HomeMy WebLinkAboutCOMMUNICATIONS SUPPORT GROUP INC. 1
.
"'Sl..l!, (;NCE NOT ON File N-2006-058
,)e:;K MAY fiQI PROCEED
U"RK OF COUNCIL
DATE:7-/i-l-06 STANDARD CONSULTANT AGREEMENT
0: frtl5 ('l.)(C.C.c.\6eroTl
THIS AGREEMENT, made and entered into this 25th day of May, 2006 by and hetween
Communications Support Group, Inc., a California corporation (hereinafter "ConsuItanl"), and
the City of Santa ^na, a charter city and municipal corporation organized and existing under the
Constitution and laws of the State of California (hereinafter "City").
RECITALS
A. The City desires to retain a consultant having special skill and knowledge in the field of
cable television financial audit services.
fl. Consultant represents that Consultant is able and willing to provide such services to the
City.
C. In undertaking the perfc)fmanee oflhis Agreement, Consultant represents that it is
knowledgeable in its field and that any services performed by Consultant under this
Agreement will be perl(mned in compliance with such standards as may reasonably be
expected from a professional in the field.
NOW THEREFORE, in consideration of the mutual and respective promises, and subJcct to the
terms and conditions hereinafter set forth, the parties agree as follo\vs:
1. SCOI'IC OF SICRVICES
Consultant, and its subcontractor Diehl, Evans & Company, LLP, shall conduct a review
ot' Adelphia Cahlevision's franchise fce payments for the period January 1,2005 through
December 31, 2005, as set forth in Exhihit A to this Agreement.
2. COMPENSA nON
u. City 8grees to pay, and Consultant agrees to accept as total payment for its services,
the rates and charges identified in Exhibit A. The total sum to be expended under this
Agreement shall not exceed $10,000,00 during the term of this Agreement.
b. Payment by City shall be made within thirty (30) days tallowing receipl of proper
invoice evidencing work performed, subject to City accounting procedures. Payment need nut
be made for work which fails to meet the standards of performance set forth in the Recitals
which may rcasonably be expected by City.
3. TERM
This Agreement shall commence on the date first written above and terminate on June 30,
2007. unless terminated earlier in accordance with Section 12, below. The term of this
Agreement may be extended upon a \vriting executed by the Executive Director of the Parks,
Recreation and thc City Attorney.
4. INDEPENDENT CONTRACTOR
Consultant shall. during the entire term of this Agreement, be construed to be an
independent contractor and not an employee of the City. This Agreement is not intended nor
shall it be construed to create an employer-employee relationship, a joint venture relationship, or
to allo\v the City to exercise discretion or control over the prokssional manner in which
Consultant performs the services which are the subject matter of this Agreement; however, the
services to be provided by Consultant shall be provided in a manner consistent with all
applicable standards and regulations governing such services. Consultant shall pay all salaries and
wages. employer's social security taxes, unemployment insurance and similar taxes relating to
employees and shall be responsible for all applicable withholding taxes.
5. INSURANCE
Prior to undertaking performance of work under this Agreement, Consultant shall
maintain and shall require its subcontractors, if any, to obtain and maintain insurance as
described below:
. a.. Du~ Lv tIn. JIUlUl_'" ortlll~: ,JG ,iee,s t?t11111?fcial gcneralliability insurance is fttrtr:;)1-
requw.::d/I'" 'fl.-f:. v.,1lCt.l,vT L:,li' ~jIC-.,;l\"'-_-t':'N'JV.z !,Pljl.
b. Worker's Compensation Insurance. In accordance with the provisiuns of Section 3300
ofthc Labor Code, Consultant. if Consultant has any employees. is required to be insured against
liahility for worker's compensation or to undertake self-insurance. Prior to commencing the
performance ur the work under this Agreement, Consultant agrees to obtain and maintain any
employer's liability insurance with limits not less than $1,000,000 per accident.
e. PrefcsoieAallial3ility (FFffif~-aoo-Gmi3Siofls) iASUrtlACe WMil-etHooifled-,iflg!e"HmiHR
not k,o ,Iml $\,QQO,OOQ.QQ l'"r claim. ~
d. Ihe following requirements apply to the insurance to be provided by Consultant
pursuant to this section:
(i) Consultant shall maintain all insurance required above in full force and effect for
the entire period covered by this Agreement.
(ii) Cendicates of insurance shall be furnished to thc City upon execution of this
Agreement and shall be approved in form by the City Attorney.
(iii) Certificatcs and policies shall statc that the policies shall not be canceled or
reduced in covernge or changed in any other material aspect without thirty (30)
days prior written notice to the City.
2
e. IfConsulLanl lails or refuses to produce or maintain the insurance required hy this
sectian ar fails ar refuses to furnish the City with required pruofthat insuranee has been procured
and is in force and paid for, the City shall have the right, at the City's election, to forthwith
terminate this Agreement. Such termination shall not effect Consultant's right to bc paid for its
time and materials expended prior to notification of termination. Consultant \-vaives the right to
receive compensation and agrees to indemnify the City for any work performed prior to approval
or insurance by the City.
6. INDEMNIFICATION
Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents,
employees, consultants, special counseL and representatives from liability for personal injury,
damages. just compensation, restitution, judicial or equitable relief arising out of claims for
pcrsonal injury, including health, and claims for property damage, whieh may arise lrom the
direct or indirect operations of the Consultant or its contractors. subcontractors, agents.
employees, or other persons acting on their behalf which relates to the services described in
section 1 of this Agreement.
7. CONFIDENTIALITY
If Consultant receives lrom the City information which due to the nature of such
information is reasonflbly understood to be confidential and/or proprietary, Consultant agrees
that it shall not use or disclose such information except in the performance of this Agreement,
and rurtht.:r agrees to eXlTcise thl:: samt.: ut.:gree of care it lIses to protect its own information of
like importance, but in no event less than reasonable care. "Confidential Information" shall
include all nonpublic information. Conlidential information includes not only written
information, but also information transferred orally, visually, electronically, or by other means,
Conlidential information disclosed to either party hy any suhsidiary and/or agem of the other
party is covered by this Agreement. The l(lfegoing obligations of non-use and nondisclosure
shall not apply to any information that (aJ has been disclosed in publicly availahle sources; (b) is.
through no fault of the Consultant disclosed in a publicly available source: (cJ is in rightful
possession of the Consultant without an obligation of eonlidentiality; (dJ is required to be
disclosed by operation oC law: or (eJ is independently developed by the Consultant without
reference to information disclosed by the City.
8. CONFLICT OF INT!<:IU:ST CLAUSE
Consultant covenants that it prcsently has no intcrests and shall not have interests, dircct
or indirect, vv'hich would conflict in any manner \-vith performance of services specified under
this Agreement.
9. NOTICE
Any notice, tender, demand, delivery, or other communication pursuant to this
Agreement shall he in writing and shall he deemed to be properly given if delivered in person or
1
mailed by llrst class ur certilied mail, postage prepaid, or sent by telefacsimilc or uther
telegraphic communiL:ation in the manner provided in this Section, to the follo\.ving persons:
To City:
Clerk of the City Council
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Bux 1988
Santa Ana, California 92702-1988
telefacsimile (714) 647-6956
With courtesy copies to:
Treasury Manager
City uf Santa Ana
60 Civic Center Plaza (M-13)
Santa Ana, California 92 702
tclcfacsimilc (714) 647-5304
and
City Atturney
City of Santa Ana
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702
tcle!ilcsimile (714) 647-6515
To Consultant:
3J/3 I'1r.;,Jeir" ;1..(
CaS .t,q /t1E5rlj Q.A
q }'.(O),b
Communications Support Group, Inc.
. ~QS s........Ilic: ,\ve!.lie . ...3,c9 i 1 ,",,;1'. '1 '6."'1';' J I ~. ",\ <("
PisdJ."RCUlt C^ 01Bll 312J .s,..",~ "I -<l.w."" / L -1
tclefacsimile 510- 54 7 -6206
Attn: Juhn Risk
fi(}9
A party may change its address by giving notice in writing to the other party. Thereafter,
any communication shall be addressed and transmitted to the Ile\V address. If sent by mail,
communication shall be effective or deemed to have been given three (3) days aftcr it has bccn
dcposited in the United Statcs mail, duly registered or certified, with postage prepaid, and
addrcssed as set forth above. If sent by telefaesimile, eommunicatiun shall be effeclive or
deemed to have been given twenty-fuur (24) hours after the time set forth on the transmission
report issued by the transmitting facsimile machine, addressed as set forth above. For purposes
of calculating these time frames, weekends, federal, state, County ur City holidays shall be
excluded.
10. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement betvveen the City and
Consultant, and supersedes any and all other agreements, oral or written, between the partics. [n
the event uf a conllict between the terms of this Agreement and any attachments hereto, the
terms of this Agreement shall prevail. This Agreement may not bl:: muuifi~d exct:pt by wrilten
4
instrument signed by the City and by an authorized representative of Consultant. The parties
agree that any terms or conditions of any purchase order or other instrument that are inconsistent
with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant nor
the City. Each party to this Agreement acknovv'icdges that no representations, inducements.
promises or agreements, orally Of mhcnvise, have been made by any party, or anyone acting on
behal!" o!" any party, which are not embodied herein.
11. ASSIGNMENT
Inasmuch as this Agreement is intended to secure the specialized services of Consultant.
Consultant may not assign, transfer, delegate, or subcontract any interest herein v,/ithout the prior
\vritten I:onsent of the City and any such assignment, transfer, delegation or suhcontract \vithmn
the City,ls prior \vrittcn consent shall be considered null iind void. Nothing in this Agreement
shall be construed to limit the City's ability to have any of the services which arc the subject to
this Agreement performed by City personnel or by other consultants retained by City.
12. TERMINATION
This Agreement may be terminated by the City upon thirty (30) days written notice of
termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant
compensation for nil services performed by Consultant prior to receipt ofslIeh notice of termination,
subject to the following conditions:
a. As a condition of such payment, the Executive Director may require Consultant to deliver
to the City all work product completed as of such date, and in such case such work product shall be
the property of the City unless prohibited by law, and Consultant consents to the City's use thereof
t(,r such purposes as the City deems appropriate.
b. Payment need not be made for work \\I'hich fails to meet the standard of performance
specified in the Recitals of this Agreement.
B. DISCRIMINATION
Consultant shall not discriminate because of race, color, creed. religion, sex. marital
status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited
by applicable Imv, in the recruitment. selection, training, utilization, promotion, termination or
other employment related activities. Consultant affirms that it is an equal opportunity employer
and shall comply with all applicable federal, state and local laws and regulations.
14. JURISDICTION - VENUE
This Agreement has been executed and delivered in the State of California and the
validity, interpretation. performance, and entilfeement of any of the clauses of this Agreement
shall be determined and governed by the laws of the State ofCalilornia. Both parties further
agree that Orange County, California, shall be the venue for any action or proceeding that may
be brought or arise out of: in connection with or by reason of this Agreement.
5
15. PROFICSSIONAL LICENSES
Consultant shall, throughout the term of this Agreement, maintain all necessary licenses,
permits, approvals, waivers, and exemptions necessary for the provision of the services
hereunder and required by the laws and regulations of the United States, the State of California,
the City of Santa Ana and all other guvernmental agencies. Consultant shall notify the City
immediately and in writing of her inability to obtain or maintain such pt:nnits, lil:enses,
approvals. waivers, and exemptions. Said inability shall be cause for termination of this
Agreement.
16. MISCELLANEOUS PROVISIONS
a. Each undersigned represents and warrants that its signature hereinbelow has the po\ver.
authority and right to bind their respective parties to each of the terms of this Agreement, aod shall
indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to
City in the event that such authority or power is no!. in fact, held by the signatory or is withdrawn.
b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set
forth in the body oflhis Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year
lirst above written.
ATTEST:
;;Z;-
~ ~~
/' PATRICIA E. H'E ,Y
/' Clerk of the Council
CITY OF SANTA ANA:
{1 Ma~.-
(.~
DAVID N. REAM
City Manager
(/
APPROVED AS TO FORM:
V:" Jl
/, 'I -_____-r _ _ /
, - J (~( .:'-','.- __-' _' _j., .{- "'./
,VYdSEPH W. hETCIlER~
,
City Attorney
COMMUNICATIONS SUPPORT
GROUP, INC.
RECOMMENDED FOR APPROV AI.:
-;.\\.'\::\S"~."...., ~ ~~. >
FRAJ'.iCISCO GUTIERREZ
Executive Director
Finance and Management
Services Agency
JJ.. ~39D1.;J.'f
6
Christine Calderon
City of Santa Ana
Page 11 of 15
ATTACHMENT 3
DESCRIPTION OF AGREED-UPON PROCEDURES
1. Nature of Engagement:
This will be an agreed-upon procedures engagement. Our basic engagement will be a
review of franchise fees paid by Adelphia Communications to the City for a one-year
period beginning January 2005 and ending December 2005.
2. Agreed-Upon Procedures Review:
In connection with this engagement, we will review Adelphia's books and records to assist
the City in determining if the Company has paid the City the appropriate franchise fees, for
the calendar year. Our review will consist of the following procedures:
Phase 1
a. Shortly after we receive a signed engagement letter or contract, we will send a
document request to the City, The letter will include a request for the following
documents:
. Franchise fee returns filed with the City by Adelphia Communications for the period
from January 1, 2005 through December 31, 2005.
. Rate and Channel Information
b. We will prepare and forward general questionnaires to Adelphia Communications with
questions related to franchise fees paid by Adelphia Communications to the City.
c. We will review the Cable Television Franchise Agreements and any Transfer
Agreements between the City and Adelphia Communications to identify definitions of
"gross revenues," franchise fee rates, late payment provisions, etc.
Phase 2
We will request that copies of certain books and records of Adelphia Communications be
forwarded to DECO's office in Irvine or to CSG's office in Piedmont. In connection with
the review of these records:
a. We will review Adelphia Communications' internal controls and systems and
procedures for accounting for gross revenue and franchise fee payments. We will
identify the various types of revenue recorded by Adelphia Communications.
b. We will identify Adelphia Communications' method for the aliocation of non-specific
revenues between franchise areas (such as Home Shopping revenues).
EXHIBIT II
Christine Calderon
City of Santa Ana
Page 12 of 15
c. We will review Adelphia Communications' method for identifying subscribers to the
proper franchise area.
d. We will test subscriber revenue by comparison with amounts recorded on reports from
the Company's outside service bureau.
e. We will review the accounting records of Adelphia Communications for any revenue
items not being reported to the City with the periodic remittances.
f. We will review the procedure of Adelphia Communications for recognizing advertising
revenues and cable launch fees in its accounting system, and if appropriate "gross
revenues" are being reported.
g. We will perform an analysis of the practices of Adelphia Communications as to
whether it has been paying franchise fees on franchise fee revenues for the period
from January 1, 2005 through December 31, 2005.
h. We will test the mathematical accuracy of selected remittances to the City for the
period January 1, 2005 through December 31,2005.
Phase 3
We will issue a report on our findings to the City.
Caveat Reqardinq the Possible Results of this Enqaqement
The management of the City is .advised that, on occasion, these engagements disclose
that the cable operator has overpaid franchise fees, utility user taxes or access fees.
Accordingly, this engagement could discover refunds owed by the City to Adelphia
Communications.
Christine Calderon
City of Santa Ana
Page 13 of 15
ATTACHMENT 3
PROJECT SCHEDULE AND TIMING OF WORK
Our "engagement beginning date" will be the date upon which we receive an original signed
engagement letter or contract from the City of Santa Ana retaining our services.
Shortly after the engagement beginning date, we will send a document request letter to the
City.
Within ten business days after we receive a response from the City to our document request
letter, we will draft questionnaires to Adelphia Communications requesting the documents
and infonmation needed for our review.
Within ten business days after receiving a reply from Adelphia Communications to our
questionnaires, we will commence our testing and review work. If Adelphia Communications
employees supply our firm with all requested information, documents and schedules on a
timely basis, we will complete our review work within ninety (90) business days.
Within ten business days after completing our review work on Adelphia Communications, we
will deliver a "draft" report to the City.
Within ten business days after our "draft" report is approved by the City, we will deliver final
reports to the City.
Christine Calderon
City of Santa Ana
Page 14 of 15
ATTACHMENT 5
ESTIMATED FIXED FEES
Our estimated fee for this engagement will be $6,000.00.
Provisions for Adjustment in Fee Arrangement
The fee quoted above was estimated based upon the following assumptions:
. Adelphia Communications will complete, sign and return all of our questionnaires,
together with all requested documents and Adelphia Communications-prepared
schedules.
. Adelphia Communications wiil have personnel available who are knowledgeable
regarding franchise fee reporting to work with DE&CO and CSG.
Should Adelphia Communications not provide the requested questionnaires, information or
documents, we will communicate these circumstances to the City in writing. This normally
will result in additional hours of work. We may request that the City of Santa Ana approve a
fee increase to cover any additional services or expenses that may be involved. CSG agrees
not to perform any additional work beyond this initial allocation without expressed written
consent by the City.
BILLING POLICIES
We will invoice the City of Santa Ana monthly for our services. Invoices are payable on
presentation. A finance charge of 1% per month will be added to fees billed but not received
before the end of the month following the month of our invoice. This corresponds to an
Annual Percentage Rate (APR) of 12%. No interest will be imposed on unpaid finance
charges. Also, our fees will be payable in full regardless of findings that result from this
engagement.'
. Additionallv Section 9.7(b) of the new franchise aqreement requires Adeiphia to reimburse the City for audit
costs if Adelohia's amount of underreoorted franchise fees exceeds 4%.
Christine Calderon
City of Santa Ana
Page 15 of 15
ACCEPTANCE OF PROPOSAL BY CITY OF SANTA ANA
If the City of Santa Ana would like to retain our firm for the cable television consulting services
noted herein at the proposed fee, please sign the unbound copy of this proposal dated April
19, 2006, and return it to us for our files.
ACCEPTED FOR THE CITY OF SANTA ANA;
By:
~\\l\0'~'''''''' \.-,\'0 .: .
Title:
Executive Director,.
finance & Management Services Age~
Date: June 7. 2006