HomeMy WebLinkAbout1989-405
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RESOLUTION NO.
89-405
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE EXECUTION OF A COOPERATIVE
AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND DONALD H.
MAYNOR.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1.
The Mayor is hereby authorized and directed
to execute on behalf of said City an Agreement between the City
of San Bernardino and Donald H. Maynor, which agreement is
attached hereto, marked Exhibit "1", and incorporated herein by
reference as fully as though set forth at length.
SECTION 2.
The authorization to execute the above-
referenced agreement is rescinded if the parties to the agreement
fail to execute it within sixty (60) days of the passage of this
resolution.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a regular
meeting thereof, held on the 16th
day of October
, 1989, by the fOllowing vote, to wit:
AYES:
Council Members Estrada, Reilly, Flores, Maudsley,
Minor, Miller
NAYS:
None
ABSENT:
Council Member Pope-Ludlam
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DAB/ses
October 5, 1989
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1 RESOLUTION...AUTHORIZING THE EXECUTION OF A COOPERATIVE AGREEMENT
BETWEEN THE CITY OF SAN BERNARDINO AND DONALD H. MAYNOR.
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The foregoing resolution is hereby
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October
, 1989.
of
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Approved as to form
and legal content:
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JAMES F. PENMAN,
Cit
By: /:
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DAB/ses
October 5, 1989
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AGREEMENT
THIS AGREEMENT is entered into this
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day of
, 1989, between the CITY OF SAN BERNARDINO, a municipal
corporation, referred to as "City", and Donald H. Maynor, A
Professional Law Corporation, referred to as "Consultant".
City and Consultant agree as follows:
1. Consultant shall perform an audit of the City's gas and
electric franchise revenues and utility users taxes.
The audit will focus on the identification and
correction of utility errors that result in the
undercollection or noncollection of franchise revenues
and/or utility users taxes.
2. The scope of the proposed audit services includes, but
is not limited to the following tasks:
A. Conduct an evaluation of commercial and
residential utility accounts in the City of San
Bernardino to determine whether the utility
accounts within the City limits are coded
correctly. In addition, audit will also seek to
identify and rectify incorrect designations or
coding errors for City utility accounts which may
not be included in City's franchise fee
calculation.
B. Consultant will review franchise revenue
collection procedures to determine whether the
revenues from newly annexed areas in the City are
included in the City's franchise calculation.
C. Consultant will review franchise fee calculations
to determine whether revenues are properly
included in the revenue base calculation and
thereby determine whether gas and electric
franchises fees are correctly calculated.
D. Consultant shall also review certain City utility
accounts to determine whether such accounts are
being billed under the most advantageous rate
tariff, given the consumption pattern of those
accounts.
E. Upon a determination of an undercollection or
noncollection of franchise fees under subsections
above, Consultant shall advise the City
Administrator in writing of the nature and amount
of such revenues, and the likelihood of
successfully collecting these amounts. Under the
direction of the City Administrator, Consultant
shall commence negotiations for payment to the
city of the disputed amounts. If any litigation
is anticipated as a result of the negotiations,
Consultant shall consult with the City Attorney
who shall review the material compiled by
Consultant and advise the Mayor and Common Council
of the merit of the case and recommend whether or
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not to institute litigation. Consultant shall
have no authority to settle any claim without the
consent of the Mayor and Common Council of City.
3. Consultant's sole compensation shall be as follows:
40% of the first $100,000 of the additional revenues
and/or savings recovered, as a result of Consultant's
activities;
30% of the next $200,000 additional savings and/or of
additional revenues and/or savings recovered by
Consultant;
25% of any additional revenues and/or savings recovered
by Consultant in excess of $300,000. "Additional
revenues and/or savings" will be initially established
by Consultant identifying in writing the corrected or
added revenue items and monitoring those corrected or
added revenue items for the duration of the agreement.
Consultant will annually provide the City with an
updated listing of the corrected or added revenue
items. Such items must be confirmed in writing by the
City. Failure to respond to Consultant within sixty
(60) days of submission to City by Consultant shall be
deemed agreement with such items. "Additional
revenues" shall include the correction of computation
errors, revenues from certain customers not being
included or not being correctly calculated, and the
inclusion of certain types of utility revenues
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previously excluded in the calculation of the gas and
electric franchise fees. It shall also include any
amounts collected by the city after litigation pursuant
to the recommendation of Consultant. It shall also
include the additional utility users taxes that result
from such correction. Correction of a computational
error made by the franchisee (e.g. tax on tax) that has
not previously occurred in more than two consecutive
years will not be carried forward beyond the year of
correction for purposes of calculating "Additional
Revenues".
Additional savings from section 2.D shall mean the
savings to the City that result from changing to the
more advantageous rate tariff recommended by
Consultant. Said savings shall be calculated from the
time of the change in rate tariffs for a period of 36
months thereafter, provided the less favorable rate
tariff continues to exist during that period.
The examples of "Additional Revenues" in Attachment A
are incorporated herein by reference.
4. The term of this agreement shall be for the 1989-90,
1990-91, 1991-92, 1992-93, and 1993-94 fiscal years.
The scope of the audit shall also include, at the
Consultant's option, up to four years prior to 1989.
5. Consultant shall be responsible for the payment of all
subcontractor costs, and shall hold City harmless from
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any claim by any such subcontractor(s) of non-payment.
6. This agreement may be terminated with or without cause
upon 90-days prior written notice by either the
Consultant or City. The City Administrator is hereby
authorized to give such notice on behalf of the City.
Upon termination by either party, Consultant shall be
entitled to compensation as provided herein based upon
"additional revenues and/or savings" identified to City
in writing as of the date of termination.
7. Nothing herein shall in any way limit or restrict City
from conducting its own audit at any time; provided,
however, once Consultant identifies added or corrected
items of revenue or savings and notifies City in
writing thereof, such items of revenue shall be deemed
to be "additional revenues and/or savings" for purposes
of calculating Consultants' compensation, regardless of
the results of City's concurrent or subsequent
audit(s).
8. Should negotiations for the disputed amounts be
unsuccessful, Consultant shall assist the City Attorney
with technical advice, and where necessary as an expert
witness in prosecuting any litigation to collect said
amounts.
9. City shall not be responsible to pay to Consultant any
amounts as noted in Paragraph 3 except on funds
actually received or savings received under section 2D.
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10. Consultant shall be considered for all intents and
purposes as an independent contractor and not as an
employee of the city.
11. Consultant agrees to hold harmless, save and defend
(upon request by City) the City of San Bernardino, its
officers, agents and employees from any claim, action
or proceeding arising out of the performance, or
failure to perform, of this Agreement by Consultant its
officers, agents or employees.
12. Before commencing to perform the terms of this
Agreement Consultant shall obtain public liability and
property damage insurance in an amount of $100,000
combined single limit naming the City, its officers,
agents and employees as additional insureds. A current
certificate of such insurance shall be kept on file
with the City Administrator. Failure to do so shall be
cause for immediate termination of the Agreement.
13. Any notice to be given from one party to the other
pursuant to this Agreement shall be deposited with the
United states Postal Service postage prepaid and
addressed as follows:
To City:
City Administrator
City Hall
300 N. "0" Street
San Bernardino, CA 92418
To Consultant:
Donald H. Maynor
Attorney At Law
2471 E. Bayshore Road, suite 501
Palo Alto, CA 94303
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Nothing in this Paragraph shall be construed to prevent
the giving of notice by personal service.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement on the date and date first above shown.
"city"
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MAYOR"
ATTEST:
~tl?~Ae/
~HAUNA CLARK, CITY CLERK
APPROVED AS TO LEGAL FORM
AND CONTENT:
JAMES F. PENMAN,
City Attorney
By: ~~
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"Consultant"
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DONALD H. MAYNOR
agrmnt
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ATTACHMENT "A"
Scope of Services
ADDITIONAL REVENUES
within thirty (30) days of the execution of this Agreement,
an audit of the City's gas franchises fees, electric franchises
fees, and utility user's taxes will be commenced for calendar
year 1989.
The audit will focus on the discovery of utility errors that
result in the undercollection or noncollection of gas franchise,
electric franchise, and/or utility user's tax revenues. Such
errors may be the result of the utility: incorrectly designating
or coding City customers as being located outside the City;
failing to include revenues from annexed areas on a timely basis;
failing to properly include all revenues in the revenue base;
failing to correctly calculate all amounts due the City; and
other similar errors.
Upon a determination of an undercollection or noncollection
of the above-described revenues, Consultant shall advise the City
Manager in writing of the nature and amount of such revenues, and
the likelihood of successfully collecting such amounts.
City shall cooperate with Consultant and Consultant's agents
in providing Consultant and his agents access to information
necessary to perform the above-described audit.
Example Of "Additional Revenues"
As Defined in Fee Aqreement
Hypothetical:
As a result of an audit of calendar year
1989, the following errors are discovered:
1.
Large gas customer, whose annual billing
would generate $5,000 of gas franchise fees
and utility user's taxes, was wrongfully
coded as being located outside the City;
"Additional revenue" would include: $5,000
for 1989, any gas franchise fees and utility
user's taxes excluded from previous years
from that customer, and all gas franchise
fees and utility user's taxes derived in the
next four years (i.e. through the 1993
accounting period) from that wrongfully
excluded customer.
2. Electric customer was billed under the wrong
rate schedule resulting in the
undercollection of $1,000 annually of
electric franchise fees and utility user's
taxes;
"Additional revenue" would include: $1,000
for 1989, any undercollections from previous
years, and the additional franchise fees and
utility user's taxes derived from the
difference between the erroneous rate
schedule and the correct rate schedule as
applied to that customer for the next four
years (i.e., through 1993 accounting period).
3. In 1989, there was a six month delay in
including an annexation in the gas franchise
fee calculation. Loss of $5,000 of gas
franchise fees and utility user's taxes to
the city;
"Additional revenue" would be $5,000.
4. Electric utility failed to include revenue
from the sale of utility widgets in the city.
Annual loss of $4,000 of electric franchise
fees;
"Additional revenue" would include: $4,000;
all electric franchise fees and utility
user's taxes from previous years derived from
the sale of widgets; and any such fees and
taxes from the sale of widgets for the next
four (4) annual accounting periods.
5. utility made a computational error of $2,000
in calculating a utility franchise fee.
"Additional revenue" would include: $2,000
only, unless the same error had occurred in
more than a total of two (2) consecutive
years, in which case, "additional revenues"
would include the previous years' corrections
as well as the amount of the correction
calculated for the next four (4) accounting
periods.
ADDITIONAL SAVINGS
Example of Additional Savinqs
Hypothetical: Attorney's accountant determines that City's city
hall is currently billed under an industrial electric rate
tariff, and that the monthly bill for that facility can be
reduced $1,000 if it changes to a commercial rate tariff. The
City follows our recommendation in July, 1990, and changes to a
commercial electric rate tariff.
"Additional Savings" would be determined by calculating the city
hall's electric bill under the commercial and industrial rate
schedules, and then calculating the actual difference between
these billing methods for each month from July, 1990, through
June, 1993 (i.e. 36 months). If the industrial rate tariff was
discontinued in April, 1991, then there would be no "additional
savings" thereafter under this agreement.
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