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RESOLUTION NO.
89-501
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH ROGER ERNST & ASSOCIATES,
AUCTIONEERS TO STORE AND SELL SEIZED VEHICLES, PERSONAL AND REAL
PROPERTY, AND FIREARMS.
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 with Roger Ernst &
Associates, Auctioneers, to store and sell seized vehicles,
personal and real property, and firearms, a copy of said
agreement is attached hereto, marked Exhibit "A", 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referenced agreement is rescinded if the parties to the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 18th
day of
December , 1989, by the following vote, to wit:
Council Members:
AYES
NAYS
ABSTAIN
ESTRADA
REILLY
FLORES
MAUDSLEY
MINOR
POPE-LUDLAM
MILLER
x
x
x
x
x
x
x
~ffhJ#~~'"
City Clerk.
HE/dys
December 8, 1989
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RESOLUTION...AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH ROGER
ERNST & ASSOCIATES, AUCTIONEERS TO STORE AND SELL SEIZED
VEHICLES, PERSONAL AND REAL PROPERTY, AND FIREARMS.
The foregoing resolution is hereby approved thi~ ~oct- day
1
/'
of
1989.
December
Approved as to
form and legal content:
JAMES F. PENMAN,
City Attorney
l, 1 ()
By: ~ . .., r ~__
o
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December 8, 1989
2
(l
i L
1~ ~~i:e:~R:~=E~Ityi~f m:~:: B~~~a:~J:::e~ ~~~ZCi~~l ~:~o~io~
of the state of California, hereinafter referred to as "Ci ty" ,
and Roger Ernst & Associates, Auctioneers, hereinafter referred
to as "Auctioneer".
AGREEMENT
WITNESSETH
Recitals:
A. The Police Department of the City of San Bernardino is
responsible with the District Attorney for the County of San
Bernardino, for initiating and litigating the forfeiture of
property seized by local law enforcement under the provisions of
Health and Safety Code Section 11470, et seq.; effecting the
judgment or declaration of forfeiture; establishing a proper
mechanism for liquidation of forfeited assets in cooperation with
local law enforcement; and making proper distribution of the
proceeds.
B. City desires to:
(1) Maximize the return on the sale of forfeited assets;
(2) Control the cost of transporting, storing, insuring,
and maintaining property prior to liquidation;
(3) Utilize public auction as the proper mechanism for
liquidation of forfeited assets; and
(4) simplify asset management, record keeping, and
accounting procedures by generally utilizing one
independent contractor to provide transportation,
storage, insurance, maintenance, and auctioneering
services for all asset seizures and forfeitures
administered by the San Bernardino Police Department.
C. Auctioneer has offered to City services to transport, store,
insure, maintain, administer and conduct public auction of seized
vehicles, personal property, firearms, and real estate for
benefit of the City.
D. Auctioneer has demonstrated its competence and qualifications
necessary for the satisfactory performance of the service
designated herein by virtue of its experience and expertise.
THEREFORE, in consideration of their mutual and perspective
promises, the parties hereto and hereby agree as follows:
1. ROLE OF CHIEF OF POLICE:
The Chief of Police shall be the City's authorized
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December 8, 1989
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representative in the interpretation and enforcement of all work
performed in connection with this Agreement. The Chief of Police
may delegate authority in connection with this Agreement to his
designees.
2. INDEPENDENT CONTRACTOR:
Auctioneer's relationship to the City shall be that of an
independent contractor. Auctioneer shall be solely responsible
for the performance of any of its employees or agents under this
Agreement. Auctioneer shall report to the City any and all
associates performing work in connection with this Agreement.
Consultant is acting as an independent contractor, and not
as an employee of the City. In the performance of personal
services pursuant to the provisions of this agreement, Consultant
shall not be supervised, directed, or under the control or
authority of any City officer or employee, except and to the
extent as may be expressly or implicitly required by the terms
and provisions of this agreement. Any direction or control so
required under this agreement shall be limited to broad
objectives or goals of the project or program to be accomplished
and not to the details and procedures to accomplish such
objectives or goals. Consultant shall not be obligated to
conform to the supervision or direction of City officers or
employees which are not authorized herein. Changes or
modifications of said objectives and goals may be made by written
recommendations of either party subject to the concurrence of the
other party in writing.
3. CARE, CUSTODY, AND CONTROL:
City agrees that it has and will in the future obtain
possession of vehicles, personal property, firearms, and/or
real property (all inclusively referred to hereinafter as
"property") pursuant to Health and Safety Code Section 11470 et
seq., and other State and local laws, and that such property is
subject to the care, custody, and control by City.
Auctioneer recognizes that care, custody, and control does
not convey legal title to City for such property. City agrees to
transfer possession of said property to Auctioneer subject to the
following conditions:
a. Auctioneer shall be available to respond to the scene
of a property seizure upon 90 minutes notice, prepared to
inventory, take possession, load and transport to secure storage
said property. Upon picking up property from the City,
Auctioneer shall sign a receipt for the property, after which
time Auctioneer shall bear all costs, expenses, and risks of loss
in loading, transporting, storing, securing, insuring, preparing
for sale, advertising, and selling the property.
/ / / /
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December 8, 1989
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b. Auctioneer shall
Auctioneer's storage facility.
for said storage.
provide secure storage at
Auctioneer shall bear all costs
4. REPAIRS AND MAINTENANCE:
City agrees that Auctioneer may elect to perform any
repairs or maintenance on property in Auctioneer's possession
provided that before such repairs or maintenance are performed,
Auctioneer receives advance approval by City.
Auctioneer shall ensure that all motor vehicles are
properly maintained and are smog certified per state law prior to
sale.
5. AUTHORIZATION OF SALE:
Auctioneer and City agree that Auctioneer shall not be
entitled to sell or offer to sell property transferred to
Auctioneer unless Auctioneer has obtained written certification
authorizing sale from City. Certification as provided herein
shall entail the receipt by Auctioneer from City of either of the
following:
a. Copy of an order releasing property to City signed by
any State or Federal Judge or magistrate.
b. Copy of authorization from California Department of
Motor Vehicles transferring title of vehicles to City.
6. RETURN OF VEHICLE OR PROPERTY:
Auctioneer agrees that City shall be entitled, prior to
public sale of property, to request the return of any property
transferred to Auctioneer for any reason, and that upon receipt
of such request, Auctioneer shall return said property to City
without assessing any cost or expense to City for such return.
On return of such property, Auctioneer shall be relieved of all
obligations or liability for such property under this Agreement.
Request for return may be made by telephone to Auctioneer.
Auctioneer agrees that in the event City notifies either
in writing or telephonically that property in Auctioneer's
possession must be returned to City, Auctioneer shall return
property to City's designated storage facility within forty-eight
(48) hours of such notification.
7. PUBLIC SALE BY AUCTION:
Auctioneer agrees to conduct public sale by auction of
property accepted for forfeiture by City held by Auctioneer in
conformance with the requirements of federal, state, and local
laws, including Chapter 2.70 of the San Bernardino Municipal
Code. Also in conducting said sale, Auctioneer shall pay for all
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December 8, 1989
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advertising, including but not limited to, newspaper advertising,
direct mail, and flyer, and shall give a minimum of five days
public notice of auction in a newspaper of general circulation
published in the City of San Bernardino. Auctioneer shall also
bear all cost relating to transporting or moving such property to
auction site. Auctioneer shall conduct absolute auctions, with
no minimum bid for property put up for sale unless the City has
expressed a concern in writing regarding a minimum sale price.
8. GUARANTEE OF RECEIVING APPRAISED VALUE:
Whenever the City expresses a concern in writing regarding
the minimum sales price on any particular property, Auctioneer
agrees to guarantee a minimum sales price, negotiated in advance
based on the appraised value of the item, and shall provide the
guarantee in the form of a certified check in the amount of the
minimum sales price, less commission, prior to the sale.
9. INSPECTION STATEMENT OF RELIANCE:
Auctioneer shall require that each auction purchaser sign a
statement acknowledging inspection of the real or personal
property being purchased and stating that the purchaser is
relying solely on that inspection in making the purchase.
10. COMPENSATION:
Auctioneer shall maintain auditable records of all property
which is sold pursuant to this Agreement. Auctioneer's records
shall be made available to the City for verification, within a
reasonable time after the City requests inspection.
Auctioneer and City agree that upon Auctioneer's sale of
property accepted for forfeiture under the conditions provided
herein, Auctioneer shall deduct as compensation for the services
provided to the City ten percent (10%) of the actual sales price
of a vehicle and twenty-five percent (25%) of the actual sales
price of a firearm or other personal property, excluding real
estate and other property of exceptional value. Actual sales
price shall mean the total price paid to the Auctioneer by the
purchaser for the property.
"Property of exceptional value" shall include any vehicle
and/or property with an appraised value greater than $100,000.
In the sale of property of exceptional value the compensation for
Auctioneer's services shall be negotiated in writing between City
and Auctioneer prior to sale, and shall generally be less than
ten percent of the actual sales price.
Auctioneer agrees that within fifteen (15) days of the sale
of property accepted for forfeiture, it shall pay to City that
actual sales price proceeds received from the sale of such
property, minus the compensation described above for Auctioneer's
services and deducting the cost of any approved repairs to
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property performed by Auctioneer prior to sale of such property.
11. BUYER'S PREMIUM:
It is understood that Auctioneer charges the buyer of any
auctioned vehicle or property excluding real estate, a buyer's
premium equal to ten percent (10%) of the actual sales price.
12. SERVICES PROVIDED IN CONNECTION WITH SALE OF REAL ESTATE OF
COMMERCIAL PROPERTY:
The particular services to be provided in connection with
the sale of a specific piece of real estate or commercial
property will be negotiated on a case by case basis, with the
exception of insurance coverage. Auctioneer shall immediately
acquire insurance coverage for fire, theft, and personal
liability on the real estate or commercial property as soon as
Auctioneer is notified by City that it has obtained ownership or
possession of the property by court order. Insurance coverage
shall be for the full appraised cash value of the improvements.
Auctioneer will also arrange for a title search and title report
on the property.
Auctioneer shall conduct an evaluation of the property and
its sales potential and submit a complete cost analysis of the
services that Auctioneer proposes to deliver in connection with
its care, custody, and control of that property. Services that
may be provided include, but are not necessarily limited to:
a. Securing the property, including installation of
locks, and/or other security devices.
b. Hiring a private security firm to make periodic
checks of the property.
c. Contracting for periodic maintenance of lawns and
landscaping.
d. Contracting for cleaning, maintenance, or repair of
the interior or exterior of the property to improve
its sales value.
e. Contract for a property inspection service to inspect
the property and identify any defects or liabilities
that should be disclosed to potential buyers.
No services or repairs shall be initiated unless approved
in advance by City and the costs identified in a cost analysis.
The fee charged for services or repairs shall be the actual cost
or the service or repair, with no surcharge added by Auctioneer.
Auctioneer shall advertise and promote the sale of the
property for at least 45 days prior to sale at auction and have a
least one advertised open house where prospective bidders may
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December 8, 1989
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preview and inspect the property and obtain a title report. Real
estate sales may be conducted by video auction in conjunction
with other auctions conducted by Auctioneer.
Buyer shall be responsible for the cost of all fees
incurred after the auction, including but not limited to, costs
of escrow and recording.
13. COMPENSATION AND FEES FOR AUCTION OF REAL ESTATE:
Unless otherwise negotiated in writing for a particular
property, Auctioneer shall receive as compensation a fee equal to
six percent (6%) of the actual sales price of the property. The
actual sales price shall mean the total sales price paid to the
Auctioneer by the purchaser for the property.
Auctioneer agrees that within thirty (30) days of the sale
of the real estate or commercial property, it shall pay to City
that actual sales price proceeds received from the sale of the
property, minus the compensation described above for Auctioneer's
services; deducting the actual, itemized cost of the specific
services agreed upon in connection with the particular property
such as insurance, security, lawn maintenance, or painting
performed by Auctioneer or its agents prior to sale of the
property; and deducting the cost of settling encumbrances on the
property identified in the title report. During this thirty day
escrow period, Auctioneer will clear all encumbrances from the
title so that the property is transferred with clear title.
14. EXAMINATION OF FIREARMS:
With respect to any firearms which are handled by
Auctioneer for City, City shall provide a list of firearms which
are to be destroyed for City by Auctioneer. Auctioneer reserves
the right to examine all the firearms listed as being appropriate
for sale at auction, and if Auctioneer determines that any of
said weapons are not appropriate, because of defect or otherwise,
for sale at auction, shall notify City that that firearm will be
removed from the list of firearms to be sold at auction, and
placed on the list of firearms to be destroyed. The destruction
of said firearms shall be done as a courtesy to City at no cost
or expense to City.
15. INSURANCE:
a. Auctioneer shall furnish City with a certificate of
insurance evidencing that it carries worker's compensation
insurance and that the policy shall not be cancelled nor the
coverage reduced except upon thirty (30) days prior written
notice to the City.
b. Auctioneer shall obtain at its sole cost and file with
the City prior to exercising any right or performing any
obligation pursuant to this agreement, and maintain for the
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December 8, 1989
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period covered by this agreement, a policy of comprehensive
general liability insurance against liability for any and all
claims, suits for damages or injuries to person or property
resulting from or rising out of operations of Auctioneer, its
officers, agents, or employees, performed in connection with this
Agreement including but not limited to premises and automobile,
which also names the City of San Bernardino, its officers,
agents, and employees as additional insured. Auctioneer's
insurance shall be primary. Said policy or policies of insurance
shall provide coverage for both bodily injury and property damage
in not less than the following amount:
General Liability
Combined Single Limit per Occurrence
General Aggregate
$1,000,000
$1,000,000
Automobile Liability
Combined Single Limit Per Occurrence $1,000,000
Auctioneer shall provide evidence of compliance with the
insurance requirements listed above by providing a certificate of
insurance, in a form acceptable to the City Attorney,
concurrently with the submittal of this Agreement. Said policy
or policies shall also contain a provision that termination,
cancellation or change of coverage of insured or additional
insured shall not be effective until thirty (30) days notice
thereof has been given in writing to City. Auctioneer shall give
City prompt and timely notice of claim made or suit instituted
arising out of Auctioneer's operations hereunder.
16. AUCTIONEER'S INDEMNIFICATION OF CITY:
Auctioneer shall defend, indemnify, and hold harmless the
City and its officers, agents, and employees against all claims
for damages or injuries to persons or property arising out of
Auctioneer's execution of the work, or otherwise by the conduct
of the Auctioneer or its employees, agents, subcontractors, or
others (including the active and passive negligence of the City,
its officers, agents, or employees) in connection with the
execution of the work covered by this contract and any and all
costs, expenses, attorney's fees and liability incurred by the
City, its officers, agents, or employees in defending against
such claims, whether the same proceed to judgment or not, except
only for those claims arising from the sole negligence or willful
conduct of the City, its officers, agents, or employees.
Auctioneer shall reimburse the City for all costs and
expenses (including but not limited to fees and charges of
attorneys, and other professionals and court costs) incurred by
City in enforcing the provisions of this Agreement.
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December 8, 1989
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17. VALIDITY:
The validity in whole or in part of any provision of this
Agreement shall not void or affect the validity of any other
provision of this Agreement.
18. LAWS GOVERNING THIS AGREEMENT:
This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
19. NOTICES:
Notices and written communications sent by one party to the
other shall be personally delivered or sent by u.S. Mail, postage
prepaid, to the following addresses:
City:
Auctioneer:
City of San Bernardino
Chief of Police
466 West 4th Street
San Bernardino, CA 92401
Roger Ernst & Associates
P.O. Box 2151
Modesto, CA. 95353
20. TERM OF AGREEMENT:
This Agreement shall remain in effect until December 31,
1991, unless earlier terminated as provided herein.
21. TERMINATION OF AGREEMENT:
This Agreement may be terminated by either party, for any
reason whatsoever, upon 120 days advance written notice to the
other party. If notice of termination is given, each party shall
work in good faith to effect the orderly sale and disposition of
property in possession of Auctioneer prior to notification,
including if necessary, a grace period of sixty days to dispose
of such property continuing under the same terms and conditions
of this Agreement.
22. NON-EXCLUSIVITY OF AGREEMENT:
City reserves the right to contract with persons or
auctioneers other than Roger Ernst & Associates to dispose of any
forfeited vehicles, real or personal property, or firearms.
23. EXCLUSIVITY AND AMENDMENT OF AGREEMENT:
This Agreement supersedes any and all other Agreements
either oral or in writing between the parties hereto with respect
to the employment of Auctioneer by City and contains all the
covenants and Agreements between the parties with respect to such
employment in any manner whatsoever. Each party to this
Agreement acknowledges that no representations, inducements,
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December 8, 1989
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promises, or Agreements, orally or otherwise have been made by
any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other Agreement or amendment hereto
shall be effective unless executed in writing and signed by both
City and Auctioneer.
24. SIGNATURES:
THIS AGREEMENT is deemed to be executed by the parties
hereto in San Bernardino even though the signing of the Agreement
by ROGER ERNST is done in Modesto, California.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the date and year first written above.
Attest:
CITY OF SAN BERNARDINO, a
Municipal corpora' of the
State of Califor
~/#~
city Clerk
/ h~,c7
Dated
ASSOCIATES
Approved as to form
and legal content:
JAMES F. PENMAN, City Attorney
1 2.
By: ~ ") .i/Y~
~'
:/
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December 8, 1989
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