HomeMy WebLinkAbout05 - Agreement for Oil Well Management Services�EWPR CITY OF
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<,FoR�P City Council Staff Report
July 11, 2017
Agenda Item No. 5
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: George Murdoch, Municipal Operations Director
PREPARED BY: Joshua Rosenbaum, Senior Management Analyst,
jrosenbaum@newportbeachca.gov
PHONE: 949-644-3057
TITLE: Professional Services Agreement with Sampson Oil Company for
Oil Well Management Services
ABSTRACT:
Sampson Oil Company (Sampson) has managed and operated the City's oil fields in West
Newport since 1984. Sampson's services include daily maintenance, repair and operation
of the City's fifteen oil wells, one injection well, a production tank facility and lines;
coordination of regulatory agency inspections and compliance; purchasing of materials;
and managing subcontractor repairs. The Municipal Operations Department is requesting
City Council approval of a single source Professional Services Agreement with Sampson
for the management and operations of the Newport oil field.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Authorize the Mayor to execute a Professional Services Agreement with Sampson Oil
Company for an amount not to exceed $1,213,200 over a three-year contract term. Of
this amount, $104,400 is for the day-to-day routine maintenance operations of the oil
fields per year, and $300,000 per year for unforeseen as -needed maintenance and
repairs.
FUNDING REQUIREMENTS:
The FY 2017-18 budget includes sufficient funding for this Agreement. The Professional
Services portion of the Agreement will be expensed from the Oil and Gas Tidelands Fund
account 10090907-811008 Services Professional. The Maintenance and Repairs
expenses, should they be incurred, will be expensed from the Oil and Gas Tidelands Fund
account 10090907-851037 Maintenance and Repairs.
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Professional Services Agreement with Sampson Oil Company for Oil Well Management
Services
July 11, 2017
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DISCUSSION:
Sampson Oil Company (Sampson) has managed and operated the City's oil fields in West
Newport since 1984. That service includes daily maintenance, repair and operation of the
City's fifteen oil wells and one injection well, the production tank facility, and lines.
Sampson also coordinates regulatory agency inspections and compliance reporting,
purchases materials and manages subcontractors that perform as -needed repairs.
The current Agreement with Sampson expires June 30, 2017. The Municipal Operations
Department is seeking a sole source Professional Services Agreement with Sampson
due to its 33 years of experience with the City and its expertise and familiarity with the
management and operations of the West Newport oil fields.
Sampson's proposal to continue the routine management and operation of the City wells
is $104,400 per year. This includes all necessary time needed by Sampson's
administrative, maintenance, and office staff to maintain and operate the system yearly.
Sampson's staff will perform minor repairs at no additional cost; however, larger repairs
will be done by subcontractors and approved by City staff.
In 2012, the City Council approved an amendment to route unforeseen maintenance and
repair services through Sampson's Professional Services Agreement to minimize City
efforts acquiring multiple contracts that include the necessary insurance requirements.
Sampson not only manages the City's oil fields but the oil fields of Hellman properties in
Seal Beach and has established many agreements with repair companies the City would
also require.
Thus, this agreement also includes an annual $300,000 not -to -exceed allowance for
unforeseen repairs performed by subcontractors. It is not anticipated that the full
$300,000 will be spent annually but this provides the funding and contract ability in the
event larger repairs are required. Per the agreement, Sampson can add a not -to -exceed
ten percent charge for all subcontract work for administration, oversight, responsibility
and acquiring necessary insurance.
Sampson is required to follow procedures in acquiring proposals for materials, entering
into agreements with subcontractors, processing invoices, paying for services, and
obtaining proper insurance coverage for work being done. The approval process for as -
needed maintenance and repairs work is based on the estimated cost of the work. Repairs
estimated to cost under $10,000 requires written notification to the Municipal Operations
Director. Repair work that will cost above $10,000 requires written approval of the Director
and must include a minimum of three proposals or a sole source justification. The
implementation of routing as -needed maintenance and repair services through Sampson
has contributed to a more efficient and effectively run oil well operation over the last five
years.
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Professional Services Agreement with Sampson Oil Company for Oil Well Management
Services
July 11, 2017
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ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A - Professional Services Agreement with Sampson Oil Company for Oil
Well Management Services
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH SAMPSON OIL COMPANY FOR
OIL WELL MANAGEMENT SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 11th day of July, 2017 ("Effective Date"), by and between the CITY
OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and
SAMPSON OIL COMPANY, a California corporation ("Consultant"), whose address is
301 Ultimo Avenue, Long Beach, California 90814, and is made with reference to the
following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide oil well management services
("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on July 11, 2020, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A. In the absence of a specific schedule, the Services shall be performed to
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completion in a diligent and timely manner. The failure by Consultant to strictly adhere to
the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely
manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Schedule of Billing
Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's
compensation for all Work performed in accordance with this Agreement, including all
reimbursable items and subconsultant fees, shall not exceed One Million Two Hundred
Thirteen Thousand Two Hundred Dollars and 00/100 ($1,213,200.00), without prior
written authorization from City. No billing rate changes shall be made during the term of
this Agreement without the prior written approval of City.
4.2 Upon the first anniversary of the Effective Date and upon each anniversary
of the Effective Date thereafter, only the billing rates for foreseen maintenance service
(inclusive of pumper, design and engineering, rig supervision, construction supervision,
and special insurance charges) as set forth in Exhibit B ("Billing Rates") shall be adjusted
in proportion to changes in the Consumer Price Index, subject to the maximum
adjustment set forth below. Such adjustment shall be made by multiplying the Billing
Rates in Exhibit B by a fraction, the numerator of which is the value of the Consumer
Price Index for the calendar month three (3) months preceding the calendar month for
which such adjustment is to be made, and the denominator of which is the value of the
Consumer Price Index for the same calendar month immediately prior to Effective Date.
The Consumer Price Index to be used in such calculation is the "Consumer Price Index,
All Items, 1982-84=100 for All Urban Consumers (CPI -U)", for the Los Angeles -Riverside -
Orange County Metropolitan Area, published by the United States Department of Labor,
Bureau of Labor Statistics. If both an official index and one or more unofficial indices are
published, the official index shall be used. If said Consumer Price Index is no longer
published at the adjustment date, it shall be constructed by conversion tables included in
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such new index. In no event, however, shall the amount payable under this Agreement
be reduced below the Billing Rates in effect immediately preceding such adjustment. The
maximum adjustment increase to the Billing Rates, for any year where an adjustment is
made pursuant to this Section, shall not exceed the Consumer Price Index or 2.0% of the
Billing Rates in effect immediately preceding such adjustment, whichever is less. The
unforeseen maintenance costs shall not be subject to CPI -U.
4.3 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the specific
task in the Scope of Services to which it relates, the date the Services were performed,
the number of hours spent on all Work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar
days after approval of the monthly invoice by City staff.
4.4 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement or specifically approved in writing in advance by
City.
4.5 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Renick Sampson to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
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6. ADMINISTRATION
This Agreement will be administered by the Municipal Operations Department.
City's Director of Municipal Operations - Utilities or designee shall be the Project
Administrator and shall have the authority to act for City under this Agreement. The
Project Administrator shall represent City in all matters pertaining to the Services to be
rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers, employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services contemplated
by this Agreement (collectively, the "Indemnified Parties") from and against any and all
claims (including, without limitation, claims for bodily injury, death or damage to property),
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demands, obligations, damages, actions, causes of action, suits, losses, judgments,
fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys'
fees, disbursements and court costs) of every kind and nature whatsoever (individually,
a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or
indirectly) to any breach of the terms and conditions of this Agreement, any Work
performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
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13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this Agreement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise required by law. City is an intended beneficiary of any Work
performed by the subcontractor for purposes of establishing a duty of care between the
subcontractor and City. Except as specifically authorized herein, the Services to be
provided under this Agreement shall not be otherwise assigned, transferred, contracted
or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
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employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole right to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept confidential
unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3) years,
or for any longer period required by law, from the date of final payment to Consultant
under this Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make transcripts or
copies of such records and invoices during regular business hours. Consultant shall allow
inspection of all Work, data, Documents, proceedings and activities related to the
Agreement for a period of three (3) years from the date of final payment to Consultant
under this Agreement.
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21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction of
the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall not
discontinue Work as a result of such withholding. Consultant shall have an immediate
right to appeal to the City Manager or designee with respect to such disputed sums.
Consultant shall be entitled to receive interest on any withheld sums at the rate of return
that City earned on its investments during the time period, from the date of withholding of
any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by Consultant,
the additional design, construction and/or restoration expense shall be borne by
Consultant. Nothing in this Section is intended to limit City's rights under the law or any
other sections of this Agreement.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act"), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the Work
performed under this Agreement, and (2) prohibits such persons from making, or
participating in making, decisions that will foreseeably financially affect such interest.
24.2 If subject to the Act, Consultant shall conform to all requirements of the Act.
Failure to do so constitutes a material breach and is grounds for immediate termination
of this Agreement by City. Consultant shall indemnify and hold harmless City for any and
all claims for damages resulting from Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
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Attn: Director of Municipal Operations - Utilities
Municipal Operations Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Renick Sampson
Sampson Oil Company
301 Ultimo Avenue
Long Beach, CA 90814
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
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shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. PREVAILING WAGES
Pursuant to the applicable provisions of the Labor Code of the State of California,
not less than the general prevailing rate of per diem wages including legal holidays and
overtime Work for each craft or type of workman needed to execute the Work
contemplated under the Agreement shall be paid to all workmen employed on the Work
to be done according to the Agreement by the Consultant and any subcontractor. In
accordance with the California Labor Code (Sections 1770 et seq.), the Director of
Industrial Relations has ascertained the general prevailing rate of per diem wages in the
locality in which the Work is to be performed for each craft, classification, or type of
workman or mechanic needed to execute the Agreement. A copy of said determination
is available by calling the prevailing wage hotline number (415) 703-4774, and requesting
one from the Department of Industrial Relations. The Consultant is required to obtain the
wage determinations from the Department of Industrial Relations and post at the job site
the prevailing rate or per diem wages. It shall be the obligation of the Consultant or any
subcontractor under him/her to comply with all State of California labor laws, rules and
regulations and the parties agree that the City shall not be liable for any violation thereof.
29. STANDARD PROVISIONS
29.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
29.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
29.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
29.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
29.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
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29.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
29.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
29.8 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.
29.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
29.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
29.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
29.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: 6I 7
Aaron d.�Harp
City Attorney
ATTEST:
Date:
go
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
Bv:
Kevin Muldoon
Mayor
CONSULTANT: Sampson Oil Company,
a California corporation
Date:
By:
Renick Sampson
President
Date:
Bv:
Pamela Picard
Secretary
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
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EXHIBIT A
SCOPE OF SERVICES
• DESCRIPTION OF PROJECT
o Perform all work necessary to manage, operate, produce, protect and maintain
the City owned tideland wells, tank farm, pipelines and related oil production
facilities in accordance with good oil field practice and federal, state and local
laws, including but not limited to:
■ Provide qualified, licensed and available staff to complete the Scope of
Work
■ Recommend, schedule, coordinate and inspect the work of all oil field
service contractors.
■ Keep accurate, daily records of all production, treatment of oil, cut and
temperature of oil, deliveries, shipments and field testing; and
immediately make available to the City upon request.
■ Schedule, supervise and coordinate the transfer of all oil and gas sold
and properly gauge and measure the quantity of oil and gas produced,
saved and shipped
■ Keep detailed records and submit signed invoices for all materials,
equipment and services that will be reimbursed by the City.
■ Perform individual well tests at least every six months, indicating rate of
production, quantity of oil, and water produced.
• Furnish all tools required for normal operations.
■ Complete monthly reporting tasks to the Department of Conservation as
well as potential annual reporting with the County of Orange.
• CORRESPONDENCE
o All correspondence shall be addressed to Municipal Operations Director,
Municipal Operations Department, City of Newport Beach, 100 Civic Center
Drive, PO Box 1768 Newport Beach, California 92660.
• STANDARD OF CARE
o All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and
technical personnel required to perform the Services required by this
Agreement, and that it will perform all Services in a manner commensurate
community professional standards and with the ordinary degree of skill and
care that would be used by other reasonably competent practitioners of the
same discipline under similar circumstances.
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o All Services shall be performed by qualified and experienced personnel who
are not employed by City. By delivery of completed Work, Consultant certifies
that the Work conforms to the requirements of this Agreement, all applicable
federal, state and local laws, and legally recognized professional standards.
o Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense,
all licenses, permits, qualifications, insurance and approvals of whatsoever
nature that is legally required of Consultant to practice its profession.
Consultant shall maintain a City of Newport Beach business license during the
term of this Agreement.
o Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason
of strikes, lockouts, accidents, acts of God, or the failure of City to furnish timely
information or to approve or disapprove Consultant's Work promptly, or delay
or faulty performance by City, contractors, or governmental agencies.
• RESPONSIBILITY FOR DAMAGES OR INJURY
o City and all officers, employees and representatives thereof shall not be
responsible in any manner for any loss or damage to any of the materials
or other things used or employed in performing the Project or for injury to or
death of any person as a result of Consultant's performance of the Services
required hereunder; or for damage to property from any cause arising from
the performance of the Project by Consultant, or its subcontractors, or its
workers, or anyone employed by either of them.
o Consultant shall be responsible for any liability imposed by law and for
injuries to or death of any person or damage to property resulting from
defects, obstructions or from any cause arising from Consultant's Work on
the Project, or the Work of any subcontractor or supplier selected by
Consultant.
o To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers,
agents, volunteers, employees, and any person or entity owning or
otherwise in legal control of the property upon which Consultant performs
the Project and/or Services contemplated by this Agreement (collectively,
the "Indemnified Parties") from and against any and all claims (including,
without limitation, claims for bodily injury, death or damage to property),
demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including,
without limitation, attorneys' fees, disbursements and court costs) of every
kind and nature whatsoever (individually, a Claim; collectively, "Claims"),
which may arise from or in any manner relate (directly or indirectly) to any
breach of the terms and conditions of this Agreement, any Work performed
or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities
conducted on the Project (including the negligent and/or willful acts, errors
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and/or omissions of Consultant, its principals, officers, agents, employees,
vendors, suppliers, contractors, subcontractors, anyone employed directly
or indirectly by any of them or for whose acts they may be liable or any or
all of them).
• RECORDS
o Consultant shall keep records and invoices in connection with the Services
to be performed under this Agreement. Consultant shall maintain complete
and accurate records with respect to the costs incurred under this
Agreement and any Services, expenditures and disbursements charged to
City, for a minimum period of three (3) years, or for any longer period
required by law, from the date of final payment to Consultant under this
Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make
transcripts or copies of such records and invoices during regular business
hours. Consultant shall allow inspection of all Work, data, Documents,
proceedings and activities related to the Agreement for a period of three (3)
years from the date of final payment to Consultant under this Agreement.
• WORKING HOURS
o The Consultant will submit a work schedule for regularly scheduled and
monitored tasks. The work schedule will include the names and contact
phone numbers for any Consultant employee that will be working at the
City's facilities.
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Technical Maintenance Requirements
• MANAGEMENT TASKS
o Perform all work necessary to manage, operate, produce, protect and maintain
the City owned tideland wells, tank farm, pipelines and related oil production
facilities in accordance with good oil field practice.
o Respond to all emergencies and provide for personnel to safely and
continuously operate the oil facilities 24 hours a day, 7 days a week.
o Provide qualified, licensed and available staff to complete the Scope of Work
o Provide the City with detailed recommendations, estimates and technical
advice to maintain and improve production, maintenance and security for the
oil facilities.
o Recommend, schedule, coordinate and inspect the work of all oil field service
contractors.
o Keep accurate, daily records of all production, treatment of oil, cut and
temperature of oil, deliveries, shipments and field testing; and immediately
make available to the City upon request.
o Schedule, supervise and coordinate the transfer of all oil and gas sold and
properly gauge and measure the quantity of oil and gas produced, saved and
shipped.
o Keep detailed records and submit signed invoices for all materials, equipment
and services that will be reimbursed by the City.
o Perform individual well tests at least every six months, indicating rate of
production, quantity of oil, and water produced.
o Furnish all tools required for normal operations.
• OPERATIONS TASKS
o Take & record tank gauge readings daily.
o Plan tank management/shipping arrangements and prepare crude for shipping.
o Batch treat wells (approximately 40 treatments per week) for mineral buildup
and saltwater corrosion.
o Perform production well tests to determine water/oil ratios for each well.
o Program and maintain pump off controllers.
o Manage the water treatment system including, but not limited to:
■ Order chemicals,
■ Maintain chemical rates,
■ Fill day pots,
■ Keep chemical pumps pumping,
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■ Maintain chemical lines and fittings,
■ Maintain the Wemco,
■ Change filter bags when necessary, and
■ Skim the skim tank daily.
o Maintain all daily records including, but not limited to:
■ Gage records,
■ Chemical usage,
■ Pump off controller daily runs times, and
• Injection well rates and volumes.
o Manage water injection system.
o Manage natural gas system and vapor recovery system.
o Check wells and tank farm a minimum of three times a day.
o Generate spreadsheet on a monthly basis that tracks production curve and
depletion rate.
• SUPERVISION AND RELATED ISSUES
o Supervise all production rig (repair) work including, but not limited to:
• Tubing, rod and pump repair,
■ Casing and liner repair,
■ Inner liner installation,
■ Well packer setting,
■ Cementing, and
■ Fishing.
o Supervise all drilling rig work.
o Supervise all construction work.
o Prepare for and attend all meetings related to, but not limited to:
■ Wells,
■ Tank farm,
■ Pipelines,
■ Natural gas,
• Hoag hospital
• Cogeneration
■ Bitter Point sewage lift station (County Sanitation District of Orange
County),
■ Annual AQMD inspections,
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■ DOGG (Department of Oil, Gas and Geothermal Resources)
inspections, and
■ Fire Department inspections.
o DOGG permitting and reporting including, but not limited to:
■ Permit to drill new, redrill, and/or abandon wells, and alter casing.
• DESIGN AND ENGINEERING DUTIES
o Tank farm alteration including, but not limited to:
■ Crude oil system,
■ Water injection system,
• Wemco
• Pump sizing
• Pipe sizing
■ Natural gas system,
• Gas sales
o Chart changing
o Maintain gas odorant
• Cogeneration
■ Vapor recovery system.
o Design pump sizes and rod strings.
o Design all electrical loads:
■ Motor sizes,
■ Disconnect sizes,
■ Starter sizes, and
■ Wire sizes.
o Design and engineer any new wells including, but not limited to:
■ Casing design,
■ Liner size,
■ Well head design, and
■ Pumping unit size.
• MAINTENANCE
o Inspect oil levels (weekly):
■ Air balance pumping units,
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■ Air compressors,
■ Vapor recovery compressor, and
■ Injection pump.
o Grease:
• Wemco (weekly), and
• Plug valves (semi-annual).
o Check high level switches on all tanks (monthly).
o Replace odorant (when needed).
o Check pressure/vacuum relief valves on all tanks (monthly).
o Maintain injection pump: replace packing when needed, add oil when
needed, check belts and grease.
o Clean Wemco (when needed).
o Maintain vapor recovery compressor.
o Maintain filter system.
o Maintain all air compressors.
o Perform minor pipefitting.
REPAIRS
o Minor pipe fitting jobs.
o Repair minor leaks.
o Repair or replace rod rotator cables.
o Replace belts on small equipment.
• PROJECT MANAGEMENT OF SUBCONTRACTORS
o Provide the City with detailed recommendations, estimates and technical
advice to maintain and improve production, maintenance and security for
the oil facilities.
o Consultant, at the City's request or approval of Consultant's
recommendation, may be required to subcontract with other contractors,
consultants, vendors, or delivery companies for the purchase of services
and/or goods.
o The Consultant shall receive invoices for all work at the Oil Fields and
process the payments following the guidelines in the below section
"Authorization of Work and Invoices".
■ The receipt, approval, and processing of all invoices related to Oil
Field Management and Operations from subcontractors,
subconsultants, sub -vendors and sub -delivery companies shall not
to exceed $300,000 per agreement year.
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o All subcontractors are required to maintain City approved insurance
documents before any work is to be completed at the property. A list of the
necessary insurance limits can be found at the bottom of the Scope.
o It is the responsibility of the Consultant to ensure that all subcontractors
meet the Insurance requirements.
o Consultant shall be entitled to reimbursement for the cost of Additional
Services performed as set forth, plus a fee not to exceed 10% of the invoice
amounts paid by Consultant to subcontractors, consultants, vendors and
delivery companies, subject to the annual limit for subcontractors.
All original receipts and invoices from the subcontractors,
consultants, vendors and delivery companies must be included in the
Consultant's invoices. The City reserves the right to not pay for any
purchases or work not previously approved by the City.
• AUTHORIZATION OF WORK AND INVOICES
o Consultant must adhere to the following parameters for authorizing work to
subcontractors.
o The approval of services to be performed by subcontractors outside of the
Scope of the services for this agreement will be based on proposed cost of
project.
■ If the proposed project is between $0 to $10,000, the Consultant shall
notify the Utilities General Manager or designee.
■ If the proposed project is between $10,001 to $25,000, the
Consultant shall be required to submit a minimum of three proposals
or a sole source document including the projected cost of the project.
No work shall begin until written approval is provided by the Utilities
General Manager.
■ If the proposed project is over $25,000, the Consultant shall be
required to submit a minimum of three proposals or a sole source
document including the projected cost of the project. No work shall
begin until written approval is provided by the Municipal Operations
Department Director.
• PAYMENT FOR INVOICES
o Reimbursement for invoices must be submitted to the City within 30 -days
of Consultant's receipt.
o Consultant's invoice must include an itemized list of services including:
■ Subcontractor, if applicable,
■ Well number,
■ Work Performed, and
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■ Overhead costs will be a separate item with maximum charge of
10%.
• INSURANCE REQUIREMENTS FOR SUBCONTRACTORS
o All subcontractors will provide General Liability with endorsements as outlined
in the contract with the following limits according to the type of service they
provide:
■ Pump Unit Repair $1,000,000 Occurrence
• Well Maintenance, Well Pulling $5,000,000 Occurrence
■ Misc. Electrical Work $1,000,000 Occurrence
■ Clean Up and Removal of Oil Waste $2,000,000 Occurrence
• Motor Repairs $1,000,000 Occurrence
■ Tank Repairs $1,000,000 Occurrence
■ Welding, Misc. $2,000,000 Occurrence
■ Testing of Tubes $1,000,000 Occurrence
o Clean up and removal of oil waste vendors must also carry Pollution Liability
o For all of the above, Aggregate limits should be twice the Occurrence limit or
apply specifically to this contract.
o All subcontractors will provide Automobile Liability and Workers Compensation
with endorsements as outlined in the contract.
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EXHIBIT B
SCHEDULE OF BILLING RATES
Sampson Oil Yearly Fee Schedule
Sampson Oil Company would like to present the following fee schedule to manage and
operate the City of Newport Beach's oil field. This schedule is based on a 365 day work
year.
Pumper
$50,596
Per Year
Design and Engineering
$6,704
Per Year
Rig Supervision
$17,257
Per Year
Construction Supervision
$16,257
Per Year
Special Insurance Charges
$13,586
Per Year
Total Annual Fee for
$104,400
Per Year
Foreseen Maintenance
Service
*Total Annual Allowance
*$300,000
*Per Year
for Unforeseen
Maintenance, Repairs,
and Professional
Services
*Consultant shall be entitled to reimbursement for the cost of unforeseen maintenance,
repairs, and professional services performed as set forth herein, plus a fee not to exceed
ten percent (10%) of the invoice amounts paid by Consultant to subcontractors,
subconsultants, sub -vendors, and sub -delivery companies, as set forth herein subject to
the annual limit for subcontractors.
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EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers, employees and any person
or entity owning or otherwise in legal control of the property upon which
Consultant performs the Project and/or Services contemplated by this
Agreement.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
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Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
D. Pollution Liability Insurance. Consultant shall maintain a policy providing
Consultant's pollution liability ("CPL") coverage with a total limit of liability of
no less than $5,000,000 per loss and $5,000,000 in the aggregate per policy
period. Claims -made policies require a 10 -year extended reporting period.
The CPL policy shall include coverage for cleanup costs, third -party bodily
injury and property damage, including loss of use of damaged property or
of property that has not been physically injured or destroyed, resulting from
pollution conditions caused by contracting operations. Coverage as
required in this paragraph shall apply to sudden and non -sudden pollution
conditions resulting from the escape or release of smoke, vapors, fumes,
acids, alkalis, toxic chemicals, liquids, or gases, waste materials, or other
irritants, contaminants, or pollutants. The CPL shall also provide coverage
for transportation and off -Site disposal of materials. The policy shall not
contain any provision or exclusion (including any so-called "insured versus
insured" exclusion or "cross -liability" exclusion) the effect of which would be
to prevent, bar, or otherwise preclude any insured or additional insured
under the policy from making a claim which would otherwise be covered by
such policy on the grounds that the claim is brought by an insured or
additional insured against an insured or additional insured under the policy.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers,
employees, and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement, or shall specifically allow Consultant or
others providing insurance evidence in compliance with these requirements
to waive their right of recovery prior to a loss. Consultant hereby waives its
own right of recovery against City, and shall require similar written express
waivers from each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers,
employees, and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement shall be included as insureds under such
policies.
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C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall -not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
E. Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self -
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insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
G. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Contract, and that involve or may involve coverage
under any of the required liability policies. City assumes no obligation or
liability by such notice, but has the right (but not the duty) to monitor the
handling of any such claim or claims if they are likely to involve City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
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