14-159 Keyser Marston Associates, Inc OFFICE OF THE CITY CLERK
CITY HALL
10300 TORRE AVENUE•CUPERTINO, CA 95014-3255
TELEPHONE: (408)777-3223• FAX: (408)777-3366
C U P E RT I N O WEBSITE:www.cupeitino.org
September 25, 2014
Keyser Marston Assocaites, Inc
160 Pacific Avenue, Suite 204
Golden Gateway Commons
San Francisco, CA 94111
Re: Agreement for consultant services.
A fully executed copy of the agreement for consultant services with the City of
Cupertino is enclosed. If you have any questions or need additional information, please
contact the Community Development Department at (408) 777-3308.
Sincerely,
Andrea Sanders
Senior Office Assistant
City Clerk's Office
Enclosure
cc: Community Development
AGREEMENT BETWEEN THE CITY OF CUPERTINO AND KEYSER
MARSTON ASSOCIATES, INC. FOR CONSULTANT SERVICES FOR
FINANCIAL PRO-FORMA FEASIBILITY ANALYSIS FOR BMR PROPOSAL
FOR PARKSIDE TRAILS DEVELOPMENT
THIS AGREEMENT, for reference dated August 1, 2014, is by and
etween CITY OF CUPERTINO, a municipal corporation (hereinafter referred to
as "City"), and Keyser Marston Associates Inc.a California corporation, whose
address is 160 Pacific Avenue, Suite 204, Golden Gateway Commons, San
Francisco, California 94111 (hereinafter referred to as "Consultant"), and is made
with reference to the following:
RECITALS:
A. City is a municipal corporation duly organized and validly existing
under the laws of the State of California with the power to carry on its business
as it is now being conducted under the Constitution and the statutes of the State
of California and the Cupertino Municipal Code.
B. Consultant is specially trained, experienced and competent to
perform the special services which will be required by this Agreement; and
C. Consultant possesses the skill, experience, ability,background,
certification and knowledge to provide the services described in this Agreement
on the terms and conditions described herein.
D. City and Consultant desire to enter into an agreement for
professional services upon the terms and conditions herein.
NOW, THEREFORE, it is mutually agreed by and between the
undersigned parties as follows:
1. TERM:
The term of this Agreement shall commence on August 1, 2014, and shall
terminate on September 30, 2014, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED.
Consultant shall perform each and every service set,forth in Exhibit "A"
which is attached hereto and incorporated herein by this reference.
3. COMPENSATION TO CONSULTANT:
Consultant shall be compensated for services performed pursuant to this
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Agreement in the amount set forth in Exhibit "B" which is attached hereto and
incorporated herein by this reference. Payment shall be made by checks drawn
on the treasury of the City, to be taken from the 110-2218, BS 24241 fund. For the
full performance of this Agreement, CITY shall pay CONSULTANT: $5,500.00.
Payment will be made by the City on a reimbursement basis each month.
The Consultant shall submit a monthly i-nvoice with supporting documentation
to the City. Upon receipt of the monthly invoice from the Consultant the City '
will review the invoice along with supporting documentation. Only upon
satisfactory review of the invoice and supporting documentation will the City
disburse funds to the Consultant.
4. TIME IS OF THE ESSENCE:
Consultant and City agree that tirrie is of the essence regarding the
performance of this Agreement.
5. STANDARD OF CARE:
Consultant agrees to perform all services hereunder in a manner
commensurate with the prevailing standards of like professionals in the San
Francisco Bay Area and agrees that all services shall be performed by qualified
and experienced personnel who are not employed by the City nor have any
contractual relationship with City.
6. INDEPENDENT PARTIES:
City and Consultant intend that the relationship between them created by
this Agreement is that of employer-independent contractor. 'The manner and
means of conducting the work are under the control of Consultant, except to the
extent they are limited by statute, rule or regulation and the express terms of this
Agreement. No civil service status or other right of employment will be acquired
by virtue of Consultant's services. None of the benefits provided by City to its
employees, including but not limited to, tulemployment insurance, workers'
compensation plans, vacation and sick leave are available from City to
Consultant, its employees or agents. Deductions shall not be made for any state
or federal taxes, FICA payments, PERS payments, or other purposes normally
associated with an employer-employee relationship from any fees due
Consultant. Payments of the above items;, if required, are the responsibility of
Consultant.'
7. IMMIGRATION REFORM.AND CONTROL ACT (IRCA):
Consultant assumes any and all responsibility for verifying the identity
and employment authorization of all of his/her employees performing work
hereunder, pursuant to all applicable IRCA-or other federal, or state rules and
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regulations. Consultant shall indemnify and hold City harmless from and
against any loss, damage, liability, costs or expenses arising from any
noncompliance of this provision by Consultant.
8. NON-DISCRIMINATION:
Consistent with City's policy that harassment and discrimination are
unacceptable employer/employee conduct, Consultant agrees that harassment or
discrimination directed toward a job applicant,.a City employee, or a citizen by
Consultant or Consultant's employee or subcontractor on the basis of race,
religious creed, color, national origin, ancestry, handicap, disability, marital
status, pregnancy, sex, age, or sexual orientation will not be tolerated.
Consultant agrees that any and all violations of this provision shall constitute a
material breach of this Agreement.
9. HOLD HARMLESS:
Indemnification:
Consultant shall, to the fullest extent allowed by law, with respect to all
services performed in connection with the Agreement, indemnify, defend,
and hold harmless the City and its officers, officials, agents, employees
and volunteers from and against any and all liability, claims, actions,
causes of action or demands whatsoever against any of them, including
any injury to or death of any person or damage to property or other
liability of any nature, whether physical, emotional, consequential or
otherwise, arising out, pertaining to, or related to the negligence,
recklessness, or willful misconduct in the negligent performance of this
Agreement by Consultant or Consultant's employees, officers, officials,
agents or independent contractors. Such costs and expenses shall include
reasonable attorneys' fees of cou lsel of City's choice, expert fees and all
other costs and fees of litigation.
A. Claims for Professional Li abili!y. Where the law establishes a
standard of care for Consultant's professional services, and to the extent
the Consultant breaches or fails to meet such established standard of care,
or is alleged to have breached or failed to meet such standard of care,
Consultant shall, to the fullest extent allowed by law, with respect to all
services performed in connection with the Agreement, indemnify, defend,
and hold harmless the City and its officers, officials, agents, employees
and volunteers from and against: any and all liability, claims, actions,
causes of action or demands whatsoever against any, of them, including
any injury to or death of any person or damage to property or other
liability of any nature, that arise out of, pertain to, or relate to the
negligence, recklessness, or willful misconduct of Consultant or
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Consultant's employees, officers, officials, agents or independent
contractors.. ' Such costs and expenses shall include reasonable attorneys'
fees of counsel of City's choice, expert fees and all other costs and fees of
litigation. Consultant shall not be obligated under this Agreement to
indemnify City to the extent that the damage is caused by the sole or
active negligence or willful misconduct of City, its agents or employees.
B. Claims for Other Liabi-lit Consultant shall, to the fullest
extent allowed by law, with :respect to all services performed in
connection with the Agreement, indemnify, defend, and hold harmless the
City and its officers, officials, agents, employees and volunteers against
any . and all liability, claims, actions, causes of action or demands
whatsoever from and against an.y of them, including any injury to or
death of any person or damage to property or other liability of any nature,
that arise out of, pertain to, or relate to the negligence, recklessness, or
willful misconduct of Consultant or,Consultant's employees, officers,
officials, agents or independent contractors. Such costs and expenses shall
include reasonable attorneys' fees of counsel of City's choice, expert fees
and all other costs and fees of litigation. Consultant shall not be obligated
under this Agreement to indemnify City to the extent that the damage is
caused by the sole or active negligence or willful misconduct of City, its
agents or employees.
10. INSURANCE:
On or before the commencement of the term of this Agreement,
Consultant shall furnish City with certificates showing the type, amount, class of
operations covered, effective dates and dates of expiration of insurance coverage
in compliance with paragraphs 10 A, B; C:, D and E. Such certificates, which do
not limit Consultant's indemnification, shall also contain substantially the
following statement: "Should any of the above insurance covered by this
certificate be canceled or coverage reduced before the expiration date thereof, the
insurer affording coverage shall provide thirty (30) days' advance written notice
to the City of Cupertino by certified mail, Attention: City Manager." It is agreed
that Consultant shall maintain in force at all times during the performance of this
Agreement all appropriate coverage of insurance required by this Agreement
with an insurance company that is acceptable to City and licensed to do
insurance business in the State of California. Endorsements naming the City as
additional insured shall be submitted with.the insurance certificates.
A. COVERAGE:
Consultant shall maintain the following insurance coverage:
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(1) Workers' Compensation:
Statutory coverage as required by the State of California.
(2) Liability
Commercial general liability coverage in the following
minimum limits:
Bodily Injury: $500,000
each occurrence
; 1,000,000
aggregate - all other
Property Damage: `, 100,000 each occurrence
$250,000 aggregate
If submitted, combined single limit policy with aggregate
limits in the amounts of$1,000,000 will be considered
equivalent to the required minimum limits shown above.
(3) Automotive:
Comprehensive automotive liability coverage in the
following minimum limits:
Bodily Injury: $500,000 each occurrence
Property Damage: $100,000 each occurrence
or
Combined Single Limit: $500,000 each occurrence
(4) Professional Liability:
Professional liability insurance which includes coverage for
the professional acts, errors and omissions of Consultant in
-the amount of at least$1,000,000.
B. SUBROGATION WAIVED::
Consultant agrees that in the event.-of loss due to any of the perils for
which he/she has agreed to provide comprehensive general and automotive
liability insurance, Consultant shall look solely to his/her insurance for recovery.
Consultant hereby grants to City, on behalf of any insurer providing
comprehensive general and automotive liability insurance to either Consultant or
City with respect to the services of Consultant herein, a waiver of any right to
subrogation which any such insurer of satid Consultant may acquire against City
by virtue of the payment of any loss under such insurance.
C. FAILURE TO SECURE:
If Consultant at any time during the term hereof should fail to secure or
maintain the foregoing insurance, City shall be permitted to obtain such
insurance in the Consultant's name or as im agent of the Consultant and shall be
compensated by the Consultant for the costs of the insurance premiums at the
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maximum rate permitted by law and computed from the date written notice is
received that the premiums have not been paid.
D. ADDITIONAL INSURED:
City, its City Council,boards and commissions, officers, employees and
volunteers shall be named as an additional insured under all insurance
coverages, except any professional liability insurance, required by this
Agreement. The naming of an additional:insured shall not affect any recovery to
which such additional insured would be entitled under this policy if not named
as such additional insured. An additionA insured named herein shall not be
held liable for any premium, deductible portion of any loss, or expense of any.
nature on this policy or any extension thereof. Any other insurance held by an
additional insured shall not be required to contribute anything toward any loss
or expense covered by the insurance provided by this policy.
E. SUFFICIENCY OF INSURANCE:
The insurance limits required by City are not represented as being
sufficient to protect Consultant. Consultant is advised to confer with
Consultant's insurance broker to determine adequate coverage for Consultant.
11. CONFLICT OF INTEREST:
Consultant warrants that it is not a conflict of interest for Consultant to
perform the services required by this Agreement. Consultant may be required to
fill out a conflict of interest form if the services provided under this Agreement
require Consultant to make certain governmental decisions or serve in a staff
capacity as defined in Title 2, Division 6, Section 18700 of the California Code of
Regulations.
12. PROHIBITION AGAINST TRANSFERS: °
Consultant shall not assign, sublease, hypothecate, or transfer this
Agreement, or any interest therein, directly or indirectly, by.operation of law or
otherwise, without prior written consent of City. Any attempt to do so without
said consent shall be null and void, and any assignee, sublessee, hypothecate or
transferee shall acquire no right or interest by reason of such attempted
assignment, hypothecation or transfer. However, claims for money by
Consultant from City under this Agreement may be assigned to-a bank, trust
company or other financial institution without prior written consent. Written
notice of such assignment shall be promptly furnished to City by Consultant'.
The sale, assignment, transfer or other disposition of any of the issued and
outstanding capital stock of Consultant, or of the interest of any general partner
or joint venturer or syndicate member or cotenant, if Consultant is a partnership
or joint venture or syndicate or cotenancy, which shall result in changing the
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control of Consultant, shall be construed as an assignment of this Agreement.
Control means fifty percent(50%) or more of the voting power of the
corporation.
13. SUBCONTRACTOR APPROVAL-
Unless prior written consent from City is obtained, only those people and
subcontractors whose names and resumes are attached to this Agreement shall
be used in the performance of this Agreement.
In the event that Consultant employs subcontractors, such subcontractors
shall be required to furnish proof of workers' compensation insurance and shall
also be required to carry general, automobile and professional liability insurance
in reasonable conformity to the insurance carried by Consultant. In addition,
any work or services subcontracted hereunder shall be subject to each provision
of this Agreement.
14. PERMITS AND LICENSES:
Consultant, at his/her sole expense!, shall obtain and maintain during the
term of this Agreement, all appropriate permits, certificates and licenses
including,but not limited to, a City Business License, that may be required in
connection with the performance of services hereunder.
15. REPORTS:
A. Each and every report, draft, work product, map, record and other
document, with the exception of Consultant's proprietary computer models,
hereinafter collectively referred to as "Report", reproduced, prepared or caused
to be prepared by Consultant pursuant to or in connection with this Agreement,
shall be the exclusive property of City. Consultant shall not copyright any
Report required by this Agreement and shall execute appropriate documents to
assign to City the copyright to Reports created pursuant to this Agreement. Any
Report, information and data acquired or required by this Agreement shall
become the property of City, and all publication rights are reserved to City.
Consultant may retain a copy of any report furnished to the City pursuant to this
Agreement.
B. All Reports prepared by Consultant may be used by City in
execution or implementation of:
(1) The original Project for which Consultant was hired;
(2) Completion of the original Project by others;
(3) Subsequent addition, to the original project; and/or
(4) Other City projects as appropriate.
C. Consultant shall, at such time and in such form as City may
require, furnish reports concerning the status of services required under this
Agreement.
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D. All Reports required to be provided by this Agreement shall-be
printed on recycled paper. All Reports shall be copied on both sides of the paper.
except for one original, which shall be single sided.
E. No Report, information or ether data given to or prepared or
assembled by Consultant pursuant to this Agreement shall be made available to
any individual or organization by Consultant without prior approval by City.
16. RECORDS:
Consultant shall maintain complet-e and accurate records with respect to
sales, costs, expenses, receipts and other such information required by City that
relate to the performance of services under this Agreement.
Consultant shall maintain adequaite records of services provided in
sufficient detail to permit 'an evaluation of services. All such records shall be
maintained in accordance with generally accepted accounting principles and
shall be clearly identified and readily accessible. Consultant shall provide free
access to such books and records to the representatives of City or its designees at
all proper times, and gives City the right to examine and audit same, and to
make transcripts therefrom as necessary, and to allow inspection of all work,
data, documents, proceedings and activities related to this Agreement. Such
records; together with supporting documents, shall be kept separate from other
documents and records and shall be maintained for a period of three (3) years
after receipt of final payment.
If supplemental examination or-autdit of the records is necessary due to
concerns raised by City's preliminary examination or audit of records, and the
City's supplemental examination or audio of the records discloses a failure to
adhere to appropriate internal financial controls, or other breach of contract or
failure to act in good faith, then Consultant shall reimburse City for all
reasonable costs and expenses associated with the supplemental examination or
audit.
17. NOTICES:
All notices, demands, requests or approvals to be given under this
Agreement shall be given in writing and conclusively shall be deemed served
when delivered personally or on the second business day after the deposit
thereof in the United States Mail, postage prepaid, registered or certified,
addressed as hereinafter
provided.
All notices, demands, requests, or approvals from Consultant to City shall
be addressed to City at:
City of Cupertino
10300 Torre Ave
Cupertino CA 95014
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Attention: Senior Housing Planner
All notices, demands, requests, or approvals from City to Consultant shall
be addressed to Consultant at:
Keyser Marston Associates, Inc.
160 Pacific Avenue, Suite 204
Golden Gateway Commons
San Francisco, California 94111
Attn: Senior Principal
18. TERMINATION:
In the event Consultant fails or refuses to perform any of the provisions
hereof at the time and in the manner required hereunder, Consultant shall be
deemed in default in the performance of this Agreement. If such default is not
cured within within the time specified after receipt by Consultant from City of
written notice of default, specifying the nature of such default and the steps
necessary to cure such default, City may terminate the Agreement forthwith by
giving to the Consultant written notice thereof.
City shall have the option, at its sole discretion and without cause, of
terminating this Agreement by giving sOTen (7) days' prior written notice to
Consultant as provided herein. Upon termination of this Agreement, each party
shall pay to the other party that portion of compensation specified in this
Agreement that is earned and unpaid prior to the effective date of termination.
19. COMPLIANCES:
Consultant shall comply with all s1 ate or federal laws and all ordinances,
rules and regulations enacted or issued by City.
20. CONFLICT OF LAW:
This Agreement shall be interpreted under, and enforced by the laws of
the State of California excepting any choice of law rules which may direct the
application of laws of another jurisdiction. The Agreement and obligations of the
parties ate subject to all valid laws, orders, rules, and regulations of the
authorities having jurisdiction over this Agreement (or the successors of those
authorities.)
Any suits brought pursuant to this Agreement shall be filed with the
courts of the County of Santa Clara, State of California.
21. ADVERTISEMENT:
Consultant shall not post, exhibit, display or allow to be posted, exhibited,
displayed any signs, advertising, show bills, lithographs, posters or cards of any
kind pertaining to the services performed under this Agreement unless prior
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written approval has been secured from City to do otherwise.
22. WAIVER:
A.waiver by City of any breach of any term, covenant, or-condition
contained herein shall not be deemed to be a waiver of any subsequent breach of
the same or any other term, covenant, or condition contained herein, whether of
the same or a different character.
23. INTEGRATED CONTRAC=T:
This Agreement represents the full and complete understanding of-every
kind or nature whatsoever between the parties hereto, and all preliminary
negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the.provisions
hereof. Any modification of this Agreement will be effective only by written
execution signed by both City and Consultant.
24. INSERTED PROVISIONS:
Each provision and clause required by law to be.inserted into the
Agreement shall be deemed to be enacted herein, and the Agreement shall be
read and enforced as though each were included herein. If through mistake or
otherwise, any such provision is not inserted or is not correctly inserted, the
Agreement shall be amended to make such insertion on application by either
party.
25. CAPTIONS:
The captions in this Agreement are for convenience only, are not a part of
the Agreement and in no way affect, limit, or amplify the terms or provisions of
this Agreement.
IN WITNESS WHEREOF, the parties have caused the Agreement to be
executed.
CONSULTANT CITY OF CUPERTINO
Keyser Marston Associates, Inc. A Municipal Corporation
Debbie M. Kern Gary Chao
By:'/�1� AZ+ By: i
Title: Senior Principal r1['i-le�Assstant Director of Community
Ike el ✓ment Department
op
Date: ( (q Date:
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APP VED AS TO FORM:
Sol Korade, City Attorney
ATTEST:
9
Grace Schmidt, City Clerk �y��f
Attachments
Exhibit A
Exhibit B
EXPENDITURE DISTRIBUTION
ACCOUNT NUMBER AMOUNT
110-2218, BS 24241 $5,500.00
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Exhibit A—Scope of Services
1 .
AL)YEii)R+.1 N'PI71:L3ti:i 1'R.I YA 1'f:RLAL CSTA'IL DINI.LOPMUNT
August 4, 2014
Mr. Christopher Valenzuela
ADVISORS IN: Senior Housing Planner
REAL ESTATE
AFFORDABLE HOUSING City of Cupertino
ECONOMIC DEVELOPMENT City Hall
SAN FRA.Nclsco Community Development Department
A.JERRY C KEY KELLY 10300 Torre Avenue
TQ�IOTI-IY C. KELLY .
KATE EARLE FUNK Cupertino, CA 95014
DEBBIE M. KERN
REED T.KAWAHARA
DAVID DOEzEMA Re: Financial Feasibility Analysis of Affordable Housing Project at 19160 Stevens
LOS ANGELES Creek Boulevard
KATHLEEN H.HEAD
JAM ES A.BABE G REGORY
Dear Mr. Valenzuela:
D. Soo-HooKEVIN E.
ENGSTROM JULIE L.
ROMEY Thank you for requesting this letter proposal from Keyser Marston Associates, Inc.
SANDII. (KMA) to assist the City in evaluating the development economics of a proposed 16-18
PAUL C.MARRA
unit affordable residential project. As proposed, the project will be affordable to
households earning up to 60% of the Area Median, Income and will be financed with a
combination of Low Income Housing tax credit proceeds, private debt, a partial land-
value contribution from a market-rate residential developer, the.Silicon Valley Housing
Trust Fund and other subsidy funds to be identified.
The proposed transaction is complicated due to a number of factors, including the
following:
■ The project is being proposed to satisfy a market-rate developer's obligation to
provide three (3) affordable on-sitE� housing units within an 18-unit single family
housing development pursuant to the City's affordable housing inclusionary
housing ordinance.
■ In-lieu of providing the three on-site affordable units, the market-rate housing
developer is proposing to satisfy his obligation by purchasing a .56-acre site for
an estimated $3.0 million, transferring the site to a non-profit developer (MidPen
Housing)for$1.7 million, and the noon-profit would build a rental project
containing not less than thirteen (13) bedrooms'affordable to Very Low Income
households. Under the market ratE� developer's proposal, the City would not bear
any cost toward delivering the 13 affordable bedrooms.
Page 1
■ MidPen Housing has prepared a preliminary financing plan for the project, which
indicates that it will need from $2.1 to $2.8 million of additional subsidy funds to
complete the project.
The City is asking KMA to assist in evaluating the economics of this proposal and the
implications to the City. KMA's role will be to:
1. Assess the reasonableness of assumptions contained in the non-profit
developer's pro'forma (both 4% and 9% tax credit scenarios);
2. Assess the feasibility of the proposed financing plan for the Project;
3. Identify other subsidy sources that could potentially be available to the Project;
and
4. Provide.recommendations for proceeding with the negotiations
KMA's Qualifications
KMA is very well qualified to assist you with this analysis and negotiation. KMA has
extensive experience with multi-family residential projects.We understand the
complexities of Low Income Housing Tax Credits, tax exempt bonds, and layering of
funds. Because affordable housing is a key component of KMA's business, we are
involved in several housing projects at any given time. This experience keeps us up to
date on the ever-changing financing sources and conditions affecting the development of
affordable rental housing. We will draw on this.experience to provide you with the best,
current information available.
Progosed ScoQe of Work
KMA will evaluate the project's feasibility and need for assistance through an analysis of
the project's pro forma. The analysis will consist of:
• A review of the project's development costs. KMA will review the reasonableness
of the development cost estimates,.
• A review of the developer's incorne projection. KMA will review the assumed
rental rates relative to the proscribed ceilings of the tax credit program and other
possible subsidy programs that will be used to finance the project.
■ An evaluation of the feasibility of the financing plan. This evaluation will include
an evaluation of the amount of dent, equity, 4% and 9% credit yields, and the
availability of other funding sources that are typically available for similar
affordable units. KMA will identify the risks and weaknesses of the financing
plans and the potential impact on the project's viability.
Paige 2
■ An evaluation of the need for add4ional subsidy. Based on the review of the
proposed financing plan and the potential availability of other subsidy funds, KMA
will estimate the magnitude of the remaining financial gap.
Products: 1)A series of financial tables summarizing the development economics of the
project; 2) Technical memorandum summarizing our findings and
recommendations.
Information Request
In order to complete the analysis, KMA will need to obtain the following information from
the City/Developer:
a. Development pro forma for affordable project (provided);
b. 30-year cash flow projection;
c. Name of contractor who provided development cost estimates for affordable
project;
d. Non-profit's self-scoring of 9% tax credit application;
e. Narrative statement from MidPen (Housing regarding why tax credit proceeds and
the Silicon Valley Housing Trust fund are the only available subsidy sources for
the project.
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Exhibit B—Schedule and Budget
Schedule and Budget
A draft evaluation of the project's economics will be submitted for your review within two
weeks after receipt of the information requested above.
We are proposing to undertake the services outlined above on a time and materials
basis. The cost will be $5,500.
We look forward to assisting you with this important project.
Sincerely,
KEYSER MARSTON ASSOCIATES, INC.
a
f
Debbie M. Kern
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