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HomeMy WebLinkAbout000625 Original Contract City of Port Angeles Record # 000625 AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PORT ANGELES AND COLUMBIA TELECOMMUNICATIONS CORPORATION RELATING TO: Confidential Opinion Report Regarding the Value of the CPI Network THIS AGREEMENT is made and entered into this /I � day of 2013, by and between THE CITY OF PORT ANGELES, a non-charter code ity of the State of Washington, (hereinafter called the "CITY") and Columbia Telecommunications Corporation, a Maryland Corporation authorized to do business in the state of Washington (hereinafter called the "CONSULTANT"). WHEREAS, the CITY desires professional services related to an Opinion Report regarding the value of the Capacity Provisioning, Inc. (CPI) network for its telecommunications utility; and WHEREAS, the CITY desires to engage the professional services and assistance of a qualified consulting firm to perform the scope of work as detailed in Exhibit A, and WHEREAS, the CONSULTANT represents that it is in full compliance with the statutes of the State of Washington for professional registration and/or other applicable requirements, and WHEREAS, the CONSULTANT represents that it has the background, experience, and ability to perform the required work in accordance with the standards of the profession, and WHEREAS, the CONSULTANT represents that it will provide qualified personnel and appropriate facilities necessary to accomplish the work; NOW, THEREFORE, in consideration of the above representations and the terms, conditions, covenants, and agreements set forth below, the parties hereto agree as follows: I SCOPE OF WORK The professional services to be performed and the results to be achieved by the CONSULTANT shall be as detailed in the attached Exhibit A and shall include all services and material necessary to accomplish the work. The CITY may review the CONSULTANT'S work product, and if it is not satisfactory, the CONSULTANT shall make such changes as may be required by the CITY. Such changes shall not constitute "Extra Work" as related in Section XII of this Agreement. The CONSULTANT agrees that all services performed under this Agreement shall be in accordance with the standards of the profession and in compliance with applicable federal, state and local laws. The Scope of Work may be amended upon written approval of both parties. PW 0410 01 Professional Services Agreement Page 1 of 7 Revised [05112/06] II OWNERSHIP OF DOCUMENTS Upon completion of the work, all documents, exhibits, photographicimages, or other presentations of the work shall become the property of the CITY for use without restriction and without representation as to suitability for reuse by any other party unless specifically verified or adapted by the CONSULTANT. However, any alteration of the documents, by the City or by others acting through or on behalf of the City, will be at the City's sole risk. III DESIGNATION OF REPRESENTATIVES Each party shall designate its representatives in writing. The CONSULTANT'S representative shall be subject to the approval of the CITY. IV TIME OF PERFORMANCE The CONSULTANT may begin work upon execution of this Agreement by both parties and the duration of the Agreement shall extend through July 31, 2014. The work shall be completed in accordance with the schedule set forth in the attached Exhibit C. V PAYMENT The CITY shall pay the CONSULTANT as set forth in this section and Exhibit B of the Agreement. Such payment shall be full compensation for work performed, services rendered, and all labor, materials, supplies, equipment and incidentals necessary to complete the work. A. Payment shall be on the basis of the CONSULTANT'S standard billing rates as set forth in Exhibit B multiplied by the actual hours worked. B. The CONSULTANT shall submit invoices to the CITY per the schedule in Exhibit B. Invoices shall detail the work, hours, employee name, and hourly rate; shall itemize with receipts and invoices the non-salary direct costs; shall indicate the specific task or activity in the Scope of Work to which the costs are related; and shall indicate the cumulative total for each task. C. The CITY shall review the invoices and make payment for the percentage of the project that has been completed less the amounts previously paid. D. The CONSULTANT invoices are due and payable within 30 days of receipt. In the event of a disputed billing, only the disputed portion will be withheld from payment. E. Final payment for the balance due to the CONSULTANT will be made after the completion of the work and acceptance by the CITY. F. Payment for "Extra Work" performed under Section XII of this Agreement shall be as agreed to by the parties in writing. PW 0410_01 Professional Services Agreement Page 2 of 7 Revised [05/12/06] VI MAXIMUM COMPENSATION Unless otherwise agreed to in writing by both parties, the CONSULTANT'S total compensation and reimbursement under this Agreement, including labor, direct non-salary reimbursable costs and outside services, shall not exceed the maximum sum of$24,750.00. The budget for each task is as set forth in the attached Exhibit B. Budgets for task(s) may be modified upon mutual agreement between the two parties, but in any event, the total payment to CONSULTANT shall not exceed $24,750.00. VII INDEPENDENT CONTRACTOR STATUS The relation created by this Agreement is that of owner-independent contractor. The CONSULTANT is not an employee of the City and is not entitled to the benefits provided by the City to its employees. The CONSULTANT, as an independent contractor, has the authority to control and direct the performance of the services to be provided. The CONSULTANT shall assume full responsibility for payment of all Federal, State, and local taxes or contributions imposed or required, including, but not limited to, unemployment insurance, Social Security, and income tax. VIII EMPLOYMENT Employees of the CONSULTANT, while engaged in the performance of any work or services under this Agreement, shall be considered employees of the CONSULTANT only and not of the CITY, and claims that may arise under the Workman's Compensation Act on behalf of said employees while so engaged, and any and all claims made by a third party as a consequence of any negligent act or omission on the part of the CONSULTANT'S employees while so engaged, on any of the work or services provided to be rendered herein, shall be the sole obligation and responsibility of the CONSULTANT. In performing this Agreement, the CONSULTANT shall not employ or contract with any CITY employee without the City's written consent. IX NONDISCRIMINATION The CONSULTANT shall conduct its business in a manner, which assures fair, equal and non-discriminatory treatment of all persons, without respect to race, creed or national origin, or other legally protected classification and, in particular: A. The CONSULTANT shall maintain open hiring and employment practices and will welcome applications for employment in all positions, from qualified individuals who are members of minorities protected by federal equal opportunity/affirmative action requirements; and, B. The CONSULTANT shall comply with all requirements of applicable federal, state or local laws or regulations issued pursuant thereto, relating to the establishment of non discriminatory requirements in hiring and employment practices and assuring the service of all persons without discrimination as to any person's race, color, religion, sex, Vietnam era veteran status, disabled veteran condition, physical or mental handicap, or national origin. PW 0410_01 Professional Services Agreement Page 3 of 7 Revised [05/12/06] X SUBCONTRACTS A. The CONSULTANT shall not sublet or assign any of the work covered by this Agreement without the written consent of the CITY. XI CHANGES IN WORK Other than changes directed by the CITY as set forth in Section I above, either party may request changes in the scope of work. Such changes shall not become part of this Agreement unless and until mutually agreed upon and incorporated herein by written amendments to this Agreement executed by both parties. XII EXTRA WORK The CITY may desire to have the CONSULTANT perform work or render services in connection with this project, in addition to the scope of work set forth in Exhibit A and minor revisions to satisfactorily completed work. Such work shall be considered as "Extra Work" and shall be addressed in a written supplement to this Agreement. The CITY shall not be responsible for paying for such extra work unless and until the written supplement is executed by both parties. XIII TERMINATION OF AGREEMENT A. The CITY may terminate this Agreement at any time upon not less than ten (10) days written notice to the CONSULTANT. Written notice will be by certified mail sent to the CONSULTANT'S designated representative at the address provided by the CONSULTANT. B. In the event this Agreement is terminated prior to the completion of the work, a final payment shall be made to the CONSULTANT, which, when added to any payments previously made, shall compensate the CONSULTANT for the percentage of work completed. C. In the event this Agreement is terminated prior to completion of the work, documents that are the property of the CITY pursuant to Section II above, shall be delivered to and received by the CITY prior to transmittal of final payment to the CONSULTANT. XIV INDEMNIFICATION/HOLD HARMLESS CONSULTANT shall defend, indemnify and hold the CITY, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the negligent acts, errors or omissions of the CONSULTANT in performance of this Agreement, except for injuries and damages caused by the sole negligence of the CITY. PW 0410_01 Professional Services Agreement Page 4 of 7 Revised [05/12106] The CITY agrees to indemnify the CONSULTANT from any claims, damages, losses, and costs, including, but not limited to, attorney's fees and litigation costs, arising out of claims by third parties for property damage and bodily injury, including death, caused solely by the negligence or willful misconduct of the CITY, CITY's employees, or agents in connection with the work performed under this Agreement. If the negligence or willful misconduct of both CONSULTANT and CITY (or a person identified above for whom each is liable) is a cause of such damage or injury, the loss, cost, or expense shall be shared between the CONSULTANT and the CITY in proportion to their relative degrees of negligence or willful misconduct and the right of indemnity shall apply for such proportion. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the CONSULTANT, the CITY, and the officers, officials, employees, and volunteers of either, the CONSULTANT'S liability hereunder shall be only to the extent of the CONSULTANT'S negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the CONSULTANT'S waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. However, the CONSULTANT expressly reserves its rights as a third person set forth in RCW 51.24.035. XV INSURANCE The CONSULTANT shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the CONSULTANT, its agents, representatives, employees or subcontractors. No Limitation. CONSULTANT'S maintenance of insurance as required by the agreement shall not be construed to limit the liability of the CONSULTANT to the coverage provided by such insurance, or otherwise limit the CITY'S recourse to any remedy available at law or in equity. Failure on the part of the CONSULTANT to maintain the insurance as required shall constitute a material breach of contract, up which the City may, after giving five business days notice to the CONSULTANT to correct the breach, immediately terminate the Agreement, or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sum so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the CONSULTANT from the City. A. Minimum Scope of Insurance CONSULTANT shall obtain insurance of the types described below: 1. Automobile Liability insurance covering all owned, non-owned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to PW 0410_01 Professional Services Agreement Page 5 of 7 Revised [05/12/06) provide contractual liability coverage; and, 2. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors, and personal injury and advertising injury. The City shall be named as an insured under the CONSULTANT'S Commercial General Liability insurance policy with respect to the work performed for the City; and, 3. Workers' Compensation coverage as required by the Industrial Insurances laws of the State of Washington; and 4. Professional Liability insurance appropriate to the CONSULTANT'S profession. B. Minimum Amounts of Insurance CONSULTANT shall maintain the following insurance limits: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of$1,000,000 per accident. 2. Commercial General Liability insurance shall be written with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. 3. Professional Liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. C. Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions for Automobile Liability, Professional Liability and Commercial General Liability insurance: 1. The CONSULTANT'S insurance coverage shall be primary insurance as respect the City. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the CONSULTANT'S insurance and shall not contribute with it. 2. The CONSULTANT shall provide the City and any additional insureds with written notice of any policy cancellation, within two business days of their receipt of such notice. 3. Any payment of deductible or self-insured retention shall be the sole responsibility of the CONSULTANT. 4. The CONSULTANT'S insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. E. Verification of Coverage PW 0410 01 Professional Services Agreement Page 6 of 7 Revised [05/12/06] CONSULTANT shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the CONSULTANT before commencement of the work. XVI APPLICABLE LAW This Agreement shall be construed and interpreted in accordance with the laws of the State of Washington, and in the event of dispute the venue of any litigation brought hereunder shall be Clallam County. XVII EXHIBITS AND SIGNATURES This Agreement, including its exhibits, constitutes the entire Agreement, supersedes all prior written or oral understandings, and may only be changed by a written amendment executed by both parties. The following exhibits are hereby made a part of this Agreement: Exhibit A - Scope of Work Exhibit B — Budget Costs Exhibit C - Schedule for the Work IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY OF PORT ANGELES APPROVED AS TO FORM: DAN MCKEEN, CITY MANAGER W LLIAM E. BLOOR, CITY ATTORNEY CONSULTANT ATTEST:i JANESV HI CITY CLERK TITLE: President PW 0410 01 Professional Services Agreement Page 7 of 7 Revised [05/12/06] City of Port Angeles Confidential Opinion Report Regarding the Value of the CPI Network August 2013 Exhibit A-Scope of Work Deliverables: The project is for Columbia Telecommunications Corporation (CTC)to formulate and deliver to the City a Confidential Opinion Report regarding the value of Capacity Provisioning Inc. (CPI). This Confidential Opinion Report shall also be labeled "Confidential—Expresses Opinions and Recommendations." Determining the value of Capacity Provisioning Incorporated's (CPI)fiber optic enterprise in Port Angeles would typically be based on four different approaches.The approaches are: 1. Valuation based upon sale of similar properties. This type of valuation is often used for connectivity enterprises such as cable television transactions. Given that the CPI business enterprise serves a set of needs specific to the region,finding comparable sales would be difficult—and may not provide particularly useful data. 2. Valuation based on book value of the CPI fiber network. This type of valuation would include a review of CPI's financial statements, including the balance sheet.The review would include key assumptions such as the depreciation of assets and which assets were capitalized. 3. Valuation based on the net present value(NPV)of the projected net profit or a discounted net cash flow of the CPI operations. 4. Valuation based on the replacement value of the CPI network. The Work To formulate an opinion on the value of Capacity Provisioning Incorporated's (CPI)fiber optic enterprise in Port Angeles, CTC will concentrate on the book value,the NPV of projected net profit, and the replacement cost.The process and information required will include: 1. Review and document operations. a. Review CTC's existing documentation of the CPI operations. b. Review financial statements (income statement,cash flow statement, and balance sheets), customer base, pricing, capital replacement projections, and other relevant documents to be provided by City staff and CPI representatives. Whenever possible, Confidential Opinion Report Regarding the Value of the CPI Network audited financial statements are desired. Depending on how the company is structured, corporate tax returns or partnership returns will also be evaluated. c. Evaluate assumptions used in producing financial statements (income statement, cash flow statement, and balance sheets). d. Review key services (and pricing for each)delivered by CPI, including services offered to the City. e. Review the plant in service. 2. Estimate the financial value of the CPI business in terms of its financial statements. This includes quantifying and comparing operating expenses to the revenue earned from existing customers. The calculation will establish the net present value (NPV)of the CPI business over varying periods of operation based on projected risk to a comparable investment by the City. 3. Estimate the book value of the CPI business through an on-site due-diligence review of the physical assets, including: a. Fiber plant maps and in field (spot inspections) b. Core switches c. Customer access devices d. Network monitoring equipment assets e. Age of the equipment and the corresponding depreciation or need for replacement. 4. Estimate the cost of constructing and operating a limited replacement network(i.e., a subset of the total CPI network that would serve only the City): a. Assume all existing and projected City sites b. Use all City prepaid assets c. Do not use I-Net cabling or facilities d. Include wireless in the solution where it is appropriate In addition, CTC shall provide a high-level analysis of some key decision-making questions that have been raised by City management and elected officials, including for example: • How does the existing CPI service fee structure relate to other area vendors, in other comparable regional, as well as national, markets? • Would operating expenses such as staffing have to increase under a City business enterprise? • What near-term upgrades are needed to keep the CPI services current? How much will those upgrades cost, in addition to its projected renewals and replacement costs? • What has been the total capitalized investment into the network over the franchise period? 21 Page Confidential Opinion Report Regarding the Value of the CPI Network • What is the value of the network's existing customers (City and external), in terms of avoided costs (City) and revenue (external)? • What is the potential value of services provided to commercial customers,when compared to the rates for other local service providers? Exhibit B—Budget Costs The "not-to-exceed" budget for this project is$24,750.00 for the tasks listed above. CTC will bill at the following hourly rates: Labor Category Rate Director of Business Consulting $165 Principal Analyst $155 Senior Project Analyst $145 Senior Analyst $135 Staff Analyst $125 Communications Aide $ 70 Director of Engineering $165 Principal Engineer $155 Senior Project Engineer $145 Senior Engineer $135 Staff Engineer $125 Engineer Aide $ 70 The Consultant may invoice the City for up to 50%of the budget upon submitting a draft Confidential Opinion Report, and the balance may be billed upon the City's acceptance of the final Confidential Opinion Report. Exhibit C—Schedule The Consultant shall deliver the final report to the City within five (5) weeks of the date of execution of the AGREEMENT FOR PROFESSIONAL SERVICES. 31 Page