HomeMy WebLinkAboutBUDGET & FINANCE AGENDA 03-13-06District
BUDGET AND FINANCE COMMITTEE
Chair Lucey
Member Boneysteele
Monday, March 13, 2006
3:30 p.m.
CSO Conference Room
1250 Springbrook Road
Walnut Creek, California
1. CALL MEETING TO ORDER
2. PUBLIC COMMENTS
3. OLD BUSINESS
a. Hiring/Contracting with Retired Employees.
4. CLAIMS MANAGEMENT
5. REPORTS/ANNOUNCEMENTS
6. REVIEW EXPENDITURES
7. ADJOURNMENT
A
i, Recycled Paper
Central Contra Costa Sanitary District
March 10, 2006
TO: BOARD BUDGET AND FINANCE COMMITTEE
FROM: RANDALL MUSGRAVES~Q/~IM
DEBBIE RATCLIFF .42
SUBJECT: February 27, 2006 Finance Committee Meeting
There were two outstanding questions from the last Board Budget and Finance
Committee meeting which required additional staff research. The questions and
answers are provided below:
1. Page 18, 159485 Enterprise Rent-A- Car -What was the length of time the
truck was rented?
The truck was rented for one month while the District vehicle was being repaired.
2. Page 5, 159580 Lenscrafters - Do we supply safety glasses to
inspectors or just field workers?
Inspectors use safety glasses while inspecting the plant and at construction site
inspections. Both the District's safety directives and the Employee Handbook
indicate that safety equipment will be provided for the employee's protection.
Safety goggles are specifically listed.
Central Contra Costa Sanitary District
July 9, 2004
TO: BUDGET AND FINANCE CO~vIMITTEE
VIA: CHARLES W. BATTS, ~ L MANAGER p
FROM: RANDALL M. MUSGRAV ,DIRECTOR OF ADMINISTRATION /~~~
SUBJECT: HIRING/CONTRACTING WITH RETIRED EMPLOYEES
At the March 2, 2006 Board meeting we submitted to you a memo discussing the review for
the use of hiring or contracting with employees who retired from the District. In the material
was a listing of retired employees. Staff had not had time to conclude obtaining the cost
information. This task took considerable effort due to our desire to provide complete and
accurate information to you. Attached is a Summary of Payments provided to all retired
employees who were either hired as a temporary employee or through a consulting
contract.
In addition, I researched what our sister Agencies do regarding this matter, also attached. I
focused on East Bay Municipal Utility District (EBMUD), Dublin-San Ramon Services
District (DSRSD), Contra Costa Water District (CCWD), Union Sanitary District (Union San)
and Delta Diablo Sanitary District (DDSD). Unfortunately, we did not receive a response
from DDSD. The following summarizes the other agencies policy or practice.
East Bav Municipal Utility District (EBMUD)
District staff is authorized to hire or contract with retire employees, after one year of
separation, except for pending litigation. It does not require Board approval.
Dublin-San Ramon Services District (DSRSD)
No written policy. They do not contract with retire employees by practice. The District and
the retired employee are held to a maximum of 960 hours by PERS (they are a PERS
agency).
Contra Costa Water District (CCWD)
District staff can hire or contract with retire employees with Board approval.
Union Sanitary District (Union San)
District staff can hire or contract with retire employees. Individual pay is comparable to
District employees performing same or similar task. The District and the retired employee
are held to a maximum of 960 hours by PERS (they are a PERS agency). It does not
require Board approval.
H:\BUdget\Hiring Retired Employees 3 10 06.DOC
• SUMMARY OF PAYMENTS
RETIRED EMPLOYEES HIRED AS DISTRICT TEMPS
Retiree Termination $ paid Service Dates Work Product
Date
Ken Laverty 2-2000 $4,229 3-00 to 9-00 Temporary purchasing
work until Manager
position filled
Pedro Mendoza 7-2002 $27,096 8-02 to 2-03 General lab work until
position was filled
Tom Trice 4-1999 $11,780 6-99 to 4-00 Inspector on several major
projects
Jan Frost 3-2000 $456 3-00 to 5-00 Secretarial work in
personnel
Carolyn Gregg 11-1999 $23,017 11-99 to 6-00 Wdrked as buyer
2 days in 12-02
RETIRED EMPLOYEES PAID THROUGH CONTRACTED WORK
Retiree Termination $ paid Service Dates Work Product
Date
Jim Belcher 6-2002 $49,995 8-02 to 11-02 Project management on
several projects
Bart Brandenburg 3-2001 $1,780 8-01 to 4-02 Coordination of Master
Gardener Program
Jade Sullivan 1-2002 $1,500 12-02 to 12-02 Recycled Water Program
Steve Colberg 3-2005 $25,000 Current Work Furnace Operations
Manual
Jay McCoy 10-1999 $32,327 4-00 to 1-01 Easement work
$34,630 12-00 to 8-02
$14,075 1-03 to 6-04
Ken Clark 8-2005 $33,230 8-05 to 11-OS Inspector for Vessing
Sewer Renovation Project
Tom Trice 4-1999 $11,145 7-05 to 9-05 Inspector on several major
projects
Bob Mowers 8-2000 $22,841 9-00 to 6-01 Finished incomplete
projects on his desk and
trained new Field
Operations
Superintendent
Clarence Covey 7-1998 $2,100 5-01 Operation & Maintenance
Manual for 2 pumping
stations
N:\ADMINSUP\ADMIN\RATCLIFFlRetirees -Summary of Payments.doc
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EBMUD
Policy 2.04
EFFECTIVE 11 AUG 92
CONTRACTUAL AGREEMENTS suPEnsEDes NEw
WITH FORMER EMPLOYEES
IT IS THE POLICY OF THE EAST BAY MUNICIPAL UTILITY DISTRICT TO:
Allow for contractual agreements wtth former employees separated from the District by
retirement, resignation or termination.
Conditions The formeremployee offers unique knowledge and skills for spedalized
professional services.
Payment of compensation for such services shall not prejudice the
retirement rights or benefits of the person.
At least one year has elapsed since separation from the District.
At least one year has elapsed since separation from the District when
accepting former employees in prindpal roles on professional services
contrails with outside firms.
Exception The one-year waiting period may be waived when, in the opinion of the
General Counsel, tt is in the best interest of the District to retain the services
of a former employee to serve as a perdpient witness, consultant or expert
witness for or on behatt of the District in any pending litigation. The term
"pending Iftgalion" shall be defned to indude any adjudicetory proceeding
before a court, administrative body, hearing offcer or arbdrator to which the
District is a party and/or those matters where there is a signfiicent exposure
to litigation against the District.
Authority Motion No. 92-130, August 11, 1992
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COhRAA COSTA
WATER D15rRICT
ADMINISTRATIVE PROCEDURE
SUBJECT: Number Effective Date: Page 1 of 2
HIRING RETIREES AND II-8 Issued: 8/20/90
FORMER BOARD MEMBERS Revised: 6/9/99
AS TEMPORARY EMPLOYEES
OR CONSULTANTS
PURPOSE:
To ensure compliance with the CCWD Code of Regulations, Chapter 3.05, by providing
procedures for hiring District retirees or former Board members as temporary employees or
consultants.
POLICY:
A District retiree or former Board member may be hired as a temporary employee, or as a
consultant on Contractual Services Agreements, when he/she possesses unique knowledge,
skills or abilities that provide continuity, training, or services that cannot be provided by any
other persons, and subject to compliance with Chapter 3.05 of the CCWD Code of Regulations.
Contracting with, or employing a former Board member or CCWD retiree requires Board
approval based on its finding that the proposed arrangement is in the best interest of the
District.
PROCEDURE:
Requests: Requests to hire District retirees or former Board Members as temporary
employees or consultants are considered non-routine, and subject to the review and
endorsement of the General Manager. Requests to enter in a Contractual Services
Agreement, or to hire a former BOD Member or CCWD retiree on a temporary basis
must be submitted in writing through the department/division head, to the General
Manager and contain the following information:
a. description of the Scope of Work to be performed for the temporary assignment or
contact;
b. detailed explanation of why the retiree possesses unique knowledge, skills, or abilities
that cannot be provided by another person, including existing District staff;
c. identification of the classification for the temporary assignment, if applicable; and,
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Administrative Procedure
II-8 HIRING RETIREES/FORMER BOARD MEMBERS AS TEMPORARY EMPLOYEES
OR CONSULTANTS
Effective: June 9, 1999
Page 2 of 2
d. length of the assignment or Contractual Services Agreement (not to exceed twelve
months).
2. Approval: Approval of Contractual Services Agreements or employment action shall be
made by the Board of Directors based on the review and recommendation of the General
Manager.
3. Length of Assignment: A retiree may work up to 120 workdays or 960 hours (if paid
hourly) in a calendar year.
4. Compensation and Benefits: If the CCWD retiree is being hired back directly as a
consultant in the classification he/she held as a permanent employee, the rate of pay shall
beat the same step he/she held as a permanent employee. For all other classifications, the
rate of pay shall be the first step in the range, unless otherwise approved by the General
Manager or his designee. No benefits, other than those mandated by law, shall be
provided these temporary appointments.
5. Contractual Services Contracts: Procedures for hiring CCWD retirees or former BOD
members as consultants on service contracts shall be the same procedures for requesting
any service for the District. Contracts to hire CCWD retirees or former BOD members,
that are within the General Manager's financial authorization, require Board approval.
RESPONSIBILITY:
Each department/division head is responsible for ensuring compliance with this Administrative
Procedure, subject to the review of the General Manager and approval of requested action by
the Board of Directors.
APPROVED:
Walter J. Bishop
General Manager
s ~ Union Sanitary District •
Policy and Procedure Manual
Temporary Employment of a Retiree
Effective: 01/2005 or Separated Employee Policy Number:
6010
Policy
It is the policy of the Union Sanitary District that District retirees or sepazated employees
may be hired for a period not to exceed 960 hours in a fiscal year, either during an
emergency to prevent stoppage of District business or because the retiree or sepazated
employee has skills needed in performing work of limited duration.
Retirees who have reached normal retirement age will be rehired in compliance with
Ca1PERS regulations (Government Code Section 21224) as described in paragraphs #1
and #4 in this policy.
Retirees who have not attained normal retirement age may be rehired per Government
Code sections 20121 and 21220.5 under the following conditions: l .) if they have a bona
fide separation in service, which means there has been a separation in service of at least
60 calendar days, commencing on the day after retirement, between the date of the
member's retirement and the first day of work for the employer as a retired person and
2.) there is no predetermined agreement between the employer and the member prior to
retirement to return to work for the employer after retirement. (In the event an emergency
has been declared as provided in Govermnent Code Section 8558 that requires the
employment of a retired person, the 60 calendar day sepazation in service requirement
shall not apply.)
Consistent with Ca1PER5 regulations, the rate of pay for retirees employed may not be
less than the existing minimum wage level, nor may it exceed that paid by the District to
other District employees performing comparable duties. The temporary employee may
receive, at the District's discretion, an additional amount up to the equivalent of medical,
dental, and vision insurance premiums. Compensation for separated employees will
follow these same prescriptions.
Procedure
Requests to hire retirees or separated employees on a temporary basis shall be made by
management submittal of a memorandum to the Executive Team, following discussion of
the proposed appointment with the Human Resources Administrator. This memorandum
will include the following:
1. Description of the temporary assignment
2. Explanation of why the retiree or sepazated employee possesses the knowledge,
skills, or abilities that cannot be provided by another person
3. Identification of the classification for the temporary assignment and compensation
4. Length of assignment
Final approval will be made by the Executive Team
Approved: Executive Team; January, 2005
Central Contra Costa Sanitary District
March 10, 2006
TO: Budget and Finance Committee
VIA: Chuck Batts, General Manager
Randall M. M raves, Director of Administration
FROM: Jim ar ' ton, Purchasing ahd Materials Manager
SUBJECT: Information on Agreements (Professional Consulting Agreements,
Technical Consulting Agreements, and Professional Engineering
Services)
As requested, I am sending portions of the Purchasing Policies and Procedures which
seem pertinent to agreements (attachments #1 and #2) and agreement # 031117 with
Dan Coitinovis (attachment #3) I am also including a memo regarding purchasing
authorization limits and audit findings that was used to help develop the subsequent
policy which has historical information regarding agreements (attachment #4).
Attachments
N:\PURCHASINGUMVNMemo to F&B re Agreements.doc
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3.4 Authorized Signature List and Approval Limits Form
a. Department Directors and Managers will initiate a separate Authorized
Signature List and Approval Limits Form for. each employee and forward
the form, bearing their approvals, to the Controller for review.
b. The Controller will review the form for general consistency with maximum
approval limits and forward the form to the General Manager for approval.
c. Upon approval by the General Manager, the Controller will retain the
original form for use in Finance and Accounting and forward a copy of the
approved form to the Department Manager, the Purchasing Manager and
the employee.
d. When a manager or supervisor will be absent from the District for twenty-
four hours or more, signature authority will be automatically transferred to
another manager or supervisor, or other designated employee based on
the Automatic Delegation of Authority matrix maintained by the Accounting
Division. Managers or supervisors who will be absent from the District on
planned leave may choose to prepare a delegation of authority memo that
amends the automatic signature authority listed in the matrix.
e. The Controller will initiate an annual review of the Authorized Signature
List and Approval Limits to ensure accuracy....
3.5 Approval of Agreements and Agreement Amendments
3.5.1 Types of Agreements. Generally, there are three types of agreements:
Professional Consulting Services, Technical Consulting Services and
Professional Engineering Services. Each is defined below.
a. Professional Cohsulting Services Agreement (PCS): Used to contract
for needed services of anon-engineering nature wherein the collection,
analysis and/or translating of information is the consultant's primary
function with the end product being a written document, training and/or
recommendation. For example, auditors, trainers, professional
psychologists, attorneys and financial advisors.
b. Technical Consulting Services Agreement (TCS): Used to contract for
needed services when physical work is being performed such as
surveying and soils investigation. Note: If soils investigation data is being
interpreted, a Professional Engineering Services contract is required.
c. Professional Engineering Services Agreement (PES): Used to
contract for needed services when professional engineering, planning,
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Central Contra Costa Sanitary Distract
Purchasing Policies and Pn~cedun:s
Page 11 0/ 154
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design, construction management, construction inspection and/or
architectural services are being performed.
3.5.2 Approval of Agreements. Approval of agreements and amendments to
agreements shall conform to the following approval matrices.
FIGURE 3.A
StaffAuthorization Limit for the Approval of Professional Consulting
Agreements, Technical Consulting Agreements
and Professional Enaineerina Aareements
Authorization Limits'
O & M Pro'ect/CIB
Professional Consultin Services $25,000 $50,000
Technical Consultin Services $50,000 $50,000
Professional En ineerin Services $50,000 $50,000
'Note: The amounts listed are the maximum amounts for which staff has been
delegated authority. Individual staff members, based on their position, may have
a lower authority limit. Agreements in an amount greater than the limits listed in
the table above require Board approval of the agreement prior to authorization
and commencement of work.
3.5.3 Amendments to Agreements. Board approval is required for
amendments to Professional Consulting, Technical Consulting and Professional
Engineering Agreements under the following conditions:
a. The amendment is greater than 15% of the original agreement amount or
$10,000, whichever is greater. Note: For agreements in an amount less
than the staff authority limits listed above, staff can make amendments up
to the staff authority7imits withoufapplying the 15% or $10,000 criteria.
b. The amendment will cause the agreement to exceed agreement
authorization limit (see table above) and the original agreement did not have
prior Board approval because it fell below the listed authorization limits.
3 6 Approval of Contracts and Contract Chanpe Orders
All contracts must be approved by the General Manager or the Purchasing
Manager. The General Manager or his/her designee can approve individual
contract change orders of up to $50,000 for District Projects. The Board of
Directors must approve individual change orders where the amount is greater
than $50,000.
Central Contra Costa Sanitary District
Purchasing Policies and Procedures
Paoe 12 of 154
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One factor -qualifications -far outweighs all other considerations in retaining
consultants, including price. Once qualifications are established, work scope,
price and means of compensation can be negotiated with the selected firm;
these three items must be in harmony with each other because experience
shows that inadequate compensation for the effort expected can lead to
inadequate results.
The variety, complexity, size and quantity of annual projects required of the
District justify an efficient procurement effort. The District seeks broad
competition and encourages extensive participation by qualified firms and in view
of the fact that consultants are expected to expend costs and effort in applying
for consideration of District contracts without any guarantee of success, it is
incumbent upon the District to minimize the information and effort required to
select a consultant. As such, it is the intent of the District to limit submittals by
interested firms. It is believed that this is everyone's best interest and allows for
more equal competition between small and medium size firms and large firms
that have substantial overhead or public relations budgets. This would
encourage greater participation, reduce cost to both the District and consultant,
reduce selection time, and increase the responsiveness of the selection process.
The following guidelines have been developed to establish the Central Contra
Costa Sanitary District's policy for selection of consultants. Separate guidelines
are established based on the level of anticipated fee:
a. Informal Selection Process
1. Anticipated fees less than $30,000.
2. Anticipated fees between $30,000 and $100,000.
b. Formal Selection Process -Anticipated fees over $100,000.
An outside service provider shall not be selected when a potential conflict of
interest exists:
a. Involvement in a related decision-making process as a member of a
Committee/Commission/Board.
b. Potential for additional personal financial gain beyond that resulting from
-performing the service.
c. Conflict with applicable provisions of the Fair Political Practices
Commission and the regulations adopted pursuant thereto.
14.4 Selection Procedures
• Professional expertise and experience in the applicable field will be the major
criteria for selection on any project. The Project Manager will obtain a written
Central Contra Costa Sanitary District
Purchasing Policies and Procedures
proposal from. the selected consultant. Effort must be made to distribute
contracts fairly and equitably without favoritism, and new consulting firms shall be
encouraged to make their capabilities known to the District.
a. Informal Selection Procedure -Anticipated Fees Less than $30,000
The Project Manager in charge of the project shall select a consultant
taking into account (a) the nature of the project, (b) the geographic
proximity of the consultant ~to the project, (c) the capability of the
consultant to produce the required service within a reasonable time, (d).
past performance, and (e) ability to meet project budget requirements.
b. Informal Selection Process -Anticipated Fees $30,000 - $100,000
The Project Manager shall conduct an informal solicitation of telephorie
and letter proposals from a limited number of firms. The consultant will be
selected based on his/her qualifications in relation to: (a) the nature of the
project, (b) the geographic proximity of the consultant to the project, (c)
the capability of the consultant to produce the required service. within a
reasonable time, (d) past performance, and (e) ability to meet project
budget requirements.
Projects may not be split into small projects for the. purpose of
circumventing the Informal Selection Process limit of $30,000 - $100,000.
c. Formal Selection Process -Anticipated Fees Greater than $100,000
The professional community with the requisite expertise shall be notified of
the proposed project and interested consultants will be invited to submit a
proposal in response to the District's Request for Proposals (RFP).
The RFP will contain a description of the work to be done and other
pertirient information regarding the project such as selection and
evaluation criteria and contract terms and conditions.
The consultants will be informed as to what specific information should be
contained in their written response. Question responses regarding the
firms'-technical perspective of the project are to be strictly limited to brief
statements addressing consultants' general concepts and approach to the
project. Detailed, voluminous design information is not desired and will
not be considered in the selection process.
A short list will be developed and these firms will be asked to attend a
proposal interview. The firms will be interviewed and ranked by a formal
selection committee comprised of District staff based on their proposal
Central Contra Costa Sanitary District
Purchasing Policies and Procedures
Page 98 of 154
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responses, their qualifications and interview presentation
negotiations will ensue with the top-ranked firm.
Selection factors may include:
a. Educational background
b. Experience and expertise
c. Demonstrated record of success
d. Individuals who will have direct charge of the work
e. Adequate staffing for the time allowance
f. Proposed method of addressing the work
g. Ability to make public presentations
h. Adequate knowledge of local conditions
i. Current workload and relationship to proposed project
j. Demonstrated record of keeping costs within project budgets
k. Quality control/quality assurance
•
14.5 Exceptions. Exceptions to consultant selection process include:
Contract
a. In the case where a consulting firm has satisfactorily performed the
preliminary stage of a project, for example pre-design, or has acquired
extensive background and working knowledge, the firm may be
selected for follow-up work without solicitations from other firms.
Note: If significant follow-up work is anticipated, then the formal
selection process may be required for the initial work even though the
initial work falls under the $30,000 or $100,000 thresholds.
b. If a firm is a highly recognized authority in a field or specialty, then the
firm may be selected without other solicitations. If the cost of the
follow-up work exceeds $100,000, the approval of the Department
Director and the General Manager is required. Additionally, all
contracts exceeding the authorized limits set forth in Chapter Three -
Approvals and Authorizations, may require the approval of the Board of
Directors.
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14.6 Debriefing Policy. The District will conduct a debriefing meeting- upon
request.=with-any-interested _consultant. The-debriefing-will-focus~on the_specific
items that the selection committee utilized as selection criteria, the procedures
used, and an assurance that it was followed consistently with all firms. The
debriefing will be limited to a general discussion of what the selection committee
used as selection criteria and in which areas firms rated lower than the first-
ranked firm.
Central Contra Costa Sanitary District
Purchasing Policies and Procedures
Paoe 99 0l 154
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itary District
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FAX: (925) 825-1437 ,
CHARLES W. RATIS
General Manager
KENTON L. ALM
ComvefJor the DisMcl
~no~ xox-zoos
ELAINE R. IfOGHME
Secrclary of the Dislricl
AGREEMENT FOR PROFESSIONAL ENGINEERING SERVICES
BETWEEN
CENTRAL CONTRA COSTA SANITARY DISTRICT
AND
DAN CORTINOVIS, CONSULTING ENGINEER
AGREEMENT NO. 031117
THIS AGREEMENT is made this 2.~~day of ~1~7yI/~'F~2 2005, by
and between the CENTRAL CONTRA COSTA SANITARY DISTRICT, 5(}19 Imhoff
Place, Martinez, California, hereinafter called the "DISTRICT", and DAN CORTINOVIS,
CONSULTING ENGINEER, 3183 Wayside Plaza #118, Walnut Creek, California,
hereinafter called "ENGINEER".
WITNESSETH:
WHEREAS, the DISTRICT desires to contract with ENGINEER to provide professional
engineering services in connection with the preparation of the Furnace Operations
Manual for the O 81 M Procedures Update Project (DP 6131); and
WHEREAS, ENGINEER is willing and holds itself capable and qualified to contract with
the DISTRICT to provide such professional engineering services; and
NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements
and the faithful performance of the terms and conditions set forth herein, the parties
hereto agree as follows: _
ARTICLE 1 ENGAGEMENT OF ENGINEER AND AUTHORIZATION TO PROCEED
1.1 The DISTRICT hereby engages ENGINEER who hereby accepts the
engagement to perform certain professional engineering services in connection
with the preparation of the Furnace Operations Manual.
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117
Page 1 of 16
~, Rec/tled Paper
' 1.2 The date of entering the Agreement and the engagement of ENGINEER will be
the date set forth on page 1 which is the date the signature of the second party
to this Agreement is obtained. The engagement of ENGINEER shall continue
until March 1, 2006. If the engagement of ENGINEER is not extended by
mutual written consent of the DISTRICT and ENGINEER, then this Agreement
shall be terminated on the date set forth above, provided that ENGINEER shall
not be relieved of any of the obligations dr covenants contained in this
Agreement until the tasks provided for within the scope of work have been
completed.
1.3 It is further provided that the obligations or covenants contained in Articles 6.6,
6.9, 6.12, 6.15 arid 6.18 shall continue in full force and effect after termination of
this Agreement due to completion or pursuant to Article 6.8.
1.4 Authorization for ENGINEER to proceed will be granted in writing by the
DISTRICT as soon as both parties sign the Agreement and applicable insurance
,documents are received- and are accepted by the DISTRICT. Under no
circumstances is ENGINEER authorized to begin work unless and until
ENGINEER has complied with the insurance provisions of Article 6.3.
1.5 It is expressly understood between the parties hereto that no employee/employer
or agency relationship is intended, the relationship of ENGINEER to the
DISTRICT being that of an independent contractor. The DISTRICT will not be
required to make any payroll deductions or provide Workers' Compensation
Insurance coverage or health benefits to ENGINEER.
ARTICLE 2 SERVICES OF ENGINEER
2.1 The scope of engineering services included in this Agreement is described in the
Scope of Work, Exhibit A, and shall, where not specifically addressed, include all
services ordinarily provided by an engineer under same or similar circumstances.
2.2 ENGINEER hereby warrants that ENGINEER and all of said ENGINEER's
employees and subcontractors hold, have obtained, and shall continue to
maintain during the course of this Agreement, all professional licenses or other
statutorily mandated certifications requisite to the performance of the work set
-forth-in the scope(s) of work,,-as maybe required in the State of California, if any.
Failure of ENGINEER, its employees and subcontractors to obtain and/or
maintain in good standing such licenses or certificates shall constitute a breach
of this Agreement and shall provide grounds for immediate termination of this
Agreement.
ARTICLE 3 RESPONSIBILITIES OF THE DISTRICT AND OF ENGINEER
3.1 The DISTRICT, without cost to ENGINEER, will provide all pertinent information
reasonably available to it which is necessary for performance by'ENGINEER
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 613'1, 0311'17 Page 2 of 16
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• ~ under this Agreement, including previous reports and data relative to the work.
. The DISTRICT does not guarantee or ensure the accuracy of any reports,
information, and/or data so provided. To the extent that any reports, information,
and/or other data so provided was supplied to the DISTRICT by person or
persons.not employees of the DISTRICT, any.liability resulting from inaccuracies
and/or omissions contained in said reports, information or data shall be limited to
liability on behalf of the party who prepared the information for~the DISTRICT or
otherwise supplied that information, report or data to the DISTRICT.
3.2 The DISTRICT will designate Randy Grieb as the person to act as the
DISTRICT's representative with respect to the work to be performed under this
Agreement. Such person will have complete authority to transmit instructions,
receive information, -and interpret -and define the DISTRICT's policies and
decisions pertinent to the work. In the event the DISTRICT wishes to make a
change in the DISTRICT'S representative, the DISTRICT will notify ENGINEER
of the change in writing.
3.3 ENGINEER shall perform the project work in such a manner as to fully comply
with all applicable professional standards of care, including professional quality,
technical accuracy, timely completion, and the coordination of all designs,
drawings, specifications, reports, and other services furnished and/or work
undertaken by ENGINEER pursuant to this Agreement.
3.4 The DISTRICT's review of drawings, designs, specifications, reports, and
incidental engineering work or materials furnished hereunder shall not in any way
relieve ENGINEER of responsibility for the technical adequacy of its work.
Neither the DISTRICT'S review, approval or acceptance of, nor payment for, any
of the services will be construed to operate as a waiver of any rights under this
Agreement or of any cause of action. arising out of the performance of this
Agreement.
3.5 During the period of this Agreement, upon request by the DISTRICT, ENGINEER
shall provide information related to the work that is reasonably necessary to
assist the DISTRICT in its coordination of the efforts of others performing
services related to the work.
ARTICLE A PAY_MENIS-T_O_ENGINEER _ -
4.1 .The DISTRICT will pay ENGINEER for work performed under this Agreement,
which work can be verified by the DISTRICT, on the basis of the following:
4.1.1. Compensation .for engineering services performed under this
Agreement shall be determined on the basis of ENGINEER'S
regular hourly rates per ENGINEER'S Fee Schedule, attached as
Exhibit B. The regular hourly rates shall compensate ENGINEER
for the costs of all direct labor, fringe benefits, indirect labor costs,
Dan Cortinovis, Fomace Operation Manual,.Randy Grieb, DP 6'131, 031117
Page 3 of 16
" overhead, and ENGINEER's profit. ENGINEER's compensation
also may include other non-labor direct charges borne by
ENGINEER. Allowable non-labor direct charges shall be billed at
cost; however; outside consultant charges and charges for
subcontracts may be billed at cost plus a markup for administrative
costs if such markup is specifically provided for elsewhere herein.
For the purpose of determining payments to ENGINEER allowable
non-labor direct charges shall be defined as follows:
(a) Allowable non-labor direct charges which may be billed at
cost include such typical expenses as cost of transportation
and subsistence, printing and reproduction, computer time
and .programming costs, identifiable supplies, and charges
by reviewing authorities.
A firm cost ceiling has been established in ARTICLE 4.3 for the
work and such ceiling shall constitute the maximum payment for
the scope(s) of work and shall not be exceeded without prior written
authorization of the DISTRICT. In the event the scope of work is
expanded or reduced by the DISTRICT, the cost ceiling shall be
subject to renegotiation, upward and downward, to reflect the
changes in services and their .costs. The adjustment to cost and
time shall be .done in accordance with the terms of ARTICLE 6.4.
In no event shall ENGINEER be entitled to compensation over and
above the original amount where changes in the scope of work or
the time for performance are necessitated by the negligence of
ENGINEER, or any subcontractor performing under it.
ENGINEER shall notify the DISTRICT when the costs incurred for
the total work approximate seventy-five percent (75%) of the cost
ceiling. With the notification, ENGINEER shall indicate whether the
sum of the current costs incurred plus the estimated total cost to be
complete the task or tasks set forth in the scope(s) of work will be
.greater or less than the cost ceiling. Receipt by the DISTRICT of
said notification that the cost for completion of all tasks shall
exceed the established cost ceiling will not constitute an approval
or authorization to increase the established cost ceiling or a waiver
of any rights that the DISTRICT may have under this Agreement.
4.2 Payment will be made by the DISTRICT within thirty (30) calendar days after
receipt of an invoice from ENGINEER setting forth the Agreement Number and
the District's Project Manager, provided that all invoices are accompanied by cost
documentation determined to be sufficient by the DISTRICT to allow the
determination of the reasonableness or accuracy of said invoice. In the event
that a payment dispute arises between the parties, ENGINEER shall provide to
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117 ~ Page 4 of 16
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the DISTRICT full and complete access to ENGINEER's labor cost records and
other direct cost data, and copies thereof if requested by the DISTRICT.
Charges are to be invoiced based on the agreed upon hourly rates invoiced on a
monthly basis. Other direct charges as provided for in ARTICLE 4.1.1 shall be
invoiced on a monthly basis.
4.3 The total estimated charges for all work under this Agreement is $25,000 and
such amount is the cost ceiling as described herein.
4.4 ENGINEER shall, at no cost to the DISTRICT, prepare any necessary rework
occasioned by ENGINEER'S failure to provide the services specified in Article 2
herein, in a satisfactory manner, due to any act or omission attributable to
ENGINEER, or its agents, including subcontractors.
ARTICLE 5 COMPLETION SCHEDULE
5.1 -The completion schedule for the work is as follows with all times identified from
the date that the DISTRICT gives written authorization to ENGINEER to begin
work or that this Agreement was entered, whichever is later and with all number
of days referring to calendar days unless otherwise noted:
TASK 1: Prepare color coded schematics of furnace systems and
subsystems - January 30, 2006
TASK 2: Review Furnace Operations Manual - February 6, 2006
TASK 3: Incorporate Furnace Operations Manual into the Plant
Information System (PIS) - February 28, 2006
5.2 It is expected that work shall begin on or about November 1, 2005, and shall be
completed in accordance with the above schedule. Time is of the essence for
- this Agreement. - - - - - -
5.3 The parties hereto agree to immediately and diligently proceed with their
respective duties as set forth herein so that .the work will be completed
satisfactorily-within-the-shortest-reasonable-lime- - -
ARTICLE 6 GENERAL PROVISIONS-
6.1 , .SCOPE OF AGREEMENT
This writing constitutes the entire Agreement between the parties relative to
professional engineering services to be provided hereunder and no modification
hereof shall be effective unless and until such modification is evidenced by a
writing signed by both parties to this Agreement.
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP6'131, 031117 Page 5 of 16
6.2 SUBCONTRACTORS AND OUTSIDE CONSULTANTS
No subcontract shall be awarded or an outside consultant engaged by
ENGINEER unless prior written approval is obtained from the DISTRICT. No
additional approval shall be required for subcontracting with or engagement of an
outside consultant set forth in an exhibit to this Agreement (Exhibit A).
6.3 INSURANCE
ENGINEER shall secure and maintain in full force and effect at its own cost and
expense until the completion of all services such insurance as shall protect it and
DISTRICT in such a manner and at such amounts as set forth below. The
premiums for said insurance coverage shall be paid by ENGINEER. Said policies
of insurance shall stipulate that this insurance shall operate as primary
insurance, and that no other insurance effected by the DISTRICT or other
named insured will be called on to cover a loss covered thereunder.
6.3.1 The DISTRICT shall be furnished with certificates of insurance and
original endorsements effecting coverage, signed by a person
authorized by the insurer to bind coverage on its behalf, verifying
the insurance coverage as required by this Agreement. These.
certificates of insurance and. original endorsements shall state the
Agreement number and shall be delivered to the DISTRICT within
fifteen (15) calendar days of execution of this Agreement. All
insurance certificates and original endorsements must be received
and approved by the DISTRICT prior to the commencement of any
work under this Agreement. The DISTRICT reserves the right to
require and have delivered complete and accurate copies of all
insurance policies required under this Agreement.
6.3.2 The insurance policies certified for compliance with this Agreement
shall include the following provisions or have them incorporated by
endorsements:
' 6.3.2.1 Coverage provided by ENGINEER's policies shall be
primary coverage.
6.3.2.2 _The--DISTRICT shall receive--thirty (30) days prior
written notice of a policy cancellation or reduction in
coverage.
6.3.3 Except for professional liability, ENGINEER shall provide insurance
coverage through insurers which have at least an "A" policyholder's
rating and "VII" financial rating in accordance with the current
Best's Key Rating Guide.
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6'131, 031'117 Page 6 of 16
6.3.4 In the event any change is made in the insurance carrier, policies,
or nature of coverage required under this Agreement ENGINEER
shall be required 'to notify the DISTRICT prior to making such
changes.
6.3.5 The insurance provided under this Agreement shall include policies
providing coverage to include each of the requirements set forth
below in amounts which meet or exceed the minimums set forth
herein:
6.3.5.2 General Liability
ENGINEER shall maintain and keep in full force and
effect general liability insurance including provisions
for contractual liability, personal injury, independent
contractors, and broad form property damage
coverages. This insurance shall have an
endorsement or policy language naming the
DISTRICT as an additional insured and with standard
cross liability clause or endorsement. The .limit for
this insurance shall be not less than $2,000,000 per
occurrence and in the aggregate, combined single
limit for bodily injury and property damage.
6.3.5.3 Automobile .Liability
ENGINEER shall maintain automobile liability
insurance with coverage for any vehicle including
those owned, leased, rented or borrowed. This
insurance shall have an endorsement or policy
language naming the DISTRICT• as an additional
insured and with a standard cross liability clause or
endorsement. The limit for this insurance shall be not
less than $500,000 per occurrence combined
single limit for bodily injury and property damage.
6.4 CHANGES-IN-SCOP-E-OR TIME-- - -- - .
If the DISTRICT requests a change in the scope of work or time of completion by
either adding to or deleting from the original scope or time of completion, an
equitable adjustment will be made and this Agreement will be modified in writing
accordingly. ENGINEER must assert any claim for adjustment under this clause
in writing within thirty (30) calendar days from the date of receipt from the
DISTRICT of the notification of change unless the DISTRICT grants a further
period of time for assertion of claim before the date of final payment under this
Agreement.
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117 Page 7 of 16
6.5 NOTICES
6.6
All notices to either party by the other shall be made in writing and delivered or
mailed to such party at their respective addresses as follows or to other such
address as either party may designate and said notices shall be deemed to have
been made when delivered or five (5) days after mailing.
To the DISTRICT:
CENTRAL CONTRA COSTA SANITARY DISTRICT
5019 Imhoff Place
Martinez, CA 94553
Attention:
Agreement No:
Telephone:
Randy Grieb
031117
(925) 229-7267
Note: The District's Project Manager for this work is Doug Craig
To ENGINEER:
DAN CORTINOVIS, CONSULTING ENGINEER
3183 Wayside Plaza #118
Walnut Creek, CA 94597
Attention: Dan Cortinovis
Telephone: (925) 932-3218
POSSESSION AND OWNERSHIP OF DRAWINGS, SPECIFICATIONS, AND
NOTES
6.6.1 All rights, title, royalties, and interest in all work product of
ENGINEER resulting from its performance under this Agreement,
including drawings and specifications, data, reports, estimates,
software, summaries, and any other such information and materials
as may be accumulated by ENGINEER in performing work under
this Agreement, whether complete or in progress, shall be vested in
the DISTRICT and none shall be revealed, disseminated, or made
available by ENGINEER to others without prior written consent of
the DISTRICT. If this Agreement is terminated in accordance with
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117 ~ Page 8 of 16
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Article 6.8 ENGINEER shall deliver such documents within two
weeks of termination.
6.6.2 It is understood that ENGINEER's work product is prepared for the
specific project at hand. Any reuse of said work products by the
DISTRICT for subsequent projects will be at the DISTRICT's own
risk. Any use by the DISTRICT of incomplete drawings,
specifications, or other related materials without the express written
authorization of ENGINEER will also be at the DISTRICT's own
risk.
6.7 ENGINEER'S ASSIGNED PERSONNEL
ENGINEER designates Steve Colberg to have immediate responsibility for the
performance of the work and for all matters relating to performance under this
Agreement. Substitution of any of these assigned personnel shall require the
prior written approval of the DISTRICT. If the DISTRICT determines that a
proposed substitution is not acceptable, then, at the request of the DISTRICT,
ENGINEER shall substitute with a person acceptable to the DISTRICT.
6.8 TERMINATION
6.8.1 Either party may terminate this Agreement for cause, in whole or in
part, if the other party fails to fulfill its obligations under this
Agreement through no fault of the terminating party. However, no
such termination for cause may be affected unless the other party
is given: (1) not less than ten (10) calendar days written notice
(delivered by Certified Mail, return receipt requested) of the intent
to terminate, and (2) an opportunity for consultation with the
terminating party before termination.
6.8.2 If the DISTRICT terminates this Agreement pursuant to Article
6.8.1, above, nothing set forth in this Article is intended to require
the DISTRICT to compensate ENGINEER for any services which
may be claimed to have been provided or be in progress, if the
DISTRICT reasonably concludes that further compensation is
-- -unwarranted.
6.8.3 The DISTRICT may terminate this Agreement, in whole or in part,
whether or ndt ENGINEER has. failed to fulfill its obligations, if the
DISTRICT has.a reasonable basis for termination (such as major
changes in the work or project requirements, cancellation of the
project, loss of outside funding, or failure of the Board'of'Directors
to authorize funding in subsequent fiscal years). ENGINEER will be .
given: (1) not less than ten (10) calendar days written notice
(delivered by Certified Mail, return receipt requested) of intent to
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117 Page 9 of 16
terminate, and (2) an opportunity for consultation with the
terminating party before termination.
6.8.4 Upon receipt of a termination notice, ENGINEER shall: (1)
promptly discontinue all services affected (unless the notice directs
otherwise), and (2) deliver or otherwise make- available to the
DISTRICT all data, drawings, specifications, reports, estimates,
summaries, and such other information and materials as
ENGINEER may have accumulated in performing this Agreement,
whether completed or in process.
6.8.5 Upon termination under~ARTICLE 6.8.3, the sole right and remedy
of ENGINEER shall be to receive payment for all amounts due and
not previously paid to ENGINEER for services completed or in
progress in accordance with the Agreement prior to such date of
termination and for services thereafter completed at the request of
the DISTRICT and any other reasonable cost incidental to such
termination of services. Such payments available to ENGINEER
under this paragraph shall not include costs related to lost. profit
associated with the expected completion of the work or other such
payments relating to the benefit of the bargain.
6.9 REMEDIES
In the event that either the DISTRICT or ENGINEER brings an action or
proceedings for damages for an alleged breach of any .provision of this
Agreement, the prevailing party shall be entitled to recover as part of such action
or proceeding, all litigation and collection expenses, including witness fees, court
costs, and reasonable attorneys' fees. Arbitration shall be attempted if both
parties mutually agree before, during, or after litigation has begun.
6.10 INDEMNITY
6.10.1 ENGINEER shall indemnify, hold harmless and assume the
defense of, in any actions at law or in equity, the DISTRICT, its
officers, employees, agents, and elective and appointive boards,
from all claims, losses, damage, including property damage,
personal injury;-including death; and liability of every kind, nature
and description, arising out of or in any way connected with the
negligent acts, errors or omissions, or the willful misconduct of
ENGINEER or any person directly or indirectly employed by, or
acting as agent for ENGINEER, directly or indirectly related to the
provision of any professional services provided hereunder, but not
including the sole or active negligence, or the willful misconduct of
the DISTRICT. This indemnification shall extend to claims, losses,
damage, injury and liability for injuries occurring after the
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117 Page 10 of 16
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completion of the aforesaid operations, arising from ENGINEER's
services.
Submission of insurance certificates or submission of other proof of
compliance with the insurance requirements does not relieve
ENGINEER from liability under this indemnification and hold
harmless clause. The obligations of this indemnity article shall
apply whether or not such insurance policies shall have been
determined to be applicable to any of such damages or claims for
damages.
6.10.2 The DISTRICT does not authorize the impermissible use of any
patent or the reproduction of. any copyrighted material by
ENGINEER which exceeds "fair use" in the performance of this
Agreement. ENGINEER is solely responsible for any such
infringement. '
ENGINEER shall indemnify the DISTRICT against and save it
harmless from any and all losses, damage, costs, expenses, and
attorneys' fees suffered or incurred as a result of or in connection
with any claims or actions based upon infringement or alleged
infringement of any patent, copyright, or trade secret, and arising
out of the use of the equipment or materials utilized to perform
under this Agreement or specified by or procured by ENGINEER,
or out of the processes or actions employed by, or on behalf of,
ENGINEER in connection with the performance of this Agreement.
6.10.3 ENGINEER shall also indemnify the DISTRICT against and save it
harmless from any and all loss, damage, costs, expenses, and
attorneys' fees suffered or incurred on account of any breach by
ENGINEER, or its employees, agents, or subcontractors, of the
aforesaid obligations and covenants, and any other provisions or
covenant of this Agreement.
6.11 SAFETY
__ _ENGINEER_shall_perform the work in full compliance with applicable state and
federal safety requirements including but not limited to Occupational Safety and
Health Administration requirements, and shall assume sole and complete
responsibility, during the course of completion of the assigriment for job site
safety of ENGINEER's employees and subcontractors' employees and their
property, applicable at all times, and not limited to normal working hours. Nothing
in this Article requires ENGINEER to be responsible for job site safety of the
DISTRICT's property or the DISTRICT'S personnel or the property or personnel
of any third parties over which ENGINEER has no authority or control.
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031 ~ 17 ~ Page 11 of 16
6.12 EXAMINATION OF RECORDS
ENGINEER agrees that the DISTRICT will have access to and the right to
examine any directly pertinent books, documents, papers, and records of any
and all transactions relating to this Agreement at any time during and after the
inception of the Agreement upon reasonable notice.
6.13 TERMS
No alteration or variation of the terms of this Agreement shall be valid unless
made in writing and signed by the parties hereto. No oral understanding or
agreement not incorporated herein shall be binding on any of the parties heretd.
6.14 ASSIGNMENT
ENGINEER shall not assigh any rights or duties or transfer its interest in this
Agreement to a third party without prior written consent of the DISTRICT.
6.15 GOVERNING LAW
This Agreement shall be governed by the laws of the State of California.
6.16 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAW
ENGINEER shall at all times observe all applicable provisions of federal, state,
and local law and regulations including, but not limited to, those related to equal
opportunity employment.
6.17 HEADINGS
Article headings in this Agreement are for convenience only acid are not intended
to be used in interpreting or construing the terms; covenants, and conditions of
this Agreement.
6.18 PARTIAL INVALIDITY
If -any term,-covenant,-condition,-or provision of this Agreement is found by a
court of competent jurisdiction ~ to: be invalid, void, or unenforceable, the
remainder of the provisions hereof shall remain in full force and effect, and shall
in no way be affected, impaired, or invalidated thereby.
6.19 AUTHORIZATION
Both the DISTRICT and ENGINEER do covenant that each individual executing.
this document by and on behalf of each party is a person duly authorized to
execute contracts for that party.
Dan Cortinovis. Furnace Operation Manual, Randy Grieb, DP 6131, 031117 Page 12 of 16
s
6.20 REPORTING REQUIREMENTS
a
If ENGINEER is an individual or sole proprietor ENGINEER must furnish its
Social Security Number (SSN). If ENGINEER is a corporation or partnership,
ENGINEER must furnish its Federal Employer Identification Number (FEIN).
ENGINEER shall complete the Taxpayer I.D. Number section below.
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, DP 6131, 031117 Page 13 of 16
IN WITNESS WHEREOF, the parties hereto have executed the Agreement in the day
and year first above written.
DAN CORTINOVIS, CONSULTING ENGINEER
Name Printed: ~`~ ~ G`'2~ ~~~~~/~~
Title: ~a,JfL~` j~/~'G En-'Gin~~Ec~
Date: O~ T °~G-2 3d~ zoci
gy: ~~ (Q~~~~-''"1
Name Printed: S"T~~+! ~ ~ ~ ~
Title: Dui NG,~L - {~ ~ X~L-JI 5 i U ~
Date: (~I U yJ ~~`-~ ~ F~ I~ Z U y S
Taxoaverl.D:
SSN ~~ b' _ 5 2. 3 9 9 3
FEIN -
CENTRAL CONTRA COSTA SANITARY DISTRICT
Date: ~iren~- ? Za~~ S"
Dan Cortinovis, Furnace Operation Manual, Randy Grieb,~ DP 6131, 031117 ~ Page 14 of 16.
Director of Administration
t •
EXHIBIT A
SCOPE OF WORK
Work to be performed by Pixelvision, a subcontractor to Dan Cortinovis.
TASK 1: Prepare and submit five (5) copies of color coded schematics of Multiple
Hearth Furnace systems and subsystems as described below for review
by District staff..Receive and incorporate comments from District staff and
provide ten (10) copies of the final schematics.
1. Schematics shall be color coded using lines and symbols that coincide
with the Districts existing schematics.
2. Schematics shall be provided for the following furnace systems and
subsystems:
a. Furnace Ash Collection(Bottom; Dry Scrubber & Soot)
b. Emissions Control System
c. Dry Scrubber System
d. Wet Scrubber System
e. Burner Piping
f. furnace Cooling Air
g. Furnace Draft
h. Furnace Drive
i. Furnace Natural and Landfill Gas
j. Furnace Compliance Schematic
3. Schematics shall call out District assigned equipment numbers next to
equipment shown on the schematic. Equipment numbers shall be
clearly visible and easily readable and shall be arranged in such a
manner that they are not easily confused with numbers for adjacent
equipment.
4. The above schematics may be combined to include more than one
system or subsystem with the approval of the District representative.
5. All-schematics-shall-be-made_available_to_District_personal_for review,
edits, and comments before schematics should be considered final
draft.
TASK 2: Following Task 1, as time and budget permit, review District's work on
Furnace Operations Manual for accuracy and completeness and provide
written comments to the District.
TASK 3: Following Task, 2, as time and budget permit, incorporate the completed
Furnace Operations Manual into the Plant Information System (PIS).
Dan Cortinovis, Furnace Operation Manual, Randy Grieb, f)P 6131, 031117 - Page 15 of 16 .
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s s
EXHIBIT B
FEE SCHEDULE
Steve Colberg $125 per Hour
Estimated Hours 180 Hours
Copies of Draft Schematics 5 sets (included)
Copies of Final Schematics 10 sets (included)
Electronic Copies of all Schematics on CD 2 CDs (included)
Copy/Publication Costs $25 per each. additional set
Total Cost of Project Not to Exceed $25,000
Dan Cortinovis, Furnace Operation Manual, Randy Gdeb, DP 6131, 031117 ~~ ~ Page 16 of 16
~,
Central Contra Costa Sanitary District
March 29, 2002
TO: Chuck Batts, General Manager
FROM: Randall M. Musgraves, Director of Administration ~~'~r,
SUBJECT: Purchasing Authorization Limits and Audit Report
SUMMARY
The Board of Directors recently requested staff to review the current contract and
purchasing authorization limits of the General Manager and management staff in general.
The Board expressed concern about the interpretation of incremental authority limits, the
possible practice of contract splitting, and possible bias toward a consultant or contractor.
The current practice of a matrix of authorization limits based on the level of approval and
the type of contract or purchase involved, is difficult to manage by District staff, confusing
to those involved in oversight of contracts, and disconcerting to the Board. In examining
this practice staff believes a simpler method of establishing authorization limits would
serve the District better. Staff recommends replacing the incremental authority limits
practice with a 15% contingency limit.
In addition to purchasing authorization limits, the District's Internal Auditor was asked to
review the entire purchasing function and in the course of that investigation found no
violation of the District's purchasing procedures. Staff will be addressing other concerns
and/or issues raised by the outside audit through an internal work plan. A copy of the
audit by the outside auditor is attached to this report.
BACKGROUND
At the February 18, 2002 Board Finance Committee meeting, staff was asked to evaluate
the current purch8"sing authorization limits-forcontracts-and-agreements.-The specific
concern stated by the Committee was the ability for staff to approve an agreement or
contract under the 550,000 amount requiring Board approval, and then process an
additional modification to the same contract of up to 550,000 on the same contract, again
without action of the Board. This concern was then discussed at the February 21, 2002
Board meeting. Again, staff was asked to investigate this practice and report back to the
Board.
Page 1
Staff had discussed with the Board Finance Committee at the time of the request that the
District's Internal Auditor, Rosemary Selland, an outside CPA, was scheduled to audit the
District's contract/agreement process and compliance. The purpose of this report is to
clarify the District's agreement and contract procedures and authorization limits, to inform
the Board of the Internal Auditor's findings, and to provide recommendations to the Board
for alignment with the Board on future transactions by staff.
CURRENT PRACTICE
Agreements and Contracts
In order to address the issue of authorization limits, a discussion of the various procedures
must first be provided. Currently, there are several forms of agreements and contracts in
District procedures for staff to use. These procedures were developed to protect the
District from risk as well as to reduce preparation time. Unfortunately, these many options
have created a complex and confusing process for staff to administer. Basically, the
District has three types of agreements and two types of contracts. They are as follows:
Professional Consulting Services (PCS) -These agreements are used for services
such as the collecting of information, analyzing information and translating
information with the end product being a written document or report, training and/or
recommendation as opposed to project design.
Technical Consulting Services ITCS) -These agreements are used when physical
work is being performed, such as surveying and soils investigation.
Professional Engineering Services (PES) -These agreements are used for
professional engineering design, construction management, and architectural
services.
Maintenance Service Contracts -These contracts are used for equipment and
building maintenance, landscaping and security services, collection services, and
duplicating and mail services.
Construction Contracts- These contracts are used for construction projects and
public works projects.
These agreements are less complex than construction contracts. They usually constitute a
single focus service to be provided to the District. In addition, there is a short form and a
long form of each type of instrument listed above. The differences between the two forms
are usually based on dollar value, complexity and/or insurance requirements. The short
form, as opposed to the long form, is usually used for agreements and contracts under
55,000, and is simple and relates to a single purpose. Different authorization limits for
such agreements and contracts apply to Operations and Maintenance (0&M) and Capital
Project agreements and contracts.
Page 2
~~ ~ ! •
Authorization Limits
O&M Professional Consulting Services agreements have an authorization limit of 525,000
for the General Manager, less for other staff, while all other agreements have an
authorization limit of 550,000 at the General Manager level. Maintenance Service
Contracts and Construction Contracts are approved in the budgeting process and therefore
do not require any additional approval by the Board once the Board approves the 0&M
Budget and the Capital Improvement Budget; these expenses are controlled by the
budgeted amounts. The authorization limits for these agreements were established to
recognize the need for flexibility and timely response or action. If the original agreement or
contract, or any modification, exceeds the authorizatiori limit of staff or the General
Manager, then staff seeks Board authorization. This process usually requires a Position
Paper providing the Board with the information and amount requiring additional funds. An
example would be as follows: The General Manager or authorized designee approves a
TCS agreement for 535,000. Staff later requests an additional 510,000, totaling
545,000. The General Manager can approve this addition. In such a case, neither the
original agreement nor the modification would be submitted to the Board for approval. If
another 520,000 is requested, bringing the agreement total to 565,000, Board approval
would be required. Because the total agreement amount now exceeds 550,000, staff
would submit the entire agreement to the Board, requesting the 520,000 in addition for
approval. Upon approval by the Board, staff has authority for an additional 550,000 of
modifications which could bring an amended agreement to 5115,000. This is the issue
that appears to alter the Board approval process requiring Board approval for contracts
over 550,000. It may appear from this process that staff could approve up to 5100,000
for an agreement and then a modification, but this is not the case. Staff is limited to
550,000 increments and must have Board approval to exceed that amount. It is this
practice or understanding of incremental authority that is at the crux of the Board's stated
concerns.
The Professional Consulting Services agreement authorization limit of 525,000 was
established by the Board at the December 16, 1993 meeting. The 550,000 authorization
limit for the other agreements was also presented at the same meeting grid referenced in
the Authorization (PCS) Agreements O&M Budget Procedure (P-01 5), which was attached
to the Board Position Paper.
The following chart shows the Board approved limits for District staff.
Type of Agreement or Contract
Professional Consulting Setiices 0&M
525,000 ProjecticlP
550,000
Technical Consulting Services 550,000 550,000
Professional Engineering Services 550,000 550,000
Maintenance Service Contracts Pre-approved via budget process
Construction Contracts Pre-approved via budget process
Page 3
The internal auditor has recently identified that there is a lack of a formal tracking system
for modifications to ensure staff authorization limits are met. There were two agreements
last year in which staff exceeded the 550,000 limit which triggers the need for Board
approval. Upon realizing the situation, staff brought both items forward to the Board in
Position Papers for review and approval.
PROJECTS/CAPITAL IMPROVEMENT PROGRAM (CIP) AUTHORIZATION LIMITS
The Engineering Department has developed additional authorization limits shown on the
attached table (Table A-5), previously discussed with the Board at the February 21, 2002
Board Meeting. This table shows that the Capital Improvement Budget or maintenance
construction contracts greater than S1 5,000 (legal bid limit) must have Board approval for
awarding the bid. Staff may authorize amendments to these contract in an aggregate
amount not to exceed 550,000. Project managers are to track the individual amendments
to gain Board approval if the 550,000 limit is exceeded. Again, the current practice allows
for such incremental approval after initial Board approval. Thus, the Board would be
presented with the contract or agreement once the additional modificationls) exceed the
550,000 limit.
INTERNAL AUDITOR REVIEW
A meeting was conducted with the Internal Auditor, the District's Controller and project
manager for the audit, and the Director of Administration soon after the Finance
Committee's request to discuss all of the various aspects, issues and concerns raised by
the Board over contract and purchasing issues. The Internal Auditor was then instructed
to review and investigate these procedures, her review is attached. Staff has also
included the report to provide the Board with a comprehensive evaluation of District
purchasing processes and procedures, which included the issue of staff authorization
limits. In summary, the Internal Auditor conducted a detailed review of over half of the
District's contracts and agreements issued over the past eighteen months. Where areas of
question or concern were found, she reviewed the backup material and support documents
until she was satisfied that the issues and/or concerns were addressed or identified by
staff.
The conclusion of the audit was that staff had continually complied with the authorization
limits, as understood by staff. There 'were other issues raised during the audit that are
addressed later in this report. A concern was also raised by the Board Finance Committee
that staff could split agreements/contracts in amounts less the 550,000 Board approval
limit in order to avoid submitting them for Board approval. The audit and subsequent staff
work validated that this practice did not occur. The two instances that were cited earlier
were for specific contracts where project managers exceeded the 550,000 limit and were
single contracts let for a specific purpose. At question in this instance is the
understanding of staff's authority as given by the Board.
Page 4
STAFF'S REVIEW
The District's Controller, with the assistance of the Principal Buyer, evaluated the past
eighteen months of District agreements and contracts. Lists of all contract and agreement
instruments were developed for evaluation. Those greater than 525,000 for 0&M
Professional Consulting Services IPCSI, and 550,000 for all other agreements, and
contracts greater than 515,000 (legal bid limit) were targeted for review. After a thorough
review staff found that all transactions complied with the Board's direction and
authorization limits (see attached report). None exceeded the 525,000 and 550,000
limits, with the exception of those two previously discussed. It does appear that a
simplified procedure could improve the understanding of the procedures and authorization
limits for both staff and the Board.
For the past several years, it has been staff's understanding and practice that, based on
the approved procedures for non-0&M PCS agreements, the General Manager is authorized
to approve up to 550,000, incrementally. The purpose for Board approval for all contracts
and agreements, as understood by staff, is to provide fiscal oversight, to assure that fair
treatment is afforded all service providers, and to ensure that the contracted work is
consistent with the Board's philosophies, directions, and expectations. It appears that the
current practices of the District are intended to meet those needs.
The following chart displays the number of agreements and O&M contracts by dollar value
over the last eighteen month period. Clearly, the majority of agreements are under the
current authorization limits. Therefore, the current process appears to meet the basic
business need for flexibility and timely action by staff.
5 PER
THOUSAND PROFESSIONAL
CONSULTING
AGREEMENTS TECHNICAL
CONSULTING
SERVICES PROFESSIONAL
ENGINEERING
SERVICES 0&M
CONSTRUCTION
CONTRACTS
0- 25 30 1 1 24 68
25-50 7 1 8 ~ 8
50-75 5 1 4 1
75-100 3 1 1
100-150
-T50=200 1-- -- 1
200-300
300-400
400-500 1 2
500-600
600-700 1
Page 5
....
AUTHORIZATION LIMITS COMPARISON
Staff contacted a number of Bay Area wastewater agencies to compare staff
authorization limits. It appears from that information that the District's authorization
limits are lower than those same limits at comparable sized agencies. However, at
those comparable agencies it appears that Board approval is required for all changes
above the initial authorization limit. The following table displays the results of that
survey.
Professional
Services' Construction
Contracts2
Delta Diablo Sanitation District 535,000 535,000
Dublin-San Ramon Services District 525,000 S100,000
East Bay Municipal Utility District 520,000 5100,000
Oro Loma Sanitary District 550,000 550,000
Union Sanitary District 550,000 $100,000
Central Contra Costa Sanitary District -increments
of: 525,000 550,000•
' Excludes maintenance service contracts
'Professional Services: Infrequent, technical and/or unique functions performed
by independent consultants or contractors whose occupation is the rendering of
such services. Examples include architectural, engineering, technical,
management and systems consultation and research.
ZConstruction Contracts: A contract that calls for a contractor's time and effort
fdr services performed for a capital construction project.
STAFF CONSIDERED OPTIONS
There are various options developed by staff for the Board's consideration. The
following are four basic options that were examined.
Current Practice-The Board could decide to continue the current practice of the
525,000/550,000 incremental limits for staff authority. As previously discussed
in this report, this option would appear to meet the requirements of fairness,
appropriateness, flexibility, and timely response. The current practice is difficult
Page 6
'
to monitor, and twice over the last eighteen months, staff has had to come to
the Board and request approval of contracts where authority limits have been
exceeded.
Remove the Incremental Authorization Limit -The Board may wish to withhold
the General Manager's currerit authority to exercise approval of $25,000 and
$50,000 incremental approval limits. This would require that the Board approve
any contract or agreement modification over the initial approval amount. This
option would simplify and clarify the process, but such a option would inhibit
flexibility and response time, and require specific Board approval. The number of
contracts may be limited in number but would result in increased costs, staff
time, contract delay.
Increased Limits -The Board could increase the existing staff authorization limits
to the amount used by comparable agencies, and require Board approval for any
additional contract or agreement modification. The limits could be increased from
525,000 to 550,000 for PCS, and from 550,000 to 5100,000 for all other
agreements and contracts. This would be similar to the authorization limits used
by Union Sanitary District, a well run agency similar in size to the District. It
would also help address the staff concern for flexibility and timely action.
Establish a Percentage Scale -The Board could decide to establish staff authority
limits based on a percentage basis for any additional contract or agreement
modifications. Staff believes that a percentage limit up to 1 5% for all
agreements and contracts may meet the requirements of both the Board and
staff. As an example fora 550,000 contract, staff authority limits for an
increase or contract modification would be $7,500. This would remove the
incremental authority procedure which has a fixed dollar amount regardless of the
value of the contract. It does, however, decrease staff's ability to quickly
process a change or modification of a major contract, and could bring a string of
small contract increases before the Board.
AUTOMATED AUTHORIZATION LIMITS
District staff has also evaluated the ability of the contract software to automate the
various authorization limits to assist with successful compliance. It appears that
significant improvements can be made in this area that would allow staff to follow
contract billings verse authorized amounts and anticipate when Board approval would
be required. Staff. will continue to pursue automating the authorization limits if
practical and cost-effective.
Page 7
.. ..
AUTHORIZATION LIMIT RECOMMENDATION
I would recommend that the current authorization limits remain in place for the reasons
previously stated in the report. However, if the Board wishes to end the incremental
authorization practice I would recommend a 510,000 or 15% contingency amount,
which ever is greater, for all agreements and contracts. This procedure would provide
some flexibility for staff, and provide the Board with greater control over amendments
to contracts or changes in agreements.
As stated previously, staff feel that some flexibility is needed to modify agreements or
contracts in order to respond to unanticipated tasks or changes that were unknown at
the time of agreement/contract execution. There was also some staff concern
expressed over the increase in Board Position Papers, possible presentations, and the
associated delay by requiring a authorization limit of 15% to small contracts. While
this concern may be addressed by placing minor agreement or contract modifications
on the consent calendar, staff believes that a fixed 510,000 baseline amount before
the 15% formula would be applied may solve this issue. This would provide the Board
with the needed information on major contract amendments or changes while not
creating a busy agenda and numerous staff presentations. As always, the Board could
pull any consent item Position Paper for discussion if there were concerns.
INTERNAL AUDITOR'S FINDINGS AND RECOMMENDATIONS:
In summary, the audit findings concluded that improvements in the filing,
documentation, processing and agreement/contract preparation are needed. There is
confusion among staff regarding the appropriate instrument to procure services.
Purchasing and Material Services reports should be re-evaluated to ensure process
efficiency and effectiveness.
Staff is currently developing atwo-year Master Project Plan to address the concerns
and recommendations of the District's Internal Auditor. There were eighteen
recommendations, which will be prioritized and for which an implementation schedule
will be submitted to District management for concurrence and support (see attached
Master Project Plan).
Page 8
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