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HomeMy WebLinkAboutStaff Report 5.D 07/17/2017Agenda Item #5.D DATE: July 17, 2017 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dar( 1St.E — Director, Public Works and Utilities Department SUBJECT: Resolution Authorizing the City Manager to Execute a Professional Services Agreement with R3 Consulting Group, Inc., to Provide a Performance Review of Refuse and Recycling Franchise Agreement Holder, Petaluma Refuse & Recycling Inc. RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Authorizing the City Manager to Execute a Professional Services Agreement with R3 Consulting Group, Inc., to Provide a Performance Review of Refuse and Recycling Franchise Agreement Holder, Petaluma Refuse & Recycling Inc. BACKGROUND Petaluma Refuse & Recycling Inc. (PR&R) has been the exclusive franchise hauler of refuse and recycling for the City of Petaluma since March 1, 2010. On January 7, 2013, a new franchise agreement was adopted by the City Council and is in effect until December 31, 2027. As per Section 12.3 of the Franchise Agreement, a performance review of the franchise operation shall be performed every 5 years beginning in 2017, and again in 2022. This performance review will identify areas where PR&R is not in compliance with provisions of the agreement, as well as identify areas where PR&R has made improvements. DISCUSSION In accordance with the Franchise Agreement, the proposed performance review will verify the following items: • That customer billings and City -approved maximum service rates have been calculated properly. • That franchise payments required to be paid to the City have been properly calculated and paid. • Compliance with the franchise agreement reporting requirements, including: o Program and service requirements o Customer service requirements o Consumer information and public education requirements o Performance standards • That any required liquidated damages have been received. • That diversion percentages are reported correctly. Per the franchise agreement, costs to perform the review shall be reimbursed by PR&R up to $60,000. It is recommended that R3 Consulting Group, Inc. (R3) conduct the performance review because of their detailed knowledge and experience with solid waste management in Petaluma and Sonoma County. R3 advised the City during the renegotiation and development of the new franchise agreement in 2012 and 2013, and performed a contract compliance review and profitability analysis on PR&R in 2012. R3 also evaluated alternatives to the City's membership in the Sonoma County Waste Management Agency in 2015 and completed an audit of PR&R in 2016. The negotiated cost to perform the performance review is not -to -exceed $55,000. It is recommended that the City initiate the performance review provision and award a professional services agreement to R3 to provide the technical and financial services. FINANCIAL IMPACTS The costs and revenues for the review are included in the FY 17/18 Solid Waste budget. Performance review costs are to be reimbursed by PR&R resulting in no financial impact to the City. ATTACHMENTS 1. Resolution 2. Professional Services Agreement 1A Attachment 1 RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH R3 CONSULTING GROUP, INC., TO PROVIDE A PERFORMANCE REVIEW OF REFUSE AND RECYCLING FRANCHISE AGREEMENT HOLDER, PETALUMA REFUSE & RECYCLING INC. WHEREAS, Petaluma Refuse & Recycling Inc. (PR&R) has a Franchise Agreement to provide refuse and recycling for the City of Petaluma approved by City Council under Ordinance 2448 N.C.S., dated January 7, 2013; and WHEREAS, Section 12.3 of the Franchise Agreement provides the City with the ability to conduct two scheduled performance reviews of PR&R in 2017 and 2022 during the life of the Franchise Agreement, which is in effect until December 31, 2027; and WHEREAS, the projected cost of the performance review is not to exceed $55,000, of which the franchisee PR&R is responsible to pay 100% of the audit costs in accordance with Section 11.8 and 12.3 of the Franchise Agreement; and WHEREAS, the audit is budgeted in the FY 17/18 budget proposal for the Solid Waste cost center; and WHEREAS, R3 Consulting Group, Inc. has extensive knowledge and experience with solid waste management for Petaluma and within Sonoma County; has successfully completed a number of key assignments for the City; and, has submitted a proposal to the City for the performance review services in the amount of $55,000, which is considered fair and appropriate for the scope of services. NOW, THEREFORE, BE IT RESOLVED the Council of the City of Petaluma hereby: 1. Authorizes the City Manager to execute a professional services agreement with R3 Consulting Group, Inc. to conduct a performance review of PR&R for a not to exceed cost of $55,000; and 2. Authorizes the City Manager to sign any documents required to execute a professional services agreement with R3 Consulting Group, Inc. to conduct a performance review on PR&R on behalf of the City of Petaluma. 3 Attachment 2 - Exhibit A to Resolution PROFESSIONAL SERVICES AGREEMENT Performance Review of Petaluma Refuse and Recycling 2017 (Title of Project) FY 17/18 Fund # 2410 Cost Center 24100 Object Code 54130 Project # Amount $55.000 For multi-year contracts or contracts with multiple accounts: FY Fund # Cost Center Object Code Project # Amount $ FY Fund # Cost Center Object Code Project # Amount $ FY Fund # Cost Center Object Code Project # Amount $ FY Fund # Cost Center Object Code Project # Amount $ FY Fund # Cost Center Object Code Project # Amount $ THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is entered into and effective as of , 20 ("Effective Date"), by and between the City of Petaluma, a city use only) municipal corporation and a charter city ("City") and R3 Consulting_ Group, Inc,, a California corporation ("Consultant") (collectively, the "Parties"). WHEREAS, the Parties enter into this Agreement for the purpose of Consultant providing professional services to City under the terms and conditions set forth herein. THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties agree as follows: 1. Services. Consultant shall provide the services as described in and in accordance with the schedule set forth in Exhibit "A" attached hereto and incorporated herein ("Services"). 2. Compensation, -Business Tax Certificate. A, For the full performance of the Services as described herein, City shall compensate Consultant in accordance with the rates specified in Exhibit A. B. Consultant shall submit detailed monthly invoices reflecting all services performed during the preceding month, and including a revised schedule for performance and additional documentation requested by City, as applicable. C. Consultant shall be compensated for services in addition to those described in Exhibit A, only if Consultant and City execute a written amendment to this Agreement describing the additional 'services to be performed and the compensation to be paid for such services. In no case shall the total compensation under this Agreement exceed $55,000 without prior written authorization of the City Manager. Further, no compensation for a section or work program component attached with a specific budget shall be exceeded without prior written authorization of the City Manager. D. Notwithstanding any provision herein, Consultant shall not be paid any compensation until such time as Consultant has on file with the City Finance Department a current W-9 form available fiom the IRS website (www.ils.gov) .and has obtained a currently valid Petaluma business tax certificate. PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 rd E. City's obligation to pay compensation to Consultant as provided herein is contingent upon Consultant's performance of the Services pursuant to the terms and conditions of this Agreement and any amendments thereto. Term. The term of this Agreement commences on the Effective Date, and terminates on 12/31/17, unless sooner terminated in accordance with Section 4. Upon termination, any and all of City's documents or materials provided to Consultant and any and all of the documents or materials prepared for City or relating to the performance of the Services, shall be delivered to the City as soon as possible, but not later than fourteen (14) days after termination of the Agreement. 4. Termination. City may terminate this Agreement without cause upon ten (10) days' written notice. City may immediately terminate or suspend this Agreement for cause. Cause for immediate termination or suspension shall include, but not be limited to, any breach of this Agreement by Consultant or Consultant's bankruptcy or insolvency. Upon receipt of notice of termination or suspension for cause, Consultant shall immediately stop all work in progress under this Agreement. In the event of early termination of this Agreement by City, Consultant shall be entitled to payment for all Services performed to the date of termination to the extent such Services were performed to the satisfaction of City in. accordance with the terms and conditions of this Agreement. If City terminates this Agreement for cause, Consultant shall be liable to City for any excess cost City incurs for completion of the Services. Consultant's Representation; Independent Contractor. Consultant represents that Consultant possesses distinct professional skills in performing the Services. City has relied upon said representation as a material inducement to enter into this Agreement. Consultant shall, therefore, provide properly skilled professional and technical personnel to perform all Services under this Agreement. It is expressly understood that Consultant and its agents and employees, shall act in an .independent capacity and as an independent contractor and not as officers, employees or agents of City. This Agreement shall not be construed as an agreement for employment. 6. Facilities and Equipment. Consultant shall, at its sole cost and expense, furnish all facilities and equipment that may be required for furnishing Services pursuant to this Agreement. City shall furnish to Consultant no facilities or equipment, unless the City otherwise agrees in writing to provide the same. 7. •Licenses, Permits, Etc. Consultant shall, at Consultant's sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits or other such approvals which are legally required for performing the Services. 8. Time. Consultant shall devote such time to the performance of the Services as may be reasonably necessary for satisfactory performance of Consultant's obligations pursuant to this Agreement. 9. Inspection. Consultant shall provide the City every reasonable opportunity to ascertain that the Services are being performed in accordance with the requirements and intentions of this Agreement. All work done and materials furnished, if any, shall be subject to PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 inspection and approval by the City. The inspection of such work shall not relieve Consultant of any of its obligations pursuant to this Agreement. 10, Progress Reports. Upon the City's request, Consultant shall provide, in a form acceptable to City, written progress reports of all oral and written observations, opinions, recommendations, analyses, progress and conclusions related to Consultant's performance of the Services. 11. Confidentiality. In the course of Consultant's employment, Consultant may have access to trade secrets and confidential information, disclosure of which is protected or limited by law. Consultant shall not directly or indirectly disclose or use any such confidential information, except as required for the performance of the Services. 12. Conflict of Interest. Consultant represents that it presently has no interest, and covenants that it shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services hereunder. Consultant further covenants that, in the performance of -this Agreement, it shall not employ any subcontractor or person having such a conflict of interest. Consultant represents that no one who has or will have any financial interest under the Agreement is an officer or employee of City. If such conflict of interest arises during this Agreement or any extension, Consultant will immediately advise City and, City may, at its sole discretion, immediately terminate this Agreement. Certain Consultants are subject to the requirements, including the disclosure and reporting requirements, of the City's Conflict of Interest Code adopted pursuant to the Political Reform Act. Such Consultants subject to the City's Conflict of Interest Code include those whose work may involve: making government decisions regarding approval -or adoption of rates, rules, or regulations, action on permits or other applications, authorization to enter into or modify contracts, or approval of plans, designs, reports, or studies. Consultant agrees to comply fully with all such requirements to the extent they apply to Consultant's performance of the Services. 13. Consultant No Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever. 14. Standard of Performance. Consultant shall perform all the Services in a manner consistent with the standards of Consultant's profession. All instruments of service of whatsoever nature, which Consultant delivers to City pursuant to this Agreement, shall be prepared in a substantial, workmanlike manner and conform to the standards of Consultant's profession. All such instruments of service shall become the sole and exclusive property of City upon delivery of the same. 15. Assianment/Transfer. No assignment or transfer in whole or in part of this Agreement shall be made without the prior written consent of City. 16. Subcontractors. Consultant shall directly perform all Services, and shall not subcontract any portion of performance of the Services without the prior written consent of City. Any such subcontractors shall be required to comply, to the full extent applicable, with PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 the terms and conditions of this Agreement, including but not limited to, procuring and maintaining insurance coverage as required herein and which shall name City as an additional insured. 17. Compliance With All Laws. Consultant shall fully comply with all applicable local, state and federal rules, laws, regulations and ordinances pertaining to the performance of the Services required hereunder, including but not limited to, the California Building Standards Code as in effect in the City, the Americans with Disabilities Act, and any laws and regulations related to any copyright, patent, trademark or other intellectual property right involved in performance of the Services. Consultant's failure to comply with any law(s) or regulation(s) applicable to the performance of the Services hereunder shall constitute a material breach of this Agreement. To the extent that any other government agency or entity provides compensation for any Services, Consultant shall comply with all rules and regulations applicable to such fiscal assistance. 18. Living Wage Ordinance. Without limiting the foregoing Section 17, Consultant shall comply fully with all applicable requirements of Petaluma Municipal Code, Chapter 8.36, Living Wage (the "Living Wage Ordinance"), as the same may be amended from time to time. Upon the City's request Consultant shall promptly provide to the City documents and information verifying Consultant's compliance with the requirements of the Living Wage Ordinance, and shall within fifteen (15) calendar days of the Effective Date of this Agreement, notify each of its affected employees as to the amount of wages and time off that are required to be provided to them pursuant to the Living Wage Ordinance, The Acknowledgement and Certification Pursuant to City of Petaluma Living Wage Ordinance, attached to this Agreement as Exhibit C, shall be a part of this Agreement for all purposes, and Consultants that are subject to Living Wage Ordinance requirements, as determined by the City, must provide a properly completed Exhibit C in accordance with the requirements of the Living Wage Ordinance. Consultant's noncompliance with the applicable requirements of the Living Wage Ordinance shall constitute cause for City's termination of this Agreement pursuant to Section 4 hereof, 19. Discrimination. During the performance of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, creed, color, national origin, ancestry, gender, sexual orientation, age or physical or mental disability in violation of any applicable law. 20. Notice. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Parry may designate by written notice. delivered to the other Party in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; or PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 7 (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. City: City Clerk City of Petaluma Post Office Box 61 Petaluma, California 94953 Phone: (707) 778-4360 Fax: (707) 778-4554 Email: cityclerk@ci.petaluma.ca.us And: Dan St. John Citv of Petaluma, Public Works & Utilities Dept. 202 N. McDowell Blvd. Petaluma, CA 94954 Phone: 707-778-4560 Fax: 707-206-6034 Email: jearl@ci.petaluma.ca.us Consultant: Richard Tagore-Erwin, Principal R3 Consulting- Group, Inc. 1512 Eureka Road, Suite 220 Roseville, CA 95.661 Phone: 91.6-782-7821 Fax: 916-782-7824 Email: rieivrin@zt3c ig com 21. Ownership of Documents. All original papers, documents or computer material on disk or microfilm, and copies thereof, produced as a result of this Agreement, shall be the property of City and may not be used by Consultant without the written consent of City. Copies of such documents or papers shall not be disclosed to others without the written consent of the City Manager or his or her designated representative. 22. Indemnification. To the maximum extent permitted by law, Consultant shall, at its own expense, indemnify, defend with counsel acceptable to the City, (which acceptance will not be unreasonably withheld), and hold harmless City and its officers, officials, employees, agents and volunteers ("Indemnitees") from and against any and all liability, loss, damage, claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, civil penalties and fines, expenses and costs (including, without limitation, claims expenses, attorney's fees and costs and fees of litigation) (collectively, "Liability") of every nature, whether actual, alleged or threatened, arising out of or in connection with the Services or Consultant's failure to comply with any of the terms of this Agreement, regardless of any fault or alleged fault of the Indemnitees. PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 The Consultant's obligation to indemnify, defend and hold harmless under this provision shall not be excused because of the Consultant's inability to evaluate Liability, or because the Consultant evaluates Liability and determines that the Consultant is not or may not be liable. The Consultant must respond within 30 calendar days to any tender for defense and indemnity by the City, unless the time for responding has been extended by an authorized representative of the City in writing. If the Consultant fails to accept tender of defense and indemnity within 30 calendar days, in addition to any other remedies authorized by law, so much of the money due or that may become due the Consultant under this Agreement as shall reasonably be considered necessary by the City, may be retained by the City until disposition has been made of the matter subject to tender, or until the Consultant accepts the tender, whichever occurs first. In the event that the City must file responsive documents in a matter tendered to Consultant prior to Consultant's acceptance of tender, Consultant agrees to fully reimburse all costs, including but not limited to attorney's fees and costs and fees of litigation, incurred by the City in filing such responsive documents. The Consultant waives any and all rights to express or implied indemnity against the Indemnitees concerting any Liability of the Consultant arising out of or in connection with the Services or Consultant''§ failure to comply with ' any of the terms of this Agreement. The defense and indemnification obligations of this Agreement shall no way be limited by, the insurance obligations that apply to this Agreement pursuant to Section 23. Notwithstanding the foregoing, to the extent this Agreement is a "construction contract" as defined by California Civil Code Section 2783, as may be amended from time to time, Consultant's duty to indemnify under this provision shall not apply when to do so would be prohibited by California Civil Code Section 2782, as may be amended from time to time. Notwithstanding the foregoing, to the extent that the Services include design professional services subject to California Civil Code Section 2782.8, as may be amended from time to time, Consultant's duty to indemnify shall only be to the maximum extent permitted by California Civil Code Section 2782.8. 23, Insurance. Consultant shall comply with the "Insurance Requirements for Consultants" in Exhibit B-2, attached hereto and incorporated herein by reference. rIndicate attached exhibit e "B-1 " "B-2," "13-3," or "13-4.1 24. Amendment. This Agreement may be amended only by a written instrument executed by both Parties. 25, Litiization. If litigation ensues which pertains to the subject matter of Consultant's services hereunder, Consultant, upon request from City, agrees to testify therein at a reasonable and customary fee. 26. Construction. This Agreement is the product of negotiation and compromise on the pant of both Parties and that the Parties agree that, notwithstanding Civil Code Section 1654, any uncertainty in the Agreement shall not be construed against the drafter of the Agreement. PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 0 27. Governing Law, Venue. This Agreement shall be enforced and interpreted under the laws of the State of California and the City of Petaluma. Any action arising from or brought in connection with this Agreement shall be venued in a court of competent jurisdiction in the County of Sonoma, State of California. 28. Non -Waiver. The City's failure, to enforce any provision of this Agreement or the waiver thereof in a particular instance shall not be construed as a general waiver of any part of such provision. The provision shall remain in full force and effect. 29. Severability. If any term or portion of this Agreement is held to be invalid, illegal,* or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 30. No Third_Party Beneficiaries. The Parties do not intend to create, and nothing in this Agreement shall be construed to create any benefit or right in any third party. 31. Mediation. The Parties agree to make a good faith attempt to resolve any dispute arising out of this Agreement through mediation prior to commencing, litigation. The Parties shallmutually agree upon the mediator and shall divide the costs of mediation equally. 32. Consultant's Books and Records. A. Consultant shall maintain any and all ledgers, 'books of accounts, invoices, Vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures and disbursements charged to the City for- a ora minimum period of three (3) years or for any longer period required by law, fi•om the date of final payment to Consultant pursuant to'this Agreement. B. Consultant shall maintain all documents_ and records which demonstrate performance under this Agreement for a minimum period of three (3) years or for any longer period required by law, from the date of termination or completion of this Agreement. C. Any records or documents required to be maintained pursuant to this Agreement shaft be made available for inspection or audit, at any time during regular business hours, upon written request by the City Manager, City Attorney, City Finance Director, or a designated representative of these officers. Copies of such documents shall be provided to the City for inspection at Petaluma City Hall when'it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the records shall be available at Consultant's address indicated for receipt of notices in this Agreement. D. Where City has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of Consultant's business, City may, by written request by any of the above-named officers, require that custody of the records be given to the City and that the records and documents be maintained in Petaluma City Hall. Access to such records and documents shall be granted to any party authorized by Consultant, Consultant's representatives, or Consultant's successor in interest. PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 10 33. Headings. The headings used in this Agreement are for convenience only and ate not intended to affect the interpretation or construction of any provisions herein. 34. Survival. All obligations arising prior to the termination or expiration of this Agreement and all provisions of this Agreement allocating liability between City and Consultant shall survive the termination or expiration of this Agreement. 35. Entire Agreement. This Agreement, including the exhibits attached hereto and incorporated herein, constitutes the entire agreement between the Parties with respect to the Set -vices, and supersedes all prior agreements or understandings, oral or written, between the Parties in this regard. IN WITNESS WHEREOF, the parties hereto have executed this document the day, month and year first above written. CITY OF PETALUMA City Manager ATTEST: City Clerk APPROVED AS TO FORM: City Attorney CONSULTANT By Name i nc Title 1511 eL�re-�,O. Address 'Mse-\Ml-,- I�A CityState Zip 03 co Taxpayer I.D. Number oOc0y �%E Petaluma Business Tax Certificate Number file name: S:\Environmental Services\Solid Waste Mgt\WastcMgmt\Agreements\PR&R\PSA PROFESSIONAL SERVICES AGREEMENT (609321) March 2017 ll Exhibit A June 1, 2017 Mr. Jason Earl Management Analyst II City of Petaluma 202 N. McDowell Blvd. Petaluma, CA 94954 Subject: Proposal to Conduct Performance Review Dear Mr. Earl: R3 Consulting Group, Inc. (R3) is pleased to submit our scope and proposed budget to conduct a performance review of Petaluma Refuse & Recycling Inc. (PR&R or Contractor) for the City of Petaluma (City). Our Project Team for this engagement has significant relevant experience conducting the specific type of review and analyses required for the City's project, and we are committed to providing the City with a high-quality work product. 133's approach to this engagement will provide the City with a quality assessment of PR&R's performance and recommended corrective actions to address any identified deficiencies in support of improving PR&R's performance underthe existing franchise goingforward. Our proposed Work Scope forthe project Is provided below and is structured to be consistent with the items to be covered by the Performance Review requirements listed in Article 12.3 of the City's franchise agreement with PR&R. No Conflict of Interest R3 understands the sensitive nature of conducting projects for public agencies. We are strongly committed to providing our clients with unbiased opinions and recommendations. Accordingly, R3 only provides services to public agencies. R3 does not have any relationship and/or employment agreement with any private waste haulers or. facility owners/operators and R3 does not provide services to any private waste haulers or facility owners/operators. We appreciate the opportunity to submit our proposal to the City. Should you have any questions regarding our proposal, or need any additional information, please contact me by phone at (916) 782- 7821 or by email at rterwin@r3cgi.com. Sincerely, R3 CONSULTING GROUP Richard Tagore-Erwin Principal 12 Scope of Work Background The City entered into a new franchise. agreement (Agreement) with PR&R with a start date of January 1, 2013. That Agreement, which expires in December 31, 2027, provides the City with the option a performance review of PR&R's operations once every five (5) years beginning in calendar year 2017, which PR&R is to pay for in 2017 and 2022 as specified in Section 11.8 of the Agreement. Any performance review that identifies non-compliance with the Agreement shall not be counted in the total number of performance reviews and/or audits the City may conduct or have conducted at the Contractor's expense during the franchise term. Project Objectives 1. Verify customer bills and billing rates have been properly calculated and that customers are being charged the appropriate rate for their subscribed service level (Task 2 — Billing Review), 2. Verify franchise payments required to be paid to the City under the Agreement have been properly calculated and paid (Task 3 — Franchise Fee Review), 3. Verify Contractor's compliance with the Agreement reporting requirements (Task 4 — Review of Reporting Requirements). 4. Verify Contractor's compliance with the performance standards of the Agreement, including (Task 5 — Performance Review): a. Program and service requirements; b. Customer service requirements; c. Consumer information and public education requirements; and d. Standards of performance. 5. Verify the diversion percentages reported -by the Contractor (Task 6 — Review of Minimum Diversion Requirement). 6. Verify Liquidated Damages have been received (Task 7 —Review of Liquidated Damages). Work Scope Task 1 Data Collection and Kick -Off Meeting objective: Collect data pertinent to the performance review, establish communication protocol with the City and MR, and affirm project scope and schedule. Task 1.1 Data Collection and Review Upon authorization by the City, R3 requests that the City and PR&R provide the following information in support of our review. Additional information requests will be submitted to the City and/or PR&R during our review, as necessary. 13 From the City: ■ Current Approved Rate Schedule; ■ Approved rate adjustments over term of Agreement; ■ Accounting of franchise fees received from the Contractor; and . ■ Record of any liquidated damages that have been assessed. From PR&R (some of these items can be reviewed on-site): Task 2 — Billing Review ■ Excel file of most current billing register covering complete billing cycle; and ■ Route maps. Task 3 — Franchise Fee Review ■ Accounting of franchise fees paid to the City. ■ Audited financial statements supporting annual "Gross Receipts"; and ■ Support for payment of "Other Fees" (Section 11.4). Task 4 — Review of Reporting Requirements ■ Contractor's 2016 Annual Report (when and if available); and ■ Copies of 2014, 2015 and 2016 Quarterly Reports. Task 5 — Performance Review ■ Program and Service Requirements; o Provide an accounting/summary of the number of Special Events Contractor services annually (Section 12.2.3.16); o Current Insurance Certificates; o Copy of Performance Bond; o Experience modification factors; and o Workers' compensation and on-the-job injury summaries (OSHA Form 300 and Form 300A). ■ Customer Service Requirements: o Customer complaint log (mentioned in Sections 9.3.2 and 12.1.7.5). ■ Consumer Information and Public Education Requirements: o Copies of all required Public Education (Section 9.1); and o Documentation supporting compliance with the requirements of Section 9.1 and Exhibit 6 — Public Education Plan. ■ Standards of Performance: o Vehicle list and tare weights; and o Vehicle load weight records. 14 Task 6 — Review of Minimum Diversion Requirement ■ 2016 diversion and disposal tonnages; and ■ Support for 2014, 2015, and 2016 reported diversion and disposal to Task 7 — Review of Liquidated Damages ■ Records of liquidated damages paid to the City. Task 1.2 Kick -Off Meeting R3 will facilitate a Project Kick -Off Meeting with R3 and designated representatives of the City and PR&R, as appropriate. This meeting will provide an opportunity to review the project objectives, 113's project approach and schedule, and discuss data availability. A primary objective of the Kick -Off Meeting will be to review specific issues of concern to the City, discuss 113's general approach to reviews of this type and develop a specific focus for the review that will provide the City, among other things, with solid information that it can use to more effectively manage its Agreement with PR&R going forward. We suggest that the Project Kick -Off Meeting begin first with R3 and the City Staff, with PR&R joining later. This will allow R3 and the City to discuss any outstanding issues regarding the project. Deliverables: ■ Review of information provided; and ■ Facilitation of Kick -Off Meeting, Task 2 Billing Review objective: To determine if customers are being charged rates that are consistent with the City's Approved Rate Schedule, and that customers are being charged the appropriate rate for their subscribed service level. Task 2.1 Comparison of Rates with Approved Rate Schedule The task involves the following items: ■ A review of service levels and charges from a recent billing cycle to determine if the rates charged for the various service levels are consistent with the approved rate schedule; and ■ A review of a recent billing cycle to determine if all rates charged have been approved (e.g., are there any charges that are billed but are not listed on the approved rate schedule such as finance charges, push/pull charges, etc.). Task 2.2 Route Audits As part of this task, field audits of selected routes will be conducted to compare the rates charged to various residential and commercial accounts to the actual level of service observed in the field. Any identified discrepancies will be documented. R3 will also review any billing or route audit procedures PR&R employs to verify service levels and correct any billing errors. At the conclusion of these tests, R3 will make a determination of the level of accuracy of the PR&R subscriber billing system, and formulate suggestions, as appropriate, to improve the accuracy of the system. 15 Deliverables: To be provided as part of Task 8 — Reports and Presentations ■ Assessment of accuracy of customer billings with Approved Rate Schedule; and ■ Field observations to assess the accuracy of customer billings with the service levels provided to customers. Task 3 Franchise Fee Review Objective: To verify franchise payments required to be paid to the City under this Agreement have been properly calculated and paid. Section 11 of the Agreement (Contractor Payments to City) specifies that the Contractor is to pay the City a franchise payment of 10.0% of the Contractor's Gross Receipts remitted by customers for collection services provided in City. Gross receipts are defined as: "all monetary amounts collected by the Contractor for the provision of Franchise Services pursuant to this Agreement, (including revenue received by.the Contractor from any entity, including Federal, State, County or other local facilities within the Service Area for the provision of Collection Services by the Contractor hereunder), calculated in accordance with Generally Accepted Accounting Procedures (GAAP). The term Gross Receipts, for purposes of this Agreement, does not include any revenues generated from the sale of Recyclable Materials, or other receipts from state and local government accounts (e.g. grants, cash awards and rebates) resulting from the performance of this Agreement." R3 will review the Contractor's franchise fee payments made under the term of the Agreement and determine if the fees paid accurately account for all gross revenues, and are based .on the specified franchise fee percentage. Deliverables: To be provided as part of Task 8 — Reports and Presentations Assessment of the accuracy of Contractor's Franchise Fee payments and any required adjustments. Task 4 Review of Reporting Requirements Objective: To verify Contractor's compliance with the franchise agreement reporting requirements. Section 12 of the Agreement (Record Keeping, Reporting and Performance Reviews) requires the Contractor to submit, among otherthings, Monthly, Quarterly and Annual Reports to the City that include specific reporting requirements. R3 will review the Contractor's 2014, 2015 and 2016 Annual Reports, as well as the quarterly reports to determine if those documents contain the required information. Section 12.2.8 of the Agreement (Additional Reporting) provides the City with the ability to require the Contractor to provide any additional reports. As appropriate, R3 will make recommendations for new or enhanced reporting requirements to provide the City with information to allow it to more efficiently and effectively administer the Agreement. Deliverables: To be provided as part of_Task 8 — Reports and Presentations ■ Assessment of the extent to which the Contractor has fulfilled its required reporting requirements; and ® Recommendations for any additional reporting requirements. I Task 5 Performance Review Objective: To determine the Contractor's compliance with the major objective performance requirements of the Agreement. Task 5.1 Review of Program and Service Requirements In Section 4.1, the Agreement specifies various Contractor program and service requirements, including but not limited to: ■ Collecting all Mixed Materials, Recyclable Materials, and Organic Materials generated in the City and placed by Generators for Collection; ■ Transporting Collected materials to an Approved Disposal Site, Approved Organic Materials Processing Site, or Approved Recyclable Materials Processing Site; ■ Processing and marketing Recyclable Materials Collected in the City by Contractor; ■ Processing, Composting, and marketing Organic Materials Collected in the City by Contractor; ■ Disposing Mixed Materials Collected in the City by Contractor; ■ Performing Street Sweeping services throughout the City in accordance with Section 7; ■ Customer service and Billing, as detailed in Section 9; ■ Public education and community outreach in accordance with Section 9 and Exhibit 6; ■ Furnishing all labor, supervision, vehicles, containers, other equipment, materials, supplies, and all other items and services necessary to perform its obligations under this Agreement; ■ Paying all expenses related to provision of services required by this Agreement including, but not limited to, taxes, regulatory fees, utilities, etc.; ■ Providing all services required by this Agreement in a thorough and professional manner so that residents, businesses, and the City are provided timely, reliable, courteous and high-quality service at all times; ■ Complying with Applicable Law; ■ Performing or providing all other services necessary to fulfill its obligations underthis Agreement; ■ Accomplishing and maintaining the Diversion Requirement established by the City, as set forth in Section 8.4 of the Agreement; ■ Insurance requirements; ■ Letter of Credit / Performance Bond requirements; ■ Commercial and residential food scrap collection; ■ Free annual residential curbside cleanup; ■ Community clean-up events; ■ Personnel dress and identification standards; ■ Collection vehicle weight limits; ■ Safety training; 17 ■ Vehicle and container standards; and ■ Recyclable material facility standards. R3 will prepare a Compliance Checklist documenting major objective performance requirements that the Contractor is required to meet. We will then access the Contractor's compliance with respect to each of those requirements and identify any areas of non-compliance. Task 5.2 Customer Service Requirements R3 will assess the Contractor's compliance with the customer service requirements of the Agreement, including Section 9.3.1 requirements related to the Contractor's Customer Service Program, and Customer Service Responsiveness table in Section 14.4.5, pg. 76-77. Task 5.3 Consumer Information and Public Education Requirements Section 9.1 of the Agreement specifies specific customer information and public education requirements that the Contractor is to perform as part of its contractual obligations. R3 will assess the Contractor's compliance with each of the specified requirements. Exhibit 6 — Public Education Plan, identifies specific services that PR&R is to perform as part.of its public education program. R3 will assess the Contractor's compliance with each of the specified requirements. Task 5.4 Standards of Performance Exhibit B of the Agreement establishes various standards of Performance for the Contractor. R3 will document the major objective requirements of that exhibit and assess the Contractor's compliance with those requirements and identify any areas of non-compliance. Deliverables: To be provided as part of Task 8 — Reports and Presentations ■ Assessment of the Contractor's compliance with its major objective performance requirements. Task 6 Review of Minimum Diversion Requirement Objective; To determine if the diversion tonnages and percentages reported by the Contractor are accurate and if it has met the minimum annual diversion requirement. Section 8 (Diversion Requirements) establishes a minimum annual diversion requirement of no less than 50%, where the diversion rate means the tons of material collected by the Contractor within the City that are sold or delivered to a recycler or reuser divided by the total tons of materials collected in the City in the contract year. R3 will review the support for the Contractor's tonnages reported in its 2014, 2015 and 2016 Annual Reports, which we will request, and establish the associated diversion rates for each of those years. We will then determine whether the Contractor has complied with the minimum diversion requirements, and if not, calculated the associated liquidated damages. Deliverables: To be provided as part of Task 8 — Reports and Presentations ■ Determination of Contractor's compliance with the annual minimum diversion requirement. IN Task 7 Review of Liquidated Damages Objective: To verify Liquidated Damages have been received. R3 will determine if the City has assessed the Contractor any liquidated damages and if any such liquidated damages have been paid to, and received by the City. Based on the review conducted as part of the above tasks, R3 will also document any liquidated damages associated with any areas of non-compliance that our review identifies. Deliverables: To be provided as part of Task 8 — Reports and Presentations ■ Determination if any liquidated damages that have been assessed have been paid by the Contractor and received by the City; and ■ Documentation of any liquidated damages associated with any identified areas of non- compliance. Task 8 Reports and Presentations Objective: To clearly document the work performed on the project and provide specific findings and recommendations. Task 8.1 Draft Report Upon completion of our review, R3 will present our preliminary findings to PR&R for review. This step is undertaken to ensure that we have not misinterpreted any of the information that has been provided. Based on comments received from PR&R, we will make any appropriate adjustments to our findings prior to presenting our electronic Draft Report. R3 will prepare a Draft Report that incorporates the work performed in Tasks 1 through 7. R3 anticipates that the report will include the following sections: ■ Executive summary; ■ Background and Introduction; ■ Methodology; and ■ Findings and Recommendations. Task 8.2 Final Report Based on written comments from City staff on the Draft Report, R3 will prepare and submit an electronic Final Report to the City. Task 8.3 Presentation R3 will make one (1) public presentation of the project findings and recommendations in a public forum designated by the City (e.g. City Council meeting or a commission/committee). Deliverables: r' one (1) electronic copy of the Draft Report; ■ one (1) electronic copy of the Final Report; 19 ■ Draft and Final PowerPoint presentation and handouts summarizing the findings and conclusions of the Final Report; and ■ One (1) presentation of the Final Report to the City Council and/or commissions or committee(s) as directed by the City Staff. Proposed Cost R3 initially proposes to complete all work in Tasks 1— 8 for a total, not -to -exceed amount of $55,000. The project cost includes labor, travel, and project expenses, and includes all work and deliverables as listed in Tasks 1— 8. R3 will invoice the City on a monthly basis only for actual work completed. — R3 CONSULTING GROUP Oategary = Hourly Rate, Principal / Project Director $205 per hour Senior Project Manager $185 per hour Project Manager $160 per hour Senior Project Analyst $145 per hour Project Analyst $135 per hour Associate Analyst $120 per hour Administrative Support $100 per hour ` REIMBURSABLE COSTS Consultants/Subcontractors Cost plus 10% Lodging and meals Direct cost Travel — Private or company car $0.54 per.mile Travel -- Other Direct cost Delivery and other expenses Direct cost Payments Unless otherwise agreed in writing, fees will be billed monthly at the first of each month for the preceding month and will be payable within 30 days of the date of the invoice. NX Escalation Fees will be escalated annually in accordance with the change in the Consumer Price Index. 21 INSURANCE REQUIREMENTS EXHIBIT B-2 Consultant's performance of the Services under this Agreement shall not commence until Consultant shall have obtained all insurance required under this paragraph and such insurance shall have been approved by the City Attorney as to form and the Risk Manager as to carrier and sufficiency. All requirements herein provided shall appear either in the body of the insurance policies or as endorsements and shall specifically bind the insurance carrier, Consultant shall procure and maintain for the duration of the contract all necessary insurance against claims now and in the future for injuries to persons or damages to property which may arise from or in connection with the performance of the Services by the Consultant, the Consultant's agents, representatives, employees and subcontractors.. Required professional liability insurance shall be maintained at the level specified herein for the duration of this Agreement and any. extension thereof and for twelve additional months following the Agreement termination or expiration. A. Minimum Scope of Insurance Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage: a. Personal injury; b. Contractual liability. 2. Insurance Services Office form covering Automobile Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 4. Professional Liability insurance. 5. Such other insurance coverages and limits as may be required by the City. B. Minimum Limits of Insurance Consultant shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate liability is used, either the general aggregate limit shall apply separately to this Agreement or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: Bodily Injury by Accident - $1,000,000 each accident. Bodily Injury by Disease - $1,000,000 policy limit. Bodily Injury by Disease - $1,000,000 each employee. 4. Professional Liability insurance: $1,000,000. 5. Such other insurance coverages and limits as may be required by the City. C. Deductibles and Self -Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or Exhibit B2 Page 1 of 3 INSURANCE REQUIREMENTS (City) (609325) August 2015 self-insured retentions as respects the City, its officers, officials, employees, and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. D. . Other Insurance Provisions The required general liability and automobile policies are to contain, or be endorsed to contain the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as Additional Insureds as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees, agents or volunteers. 2. For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought except, with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or -in limits except after thirty (3 0) days' prior written notice by certified mail, return receipt requested, has been given to the City. 6. Consultant agrees to waive subrogation rights against City regardless of the applicability of any insurance proceeds, and to require all contractors, subcontractors or others involved in any way with the Services to do likewise. 7. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirement and/or limits shall be available to the additional insured. Furthermore, the requirement for coverage and limits shall be (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; whichever is greater. 8. The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City of Petaluma before the City of Petaluma's own insurance or self-insurance shall be called upon to protect it as a named insured. Exhibit B2 Page 2 of 3 INSURANCE REQUIREMENTS (City) (609325) August 2015 23 E. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A: VII. F. Verification of Coverage Consultant shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before the Services commence. Exhibit B2 Page 3 of 3 INSURANCE REQUIREMENTS (City) (609325) August 2015 24 EXHIBIT C ACKNOWLEDGEMENT AND CERTIFICATION PURSUANT TO CITY OF PETALUMA LIVING WAGE ORDINANCE PETALUMA MUNICIPAL CODE CHAPTER 8.36 The City of Petaluma Living Wage Ordinance ("Ordinance"), Petaluma Municipal Code Chapter 8.36, applies to certain service contracts, leases, franchises and other agreements or funding mechanisms providing financial assistance (referred to hereafter as an "Agreement") between the City of Petaluma ("City") and/or the Petaluma Community Development Commission ("PCDC") and contractors, lessees, franchisees, and/or recipients of City and/or PCDC funding or financial benefits ("covered entities"). Pursuant to Petaluma Municipal Code Section 8.36.120, as part of any bid, application or proposal for any Agreement subject to the Ordinance, the covered entity shall: • Acknowledge that the covered entity is aware of the Ordinance and intends to comply with its provisions. Complete the Report of Charges, Complaints, Citations and/or Findings contained in this Acknowledgement and Certification by providing information, including the date, subject matter and manner of resolution, if any, of all wage, hour, collective bargaining, workplace safety, environmental or consumer protection charges, complaints, citations, and/or findings of violation of law or regulation by any regulatory agency or court including but not limited to the California Department of Fair Employment and Housing, Division of Occupational Safety and Health (OSHA), California Department of Industrial Relations (Labor Commissioner), Environmental Protection Agency and/or National Labor Relations Board, which have been filed or presented to the covered entity within the ten years immediately prior to the bid, proposal, submission or request. Pursuant to Petaluma Municipal Code Section 8.36.120, before the beginning of the term of any covered Agreement, or prior to the execution of said Agreement by the City or the PCDC, each covered entity shall certify that its employees are paid a living wage that is consistent with Petaluma Municipal Code Chapter 8.36. By executing this Acknowledgement and Certification, the covered entity (i) acknowledges that it is aware of the Ordinance and intends to comply with its provisions, (ii) attests to the accuracy and completeness of information provided in the Report of Charges, Complaints, Citations and/or Findings contained herein, (iii) certifies that it pays its covered employees a Living Wage as defined in Petaluma Municipal Code Chapter 8.36. and (iv) attests that the person executing this Acknowledgement and Certification is authorized to bind the covered entity as to the matters covered in this Acknowledgment and Certification. Page 1 of 3 LIVING WAGE ACKNOWLEDGEMENT AND CERTIFICATION (1638697.2) Nov 2012 25 SO ACKNOWLEDGED and CERTIFIED: Project or Contract I.D: Date: t� I (Print Name of Covered Entity/Business Capacity) By -K1 G 16LV-r[ (Print Name) Signature) Its tet' f -C,5 I J -f— (Title /Capacity of Authorized Signer) Page 2 of 3 LIVING WAGE ACKNOWLEDGEMENT AND CERTIFICATION (1638697.2) Nov 2012 26 REPORT OF CHARGES, COMPLAINTS, CITATIONS AND/OR FINDINGS PURSUANT TO PETALUMA MUNICIPAL CODE SECTION 8.36.120 FOR EACH WAGE, HOUR, COLLECTIVE BARGAINING, WORKPLACE SAFETY, ENVIRONMENTAL OR CONSUMER PROTECTION CHARGE, COMPLAINT, CITATION, AND/OR FINDING OF VIOLATION OF LAW OR REGULATION BY ANY REGULATORY AGENCY OR COURT, INCLUDING BUT NOT LIMITED TO THE CALIFORNIA DEPARTMENT of FAIR EMPLOYMENT AND HOUSING, DIVISION OF OCCUPATIONAL SAFETY AND HEALTH (OSHA), CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (LABOR COMMISSIONER), ENVIRONMENTAL PROTECTION AGENCY ANA/OR NATIONAL LABOR RELATIONS BOARD, WHICH: • AFFECTS YOU AS A PROSPECTIVE CONTRACTOR, SUBCONTRACTOR, LESSEE, FRANCHISEE AND/OR PARTY TO ANY CITY OF PETALUMA AND/OR PETALUMA COMMUNITY DEVELOPMENT COMMISSION -FUNDED AGREEMENT OR BENEFIT SUBJECT TO PETALUMA MUNICIPAL CODE CHAPTER 8.36 (LIVING WAGE ORDINANCE), AND • HAS BEEN FILED OR PRESENTED TO YOU WITHIN THE TEN YEARS IMMEDIATELY PRIOR TO THE BID, PROPOSAL, SUBMISSION OR REQUEST FOR WHICH THIS ACKNOWLEDGEMENT AND CERTIFICATION IS MADE. PLEASE PROVIDE THE DATE, THE REGULATORY AGENCY OR COURT MAKING THE CHARGE COMPLAINT, CITATION OR FINDING, THE SUBJECT MATTER AND THE MANNER OF RESOLUTION, IF ANY, FOR EACH SUCH CHARGE COMPLAINT, CITATION OR FINDING. IF NONE, PLEASE STATE "NONE": N on -er ATTACH ADDITIONAL PAGES IF NEEDED, Date: Regulatory Agency or Court: Subject Matter: Resolution, if any: Expected resolution, if known: Page 3 of 3 LIVING WAGE ACKNOWLEDGEMENT AND CERTIFICATION (1638697.2) Nov 2012 27