO
1s2.oo ro.so
2,340.00
,aoo
10,S'l6.SO
:!O,S60.SO
8,161.68 10.671.09 17,607.18 B .543.SO 10,988.l S
(16.SO 367.SO
20.lOHXl
190.00
17,7SO.lS
60B0
612.SO 318.SO
S,1341.00 4,SSl .00
opposing council could gain by seeing the amount of billings incurred by the City on any particular case, this change in billing practices occurred just one month after various residents raised concerns to the City Council, via public comments, regarding what was perceived to be excessive litigation costs, specifically citing the billings by Colantuono, Highsmith, and Whatley associated with the ongoing “Case 2” litigation.33 That South Pasadena City Attorney, Andrew Jared, who recommended the change in the decades-long billings practice, is a contract City Attorney employed directly by Colantuono, Highsmith, and Whatley presents a conflict of interest vis a vis the recommendation to Council. Potential Red Flags: Weak internal control processes, conflict of interest, asset misappropriation, financial statement fraud Finding 6.3 If the City had maintained the frequency and detail of legal expense reporting, the disclosures would have alerted the public to large fluctuations in legal expenses from year to year. The 2018-2019 CAFR filed with the City Council on October 26, 2020, estimated legal liabilities of the City, outside of its budgeted legal expenses, at $500,000. On March 12, 2021, less than 5 months after the 2018-2019 CAFR was presented to the City Council, the SouthPasadenan reported34 that the City’s then-proposed 2020-2021 City budget included a litigation budget of “$1.15 million for 2021, nearly four times as much as for 2020...” The article also quotes then-acting Interim Assistant City Manager, Elaine Aguilar, as stating the “$1.15 million figures does not include potential costs for the still pending litigation over a sewer leak on Hanscom Dr. [Case 2]” FAHC recommends that increased financial reporting of highly fluctuating, cumulatively large legal expenses is an important step toward greater financial transparency, including an immediate return to providing semi-annual reports on expenses for all lawyers, consultants, and lobbyists. Potential Red Flags: Weak internal control processes, conflict of interest, asset misappropriation, financial statement fraud IV. RECOMMENDATION REGARDING A FORENSIC AUDIT
It was not within the scope of the FAHC to make any conclusions as to whether any inappropriate activities had occurred or the intentions behind any individual activities described in this report. The FAHC has not made, nor does it infer, any such conclusions. Rather, it was the task of the FAHC to investigate whether red flags existed that would indicate inappropriate activities may have occurred. It is the opinion of the FAHC that the red flags discussed throughout this report do, on their surface, warrant a further review by specialists via a forensic audit.
However, given the number of years that have transpired since the bulk of these actions took place, the significant financial cost associated with such an endeavor, and the prior removal/resignation of many then-acting City officials potentially involved, such a step may not be practical for the City at this time. The FAHC instead recommends the City take the additional actions outlined below to help ensure similar activities are not tolerated or allowed to exist in the future. This conclusion was based, in no small part, upon the assumption that City Staff, the Finance Commission, and the City Council will continue to implement the many recommendations provided in both this report and previously provided throughout the FAHC’s work. In the event the City does not follow through on the recommendations provided in the next 12 months, it is the belief of the FAHC that a forensic audit, designed to look into the numerous findings discussed in this report, is not only warranted, but necessary.
It is further recommended that City Staff:
• Review and prepare an analysis to the Finance Commission and City Council regarding the viability of instituting a new, independent internal auditor position within the City of South Pasadena. As discussed elsewhere in this report, the existing City policies and procedures, had they been properly followed, would have helped prevent or eliminate many of the FAHC’s findings. However, as the position of City Manager is the only City Staff member reporting directly to the City Council who is also under the Council’s direct and sole supervision, a potential for conflict of interest is created. An Internal Auditor, hired by, reporting to, and having compensation determined directly by the City Council, would act 17 - 19
independently of the City Manager and Finance Departments, helping to ensure ongoing compliance with stated City codes, policies, and procedures without fear of intimidation or retaliation by the City Manager.
This internal auditor could support the City Council in their responsibility for oversight by providing institutional knowledge and an additional level of security regarding stewardship of funds for the citizens of South Pasadena;
• In order to comply with best practices for contract attorneys as described by the League of California Cities and the City of South Pasadena’s own code of ethics requiring the elimination of even the “appearance” of a conflict of interest, it is recommended the City codify as policy that the City cannot retain one law firm to provide both (i) contract City Attorney services, and (ii) litigation services; • Immediately proceed with an RFP for a new contract City Attorney law firm (as already motioned by Councilmember Zneimer and seconded by Councilmember Cacciotti in open session during the September 1, 2021 council meeting) to be acted upon, and any awards determined, by the newly constituted City Council after the November 2022 elections;
• Determine its estimated legal liability position in accordance with GASB, as required by local and State regulation, and after a full review of a fulsome economic risk analysis of all existing, pending, or threatened litigation outstanding for the relevant time-period, prepared by the City Attorney and reviewed by the Finance Department, Finance Commission, City Manager, and the City Council prior to inclusion in any City budget or CAFR;
• Increase financial reporting of highly fluctuating, cumulatively large legal expenses, including an immediate return to providing semi-annual reports on expenses for all lawyers, consultants, and lobbyists; and
• Provide a quarterly update to the Finance Commission to update both that body and, in turn through Finance Commission and City Council Liaison reports, the City Council as to Staff’s progress on implementing the recommended actions.
The opinion is based on the FAHC’s work on the operational matters described above; its review of documents and other information provided by Staff during the FAHC’s work; agenda reports, presentations, and discussions at open meetings of the Finance Commission and City Council; and other related, publicly accessible materials – many of which have been cited throughout this report in support of the FAHC’s findings and recommendations.
The FAHC did not consider, and did not have access to, City Council closed session materials, or other information protected from disclosure to the public by the attorney-client or other privileges. Nevertheless, the FAHC believes that the current members of the City Council, in consultation with current City senior management, should conduct its own assessment of the necessity for and scope of any additional audits (including a forensic audit if deemed warranted), using relevant materials that may be outside the scope of the FAHC’s work or protected from public disclosure.
For the purpose of transparency to Staff, the City Council, and City residents, much of the FAHC’s discussions regarding the final scope item, to “Assess whether it is advisable for staff to recommend a forensic audit be conducted for the period of July 2019 through the current period [September 2020],” can be found in publicly available emails and Zoom meeting video recordings (for the final two meetings of the FAHC). Videos can be found on the City’s YouTube channel (https://youtu.be/EBod1BSaoQY and https://www.youtube.com/watch?v=qkCj65QccE). [Rest of this page left intentionally blank]
17 - 20
EXHIBIT A
COMPREHENSIVE ANNUAL FINANCIAL REPORT (“CAFR”) FOR FISCAL YEAR 2018-2019 On September 24, 2020, a draft Comprehensive Annual Financial Report (“CAFR”) for fiscal year 2018-2019 was presented to the Finance Commission for review, discussion, and a recommendation to City Council.
During its initial review of the draft 2018-2019 ACFR, the commission discovered discrepancies between the draft 2018-2019 ACFR and the 2018-2019 budget adopted by City Council on June 6, 2018.35 The commission further observed discrepancies between the 2018-2019 budget adopted by City Council and the 2018-2019 budget document posted on the City’s website.36
In other words, there were three different 2018-2019 budget documents, two of which were different from the budget document actually adopted by the City Council in 2018. The commission could not find evidence that the changes had been disclosed to or approved by the City Council.
In its initial meeting on October 13, 2020, the FAHC reviewed, discussed, and provided feedback to staff on the draft CAFR, on the variances identified by the Finance Commission, and on the adverse findings made by the City’s auditor in connection with the draft 2018-2019 CAFR. Among others, the auditor’s findings included:
• Non-Compliance with Budget Policy: While reviewing the DRAFT 2018/19 CAFR, members of the FAHC realized that the 2018/19 Budget referred to in the DRAFT CAFR was not consistent with the 2018/19 Budget approved by the City Council. Similar to the 2020/21 Budget variances described elsewhere in this report, subsequent to approval of the 2018/19 Budget by the City Council, errors within the Budget appear to have been discovered by members of the Finance Department and “corrected” without any notification to, review, or approval by the Finance Commission or City Council. As noted by RAMS and included in the 2018/19 CAFR Management Letter, this was in violation of stated City Financial Policy. • Non-Compliance with City Purchasing Policy: City purchasing policies include various provisions outlining authority levels required by the total size of expenditure. These policies state, among other things, that any contract, amendment, or follow-on contract, that results in a cumulative possible expenditure in excess of $25,000.00 requires approval by the City Council37. Included in the sample selections reviewed by RAMS as part of the 2018/19 CAFR, approximately eighteen (18) contracts were found to be in potential violation of the City’s purchasing policies, including at least two contracts that, on their surface, should have gone to the City Council for approval. Both were executed by then-acting City Manager DeWolfe and then-acting City Attorney Highsmith (contracted through Colantuono, Highsmith, and Whatley).
• Bank Reconciliations Not Prepared Timely: RAMS found that bank reconciliations had not been prepared, reviewed or approved in a timely manner, describing the cause as: “The City did not have controls in place to ensure bank reconciliations were performed in timely manner [i.e., monthly].” The auditor considered this deficiency to be a “material weakness.”38
• Year-End Closing Process: RAMS found that “many accounts were not properly reviewed and/or reconciled at year-end in preparation for the [2018-2019] audit.” The auditor described the cause as:
“The City did not maintain the appropriate staffing levels to allow for the proper year-end closing process.” The auditor considered this deficiency to be a material weakness. 17 - 21
• Accounting Procedures and Policies Manual: RAMS found that the Finance Department did not have “an updated accounting procedures and policies manual readily available for reference.” The auditor considered this deficiency a “significant deficiency.”39 A revised draft 2018-2019 CAFR was presented to the Finance Commission on October 15, 2020, with current staff disclosing and explaining the revisions made to the draft initially presented to the commission on September 24, 2020, in response to feedback received from the commission and from the FAHC. The commission voted to receive and file the 2018-2019 CAFR.
The 2018-2019 CAFR was presented to the City Council on October 26, 2020. The agenda report discussed and explained the variances identified by the Finance Commission and their review by the Finance Commission and by the FAHC. The City Council voted 4-1 to receive and file the 2018-2019 CAFR.40 In the FAHC’s view, a primary cause of the financial reporting crisis that led to the formation of the FAHC was insufficient staffing in the Finance Department. In addition to the “high turnover at the management level in the Finance Department” cited by the City’s auditor, an ill-conceived 2018 reorganization of the Finance Department, promoted by the then-acting City Manager, reduced department staff from a historical nine (9) to five (5), and outsourced business licenses and payroll functions.
Exacerbating the reduction in staff was the replacement of legacy staff with new staff who did not have institutional knowledge, and the hiring of a Finance Director who lacked the experience necessary to lead the department.
These conditions, compounded by a lack of controls (and the failure to follow existing controls), led to a delay in month-end bank reconciliations -- by as much as twelve (12) months -- which in turn led to a delay in the year-end closing process, which in turn led to a delay in commencing the audit process for the 2018-2019 CAFR.
The City’s former City Manager retired suddenly effective September 12, 2020, immediately subsequent a September 11, 2020 Special Agenda Closed Session performance evaluation with the City Council. The City’s former Finance Director left on an unspecified indefinite family leave in August 2020, and resigned on October 6, 2020, prior to returning from leave and one week after the formation of this FAHC was announced. 41 The committee credits the interim Assistant City Manager hired to lead the Finance Department and current department staff for their transparency and responsiveness to feedback from the Finance Commission and the FAHC, and for bringing the fiscal year 2018-2019 CAFR to completion.
ANNUAL COMPREHENSIVE FINANCIAL REPORT (“ACFR”) FOR FISCAL YEAR 2019-2020 Finance Department staff regularly updated the FAHC and the Finance Commission on the progress of the audit necessary to complete the Annual Comprehensive Financial Report (“ACFR”) for fiscal year 2019-2020, noting completion of tasks on the year-end audit schedule.
To assist staff with preparation for the 2019-2020 audit, the FAHC reviewed City Council agenda materials for the 2019-2020 fiscal year (July 1, 2019, through June 30, 2020) to identify City Council action that had the effect of adjusting or modifying the budget, such as authorizing contracts or contract amendments, or increasing contract amounts. The FAHC members assembled the relevant agendas, agenda reports, and minutes for use by staff in connection with the audit and completion of the 2019-2020 ACFR.
A draft 2019-2020 ACFR was presented to the Finance Commission on July 14, 2021, and to the City Council on July 21, 2021. Both bodies voted to receive and file the report. 17 - 22
ANNUAL BUDGET FOR FISCAL YEAR 2020-2021
A new, draft fiscal year 2020-2021 budget was presented to the Finance Commission on March 4, 2021, and to the City Council on April 27, 2021. The commission voted unanimously to recommend approval of the 2020-2021 budget, and the Council voted unanimously to adopt the budget.
With the 2018-2019 CAFR having been completed, year-end fund balances and fiscal year 2018-2019 revenue and expenditures reported in the 2020-2021 budget were tied to actual, audited numbers. Additionally, fiscal year 2019-2020 revenue and expenditures were tied to pre-audit, actual numbers.
UPDATING FINANCIAL POLICIES AND PROCEDURES
As part of the FAHC review, recommendations were made to Staff regarding updated financial policies in 2021- 2022 budget including: mid-year budget update, quarterly reports, GASB 10 / risk management accounting (revenues and expenditures are now accounted for through insurance internal service fund, instead of through general fund via transfer). The FAHC also discussed purchasing policies, the lack of a current policies and procedures manual, reviewed existing City policies as provided by staff, and also reviewed other the policies of other “case study” cities with the City of Irvine providing a model as to best practices. The City has since retained a consultant to draft an updated policies and procedures manual tailored to the City of South Pasadena based on the prior mentioned recommendations and reviews.
17 - 23
EXHIBIT B
From: Lucy Demirjian
Sent: Wednesday, May 27, 2020 9:37 AM
To: Stephanie DeWolfe <[email protected]>; Karen Aceves <[email protected]>
Cc: Tamara Binns <[email protected]>
Subject: RE: Legal Services Account
Importance: High
Not good news here…. We will need min $180K to get through the year. COVID expenses are less than $20K to date. And the ASmith reimbursement is not guaranteed, Mike doesn’t believe it will be approved.
We need to go to Council for sure, can we discuss ASAP.
From: Karen Aceves <[email protected]>
Sent: Wednesday, May 27, 2020, 9:11 AM
To: Tamara Binns; Lucy Demirjian
Subject: Legal Services Account
Hi All,
We need to go to council to request an increase for legal services of about $200,000 for the remainder of the year. It is already over by 21, 000 so we will need to go to council this meeting.
Let’s talk more.
Karen
From: Michael Casalou
To: Sean Joyce
Subject: RE: Risk Management
Date: Wednesday, November 4, 2020 3:59:13 PM
With respect to excess coverage, a final coverage determination is made at the conclusion of a claim and if deemed not covered, related defense costs are also not covered. However, PRISM staff, on behalf of the Claims Review Committee issues a coverage alert letter early on as a courtesy to members to provide preliminary notice of potentially uncovered exposure.
The Liabilities Claims Specialist and staff from PRISM make the determination. However, they do allow communication from a member to make an argument for coverage. I am aware of only one case (Smith case) where we were notified that we may have coverage issues. However, the City’s attorney (Jenni Pancake) on that case provided a detailed response to their initial coverage letter that seemed to resonate with the PRISM staff.
From: Sean Joyce <[email protected]>
Sent: Wednesday, November 4, 2020 3:48 PM
To: Michael Casalou <[email protected]>
17 - 24
Subject: Fwd: Risk Management
Begin forwarded message:
From: Stephen Rossi <[email protected]>
Date: November 4, 2020 at 3:37:20 PM PST
To: Sean Joyce <[email protected]>
Subject: Re: Risk Management
So the two follow up questions would be:
• When do we submit for reimbursement for expenses in excess of $100K? At the time of invoice, payment, or final judgement?
• "The Liability program works on a reimbursement basis, therefore, the City will be reimbursed for amounts spent above the SIR assuming the loss is a covered under the bylaws. " Who is looking at whats covered under the bylaws and has the insurance carrier acknowledged that all of the ongoing litigations are covered? From: Sean Joyce
Sent: Tuesday, November 3, 2020 1:33 PM
To: Stephen Rossi
Subject: FW: Risk Management
Steve,
See Mike’s explanation below.
Sean
From: Michael Casalou
Sent: Tuesday, November 3, 2020 1:24 PM
To: Sean Joyce <[email protected]>
Subject: Risk Management
Risk Management Overview
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets, error and omissions; injuries to employees and natural disasters. The City utilizes a combination of self-insurance, Joint Powers Authority participation and excess insurance to address these concerns. The City’s primary coverage provider is Public Risk Innovation, Solutions and Management (PRISM formerly CSAC). The purpose of this organization is to provide a form of liability, workers compensation and property coverage whereby risks are transferred to the JPA to fund appropriately for its member agencies. General liability, Workers Compensation and Property losses are pooled among the member cities at certain levels, and coverage is jointly purchased in excess layers. The City pays an annual deposit based on a calculation of prior claims experience and payroll (or Total Insured Values for Property coverage). For Liability, the City has a self-insured retention of $100,000, losses exceeding the self-retention limit up to $5 million per claim are recovered from deposits paid by member cities.
Individual claims in excess of $5 million up to a maximum of $50 million are covered by private insurance carriers. The Liability program works on a reimbursement basis, therefore, the City will be reimbursed for amounts spent above the SIR assuming the loss is a covered under the bylaws. For Workers Compensation, the City has a self-insured retention of $125,000, losses exceeding the self-retention limit up to $5 million per claim are recovered from deposits paid by member cities. Individual claims in excess of $5 million are covered by private insurance carriers who provide ‘Statutory’ coverage. 17 - 25
EXHIBIT C
17 - 26
12MosActual 12 Mos Actual 6 MosActual 12 Mos Allnuat'd 12 Mos Actual l 2MosActual 12 Mos Actual l1 Mos Actual FY2015·2016 FY2016·2017 FY2017•2011 FY2017•2011 FY2011·2019 FY2019·2020 FYlOl0-2021 FY2021·2022 SYe•Total Che<k General Services 193,569.00 241,457.00 47,661.44 95,322 .88 105,763.72 ,, 99,376.28 107,083.94 100,008.30 507,SSS.12 LITIGATION 116,341.11 116,341.11
Case 2(SMITH) 5,263.50 ,, 114,17S.S3 156,648.38 35,556.48 311,643.89 Case l(Fo11J 14,77S.SO 1,963.00 16,738.50 Case(Benzonl) 16,921.31 33,842.62 21,944.32 55,786.94 Misc. litigation 22,089.81 44,179.62 44,337.6S 7S,029.06 Sl,649.01 3,610.35 218,SOS.69 Transp0f'tation (710 Issues) 21,604.00 2,SlS.00 2,396.50 4,793.00 1,S27.SO 8,941.00 12,208.57 857.50 28,327.57 Labor & Employment 9,354.00 8,461.00 11,727.00 23,454.00 34,352.50 ,, 52,509.19 33,527.00 50,892.00 194,734.69 Special Projects 18,256.00 36,Sl2.00 80,950.57 ,, 96,7S9.87 116,843.80 158,185.SS 489,2S1.82 Tax & Assessment 1,611.50 3,223.00 11,280.00 5,724.50 4,336.50 318.50 24,882 .50 Water & Utilities 1,457.00 2,914.00 7,520.00 : S,694.50 10,734.50 16,377.50 43,240.50 COVID-19 10,392.00 8,042.00 18,434 .00 Gardena V RWQCB 1,871.00 3,742.00 3,681.50 ,, 8,346.15 2,608.00 144.50 18,522 .15 Miscellaneous 1,998.00 1,033.00 1,903.50 600.00 (415.10) 33,639.44 35,727.84 Subtotal 21.6,S25.00 253,466.00 123,991.56 247,983.12 333,300.26 479,Sll.08 503,266.60 515,931.33 2,079,992.39 " GrowthYoY N/ A 11.9" -2.2" 34.4" 43.9" '·°" 2.5"
Subtotal • litigation (All) 39,011.12 78,022 .24 86,320.97 191,167.59 208,297.39 155,508.01 719,316.20 Subtotal • litigation (Identified as Smith Case) 5,263.50 114,l7S.S3 1S6,648.38 lS,556.48 311,643.89 Case 2 (Smith) as" or total Litigation Expense by Period (as Identified in Billings) 6.1" 59.7" 75.2" 22.9" 43.3" Subtotal - Litigation (ldentlfted Smith Q!..!a Pro Forma for Undeslgnated BIiiings) 5,263.50 114,l7S.S3 156,648.38 116,948.SS 393,03S.96 Case 2 (Smith) as" of total Litigation Expense by Period (Pro Forma for Undeslgnated Billings) 6.l" S9.7" 7S.2" 7S.2" S4.6" CITY CASE 2 LITIGATION EXPENSE DETAIL BASED ON KEY Tl MELINE OF EVENTS Key Items and Dates DATE #OF MONTH$ $Expenses Cumulat lve $'s Cumulative" Orlglnal $40K C1alm from Resident for Prope,w Remedlatlon and Replacement Costs Jan-18 N/A 0.0% Initial $SOK Senlement Offer from Reslden1 and Date of C11y Press Conference Oct-19 21.27 11,825.86 11,82S.86 First Mediation Jun-20 8.13 107,613.17 119,439.03 '·°" 20.1"
Judge Krallk Rules Against City in SlAPP Case Jan-21 7.13 61,681.42 181,120.45 30.5" Mandatory Settlement Conference Jun-21 5.03 . 94,966.96 276,087.41 46.6" s City Files Appeals Brief in SlAPP Li tigation Nov-21 5.10 71,011 .40 347,098.81 58.5" First Formal Offer of Settlement From the City to Resident . Dec-21 347,098.81 58.5" Settlement Executed Between City and Resident May-22 6.03 4S,937.15 393,035.96 66.l" Plus: Agreed $200K Settlement Cost for City jNot Included In billings numbers above) May-22 200,000.00 593,0lS.96 100.0% Cumulative Total Expense (Excludln& Third Party Fees le. Transtech, encineers, etc) 52.70 593,035.96 Total Cost to the CltySlnce Losing the SlAPP Judgement Jan-21 411,915.51 Total Cost to the CltySlnce First Mediation Date Jun-20 473,596.93 Total Cost to the City Since $80IC Settlement Proposal Made by Residen1 Oct-19 581,210.10 Total Cost to the Clty Since Original $40K Claim Made by Resident Jan-18 593,035.96 FYlOll-lOlt
I/},/~ 1/QI~ 2/7/11 5/Z/11 6&.P 1/ll/~ 1/U/U ll/.!./11 1/16/11 J/6111 4/Q/11 S/ll/.!!...a.1/11/11 1/11/~ 10/1111 11/6/~ 12/4/11 12/11/11 2/S/lO J/~------'/W:!!!...a 6/.3/'l.G 6/JJ.J~ 1,..._u11on(7l01swe>)
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SpeciolProje,<t, lITIGATION IUNl0OITlflED)
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9,S91.J7 9,S99,S'I 9,SJO.IS 18.19).53 19,MUJ 19,US.ll 9,SOD.DO 11,Jl6.2S 9.SIJ,lO 9,6l0.64 9.601.54 9,6SO.ID 9.560.U 9,560.Jl 10.011.n 10,0'JS.l l 10.lU.'2 10,0JS.40 10,067.28 l0.06S.JS 10,0BS.71 4.l ~.95 s,.-9.DO l,086.SO 141,00 l,OII.DO l.MB.00 107.00 l,Jll.40 4,l49,'l6 11,S~.lS u,ns.SJ: 1,)11.10 1,161.61 10,671.09 11,607.11 B,S4J.SO 10,981.25 6,'8S.SO 1,997.SO 4,lSJ.SO l,4JlSO )OS.SO l,Ol!.00 9800 660.SO 91.00 01.SO 1.010.SO 111.SO US.DO 164.SO JSJ:.SO 47,00 SIJ.00 196.00 1,697.00 491.SO 1.998.DO S,757.SO 3,471.00 S,146.SO ll,HO.SO UJ'9.SO J,2116.00 3,071.SO S,998.SO 1,034.00 1,959.00 l.209.00 1,292.SO 4,624.SO 1,411.00 3,187.SO 16,047.91 4,064.00 1,077.SO 12,746.76 1,411.00 1.611.SO l.231.SO !,&USO 10,199.00 J,SJS.00 s.,~.so ll,330.ll l,7l!DO 12,624.I& !,IOI.SO 15,194.57 4,112.00 U7Ul l.&949' ),0)4.0I ),471.00 2,140.00 ), llOOli J,5&156 lO,Xl).00 11,000.so 22,511.56 11,750.U 1,4ll.SO
491.SO
l ,4l0.SO 1,950.SO
7U00 ,u.s.o
s,141.00 ,.ss1.00
=======----.J7/l/2G 7/!j/'l.G 1/S/XI 11/11/10 12/16/lO 3/3/Zl 4/1/11 4/11/U 1(7fU-J./Zl/Zl 10/t/.n___tol.D/U 11/10/21 1/12/ll l/2/U 3/ZI/U ~ R-._S/4/11.J. 6,4SS.SO 14,917.80 9,14,1.00 10.000.00 10,000.00 10.006.80 10,000.00 10,000.00 l,l7J,SO
3,544.SO
voo.so
7,MI.SO IJ,641.00
l4.SO
117.SO
1.11&.00
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ENDNOTES
1 The agenda report also represented, incorrectly, that the different draft budget presented the City Council had been reviewed and recommended for approval by the Finance Commission. The agenda report begins at page 17-1 of the agenda packet for the Council’s June 3, 2020, meeting.
2 With respect to reserve and special revenue fund balances, both the former finance director who authored one of the critical reports and the Finance Commission observed that information from prior completed audits had been misapplied to prior adopted budgets.
Specifically, the adopted fiscal year 2018-2019 budget used estimated year-end balances from the adopted 2017-2018 budget, instead of actual, year-end balances from the relevant and available annual audit.
With the 2018-2019 CAFR delayed, fund balances in the original draft 2020-2021 budget presented to the Finance Commission could not have been tied to actual, audited numbers in the first instance. In light of this, the history of misapplication of audit information to prior adopted budgets, and the substantial changes made to the fund balances in the draft budget presented to the commission, the fund balances in the draft budget presented to City Council lacked reliability. 3 The $3.5 million “shortfall” referenced by Stephanie DeWolfe at the outset of the June 24, 2020 City Council meeting is actually referencing a projected revenue decline of $3.432 million from the prior “Pre-Covid” 2020-2021 General Fund revenue expectations to the revised “Post-Covid” revenue expectations (Pre- and Post-Covid budget projections by Staff were $30.893 million and $27.461 million respectively and can be found on page 17-24 of the June 3, 2020 City Council agenda meeting packet).
In reality, the Pre-Covid budget presents an increase in revenues over the 2019-2020 year. The 2019-2020 budget (approved well prior to start of Covid domestically in March 2020) includes General Fund revenue expectations of $28.601 million. As a result, the true revenue “shortfall” presented by the budget presented by Staff to the City Council in the June 3, 2020 agenda packet was not $3.5 million, but rather $1.140 million (the 2019-2020 budgeted revenues of $28.6 million less the Post-Covid budget proposal of $27.5 million).
However, it should be noted that the June 3, 2020 version of the proposed budget includes an $897 thousand reduction in property tax revenues from the draft budget provided to the Finance Commission only three days earlier ($14.825 million vs $15.722 million respectively). Were the property tax revenues held consistent with the draft previously sent to the Finance Commission, the true revenue “shortfall” provided in the Post-Covid budget would have only resulted in a $243 thousand differential from the adopted 2019/20 fiscal year budget – only 6.9% of the $3.5 million figure presented by DeWolfe and Aceves in the June 24, 2020 City Council meeting.
It should also be noted, that while the 2020-2021 fiscal year numbers are not yet finalized, on February 16, 2022, City Staff provided the City Council with a Mid-Year financial review for the 2021-2022 fiscal year. During that review, Staff presented the City Council with an updated estimate of General Fund revenues, including an estimated $16.4 million from property taxes – nearly $1.6 million HIGHER than the 2020-2021 budget proposed by DeWolfe/Aceves (these figures include both the Property Tax and Motor Vehicles in-Lieu line items in order to be consistent with the reporting presentation of the June 3, 2020 budget presentation which also included both line items).
4 The Staff report begins at 0:04:45 of the June 24, 2020 video recording available on the City’s website 5 Councilmember Schneider’s comments begin at approximately 1:04:49 of the June 24, 2020 video recording available on the City’s website
6 Councilmember Khubesrian’s comments can be found at approximately 1:23:00 of the June 24, 2020 video recording available on the City’s website
17 - 27
7 See public comments by “Emily Diaz-Vines” at page PC-2-13 and “Mel Trom” at page PC-2-15 in the additional document packet for the Council’s June 24, 2020, meeting, and https://southpasadenan.com/marina-khubesrian-admits-to-fraudulent-emails-south-pasadena-councilwoman-resigns/. 8 https://southpasadenan.com/strange-emails-sent-to-city-council-veiled-threats-to-cacciotti/ 9 Staff’s report and additional documents presented to the City Council outlining the scope of work for the FAHC, and approved 5-0 by the City Council, can be found on page 1-1 of the September 28, 2020 Special City Council Meeting Agenda located here:
https://www.southpasadenaca.gov/home/showpublisheddocument/24197/637366498690570000 and here:
https://www.southpasadenaca.gov/home/showpublisheddocument/24203/637369070841270000 10 While the FAHC originally included two (2) members from the Finance Commission, one of those members resigned from the FAHC prior to the final version of this report.
11 The October 26, 2020 vote is discussed in more detail later in this report. 12 What had previously been known as a Comprehensive Annual Financial Report (CAFR) was changed to being called an Annual Comprehensive Financial Report (ACFR)
13 https://www.investopedia.com/terms/f/forensic-audit.asp 14 American Journal of Business Education – Fourth Quarter 2008, Volume 1, Number 2, Pg 116 (https://files.eric.ed.gov/fulltext/EJ1052569.pdf)
15 American Journal of Business Education – Fourth Quarter 2008, Volume 1, Number 2, Pg 125 (https://files.eric.ed.gov/fulltext/EJ1052569.pdf)
16 https://www.investopedia.com/terms/f/forensic-audit.asp 17 City Council meeting video for November 7, 2018 (see time stamp 00:53:59):
http://www.spectrumstream.com/streaming/south_pasadena/2018_11_07.cfm 18 See City Gate Report, dated August 16, 2018, at Exec. Summary, p. 8 (https://www.southpasadenaca.gov/home/showpublisheddocument/21224/637280665975830000) 19 The Citygate report can be found on the Finance Department’s website here:
https://www.southpasadenaca.gov/government/departments/finance-department-resources 20 https://southpasadenan.com/former-city-clerk-files-retaliation-suit-alleges-cover-up-by-citymanagers/#:~:text=Lauren%20Rubin%2C%20a%20former%20long,a%20scandal%20over%20business%20licenses. 21 The April 18, 2018 Staff report along with the Citygate contract and proposal can be found here:
https://opengov.southpasadenaca.gov/WebLink/DocView.aspx?id=96147&searchid=3b9d901b-9e75-450b-a60baf5d9a48d0d6&dbid=0 22 Employment histories for Green and DeWolfe can be found on LinkedIn here https://www.linkedin.com/in/andrew-green27a96357/ and here https://www.linkedin.com/in/stephanie-dewolfe-96408062/, respectively 23 https://www.pasadenastarnews.com/2015/01/20/two-pasadena-department-heads-fired-amid-64m-embezzlementinvestigation/ 24 https://southpasadenan.com/former-city-clerk-files-retaliation-suit-alleges-cover-up-by-citymanagers/#:~:text=Lauren%20Rubin%2C%20a%20former%20long,a%20scandal%20over%20business%20licenses. 25 South Pasadena City Code Article XI Purchasing, Subsection 2.99-29 Purchasing system (11)(e):
https://www.codepublishing.com/CA/SouthPasadena/#!/SouthPasadena02.html#2.99-29 17 - 28
26 The relevant code section found at Title 2, South Pas Municipal Code Section 2.99-29 paragraph (12) states: “(12) Professional and Contractual Services. Contracts for services of specially trained and professional persons or businesses shall be exempt from bidding. If possible, quotes from three qualified vendors shall be obtained prior to the award of a contract. If the contract is equal to or below twenty-five thousand dollars, the contract shall require the approval of, and be executed by, the city manager. All contracts exceeding twenty-five thousand dollars must be approved by the city council.” 27 Comments and discussions regarding the City’s litigation accruals can be found from 0:59:59 to 1:04:33 and from 1:3217 to 1:56:25 of the October 26, 2020 City Council meeting video available on the City’s website. 28 Under GASB accounting standards, potential liabilities associated with litigation outstanding at June 30, 2019 would need to be reviewed for potential inclusion in a litigation accrual on the City balance sheet. Potential liabilities that presented subsequent to June 30, 2019 would be reviewed for potential inclusion in a subsequent event footnote. 29 https://southpasadenan.com/case-settled-city-settles-another-lawsuit/ 30 https://www.calcities.org/resource/practicing-ethics 31 e.g. legal billings generated by Kane, Ballmer, Berkman on page 32 of the November 17, 1999 City Council Agenda Packet:
https://opengov.southpasadenaca.gov/WebLink/0/doc/220/Page1.aspx 32 See legal billings generated by Colantuono, Highsmith and Whatley on page 10-9 of the October 6, 2021 City Council Agenda Packet: https://www.southpasadenaca.gov/home/showpublisheddocument/27166/637686044516370000 vs billings generated by the same firm on page 7-13 of the August 18, 2021 City Council Agenda Packet:
https://www.southpasadenaca.gov/government/city-council-meetings/2021-council-meetings 33 Specific public comments regarding this note can be found on page AD-69 here:
https://www.southpasadenaca.gov/home/showpublisheddocument/26854/637649025770770000; and pages AD-13 and AD29 here: https://www.southpasadenaca.gov/home/showpublisheddocument/26956/637661131074470000; and page 34 https://southpasadenan.com/59-million-south-pasadena-city-budget-saved-by-voter-support-cell-towerlease/#:~:text=The%20news%20comes%20as%20the,percent%20higher%20than%20fiscal%202020.&text=Including%20fund%2 0transfers%20such%20as,new%20capital%20spending%20being%20proposed. 35 The 2018-2019 budget adopted by City Council was labeled “DRAFT” and did not include a city manager’s budget message, the City’s financial policies for fiscal year 2018-2019, or an expenditure summary by fund. See agenda packet for the Council’s June 6, 2018, meeting, beginning at page 15-12. It should be noted that although a budget presentation was made to the Finance Commission at a May 22, 2018, meeting, this was a “receive and file” agenda item, and no recommendation was made to the City Council by the commission concerning adoption of the draft 2018-2019 budget. 36 Although the fiscal year 2018-2019 budget document posted on the City’s website did include a city manager’s budget message and statement of financial policies for fiscal year 2018-2019, these items had mainly been cut and pasted from the adopted 2017-2018 budget without change or update, including the same summary charts and graphics from the prior fiscal year.
37 South Pasadena City Code Article XI Purchasing, Subsection 2.99-29 Purchasing system (11)(e):
https://www.codepublishing.com/CA/SouthPasadena/#!/SouthPasadena02.html#2.99-29 38 “Material weakness” is defined as “a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.”
39 “Significant deficiency” is defined as “a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.” 40 The single vote against the receipt and file of the 2018-2019 CAFR has been discussed in more detail elsewhere in this report. 41 https://tigernewspaper.com/finance-director-karen-aceves-resigns-from-city-post/ 17 - 29