HomeMy WebLinkAbout25D - AGMT - ACCOUNTING SRVS - MED MARIJUANA LOTTERYREQUEST FOR
COUNCIL ACTION
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APRIL 21, 2015
TITLE:
AMEND AN AGREEMENT FOR PUBLIC
ACCOUNTING SERVICES IN
CONJUNCTION WITH THE MEDICAL
MARIJUANA REGISTRATION
APPLICATION RANDOM SELECTION
PROCESS WITH WHITE NELSON DIEHL
EVANS LLP
(STRATEGIC PLAN NO. , 1; 5 4)
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
111:1=1i19:4101
❑ As Recommended
❑ As Amended
❑ Ordinance on 15' Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the City Manager and Clerk of the Council to execute the attached amendment to the
agreement with White Nelson Diehl Evans LLP (Consultant) to conduct a random selection
"lottery" process under the provisions of Measure BB (Ordinance No. NS 2864) for an additional
amount of $9,000 not to exceed a total contracted amount of $34,000, subject to non - substantive
changes approved by the City Manager and City Attorney.
DISCUSSION
On December 1, 2014, the City, in accordance with the voter - approved ballot measure BB,
entered into an agreement with the Consultant to conduct a random selection "lottery" process to
select locations which would be allowed to submit applications for a Regulatory Safety Permit to
operate a Medical Marijuana Collective within the City.
At the time the original Consultant Agreement was signed the estimated number of applications
that would be received for this process was anticipated to be approximately 200. This estimate
was based on information derived from other jurisdictions which had engaged in open or lottery
type selection processes. However, at the conclusion of the Medical Marijuana Registration
Application period on January 15, 2015, the City was in receipt of 632 Medical Marijuana
Registration Applications, over 3 times the number initially projected. This increase in
applications received resulted in a substantial increase in the time, staffing, and materials
required by the Consultant in order to continue to ensure that the selection process was
performed in a fair, independent and impartial manner as approved in the original agreement.
To adjust for the increase in applications, the original agreement was amended on January 23,
2015, to accommodate the expanded scope of work and clarify the role of the consultant in
connection with increased due diligence services, preparation, and post lottery reporting. These
additional measures resulting from the increase in Medical Marijuana Registration Applications
25D -1
Amendment to the Agreement with
White Nelson Diehl Evans, LLP
April 21, 2015
Page 2
received resulted in an additional $9,000 cost to cover the additional time, staffing, and materials
required to conduct the random selection "lottery" process.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's effort to meet Goal #1 Community Safety, Objective #1
(Modernize the Community Policing philosophy to improve customer service, crime prevention
and traffic / pedestrian / bicycle safety), and Goal #5 Community Health, Livability, Engagement
and Sustainability, Objective #4 (Support neighborhood vitality and livability).
FISCAL IMPACT
Funds in the amount of $34,000 are available in the City Manager's General Non - departmental
fiscal year 2014 -15 budget within the General Fund Contract Services- Professional account (no.
01105015 - 62300).
Vince Fregoso, A 1CP
Interim Executive D.1, or
Planning and Building Agency
MF/WH:
APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
Finance and Management Services Agency�j
Exhibit: Second Amendment to Consultant Agreement
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SECOND AMENDMENT TO CONSULTANT AGREEMENT
THIS SECOND AMENDMENT TO CONSULTANT AGREEMENT made and
entered into this 21 st day of April, 2015, by and between White Nelson Diehl Evans LLP, a
limited liability partnership (hereinafter "Consultant "), and the City of Santa Ana, a
charter city and municipal corporation organized and existing under the Constitution and
laws of the State of California (hereinafter "City").
RECITALS:
A. The parties entered into that certain CONSULTANT AGREEMENT (Agreement,(4-
2015 -006) [Exhibit 1], dated December 1, 2014 (hereinafter "said Agreement ") by which
Contractor for an amount not to exceed $25,000 would provide "lottery" process
selection services in connection with applications to operate Medical Marijuana
Dispensaries within the City, and provide certain other consulting and forensic services.
B. The parties subsequently entered into an Amendment to Consultant Agreement
(Agreement N -2015- 006 -001) [Exhibit 2], dated effective January 23, 2015 (hereinafter
"said First Amendment to Agreement "), and amended the Scope of Services of said
Agreement to include increased Consultant due diligence, preparation and post lottery
reporting.
C. The parties now wish to amend the Compensation clause of said Agreement in order to
recognize the corresponding requirement for increased contractual services as well as
increased lottery equipment expense and other costs relating to said First Amendment to
Agreement.
WHEREFORE, in consideration of the mutual and respective promises of said Agreement
and subsequent said First Amendment to Agreement, and subject to all the terms and
conditions of both, except those amended in this Second Amendment to Agreement, the
parties agree as follows:
1. Section 1, SCOPE OF SERVICES, shall be amended and updated to include the services
described in Exhibits 1 and 2 as set forth herein below:
"I. SCOPEOFSERVICES
Pursuant to Section 18- 617.01 of the Santa Ana Municipal Code (SAMC), the
City's Director of Planning and Building will compile a "Qualified Registration
List" of all applicants desiring to operate a Medical Marijuana Dispensary within
the City. Consultant shall conduct a "lottery" process in an open and public
location, pursuant to the requirements of the SAMC. Consultant shall perform
such other consulting or forensic services under this contract (including but not
limited to the lottery selection process and set -up, public information workshops,
and consultative meetings or teleconferences with City staff) that are 1) requested
by the City and 2) that the Consultant is qualified to perform and agrees to
perform.
1
25D -3
I. SCOPE OF SERVICES (CONTINUED):
A. The City agrees to retain an outside law firm (hereinafter "Law Firm ")
knowledgeable in Federal, California and applicable County laws,
regulations, ordinances, case law and other legal summaries regarding the
conduct of lotteries. Law Firm will provide Consultant with an opinion on
or before January 31, 2015, that the random selection of applicants
(lottery) to be conducted by Consultant on February 5, 2015 is allowed
under all applicable Federal, California and county laws, regulations and
ordinances and will provide such other written legal /advice opinions
and/or oral legal advice as is necessary at the request of Consultant. If it
is determined that any process, procedure or other planned operation of
the random selection process ( "Lottery") is in violation of any Federal,
California or County applicable laws, regulations or ordinances, then
Consultant has the option to terminate this agreement or seek further
legal counsel from the Law Firm. Also, the City will be responsible for all
time and charges of Law Firm, and Law Firm will invoice its time and
charges directly to the City. City agrees to enter into a written agreement
with Law Firm no later than January 27, 2015.
B. Consultant agrees to acquire a manually - operated drum and pre -
numbered ping pong balls numbered from 1 to 1,000 no later than January
28,2015.
C. Pursuant to Measure BB, Section 18-617.01, the City's Director of Planning
and Building (hereinafter 'Director ") or designee, has received, reviewed
and approved applications for Medical Marijuana Dispensary locations
through the cut -off date of January 15, 2015. Director or designee, agrees
to prepare a numerical listing (the Master Listing) in both PDF and excel
format of the approved applications with the following data for each
approved application:
• The Applicant's identifying number (Application Number or
other number assigned by the City)
• The Primary Contact Person on the Application
• The legal name of the Applicant (natural person, LLC, LLP,
• C Corp, S Corp, etc.)
• The property address for which the Applicant has applied to
operate a dispensary.
OA
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t SCOPE OF SERVICES (CONTINUED):
City will provide the Master Listing to Consultant by January 27, 2015.
Consultant will perform a "random sort" using computer software on the
Master Listing to assign final identifying (lottery) numbers to each
approved Applicant, and will then return the Master Listing to City by
January 29, 2015. The Director or designee will confirm receipt of the
final Master Listing and advise Consultant. Consultant will print 750 copies
of the Master Listing to be distributed to attendees at the random
selection process (Lottery) on February 5, 2015.
D. Consultant agrees to prepare a PowerPoint presentation of the random
selection process (Lottery) and forward to City by January 29, 2015. This
presentation will ultimately be used on the day of the random selection
process (Lottery) for explanatory purposes to the attendees.
E. City agrees that on February 2, 2015 (as detailed below) and on February
5, 2015 (the day of the random selection process (Lottery)), the City will
coordinate the Audio /Visual requirements in the City Council Chambers or
alternate location as follows:
• The City will make available to Consultant an A/V system, a
laptop computer, a pull -down screen, and aprojector for use
by the Consultant.
• The random selection process (Lottery) will be conducted
using a large, manually- operated raffle drum, filled with pre -
numbered ping pong balls. As each ball is selected, The City
should provide the necessary equipment to project the ball
number on the screen so that all participants can clearly see
the number selected. Any necessary projection equipment
must be acquired, installed and tested by January 30, 2015.
F. A practice session will be held at the City Council Chambers or alternate
location for White Nelson Diehl Evans LLP and City designated staff on
February 2, 2015.
G. The following procedures will be followed by Consultant in conducting
the random selection process (Lottery) on February 5, 2015:
• The Council Chambers or alternate location, will be opened to
Consultant at least two hours in advance of the random
selection process (Lottery). The manually- operated drum will
be installed upon entry.
3
25D -5
I SCOPE OFSERVICES (CONTINUED):
• The random selection process (Lottery) will be conducted
under the supervision of Mr. William S. Morgan, CPA,
( "Morgan") and other staff from White Nelson Diehl Evans
LLP ( "WNDE "). Mr. Morgan and other WNDE staff will
load each pre- numbered balls into the manually operated
drum.
• Prior to the start of the random ball selection, Morgan will
discuss the random selection process (Lottery) via a
PowerPoint presentation to all attendees.
• WNDE staff will monitor and operate the manually- operated
drum at all times.
• As each pre - numbered ball is selected, one City official and
one WNDE staff will make a written record of the selection on
the Master Listing.
• Once Morgan or WNDE staff provides the Director or
designee with the identifying (Lottery) number associated with
the selected ball, the Director or designee will be given time
to assess the coordinates of the property and deteinine if the
Applicant selected must be placed on a waiting list for the
subject property.
H. At the conclusion of the random selection process (Lottery) the WNDE
staff and City Officials will compare the results. The results of the
random selection process (Lottery) will be posted by no later than 12:00
P.M. on February 6, 2015 on the City's website.
On or before February 12, 2015, Consultant will publish a report on the
results of the random selection process (Lottery) which will include:
• A description of the various procedures used both before and
during the random selection process (Lottery) to assure a truly
random selection of Applicants.
Conclusions that the random selection process (Lottery) was
conducted in a fair, independent, and objective manner.
Emphasis will be placed on the fact that no City of Santa Ana
employee or elected official provided any guidance or
direction on how to conduct the random selection process
(Lottery).
0
25D -6
2. Section 3, COMPENSATION, shall be amended and updated to include the following:
a. City agrees to pay, and Contractor 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 $34,000 during the tern of this Agreement.
3. Except as hereinabove amended, all terms and conditions of said Agreement together
with all subsequent teens and conditions said First Amendment to Agreement shall
remain in full force and effect."
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to
Agreement on the date and year first written above.
ATTEST:
Maria D. Huizar
Clerk of the Council
APPROVED AS TO FORM:
SOMAor VALH
City Attorn
BY:
CITY OF SANTA ANA
David Cavazos
City Manager
CONSULTANT:
marm William S. Morgan
City Attorney Principal
Tax ID# 33- 0686301
White Nelson Diehl Evans, LLP
Certified Public Accountants &
Consultants
RECOMMENDED FOR APPROVAL:
VINCENT FREGOSO
Interim Executive Director
Planning & Building Agency
E
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INSURANCE 09 FILE
WORK MY PROCEED
UNTIL. INSURANCE EXPIR .
CLERK OF COUNCIL,
DATE ;,
HAsQ a: wl i61i JAN 201x:
Exhibit 1
COST §ULTANT AGREEMENT
N -2015 -006
THIS AGREEMENT, made and entered into this 1 st day of December, 2014 by and between Ylite
Nelson Diehl Evans LLP, a limited liability partnership (hereinafter "Consultant "), and the City of Santa
Ana, 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
public accountancy,
B. Consultant represents that Consultant is able and willing to provide such services to the City.
C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in
its field and that any services performed by Consultant under this Agreement will be performed in
compliance with such standards as may reasonably be expected from a professional consulting firm
in the field.
NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the tenors and
conditions hereinafter set forth., the parties agree as follows:
1» SCOPE OF SERVICES
Pursuant, to Section 1 8-617.01 of the Santa. Ana Municipal Code (SAMC), the City's Director of
Planning and Building will compile a "Qualified Registration List" of "all applicants desiring to operate
a Medical Marijuana Dispensary within the City. Consultant shall conduct a "lottery" process in an
open and public location, pursuant to the requirements of the SAMC. Consultant shall perform such
other consulting or forensic services under this contract (including but not limited to the lottery
selection process and set -up, public information workshops, and consultative meetings or
teleconferences with City staff) that are 1) requested by the City and 2) that the Consultant is qualified
to perform and agrees to perform.
2. DELIVERY OF WORK PRODUCT
Consultant shall deliver to City (as applicable) all work product which results from the services
provided. Said work product (as applicable) shall be submitted in hard copy and produced in an electronic
form compatible with City's computer system, as agreed between the Project Manager and Consultant.
In regard to all copyrightdble material produced as a deliverable under this Agreement, including but
not limited to books, reports, plans, photographs, drawings, films, recordings, videotapes, and computer
programs, Consultant agrees, for itself and for its affected officers, employees, agents, contractors, and
volunteer workers, that (a) other such material may not be copyrighted without prior review from the City,
and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers,
agents and employees acting within the scope of their official duties, as a condition of payment to the
25D -8
Consultant, a royalty - free, nonexclusive, irrevocable license throughout the world. for governmental purposes
to disclose, publish, translate, reproduce, and use such materials,
3. COMPENSATION
a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the rates and
charges identified in Exhibit A. The total surn to be expended under this Agreement shall not exceed
$25,000 during the term of this Agreement.
b. Payment by City shall be made within thirty (30) days following receipt of proper invoice
evidencing work performed, subject to City accounting procedures. Payment need not be made for work
which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected
by City.
4. TERM
This Agreement shall commence on the date first written above and terminate on June 30, 2015,
unless terminated earlier in accordance with Section 13, below. Although this Agreement shall first be
effective as of December 1, 2014, Consultant's services shall be limited to mutually agreed to consultative
meetings /teleconferences with City staff until after January 1, 2015. The term of this Agreement maybe
extended upon a writing executed by the City Manager, Executive Director of Planning and Building and
the City Attorney.
5. INDEPENDENT CONTRACTOR
Consultant shall, during the entire tern 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 allow the City to exercise
discretion or control over the professional 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.
6. 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. Commercial General Liability Insurance. Consultant shall maintain commercial general liability
insurance naming the City, its officers, employees, agents, volunteers and representatives as additional
insured(s) and shall include, but not be limited to protection against claims arising from bodily and personal
injury, including death resulting therefrom and damage to property, resulting from any act or occurrence
arising out of Consultant's operations in the performance of this Agreement, including, without limitation,
acts involving vehicles. The amounts of insurance shall be not less than the following; single limit coverage
applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total
amount of $1,000,000 per occurrence. Consultant shall supply City with a fully executed additional insured
25D -9
endorsement in substantially the form attached hereto as Exhibit B upon execution of this Agreement and
shall be approved in form by the City Attorney.
b, Business automobile liability insurance, or equivalent form, with a combined single limit of not
less than $1,000,000 per occurrence, Such insurance shall include coverage for owned, hired and non -owned
automobiles.
c. Worker's Compensation Insurance, In accordance with the provisions of Section 3300 of the
Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for
worker's compensation or to undertake self - insurance. Prior to commencing the performance of 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.
d. Professional liability (errors and omissions) insurance, with a combined single limit of not less
than $1,000,000 per claim.
e, The 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) Certificates of insurance shall be furnished to the City upon execution of this
Agreement and shall be approved in form by the City Attorney.
(iii) Certificates and policies shall state that the policies shall not be canceled or reduced in
coverage or changed in any other material aspect without thirty (30) days prior written
notice to the City.
f. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails
or refuses to furnish the City with required proof that insurance 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 affect Consultant's right to be paid for its time and materials expended prior to
notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the
City for any work performed prior to approval of insurance by the City.
7. INDEMNIFICATION
Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees,
consultants, special counsel, and representatives from liability: (1) for personal injury, damages, just
compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including
health, and claims for property damage, which may arise due to negligent acts, omissions or willful
misconduct in the performance, from 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 l of this Agreement; and (2) from any claim that personal injury, damages, just
compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from
negligent acts, omissions or willful misconduct in the performance of this Agreement, The Consultant
25D -10
further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and
costs for special counsel to be selected by the City, regarding any action by a third party asserting that
personal injruy, damages, just compensation, restitution, judicial or equitable relief due to personal or
property rights arises by reason of effects arising from this Agreement. City may make all reasonable
decisions with respect to its representation in any legal proceeding,
[COMy_10D1RYY_/IRMM
If Consultant receives from the City information which due to the nature of such information is
reasonably 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 further agrees to exercise the same degree
of care it uses to protect its own information of like importance, but in no event less than reasonable care,
"Confidential Information" shall include all nonpublic information. Confidential information includes not
only written information, but also information transferred orally, visually, electronically, or by other means.
Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered,
by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any
information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant
disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation
of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by
the Consultant without reference to information disclosed by the City.
CONFLICT OF INTEREST CLAUSE
Consultant covenants that it presently has no interests and shall not have interests, direct or indirect,
which would conflict in any manner with performance of services specified under this Agreement.
10. NOTICE
Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in
writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified
mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in
this Section, to the following persons:
To City: Cleric of the City Council
City of Santa Ana
20 Civic Center Plaza (M -30)
P.O. Box 1988
Santa Ana, CA 92702 -1988
telefacsimile (714) 647 -6956
With courtesy copies to:
Executive Director of Planning and Building
City of Santa Ana
20 Civic Center Plaza (M -20)
P.O. Box 1988
25D -11
and
Santa Ana, California 92702
telefacsimile (714) 973 -1461
City Attorney
City of Santa Ana
20 Civic Center Plaza (M -29)
P.O. Box 1988
Santa Ana, California 92702
telefacsimile (714) 647 -6515
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To Consultant: William S. Morgan
White Nelson Diehl Evans LLP
2121 Alton Parkway, Ste, 100
Irvine, CA, 92606 -4906
telefacsimile (714) 795 -5396
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 new address. If sent by mail,
communication shall be effective or deemed to have been given three (3) days after it has been
deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed
as set forth above. If sent by telefacsimile, communication shall be effective or deemed to have been
given twenty -four (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 or City holidays shall be excluded.
11. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement between the City and Consultant,
and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict
between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail.
This Agreement may not be modified except by written instrument signed by the City and, by an authorized
representative of Consultant. The parties agree that any terms or conditions of any proposal 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 acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on
behalf of any parties, which are not embodied herein.
12. 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 without the prior written consent of the
City and any such assignment, transfer, delegation or subcontract without the City's prior written consent
shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to
have any of the services which are the subject to this Agreement performed by City personnel or by other
consultants retained by City.
13. TERMINATION
This Agreement maybe 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 all
services performed by Consultant prior to receipt of such 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 products 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 for such purposes as the City
deems appropriate. 25D -13
b. Payment need not be made for work which fails to meet the standard of performance specified in the
Recitals of this Agreement.
14. 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 law, 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.
15. JURISDICTION - VENUE
This Agreement has been executed and delivered in the State of California and the validity,
interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and
governed by the laws of the State of California. Both parties further agree that Orange County, California,
shall be the venue for any action or proceeding that maybe brought or arise out of, in connection with or by
reason of this Agreement.
16. PROFESSIONAL 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
governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain
or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for
termination of this Agreement.
17. MISCELLANEOUS PROVISIONS
a. Each undersigned represents and warrants that its signature herein below has the power, authority
and right to bind their respective parties to each of the terns of this Agreement, and 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 not, in fact, held by the signatory or is withdrawn.
25D -14
b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the
body of Us Agreement.
IN WITNESS "WHEREOF, the parties hereto have executed this Agreement the date and year first
above written.
ATTEST:
. "'D � jhula
MARIA D. I-JUJZAR
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attoypa
>tant City Attorney
KAREN HALUZA
brim Executive Director
?Tanning & Building Agency
CITY] OF SANTA ANA
DAV CAVAZOS
City Manager
CONSULTANT:
NAME W:� \1ne,,, S„ Pnar�q�,
Title:
Tax 17at r Q )
25D -15
Fi
EXHIBIT A
CONSULTANT'S PROPOSAL
AND
FEESCHEDULE
Consultant's standard hourly rates shall apply to all consulting or forensic services provided
(including but not limited to the lottery selection process and set -up, public information workshops,
and consultative meetings or teleconferences with City staff) as follows:
Nitin Patel, CPA, Engagement Partner .................... $400.00
William S. Morgan, CPA, Consultant ...................... $325.00
Managers (CPAs) ................ ............................... $225.00 - $290.00
Staff Supervisors /Seniors .... ............................... $130.00 - $190.00
Consultant will charge the City for actual hours worked at the standard hourly rates noted above, not
to exceed $25,000.00.
Consultant will provide City with detailed accounting of hourly charges and other associated costs
incurred. Consultant will invoice City monthly on a net 30 day basis.
• Prorated hourly billings shall be stated in 15 minute intervals.
• Travel time charges to and from any workshop, meeting, public lottery, and all other events
requiring attendance by Consultant or Consultant's representative during normal working
hours shall be included.
• Cost of Lottery Equipment (durable goods) shall be separately stated along with the cost of
consumables (all taxes included). Durable lottery equipment purchased by Consultant and
reimbursed by the City, shall become property of the City.
25D -16
INSURANCE ON FILE Exhibit 2 N- 2016.006.001
WORK {SAY PROCEED
UN "V "VLPN� EXPIRES
CLERK CLERK OF COUNCIL
RATE:. AMENDMENT TO CONSULTANT AGREEMENT
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A, Whereas, on December 1, 2014, , White Nelson Diehl Evans LLP, a limited liability
partnership (hereinafter "Consultant"), and the City of Santa. Ana, a charter city and
municipal corporation organized and existing under the Constitution and laws of the State
of California (hereinafter "City ") entered into a Consultant Agreement ( "Consultant
Agreement ") whereby Consultant would conduct a "lottery" process in connection with
applications to operate Medical Marijuana Dispensaries within the City, and provide
certain other consulting and forensic services;
B. Consultant and the City wish to amend and clarify the Scope of Services under the
Consultant Agreement, effective as of January 23, 2015;
C. Section 11 of Consultant Agreement provides that the Consultant Agreement may be
modified pursuant to a written instrument signed by the City and by an authorized
representative of Consultant,
AMENDMENTS TO CONSULTANT AGREEMENT
1. SCOPE OF SERVICES:
In consideration of the mutual and respective promises, the parties agree to the following
amendments to the Scope of Services:
A. The City agrees to retain an outside law firm (hereinafter "Law Firm ") knowledgeable in
Federal, California and applicable County laws, regulations, ordinances, case law and
other legal summaries regarding the conduct of lotteries. Law Firm will provide
Consultant with an opinion on or before January 31, 2015, that the random selection of
applicants (lottery) to be conducted by Consultant on February 5, 2015 is allowed under
all applicable Federal, California and county laws, regulations and ordinances and will
provide such other written legal/ advice opinions and/or oral legal advice as is necessary
at the request of Consultant. If it is determined that any process, procedure or other
planned operation of the random selection process ("Lottery) is in violation of any
Federal, California or County applicable laws, regulations or ordinances, then. Consultant
has the option to terminate this agreement or seek further legal counsel from the Law
Finn, Also, the City will be responsible for all time and charges of Law Firm, and Law
Firm will invoice its time and charges directly to the City, City agrees to enter into a
written agreement with Law Firm no later than January 27, 2015.
B. Consultant agrees to acquire a manually- oporated drum and pre - numbered ping pong
balls numbered from 1 to 1,000 no later than January 28, 2015,
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1, SCOPE OF SERVICYS (CONTINUED):
C. Pursuant to Measure BB, Section 18- 617,01, the City's Director of Planning and Building
(hereinafter "Director ") or designee, has received, reviewed and approved applications
for Medical Marijuana Dispensary locations through the cut -off date of January 15, 2015.
Director or designee, agrees to prepare a numerical listing (the Master Listing) in both
PDF and excel format of the approved applications with the following data for each
approved application:
• The Applicant's identifying number (Application Number or other number
assigned by the City)
• The Primary Contact Person on the Application
• The legal name of the Applicant (natural person, LLC, LLP, C Corp, S Corp, etc.)
• The property address for which the Applicant has applied to operate a dispensary.
City will provide the Master Listing to Consultant by January 27, 2015. Consultant will
perform a "random sort" using computer software on the Master Listing to assign, final
identifying (lottery) numbers to each approved Applicant, and will then return the Master
Listing to City by January 29, 2015. The Director or designee will confirm, receipt of the
final Master Listing and advise Consultant. Consultant will print 750 copies of the Master
Listing to be distributed to attendees at the random selection proem (Lottery) on
February 5, 2015.
D. Consultant agrees to prepare a PowerPoint presentation of the random selection process
(Lottery) and forward to City by January 29, 2015. This presentation will ultimately be
used on the day of the random selection process (Lottery) for explanatory purposes to the
attendees.
E. City agrees that on February 2, 2015 (as detailed below) and on February 5, 2015 (the
day of the random selection process (Lottery)), the City will coordinate the Audio /Visual
requirements in the City Council Chambers or alternate location as follows:
• The City will make available to Consultant an AN system, a laptop computer, a
pull-down screen, and a projector for use by the Consultant.
• The random selection process (Lottery) will be conducted using a large,
manually- operated raffle drum, filled with pre - numbered ping pong balls. As each
ball is selected, the City should provide the necessary equipment to project the
ball number on the screen so that all participants can clearly see the number
selected. Any necessary projection equipment must be acquired, installed and
tested by January 30, 2015.
F. A practice session will be held at the City Council Chambers or alternate location for
White Nelson Diehl Evans LLP and City designated staff on February 2, 2015.
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N -2015- 006.001
1. SCOPE OF SERVICES (CONTINUED):
G. The following procedures will. be followed by Consultant in conducting the random
selection process (Lottery) on February 5,2015:
• The Council Chambers or alternate location, will be opened to Consultant at least
two hours in advance of the random selection process (Lottery). The manually -
operated drum will be installed upon entry.
• The random selection process (Lottery) will be conducted under the supervision
of Mr. William S. Morgan, CPA, ( "Morgan ") and other staff from White Nelson
Diehl Evans LLP (°`WNDE "). Mr. Morgan and other WNDE staff will, load each
pre - numbered balls into the manually operated drum.
• Prior to the start of the random ball selection, Morgan will discuss the random
selection process (Lottery) via a PowerPoint presentation to all attendees.
• WNDE staff will monitor and operate the manually - operated drum at all times.
• As each pre- numbered ball is selected, one City official and one WNDE staff will
make a written record of the selection on the Master Listing.
• Once Morgan or WNDE staff provides the Director or designee with the
identifying (lottery) number associated with the selected ball, the Director or
designee will be given time to assess the coordinates of the property and
determine if the Applicant selected must be placed on a waiting list for the subject
property.
H. At the conclusion of the random selection process (Lottery) the WNDE start` and City
Officials will compare the results. The results of the random selection process (Lottery)
will be posted by no later than 12:00 PM on February 6, 2015 on the City's website.
On or before February 12, 2015, Consultant will publish a report on the results of the
random selection process (Lottery) which will include:
• A description of the various procedures used both before and during the random
selection process (Lottery) to assure a truly random selection of Applicants.
• Conclusions that the random selection process (Lottery) was conducted in a fair,
independent, and objective manner. Emphasis will be placed on the fact that no
City of Santa Ana employee or elected official provided any guidance; or direction
on how to conduct the random selection. process (Lottery),
7. INDEMNIFICATION:
The existing Indemnification clause in the Consultant Agreement will remain unchanged.
A new second paragraph will be added, pursuant to this amendment as follows:
25D -19
7. INDEMNIFICATION (CONTINUED):
All parties understand that litigation could result in connection with the random selection process
(Lottery). If any party files a legal action against the City in connection with the random
selection process (Lottery) (including Applicants, federal or state regulatory agencies or other
parties), and /or if Consultant is named as a Defendant or party to that action against the City, or
any other separate legal action solely against Consultant, then City agrees to hold Consultant
harmless with respect to such actions, All of Consultant's reasonable legal fees and costs
associated with the litigation will be paid by the City, including but not limited to:
Attorney's fees.
Document production costs (salaries and out -of- pocket crusts)
• Cost to prepare for and attend depositions
Cost to prepare for and testify at trial
Other costs associated with the litigation, such as meetings with attorneys, meeting with
City officials, etc.
Court costs
« A settlement amount, judgment, and /or any imposed penalties.
The City will be invoiced by the Consultant based on the hourly rates listed on Exhibit A of the
Consultwt Agreement in relation to any resulting litigation following the random selection
process (Lottery).
ATTEST:
IYIARIA D. HUIZAR
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attor,y
Sandra.
City Attorney
25D -20
CONSULTANT:
WILLIAM S. MORGAN tyj
Principal
Tax ID# 33- 0686301
White Nelson .Diehl Evans LLP
Certified Public Accountants eta
Consultants
4
SIGNATUREi S:
ATTEST:
MARIA D. HUIZAR.
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALIIO
City Attorney
Dy:
Sandra Sciawarzmann
Senior Assistant City Attorney
RECOMMENDED FOR APPROVAL:
VINCENT FREGOSO
Interim Executive Director
Planning & Building Agency
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N- 2015- 006 -001
CITY OF SANTA ANA
DAVID CAVAZOS
City Manager
CONSULTANT:
CN 'g'l,�y +n
WILLIAM S. MORGAN
Principal
Tax ID# 33- 0686301
White Nelson Dichl Evans LLP
Certified Public Accountants &
Consultants
RECOMMENDED FOR APPROVAL:
U l"
�`,,.'
VINCENT PRE SO,
Bi
Interim Executive r f ctor
Planning & Building Agency
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