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HomeMy WebLinkAboutHARRIS REALTY APPRAISALS - 2003-10-21Su ity Hunt Beach• To: Connie Brockway, City Clerk Contracts Submittal to City Clerk's Office A 2094 JUL P 512 0 1. Name of Contractor: Harris Realty Appraisals 2. Purpose of Contract: For Example: Audit Services or Water Quality Testing Huntington Lake — Huntington Central Park prepare CFD Appraisal for development known as the "Strand " 3. Amount of Contract: Copy of contract distributed to: The ORIGINAL insurance certificate/waiver sent to Risk Management Initiating Dept._ City Treasurer _ ORIGINAL bonds sent to Treasurer gariie/ExVnsion �X City Attomey's Office Date: 7/7/04 g:/Attymisc/forrns/city clerk contract transmittal.doc PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTONEACH AND FOR Cm_t12- THIS AGREEMENT ("Agreement") is made and entered into this ;� 157^ day of l�� 205, by and between the City of Huntington Beach, a municipal corporation of%the State of California, hereinafter referred as "CITY, and S e �V A ff --, a Qto hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT. ,,ll a CONSULTANT hereby designates JAAArt$ �. e, who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. agree/fonw/profsery 10/1510 1 -A I - � t 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence as soon as practicable after the execution of this Agreement by CITY (the "Commencement Date"). This Agreement shall expire on IiS�F12 3T o , unless sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than l% JU ,9,►�-�! from the Commencement Date of this Agreement. These times may be extended with the written permission of CITY. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed Dollars ($ "Ty, O D U . o o ). 5. EXTRA WORK . In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such work only after receiving written authorization from CITY. Additional agrec/fonns/profserv10115101-A 2 compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 7. DISPOSITION OF PLANS ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent performance of this Agreement or its failure to comply with any of its obligations contairXed in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall agree/forms/profservl0/15101-A 3 approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. ` The above - mentioned insurance shall not contain a self -insured retention, "deductible" or any other similar form of limitation on the required coverage except with the express written consent of CITY. A claims -made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with'or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements)., B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. agrcc/forms/profscrv10115101-A 4 C 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. shall state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either parry, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and agree/forms/profserv10/15/01-A 5 all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and er unfinished documents, exhibits, report, and evidence shall, at the option of CITY, became its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsulltants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTSMATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail -return receipt requested: TO CITY: City of Huntington Beach ATTN: 45�111Vo A . ���k_►2-�±�1 2000 Main Street Huntington Beach, CA 92648 17. CONSENT TO CONSULTANT: When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. agree/forms/profsery 10/15/01 -A 7 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement agree/fomu/profsery10/ 15/01-A 8 which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that -such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. . 24. ATTORNEY'S FEES In the event suit is brought by either parry to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, agree/forras/profserv10/15/01-A 9 each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non -prevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. agree/fomis/profserv10/15/01-A 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized offices the day, month and year first above written. CONSULTANT, CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California 64d 6 Director of ril cvylul . By:7 (Pursuant To HBMC §3.03.1 0) 8 print name I : (ci le one) Chairm residentN' a President AND By: pent name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary — Treasurer agree/forms/profservl0/15101-A I 1 APPROVED AS TO FORM: 16� no - rl- t '-V� — /V/ph3l City Atto ey REVIEWED AND APPROVED: City Administrator (only for contracts $50, 000.00 and over) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND FOR Table of Contents Scopeof Services.....................................................................................................I CityStaff Assistance................................................................................................2 Term; Time of Performance.....................................................................................2 Compensation..........................................................................................................2 ExtraWork...............................................................................................................2 Methodof Payment..................................................................................................3 Disposition of Plans, Estimates and Other Documents ...........................................3 HoldHarmless.........................................................................................................3 Professional Liability Insurance.............................................................................4 Certificate of Insurance............................................................................................5 IndependentContractor............................................................................................6 Termination of Agreement.......................................................................................6 Assignment and Delegation......................................................................................6 Copyrights/Patents...................................................................................................7 City Employees and Officials..................................................................................7 Notices.........................................................................................7 Consent....................................................................................................................8 Modification.............................................................................................................8 SectionHeadings.....................................................................................................8 Interpretation of this Agreement..............................................................................8 DuplicateOriginal....................................................................................................9 Immigration...............................................................................................................9 Legal Services Subcontracting Prohibited................................................................9 Attorney's Fees..........................................................................................................10 Survival.....................................................................................................................10 GoverningLaw.........................................................................................................10 Entirety..................................................................................................I...................10 4 Exhibit "A" PROPOSAL Real Estate Appraisal Services City of Huntington Beach THE STRAND Community Facilities District Harris Realty Appraisal 5100 Birch Street, Suite 200 Newport Beach, CA 92660 949/851-1227 Contact: James B. Harris, MAI AG001846 9 Harris Realti Appraisal � 5100 Birch Street, Suite 200 Newport Beach, California 92660 949 - 851-1227 FAX 949 - 851-2055 April 21, 2003 Mr. Gustavo A. Duran Housing and Redevelopment Manager City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 RE: Proposal for Appraisal Services City of Huntington Beach The Strand Community Facilities District Dear Mr. Duran: In response to your request and our review of the RFP for the appraisal of The Strand Community Facilities District, HARRIS REALTY APPRAISAL is subrnitting the following Proposal for Appraisal Services for the proposed City of Huntington Beach CFD No. 2003-1. It is our understanding that this appraisal will be for the purpose of estimating the "As Is" Market Value of the taxable property within the boundaries of the proposed CFD. In addition, the Market Value, assuming the completion of all proposed improvements will be reported. It is also our understanding that the City will use this appraisal for the issuance of bonds for the proposed CFD. The proposed CFD will be of The Strand, a hotel/retail project. The proposed improvements include approximately 227,000 square feet of hotel (149 rooms), office and retail uses. The parcel for these uses is approximately 3 acres in size. The subject property will be valued by a Developmental Analysis, in combination with the Direct Comparison and Income Approaches to value the individual uses. A discounted cash flow, giving consideration to the absorption estimates provided by the absorption consultant, will be completed. Due to the various proposed uses and their various development schedules, a stand-alone absorption study would be beneficial to the appraiser and the City. The estimated values will reflect the bulk value of the "As Is" and "As Complete" condition of the property. According to your request, and in compliance with the California Debt and Investment Advisory Commission (CDIAC), the valuation will include the "As Is" Market Value giving consideration to the proposed development to be partially funded by this CFD. In addition, the Market Value, assuming the completion of all proposed improvements will be reported. Harris Realty Appraisal is an independent appraisal contractor, which has operated for business in Southern California since 1982. Harris Realty Appraisal has provided appraisal services to numerous public agencies for 21 years. (Please refer to Mr. Gustavo A. Duran April 21, 2003 Page 2 our qualifications.) James B. Harris is a MAI (No. 6508) and is a Certified General Appraiser (No. AG001846). He has appraised many shopping centers. Berri J. Cannon is a Certified General Appraiser (No. AG009147). They have completed numerous appraisals of Community Facility Districts and Assessment Districts in Los Angeles, Orange, San Diego, Ventura, San Bernardino, and Riverside Counties over the past ten years. Kenton Boettcher, a Certified General Appraiser (No. AG010922), offers a dimension to Harris Realty Appraisal, not typically found in appraisal offices. Kenton Boettcher offers over twenty years of experience in real estate related market analysis and feasibility studies. This area of expertise is particularly applicable in the valuation of proposed properties. Harris Realty Appraisal will provide appraisal services that will be consistent with all recognized and applicable standards. These include the Uniform Standards of Professional Practice (USPAP) of the Appraisal Foundation; the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute; and the Appraisal Standards for Land -Secured Financings, as published by the California Debt and Investment Advisory Commission (CDIAC). The City's Consultant Services Agreement will also be complied with. The methodology utilized will be consistent with the above standards and will fully support the appraised vague, which will represent our opinion. This self-contained narrative report will be fully documented and will lead the reader to our conclusion of value. It will have a date of value of our last inspection of the property, currently anticipated to be in early 2004. As a part of this assignment we will complete a summary of the appraisal for publication purposes in the POS/OS. The scope of this assignment will be to arrive at the "As Is" Market Value of the land and any improvements, and the "As Complete" value, within the boundaries of the District. The commercial property will be valued by Direct Comparison with similar retail property sales. In compliance with the Standards of the Appraisal Institute, we will complete a cursory review of the market to test the reasonableness of the absorption estimates, provided by the absorption consultant, for use in the Developmental Analysis. The scope stated in the RFP will be followed. In addition, there will most likely be several meetings concerning this assignment with the City and Finance Team. Our appraisal will also be subject to review, at which time we will address any questions and resolve any and all issues, rendering a final value conclusion. Harris Realty Appraisal does not have a financial, business or other relationship with any entity that may have a conflict or impact on the outcome of the Real Estate Appraisal Services to be provided to the City. Harris Realty Appraisal will complete all components of this project in a timely manner. At this time, Harris Realty Appraisal is not providing appraisal services to any client that would have an interest in the outcome of the services we propose to provide. Mr. Gustavo A. Duran April 21, 2003 Page 3 Harris Realty Appraisal has completed over fifty-five Community Facilities District appraisals over the last five years. These appraisals were completed for the following agencies: California State University, City of Riverside, County of Riverside, County of Orange, City of Los Angeles, City of Camarillo, City of Fullerton, City of Lake Elsinore, City of Fontana, City of San Marcos, City of Perris, City of Beaumont, City of Oceanside, City of Victorville, Eastern Municipal Water District, Ramona Municipal Water District, Rancho Santa Fe Community Facilities District, the Val Verde Unified School District, and the Saddleback Valley Unified School District. We have appraised master planned communities containing over 50,000 existing residential dwelling units, 20,000,000 square feet of industrial and office buildings, 5,000,000 square feet of retail shopping centers, land proposed for residential uses that range up to 2,500 acres, land proposed for commercial and industrial uses that range up to 800 acres, and land in agricultural preserve that range up to 18,000 acres, all for Community Facilities and Assessment Districts. A portion of the Community Facilities Districts appraised by Harris Realty Appraisal are included as a separate exhibit to this proposal. For this assignment, we are anticipating two to three meetings with the Finance Team. A preliminary draft appraisal will be available within 90 days after authorization to proceed and receipt of all necessary information to complete the assignment. The completed self-contained narrative report will be available two weeks following the review of the draft appraisal. The summary appraisal report for inclusion in the Preliminary Official Statement and Official Statement will take approximately one week after the completion of the final appraisal report. This timing estimate is based on the awarding of the contract within four weeks, and the receipt of all necessary items within two weeks of starting on this assignment. Given our current understanding of the appraisal assignment, our fee for all services will be $40,000. The appraisal will first be provided as a draft report for review. Five copies of the final report will be provided after the review process. A synopsis of the full self- contained report will be provided for use in the Official Statement, if requested. A certificate will be provided stating the appraisal report/synopsis is complete and not misleading. The complexity and timing of this assignment warrant the participation of only senior appraisers who have completed numerous similar assignments. Therefore, the completion of your assignment will be by James B. Harris, MAI and Berri J. Cannon. Kenton Boettcher may be utilized in conjunction with the highest and best use analysis, if warranted. The hourly rate for James Harris is $200.00. The hourly rate for Berri Cannon and Kenton Boettcher is $175.00. If awarded this assignment, Harris Realty Appraisal will comply with the City's insurance and business license requirements. Covered within the billable rates are the typical expenses anticipated for this assignment. Additional meetings above those anticipated will be invoiced separately. If there should be a need to redo the analysis based on a change in the assignment by the City, an additional charge may be required. If there is a need for more than five Mr. Gustavo A. Duran April 21, 2003 Page 4 copies of the appraisal reports, an additional charge, based on costs will be invoiced. If we are awarded the contract, we will be requesting a retainer upon authorization. The contact person will be James B. Harris. My direct line is 949-851-1227 and the fax line is 949-851-2055. My e-mail address is jharrismai@aol.com. If awarded this assignment, Berri Cannon and I will be working on the appraisal and will be available to answer any questions you might have throughout the assignment. Our qualifications are included in this appraisal package. Business references of Harris Realty Appraisal are also included. Harris Realty Appraisal appreciates the opportunity to provide this proposal package. If you have any questions or would like to set up an interview, please call. AUTHORIZATION TO PROCEED AS SET FORTH ABOVE: By Title Date Respectfully submitted, )ames B. Harris, MAI G 001846 a � 1 • Exhibit "B" City of Huntington Beach THE STRAND Community Facilities District PROPOSEDFEE A. Total Fixed Rate B. Hourly Rate James B. Harris, MAI $200.00 Berri J. Cannon $175.00 Kenton Boettcher $175.00 $40,000.00 M 0 The Strand CFD Appraisal Consultant List John S. Adams & Associates, Inc. 5100 Birch Street Newport Beach, CA 92660 Phone: (949) 833-1972 Fax: (949) 851-2055 Jerry Vogt Jerry Vogt & Associates 33191 Paseo Blanco San Juan Capistrano, CA 92675 Phone: (949) 489-8029 glvoogt(a)cox.net Jim Harris, MAI Harris Realty Appraisal 5100 Birch Street, Ste. 200 Newport Beach, CA 92660 Phone: (949) 851-1227 Fax: (949) 851-2055 Bruce Hull, MAI 1056 E. Meta #202 Ventura, CA 93001 Phone: (805) 641-3275 FAX: (805) 641-3278 bhu1186686@aol.com SU ' PROFESSIONAL SERVICE CONTRACTS PURCHASING CERTIFICATION 1. Requested by: Gus Duran 2. Date: October 22, 2003 3. Name of consultant: Harris Realty Appraisal 4. Description of work to be performed: CFD Appraisal - The Strand 5. Amount of the contract: $40,000.00 6. Are sufficient funds available to fund this contract?' ® Yes, ❑ No 7. Company number and object code where funds are budgeted: 30580101.69365 8. Is this contract generally described on the list of professional service contracts approved by the City Council'? ® Yes, ❑ No 9. Is this contract within $25,000 or 25% (whichever is less) of the amount stated on the list of professional service contracts approved by the City Council?' ® Yes, ❑ No 10. Were (at least) informal written proposals requested of three consultants? ® Yes, ❑ No 11. Attach list of consultants from whom proposals were requested (including a contact telephone number). 12. Attach proposed scope of work. 13. Attach proposed payment schedule. 5WHARWAMADRIL, Man ger Purchasing/Central Services If the answer to any these questions is "No," the contract will require approval from the City Council. PurchCert 6/22/2004 11:31 AM 07/01/2004 08:32 FAX 8059620652 0 LIABILITY INSURANCE 4 002/002 e\f 52 C- i CEI TIFIC:i,TE OF INSURANCE ' Pmdu; tr: Lsue Dacc: 07/01/2004 This Certificate is issued as a matter of information only and I LIABILITY INSURANCE ADMINISTRATORS confers no rights upon ncc Certificate Holder. This Cerrifcatc P.O. Box 1319 does not ameW, cxtvnd or almr the coverage afforded by the Sania Barbara, CA 93102-1319 policy below. Insured: 101175 COMPANY AFFORDING COVERAGE HARRIS REALTY APPRAISAL James B. Harris, MAI Liberty Insurance Underwriters, Inc. ` 5100 Birch Street, Suite 200 Newport Beach, CA 92660 I Fax Number 949-851-2055 Authorize eprescntative This is to certify that the policy of insurance listed below has been issued to the Insured named above for the policy period indicated. Notwithstanding any requirement, term of condition of any contract or other document with respect to which this Certificate may be issued or may pertain, the insurance afforded by the policy described herein is subject to all the terms, exclusions and conditions of such policy. Limits shown may have been Tcduced by paid claims. TYPE OF INSURANCE POLICY NUMBER E TECTrvE DATE EXPIRATION DATE LIMITS Professional Liability LIL1003120-003 05r04/2004 05104/2005 General Aggregate i S ),1)00.000 s Each Claim 1,000,006 i Description of Operations/Locations/Special items: i REAL, ESTATE APPRAISERS PROFESSIONAL LIABILITY INSURANCE EVIDENCE OF INSURANCE Certificate Holder: Cancellation: City of Huntington Beach Should the above described policy be cancelled before the Attn: Gus Duran, Department of Economic Development expiration date thereof, the issuing Company will 2000 Main Street mail 30 days notice, except 10 days notice for nonpayment or Huntington Beach, CA 92648 premium, to the certificate holder named to the left. i APPROVED AS TO FORM j LIA0001 (1 1 /97) .rasa�a�aa'a�n k;�TiCl1l � l>tly t4 II1G / � Certificate Holder Copy JUL-01-2004 08:39 8059620652 136% P.O;) t s ,situ INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST 1. Requested by: Gus Duran-I 2. Date: August. 3. Name of contractor/permittee: Harris Realty Appraisal 4. Description of work to be performed: CFD Real Estate Appraisal 5. Value and length of contract: $40,000 Untill Dec. 31, 2004 6. Waiver/modification request: Waiver of Deductible / Acce-pt` 'jj°�`�`(�' 7. Reason for request and why it should be granted: Consultant is meJy providing a written document to serve as the basis for the issuance of a Mello -Roos bond. 8. Identify the risks to the City in approving this waiver/modification: None A4 Department Head Signature D te: APPROVALS Approvals must beobtainedin the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrators Office is only required if Risk Management and the City Attorney's Office disagree. 1. Risk Management Approved ❑ Denied y Signature Date 2. City Attorney's Office pproved ❑ Den' 4 v !� Signatur Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted: to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Administrative Services �__..�........ 0 1_.d_...._:A__a:__ IAA—:...... 0/A AInnn0 O.AC MA A i Date Issued: Polic Number: Previous Policy Number: 05/06/2003 LWO03120-002 LI0003120-001 REAL ESTATE APPRAISERS PROFESSIONAL LIABILITY LibertyInsurance Underwriters L=_ 55 Water Street, 18th Floor New York. NY 10041 Item THIS IS A CLAIMS MADE AND REPORTED POLICY. PLEASE READ IT CAREFULLY. LIBERTY INSURANCE UNDERWRITERS, INC. (herein called "the Company") DECLARATIONS 1. Customer ID: 101175 Companies writing property and casualty Named Insured: insurance business in California are required to HARRIS REALTY APPRAISAL participate in the California Insurance Guarantee Association. If a company becomes insolvent, James B. Harris, MAI the California Insurance Guarantee Association 5100 Birch Street, Suite 200 settles unpaid claims and assesses each insurance company for its fair share. California Newport Beach, CA 92660 law requires all companies to surcharge policies to recover these assessments. If your policy is "CA 2. Policy Period: surcharged, Surcharge" with an amount will From: 05/04/2003 To: 05/04/2004 be displayed on your premium notice. 12:01 A.M. Standard Time at the address stated in Item 1. 3. Deductible: $1,000.00 Each Claim APPRS- l 1`_D lU roRm J� 4. Retroactive Date: 05/04/1998 5. Inception Date: 05/04/2002 6. Limits of Liability: The Limit of Liability for Each Claim and in A. $1,000,000.00 Each Claim the Aggregate is reduced by Damages and B. $1,000,000.00 Aggregate Claims Expenses as dermed in the Policy. 7. Mail All Notices to Agent: Liability Insurance Administrators 1600 Anacapa Street Santa Barbara, California 93101 (805) 963-6624; Fax: (805) 962-0652 8. Annual Premium: $1,015.00 + $20.30 CA Surcharge 9. Number of Appraisers: 1 10. Forms attached at issue: LIA002 (07/01) LIA012 (07/01) LIA013 (07/01) LIA024 (07/01) TRIA Form C (01/03) This Declarations Page together with the completed and signed Policy Application including all attachments and exhibits thereto, and the LIA001 (07/01) By Authorized Signature W Liberty Insurance Underwriters,, Liberty (hereinafter called "the Company") ]n prance REAL ESTATE APPRAISERS Underwriters lino— PROFESSIONAL LIABILITY INSURANCE POLICY THIS IS A CLAIMS MADE AND REPORTED POLICY. COVERAGE IS LIMITED TO LIABILITY FOR ONLY THOSE CLAIMS THAT ARE FIRST MADE AGAINST THE INSURED AND REPORTED TO THE COMPANY IN WRITING NO LATER THAN Sum (to) DAYS AFTER EXPIRATION OR TERMINATION OF THIS POLICY FOR A WRONGFUL ACT COMMITTED ON OR AFTER THE RETROACTIVE DATE AND BEFORE THE END OF THE POLICY PERIOD. PLEASE READ THE POLICY CAREFULLY. All words that are In bold face type, other than the caption titles, have special meanings set forth In Section IV., DEFINITIONS, of the Policy. In consideration of and subject to the payment of the premium, the agreement of the Named Insured to pay the Deductible amount stated In the Declarations and described herein, and In reliance upon the particulars, statements, representations, attachments and exhibits contained in and submitted with the Application which shall be the basis of this Policy and deemed to be incorporated herein, and subject to all the terms, conditions, limitations and any endorsements to this Policy, the Company and Named Insured agree as folkhws: I. INSURING AGREEMENTS (A) The Company will pay on behalf of the Insured all sums in excess of the Deductible amount stated In the Declarations which the Insured shall become legally obligated to pay as Damages and Claims Expenses resulting from Claims first made against the Insured during the Policy Period, or Extended Reporting Period, If applicable, as a result of a Wrongful Act by the Insured or any Entity for whom the Insured is legally liable, provided that: (1) such Wrongful Act was committed on or after the Retroactive Date and before the end of the Policy Period; and (2) prior to the Inception Date stated in the Declarations of this Policy, the Insured did not know or could not have reasonably expected that such Wrongful Act might give rise to a Claim. As a condition precedent to coverage. the Insured shall report all Claims In writing to the Company as soon as practleable, but in no event later than sixty (60) days after expiration or termination of this Policy, or during the Extended Reporting Period, if applicable. (B) The Insured shall not admit or assume liability for any Wrongful Act, or settle any Claim, or incur any expenses, including Claims Expenses, without the written consent of the Company. However, the Insured must take all reasonable action within its ability to prevent or mitigate any Claim which would be covered under this Policy. The Company has the right to make such investigation and conduct negotiations and, with the written consent of the Insured, effect settlement of any Claim as the Company deems reasonable. If the insured refuses to consent to a settlement recommended by the Company and elects to Contest or continue to contest the Claim, the Company's liability shall not exceed the amount for which the Company would have been liable for Damages and Claims Expenses if the Claim had been so settled when and as so recommended, and the Company shall have the right to withdraw from the further defense of the Claim by tendering control of the defense thereof to the Insured. The operation of this paragraph shall be subject to the Limits of Liability and Deductible provisions of this Policy. The Company shall not be obligated to pay any Damages and/or Claims Expenses, or to undertake or continue the defense of any Claim afterthe applicable Omit of the Company's liability has been exhausted by payment of Damages and/or Claims Expenses or after deposit of the applicable limit of the Company's liability with or subject to control of a court of competent jurisdiction. It. TERRITORY AND DEFENSE (A) The coverage afforded by this Policy applies worldwide, but only N the Claim Is made in the Unites States of America, its territories and possessions, or Canada. (B) The Company has the sole right to appoint defense counsel and the right and duty to defend any Claim made against the Insured. Ill. SUPPLEMENTAL PAYMENTS Subject to all other terms end conditions, this Policy affords the following Supplemental Payments. Any payment made by the Company under this section shall not apply to the Deductible and shall not reduce the Limits of Liability. (A) PRE -CLAIM ASSISTANCE If during the Policy Period the Insured reports a specific Wrongful Act in accordance with Conditions (A) of this Policy, the Company, at its sole option, may investigate such specific Wrongful Act as it deems appropriate. Once the Company has incurred $5,000 of expenses for such an investigation, the Company shall deem that a Claim arising from such specific Wrongful Act has been made. Until such time that a Claim arising from such specific Wrongful Act has or is deemed to have been made, any amounts incurred by the Company for such Investigation shall be at the Company's expense. (B) DISCIPLINARY PROCEEDINGS If a Disciplinary Proceeding Is commenced against the insured during the Policy Period and reported to the Company within sixty (60) days of the Insured's receipt of first notice of the Disciplinary Proceeding, the Company will reimburse the Insured for reasonable attorney's fees Incurred in responding to such Disciplinary Proceeding, provided such fees are incurred by an attomey(s) designated by the Company, or designated by the Insured with the written consent of the Company. The maximum payment made by the Company pursuant to this Supplemental Payment shall be $2,500 for each Policy Period regardless of the number of Disciplinary Proceedings. The Company shall not pay Damages pursuant to this provision, including but not limited to any fines, sanctlons or statutory penalties. (C) REIMBURSEMENT OF EXPENSES If the Insured is requested by the Company to attend hearings. depositions and trials relative to the defense of a Claim, the Company shall reimburse the insured's actual loss of earnings and reasonable expenses due to such attendance up to $250 per day. The maximum payment made by the Company pursuant to this Supplemental Payment shall be $2.500 for each Policy Period. LIA002 (7/01) Psgc h of 6 MAY-29-2003 19:22 9498512055 98% P.02 ? IV. DEFINfTION5 • (A) "Clalen' means receipt of a demand naming the Insured seeking Damages and/or Professional Services arising out of a Wrongful Act by the Insured or any Entity for whom the Insured is legally liable. (8) "Claims Expenses' means: (1) Reasonable and necessary fees charged by an attomey(s) designated by the Company, or designated by the Insured with the Company's written consent, to defend a Claim and; (2) All other fees, costs and charges, resulting from the investigation, adjustment, defense, and appeal of a Claim, if Incurred by the Company, or by the Insured with the Company's written consent, including premiums on appeal bonds, provided that the Company shall not be obligated to apply for or furnish such appeal bonds. The determination by the Company as to the reasonableness of Claims Expenses shalt be conclusive on the Insured. Claims Expenses do not include salary charges, wages or expenses of partners, principals, officers, directors, members or employees of either the Company or Insured. (C) "Damages" means a compensatory monetary amount for which the Insured may be held legally liable, Including judgments (Inclusive of any pre- or post -judgment Interest), awards, or settlements negotiated with the approval of the Company. Damages do not include any return, withdrawal or reduction of professional fees, profits or other charges, or fines, sanctions, taxes or penalties. Damages do not Include any punitive or exemplary damages, attorney fee awards or the multiple portion of any multiplied damage award. (D) "Disciplinary Proceeding" means any proceeding, investigation or review by a regulatory or disciplinary official, board or agency to investigate charges of professional misconduct In the performance of Professional Services. (E) "Entity" means any individual, sole proprietor, partnership, or corporation or other form of association recognized as such by law, but does not include any joint venture In which the Insured is a participant. (F) 'Extended Reporting Period" means the applicable period of time after the end of the Policy Period for reporting Claims arising out of Wrongful Acts committed or alleged to have been committed prior to the end of the Policy Period and on or subsequent to the Retroactive Date, and otherwise covered by this Policy. (G) "Inception Date" maans the effective date of the first Real Estate Appraisers Professional Liability Insurance Policy issued by the Company, or another member company of the Liberty Mutual Group, to the Named Insured and continuously renewed and malntalned in effect up to the inception of this Policy Period. (H) 'Insured" means only the following: (1) The Named Insured designated in Item t of the Declarations, or by endorsement to this Policy: (2) . Any person who is, was, or hereafter becomes a partner, principal, officer, director, member, or employee of the Named Insured. but only while acting on behalf of the Named Insured; (3) Independent contractors who are natural persons, or any temporary personnel, but only while acting under the direct supervision and on behalf of the Named Insured; (4) Th4te, heirs, executors, administrators, and legal representatives of an Insured, in the event of such Insured's death, disability, incapacity, Insolvency. or bankruptcy, but only to the extent such Insured would have otherwise been provided coverage under this Policy: (5) The lawful spouse of any Insured solely by resson of: (a) Spousal status, or; (b) A spouse's ownership interest in property or assets that are sought as recovery. This Definition (H)(5) shall not apply to the extent a Claim alleges any wrongful act or omission by such spouse. (1) "Mediation" means a non -binding process in which a neutral panel or individual assists the parties in reaching their own settlement. To be considered Mediation under this Poficy, the process must be of a kind set forth in the Commercial Mediation Rules of the American Arbitration Association. The Company, however, at its sole option, may recognize any Mediation process or forum presented for approval. (J) "Personal Injury" means false arrest, detention or imprisonment, or malicious prosecution: the publication or utterance of a libel or slander or other defamatory or disparaging material; a publication or utterance in violation of an individual's right of privacy; wrongful entry or eviction: or the invasion of the right of private occupancy. (K) "Policy Period" means the period specified in Item 2 of the Declarations, or any shorter period that may occur as a result of a cancellation of this Policy, and specifically excludes any Extended Reporting Period hereunder. (L) "Pollutants" means any sofid, liquid, gaseous orthermal Irttant or contaminant, including but not limited to asbestos, radon, formaldehyde. smoke, vapor, soot, fumes, acids, alkalis, chemicals, and "waste". "Waste' includes materials to be recycled, reconditioned or reclaimed, (M) "Professionsl Services' means those services the Insured Is legally qualified to perform for others in the Insured's capacity as a Real Estate Appraiser. (N) "Real Estate Appraiser" means an Entity engaged In the profession of estimating the value of real property for others for a fee, including services usually and customarily performed or rendered by a Real Estate Appraiser. (0) "Retroactive Date' means the date specified in Item 4 of the Declarations. This Policy shall only apply to Claims resulting from Wrongful Acts committed on or after that date. (P) "Wrongful Ad" means any actual or alleged PCt, error, omission or Personal injury in the rendering of or (allure to render Professional Services. V. EXCLUSIONS This Policy does not apply to and the Company shall not be liable for Damages and/or Claims Expenses resulting from any Claim made against an Insured: (A) for, based upon, or arising from any deliberately dishonest, malicious, criminal or fraudulent act or omission or any willful violation of law by an Insured; however, this Exclusion shall not apply to any Insured that did not commit, participate in, or have knowledge of any such act. omission or violation of low described in this Exclusion; UA002 (71Ot) Page 2 of 6 MAY-29-2003 19:23 9498512055 qe% P.03 ` (B) by or on behalf of or with the letance of any: (1), Insured or (2) Entity of which the Insured is a director, officer, partner principal stockholder or employee; or (3) Entity under common ownership with the Insured; (C) for, based upon, or arising from actual or alleged discrimination, humiliation, harassment, or misconduct by the Insured because of race,. creed, color, age, gender, sex, sexual preference or orientation, national origin, religion, disability. handicap. or marital status: however, the Company shall pay Claims Expenses for the defense of such Claims up to a maximum of $50,000 for the Policy Period, without the Company incurring any liability to pay Damages. The Company's defense obligation does not extend to any administrative complaint filed with any state or federal agency. (D) by a current or former employee, independent contractor or job applicant of the Insured In their capacity as such; (E) for, based upon, or arising from bodily injury, sickness, disease, emotional distress, mental anguish, outrage, humiliation or death; (F) for, based upon, or arising from injury to or destruction of any tangible property including loss of use thereof; (G) for, based upon, or arising from the liability of others assumed by the Insured under any contract or agreement, unless such liablitywould have attached to the Insured even In the absence of such contract or agreement: (H) for, based upon, or arising from Professional Services involving real property in which the Insured or a member of the Insured's family has, had or contemplated having an ownership Interest: (1) for, based upon, or arising from Professional Services involving real property for which the Insured, or an Entity in which the Insured is a partner, officer, director, stockholder or employee. acts as a real estate agent, real estate broker or property manager: (J) for, based upon, or arising from representations or warranties, express, implied or otherwise, made by the Insured pertaining to the guarantee of future value of real property; (K) for, based upon, or arising from the Insured's activities as a Property manager, real estate agent or real estate broker, (L) for, based upon, or arising from: (1) the performance of Professional Services for a real estate syndicate(s), real estate investment trust(s) or limited partnership which utilizes the Insured's appraisal or report, or any information contained therein, to solicit investors or limited partners. (2) alleged violations of the Securities Act of 1933 or 1934 and the amendments thereto, or any state blue sky or securities law or similar federal or state taw. This Exclusion shall not apply if the Insured's appraisal or report is prepared for or on behalf of a commercial lender, or an affiliate or subsidiary of a commercial lender, or any conduit lender. (M) for, based upon, or arising from Professional Services performed in contravention of any governmental licensing, certification, or other applicable regulatory requirement, or In violation of any penal statute or ordinance: (N) for, bje upon, or arising from Profossional Services Involving undeveloped or vacant land w"e proposed use is for multiple unit single family housing developments, condominium developments, co-operative housing develop- ments or apartment developments consisting of 10 units or more; (0) for, based upon, or arising from Professional Services involving "commercial property" unless the Insured's appraisal or report is attested to by an Insured who has been specifically approved by the Company to do commercial appraisals and so Indicated by being named in an endorsement attached to and made a part of this Policy. "Commercial Property' means any property otherthan a single family residence, single family vacant land, multi -family units of 9 or less, and vacant land for multl-family units of 9 or less. (P) for, based upon, or arising from the insolvency of the Insured; (0) for, based upon, or arising from the appraisal or appraisals of two or more properties that: (1) were sold within the twelve (12) months prior to, or had another sate pending at, the time of the appraisal(s); and (2) the Insured knew of or should have discovered such sale or pending sale by consulting usual and customary data sources: and (3) the insured failed to note such sale or pending sale on the appreisal(s). (R) for, based upon, or arising from punitive, exemplary or multiple damages or attorney fee awards or any other type of non - compensatory damages awarded pursuant to the 'Deceptive Trade Practices Act'. "Consumer Protection Act' or any similar statutes of any state, or the "Federal Racketeer Influenced and Corrupt Organization Act'; (S) for, based upon, or arising from: (1) diminution of value, which would not have occurred in whole or in part had there not been actual, alleged or threatened discharge. dispersal, seepage, migration, release or escape of Pollutants at any time; or (2) any request, demand or order to test for, monitor, clean up, remove, contain, treat, detoxify orneutralize, or In any way respond to, or assess the effects of Pollutants; or (3) testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or In any way responding to, or assessing the effects of Pollutants: or (4) the Insured noting or falling to note the presence or . absence of any Pollutants. VI. CONDITIONS (A) REPORTING OF WRONGFUL ACTS THAT MAY GIVE RISE TO A CLAIM If during the Policy Period the Insured becomes aware of a specific Wrongful Act that may reasonably be expected to give rise to a Claim against the Insured, and if the Insured reports such specific Wrongful Act to the Company during the Policy Period In writing, then any Claim subsequently arising from such specific Wrongful Act duly reported in accordance with this paragraph shall be deemed under this Page 3 of 6 LIA002 (7f01 MA'-'-2e-2003 19:23 949e512055 97% ~ Policy to be a Claim made 09 the Policy Period. Such written notice to the Company shall include: (1) particulars as to the reasons for anticipaOng such a Claim; and (2) the nature and dates of the alleged Wrongful Act; and (3) the alleged injuries or damages sustained; and (d) the names of potential claimants, if available; and (5) the manner in which the Insured first became aware of the specific Wrongful Act. (B) NOTICE OF CLAIM OR WRONGFUL ACTS In the event of a Claim the Insured shall as a condition precedent to the coverage afforded by this Policy: (1) Immediately forward to the Company every demand. notice, summons or other process Including Institution of arbitration proceedings received by the Insured. (2) Immediately forward to the Company any other relevant Information as requested by the Company Including copies of the appralsal(s) or other work product giving rise to the Claim. Notice of any Claim or specific Wrongful Act shall be given In writing as described in item 7 of the Declarations. Notice shall not be effective until the date of receipt by the Company at this address, (C) COOPERATION The Insured shalt cooperate with the Company. Upon the Company's request, the Insured shall submit to examination and questioning by a representative of the Company, under oath If required, shall assist In effecting settlement, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits, as well as in the giving of a written statement or statements to the Company's representatives and meeting with such representatives for the purpose of investigation and/or defense. and shall provide the Company with any available information and documentation relevant to any matter under investigation by the Company, without charge to the Company. Additionally, upon the Company's request and in accordance with Section III(C), the Insured shall attend hearings. depositions and trials relative to the defense of a Claim. The Insured shall take such action as may be necessary to secure and effect any rights of indemnity, contribution or apportionment which the Insured and/or the Company may have. (D) LIMITS OF LIABILITY The Company's maximum liability for all Damages and Claims Expenses resulting from each Claim shall be the Limit of Liability for each Claim setforth in Item 6(A) of the Declarations. The Company's maximum aggregate liability for all Damages and Claims Expenses resulting from all Claims covered by this Policy shall be the aggregate Limit of Liability for all Claims set forth In Item 6(B) of the Declarations. Two or more Claims alleging, based upon, arising out of or attributable to the same or related Wrongful Act(s) shall be treated as a single Claim regardless of whether made against one or more than one Insured. All Claims arising out of the same Wrongful Act shall be considered first made within the Policy Period In which the earliest of such Claims was first made, or deemed to be made purs* Condition (A) of this Policy. and all such Claims shall be subject to one such Limit of Liability as set forth in Item 6(A) of the Declarations. The Limits of Liability of the Company for the Extended Reporting Period, if applicable, shall be part of, and not in addition to, the Limits of Liability of the Company for the Policy Period. Any payment of Damages and/or Claims Expenses by the Company shall reduce the Limits of Liability. Claims made against more than one Insured under this Policy shall not operate to increase the limit of the Company's liability. (E) DEDUCTIBLE The Company shall only be liable for those amounts payable under this Policy for: (1) Claims Expenses, and (2) Damages which are In excess of the applicable Deductible stated In Item 3 of the Declarations. The Deductible shall apply separately to each Claim and shall be bome by the Insured and remain uninsured. For purposes of the Deductible, Claims arising out of the same Wrongful Act shall be considered one Claim, and only one Deductible amount shall apply thereto. The Insured shall be liable for the Deductible amount set forth in Item 3 of the Declarations for each Claim. The Deductible shall not reduce or increase the Limits of Liability. The Insured shall promptly make any required Deductible payments within thirty (30) days of written demand by the Company. The Company shall have no obligation to make payments within the Deductible and to then seek reimburse- ment from the Insured. (F) DEDUCTIBLE CREDITS (1) EARLY RESOLUTION OF CLAIMS DEDUCTIBLE CREDIT If within one year of being reported in accordance with Condition (B) of this Policy, or within one year of being deemed to be made pursuant to Condition (A) of this Policy, a Claim is fully and finally resolved to the satisfaction of all parties, Including the Company, and all Damages and Claims Expenses arising from such Claim have been paid, the Insured's Deductible obligation for such Claim shall be reduced by 25% up to a maximum reduction of $5,000. (2) MEDIATION OF CLAIMS DEDUCTIBLE CREDIT If a Claim is fully and finally resolved to the satisfaction of all parties including the Company as a result of Mediation, the Insured's Deductible obligation for such Claim shall be reduced by 50% up to a maximum reduction of $5.000. (G) ACQUISITION OR CREATION OF ANOTHER ENTITY If during the Policy Period, the Named Insured acquires or creates another Entity in which the Named Insured has an ownership interest of greater than 50%, such Entity shall be considered an insured under this Policy, but only for Wrongful Acts committed after the date of acquisition or creation. LIA002 (7101) Pa e 4 or6 MAY-29-2003 19:24 9499512055 99% P.05 As a condition Precedocoverage under Condition (G), the Named Insured shall give written nonce to the Company of the acquisition or creation of such Entity no later than ninety (90) days after the effective date of such acquisition or creation, together with such information that the Company may require. Upon receipt of notice of such acquisition or creation, the Company may at its sole option agree to appropriately endorse this Policy subject to additional premium and/ or changed terms and conditions. If the Named Insured does not agree to the additional premium and/or changed terms and condiftons, if any, coverage otherwise afforded under this provision for such acquired or created Entity shall terminate ninety (90) days after the effective date of such acquisition or creation, or at the end of the Policy Period, whichever is earlier. if the Named Insured ceases to have an ownership interest of greater than 50% in such acquired or created Entity, coverage otherwise afforded under this provision shall terminate effective on the date such ownership interest ceases. (H) NOTICE OF CANCELLATION This Policy may be cancelled by the Named Insured by surrender of this Policy to the Company or by giving written notice to the Company stating when thereafter such cancellation shall be effective. If this Policy is cancelled by the Named Insured, the Company shall retain the customary short rate proportion of the premium hereon, except as otherwise provided In this Policy. The Company may cancel this Policy for material misrepresentation In the Application for this Policy, for arty material change in the risk, for any revocation, suspension or surrender of the Insured's professional license or right to practice his profession or for non- = paymentof premium or Deductible. Notice of cancellation shall be mailed to the Named Insured by registered, certified, or other first class mail, at the Named Insured's address shown in Item 1 of the Declarations. Written notice shall state when, not less than sixty (60) days thereafter (or ten (10) days thereafter when cancellation is due to non-payment of premium or Deductible), the cancellation shall be effective. The mailing of such notice as aforesaid shall be sufficient proof of notice and this Policy shall terminate at the date and hour specified in such notice. If this Policy shall be cancelled by the Company, the Company shall retain the pro-rata proportion of the premium hereon. (1) NOTICE OF NON -RENEWAL The Company may non -renew this Policy by mailing written notice to the Named Insured by registered. certified or other first class mail, at the Named Insured's address shown in Rem 1 of the Declarations. Written notice shall state when, not less than sixty (60) days thereafter the non -renewal shall be offeaive. (J) EXTENDED REPORTING PERIOD In case of cancellation or non -renewal of this Polity. by either the Named Insured or the Company, for reasons other than material misrepresentation in the Application for this Policy or non-payment of premium or Deductible, the Named Insured shall have the right upon payment of an additional premium, to an extension of coverage under this Policy subject to all other tents. conditions, limitations of and any endorsements to this Policy for a period of either one year for an additional premium of 100% of the total annual premium; or two years for an additional premium of 150%, of the total annual premium; or three 0 for an additional premium of 200% of the total enno premium following the effective date of such cancellation refusal to renew but only with respect to any Wrongful committed before the date of such cancellation or non -renew If the Named Insured shall cancel or fail to renew this Poli due to retirement from active business as a Real Esta Appraiser, the Named Insured shall have the right up. payment of an additional premium, to an unlimited extenO of coverage under this Policy, subject to all other terrr conditions, limitations of and endorsements to this Policy. 11 Extended Reporting Period would apply to any Wrongi Act committed before the cancellation or failure to rene The option is only available if: (1) the Named Insured was continuously insured with tl Company for at least three (3) consecutive years; and (2) the Named Insured was employed on a full-time bas (at least thirty (30) hours per week) as a Real Esta• Appraiser for at least twenty (20) consecutive years. The premium for this unlimited Extended Reporting Peric shall be 300% of the Company's total annual premium. The offer of renewal terms, conditions, Limits of Liability ane or premiums different from those of this Policy shall no constitute a cancellation or refusal to renew. The Extended Reporting Period shall terminate on th effective date and hour of any other insurance issued to th Named Insured or successor to the Named Insured whit replaces in whole or in part the coverage afforded by th Extended Reporting Period. As a condition precedent to the Named Insured's right t purchase the Extended Reporting Period, the full premiur and any Deductible(s) due for this Policy and Policy Pori& must have been paid. The Named Insured's right to purchase the Extender Reporting Period must be exercised by notice in writing no later than sixty (60) days following the non -renewal o cancellation date of this Policy, and must include payment o premium for the applicable Extended Reporting Period a: well as payment of all premiums and any Deductible(s) dui the Company. If such notice is not so given to the Company the Named Insured shall not, at a later date, be able to exerclsr such right. At the commencement of any Extended Reporting Period the entire premium thereafter shall be deemed earned .and it the event the Named Insured terminates the Extended Reporting Period before its expiration date, the Company shall not be liable to return to the Named Insured any portion of the premium for the Extended Reporting Period. The fact that this Policy may be extended by virtue of an Extended Reporting Period shall not in any way increase the Limits of Liability as set forth In the Declarations. The Extended Reporting Period shall be renewable at the sole option of the Company. (K) OTHER INSURANCE If any Claim or Wrongful Act noticed to the Company under this Policy is insured by another valid policy or policies, then this Policy shall apply only in excess of the amount of any deductibles, retentions and limits of liability under such other policy or policies, whether such other policy or policies are stated to be primary, contributory, excess, contingent or otherwise, unless such other insurance is written specifically excess of this Policy by reference in such other policy to the Policy Number indicated on this Policy's Declarations. MAY-29-2003 19:24 9499512055 Paoo 5 of 8 LIA002 ( ge% P.06 (L) SUBROGATION In the event of any payment under this Policy, the Company shall be subrogated to all of the Insured's rights of recovery against any person or organi7.ation, and the Insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The Insured shall do nothing after a Claim Is made to prejudice such rights. The Company hereby waives its subrogation rights against s talent of the Insured to the extent that the Insured had, prior to a Claim, or a Wrongful Act reasonably expected to give rise to a Claim, entered Into a written agreement to waive such rights. Any amount recovered upon the exercise of such rights of subrogation shall first be applied to the repayment of expenses incurred by the Company toward subrogation, second toward reimbursement of any payments made by the Insured pursuant to the Insured's Deductible, and any remaining balance shall be the Company's. (M) ALTERATION AND ASSIGNMENT No change in, modification of, or assignment of interest under this Policy shall be effective except when made by written endorsement by an authorized representative of the Company. (N) REIMBURSEMENT OF THE COMPANY If the Company has paid any Damages and/or Claims Expenses in excess of the applicable Limit of Liability or within the amount of the applicable Deductible, the Insured shall be Gnble to the Company for any and all such amounts and, upon demand, shall pay such amounts to the Company promptly. (0) ENSCONTRACT By acceptance of this Policy the Insured agrees that the statements In the Declarations and Application are its agreements and representations, that this Policy is issued in reliance upon the truth of such representations and that this Policy embodies all agreements existing between the Insured and the Company. (P) AUDIT The Company may examine and audit the insured's books and records at any time during the Policy Period and within three (3) years after termination of this Policy to the extent such books and records relate to the subject matter of this Policy. (Q) NAMED INSURED SOLE AGENT The Named Insured shall be the sole agent of all Insureds hereunder for the purpose of effecting or accepting any amendments to or cancellation of this Polity, for the purposo of receiving such notices as may be required by law and/or any provision(s) of this Policy, for the completing of any Application and the making of any representations, for the payment of any premium and the receipt of any retum premium that may become due under this Policy, for the payment of any Deductible obligations that may become due under this Policy, and the exercising or declining to exercise any right under this Policy, including declining or exercising any Extended Reporting Period. (R) BANKRUPTCY OR INSOLVENCY The bankruptcy or insolvency of any Insured or an Insured's estate will not relieve the Company of its obligations under this Policy. IN WITNESS WHEREOF the Company has caused this, Policy to be executed and attested, but this Policy shall not be valid unless countersigned on the Declarations page by duly authorized representative of the Company. Secretary Authorized Representatives of Liberty Insurance Underwriters, Inc. UA002 (7/0 t) Page s of 6 MAY-29-2003 19:25 949e512055 98x P.07 C.lJ/ LO/ LUUJ 1 / LJ J`. JVJI LV J./ THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY - REAL ESTATE SYNDICATE AN� REIT MODIFICATION APPRAISAL OF VACANT LAND ENDORSEMENT It is agreed that Section V. of the Policy, Exclusion (L) and replaced with the following: and Exclusion (N) respectively are deleted This Policy does not apply to and the Company shall I not be liable for Damages and/or Claims Expenses resulting from any Claim made against an Insu (L) for, based upon, or arising from: (1) the performance of Professional Se ry ces in connection with proposed or future construction for a real estate syndi ate(s), real estate investment trust(s) or limited partnership, which utilizes the Insured's appraisal or report or any information contained therein, to solic it investors or limited partners. (2) alleged violations of the Securities A t of 1933 or 1934 and the amendments thereto, or any state blue sky or secu ities law or similar federal or state law. This Exclusion shall not apply if the Insured's appraisal lor report is prepared for or on behalf of a commercial lender, or an affiliate or subsidiary of a commercial lender, or any conduit lender. (N) for, based upon, or arising from Professional Sen whose proposed use is for multiple unit single -fa developments, co-operative housing development; ten (10) units or more, unless the appraisal is pert one or more of the following professional design by one of the following Insureds: All other terms and conditions of this Policy remain u LIA024 (07/01) Page 1 of 1 ces involving undeveloped or vacant land nily housing developments, condominium or apartment developments consisting of rmed by or attested to by an Insured with :ions: MAI, SRPA, SREA, ASA, IFAC, or MAY-29-2003 19:25 949e512055 9e% P.oe . VJL LUJJ May 6, 2003 HARRIS REALTY APPRAISAL James S. Harris, MAI 5100 Birch Street, Suite 200 Newport 6a3ch. CA 92660 Policy Number: LIU003120-002 Effective: 05/OA/2004 THIS NOTICE CONTAINS IMPORTANT INFORMATION ABOUT THE TERRORISM RISK INSURANCE ACT OF 2002. PLEASE READ IT CAREFULLY. THFTERRORISM RISK INSURANCE AC.ZQ.E2Q02 On November 26, 2002. President Bush signed Into law the Terrorism Risk Insurance Act of 2002. The Act establlshas a temporary program to spread the risk of catastrophic losses from an act of terrorism between insurers and the federal government The stated purpose of the Act is 'to protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty insurance for terrorism risk.' The Act requires Insurers to pay tosses from an act of terrorism up to an amount equal to a percentage of Its direct earned premium. This amount is called the 'insurer deductible: If an individual insurers losses exceed this amount, the federal "Terrorism Insurance Program' will reimburse the insurer for 90% of tosses paid in excess of the insurer deductible. An Insurer that has met its Insurer deductible is not liable for any portion of losses In excess of $100 billion per year, Similarly, the federal government is not liable for any losses covered by the Act that exceed this amount. MANO,ATORY OFFER OE CQV E OR A N ACT OF TF,ER_QRI.SSM ANQ QZSC`ISUR�OF PR€ML�M Under the Act, Insurers must make coverage available for any toss that results from an act of terrorism Ate► Q that is othenvlse covered under your policy. The Act alao requires insurers to provide notice to policyholders of the premium charge for tosses that result from an act of terrorism and are therefore covered under the Federal Insurance Program. An 'act of terrorism means: Any act that is certified by the Secretary lot the Treasury], in concurrence with the Secretary of State, and the Attorney General of the United States (1) to be an act of terrorism; (li) to be a violent act or an act that is dangerous to — (1) human life; (11) property; or (111) infrastructure; (lii) to have resulted In damage within the United States, or outside of the United States in the case of - (1) an air carrier (as defined in section 40102 of title d9, United States Code) or United States flag vessel (or a vessel based principally In the United States, on which United States income tax Is paid and whose Insurance coverage is subject to regulation in the United States); or (11) the premises of a United States mission; and (iv) to have been committed by an individual or Individuals acting on behalf of any foreign person or foreign Interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. P)2E�,41u n(�D c osQRt'lI6T MINT Your policy does not contain an exclusion for losses resulting from an act of terrorism. Coverage for such losses is still subject to all of the terms, definitions; exclusions and conditions in your policy. as well as the terms, definitions, exclusions and conditions of the primary and underlying excess policies. THE PREMIUM CHARGE FOR LOSSES ARISING FROM AN ACT OF TERRORISM IS $0.00. THE SUMMARY OF THE ACT AND THE COVERAGE UNDER YOUR POLICY CONTAINED IN THIS NOTICE IS NECESSARILY GENERAL IN NATURE. YOUR POLICY CONTAINS SPECIFIC TERMS, DEFINITIONS, EXCLUSIONS AND CONDITIONS. IN CASE OF ANY CONFLICT, YOUR POLICY LANGUAGE WILL CONTROL THE RESOLUTION OF ALL COVERAGE QUESTIONS. PLEASE READ YOUR POLICY CAREFULLY, F.W I or t TR1A FORM C led. lAVOJ) MA`r'-29-2003 19 : 25 9498512055 98i P.09 10k175 • * THIS E1` UGRSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY COMMERCIAL APPRAISAL ENDORSEMENT This endorsement, effective on 05/04/2003 at 12:01 A.M. standard time at the address of the Named Insured Forms a part of Policy Number: LI0003120-002 Issued to: HARRIS REALTY APPRAISAL It is agreed that the following Insureds have been approved by the Company to perform Professional Services involving commercial property: Insured James B. Harris Effective Date of Approval All other terms and conditions of this Policy remain unchanged. LIA013 (7/01) 05/04/2003 MAY-29-20e3 19:26 9499512055 98% P.10 -- -101175 . 4 e THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT AREFULLY ADDITIONAL COVERED PERSONS ENDORSEMENT This endorsement, effective on 05/04/2003 at 12:01 A.M. standard time at the address of the Named Insured Forms a part of Policy Number: LI0003120-002 Issued to: HARRIS REALTY APPRAISAL It is agreed that Section IV of the Policy, Definition (H) is amended to include: "Insured" means: The persons identified below, but only while acting on behalf of the Named Insured: Name James B. Harris Coverage Effective Date 05/04/2003 All other terms and conditions of this Policy remain unchanged. LIA012 (7/01) Employee or Independent Contractor Principal/Owner MAY-29-2003 19:26 9499512055 99x P.11 Date lssued: PoliSy Number: Previous PolicX Number: w + 05/06n003 LIU003120-002 uu003120-001 REAL ESTATE APPRAISERS PROFESSIONAL LIABILITY Liberty_ Insurance t bmdetrwritm bac._ 55 Water Street, 18th Floor New York, NY 10041 Item THIS IS A CLAIMS MADE AND REPORTED POLICY. PLEASE READ IT CAREFULLY. LIBERTY INSURANCE UNDERWRITERS, INC. (herein called "the Company") )DECLARATIONS 1. Customer ID: 101175 Companies writing property and casualty Named Insured: insurance business in California are required to HARRIS REALTY APPRAISAL participate in the California Insurance Guarantee Association. If a company becomes insolvent, James B. Harris, MAI the California Insurance Guarantee Association 5100 Birch Street, Suite 200 settles unpaid claims and assesses each insurance company for its fair share. California Newport Beach, CA 92bb0 p° law requires all companies to surcharge policies to recover these assessments. If your policy is 2. Policy Period: surcharged, "CA Surcharge" with an amount will From: OS/04/2003 To OS/04/2004 be displayed on your premium notice. 12:01 A.M. Standard Time at the address stated in Item 1. 3. Deductible: $1,000.00 Each Clain 4. Retroactive Date: 05/04/ 1998 S. Inception Datc: 05/04/2002 6. Limits of Liability: The Limit of Liability for Each Claim and in A. $1,000,000.00 Each Claim the Aggregate is reduced by Damages and B. $1,000,000.00 Aggregate Claims Expenses as defined in the Policy. 7. Mail All Notices to Agent: Liability Insurance Administrators 1600 Anacapa Stred Santa Barbara, California 93101 (805)963-6624; Fax: (805) 962-0652 8. Annual Premium: $1,015.00 + S20.30 CA Surcharge 9. Number of Appraisers: 1 10. Forms attached at issue: LU002 (07/01) LIA012 (07/01) LU013 (07/01) LIA024 (07101) TRIA Form C (01/03) This Declarations Page together with the completed and signed Policy Application including all attachments and exhibits thereto, and the Real Estate Appraisers Professional Uabillty Insurance Policy hall constitute 4a c ntraet between the Named Insured and the Company, By LIA001 (07/01) Authorized Signature MAY-29-2003 19:26 9499512055 ge% P.12 • • (12) November 3, 2003 - Council/Agency Minutes - Page 12 (City Council) Directed the City Administrator to Make Improvements As Amended to the City's Contracting Processes (Including Professional Services Contracts under Huntington Beach Municipal Code Section 3.03) (120.10) The City Council considered a communication from Councilmember Jill Hardy transmitting the following Statement of Issue: `At the October 20, 2003 City Council meeting, staff recommended improvements to the city's contracting processes. 1 believe the following recommendations represent effective solutions to recent concerns identified with the contracting process. In addition to the recommended improvements (listed below), I propose that staff provide the City Council an update on the contracting process as part of the FY 2004-05 budget process. A motion was made by Hardy, second (inaudible) as amended to provide that the City Attorney, not Departments will maintain a log of the contracts they enter into which will be transmitted quarterly to the City Clerk's office to ensure proper filing and to direct the City Administrator to make the following improvements to the city's contracting processes within 90 days and provide a report to the City Council regarding the contracting processes as part of the FY 2004-05 budget process: a. City Attorney's office will, upon approving a Professional Services Contract (PSA), transmit the original agreement to the City Clerk's office; and b. Develop an annual training program for processing all types of contracts; and C. Develop Administrative Regulations to establish the method for processing' maintenance/service and public works contracts, and d. Contracts will not be dated until they are effective (signed by City Attorney's office); and e. Remove the Mayor and City Clerk signature lines from contracts when not required; and f. Modify Purchasing Manager Certification to apply to maintenance/service and public works contracts; and g. Assign a single department contract coordinator to ensure contract proper processing; and h. Depai:#ReRts City Attorney will maintain a log of the contracts they enter into which will be transmitted quarterly to the City Clerk's office to ensure proper filing; and i. Staffs professional service agreement signature authority will be capped at $100,000, agreements over $100,000 will require City Council approval. City Attorney Jennifer McGrath clarified for Councilmember Dave Sullivan that her office verifies all documents are accurate, appropriately signed and approved as to form. r• 13 • November 3 2003 - Council/Agency Minutes - Page 13 City Clerk Connie Brockway responded to Councilmember Dave Sullivan's inquiry relative to why she believed City Clerk attestation on city contracts to be necessary stating that a majority of cities require the City Clerk to always attest to the signatures of city officers entering into contracts on behalf of the city; that attestation by the City Clerk applies to contracts approved and entered into that do not appear on city council agendas and to those contracts which do appear on the city council agenda. The City Clerk informed Council of an email survey her office had conducted of over forty cities wherein all but eight cities required the City Clerk to attest to all agreements even those agreements not appearing on the council agenda. She referred to cities such as the City of Irvine, Santa Ana and Anaheim which require City Clerk attestation to the signatures of the city officers just as the City Clerk must attest to the signature of the Mayor on contracts that go through the city council process. She informed Council of the reasons why she believed her request to attest to in house contracts was reasonable. A substitute motion was made by Sullivan, second Coerper to require attestation and limit contracts to $50,000. City Attorney McGrath stated her opinion that the city seal or attestation line on city contracts is not required. City Attorney McGrath reported on the Huntington Beach Municipal Code Section 3.03 process. City Administrator Ray Silver reported on the Professional Services Contract process stating in order to save staff time his office, the City Attorney and Risk Management developed a standard. professional services contract. City Administrator Silver informed Council that staff wants to improve the system and address the legitimate concerns raised by the City Clerk. Council voted on the above -mentioned substitute motion made by Councilmember Sullivan. The motion failed by the following roll call vote: AYES: Sullivan, Coerper, Green, NOES: Boardman, Cook, Houchen, Hardy ABSENT: None Council voted on the above -mentioned original motion. The original motion as amended by Councilmember Hardy that the City Attorney, not Departments will maintain a log of the contracts they enter into which will be transmitted quarterly to the City Clerk's office to ensure proper filing carried by the following roll call vote: AYES: Coerper, Hardy, Green, Boardman, Cook, Houchen NOES: Sullivan ABSENT: None