2014/04/30 Kosmont and Associates, Inc. FY15 Hotel Feasibility study PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT for Professional Services ("Agreement") is made th1s43&day of
April, 2014 ("Effective Date") by and between the CITY OF MENIFEE ("City") and Kosmont &
Associates, Inc., a California Corporation doing business as Kosmont Companies ("Consultant")
(together sometimes referred to the "Parties").
Section 1, SERVICES. Subject to the terms and conditions set forth in this
Agreement, Consultant shall provide to City the services described in the Scope of Work,
(Exhibit A) and incorporated here. Consultant will perform subsequent Task Orders as
requested by the Contract Administrator, in accordance with the Scope of Work, In the event of
a conflict in or inconsistency between the terms of this Agreement and Exhibit A, this Agreement
shall prevail.
1.1 Term of Services. The term of this Agreement shall begin on the
Effective Date and shall end on June 30, 2015 unless the term of the Agreement is otherwise
terminated or extended as provided for in Section 8. The time provided to Consultant to
complete the services required by this Agreement shall not affect the City's right to terminate the
Agreement, as provided for in Section 8.
1.2 Standard of Performance. Consultant shall perform all services
required pursuant to thls Agreement in the manner and according to the standards observed by
a competent practitioner of the profession in which Consultant is engaged in the geographical
area in which Consultant practices its profession and to the sole satisfaction of the Contract
Administrator,
1.3 Assignment of Personnel. Consultant shall assign only competent
personnel to perform services pursuant to Agreement. In the event that City, in its sole
discretion, at any time during the term of this Agreement, desires the reassignment of any such
persons, Consultant shall, immediately upon receiving notice from City of such desire of City,
reassign such person or persons.
1.4 Time. Consultant shall devote such time to the performance of services
pursuant to this Agreement as may be reasonably necessary to satisfy Consultant's obligations
hereunder.
1.5 Authorization to Perform Services. The Consultant is not authorized to
perform any services or incur any costs whatsoever under the terms of this Agreement until
receipt of authorization from the Contract Administrator.
Section 2. COMPENSATION. City hereby agrees to pay Consultant a sum not to
exceed Twenty Four Thousand Seven Hundred and Fifty Dollars ($24,750) notwithstanding any
contrary indications that may be contained in Consultant's proposal, for services to be
performed and reimbursable costs incurred under this Agreement. In the event of a conflict
between this Agreement and Exhibit A, regarding the amount of compensation, this Agreement
shall prevail. City shall pay Consultant for services rendered pursuant to this Agreement at the
time and in the manner set forth herein. The payments specified below shall be the only
payments from City to Consultant for services rendered pursuant to this Agreement. Consultant
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Professional Services Agreementwith 1 of 12
shall submit all invoices to City in the manner specified herein. Except as specifically authorized
in advance by City, Consultant shall not bill City for duplicate services performed by more than
one person.
2.1 Invoices. Consultant shall submit invoices monthly during the term of
this Agreement, based on the cost for services performed and reimbursable costs incurred prior
to the invoice date. Invoices shall contain the following information:
• Serial identifications of progress bills; i.e., Progress Bill No, 1 for the first
invoice, etc.;
• The beginning and ending dates of the billing period;
• A Task Summary containing the original contract amount, the amount of prior
billings, the total due this period, the balance available under the Agreement,
and the percentage of completion;
• At City's option, for each work item in each task, a copy of the applicable time
entries or time sheets shall be submitted showing the name of the person
doing the work, the hours spent by each person, a brief description of the
work, and each reimbursable expense;
• The total number of hours of work performed under the Agreement by
Consultant and each employee, agent, and subcontractor of Consultant
performing services hereunder necessary to complete the work described in
Exhibit A;
• Receipts for expenses to be reimbursed;
• The Consultant's signature.
2.2 Monthly Payment. City shall make monthly payments, based on
invoices received, for services satisfactorily performed, and for authorized reimbursable costs
incurred. City shall have thirty (30) days from the receipt of an invoice that complies with all of
the requirements above to pay Consultant.
2.3 Final Payment. City shall pay the last ten percent (10%) of the total sum
due pursuant to this Agreement within sixty (60) days after completion of the services and
submittal to City of a final invoice, if all services required have been satisfactorily performed.
2A Total Payment. City shall not pay any additional sum for any expense or
cost whatsoever incurred by Consultant in rendering services pursuant to this Agreement. City
shall make no payment for any extra, further, or additional service pursuant to this Agreement.
In no event shall Consultant submit any invoice for an amount in excess of the
maximum amount of compensation provided above either for a task or for the entire Agreement,
unless the Agreement is modified in writing prior to the submission of such an invoice.
2.6 Hourly Fees. Fees for work performed by Consultant on an hourly basis
shall not exceed the amounts shown on the fee schedule included with Exhibit A.
2.6 Reimbursable Expenses. Reimbursable expenses are included within
the maximum amount of the contract.
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2.7 Payment of Taxes. Consultant is solely responsible for the payment of
employment taxes incurred under this Agreement and any federal or state taxes.
2.8 Payment upon Termination. In the event that the City or Consultant
terminates this Agreement pursuant to Section 8, the City shall compensate the Consultant for
all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of
the date of written notice of termination. Consultant shall maintain adequate logs and
timesheets in order to verify costs incurred to that date,
Section 3. FACILITIES AND EQUIPMENT. Except as otherwise provided,
Consultant shall, at its sole cost and expense, provide all facilities and equipment necessary to
perform the services required by this Agreement. City shall make available to Consultant only
physical facilities such as desks, filing cabinets, and conference space, as may be reasonably
necessary for Consultant's use while consulting with City employees and reviewing records and
the information in possession of the City. The location, quantity, and time of furnishing those
facilities shall be in the sole discretion of City. In no event shall City be required to furnish any
facility that may involve incurring any direct expense, including but not limited to computer, long-
distance telephone or other communication charges, vehicles, and reproduction facilities.
Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this
Agreement, Consultant, at its own cost and expense, shall procure the types and amounts of
insurance checked below and provide Certificates of Insurance, indicating that Consultant has
obtained or currently maintains insurance that meets the requirements of this section and which
is satisfactory, in all respects, to the City. Consultant shall maintain the insurance policies
required by this section throughout the term of this Agreement. The cost of such insurance shall
be included in the Consultant's compensation. Consultant shall not allow any subcontractor,
consultant or other agent to commence work on any subcontract until Consultant has obtained
all insurance required herein for the subcontractor(s) and provided evidence thereof to City.
Verification of the required insurance shall be submitted and made part of this Agreement prior
to execution. Consultant acknowledges the Insurance policy must cover inter-insured suits
between the City and other Insureds.
4.1 Workers' Compensation. Consultant shall, at Its sole cost and expense,
maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any
and all persons employed directly or indirectly by Consultant. The Statutory Workers'
Compensation Insurance and Employer's Liability Insurance shall be provided with limits of not
less than ONE MILLION DOLLARS ($1,000,000.00) per accident, ONE MILLION DOLLARS
($1,000,000.00) disease per employee, ONE MILLION DOLLARS ($1,000,000.00) disease per
policy. In the alternative, Consultant may rely on a self-insurance program to meet those
requirements, but only if the program of self-insurance complies fully with the provisions of the
California Labor Code. Determination of whether a self-insurance program meets the standards
of the Labor Code shall be solely in the discretion of the Contract Administrator. The insurer, if
insurance is provided, or the Consultant, if a program of self-insurance is provided, shall waive
all rights of subrogation against the City and its officers, officials, employees, and authorized
volunteers for loss arising from work performed under this Agreement.
4.2 Commercial General
Automobile Liability Insurance.
4824-7172-0903.1 3 of 12
4.2.1 General requirements. Consultant, at its own cost and expense,
shall maintain commercial general and automobile liability insurance for the term of this
Agreement in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per
occurrence, combined single limit coverage, for risks associated with the work contemplated by
this Agreement, TWO MILLION DOLLARS ($2,000,000,00) general aggregate, TWO MILLION
DOLLARS ($2,000,000.00) products/completed operations aggregate. If a Commercial General
Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is
used, either the general aggregate limit shall apply separately to the work to be performed
under this Agreement or the general aggregate limit shall be at least twice the required
occurrence limit. Such coverage shall include but shall not be limited to, protection against
claims arising from bodily and personal injury, including death resulting therefrom, and damage
to property resulting from activities contemplated under this Agreement, including the use of
hired, owned and non-owned automobiles.
4.2.2 Minimum scope of coverage. Commercial general coverage
shall be at least as broad as Insurance Services 75Fice Commercial General Liability occurrence
form CG 0001 or GL 0002 (most recent editions) covering comprehensive General Liability and
Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General
Liability. Automobile coverage shall be at least as broad as Insurance Services Office
Automobile Liability form CA 0001 (ed. 12190) Code 8 and 9, No endorsement shall be attached
limiting the coverage.
4.2.3 Additional requirements. Each of the following shall be included
in the insurance coverage or added as a certified endorsement to the policy:
a. The insurance shall cover on an occurrence or an accident
basis, and not on a claims-made basis.
b, Any failure of Consultant to comply with reporting
provisions of the policy shall not affect coverage provided to City and its officers, employees,
agents, and volunteers.
4.3 Professional Liability Insurance.
4.3.1 General requirements. Consultant, at its own cost and expense,
shall maintain for the period covered by this Agreement professional liability insurance for
licensed professionals performing work pursuant to this Agreement in an amount not less than
ONE MILLION DOLLARS ($1,000,000) covering the licensed professionals' errors and
omissions. Any deductible or self-insured retention shall not exceed $150,000 per claim.
4.3.2 Claims-made limitations. The following provisions shall apply if
the professional liability coverage is written on a claims-made form:
a. The retroactive date of the policy must be shown and must
be no later than the commencement of the work.
b. Insurance must be maintained and evidence of insurance
must be provided for one (1) year after completion of the Agreement or the work, so long as
commercially available at reasonable rates.
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C. If coverage is canceled or not renewed and it is not
replaced with another claims-made policy form with a retroactive date that precedes the date of
this Agreement, Consultant must provide extended reporting coverage for one (1) year after
completion of the Agreement or the work. Such continuation coverage may be provided by one
of the following: (1) renewal of the existing policy; (2) an extended reporting period
endorsement; or (3) replacement insurance with a retroactive date no later than the
commencement of the work under this Agreement.
d. A copy of the claim reporting requirements must be
submitted to the City prior to the commencement of any work under this Agreement,
4.4 All Policies Requirements.
4.4.1 Acceptability of insurers. All insurance required by this section
is to be placed with insurers with a Bests' rating of no less than A:VII and admitted in California.
4.4.2 Verification of coveraae. Prior to beginning any work under this
Agreement, Consultant shall furnish City with Certificates of Insurance, additional insured
endorsement or policy language granting additional insured status complete certified copies of
all policies, including complete certified copies of all endorsements. All copies of policies and
certified endorsements shall show the signature of a person authorized by that insurer to bind
coverage on its behalf. The Certificate of Insurance must include the following reference:
Menifee Hotel Feasibility Study. The name and address for Additional Insured endorsements,
Certificates of Insurance and Notice of Cancellation is: City of Menifee, 29714 Haun Road,
Menifee, CA 92586. The City must be endorsed as an additional insured for liability arising out
of ongoing and completed operations by or on behalf of the Consultant.
4.4.3 Notice of Reduction in or Cancellation of Coverage A certified
endorsement shall be attached to all insurance obtained pursuant to this Agreement stating that
coverage shall not be suspended, voided, canceled or materially changed by either party, or
reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified,
mail, return receipt requested, has been given to the City. In the event that any coverage
required by this section is reduced, limited, cancelled, or materially affected in any other
manner, Consultant shall provide written notice to City at Consultant's earliest possible
opportunity and in no case later than ten (10) working days after Consultant is notified of the
change in coverage.
4.4.4 Additional insured; primary insurance City and its officers,
employees, agents, and authorized volunteers shall be covered as additional insureds with
respect to each of the following: liability arising out of activities performed by or on behalf of
Consultant, including the insured's general supervision of Consultant; products and completed
operations of Consultant, as applicable; premises owned, occupied, or used by Consultant; and
automobiles owned, leased, or used by the Consultant in the course of providing services
pursuant to this Agreement. The coverage shall contain no special limitations on the scope of
protection afforded to City or its officers P Y , employees, agents, or authorized volunteers, The
insurance n e to the City as an additional i non-
contributory
Y insured must apply on a primary and non
contributor basis with respect to an insurance self-insurance e or elf insurance P Y program maintained by the
City. Additional insured st
atus shall continue for
r 1 year after delivery
( Y e of raduct s .
Y p ( )
4824-7172-0963.E 5 of 12
A certified endorsement must be attached to all policies stating that
coverage is primary insurance with respect to the City and its officers, officials, employees and
volunteers, and that no insurance or self-insurance maintained by the City shall be called upon
to contribute to a loss under the coverage.
4.4.6 Deductibles and Self-insured Retentions Consultant shall
obtain the written approval of City for the self-insured retentions and deductibles before
beginning any of the services or work called for by any term of this Agreement.
During the period covered by this Agreement, only upon the prior express
written authorization of Contract Administrator, Consultant may increase such deductibles or
self-insured retentions with respect to City, its officers, employees, agents, and volunteers. The
Contract Administrator may condition approval of an increase in deductible or self-insured
retention levels with a requirement that Consultant procure a bond guaranteeing payment of
losses and related investigations, claim administration, and defense expenses that is
satisfactory in all respects to each of them.
4.4.6 Subcontractors, Consultant shall include all subcontractors as
insureds under its policies or shall furnish separate certificates and certified endorsements for
each subcontractor. All coverages for subcontractors shall be subject to all of the requirements
stated herein.
4.4.7 Variation, Contract Administrator may approve in writing a
variation in the foregoing insurance requirements, upon a determination that the coverage,
scope, limits, and forms of such insurance are either not commercially available, or that the
City's interests are otherwise fully protected.
4.6 Remedies. In addition to any other remedies City may have If Consultant
fails to provide or maintain any insurance policies or policy endorsements to the extent and
within the time herein required, City may, at its sole option, exercise any of the following
remedies, which are alternatives to other remedies City may have and are not the exclusive
remedy for Consultant's breach:
• Obtain such insurance and deduct and retain the amount of the premiums
for such insurance from any sums due under the Agreement;
• Order Consultant to stop work under this Agreement or withhold any
payment that becomes due to Consultant hereunder, or both stop work and
withhold any payment, until Consultant demonstrates compliance with the
requirements hereof; and/or
• Terminate this Agreement.
Section 6. INDEMNIFICATION.
4824-7172-0963.1 6 of 12
(a ) Indemnification for Professional Liability, Where the law establishes a professional
standard of care for Consultant's Services, to the fullest extent permitted by law, Consultant
shall indemnify, protect, defend and hold harmless City and any and all of its officials,
employees and agents ("Indemnified Parties") from and against any and all losses, liabilities,
damages, costs and expenses, including attorney's fees and costs to the extent same are
caused in whole or in part by any negligent or wrongful act, error or omission of Consultant, its
officers, agents, employees or sub-consultants (or any entity or individual that Consultant shall
bear the legal liability thereof) in the performance of professional services under this Agreement.
(b) Indemnification for Other than Professional Liability, Other than in the performance
of professional services and to the full extent permitted by law, Consultant shall indemnify,
protect, defend and hold harmless the City of Menifee, and any and all of its employees, officials
and agents from and against any liability (including liability for claims, suits, actions, arbitration
proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of
any kind, whether actual, alleged or threatened, including attorneys fees and costs, court costs,
interest, defense costs, and expert witness fees), where the same arise out of, are a
consequence of, or are In any way attributable to, in whole or in part, the performance of this
Agreement by Consultant or by any individual or entity for which Consultant is legally liable,
including but not limited to officers, agents, employees or sub-contractors of Consultant.
(c) The provisions of this section do not apply to claims occurring as a result of City's
sole or active negligence. The provisions of this section shall not release City from liability
arising from gross negligence or willful acts or omissions of City or any and all of its officials,
employees and agents.
Section 6. STATUS OF CONSULTANT.
6.1 Independent Contractor. At all times during the term of this Agreement,
Consultant shall be an independent contractor and shall not be an employee of City. City shall
have the right to control Consultant only insofar as the results of Consultant's services rendered
pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3;
however, otherwise City shall not have the right to control the means by which Consultant
accomplishes services rendered pursuant to this Agreement. Notwithstanding any other City,
state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of
its employees, agents, and subcontractors providing services under this Agreement shall not
qualify for or become entitled to any compensation, benefit, or any incident of employment by
City, including but not limited to eligibility to enroll in the California Public Employees Retirement
System (PERS) as an employee of City and entitlement to any contribution to be paid by City for
employer contributions and/or employee contributions for PIERS benefits.
Section 7. LEGAL REQUIREMENTS.
7.1 Governing Law. The laws of the State of California shall govern this
agreement.
7.2 Compliance with Applicable Laws. Consultant and any subcontractor
shall comply with all applicable local, state and federal laws and regulations applicable to the
performance of the work hereunder. Consultant shall not hire or employ any person to perform
work within the City of Menifee or allow any person to perform work required under this
4824-7172-0963.1 7 of 12
Agreement unless such person is properly documented and legally entitled to be employed
within the United States. Consultant shall obtain a City of Menifee business license. Consultant
shall require the same of all subcontractors.
7.3 Licenses and Permits. Consultant represents and warrants to City that
Consultant and its employees, agents, and any subcontractors have all licenses, permits,
qualifications, and approvals of whatsoever nature that are legally required to practice their
respective professions. Consultant represents and warrants to City that Consultant and its
employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all
times during the term or this Agreement any licenses, permits, and approvals that are legally
required to practice their respective professions. In addition to the foregoing, Consultant and
any subcontractors shall obtain and maintain during the term of this Agreement valid Business
Licenses from City.
Section 8. TERMINATION AND MODIFICATION.
8.1 Termination. City may cancel this Agreement at any time and without
cause upon written notification to Consultant.
Consultant may cancel this Agreement upon 30 days' written notice to City and
shall include in such notice the reasons for cancellation.
In the event of termination, Consultant shall be entitled to compensation for
services performed to the effective date of termination; City, however, may condition payment of
such compensation upon Consultant delivering to City any or all documents, photographs,
computer software, video and audio tapes, and other materials provided to Consultant or
prepared by or for Consultant or the City in connection with this Agreement.
8.2 Extension. City may, in its sole and exclusive discretion, extend the end
date of this Agreement beyond that provided for in Subsection 1.1, Any such extension shall
require a written amendment to this Agreement, as provided for herein. Consultant understands
and agrees that, if City grants such an extension, City shall have no obligation to provide
Consultant with compensation beyond the maximum amount provided for in this Agreement.
Similarly, unless authorized by the Contract Administrator, City shall have no obligation to
reimburse Consultant for any otherwise reimbursable expenses incurred during the extension
period.
8.3 Amendments. The parties may amend this Agreement only by a writing
signed by all the parties.
8.4 Assignment and Subcontracting. City and Consultant recognize and
agree that this Agreement contemplates personal performance by Consultant and is based
upon a determination of Consultant's unique personal competence, experience, and specialized
personal knowledge. Moreover, a substantial inducement to City for entering into this
Agreement was and is the professional reputation and competence of Consultant. Consultant
may not assign this Agreement or any interest therein without the prior written approval of the
Contract Administrator. Consultant shall not subcontract any portion of the performance
contemplated and provided for herein, other than to the subcontractors noted in the proposal,
1924-7172-0963.1 8 of 1.2
without prior written approval of the Contract Administrator. In the event that key personnel
leave Consultant's employ, Consultant shall notify City immediately.
8.5 ®ptions upon Breach by Consultant. If Consultant materially breaches
any of the terms of this Agreement, City's remedies shall include, but not be limited to, any or all
of the following:
8.5.1 Immediately terminate the Agreement;
8.5.2 Retain the plans, specifications, drawings, reports, design
documents, and any other work product prepared by Consultant pursuant to this Agreement;
8.5.3 Retain a different consultant to complete the work described in
Exhibit A not finished by Consultant; or
Section 9. KEEPING AND STATUS OF RECORDS.
9.1 Records Created as Part of Consultant's Performance All reports,
data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies,
specifications, records, files, or any other documents or materials, in electronic or any other
form that Consultant prepares or obtains pursuant to this Agreement and that relate to the
matters covered hereunder shall be the property of the City. Consultant hereby agrees to deliver
those documents to the City upon termination of the Agreement. However, such documentation
and property shall not be construed to include computer software or proprietary third party data,
including but not limited to data or licensed information used by Consultant to complete this
assignment, It is understood and agreed that the documents and other materials, including but
not limited to those described above, prepared pursuant to this Agreement are prepared
specifically for the City and are not necessarily suitable for any future or other use. City and
Consultant agree that, until final approval by City, all data, plans, specifications, reports and
other documents are confidential and will not be released to third parties without prior written
consent of both parties unless required by law.
9.2 Consultant's Books and Records. Consultant shall maintain any and
all ledgers, books of account, invoices, vouchers, canceled checks, and other records or
documents evidencing or relating to charges for services or expenditures and disbursements
charged to the City under this Agreement for a minimum of three (3) years, or for any longer
period required by law, from the date of final payment to the Consultant to this Agreement.
9.3 Inspection and Audit of Records. Any records or documents that
Section 9.2 of this Agreement requires Consultant to maintain shall be made available for
inspection, audit, and/or copying at any time during regular business hours, upon oral or written
request of, the City. Under California Government Code Section 8546.7, if the amount of public
funds expended under this Agreement exceeds Ten Thousand Dollars $10 000.00 the
Agreement shall be subject to the examination and audit of the State Auditor, at the request of
City or as part of any audit of the City, for a period of three (3) years after final payment under
the Agreement.
i
Section 1t1, MISCELLANEOUS PROVISIONS.
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10.1 Attorneys' Fees. If either party to this Agreement brings any action,
including an action for declaratory relief, to enforce or interpret the provision of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees and expenses including costs,
in addition to any other relief to which that party may be entitled. The court may set such fees in
the same action or in a separate action brought for that purpose.
10.2 venue. In the event that either party brings any action against the other
under this Agreement, the parties agree that trial of such action shall be vested exclusively in
Riverside County.
10.3 Severability. If a court of competent jurisdiction finds or rules that any
provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement
not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any
provision of this Agreement shall not void or affect the validity of any other provision of this
Agreement.
10.4 No Implied Waiver of Breach. The waiver of any breach of a specific
provision of this Agreement does not constitute a waiver of any other breach of that term or any
other term of this Agreement,
10.6 Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of and shall apply to and bind the successors and assigns of the parties.
10.6 Consultant Representative. All matters under this Agreement shall be
handled for Consultant by Larry J. Kosmont, CRE.
10.7 City Contract Administration. This Agreement shall be administered by
a City Employee, Jeff Wyman ("Contract Administrator"). All correspondence shall be directed
to or through the Contract Administrator or his or her designee.
10„8 Notices. Any written notice to Consultant shall be sent to:
Kosmont Companies
Attn: Larry J. Kosmont
865 South Figueroa Street, #3500
Los Angeles, Ca. 90017
Any written notice to City shall be sent to the Contract Administrator with a copy
to:
City Clerk
City of Menifee
29714 Maun Road
Menifee, CA 92586
10.9 Professional Seal. Where applicable in the determination of the
Contract Administrator, the first page of a technical report, first page of design specifications,
and each page of construction drawings shall be stamped/sealed and signed b the licensed
9 Y
professional responsible for the report/design preparation. The stamp/seal shall be in a block
4824-7172-0963.1 10 of 12
entitled "Seal and Signature of Registered Professional with report/design responsibility," as in
the following example.
Seal and Signature of Registered Professional with
re ort/desi n responsibility.
10.10 Integration. This Agreement, including the scope of work attached
hereto and incorporated herein as Exhibit A, represents the entire and integrated agreement
between City and Consultant and supersedes all prior negotiations, representations, or
agreements, either written or oral.
10.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original and all of which together shall constitute one
agreement.
10.12 Nondiscrimination. Consultant shall not discriminate in any way,
against any person n the basis of race, color, religious creed, national origin, ancestry, sex, age,
physical handicap, medical condition or marital status in connection with or related to the
performance of this Agreement.
Section 11.
The Parties have executed this Agreement as of the Effective Date.
CITY OF MENIFEE CONSULTANT
KOSMONT & ASSOCIATES, INC., a
California Corporation
dba Kosm nt Com nies
Robert o nson, City Manager La J. Ko on CR `, President
Attest:
KKathy Bennett, City Clerk Susan Perry, Esq., Corporate 56 retary
t
Approved as to Form:
Julie H. Biggs, Int rim ttorney
4824-7172-0963.1 11 of 12
EXHIBIT A
SCOPE OF WORK
(see attached)
4824-7172-0963.1 12 of 12
koSMik
compQmes
Kosmont & Associates, Inc., doing business as Kosmont Companies ("Consultant" or
"Kosmont"), is pleased to present this proposal for real estate advisory consulting
services to the City of Menifee ("Client", "City") in connection with the preparation of a
Hotel Feasibility Study ("Project"). Kosmont will work with sub-consultant C.H. Johnson
Consulting to complete this assignment. This proposal serves as an Agreement.
I. BACKGROUND AND OBJECTIVE
The City of Menifee desires to evaluate the market for a new hotel(s) within the City, As
part of this evaluation the City desires Consultant's assistance in preparing a Hotel
Feasibility Study,
II. SCOPE OF SERVICES
Consultant will assist Client in the preparation of a Hotel Feasibility Study.
The major tasks to be performed by Consultant that will comprise this assignment are
described as follows:
Task 1: Background Research
In this task, Consultant will complete an initial review of market information and conduct
exploratory interviews. The initial information overview will include a review of
appropriate information from prior hotel and research reports performed in the area
market (if available).
Task 2: Survey and Interviews
Consultant will interview area hospitality officials including area hotel general managers.
Topics to be analyzed and discussed include:
■ Perceived and comparative deficiencies in the hotel supply.
Number, quality and chain affiliations of rooms in the submarket.
■ Customers' requirements in terms of size, quality, brand, amenity and site
location characteristics.
Review of booking and turn-away reports and reasons for turn-aways and
oversold conditions in the local submarket.
Task 3: Hotel Supply & Demand Analysis
In this task, Consultant will analyze information to determine whether the market can
absorb one or more new hotels.
865 South Figueroa Street 35"Floor Los Angeles CA 90017 ph 213.4117.3300 fx 213.417.3311 www.kosinont.com
Key component of Consultant's analysis may include:
• How hotels in the local market performed over the past several years.
• If a new hotel is built, how much business could it induce into the market.
• Length of absorption of new hotel(s).
Consultant's analytical approach to answering these questions is presented below:
• Review total hotel supply offerings for the local market and map and describe
competitive hotel offerings and plans for future hotel developments.
• Analyze historical trends in the local hotel market, including the number of rooms,
occupancy rates, and ADR's and room tax collection trends.
• Identify a set of competitive hotels in the market and analyze occupancy, ADR's,
and RevPAR for this competitive set over the past five years, based on Smith
Travel Research ("STIR") data.
• Analyze the seasonality of demand for the competitive set.
• Project future occupancy and rate for the competitive set.
• Perform a market penetration analysis for the proposed hotel and estimate future
room-night demand, occupancy, and ADR,
• Obtain market and financial data from STIR, and review information on a
competitive set of hotel properties.
• Perform a sensitivity analysis and discuss its impact on the demand penetration
of an additional hotel.
• Based on a supply and demand analysis that reflects market growth and room
supply additions, discuss phasing issues and options.
Task 4: Hotel Financial Projection
The single most important analysis for a hotel project is the preparation of the hotel's
cash flow analysis, which, in turn, determines the level of debt the hotel can sustain.
Questions Consultant's analysis will address may include:
• Occupancy and average room rate potential of the hotel.
■ Sources of revenues are available and the hotel's potential to generate these
sources.
• Expenses associated with the operation and how will expenses vary with
business volume.
• Cash flow will be available to service debt and to provide a return on investment
in any given period.
Consultant's analytical approach to answering these questions will involve the following:
• Develop a supported basis for estimating each revenue and expense item over a
given accounting period.
KOSMONT COMPANIES
865 South Figueroa Street 35"Floor Los Angeles CA 90017 ph 293.417.3300 fx 213.417.3311 www.kosmont.com
• Develop a proforma operating statement for the first ten years of operation based
on demand projections and a ratio analysis of revenue and expenses in the
format prescribed by the Uniform Systems of Accounts forthe Hotel Industry.
• Based on the projected net operating Income of the property for the first ten
years of operation and an assumed capitalization rate after ten years of
operation, estimate the net present value of the property and internal rate of
return. Consultant can also then estimate the present value of any subsidy
needed to provide an attractive or feasible rate of return for private sector
development.
Task 5: Summary Report
Consultant will prepare a summary PowerPoint slide deck with its findings from Task 1-
4. Consultant will first provide a draft report for Client's review and comments,
Consultant will then incorporate Client's comments, as appropriate, into a final
document. Consultant will provide an electronic"PDF" copy of the final document.
Task 6: Other As-Needed Services
Consultant is available to assist Client on an as-needed basis as requested by Client
and mutually agreed upon by Consultant.
III. SCHEDULE AND REQUIRED DATA
Consultant is prepared to commence work as soon as authorized.
KOSMONT COMPANIES
865 South Figueroa Street 35"Floor Los Angeles CA 90017 ph 213.417.3300 &213,417.3311 www.kosmont.com