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Telecommunication/Cable Franchise 05PROFESSIONAL SERVICES AGREEMENT This AGREEMENT FOR PROFESSIONAL SERVICES (the "Agreement"), is made and entered into by and among the CITY OF LA QUINTA (the "City"), and Telecommunications Management Corp. (The "Contractor"). The parties hereto agree as follows: SERVICES OF CONTRACTOR 1.1 Scope of Services. In compliance with all terms and conditions of the Agreement, the Contractor shall provide those services related to Franchise Review of Time Warner Cable -Franchise Fee Audit, as specified in the "Scope of Services" attached hereto as Exhibit "A" and incorporated herein by this reference (the "services" or "work"). Contractor warrants that all services will be performed in a competent, professional and satisfactory manner in accordance with the standards prevalent in the industry for such services. Services will be provided to the City. 1.2 Contractor's Proposal. The Scope of Services shall include the Contractor's proposal or bid, which shall be incorporated herein by this reference as though fully set forth herein. In the event of any inconsistency between the terms of such proposal and this Agreement, the terms of this Agreement shall govern. 1.3 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, regulations and laws of the Municipality, the City, and any and all Federal, State or local governmental agency of competent jurisdiction. 1.4 Licenses, Permits, Fees, and Assessments. Contractor shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Contractor shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the performance of the services required by this Agreement. 1.5 Familiarity with Work. By executing this Agreement, Contractor warrants that (a) it has thoroughly investigated and considered the work to be performed, (b) it has investigated the site of the work and fully acquainted itself with the conditions there existing, (c) it has carefully considered how the work should be performed, and (d) it fully understands the facilities, difficulties and restrictions attending performance of the work under this Agreement. Should the Contractor discover any latent or unknown conditions materially differing from those inherent in the work or as represented by the City, it shall immediately inform City of such fact and shall not proceed except at Contractor's risk until written instructions are received from the Contract Officer (as defined in Section 4.2 hereof). 1.6 Care of Work. The Contractor shall adopt reasonable methods during the life of the Agreement to furnish continuous protection to the work, and the equipment, materials, papers and other components thereof to prevent losses or damages, and shall be responsible for all such damages, to person, or property, until acceptance of the work by City, except such losses or damages as may be caused by City's own negligence. The performance of services by Contractor shall not Page 1 relieve Contractor from any obligation to correct any incomplete, inaccurate or defective work at no further cost to the City, when such inaccuracies are due to the negligence of Contractor. 1.7 Additional Services. In accordance with the terms and conditions of this Agreement, the Contractor shall perform services in addition to those specified in the Scope of Services, (Exhibit "A") when directed in writing to do so by the Contract Officer, provided that Contractor shall not be required to perform any additional services without compensation. 2.0 COMPENSATION 2.1 Contract Sum. For the services rendered pursuant to the Agreement, the Contractor shall be compensated in accordance with the "Schedule of Compensation" attached hereto as Exhibit "B" and incorporated herein by this reference. The Contractor shall be compensated in an amount not exceeding Twelve Thousand Eight Hundred Dollars ($12,800) (the "Contract Sum"). The method of compensation set forth in the Schedule of Compensation will include payment for time and materials based upon the Contractor's rates as specified in Exhibit `B", or such other methods as may be specified in the Schedule of Compensation (Exhibit `B"). Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, transportation expenses, telephone expense, and similar costs and expenses when and if specified in the Schedule of Compensation (Exhibit "B"). 2.2 Method of Payment. Any month in which Contractor wishes to receive payment, Contractor shall submit to the City no later than the tenth (loth) working day of such month, in the form approved by the Contract Officer, an invoice for services rendered prior to the date of the invoice. Such invoice shall (1) describe in detail the services provided, including time and materials, (2) specify each staff member who has provided services and the number of hours assigned to each such staff member, and (3) indicate the total expenditures to date. Such invoice shall contain a certification by a principal member of Contractor specifying that the payment requested is for work performed in accordance with the terms of this Agreement. The City will pay Contractor for all expenses stated thereon which are approved by the City pursuant to this Agreement no later that the last working day of the month. 3.0 PERFORMANCE SCHEDULE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. 3.2 Schedule of Performance. All services rendered pursuant to this Agreement shall be performed diligently and within the performance of this Agreement. 3.3. Force Majeure. All time periods specified for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Contractor, including, but not restricted to, acts of God or of the public enemy, fires, earthquakes, floods, epidemic, quarantine Page 2 restrictions, riots, strikes, freight embargos, acts of any governmental agency other than City, and unusually severe weather, if the Contractor shall within ten (10) days of the commencement of such delay notify the Contracting Officer in writing of the causes of the delay. The Contracting Officer shall ascertain the facts and the extent of delay and extend the time for performing their services for the period of the forced delay when and if in his judgment such delay is justified, and the Contracting Officer's determination shall be final and conclusive upon the parties to this Agreement. 3.4 Term. Unless earlier terminated in accordance with Sections 7.7 and 7.8 of this Agreement, this Agreement shall continue in full force and effect for one ( 1 J years, from the date of the execution of this Agreement. 4.0 COORDINATION OF WORK 4.1 Representative of Contractor. The following principals of Contractor are hereby designated as being the principals and representatives of Contractor authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith: Carl Pilnick 2. It is expressly understood that the experience, knowledge, capability and reputation of the foregoing principals were a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principals shall be responsible during the term of the Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the services hereunder. The foregoing principals may not be changed by Contractor and no other personnel may be assigned to perform the service required hereunder without the express written approval of City. 4.2 Contract Officer. The Contract Officer shall be the City Manager or such other person as may be designated by the City Manager. The Contract Officer has been authorized to act on behalf of the City for the purposes of this Agreement. It shall be the Contractor's responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and the Contractor shall refer any decisions which must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. 4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Contractor, its principals and employees were a substantial inducement for the City to enter into this Agreement. Therefore, Contractor shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the City. In addition, neither this Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. 4.4 Independent Contractor. Neither the City nor any of its employees shall have any control over the manner, mode or means by which Contractor, its agents or employees, perform the services required herein, except as otherwise set forth. Contractor shall perform all Page 3 services required herein as an independent contractor with only such obligations as are consistent with that role. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 4.5 City Cooperation. The City shall provide Contractor with any plans, publications, reports, statistics, records or other data or information pertinent to services to be performed hereunder which are reasonably available to the City. 5.0 INSURANCE INDEMNIFICATION AND BONDS. 5.1 Insurance. The Contractor shall procure and maintain, at its cost, and submit concurrently with its execution of the Agreement, public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Contractor's acts or omissions rising out of or related to Contractor's performance under this Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall be primary for losses arising out of Contractor's performance hereunder and neither the City nor its insurers shall be required to contribute to any such loss. A certificate evidencing the foregoing and naming the City and its officers and employees as additional insured shall be delivered to and approved by the City prior to commencement of the services hereunder. The amount of insurance required hereunder shall be determined by the Contract Sum in accordance with the following table: Contract Sum Coverage (personal injury/property damage) Less than $50,000 $100,000 per individual; $300,000 per occurrence $50,0004300,000 $250,000 per individual; $500,000 per occurrence Over $300,000 $500,000 per individual; $1,000,000 per occurrence The Contractor shall provide the City with proof of personal automobile insurance for its principals assigned to this project. Contractor shall also carry Workers' Compensation Insurance in accordance with State Workers' Compensation laws. The Contractor shall procure professional errors and omissions liability insurance in the amount acceptable to the City. All insurance required by the Section shall be kept in effect during the term of this Agreement and shall not be cancelable without thirty (30) days' written notice of proposed cancellation to City. The procuring of such insurance or the delivery of policies or certificates evidencing the same shall not be construed as a limitation of Contractor's obligation to indemnify the City, its officers, employees, contractors, subcontractors or agents. 5.2 Indemnification. The Contractor shall defend, indemnify and hold harmless Page 4 the City, its officers, officials, employees, representatives and agents, ("City indemnitees"), from and against any and all actions, suits, proceedings, claims, demands, losses, costs, and expenses, including legal costs and attorneys' fees, for injury to or death of person(s), for damage to property (including property owned by the City) ("Claims") and for errors and omissions committed by Contractor, its officers, anyone directly or indirectly employed by Contractor, any subcontractor, and agents or anyone for whose acts any of them may be liable, arising directly or indirectly out of or related to Contractor's performance under this Agreement, except to the extent of such loss as may be caused by City's own active negligence, sole negligence or willful misconduct, or that of its officers or employees. In the event the City indemnitees are made a party to any action, lawsuit, or other adversarial proceeding in any way involving such Claims, Contractor shall provide a defense to the City indemnitees, or at the City's option, reimburse the City indemnitees their costs of defense, including reasonable attorney's fees, incurred in defense of such Claims. In addition contractor shall be obligated to promptly pay any final judgment or portion thereof rendered against the City indemnitees. 5.3 Remedies. In addition to any other remedies the City may have if Contractor fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, the City, at its sole option: 1. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under this Agreement. 2. Order the Contractor to stop work under this Agreement and/or withhold any payments(s) which become due to Contractor hereunder until Contractor demonstrates compliance with the requirements hereof. Terminate the Agreement. Exercise of any of the above remedies, however, is an alternative to any other remedies the City may have and are not the exclusive remedies for Contractor's failure to maintain or secure appropriate policies or endorsements. Nothing herein contained shall be construed as limiting in any way the extent to which Contractor may be held responsible for payments of damages to person or property resulting from Contractor's or its subcontractorsOperformance of work under this Agreement. 6.0 RECORDS AND REPORTS 6.1 Reports. Contractor shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the services required by this Agreement as the Contract Officer shall require. 6.2 Records. Contractor shall keep such books and records as shall be necessary Page 5 to perform the services required by this Agreement and enable the Contract Officer to evaluate the cost and the performance of such services. Books and records pertaining to costs shall be kept and prepared in accordance with generally accepted accounting principles. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit and make records and transcripts from such records. 6.3 Ownership of Documents. Originals of all drawings, specifications, reports, records, documents, and other materials, whether in hard copy or electronic form, which are prepared by Contractor, its employees, subcontractors and agents in the performance of this Agreement, shall be the property of City and shall be delivered to City upon the termination of this Agreement or upon the earlier request of the Contract Officer, and Contractor shall have not claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership of the documents and materials hereunder. Contractor may retain copies of such documents for its own use. Contractor shall ensure all subcontractors to assign City any documents or materials prepared by them, and in the event Contractor fails to secure such assignment, Contractor shall indemnify City for all damages suffered thereby. 6.4 Release of Documents. The drawings, specifications, reports, records, documents and other materials prepared by Contractor in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer or as required by law. Contractor shall not disclose to any other private entity or person any information regarding the activities of the City or City, except as required by law or as authorized by the City. 7.0 ENFORCEMENT OF AGREEMENT 7.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Contractor covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 7.2 Disputes. In the event of any dispute arising under this Agreement, the injured party shall notify the injuring party in writing of its contentions by submitting a claim therefor. The injured party shall continue performing its obligation hereunder so long as the injuring party commences to cure such default within ten (10) days of service of such notice and completes the cure of such default within forty-five (45) days after service of the notice, or such longer period as may be permitted by the Contract Officer; provided that if the default is an immediate danger to the health, safety and general welfare, the City may take such immediate action as the City deems warranted. Compliance with the provisions of this Section shall be a condition precedent to termination of the Agreement for cause and to any legal action, and such compliance shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit City's right to terminate this Agreement without cause pursuant to Section 7.8. Page 6 7.3 Retention of Funds. City may withhold from any monies payable to Contractor sufficient funds to compensate City for any losses, costs, liabilities or damages it reasonably believes were suffered by City due to the default of Contractor in the performance of the services required by the Agreement. 7.4 Waiver. No delay or omission in the exercise of any right or remedy of a nondefaulting party on any default shall impair such right or remedy or be construed as a waiver. City's consent or approval of any act by Contractor requiring City's consent or approval shall not be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Contractor. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 7.5 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 7.6 Legal Action. In addition to any other rights or remedies, either party may take legal action, at law or at equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. 7.7 Termination Prior to Expiration of Term. This Section shall govern any termination of this Agreement, except as specifically provided in the following Section 7.8 for termination for cause. The City reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days' written notice to Contractor. Upon receipt of any notice of termination, Contractor shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Contractor shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation (Exhibit `B") or such as may be approved by the Contract Officer, except as provided in Section 7.3. 7.8 Termination for Default of Contractor. If termination is due to the failure of the Contractor to fulfill its obligation under this Agreement, City may, after compliance with the provision of Section 7.2, take over the work and prosecute the same to completion by contract or otherwise, and the Contractor shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that the City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to the Contractor for the purpose of setoff or partial payment of the amounts owned the City as previously stated in Section 7.3. 7.9 Attorneys' Fees. If either party commences an action against the other parry arising out of or in connections with this Agreement, the prevailing party shall be entitled to recover Page 7 reasonable attorneys' fees and costs of suit from the losing party. 8.0 CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 8.1 Non -liability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Contractor, or any successor in interest, in the event of any default or breach by the City of for any amount which may become due to the Contractor or to its successor, or for breach of any obligation of the terms of the Agreement. 8.2 Conflict of Interest. No officer or employee of the City shall have any personal interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his personal interest or the interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. The Contractor warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement. 8.3 Covenant Against Discrimination. Contractor covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, disability or ancestry in the performance of the Agreement. Contractor shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin, physical disability, mental disability, medical condition, age or ancestry. 9.0 MISCELLANEOUS PROVISIONS 9.1 Notice. Any notice, demand, request, consent, approval, communication either party desires or is required to give to the other parties or any other person shall be in writing and either served personally or sent by prepaid, first-class mail to the address set forth below. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this Section 9.1. To City: CITY OF LA QUINTA 78-495 Calle Tampico La Quinta, California 92253 Attention: Thomas P. Genovese City Manager Page 8 To Contractor: Michael Friedman Telecommunications Management Corp. 5757 Wilshire Blvd., Suite 635 Los Angeles, CA 90036 Tel: 323-391-2600 Fax: 323-931-7355 9.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and all previous understandings, negotiations and agreements are integrated into and superseded by this Agreement. 9.3 Amendment. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing signed by all parties. 9.4 Severability. In the event that any or more of the phrases, sentences, clauses, paragraphs, or sections contained in the Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceable shall not effect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder. 9.5 Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement the parties hereto are formally bound to the provisions of this Agreement. Page 9 IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates stated below. CITY OF LA QUINTA Dated: /I x3 City Manager ATTEST: Z VED AS O FORM: Ly Dated: By: Name: Title: rJiocv� "CONTRACTOR Page 10 SCOPE OF SERVICES EXHIBIT B Page I 1 FIGURE 1 TMC FRANCHISE FEE AUDITS PERFORMED COMMUNITY CABLE OPERATOR DATE AUDIT COMPLETED San Bernardino, CA Comcast & Chambers 1991 Watsonville, CA Sonic 1991 Rancho Cucamonga, CA DCA Cablevision & Simmons Cable 1992 Adams County, CO TCI 1992 Arvada, CO TCI 1992 Castle Rock, CO TCI 1992 Cherry Hills Village, CO TCI 1992 Commerce, CO TCI 1992 Golden, CO TCI 1992 Palm Desert, CA Colony 1993 Half Moon Bay & Coastside Cable 1994 San Mateo County, CA Martin County, FL Adelphia 1994 El Segundo, Gardena, Hawthorne, Lawndale Time Warner 1994 & Torrance, CA Long Beach, CA CVI 1995 El Monte & Liberty Cable 1995 South Gate, CA Rancho Cucamonga, CA Marks Cablevision 1998 Calabasas, CA CalaVision, Falcon and TCI 1999 Burbank, Glendale and Marcus 1999 La Canada Flintridge, CA San Mateo County Telecommunications TCI 1999 Authority, CA Marin Telecommunications Agency, CA TCI 1999 Dublin, Livermore, Pleasanton and San TCI 1999 Ramon, CA Campbell, CA TCI 1999 La Puente, CA TCI 1999 Simi Valley, CA Comcast 1999 Whittier, CA Marcus/Charter 2000 Westlake Village, CA AT&T/Adelphia 2000 Pacifica, CA TCl/AT&T 2000 Beverly Hills, CA Adelphia 2000 Lawndale, CA Time Warner 2000 San Bernardino Co., CA 13 franchises - 7 operators 2000-2001 Santa Clarita, CA AT&T & Time Warner 2001 Santa Barbara, CA Cox 2001 Artesia, CA AT&T 2002 Tustin, CA AT&T 2002 Cerritos, CA Verizon 2002 La Palma, CA AT&T 2002 Marin Telecommunications Agency, CA AT&T 2002 Gainesville & Alachua Co., FL Cox 2003 Burbank & Glendale, CA Charter 2003 Thousand Oaks, CA Adelphia 2003 Simi Valley, CA Adelphia 2003 Beverly Hills, CA Adelphia 2003 El Monte, CA Adelphia 2003 Seal Beach, CA Adelphia 2004 Canyon Lake, CA Comcast 2004 West Covina, CA Charter 2004 Hesperia, CA Charter 2004 SCHEDULE OF COMPENSATION Page 12 5757 Wilshire Blvd. • Suite 635 • Los Angeles, CA 90036 • (323) 931-2600 • Fax (323) 931-7355 August 3, 2005 Mr. William M. Marticorena .Rutan & Tucker 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626-1998 Dear Mr. Marticorena: In response to your request, Telecommunications Management Corp. (TMC) is pleased to submit to perform an audit of the cable system franchise fees computed and paid to the City of La Quinta (the City) by the City's cable system operator, Time Warner Cable (Time Warner). The scope of the audit shall include the following: A review of the revenue records of the cable operator for. the three calendar years 2002, 2003 and 2004 and the first two quarters of 2005, including the sources of all revenue components. This will include revenue, such as commissions paid by the home shopping channels, which may be paid to the corporate offices or to an affiliate rather than directly to the local cable system. A review of the method utilized bV the operator to compute franchise fees due to the City, including all revenue elements included in the computation. A detailed analysis will be made of any revenues excluded from the computation, and whether these exclusions are in compliance with franchise requirements and cable industry practices. A comparison of the computed franchise fees due with actual payments made to the City, to verify that all fees have been paid. Mr. William M. Marticorena Rutan & Tucker August 3, 2005 Page 2 In the event of any discrepancies, an estimate of the underpayments will be made. The end -result of the review and audit shall be a written report detailing all findings, along with estimates of incorrect payments, to the extent any are found, and recommendations for future financial reports.and procedures. Three (3) bound copies and one (1) unbound (reproducible copy) are included in the cost quoted below. The audit report shall be submitted to the City within forty-five (45) days of receipt of all information requested from Time Warner. The cost shall be $12,800 on a firm, fixed -price basis. The cost includes one (1) meeting with City staff and officials to review the audit findings. Invoices shall be submitted in accordance with the following schedule: • 50% thirty (30) days after authorization to proceed; and • 50% upon submission of audit report. For services beyond the stated scope of work, the City will be. invoiced monthly on an hourly basis at the following TMC rates: Mr. Pilnick $220 per hour Mr. Friedman $185 per hour. Figure 1 provides a summary list of the franchise fee audits TMC has performed. Thank you for the opportunity to offer our services, and we look forward to your response. Sincerely, Carl Pilnick President Enclosure