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HomeMy WebLinkAbout2016 CON Financial Credit Network - Collection ServicesAGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND FINANCIAL CREDIT NETWORK, INC. THIS AGREEMENT is entered into on this 6th day of December, 2016, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and FINANCIAL CREDIT NETWORK, INC., (the "CONSULTANT"), a California corporation. RECITALS WHEREAS, the CITY desires to employ a CONSULTANT to provide collection services for delinquent accounts receivable for the City. WHEREAS, the CITY has determined that the CONSULTANT is qualified by experience and ability to perform the services desired by the CITY, and the CONSULTANT is willing to perform such services. NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS: 1. ENGAGEMENT OF CONSULTANT. The CITY agrees to engage the CONSULTANT, and the CONSULTANT agrees to perform the services set forth here in accordance with all terms and conditions contained herein. The CONSULTANT represents that all services shall be performed directly by the CONSULTANT or under direct supervision of the CONSULTANT. 2. EFFECTIVE DATE AND LENGTH OF AGREEMENT. This Agreement will become effective on December 6, 2016. The duration of this Agreement is for the period of December 6, 2016 through June 30, 2019. This Agreement may be extended by mutual agreement upon the same terms and conditions for two (2) additional one (1) year terms. 3. SCOPE OF SERVICES. The CONSULTANT shall provide collection services for delinquent account receivables. The CONSULTANT will perform services as set forth in the attached Exhibit "A." The CONSULTANT shall not have full rights to accounts in that these accounts are due to the CITY. CONSULTANT shall be able to pursue collections, as permitted by applicable law, only on behalf of the CITY. CONSULTANT shall not have the authority to accept a compromise or settlement on any account without written consent of the Director of Finance, or designee. The CITY may establish parameters in which accounts may be setted by CONSULTANT on CITY's behalf. The CONSULTANT shall be responsible for all research and reviews related to the work and shall not rely on personnel of the CITY for such services, except as authorized in advance by the CITY. The CONSULTANT shall appear at meetings as specified in Exhibit "A" to keep staff and City Council advised of the progress on the Project. The CITY may unilaterally, or upon request from the CONSULTANT, from time to time reduce or increase the Scope of Services to be performed by the CONSULTANT under this Agreement. Upon doing so, the CITY and the CONSULTANT agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction or increase in the compensation associated with said change in services. 4. PROJECT COORDINATION AND SUPERVISION. The Director of Finance is designated as the Project Coordinator for the CITY and will monitor the progress and execution of this Agreement. The CONSULTANT shall assign a single Project Director to provide supervision and have overall responsibility for the progress and execution of this Agreement for the CONSULTANT. Kris Davisson is hereby designated as the Project Director for the CONSULTANT. The City reserves the right to perform periodic audits to ensure all amounts collected are accurately reported and remitted. The Director of Finance, or designee, shall be allowed access to CONSULTANT's debtor account information for the purpose of generating recovery analysis reports or auditing files at any time. 5. COMPENSATION AND PAYMENT. The compensation for the CONSULTANT is contingent upon collection of moniesby the CONSULTANT, as permitted by law, and shall be based on charges covering actual work performed in accordance with the fee rates in the attached Exhibit "B." All monies due to the CONSULTANT shall be deducted from collections received by the CONSULTANT; and the CONSULTANT shall submit a monthly invoice to the City documenting amounts collected and fees deducted on all accounts. The CONSULTANT shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred, and shall make such materials available at its office at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment under this Agreement, for inspection by the CITY, and for furnishing of copies to the CITY, if requested. 6. ACCEPTABILITY OF WORK. The City shall decide any and all questions which may arise as to the quality or acceptability of the services performed and the manner of performance, the acceptable completion of this Agreement, and the amount of compensation due. In the event the CONSULTANT and the City cannot agree to the quality or acceptability of the work, the manner of performance and/or the compensation payable to the CONSULTANT in this Agreement, the City or the CONSULTANT shall give to the other written notice. Within ten (10) business days, the CONSULTANT and the City shall each prepare a report which supports their position and file the same with the other party. The City shall, with reasonable diligence, determine the quality or acceptability of the work, the manner of performance, and/or the compensation payable to the CONSULTANT. 7. DISPOSITION AND OWNERSHIP OF DOCUMENTS. The Memoranda, Reports, Maps, Drawings, Plans, Specifications, and other documents prepared by the CONSULTANT for this Project, whether paper or electronic, shall become the property of the CITY for use with respect to this Project, and shall be turned over to the CITY upon completion of the Project, or any phase thereof, as contemplated by this Agreement. 2 Contemporaneously with the transfer of documents, the CONSULTANT hereby assigns to the CITY, and CONSULTANT thereby expressly waives and disclaims any copyright in, and the right to reproduce, all written material, drawings, plans, specifications, or other work prepared under this Agreement, except upon the CITY'S prior authorization regarding reproduction, which authorization shall not be unreasonably withheld. The CONSULTANT shall, upon request of the CITY, execute any further document(s) necessary to further effectuate this waiver and disclaimer. The CONSULTANT agrees that the CITY may use, reuse, alter, reproduce, modify, assign, transfer, or in any other way, medium, or method utilize the CONSULTANT'S written work product for the CITY'S purposes, and the CONSULTANT expressly waives and disclaims any residual rights granted to it by Civil Code Sections 980 through 989 relating to intellectual property and artistic works. Any modification or reuse by the CITY of documents, drawings, or specifications prepared by the CONSULTANT shall relieve the CONSULTANT from liability under Section 14, but only with respect to the effect of the modification or reuse by the CITY, or for any liability to the CITY should the documents be used by the CITY for some project other than what was expressly agreed upon within the Scope of this project, unless otherwise mutually agreed. 8. INDEPENDENT CONTRACTOR. Both parties hereto in the performance of this Agreement will be acting in an independent capacity and not as agents, employees, partners, or joint venturers with one another. Neither the CONSULTANT nor the CONSULTANT'S employees are employees of the CITY, and are not entitled to any of the rights, benefits, or privileges of the CITY'S employees, including but not limited to retirement, medical, unemployment, or workers' compensation insurance. This Agreement contemplates the personal services of the CONSULTANT and the CONSULTANT'S employees, and it is recognized by the parties that a substantial inducement to the CITY for entering into this Agreement was, and is, the professional reputation and competence of the CONSULTANT and its employees. Neither this Agreement nor any interest herein may be assigned by the CONSULTANT without the prior written consent of the CITY. Nothing herein contained is intended to prevent the CONSULTANT from employing or hiring as many employees, or SUBCONSULTANTS, as the CONSULTANT may deem necessary for the proper and efficient performance of this Agreement. All agreements by CONSULTANT with its SUBCONSULTANT(S) shall require the SUBCONSULTANT(S) to adhere to the applicable terms of this Agreement. 9. CONTROL. Neither the CITY nor its officers, agents, or employees shall have any control over the conduct of the CONSULTANT or any of the CONSULTANT'S employees, except as herein set forth, and the CONSULTANT or the CONSULTANT'S agents, servants, or employees are not in any manner agents, servants, or employees of the CITY, it being understood that the CONSULTANT its agents, servants, and employees are as to the CITY wholly independent CONSULTANT, and that the CONSULTANT'S obligations to the CITY are solely such as are prescribed by this Agreement. 10. COMPLIANCE WITH APPLICABLE LAW. The CONSULTANT, in the performance of the services to be provided herein, shall comply with all applicable state and federal statutes and regulations, including, but not limited to, the provisions of the federal Fair Debt Collection Practices Act and California's Rosenthal Fair Debt Collection Practices Act, and all applicable ordinances, rules, and regulations of the City of National City, whether now in force or subsequently enacted. The CONSULTANT and each of its SUBCONSULTANT(S), shall obtain and maintain a current City of National City business license prior to and during performance of any work pursuant to this Agreement. 11. LICENSES, PERMITS, ETC. The CONSULTANT represents and covenants that it has all licenses, permits, qualifications, and approvals of whatever nature that are legally required to practice its profession. The CONSULTANT represents and covenants that the CONSULTANT shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement, any license, permit, or approval which is legally required for the CONSULTANT to practice its profession. 12. STANDARD OF CARE. A. The CONSULTANT, in performing any services under this Agreement, shall perform in a manner consistent with that level of care and skill ordinarily exercised by members of the CONSULTANT'S trade or profession currently practicing under similar conditions and in similar locations. The CONSULTANT shall take all special precautions necessary to protect the CONSULTANT'S employees and members of the public from risk of harm arising out of the nature of the work and/or the conditions of the work site. B. Unless disclosed in writing prior to the date of this Agreement, the CONSULTANT warrants to the CITY that it is not now, nor has it for the five (5) years preceding, been debarred by a governmental agency or involved in debarment, arbitration or litigation proceedings concerning the CONSULTANT'S professional performance or the furnishing of materials or services relating thereto. C. The CONSULTANT is responsible for identifying any unique products, treatments, processes or materials whose availability is critical to the success of the project the CONSULTANT has been retained to perform, within the time requirements of the CITY, or, when no time is specified, then within a commercially reasonable time. Accordingly, unless the CONSULTANT has notified the CITY otherwise, the CONSULTANT warrants that all products, materials, processes or treatments identified in the project documents prepared for the CITY are reasonably commercially available. Any failure by the CONSULTANT to use due diligence under this sub -paragraph will render the CONSULTANT liable to the CITY for any increased costs that result from the CITY'S later inability to obtain the specified items or any reasonable substitute within a price range that allows for project completion in the time frame specified or, when not specified, then within a commercially reasonable time. 13. NON-DISCRIMINATION PROVISIONS. The CONSULTANT shall not discriminate against any employee or applicant for employment because of age, race, color, ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or medical condition. The CONSULTANT will take positive action to insure that applicants are employed without regard to their age, race, color, ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or medical condition. Such action shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment or recruitment 4 advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONSULTANT agrees to post in conspicuous places available to employees and applicants for employment any notices provided by the CITY setting forth the provisions of this non-discrimination clause. 14. CONFIDENTIAL INFORMATION. The CITY may from time to time communicate to the CONSULTANT certain confidential information to enable the CONSULTANT to effectively perform the services to be provided herein. The CONSULTANT shall treat all such information as confidential and shall not disclose any part thereof without the prior written consent of the CITY. The CONSULTANT shall limit the use and circulation of such information, even within its own organization, to the extent necessary to perform the services to be provided herein. The foregoing obligation of this Section 14, however, shall not apply to any part of the information that (i) has been disclosed in publicly available sources of information; (ii) is, through no fault of the CONSULTANT, hereafter disclosed in publicly available sources of information; (iii) is already in the possession of the CONSULTANT without any obligation of confidentiality; or (iv) has been or is hereafter rightfully disclosed to the CONSULTANT by a third party, but only to the extent that the use or disclosure thereof has been or is rightfully authorized by that third party. The CONSULTANT shall not disclose any reports, recommendations, conclusions, or other results of the services or the existence of the subject matter of this Agreement without the prior written consent of the CITY. In its performance hereunder, the CONSULTANT shall comply with all legal obligations it may now or hereafter have respecting the information or other property of any other person, firm, or corporation. CONSULTANT shall be liable to CITY for any damages caused by breach of this condition, pursuant to the provisions of Section 14. 15. INDEMNIFICATION AND HOLD HARMLESS. The CONSULTANT agrees to defend, indemnify and hold harmless the City of National City, its officers, officials, agents, employees, and volunteers against and from any and all liability, loss, damages to property, injuries to, or death of any person or persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature, including workers' compensation claims, of or by anyone whomsoever, resulting from or arising out of the CONSULTANT'S performance or other obligations under this Agreement; provided, however, that this indemnification and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers, employees, or volunteers. CITY will cooperate reasonably in the defense of any action, and CONSULTANT shall employ competent counsel, reasonably acceptable to the City Attorney. The indemnity, defense, and hold harmless obligations contained herein shall survive the termination of this Agreement for any alleged or actual omission, act, or negligence under this Agreement that occurred during the term of this Agreement. 16. WORKERS' COMPENSATION. The CONSULTANT shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Government Code and all amendments thereto; and all similar State or federal acts or laws applicable; and shall indemnify, 5 and hold harmless the CITY and its officers, employees, and volunteers from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description, including reasonable attorney's fees and defense costs presented, brought or recovered against the CITY or its officers, employees, or volunteers, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by the CONSULTANT under this Agreement. 17. INSURANCE. The CONSULTANT, at its sole cost and expense, shall purchase and maintain, and shall require its SUBCONSULTANT(S), when applicable, to purchase and maintain throughout the term of this Agreement, the following checked insurance policies: A. ® If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile Insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage of $1,000,000 combined single limit per accident. Such automobile insurance shall include owned, non -owned, and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. C. Commercial General Liability Insurance, with minimum limits of either $2,000,000 per occurrence and $4,000,000 aggregate, or $1,000,000 per occurrence and $2,000,000 aggregate with a $2,000,000 umbrella policy, covering all bodily injury and property damage arising out of its operations, work, or performance under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location." The "project" or "location" should be noted with specificity on an endorsement that shall be incorporated into the policy. D. Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of CONSULTANT'S employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the City. Said endorsement shall be provided prior to commencement of work under this Agreement. If CONSULTANT has no employees subject to the California Workers' Compensation and Labor laws, CONSULTANT shall execute a Declaration to that effect. Said Declaration shall be provided to CONSULTANT by CITY. E. The aforesaid policies shall constitute primary insurance as to the CITY, its officers, officials, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY of cancellation or material change. F. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, the CONSULTANT shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. G. Insurance shall be written with only California admitted companies that hold a current policy holder's alphabetic and financial size category rating of not less than A-VII according to the current Best's Key Rating Guide, or a company equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted 6 "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. H. This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, filed with, and approved by the CITY'S Risk Manager. If the CONSULTANT does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. I. All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. 18. LEGAL FEES. If any party brings a suit or action against the other party arising from any breach of any of the covenants or agreements or any inaccuracies in any of the representations and warranties on the part of the other party arising out of this Agreement, then in that event, the prevailing party in such action or dispute, whether by final judgment or out -of -court settlement, shall be entitled to have and recover of and from the other party all costs and expenses of suit, including attorneys' fees. For purposes of determining who is to be considered the prevailing party, it is stipulated that attorney's fees incurred in the prosecution or defense of the action or suit shall not be considered in determining the amount of the judgment or award. Attorney's fees to the prevailing party if other than the CITY shall, in addition, be limited to the amount of attorney's fees incurred by the CITY in its prosecution or defense of the action, irrespective of the actual amount of at y=s es incurred by the prevailing party. MEDIATION/ARBITRATION. If a dispute arises out of or relates to this g , or the breach thereof, the parties agree first to try, in good faith, to settle the dispute by mediation in San Diego, California, in accordance with the Commercial Mediation Rules of the American Arbitration Association (the "AAA") before resorting to arbitration. The costs of mediation sha"we e-eque h ies. ^ „y co„troversy or claim arising out of, or relating to, this Agreement, or breach thereof, which is not resolved by mediation shall be settled by arbitration in San Diego, California, in accordance with the Commercial Arbitration Rules of the AAA then existing. Any award rendered shall be final and conclusive „„or the parties, and controversbitration "hall be borne eguatty by the parties to the arbitration, provided that each party shall pay for and bear the costs of its own experts', evidence, and specified party as part of the arbitration award. 20. TERMINATION. A. This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60-day's written notice to the CONSULTANT. During said 60-day period the CONSULTANT shall perform all services in accordance with this Agreement. B. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by the CONSULTANT in 7 connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. C. Termination with or without cause shall be effected by delivery of written Notice of Termination to the CONSULTANT as provided for herein. D. In the event of termination, all finished or unfinished Memoranda Reports, Maps, Drawings, Plans, Specifications and other documents prepared by the CONSULTANT, whether paper or electronic, shall immediately become the property of and be delivered to the CITY, and the CONSULTANT shall be entitled to receive just and equitable compensation for any work satisfactorily completed on such documents and other materials up to the effective date of the Notice of Termination, not to exceed the amounts payable hereunder, and less any damages caused the CITY by the CONSULTANT'S breach, if any. Thereafter, ownership of said written material shall vest in the CITY all rights set forth in Section 7. E. The CITY further reserves the right to immediately terminate this Agreement upon: (1) the filing of a petition in bankruptcy affecting the CONSULTANT; (2) a reorganization of the CONSULTANT for the benefit of creditors; or (3) a business reorganization, change in business name or change in business status of the CONSULTANT. 21. NOTICES. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered; or sent by overnight mail (Federal Express or the like); or sent by registered or certified mail, postage prepaid, return receipt requested; or sent by ordinary mail, postage prepaid; or telegraphed or cabled; or delivered or sent by telex, telecopy, facsimile or fax; and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if sent by overnight mail, the business day following its deposit in such overnight mail facility, (iii) if mailed by registered, certified or ordinary mail, five (5) days (ten (10) days if the address is outside the State of California) after the date of deposit in a post office, mailbox, mail chute, or other like facility regularly maintained by the United States Postal Service, (iv) if given by telegraph or cable, when delivered to the telegraph company with charges prepaid, or (v) if given by telex, telecopy, facsimile or fax, when sent. Any notice, request, demand, direction or other communication delivered or sent as specified above shall be directed to the following persons: To CITY: Director of Finance City of National City 1243 National City Boulevard National City, CA 91950-4397 To CONSULTANT: Kris Davisson, Vice President Financial Credit Network, Inc. 1300 West Main Street Visalia, CA 93292 Notice of change of address shall be given by written notice in the manner specified in this Section. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request, or communication sent. Any notice, request, demand, direction or other communication 8 sent by cable, telex, telecopy, facsimile or fax must be confirmed within forty-eight (48) hours by letter mailed or delivered as specified in this Section. 22. CONFLICT OF INTEREST AND POLITICAL REFORM ACT OBLIGATIONS. During the term of this Agreement, the CONSULTANT shall not perform services of any kind for any person or entity whose interests conflict in any way with those of the City of National City. The CONSULTANT also agrees not to specify any product, treatment, process, or material for the project in which the CONSULTANT has a material financial interest, either direct or indirect, without first notifying the CITY of that fact. The CONSULTANT shall at all times comply with the terms of the Political Reform Act and the National City Conflict of Interest Code. The CONSULTANT shall immediately disqualify itself and shall not use its official position to influence in any way any matter coming before the CITY in which the CONSULTANT has a financial interest as defined in Government Code Section 87103. The CONSULTANT represents that it has no knowledge of any financial interests that would require it to disqualify itself from any matter on which it might perform services for the CITY. ® If checked, the CONSULTANT shall comply with all of the reporting requirements of the Political Reform Act and the National City Conflict of Interest Code. Specifically, the CONSULTANT shall file a Statement of Economic Interests with the City Clerk of the City of National City in a timely manner on forms which the CONSULTANT shall obtain from the City Clerk. The CONSULTANT shall be strictly liable to the CITY for all damages, costs or expenses the CITY may suffer by virtue of any violation of this Paragraph 22 by the CONSULTANT. 23. PREVAILING WAGES. State prevailing wage rates may apply to work performed under this Agreement. State prevailing wages rates apply to all public works contracts as set forth in California Labor Code, including but not limited to, Sections 1720, 1720.2, 1720.3, 1720.4, and 1771. Consultant is solely responsible to determine if State prevailing wage rates apply and, if applicable, pay such rates in accordance with all laws, ordinances, rules, and regulations. 24. MISCELLANEOUS PROVISIONS. A. Computation of Time Periods. If any date or time period provided for in this Agreement is or ends on a Saturday, Sunday or federal, state or legal holiday, then such date shall automatically be extended until 5:00 p.m. Pacific Time of the next day which is not a Saturday, Sunday or federal, state, or legal holiday. B. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. C. Captions. Any captions to, or headings of, the sections or subsections of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. D. No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, or obligate any of the parties hereto, to any person or entity other than the parties hereto. 9 E. Exhibits and Schedules. The Exhibits and Schedules attached hereto are hereby incorporated herein by this reference for all purposes. To the extent any exhibits or schedules or provisions thereof conflict or are inconsistent with the terms and conditions contained in this Agreement, the terms and conditions of this Agreement shall control. F. Amendment to this Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto. G. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. H. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. I. Audit. If this Agreement exceeds ten -thousand dollars ($10,000), the parties shall be subject to the examination and audit of the State Auditor for a period of three (3) years after final payment under the Agreement, per Government Code Section 8546.7. J. Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between the parties as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent, or representative of any party hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby. K. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. L. Subcontractors or Subconsultants. The City is engaging the services of the CONSULTANT identified in this Agreement. The CONSULTANT shall not subcontract any portion of the work, unless such subcontracting was part of the original proposal or is allowed by the City in writing. In the event any portion of the work under this Agreement is subcontracted, the subconsultant(s) shall be required to comply with and agree to, for the benefit of and in favor of the City, both the insurance provisions in Section 17 and the indemnification and hold harmless provision of Section 15 of this Agreement. M. Construction. The parties acknowledge and agree that (i) each party is of equal bargaining strength, (ii) each party has actively participated in the drafting, preparation and negotiation of this Agreement, (iii) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (iv) each party and such party's counsel and advisors have reviewed this Agreement, (v) each party has agreed to enter into this Agreement following such review and the rendering of such advice, and (vi) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written. [Signature Page to Follow] 10 CITY OF NATIONAL CITY By: RoMorrison, Mayor APPROVED AS TO FORM: I ,2,34.100. George H. Eiser, III Interim City Attorney FINANCIAL CREDIT NETWORK, INC. (Corporation - signatures of two corporate officers required) By: By: (Name) (Print) Pre 4)-titt.vIt' (Title) (Name) (Print) (Title) Exhibit A FINANCIAL CREDIT NETWORK, INC. SCOPE OF SERVICES A. General Services: Financial Credit Network, Inc. ("FCN") shall provide collection services for unpaid and delinquent accounts receivable for the City of National City ("City") which includes: 1. administrative citations; 2. code enforcement citations; 3. business licenses; 4. false alarm billing; 5. property damage; 6. returned checks; and 7. miscellaneous receivables. B. Specific Services: FCN shall perform the following specific services: 1. Accept automated or manual transfers of delinquent accounts information from the City or City -authorized vendor's database (during which times FCN will work, at no additional cost, with the City, and City software, to ensure accurate and timely transmission of data); 2. Perform a minimum of two written or telephone contacts for each account within sixty (60) days of receipt of delinquent account information from the City; 3. Conduct skip tracing on delinquent accounts using tools provided by FCN; 4. Accrue interest on outstanding balances at a rate established by the City as authorized by the National City Municipal Code or by resolution of the City Council of the City of National City; 5. Provide consumer with multiple payment options; 6. Remit monies due to the City at least monthly, providing a detailed accounting of collections less City -owed fees with each remittance; 7. Report, in accordance with all applicable federal and California laws, all uncollected accounts pursued for collection by FCN for not less than 60 days to the major credit bureaus, except for types of accounts excluded from reporting by the National City Director of Finance ("Director"); 8. In accordance with the Fair Credit Reporting Act, remove account notifications from all affected bureaus at the request of the Director and provide a copy of the account notification removal letter or form submitted to each bureau to the Director; 9. Provide on -going training and education opportunities and provide updates to City staff on changes in state and federal laws related to credit and collections; Page 1 of 3 Exhibit A 10. Meet at least annually with the Director and other City staff to review and discuss all services and collection results; 11. Provide recommendations on how the City can reduce future bad debt; 12. Maintain accurate records of all correspondence, accounting records, banking records, and other relative evidence for each assigned account for at least seven (7) years after termination of the collection action and make said records available to the City for review upon request by the Director of Finance, or designee. C. Additional Collection Requirements: 1. The City reserves the right to withdraw a delinquent account from FCN at any time. In such cases, FCN shall cease all collection and/or legal activities related to the account. If an account is withdrawn prior to collection activity on the part of FCN, no fees shall be due. 2. The City requires FCN to exercise high ethical standards in its collection efforts. The FCN shall conduct its collection business in a professional manner and shall not use tactics which may be interpreted as harassment or as demeaning or that otherwise may reflect poorly on the City's image. The City prohibits any collection enforcement procedures not consistent with the City's requirements. 3. FCN shall make contacts with delinquent accountholders under FCN's name. 4. FCN shall instruct delinquent accountholders to submit payment to the collection agency. Any payments received by the City directly from accountholders will be forwarded to FCN for processing. FCN will be notified of any payment forwarded by the City. Funds received by FCN must be maintained in a trust fund until remitted to the City and the collection fee can be deducted at the time of remittance. D. Reporting Requirements: FCN shall provide the City with the following reports: 1. Monthly status report detailing all its collection activities for the previous month that shall include detailed accounting information, including: a. original placed value of debt; b. current value of debt; c. amount(s) and date(s) of all payment(s) received; d. interest charged; e. charges waived; f. balance due; 2. Invoices detailing collections received for the previous month, less all fees deducted (as set forth in Exhibit B) shall be sent to the City on a monthly basis. Page 2 of 3 Exhibit A 3. Period -to -date and fiscal year-to-date financial summary reports reflecting pertinent information, such as receipts, total accounts receivable, net accounts receivable, and collection percentage. 4. Annual report detailing the previous fiscal year's activities (July 1 through June 30), including detailed listings of the following: a. all accounts by type; b. all accounts closed in the past year by type; c. all activity by account in past year by account type; and d. summary of those reports mentioned in subsections 3(a)-3(c) 5. Ad hoc reports upon the City's request. 6. Detailed and summarized aging report, upon the City's request. E. Administrative Provisions: 1. FCN shall guarantee the confidentiality, security, and safety of all files, documents, computer files, etc. 2. FCN shall not subcontract work covered by this Exhibit A, or the Agreement between the City and FCN, without the prior written consent of the City. Page 3 of 3 Exhibit B FINANCIAL CREDIT NETWORK, INC. RATES TO PERFORM COLLECTION SERVICES Fees for collections services for delinquent accounts receivable forwarded by the City of National City ("City") to Financial Credit Network, Inc. ("FCN") are contingent upon collection on said delinquent accounts receivable. Fees will be deducted from collections in accordance with the following schedule: Description Contingency Fee Primary Placements for: 1. Administrative citations 24% 2. Business licenses 24% 3. False alarm billing 24% 4. Property damage 24% 5. Returned checks 24% 6. Miscellaneous receivables 24% Court action for primary placements for all account types (if required) 34% Transfer of account to an out -of -area agency for collection (forwarding) 34% Franchise Tax Board Intercept Program finder's fee 8% Future Primary Placements not enumerated in 1-6 in this Exhibit B 24% Future court action for Primary Placements not enumerated in 1-6 in this Exhibit B 34% The City shall not incur any costs for collection services. All monies due to FCN shall be deducted from collections by the Consultant; however, the City shall be invoiced for all fees deducted on a monthly basis. A detailed accounting of collections, less City -owed fees will accompany each remittance to the City. Additional fees may not be added to the principal amount of any debt to the City without prior written approval from the City. Notwithstanding approval by the City, additions must be in accordance with all applicable federal and state laws. Page 1 of 1 FINACRE-02 ANGELA 4C RLY CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY) 11/18/2016 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Buckman -Mitchell, Inc. 500 N. Santa Fe Street Visalia, CA 93292 192MACT PHONE FAX (A/c, No, Ex* (559) 733-1181 I (A/C, No(559) 738-5517 Ross: angela c@bminc.com INSURER(S) AFFORDING COVERAGE NAIC # INSURER A :West American Insurance Co. 44393 INSURED Financial Credit Network, Inc. Alicia Sundstrom P.O. Box3084 Visalia, CA 93278 INSURER B : Ohio Security Insurance Co. 24082 INSURER C: American Fire & Casualty Co. 24066 INSURER o : State Compensation Ins. Fund 35076 INSURER E : INSURER F : COVERAGES CERTIFICATE NUM • THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACTOR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLIC ES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL INSD SUBR W VD POLICY NUMBER POLICY EFF IMM/DD/YYYY) POLICY EXP (MM/DD/YYYYI LIMITS A X COMMERCIAL GENERAL LIABILITY X BKW56435941 03/31/2016 03/31/2017 EACH OCCURRENCE $ 1,000,000 CLAIMS -MADE X OCCUR DREMISESO(Eaoccu ante) $ 500,000 MED EXP (Any one person) $ 15,000 PERSONAL & ADV INJURY $ Excluded GEN'L X AGGREGATE POLICY OTHER: LIMIT APPLIES PRO- JECT PER: LOC GENERAL AGGREGATE $ 2,000,000 PRODUCTS - COMP/OP AGG $ 2,000,000 $ B AUTOMOBILE X LIABILITY ANY AUTO OWNED SCHEDULED X BAS56435941 03/31/2016 03/31/2017 COMBINED SINGLE LIMIT (Ea accident) $ 1,000,000 BODILY INJURY (Per person) $ BODILY�INJURY (Per accident) $ PROPERTY accident4AMAGE $ $ C X UMBRELLA LIAB EXCESS LIAB X OCCUR CLAIMS -MADE ESA56435941 03/31/2016 03/31/2017 EACH OCCURRENCE $ 3,000,000 AGGREGATE $ 3,000,000 DED X RETENTION $ 0 $ D WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBERoIEXCLUDED? If yes, describe under DESCRIPTION OF OPERATIONS below Y / N N NIA X 909984716 05/17/2016 05/17/2017 X PER STATUTE OTH- ER E.L. EACH ACCIDENT 1,000,000 $ E.L. DISEASE - EA EMPLOYEE 1,000,000 $ E.L. DISEASE - POLICY LIMIT 1,000,000 $ DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Re: Collection Agency Services The City of National City is named as Additional Insured under the General Liability and Auto Liability per the Additional Insured form CG8810 0413 and CA8810 0113 as respects to Operations of the Named Insured. General Liability coverage is Primary per form CG8810 0413. Waiver of Subrogation applies to the Workers Compensation per attached form. *THIS CERTIFICATE REVISES AND SUPERCEDES THE CERTIFICATE ISSUED ON 10/25/16* CERTIFICATE HOLDER CANC Cityof National CityTHE C/O Risk Manager 1243 National City Blvd. National City, CA 91950-4397 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHOR/ZED REEPRESENTATIVE 144 ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD COMMERCIAL AUTO CA 88 10 01 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BUSINESS AUTO COVERAGE ENHANCEMENT ENDORSEMENT This endorsement modifies insurance provided under the following: BUSINESS AUTO COVERAGE FORM With respect to coverage afforded by this endorsement, the provisions of the policy apply unless modified by the endorsement. COVERAGE INDEX SUBJECT PROVISION NUMBER ADDITIONAL INSURED BY CONTRACT, AGREEMENT OR PERMIT 3 ACCIDENTAL AIRBAG DEPLOYMENT 12 AMENDED DUTIES IN THE EVENT OF ACCIDENT, CLAIM, SUIT OR LOSS 19 AMENDED FELLOW EMPLOYEE EXCLUSION 5 AUDIO, VISUAL AND DATA ELECTRONIC EQUIPMENT COVERAGE 13 BROAD FORM INSURED 1 BODILY INJURY REDEFINED 22 EMPLOYEES AS INSUREDS (including employee hired auto) 2 EXTENDED CANCELLATION CONDITION 23 EXTRA EXPENSE - BROADENED COVERAGE 10 GLASS REPAIR - WAIVER OF DEDUCTIBLE 15 HIRED AUTO PHYSICAL DAMAGE (including employee hired auto and loss of use) 6 HIRED AUTO COVERAGE TERRITORY 20 LOAN / LEASE GAP 14 PARKED AUTO COLLISION COVERAGE (WAIVER OF DEDUCTIBLE) 16 PERSONAL EFFECTS COVERAGE 11 PHYSICAL DAMAGE - ADDITIONAL TRANSPORTATION EXPENSE COVERAGE 8 RENTAL REIMBURSEMENT 9 SUPPLEMENTARY PAYMENTS 4 TOWING AND LABOR 7 TWO OR MORE DEDUCTIBLES 17 UNINTENTIONAL FAILURE TO DISCLOSE HAZARDS 18 WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US 20 SECTION 11 • LIABILITY COVERAGE is amended as follows: 1. BROAD FORM INSURED SECTION II - LIABILITY COVERAGE, paragraph A.1. - WHO IS AN INSURED is amended to include the following as an insured: d. Any legally incorporated entity of which you own more than 50 percent of the voting stock during the policy period. However, "insured" does not include any organization that: (1) Is a partnership or joint venture; or (2) Is an insured under any other automobile policy; or (3) Has exhausted its Limit of Insurance under any other automobile policy. Paragraph d. (2) of this provision does not apply to a policy written to apply specifically in excess of this policy. e. Any organization you newly acquire or form, other than a partnership or joint venture, of which you own more than 50 percent of the voting stock. This automatic coverage is afforded only for 180 days from the date of acquisition or formation. However, coverage under this provision does not apply: (1) If there is similar insurance or a self -insured retention plan available to that organization; CA88100113 d 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 7 • (2) If the Limits of Insurance of any other insurance policy have been exhausted; or (3) To "bodily injury" or "property damage" that occurred before you acquired or formed the organization. 2. EMPLOYEES AS INSUREDS SECTION II - LIABILITY COVERAGE, paragraph A.1. - WHO IS AN INSURED is amended to include the following as an insured: f. Any "employee" of yours while using a covered "auto" you do not own, hire or borrow, but only for acts within the scope of their employment by you. Insurance provided by this endorse- ment is excess over any other insurance available to any "employee". g. An "employee" of yours while operating an auto hired or borrowed under a written contract or agreement in that "employee's" name, with your permission, while performing duties re- lated to the conduct of your business and within the scope of their employment. Insurance provided by this endorsement is excess over any other insurance available to the "employee". 3. ADDITIONAL INSURED BY CONTRACT, AGREEMENT OR PERMIT SECTION II - LIABILITY COVERAGE, paragraph A.1. • WHO IS AN INSURED is amended to include the following as an insured: h. Any person or organization with respect to the operation, maintenance or use of a covered "auto", provided that you and such person or organization have agreed in a written contract, agreement, or permit issued to you by governmental or public authority, to add such person, or organization, or governmental or public authority to this policy as an "insured". However, such person or organization is an "insured": (1) Only with respect to the operation, maintenance or use of a covered "auto"; (2) Only for "bodily injury" or "property damage" caused by an "accident" which takes place after you executed the written contract or agreement, or the permit has been Issued to you; and (3) Only for the duration of that contract, agreement or permit 4. SUPPLEMENTARY PAYMENTS SECTION II - LIABILITY COVERAGE, Coverage Extensions, 2.a. Supplementary Payments, para- graphs (2) and (4) are replaced by the following: (2) Up to $3,000 for cost of bail bonds (including bonds for related traffic violations) required because of an "accident" we cover. We do not have to furnish these bonds. (4) All reasonable expenses incurred by the insured at our request, including actual loss of earn- ings up to $500 a day because of time off from work. 5. AMENDED FELLOW EMPLOYEE EXCLUSION In those jurisdictions where, by law, fellow employees are not entitled to the protection afforded to the employer by the workers compensation exclusivity rule, or similar protection, the following provision is added: SECTION II - LIABILITY, exclusion B.5. FELLOW EMPLOYEE does not apply if the "bodily injury" results from the use of a covered "auto" you own or hire. SECTION III - PHYSICAL DAMAGE COVERAGE is amended as follows: B. HIRED AUTO PHYSICAL DAMAGE Paragraph A.4. Coverage Extensions of SECTION III - PHYSICAL DAMAGE COVERAGE, is amended by adding the following: if hired "autos" are covered "autos" for Liability Coverage, and if Comprehensive, Specified Causes of Loss or Collision coverage are provided under the Business Auto Coverage Form for any "auto" you own, then the Physical Damage coverages provided are extended to "autos": a. You hire, rent or borrow; or CA88100113 ® 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 2 of 7 b. Your "employee" hires or rents under a written contract or agreement in that "employee's" name, but only if the damage occurs while the vehicle is being used in the conduct of your business, subject to the following limit and deductible: A. The most we will pay for "loss" in any one "accident" or "loss" is the smallest of: (1) $50,000; or (2) The actual cash value of the damaged or stolen property as of the time of the "loss"; or (3) The cost of repairing or replacing the damaged or stolen property with other property of like kind and quality, minus a deductible. B. The deductible will be equal to the largest deductible applicable to any owned "auto" for that coverage, C. Subject to the limit, deductible and excess provisions described in this provision, we will provide coverage equal to the broadest coverage applicable to any covered "auto" you own. D. Subject to a maximum of $1,000 per "accident", we will also cover the actual loss of use of the hired "auto" if it results from an "accident", you are legally liable and the lessor incurs an actual financial loss. E. This coverage extension does not apply to: (1) Any "auto" that is hired, rented or borrowed with a driver; or (2) Any "auto" that is hired, rented or borrowed from your "employee", For the purposes of this provision, SECTION V - DEFINITIONS is amended by adding the following: "Total loss" means a "loss" in which the cost of repairs plus the salvage value exceeds the actual cash value. 7. TOWING AND LABOR SECTION IiI - PHYSICAL DAMAGE COVERAGE, paragraph A.2. Towing, is amended by the addition of the following: We will pay towing and labor costs incurred, up to the limits shown below, each time a covered "auto" classified and rated as a private passenger type, "light truck" or "medium truck" is dis- abled: a. For private passenger type vehicles, we will pay up to $50 per disablement. b. For "light trucks", we will pay up to $50 per disablement. "Light trucks" are trucks that have a gross vehicle weight (GVW) of 10,000 pounds or less. c. For "medium trucks" , we will pay up to $150 per disablement. "Medium trucks" are trucks that have a gross vehicle weight (G VW) of 10,001 - 20,000 pounds. However, the labor must be performed at the place of disablement. 8. PHYSICAL DAMAGE • ADDITIONAL TRANSPORTATION EXPENSE COVERAGE Paragraph A.4.0., Coverage Extension of SECTION I11 - PHYSICAL DAMAGE COVERAGE, is amend- ed to provide a limit of $50 per day and a maximum limit of $1,500 CA 88 10 01 13 ® 2013 Liberty Mutual Insurance includes copyrighted material of Insurance Services office, Inc-, with its permission. Page 3 of 7 r 9. RENTAL REIMBURSEMENT SECTION ID - PHYSICAL DAMAGE COVERAGE, A. COVERAGE, is amended by adding the following: a. We will pay up to $75 per day for rental reimbursement expenses incurred by you for the rental of an "auto" because of "accident" or "loss", to an "auto" for which we also pay a "loss" under Comprehensive, Specified Causes of Loss or Collision Coverages. We will pay only for those expenses incurred after the first 24 hours following the "accident" or "loss" to the covered "auto." b. Rental Reimbursement will be based on the rental of a comparable vehicle, which in many cases may be substantially less than $75 per day, and will only be allowed for the period of time it should take to repair or replace the vehicle with reasonable speed and similar quality, up to a maximum of 30 days. c. We will also pay up to $500 for reasonable and necessary expenses incurred by you to remove and replace your tools and equipment from the covered "auto". d. This coverage does not apply unless you have a business necessity that other "autos" avail- able for your use and operation cannot fill. e. If "loss" results from the total theft of a covered "auto" of the private passenger type, we will pay under this coverage only that amount of your rental reimbursement expenses which is not already provided under Paragraph 4. Coverage Extension. f. No deductible applies to this coverage. For the purposes of this endorsement provision, materials and equipment do not include "personal effects" as defined in provision 11. 10. EXTRA EXPENSE - BROADENED COVERAGE Under SECTION 111- PHYSICAL DAMAGE COVERAGE, A. COVERAGE, we will pay for the expense of returning a stolen covered "auto" to you. The maximum amount we will pay is $1,000. 11. PERSONAL EFFECTS COVERAGE A. SECTION 111 - PHYSICAL DAMAGE COVERAGE, A. COVERAGE, is amended by adding the following: If you have purchased Comprehensive Coverage on this policy for an "auto" you own and that "auto" is stolen, we will pay, without application of a deductible, up to $600 for "personal effects" stolen with the "auto," The insurance provided under this provision is excess over any other collectible insurance. B. SECTION V - DEFINITIONS is amended by adding the following: For the purposes of this provision, "personal effects" mean tangible property that is worn or carried by an insured." "Personal effects" does not include tools, equipment, jewelry, money or securities. 12. ACCIDENTAL AIRBAG DEPLOYMENT SECTION III - PHYSICAL DAMAGE COVERAGE, B. EXCLUSIONS is amended by adding the follow- ing: If you have purchased Comprehensive or Collision Coverage under this policy, the exclusion for "loss" relating to mechanical breakdown does not apply to the accidental discharge of an airbag. Any insurance we provide shall be excess over any other collectible insurance or reimbursement by manufacturer's warranty. However, we agree to pay any deductible applicable to the other cov- erage or warranty. 13. AUDIO. VISUAL AND DATA ELECTRONIC EQUIPMENT COVERAGE SECTION III - PHYSICAL DAMAGE COVERAGE, B. EXCLUSIONS, exception paragraph a. to exclu- sions 4.c. and 4.d. is deleted and replaced with the following: CA88100113 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 4 of 7 Exclusion 4.c. and 4.d. do not apply to: a. Electronic equipment that receives or transmits audio, visual or data signals, whether or not designed solely for the reproduction of sound, if the equipment is permanently installed in the covered "auto" at the time of the "loss" and such equipment is designed to be solely operated by use of the power from the "auto's" electrical system, in or upon the covered "auto" and physical damage coverages are provided for the covered "auto"; or If the "loss" occurs solely to audio, visual or data electronic equipment or accessories used with this equipment, then our obligation to pay for, repair, return or replace damaged or stolen property will be reduced by a $100 deductible. 14. LOAN / LEASE GAP COVERAGE A. Paragraph C., LIMIT OF INSURANCE of SECTION III - PHYSICAL DAMAGE COVERAGE is amended by adding the following: The most we will pay for a "total loss" to a covered "auto" owned by or leased to you in any one "accident" is the greater of the: 1. Balance due under the terms of the loan or lease to which the damaged covered "auto" is subject at the time of the "loss" less the amount of: a. Overdue payments and financial penalties associated with those payments as of the date of the "loss", b. Financial penalties imposed under a lease due to high mileage, excessive use or ab- normal wear and tear, c. Costs for extended warranties, Credit Life Insurance, Health, Accident or Disability Insurance purchased with the loan or lease, d. Transfer or rollover balances from previous loans or leases, e. Final payment due under a "Balloon Loan", f. The dollar amount of any unrepaired damage which occurred prior to the "total loss" of a covered "auto", g. Security deposits not refunded by a lessor, h. All refunds payable or paid to you as a result of the early termination of a lease agreement or as a result of the early termination of any warranty or extended service agreement on a covered "auto", i. Any amount representing taxes, j. Loan or lease termination fees; or 2. The actual cash value of the damage or stolen property as of the time of the "loss". An adjustment for depreciation and physical condition will be made In determining the actual cash value at the time of the "loss". This adjustment is not applicable in Texas. B. ADDITIONAL CONDITIONS This coverage applies only to the original loan for which the covered "auto" that incurred the Toss serves as collateral, or lease written on the covered "auto" that incurred the loss. C. SECTION V - DEFINTIONS is changed by adding the following: As used in this endorsement provision, the following definitions apply: "Total Toss" means a "loss" in which the cost of repairs plus the salvage value exceeds the actual cash value. A "balloon loan" is one with periodic payments that are insufficient to repay the balance over the term of the loan, thereby requiring a large final payment. r CAEta 100113 ® 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, inc., with its permission. Page 5 of 7 1 15. GLASS REPAIR - WAIVER OF DEDUCTIBLE Paragraph D. Deductible of SECTION III - PHYSICAL DAMAGE COVERAGE is amended by the addition of the following: No deductible applies to glass damage if the glass is repaired rather than replaced. 16. PARKED AUTO COLLISION COVERAGE (WAIVER OF DEDUCTIBLE) Paragraph D. Deductible of SECTION III - PHYSICAL DAMAGE COVERAGE is amended by the addition of the following: The deductible does not apply to "loss" caused by collision to such covered "auto" of the private passenger type or light weight truck with a gross vehicle weight of 10,000 lbs. or less as defined by the manufacturer as maximum loaded weight the "auto" is designed to carry while it is: a. In the charge of an "insured"; b. Legally parked; and c. Unoccupied. The "loss" must be reported to the police authorities within 24 hours of known damage. The total amount of the damage to the covered "auto" must exceed the deductible shown In the Declarations. This provision does not apply to any "loss" if the covered "auto" is in the charge of any person or organization engaged in the automobile business. 17. TWO OR MORE DEDUCTIBLES Under SECTION III PHYSICAL DAMAGE COVERAGE, if two or more company policies or coverage forms apply to the same accident, the following applies to paragraph D. Deductible: a. If the applicable Business Auto deductible is the smaller (or smallest) deductible it will be waived; or b. If the applicable Business Auto deductible is not the smaller (or smallest) deductible it will be reduced by the amount of the smaller (or smallest) deductible; or c. If the loss involves two or more Business Auto coverage forms or policies the smaller (or smallest) deductible will be waived. For the purpose of this endorsement company means any company that is part of the Liberty Mutual Group. SECTION IV - BUSINESS AUTO CONDITIONS Is amended as follows: 18. UNINTENTIONAL FAILURE TO DISCLOSE HAZARDS SECTION IV- BUSINESS AUTO CONDITIONS, Paragraph B.2. is amended by adding the following: If you unintentionally fail to disclose any hazards, exposures or material facts existing as of the inception date or renewal date of the Business Auto Coverage Form, the coverage afforded by this policy will not be prejudiced. However, you must report the undisclosed hazard of exposure as soon as practicable after its discovery, and we have the right to collect additional premium for any such hazard or exposure. 19. AMENDED DUTIES IN THE EVENT OF ACCIDENT, CLAIM, SUIT, OR LOSS SECTION IV - BUSINESS AUTO CONDITIONS, paragraph A.2.a. Is replaced in its entirety by the following: a. In the event of "accident", claim, "suit" or "loss", you must promptly notify us when it is known to: 1. You, if you are an individual; 2. A partner, if you are a partnership; 3. Member, if you are a limited liability company; 4. An executive officer or the "employee" designated by the Named Insured to give such notice, if you are a corporation. CA 88 10 01 13 11) 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services office, Inc., with Its permission. Page 6 of 7 If you die, your rights and duties under this policy will be transferred to your legal repre- sentative but only while acting within the scope of duties as your legal representative. Until your legal representative is appointed, anyone having proper temporary custody of your property will have your rights and duties but only with respect to that property. IL00171198 Copyright, Insurance Services Office, Inc., 1998 Page 2 of 2 COMMERCIAL GENERAL LIABILITY CG88100413 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. COMMERCIAL GENERAL LIABILITY EXTENSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART INDEX SUBJECT PAGE NON -OWNED AIRCRAFT 2 NON -OWNED WATERCRAFT 2 PROPERTY DAMAGE LIABILITY - ELEVATORS 2 EXTENDED DAMAGE TO PROPERTY RENTED TO YOU (Tenant's Property Damage) 2 MEDICAL PAYMENTS EXTENSION 3 EXTENSION OF SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 3 ADDITIONAL INSUREDS - BY CONTRACT, AGREEMENT OR PERMIT 3 PRIMARY AND NON-CONTRIBUTORY- ADDITIONAL INSURED EXTENSION 5 ADDITIONAL INSUREDS - EXTENDED PROTECTION OF YOUR "LIMITS OF INSURANCE" 6 WHO IS AN INSURED - INCIDENTAL MEDICAL ERRORS/MALPRACTICE AND WHO IS AN INSURED - FELLOW EMPLOYEE EXTENSION - MANAGEMENT EMPLOYEES 6 NEWLY FORMED OR ADDITIONALLY ACQUIRED ENTITIES 7 FAILURE TO DISCLOSE HAZARDS AND PRIOR OCCURRENCES 7 KNOWLEDGE OF OCCURRENCE, OFFENSE, CLAIM OR SUIT 7 LIBERALIZATION CLAUSE 7 BODILY INJURY REDEFINED 7 EXTENDED PROPERTY DAMAGE 8 WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US - 8 WHEN REQUIRED IN A CONTRACT OR AGREEMENT WITH YOU 2013 Liberty Mutual Insurance CG 88 10 04 13 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 8 With respect to coverage afforded by this endorsement, the provisions of the policy apply unless modified by the endorsement. A. NON -OWNED AIRCRAFT Under Paragraph 2. Exclusions of Section 1 - Coverage A - Bodily Injury And Property Damage Liability, exclusion g. Aircraft, Auto Or Watercraft does not apply to an aircraft provided: 1. It is not owned by any insured; 2. It is hired, chartered or loaned with a trained paid crew; 3. The pilot in command holds a currently effective certificate, issued by the duly constituted authority of the United States of America or Canada, designating her or him a commercial or airline pilot; and 4. It is not being used to carry persons or property for a charge. However, the insurance afforded by this provision does not apply if there is available to the insured other valid and collectible insurance, whether primary, excess (other than insurance written to apply specifically in excess of this policy), contingent or on any other basis, that would also apply to the Toss covered under this provision. B. NON -OWNED WATERCRAFT Under Paragraph 2. Exclusions of Section I • Coverage A - Bodily Injury And Property Damage Liability, Subparagraph (2) of exclusion g. Aircraft, Auto Or Watercraft is replaced by the following: This exclusion does not apply to: (2) A watercraft you do not own that is: (a) Less than 52 feet long; and (b) Not being used to carry persons or property for a charge. C. PROPERTY DAMAGE LIABILITY - ELEVATORS 1. Under Paragraph 2. Exclusions of Section I - Coverage A - Bodily injury And Property Damage Liabil- ity, Subparagraphs (3), (4) and (6) of exclusion j. Damage To Property do not apply if such "property damage" results from the use of elevators. For the purpose of this provision, elevators do not include vehicle lifts. Vehicle lifts are lifts or hoists used in automobile service or repair operations. 2. The following is added to Section IV - Commercial General Liability Conditions, Condition 4. Other Insurance, Paragraph b. Excess insurance: The insurance afforded by this provision of this endorsement is excess over any property insurance, whether primary, excess, contingent or on any other basis. D. EXTENDED DAMAGE TO PROPERTY RENTED TO YOU (Tenant's Property Damage) If Damage To Premises Rented To You is not otherwise excluded from this Coverage Part: 1. Under Paragraph 2. Exclusions of Section I - Coverage A - Bodily Injury and Property Damage Liability: a. The fourth from the last paragraph of exclusion j. Damage To Property is replaced by the follow- ing: Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire, lightning, explosion, smoke, or leakage from an automatic fire protection system) to: (i) Premises rented to you for a period of 7 or fewer consecutive days; or (ii) Contents that you rent or lease as part of a premises rental or lease agreement for a period of more than 7 days. Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" to contents of premises rented to you for a period of 7 or fewer consecutive days. A separate limit of insurance applies to this coverage as described in Section IIi - Limits of Insurance. CG8810ad13 ® 2013 Liberty Mutual Insurance Inelnriac,nnvrinhtad matorial of InC,iranra SArvirac affirm:}Inn_ with its nermission. Pane 2of8 b. The last paragraph of subsection 2. Exclusions is replaced by the following: Exclusions c. through n. do not apply to damage by fire, lightning, explosion, smoke or leakage from automatic fire protection systems to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III - Limits Of Insurance. 2. Paragraph 6. under Section III - Limits Of insurance is replaced by the following: 6. Subject to Paragraph 5. above, the Damage To Premises Rented To You Limit Is the most we will pay under Coverage A for damages because of "property damage" to: a. Any one premise: (1) While rented to you; or (2) While rented to you or temporarily occupied by you with permission of the owner for damage by fire, lightning, explosion, smoke or leakage from automatic protection sys- tems; or b. Contents that you rent or lease as part of a premises rental or lease agreement. 3. As regards coverage provided by this provision D. EXTENDED DAMAGE TO PROPERTY RENTED TO YOU (Tenant's Property Damage) - Paragraph 9.a. of Definitions is replaced with the following: 9.a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire, lightning, explosion, smoke, or leakage from automatic fire protection systems to premises while rented to you or temporarily occupied by you with the permission of the owner, or for damage to contents of such premises that are included in your premises rental or lease agreement, is not an "insured contract". E. MEDICAL PAYMENTS EXTENSION If Coverage C Medical Payments is not otherwise excluded, the Medical Payments provided by this policy are amended as follows: Under Paragraph 1. Insuring Agreement of Section I - Coverage C - Medical Payments. Subparagraph (b) of Paragraph a. is replaced by the following: (b) The expenses are incurred and reported within three years of the date of the accident; and F. EXTENSION OF SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 1. Under Supplementary Payments - Coverages A and B, Paragraph 1.b. is replaced by the following: b. Up to $3,000 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. 2. Paragraph 1.d. is replaced by the following: d. Alt reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $500 a day because of time off from work. G. ADDITIONAL INSUREDS - BY CONTRACT, AGREEMENT OR PERMIT 1. Paragraph 2. under Section 11- Who Is An Insured is amended to include as an insured any person or organization whom you have agreed to add as an additional insured in a written contract, written agreement or permit. Such person or organization is an additional Insured but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused in whole or in part by: a. Your acts or omissions, or the acts or omissions of those acting on your behalf, in the performance of your on going operations for the additional insured that are the subject of the written contract or written agreement provided that the "bodily injury" or "property damage" occurs, or the "per- sonal and advertising injury" is committed, subsequent to the signing of such written contract or written agreement; or CG88100413 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 3 of 8 b. Premises or facilities rented by you or used by you; or c. The maintenance, operation or use by you of equipment rented or leased to you by such person or organization; or d. Operations performed by you or on your behalf for which the state or political subdivision has issued a permit subject to the following additional provisions: (1) This insurance does not apply to "bodily injury", "property damage", or "personal and ad- vertising injury" arising out of the operations performed for the state or political subdivision; (2) This insurance does not apply to "bodily injury" or "property damage" included within the "completed operations hazard". Insurance applies to premises you own, rent, or control but only with respect to the following hazards: (3) (a) The existence, maintenance, repair, construction, erection, or removal of advertising signs, awnings, canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoist away openings, sidewalk vaults, street banners, or decorations and similar expo- sures; or (b) The construction, erection, or removal of elevators; or (c) The ownership, maintenance, or use of any elevators covered by this Insurance. However: 1. The insurance afforded to such additional insured only applies to the extent permitted by law; and 2. If coverage provided to the additional insured is required by a contract or agreement, the insur- ance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured. With respect to Paragraph 1.a. above, a person's or organization's status as an additional insured under this endorsement ends when: (1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insureds) at the location of the covered operations has been completed; or (2) That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations fora principal as a part of the same project. With respect to Paragraph 1.b. above, a person's or organization's status as an additional insured under this endorsement ends when their written contract or written agreement with you for such premises or facilities ends. With respects to Paragraph 1.c. above, this insurance does not apply to any "occurrence" which takes place after the equipment rental or lease agreement has expired or you have returned such equipment to the lessor. The insurance provided by this endorsement applies only if the written contract or written agreement is signed prior to the "bodily injury" or "property damage". We have no duty to defend an additional insured under this endorsement until we receive written notice of a "suit" by the additional insured as required in Paragraph b. of Condition 2. Duties In the Event Of Occurrence, Offense, Claim Or Suit under Section IV - Commercial General Liability Condi- tions. CG88100413 ® 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its Remission. Page 4 of 8 2. With respect to the insurance provided by this endorsement, the following are added to Paragraph 2. Exclusions under Section I - Coverage A - Bodily Injury And Property Damage Liability: This insurance does not apply to: a. "Bodily injury" or "property damage" arising from the sole negligence of the additional insured. b. "Bodily injury" or "property damage" that occurs prior to you commencing operations at the location where such "bodily injury" or "property damage" occurs. c. "Bodily injury", "property damage" or "personal and advertising injury" arising out of the render- ing of, or the failure to render, any professional architectural, engineering or surveying services, including: (1) The preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or (2) Supervisory, inspection, architectural or engineering activities. This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occur- rence" which caused the "bodily injury" or "property damage", or the offense which caused the "personal and advertising injury", involved the rendering of, or the failure to render, any professional architectural, engineering or surveying services. d. "Bodily injury" or "property damage" occurring after: (1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or (2) That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. e. Any person or organization specifically designated as an additional insured for ongoing operations by a separate ADDITIONAL INSURED -OWNERS, LESSEES OR CONTRACTORS endorsement is- sued by us and made a part of this policy. 3. With respect to the insurance afforded to these additional insureds, the following is added to Section 111 - Limits Of Insurance: If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance: a. Required by the contract or agreement; or b. Available under the applicable Limits of Insurance shown in the Declarations; whichever is less. This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations. H. PRIMARY AND NON-CONTRIBUTORY ADDITIONAL INSURED EXTENSION This provision applies to any person or organization who qualifies as an additional insured under any form or endorsement under this policy. Condition 4. Other Insurance of SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS is amend- ed as follows: a. The following is added to Paragraph a. Primary Insurance: if an additional insured's policy has an Other Insurance provision making its policy excess, and you have agreed in a written contract or written agreement to provide the additional insured coverage on a primary and noncontributory basis, this policy shall be primary and we will not seek contribution from the additional insured's policy for damages we cover. CG88100413 2013 Liberty Mutual insurance includes coovrighted material of Insurance Services Office. Ina., with its permission. Page 5 of 8 b. The following is added to Paragraph b. Excess insurance: When a written contract or written agreement, other than a premises lease, facilities rental contract or agreement, an equipment rental or lease contract or agreement, or permit issued by a state or political subdivision between you and an addition& insured does not require this insurance to be primary or primary and non-contributory, this insurance is excess over any other insurance for which the addi- tional insured is designated as a Named Insured. Regardless of the written agreement between you and an additional insured, this insurance is excess over any other insurance whether primary, excess, contingent or on any other basis for which the additional insured has been added as an additional insured on other policies. I. ADDITIONAL INSUREDS - EXTENDED PROTECTION OF YOUR "LIMITS OF INSURANCE" This provision applies to any person or organization who qualifies as an additional insured under any form or endorsement under this policy. 1. The following is added to Condition 2. Duties In The Event Of Occurrence, Offense, Claim or Suit: An additional insured under this endorsement will as soon as practicable: a. Give written notice of an "occurrence" or an offense that may result in a claim or "suit" under this insurance to us; b. Tender the defense and indemnity of any claim or "suit" to all insurers whom also have insurance available to the additional insured; and c. Agree to make available any other insurance which the additional insured has for a loss we cover under this Coverage Part. d. We have no duty to defend or indemnify an additional insured under this endorsement until we receive written notice of a "suit" by the additional insured. 2. The limits of insurance applicable to the addition& insured are those specified in a written contract or written agreement or the limits of insurance as stated in the Declarations of this policy and defined in Section III - Limits of Insurance of this policy, whichever are Tess. These limits are inclusive of and not in addition to the limits of insurance available under this policy. J. WHO IS AN INSURED - INCIDENTAL MEDICAL ERRORS / MALPRACTICE WHO IS AN INSURED - FELLOW EMPLOYEE EXTENSION - MANAGEMENT EMPLOYEES Paragraph 2.a.(1) of Section II - Who Is An Insured is replaced with the following: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), to a co -"employee" while in the course of his or her employ- ment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co -"employee" or "volunteer worker" as a consequence of Paragraph (1) (a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1) (a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. However, if you are not in the business of providing professional health care services or providing profes- sional health care personnel to others, or if coverage for providing professional health care ser- vices is not otherwise excluded by separate endorsement, this provision (Paragraph (d)) does not apply. Paragraphs (a) and (b) above do not apply to "bodily injury" or "personal and advertising injury" caused by an "employee" who is acting in a supervisory capacity for you. Supervisory capacity as used herein means the "employee's" job responsibilities assigned by you, includes the direct supervision of other "employ- ees" of yours. However, none of these "employees" are insureds for "bodily injury" or "personal and CG 88 10 04 13 @ 2013 Liberty Mutual Insurance Innhi,lac nnnvriahted rnnferial of Inei.ranno CanJinRa rlffine Inn with Ile nsrrnieeinn Panel! R of R advertising Injury" arising out of their willful conduct, which is defined as the purposeful or willful intent to cause "bodily injury" or "personal and advertising injury", or caused in whole or in part by their Intoxica- tion by liquor or controlled substances. The coverage provided by provision J. is excess over any other valid and collectable insurance available to your "employee". K. NEWLY FORMED OR ADDITIONALLY ACQUIRED ENTITIES Paragraph 3. of Section II - Who Is An Insured is replaced by the following: 3. Any organization you newly acquire or form and over which you maintain ownership or majority interest, will qualify as a Named Insured if there is no other similar insurance available to that organization. However: a. Coverage under this provision is afforded only until the expiration of the policy period in which the entity was acquired or formed by you; b. Coverage A does not apply to "bodily injury" or "property damage" that occurred before you acquired or formed the organization; and c, Coverage B does not apply to "personal and advertising injury" arising out of an offense committed before you acquired or formed the organization. d. Records and descriptions of operations must be maintained by the first Named Insured. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations or qualifies as an insured under this provision. L. FAILURE TO DISCLOSE HAZARDS AND PRIOR OCCURRENCES Under Section IV - Commercial General Liability Conditions, the following is added to Condition B. Repre- sentations: Your failure to disclose all hazards or prior "occurrences" existing as of the Inception date of the policy shall not prejudice the coverage afforded by this policy provided such failure to disclose all hazards or prior "occurrences" is not intentional. M. KNOWLEDGE OF OCCURRENCE, OFFENSE, CLAIM OR SUIT Under Section IV - Commercial General Liability Conditions, the following is added to Condition 2. Duties In The Event of Occurrence, Offense, Claim Or Suit: Knowledge of an "occurrence", offense, claim or "suit" by an agent, servant or "employee" of any insured shall not in itself constitute knowledge of the insured unless an insured listed under Paragraph 1, of Section 11- Who Is An Insured or a person who has been designated by them to receive reports of "occurrences", offenses, claims or "suits" shall have received such notice from the agent, servant or "employee". N. LIBERALIZATION CLAUSE If we revise this Commercial General Liability Extension Endorsement to provide more coverage without additional premium charge, your policy will automatically provide the coverage as of the day the revision is effective in your state. O. BODILY INJURY REDEFINED Under Section V - Definitions, Definition 3. is replaced by the following: 3. "Bodily injury" means physical injury, sickness or disease sustained by a person. This includes mental anguish, mental injury, shock, fright or death that results from such physical injury, sick- ness or disease. CG88100413 ©' 2013 Liberty Mutual insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission, Page 7 of 8 P. EXTENDED PROPERTY DAMAGE Exclusion a. of COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY is replaced by the following: a. Expected Or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" or "property damage" resulting from the use of reasonable force to protect persons or property. Q. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US - WHEN REQUIRED IN A CONTRACT OR AGREEMENT WITH YOU Under Section IV - Commercial General Liability Conditions, the following is added to Condition 8.Trans- fer Of Rights Of Recovery Against Others To Us: We waive any right of recovery we may have against a person or organization because of payments we make for injury or damage arising out of your ongoing operations or "your work" done under a contract with that person or organization and included in the "products -completed operations hazard" provided: 1. You and that person or organization have agreed in writing in a contract or agreement that you waive such rights against that person or organization; and 2. The injury or damage occurs subsequent to the execution of the written contract or written agree- ment. CG 8810 04 13 2013 Liberty Mutual Insurance Includes coovriohted material of Insurance Services Office, InC., with its permission. Page 8 of 8 RESOLUTION NO. 2016 — 204 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH FINANCIAL CREDIT NETWORK, INC., FOR DEBT COLLECTION SERVICES FOR A THREE-YEAR TERM WITH AN OPTION TO EXTEND FOR TWO ADDITIONAL ONE-YEAR TERMS WHEREAS, the City desires to employ a consultant to provide debt collection services for collection of delinquent indebtedness owed to the City; and WHEREAS, the City has determined that Financial Credit Network, Inc., is a professional collection agency and is qualified by experience and ability to perform the services desired by the City; and WHEREAS, Financial Credit Network, Inc., is willing to perform such services for a period of three years with an option to extend for two additional one-year terms. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute an Agreement with Financial Credit Network, Inc., for debt collection services for collection of delinquent indebtedness owed to the City for a term of three -years with an option to extend for two additional one-year terms. Said Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 6th day of December APPROVED AS TO FORM: George H. Eiser, III Interim City Attorney 1 6. on Morrison, Mayor Passed and adopted by the Council of the City of National City, California, on December 6, 2016 by the following vote, to -wit: Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California f/ J Jerk of the it of fV City y ational City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2016-204 of the City of National City, California, passed and adopted by the Council of said City on December 6, 2016. City Clerk of the City of National City, California By: Deputy C fd 016-5 CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT MEETING DATE: December 6, 2016 AGENDA ITEM NO. 38 ITEM TITLE: Resolution of the City Council of the City of National City authorizing the Mayor to execute an agreement with Financial Credit Network, Inc. for collection services for the period December 6, 2016 through June 30, 2019 with two additional one-year options. PREPARED BY: Mark Roberts, Director of Finance PHONE: 619-336-4265 EXPLANATION: See attached staff report. FINANCIAL STATEMENT: ACCOUNT NO. NA DEPARTMENT: Finance���� APPROVED BY: ; 41 ��i APPROVED: `' a Finance APPROVED: MIS ENVIRONMENTAL REVIEW: This is not a project and, therefore, not subject to environmental review. ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Adopt the resolution, authorizing the Mayor to execute the agreement with Financial Credit Network, Inc. for collection services for the period December 6, 2016 through June 30, 2019 with two additional one-year options. BOARD / COMMISSION RECOMMENDATION: NA ATTACHMENTS: 1. Staff Report 2. Financial Credit Network, Inc. Agreement 3. Resolution RF,s0l,1)I\00 N0• 0,ONG-`.104 CALIFORNIA NATIONAL.CITY / o` INCpO J ED City Council Staff Report December 6, 2016 ITEM Resolution of the City Council of the City of National City authorizing the Mayor to execute an agreement with Financial Credit Network, Inc. ("FCN") for collection services for the period December 6, 2016 through June 30, 2019 with two additional one-year options. BACKGROUND Historically, collection of delinquent indebtedness owed to the City has been conducted internally, i.e., by City staff. However, due to limited staff resources and the lack of specialized computer software for locating delinquent account holders, collection of delinquent indebtedness often is not pursued beyond the sending of delinquent letters, resulting in many revenues due the City going uncollected. In order to improve the collection rate of revenues due to the City, staff issued a request for proposals ("RfP") for collection services seeking the services of a professional collection agency to which the City could forward its oldest outstanding delinquent accounts for collection. The RfP was issued on April 12, 2016. DELINQUENT ACCOUNTS OUTSTANDING The table below lists the current numbers, average balances, and (overall) totals of delinquent indebtedness owed to the City by category. Account Category Delinquent Accounts Average Account Balance Total Non -Sufficient Fund Checks 219 $ 144 $ 31,598 Admin Citations 91 331 30,146 False Alarms 19 1,458 27,704 Fire Inspection Fees 68 340 23,141 Permits 6 5,336 32,017 Miscellaneous Receivables 30 1,560 46,787 Library Fines 8,078 21 169,058 Library Damage Fees 34 24 3,235 Library Overdue Fees 2,912 4 12,811 Library Lost Materials 3,619 64 232,706 Total $ 609,202 Page 2 Resolution of the City Council of the City of National City authorizing the Mayor to execute an agreement with Financial Credit Network, Inc. ("FCN") for collection services for the period December 6, 2016 through June 30, 2019 with two additional one-year options. December 6, 2016 REQUEST FOR PROPOSALS PROCESS As noted above, an RfP for collection services was issued on April 12, 2016. The RfP was sent to several firms and was posted on the City's website and the California Society of Municipal Finance Officers (CSMFO) website. Responses to the RfP were due by 5:00 pm on May 3, 2016. The City received two (2) proposals in response to the RfP. The firms submitting proposals, listed in alphabetical order, are: Access Capital Services, Inc. Financial Credit Network, Inc. Staff evaluated and ranked the proposals of both firms, based upon the following factors: • relevant experience with similar programs; • demonstrated knowledge of the work/services required; • proposed methodology; and • cost of services. After reviewing and considering each proposal, staff selected FCN as the highest-ranking firm. FINANCIAL CREDIT NETWORK Financial Credit Network, Inc., a California corporation, was founded in 1954 to service the collection needs of clients throughout the State of California. Since then, FCN has grown to serve more than 600 clients nationally, 63 of which are public sector clients in -California. RECOMMENDATION Staff recommends the City Council authorize the Mayor to execute the agreement with Financial Credit Network, Inc. for collection services for a three-year term with two additional one-year options. FISCAL IMPACT FCN'S collection fees will be based upon the type of delinquent account and amount collected, in accordance with the following schedule: Account Tie Collection Fee Administrative citations 24% Business licenses 24% False alarm billing 24% Property damage 24% Returned checks 24% Miscellaneous receivables 24% Court action for primary placement 34% Page 3 Resolution of the City Council of the City of National City authorizing the Mayor to execute an agreement with Financial Credit Network, Inc. ("FCN") for collection services for the period December 6, 2016 through June 30, 2019 with two additional one-year options. December 6, 2016 Transfer to an out -of -area collection agency 34% Franchise Tax Board finders' fee 8% Other account types same as above The City shall not incur any costs for collection services. All monies due shall be deducted from collections by FCN; however, the City shall be invoiced for all fees deducted. FCN's overall historical collection rate is 28%. Taking into account this success rate, FCN's fee schedule, and the current amounts and categories of delinquent indebtedness selected for referral, the estimated initial fiscal impact of the execution of this agreement will be (net) revenues of approximately $100,000. The estimated annual impact thereafter will be approximately $15,000. ATTACHMENTS Attachment 1 — Financial Credit Network, Inc. Agreement Attachment 2 — Resolution AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND FINANCIAL CREDIT NETWORK, INC. THIS AGREEMENT is entered into on this 6th day of December, 2016, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and FINANCIAL CREDIT NETWORK, INC., (the "CONSULTANT"), a California corporation. RECITALS WHEREAS, the CITY desires to employ a CONSULTANT to provide collection services for delinquent accounts receivable for the City. WHEREAS, the CITY has determined that the CONSULTANT is qualified by experience and ability to perform the services desired by the CITY, and the CONSULTANT is willing to perform such services. NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS: 1. ENGAGEMENT OF CONSULTANT. The CITY agrees to engage the CONSULTANT, and the CONSULTANT agrees to perform the services set forth here in accordance with all terms and conditions contained herein. The CONSULTANT represents that all services shall be performed directly by the CONSULTANT or under direct supervision of the CONSULTANT. 2. EFFECTIVE DATE AND LENGTH OF AGREEMENT. This Agreement will become effective on December 6, 2016. The duration of this Agreement is for the period of December 6, 2016 through June 30, 2019. This Agreement may be extended by mutual agreement upon the same terms and conditions for two (2) additional one (1) year terms. 3. SCOPE OF SERVICES. The CONSULTANT shall provide collection services for delinquent account receivables. The CONSULTANT will perform services as set forth in the attached Exhibit "A." The CONSULTANT shall not have full rights to accounts in that these accounts are due to the CITY. CONSULTANT shall be able to pursue collections, as permitted by applicable law, only on behalf of the CITY. CONSULTANT shall not have the authority to accept a compromise or settlement on any account without written consent of the Director of Finance, or designee. The CITY may establish parameters in which accounts may be setted by CONSULTANT on CITY's behalf. The CONSULTANT shall be responsible for all research and reviews related to the work and shall not rely on personnel of the CITY for such services, except as authorized in advance by the CITY. The CONSULTANT shall appear at meetings as specified in Exhibit "A" to keep staff and City Council advised of the progress on the Project. The CITY may unilaterally, or upon request from the CONSULTANT, from time to time reduce or increase the Scope of Services to be performed by the CONSULTANT under this Agreement. Upon doing so, the CITY and the CONSULTANT agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction or increase in the compensation associated with said change in services. 4. PROJECT COORDINATION AND SUPERVISION. The Director of Finance is designated as the Project Coordinator for the CITY and will monitor the progress and execution of this Agreement. The CONSULTANT shall assign a single Project Director to provide supervision and have overall responsibility for the progress and execution of this Agreement for the CONSULTANT. Kris Davisson is hereby designated as the Project Director for the CONSULTANT. The City reserves the right to perform periodic audits to ensure all amounts collected are accurately reported and remitted. The Director of Finance, or designee, shall be allowed access to CONSULTANT's debtor account information for the purpose of generating recovery analysis reports or auditing files at any time. 5. COMPENSATION AND PAYMENT. The compensation for the CONSULTANT is contingent upon collection of moniesby the CONSULTANT, as permitted by law, and shall be based on charges covering actual work performed in accordance with the fee rates in the attached Exhibit "B." All monies due to the CONSULTANT shall be deducted from collections received by the CONSULTANT; and the CONSULTANT shall submit a monthly invoice to the City documenting amounts collected and fees deducted on all accounts. The CONSULTANT shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred, and shall make such materials available at its office at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment under this Agreement, for inspection by the CITY, and for furnishing of copies to the CITY, if requested. 6. ACCEPTABILITY OF WORK. The City shall decide any and all questions which may arise as to the quality or acceptability of the services performed and the manner of performance, the acceptable completion of this Agreement, and the amount of compensation due. In the event the CONSULTANT and the City cannot agree to the quality or acceptability of the work, the manner of performance and/or the compensation payable to the CONSULTANT in this Agreement, the City or the CONSULTANT shall give to the other written notice. Within ten (10) business days, the CONSULTANT and the City shall each prepare a report which supports their position and file the same with the other party. The City shall, with reasonable diligence, determine the quality or acceptability of the work, the manner of performance, and/or the compensation payable to the CONSULTANT. 7. DISPOSITION AND OWNERSHIP OF DOCUMENTS. The Memoranda, Reports, Maps, Drawings, Plans, Specifications, and other documents prepared by the CONSULTANT for this Project, whether paper or electronic, shall become the property of the CITY for use with respect to this Project, and shall be turned over to the CITY upon completion of the Project, or any phase thereof, as contemplated by this Agreement. 2 Contemporaneously with the transfer of documents, the CONSULTANT hereby assigns to the CITY, and CONSULTANT thereby expressly waives and disclaims any copyright in, and the right to reproduce, all written material, drawings, plans, specifications, or other work prepared under this Agreement, except upon the CITY'S prior authorization regarding reproduction, which authorization shall not be unreasonably withheld. The CONSULTANT shall, upon request of the CITY, execute any further document(s) necessary to further effectuate this waiver and disclaimer. The CONSULTANT agrees that the CITY may use, reuse, alter, reproduce, modify, assign, transfer, or in any other way, medium, or method utilize the CONSULTANT'S written work product for the CITY'S purposes, and the CONSULTANT expressly waives and disclaims any residual rights granted to it by Civil Code Sections 980 through 989 relating to intellectual property and artistic works. Any modification or reuse by the CITY of documents, drawings, or specifications prepared by the CONSULTANT shall relieve the CONSULTANT from liability under Section 14, but only with respect to the effect of the modification or reuse by the CITY, or for any liability to the CITY should the documents be used by the CITY for some project other than what was expressly agreed upon within the Scope of this project, unless otherwise mutually agreed. 8. INDEPENDENT CONTRACTOR. Both parties hereto in the performance of this Agreement will be acting in an independent capacity and not as agents, employees, partners, or joint venturers with one another. Neither the CONSULTANT nor the CONSULTANT'S employees are employees of the CITY, and are not entitled to any of the rights, benefits, or privileges of the CITY'S employees, including but not limited to retirement, medical, unemployment, or workers' compensation insurance. This Agreement contemplates the personal services of the CONSULTANT and the CONSULTANT'S employees, and it is recognized by the parties that a substantial inducement to the CITY for entering into this Agreement was, and is, the professional reputation and competence of the CONSULTANT and its employees. Neither this Agreement nor any interest herein may be assigned by the CONSULTANT without the prior written consent of the CITY. Nothing herein contained is intended to prevent the CONSULTANT from employing or hiring as many employees, or SUBCONSULTANTS, as the CONSULTANT may deem necessary for the proper and efficient performance of this Agreement. All agreements by CONSULTANT with its SUBCONSULTANT(S) shall require the SUBCONSULTANT(S) to adhere to the applicable terms of this Agreement. 9. CONTROL. Neither the CITY nor its officers, agents, or employees shall have any control over the conduct of the CONSULTANT or any of the CONSULTANT'S employees, except as herein set forth, and the CONSULTANT or the CONSULTANT'S agents, servants, or employees are not in any manner agents, servants, or employees of the CITY, it being understood that the CONSULTANT its agents, servants, and employees are as to the CITY wholly independent CONSULTANT, and that the CONSULTANT'S obligations to the CITY are solely such as are prescribed by this Agreement. 3 10. COMPLIANCE WITH APPLICABLE LAW. The CONSULTANT, in the performance of the services to be provided herein, shall comply with all applicable state and federal statutes and regulations, including, but not limited to, the provisions of the federal Fair Debt Collection Practices Act and California's Rosenthal Fair Debt Collection Practices Act, and all applicable ordinances, rules, and regulations of the City of National City, whether now in force or subsequently enacted. The CONSULTANT and each of its SUBCONSULTANT(S), shall obtain and maintain a current City of National City business license prior to and during performance of any work pursuant to this Agreement. 11. LICENSES, PERMITS, ETC. The CONSULTANT represents and covenants that it has all licenses, permits, qualifications, and approvals of whatever nature that are legally required to practice its profession. The CONSULTANT represents and covenants that the CONSULTANT shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement, any license, permit, or approval which is legally required for the CONSULTANT to practice its profession. 12. STANDARD OF CARE. A. The CONSULTANT, in performing any services under this Agreement, shall perform in a manner consistent with that level of care and skill ordinarily exercised by members of the CONSULTANT'S trade or profession currently practicing under similar conditions and in similar locations. The CONSULTANT shall take all special precautions necessary to protect the CONSULTANT'S employees and members of the public from risk of harm arising out of the nature of the work and/or the conditions of the work site. B. Unless disclosed in writing prior to the date of this Agreement, the CONSULTANT warrants to the CITY that it is not now, nor has it for the five (5) years preceding, been debarred by a governmental agency or involved in debarment, arbitration or litigation proceedings concerning the CONSULTANT'S professional performance or the furnishing of materials or services relating thereto. C. The CONSULTANT is responsible for identifying any unique products, treatments, processes or materials whose availability is critical to the success of the project the CONSULTANT has been retained to perform, within the time requirements of the CITY, or, when no time is specified, then within a commercially reasonable time. Accordingly, unless the CONSULTANT has notified the CITY otherwise, the CONSULTANT warrants that all products, materials, processes or treatments identified in the project documents prepared for the CITY are reasonably commercially available. Any failure by the CONSULTANT to use due diligence under this sub -paragraph will render the CONSULTANT liable to the CITY for any increased costs that result from the CITY'S later inability to obtain the specified items or any reasonable substitute within a price range that allows for project completion in the time frame specified or, when not specified, then within a commercially reasonable time. 13. NON-DISCRIMINATION PROVISIONS. The CONSULTANT shall not discriminate against any employee or applicant for employment because of age, race, color, ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or medical condition. The CONSULTANT will take positive action to insure that applicants are employed without regard to their age, race, color, ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or medical condition. Such action shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment or recruitment 4 advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONSULTANT agrees to post in conspicuous places available to employees and applicants for employment any notices provided by the CITY setting forth the provisions of this non-discrimination clause. 14. CONFIDENTIAL INFORMATION. The CITY may from time to time communicate to the CONSULTANT certain confidential information to enable the CONSULTANT to effectively perform the services to be provided herein. The CONSULTANT shall treat all such information as confidential and shall not disclose any part thereof without the prior written consent of the CITY. The CONSULTANT shall limit the use and circulation of such information, even within its own organization, to the extent necessary to perform the services to be provided herein. The foregoing obligation of this Section 14, however, shall not apply to any part of the information that (i) has been disclosed in publicly available sources of information; (ii) is, through no fault of the CONSULTANT, hereafter disclosed in publicly available sources of information; (iii) is already in the possession of the CONSULTANT without any obligation of confidentiality; or (iv) has been or is hereafter rightfully disclosed to the CONSULTANT by a third party, but only to the extent that the use or disclosure thereof has been or is rightfully authorized by that third party. The CONSULTANT shall not disclose any reports, recommendations, conclusions, or other results of the services or the existence of the subject matter of this Agreement without the prior written consent of the CITY. In its performance hereunder, the CONSULTANT shall comply with all legal obligations it may now or hereafter have respecting the information or other property of any other person, firm, or corporation. CONSULTANT shall be liable to CITY for any damages caused by breach of this condition, pursuant to the provisions of Section 14. 15. INDEMNIFICATION AND HOLD HARMLESS. The CONSULTANT agrees to defend, indemnify and hold harmless the City of National City, its officers, officials, agents, employees, and volunteers against and from any and all liability, loss, damages to property, injuries to, or death of any person or persons, and all claims, demands, suits, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature, including workers' compensation claims, of or by anyone whomsoever, resulting from or arising out of the CONSULTANT'S performance or other obligations under this Agreement; provided, however, that this indemnification and hold harmless shall not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers, employees, or volunteers. CITY will cooperate reasonably in the defense of any action, and CONSULTANT shall employ competent counsel, reasonably acceptable to the City Attorney. The indemnity, defense, and hold harmless obligations contained herein shall survive the termination of this Agreement for any alleged or actual omission, act, or negligence under this Agreement that occurred during the term of this Agreement. 16. WORKERS' COMPENSATION. The CONSULTANT shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Government Code and all amendments thereto; and all similar State or federal acts or laws applicable; and shall indemnify, 5 and hold harmless the CITY and its officers, employees, and volunteers from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description, including reasonable attorney's fees and defense costs presented, brought or recovered against the CITY or its officers, employees, or volunteers, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by the CONSULTANT under this Agreement. 17. INSURANCE. The CONSULTANT, at its sole cost and expense, shall purchase and maintain, and shall require its SUBCONSULTANT(S), when applicable, to purchase and maintain throughout the term of this Agreement, the following checked insurance policies: A. ® If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile Insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage of $1,000,000 combined single limit per accident. Such automobile insurance shall include owned, non -owned, and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. C. Commercial General Liability Insurance, with minimum limits of either $2,000,000 per occurrence and $4,000,000 aggregate, or $1,000,000 per occurrence and $2,000,000 aggregate with a $2,000,000 umbrella policy, covering all bodily injury and property damage arising out of its operations, work, or performance under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location." The "project" or "location" should be noted with specificity on an endorsement that shall be incorporated into the policy. D. Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of CONSULTANT'S employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the City. Said endorsement shall be provided prior to commencement of work under this Agreement. If CONSULTANT has no employees subject to the California Workers' Compensation and Labor laws, CONSULTANT shall execute a Declaration to that effect. Said Declaration shall be provided to CONSULTANT by CITY. E. The aforesaid policies shall constitute primary insurance as to the CITY, its officers, officials, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY of cancellation or material change. F. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, the CONSULTANT shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. G. Insurance shall be written with only California admitted companies that hold a current policy holder's alphabetic and financial size category rating of not less than A-VII according to the current Best's Key Rating Guide, or a company equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted 6 "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. H. This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, filed with, and approved by the CITY'S Risk Manager. if the CONSULTANT does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. I. All deductibles and self -insured retentions in excess of $ l 0,000 must be disclosed to and approved by the CITY. 18. LEGAL FEES. If any party brings a suit or action against the other party arising £Iona any breach of any of the covenants or agreements or any inaccuracies in any of the representations and warranties on the part of the other party arising out of this Agreement, then in that event, the prevailing party in such action or dispute, whether by final judgment or out -of -court settlement, shall be entitled to have and recover of and from the other party all costs and expenses of suit, including attorneys' fees. For purposes of determining who is to be considered the prevailing party, it is stipulated that attorney's fees incurred in the prosecution or defense of the action or suit shall not be considered in determining the amount of the judgment or award. Attorney's fees to the prevailing party if other than the CITY shall, in addition, be limited to the amount of attorney's fees incurred by the CITY in its prosecution or defense of the action, irrespective of the actual amount of ees 'ncurred by the prevailing party. 20. TERMINATION. A. This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60-day's written notice to the CONSULTANT. During said 60-day period the CONSULTANT shall perform all services in accordance with this Agreement. B. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by the CONSULTANT in 7 connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. C. Termination with or without cause shall be effected by delivery of written Notice of Termination to the CONSULTANT as provided for herein. D. In the event of termination, all finished or unfinished Memoranda Reports, Maps, Drawings, Plans, Specifications and other documents prepared by the CONSULTANT, whether paper or electronic, shall immediately become the property of and be delivered to the CITY, and the CONSULTANT shall be entitled to receive just and equitable compensation for any work satisfactorily completed on such documents and other materials up to the effective date of the Notice of Termination, not to exceed the amounts payable hereunder, and less any damages caused the CITY by the CONSULTANT'S breach, if any. Thereafter, ownership of said written material shall vest in the CITY all rights set forth in Section 7. E. The CITY further reserves the right to immediately terminate this Agreement upon: (1) the filing of a petition in bankruptcy affecting the CONSULTANT; (2) a reorganization of the CONSULTANT for the benefit of creditors; or (3) a business reorganization, change in business name or change in business status of the CONSULTANT. 21. NOTICES. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered; or sent by overnight mail (Federal Express or the like); or sent by registered or certified mail, postage prepaid, return receipt requested; or sent by ordinary mail, postage prepaid; or telegraphed or cabled; or delivered or sent by telex, telecopy, facsimile or fax; and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if sent by overnight mail, the business day following its deposit in such overnight mail facility, (iii) if mailed by registered, certified or ordinary mail, five (5) days (ten (10) days if the address is outside the State of California) after the date of deposit in a post office, mailbox, mail chute, or other like facility regularly maintained by the United States Postal Service, (iv) if given by telegraph or cable, when delivered to the telegraph company with charges prepaid, or (v) if given by telex, telecopy, facsimile or fax, when sent. Any notice, request, demand, direction or other communication delivered or sent as specified above shall be directed to the following persons: To CITY: To CONSULTANT: Director of Finance City of National City 1243 National City Boulevard National City, CA 91950-4397 Kris Davisson, Vice President Financial Credit Network, Inc. 1300 West Main Street Visalia, CA 93292 Notice of change of address shall be given by written notice in the manner specified in this Section. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request, or communication sent. Any notice, request, demand, direction or other communication 8 sent by cable, telex, telecopy, facsimile or fax must be confirmed within forty-eight (48) hours by letter mailed or delivered as specified in this Section. 22. CONFLICT OF INTEREST AND POLITICAL REFORM ACT OBLIGATIONS. During the term of this Agreement, the CONSULTANT shall not perform services of any kind for any person or entity whose interests conflict in any way with those of the City of National City. The CONSULTANT also agrees not to specify any product, treatment, process, or material for the project in which the CONSULTANT has a material financial interest, either direct or indirect, without first notifying the CITY of that fact. The CONSULTANT shall at all times comply with the terms of the Political Reform Act and the National City Conflict of Interest Code. The CONSULTANT shall immediately disqualify itself and shall not use its official position to influence in any way any matter coming before the CITY in which the CONSULTANT has a financial interest as defined in Government Code Section 87103. The CONSULTANT represents that it has no knowledge of any financial interests that would require it to disqualify itself from any matter on which it might perform services for the CITY. If checked, the CONSULTANT shall comply with all of the reporting requirements of the Political Reform Act and the National City Conflict of Interest Code. Specifically, the CONSULTANT shall file a Statement of Economic Interests with the City Clerk of the City of National City in a timely manner on forms which the CONSULTANT shall obtain from the City Clerk. The CONSULTANT shall be strictly liable to the CITY for all damages, costs or expenses the CITY may suffer by virtue of any violation of this Paragraph 22 by the CONSULTANT. 23. PREVAILING WAGES. State prevailing wage rates may apply to work performed under this Agreement. State prevailing wages rates apply to all public works contracts as set forth in California Labor Code, including but not limited to, Sections 1720, 1720.2, 1720.3, 1720.4, and 1771. Consultant is solely responsible to determine if State prevailing wage rates apply and, if applicable, pay such rates in accordance with all laws, ordinances, rules, and regulations. 24. MISCELLANEOUS PROVISIONS. A. Computation of Time Periods. If any date or time period provided for in this Agreement is or ends on a Saturday, Sunday or federal, state or legal holiday, then such date shall automatically be extended until 5:00 p.m. Pacific Time of the next day which is not a Saturday, Sunday or federal, state, or legal holiday. B. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. C. Captions. Any captions to, or headings of, the sections or subsections of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. D. No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, or obligate any of the parties hereto, to any person or entity other than the parties hereto. 9 E. Exhibits and Schedules. The Exhibits and Schedules attached hereto are hereby incorporated herein by this reference for all purposes. To the extent any exhibits or schedules or provisions thereof conflict or are inconsistent with the terms and conditions contained in this Agreement, the terms and conditions of this Agreement shall control. F. Amendment to this Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto. G. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. H. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. I. Audit. If this Agreement exceeds ten -thousand dollars ($10,000), the parties shall be subject to the examination and audit of the State Auditor for a period of three (3) years after final payment under the Agreement, per Government Code Section 8546.7. J. Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between the parties as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent, or representative of any party hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby. K. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. L. Subcontractors or Subconsultants. The City is engaging the services of the CONSULTANT identified in this Agreement. The CONSULTANT shall not subcontract any portion of the work, unless such subcontracting was part of the original proposal or is allowed by the City in writing. In the event any portion of the work under this Agreement is subcontracted, the subconsultant(s) shall be required to comply with and agree to, for the benefit of and in favor of the City, both the insurance provisions in Section 17 and the indemnification and hold harmless provision of Section 15 of this Agreement. M. Construction. The parties acknowledge and agree that (i) each party is of equal bargaining strength, (ii) each party has actively participated in the drafting, preparation and negotiation of this Agreement, (iii) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (iv) each party and such party's counsel and advisors have reviewed this Agreement, (v) each party has agreed to enter into this Agreement following such review and the rendering of such advice, and (vi) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written. [Signature Page to Follow] 10 CITY OF NATIONAL CITY By: Ron Morrison, Mayor APPROVED AS TO FORM: George H. Eiser, III Interim City Attorney FINANCIAL CREDIT NETWORK, INC. (Corporation — signatures of two corporate officers required) By: (Name) 4-<)Euievistm",...) (Print) 77re -t&r (Title) By: b7kki&k, (Name) -k`rrS b\i�SS (Print) (Title) Exhibit A FINANCIAL CREDIT NETWORK, INC. SCOPE OF SERVICES A. General Services: Financial Credit Network, Inc. ("FCN") shall provide collection services for unpaid and delinquent accounts receivable for the City of National City ("City") which includes: 1. administrative citations; 2. code enforcement citations; 3. business licenses; 4. false alarm billing; 5. property damage; 6. returned checks; and 7. miscellaneous receivables. B. Specific Services: FCN shall perform the following specific services: 1. Accept automated or manual transfers of delinquent accounts information from the City or City -authorized vendor's database (during which times FCN will work, at no additional cost, with the City, and City software, to ensure accurate and timely transmission of data); 2. Perform a minimum of two written or telephone contacts for each account within sixty (60) days of receipt of delinquent account information from the City; 3. Conduct skip tracing on delinquent accounts using tools provided by FCN; 4. Accrue interest on outstanding balances at a rate established by the City as authorized by the National City Municipal Code or by resolution of the City Council of the City of National City; 5. Provide consumer with multiple payment options; 6. Remit monies due to the City at least monthly, providing a detailed accounting of collections less City -owed fees with each remittance; 7. Report, in accordance with all applicable federal and California laws, all uncollected accounts pursued for collection by FCN for not less than 60 days to the major credit bureaus, except for types of accounts excluded from reporting by the National City Director of Finance ("Director"); 8. In accordance with the Fair Credit Reporting Act, remove account notifications from all affected bureaus at the request of the Director and provide a copy of the account notification removal letter or form submitted to each bureau to the Director; 9. Provide on -going training and education opportunities and provide updates to City staff on changes in state and federal laws related to credit and collections; Page 1 of 3 Exhibit A 10. Meet at least annually with the Director and other City staff to review and discuss all services and collection results; 11. Provide recommendations on how the City can reduce future bad debt; 12. Maintain accurate records of all correspondence, accounting records, banking records, and other relative evidence for each assigned account for at least seven (7) years after termination of the collection action and make said records available to the City for review upon request by the Director of Finance, or designee. C. Additional Collection Requirements: 1. The City reserves the right to withdraw a delinquent account from FCN at any time. In such cases, FCN shall cease all collection and/or legal activities related to the account. If an account is withdrawn prior to collection activity on the part of FCN, no fees shall be due. 2. The City requires FCN to exercise high ethical standards in its collection efforts. The FCN shall conduct its collection business in a professional manner and shall not use tactics which may be interpreted as harassment or as demeaning or that otherwise may reflect poorly on the City's image. The City prohibits any collection enforcement procedures not consistent with the City's requirements. 3. FCN shall make contacts with delinquent accountholders under FCN's name. 4. FCN shall instruct delinquent accountholders to submit payment to the collection agency. Any payments received by the City directly from accountholders will be forwarded to FCN for processing. FCN will be notified of any payment forwarded by the City. Funds received by FCN must be maintained in a trust fund until remitted to the City and the collection fee can be deducted at the time of remittance. D. Reporting Requirements: FCN shall provide the City with the following reports: 1. Monthly status report detailing all its collection activities for the previous month that shall include detailed accounting information, including: a. original placed value of debt; b. current value of debt; c. amount(s) and date(s) of all payment(s) received; d. interest charged; e. charges waived; f. balance due; 2. Invoices detailing collections received for the previous month, less all fees deducted (as set forth in Exhibit B) shall be sent to the City on a monthly basis. Page 2 of 3 Exhibit A 3. Period -to -date and fiscal year-to-date financial summary reports reflecting pertinent information, such as receipts, total accounts receivable, net accounts receivable, and collection percentage. 4. Annual report detailing the previous fiscal year's activities (July 1 through June 30), including detailed listings of the following: a. all accounts by type; b. all accounts closed in the past year by type; c. all activity by account in past year by account type; and d. summary of those reports mentioned in subsections 3(a)-3(c) 5. Ad hoc reports upon the City's request. 6. Detailed and summarized aging report, upon the City's request. E. Administrative Provisions: 1. FCN shall guarantee the confidentiality, security, and safety of all files, documents, computer files, etc. 2. FCN shall not subcontract work covered by this Exhibit A, or the Agreement between the City and FCN, without the prior written consent of the City. Page 3 of 3 Exhibit B FINANCIAL CREDIT NETWORK, INC. RATES TO PERFORM COLLECTION SERVICES Fees for collections services for delinquent accounts receivable forwarded by the City of National City ("City") to Financial Credit Network, Inc. ("FCN") are contingent upon collection on said delinquent accounts receivable. Fees will be deducted from collections in accordance with the following schedule: Description Contingency Fee Primary Placements for: 1. Administrative citations 24% 2. Business licenses 24% 3. False alarm billing 24% 4. Property damage 24% 5. Returned checks 24% 6. Miscellaneous receivables 24% Court action for primary placements for all account types (if required) 34% Transfer of account to an out -of -area agency for collection (forwarding) 34% Franchise Tax Board Intercept Program finder's fee 8% Future Primary Placements not enumerated in 1-6 in this Exhibit B 24% Future court action for Primary Placements not enumerated in 1-6 in this Exhibit B 34% The City shall not incur any costs for collection services. All monies due to FCN shall be deducted from collections by the Consultant; however, the City shall be invoiced for all fees deducted on a monthly basis. A detailed accounting of collections, less City -owed fees will accompany each remittance to the City. Additional fees may not be added to the principal amount of any debt to the City without prior written approval from the City. Notwithstanding approval by the City, additions must be in accordance with all applicable federal and state laws. Page 1 of 1 RESOLUTION NO. 2016 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH FINANCIAL CREDIT NETWORK, INC., FOR DEBT COLLECTION SERVICES FOR A THREE-YEAR TERM WITH AN OPTION TO EXTEND FOR TWO ADDITIONAL ONE-YEAR TERMS WHEREAS, the City desires to employ a consultant to provide debt collection services for collection of delinquent indebtedness owed to the City; and WHEREAS, the City has determined that Financial Credit Network, Inc., is a professional collection agency and is qualified by experience and ability to perform the services desired by the City; and WHEREAS, Financial Credit Network, Inc., is willing to perform such services for a period of three years with an option to extend for two additional one-year terms. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute an Agreement with Financial Credit Network, Inc., for debt collection services for collection of delinquent indebtedness owed to the City for a term of three -years with an option to extend for two additional one-year terms. Said Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 6th day of December, 2016. Ron Morrison, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: George H. Eiser, III Interim City Attorney CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk December 21, 2016 Ms. Kris Davisson Financial Credit Network 1300 West Main Street Visalia, CA 93292 Dear Ms. Davisson, On December 6th, 2016, Resolution No. 2016-204 was passed and adopted by the City Council of the City of National City, authorizing execution of an Agreement with Financial Credit Network. We are enclosing for your records a certified copy of the above Resolution and a fully executed original Agreement. Sincerely, Michael R. Darla, CMC City Clerk Enclosures