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Home My WebLink About02/21/2002 BAKERSFIELD Mike Maggard, Chair Harold Hanson Mark Salvaggio Staff: Darnell Haynes SPECIAL MEETING NOTICE BUDGET AND FINANCE COMMI'I-rEE of the City Council - City of Bakersfield Thursday, February 21, 2002 4:00 p.m. City Manager's Conference Room, Suite 201 Second.Floor - City' Hall, 150i Truxtun Avenue, Bakersfield, CA AGENDA 1. ROLL CALL 2. ADOPT JANUARY 17, 2002 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS o A. Staff report and Committee recommendation regarding application of the business license ordinance to commercial and residential rental property businesses - Thiltgen 5. NEW BUSINESS A. Staff report and Committee recommendation regarding Kem-Tech, Inc repayment of economic development loan -Kunz B. Staff report and Committee recommendation regarding Economic Development Loan Program Policy- Kunz C. Staff report and Committee recommendation regarding funding request byGreater Bakersfield Vision 2020, Inc. 6. COMMI'I'rEE COMMENTS 7. ADJOURNMENT S:~Damel~002Bud&FinanceComrnittee~f02feb21agen.wpd D AIFT BAKERSFIELD AJa-n-Tandy, City M~nager Harold Hanson Darnell Haynes, Assistant to the City Manager Mark Salvaggio AGENDA SUMMARY REPORT BUDGET AND'FINANCE COMMrn'EE Thursday, January 17, 2002 - 4:00 p.m. City Manager's Conference Room 1. ROLL CALL Call to Order at 4:09 p.m. Present: Councilmembers Mike Maggard, Chair; and Mark Salvaggio Absent 'Councilmember Harold Hanson 2. ADOPT DECEMBER 6, 2001 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS A. Staff report and'Committee recommendation regarding application of the business license ordinance to commercial and residential rental property businesses City Attorney Bart Thiltgen stated the Committee at the last meeting requested that he come back with a review of law associated with this. He has submitted a confidential memorandum to the Committee members, which addressed the status of the law and legal concerns. The position of the Attorney's Office in regard to this business license ordinance as it is written now, is that the licensing is for use of the property for commercial concerns, and not related to the ownership interests of the property. The original concern of Mr. Leggio was that their operation is a passive investment. From a legal standpoint, it is the City Attorney's opinion that the investment is an ownership interest and is not a use. interest. The City is actually taxing the use of the property as a use for commercial rentals. The Committee also requested the City Attorney to look at alternative methods of taxation. After evaluation, the City Attorney was unable to come up with alternatives, which would not be facing an equal protection challenge from other businesses. From an equal protection standpoint, normally business licensing is based upon a nexus of the fact that the public entity is having to provide services to the business. The license tax is for the privilege of doing business within the community. If you separate out "passive investments" and determine it should not be taxed, others paying the tax who are getting identical services could challenge and say this is not equal application of the law. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE ThurSday, January 17, 2002 Page -2- The City Attorney stated from a legal standpoint, his recommendation is to continue to tax the commercial concerns, but when evaluating residential rentals, recognize that having a single residential rental may not necessarily be a business. His-recommendation was to determine that if you own four or more residential rentals, you are conducting a rental business and subject to the business license tax and less than four (three) you are not. Finance Director Gregory Klimko stated his.recommendation is the same, but is based upon the fact the business license ordinance is not regulatory. It is a revenue raising measure. Mr. Klimko's recommendation was to apply it as broadly as we legally can to raise revenue from the application of the business license ordinance. City Treasurer Bill Descary recommended a broad-based application of the ordinance based on gross receipts. If units are empty and there are no receipts, there would be no tax. Committee 'Member Salvaggio reiterated staff's recommendation to be as follows: 1) staff. does not recommend that we exempt the owner of commercial rental properties from the requirement of paying the business tax; and 2) staff does recommend that we exempt residential rental properties for less than four units. Committee Member Salvaggio stated he could support this recommendation and agrees the tax should be applied equally among like -businesses. Committee Chair Maggard stated with respect to his colleague and staff, he does not agree with staff's recommendation. He felt that just because we can tax, does not mean that we should. He stated staff is doing their job and being good and loyal in finding ways to raise. revenue. However, his job as a Councilmember is to make sure.that it is done equitably and the citizens are represented appropriately. He feels it is .his charge to bring some balance. .Committee'Chair Maggard stated he does not think this applies the law fairly. If people are ~n the business of renting/leasing properties such as the Marketplace or Valley Plaza, they should have a business license because they are clearly in the business of managing properties. In contrast, there are many people in Bakersfield who own a few residential rentals or a commercial property as passive investments who are not in the business or actively making a living managing or renting properties. Many of these are retirees and should not be subjected to having a business license and paying business license tax on rental income. It seemed to him that it should not apply to passiVe rental of property, whether on a commercial or residential basis. It should apply at the purpose of the property. If someone leases a building to run a business, they should have a business license, which pays for the services they are receiving from the City. However, by subjecting the owner of the same building to a business license tax, the services are being paid for twice. If the purpose of the property is residential, it does not consume the same level of City services as does a business and, therefore, the property in his opinion should not be subject to a business license because it is not a business. 'DRAFT AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, January 17, 2002 Page -3- Th'e amount-of revenue the City received from rental ~business licenses last year was approximately $20,563 from 74 businesses. With broad enforcement, staff felt this has a potential revenue source of up to $100,000. Committee Chair Maggard stated there are very few ~rental businesses in Bakersfield of the size that someone makes their living from .it. He requested staff to come up with various alternatives to set a threshold for application of the business license tax, with the hope that the casual renter of property would be exempt. Finance Director Gregory Klimko suggested perhaps it could be based on gross rental receipts instead of an arbitrary number of units. Committee Chair Maggard was interested in this concept and requested the City Attorney to explore this idea from a legal standpoint and any other possible alternatives and bring the information back to the Budget and Finance Committee. (Committee Member Hanson absent.) NEW BUSINESS A. Finance Department report and Committee recommendation regarding independent auditors reports and Management Letter for fiscal year ending June · 30, 2001, including the following: 1..Comprehensive Annual 'Financial Report (CAFR) 2. Single Audit Report- Schedule of Federal Expenditures 3. Compliance with contractual requirements relative to the Bakersfield Subregional Wastewater Management Plan 4. Appropriations Limit Worksheet (GANN Limit) 5. Required Communication with Audit Committees in Accordance with Statement of Auditing Standards 6. Independent Auditors Report - Internal Control Structure The audits were all clean and there were no significant findings. It was noted the City has received two annual awards each year for 19 years for its financial reports. The Committee unanimously accepted .the reports. (Committee Member Hanson absent). B. Staff report and Committee recommendation regarding proposed increase in loan limit for single family rehabilitation projects Community .Development Coordinator George Gonzales explained since 1979 the Block Grant Funds have been utilized to make loans for rehabilitation of Iow-income residential owner-occupied single-family dwellings. The City offers two different loans: a 4% amortized loan and a 0% deferred loan. In 1999, the Council approved the loan limit of $35,000 for deferred and a $35,000 limit for amortized loans. Staff would like to be able DRAFT BUDGET AND FINANCE COMMITTEE Thursday, January 17, 2002 Page -4- to combine the two, instead of having.either an amortized or deferred loan. In that way, a combination of the two loans could be offered when the homeowner's income cannot support the payment of the amortized loan or a project may require extensive demolition work and rehabilitation of the structure. Staff recommends that we amend the Loan Limit Policy to include authorization to allow approval of both amortized and deferred loans .in an amount not to exceed $70,000 for each rehabilitation project. The Committee unanimously approved staff's recommendation and forwarding to the Council for adoption. (Committee Member Hanson absent) C. Staff report and Committee recommendation regarding Economic and Community Development Department's housing guidelines and proposed foreclosure policy Community Development Coordinator George .Gonzales explained that since the beginning of the rehab loan program, the City has never had a foreclosure policy. If the City has to foreclose, there is no set policy. The Economic and Community Development Department has drafted a Foreclosure Policy. The Policy would apply to all loans given by the department to recipients of the City's various housing programs. Currently a loan recipient signs a promissory note and executed deed of trust in favor of the City. This Policy would provide that if during the life of.the loan or term of the grant, the loan recipient is not in compliance with the contractual agreements, a pre-foreclosure analysis would be conducted to determine the best course of action for both the City and the recipient. If the recommendation is for foreclosure, the Economic Development Director would determine whether it would be in the City's best interest to foreclose on the property, take legal action against the client with regard to the promissory note, or request the Finance Director to write off the loan if it is deemed to be uncollectible. Every effort will be made by staff to ensure that displacement of any Iow-income resident who has received assistance under the City's housing programs will be the option of last resort. Staff recommends approval of the Foreclosure Policy by the Committee and forwarding to the Council for adoption. The Committee unanimously approved staff's recommendation and forwarding the Foreclosure Policy to the Council for adoption. (Committee Member Hanson absent.) 6. COMMITTEE COMMENTS 7. ADJOURNMENT The meeting adjourned at 5:32 p.m. DRAFT BUDGET AND'FINANCE COMMrl-I'EE Thursday, ,January 17, 2002 Page -5- Staff present: City Manager Alan Tandy; City Attorney Bart Thiltgen; Assistant City Manager John W. Stinson; Assistant to the City Manager Darnell Haynes; Finance Director Gregory Klimko; Assistant Finance Director Nelson Smith; City Treasurer Bill Descary; Deputy City Attorney Michael AIIford; Community Development Coordinator George Gonzales; and ED/CD Business Manager Rhonda Barnhard. Others present: James Burger, reporter, The Bakersfield Californian cc: Honorable Mayor and City Council DWH:jp S:~Damell~2002Bud&FinanceCommittee\02jan 17summary.wpd ;,..% BAKERSFIELD Economic and Community Development .Department MEMORANDUM February 8, 2002 TO: Budget and Finance Committee f-~ ~ FROM: Donna L. Kunz, Economic Development Director SUBJECT: Kern Tech, Inc. Amendment No. 1 to Agreement 97-65 regarding repayment of economic development loan. (Ward 2) On February 6, 2002, City Council referred this item back to the Budget and Finance Committee for their recommendation. On March 26, 1997, the City Council approved a 0% interest, five-year loan agreement with Kern-Tech, Inc., a manufacturing company located in the Old Town Kern-Pioneer Redevelopment Project Area. Funds for this loan were Community Development Block Grant (CDBG) monies and were used to help purchase equipment. In return for this loan, the company agreed to hire 18 new employees over the term of the agreement. Of those workers hired each year, at least 51% must be Iow- and moderate-income individuals. The company was given the option of making annual payments of 20% of the loan amount ($33,959.40), or one balloon payment at the end of the five-year term. Kern-Tech chose the balloon payment option. Kern-Tech, Inc., has officially notified us that the company will be unable to make its payment of $169,797 due on March 26, 2002. The company has proposed the following plan to pay its debt to the City of Bakersfield: 1. Begin making payments of $1,000 monthly beginning April 1,2002; 2. Schedule a review in three years to determine if payments are able to be increased; and 3. Maintain the same collateral already in place. The letter from Kern-Tech is attached, which includes a list of benefits the company has provided to the local economy. Security for the loan is a personal guaranty from the company's two principals, Michael K. Miler and James (3. David, as well as a U(3C-1 Security .Document on the equipment. dlk:S:\DEBBIE'S~kern tech b&F memo.wpd " The company has surpassed the performance 'requirements of the agreement. As the following table shows, Kem-Tech created more jobs than were required, and exceeded the 51% level of Iow- and moderate-income individuals hired. - . :~ ,,.' ,, '~. ~ ~ .,~ : .~ ,,:~,~ ,,~ ,~, ,, :- ~,~,~,,%,,.,f,~,~ '~,,: ::, ,....,.. arch 26¥~ 1997 ~ December,31, 2001 ;;' ;;.:,.' ~: &:,:?~:,,;~ ::? Required To date ¢ of new hires 18 41 % of hires who are Iow- and 51% 67.5% moderate-income individuals The agreement with Kern-Tech is a repayable loan. Some economic development loans made by the City of Bakersfield have been repayable and some others were forgivable; in a forgivable loan, one-fifth of the loan amount is forgiven for each year the borrowing company meets the requirements of the agreement. Staff'has reviewed the financial statements of the company and concur that they can meet the debt service of their proposed repayment schedule. Therefore, staff recommends that Agreement 97-65 be amended to reflect the proposed repayment plan as outlined in Kern-Tech's letter of December 28, 2001. dlk:S:\DEBBIE'S~kern tech b&F memo.wpd Z'.echFOR YOUR INFORMATION 661-323-1561 F~'~t-32~7~ . ~.k~-tech.com 28 December, 2001 Donna L. Kurtz, Director Economic Development Department City of Bakersfield 515 Truxtun Ave. Bakersfield, CA93301 Re: Proposed Amendment.to: A~e~ment No. 97-65, Dated March 26~, 1997 Dear Ms. Kunz, Our company is unable to make .the payment of $169,797.00 due on March 26th, 2002 per the above referenced contract. We are determined to pay our debt to the,city and offera plan to do so below. Our proposal includes; Maintaining the same collateral for security as outlined in .the existing contract, be~'n making paymems to the city of $1~000.00 per momh as of April 1, 2002 and scheduling a review in three years to determine if payments are able to be increased. We are contacting you now because we realize that ~some .time is necessary in order for city officials to study this matter. Our financial statemems and balance sheets are available for your perusal. Additionally, we are available to answer questions or visit with interested parties as required. We very much appreciate the loan and have every intemion of paying it in full. If there is anything that your office requires of us prior to responding to this request, please contact me. Our hours are 7:00 a~m. to 5:00 p.m. Monday through Friday and my home phone is 664-7922. Please give my regards to your staff. M~c~e~ K. MHter President Benefits to Bakersfield due to the Kern-Tech Loan for Machinery · Prior to the founding of Kern-Tech, Original Equipment Manufacturers in the area had to purchase Custom Tooling and Special Machinery outside of Kern County. · Since Kern-Tech has pursued customers outside of Bakersfield, our client base has grown to include cuStomers located in Mojave, Palmdale, Van Nuys, Chatsworth, North Hollywood, Burbank, Calabasas, Rancho Dominguez, fresno and Oakland. · Because our company has initiated and maintained relationships with engineering staff at prime contractors, we are able to bring projects to Bakersfield for Other local companies as well. In 2000 we brought $1,400,000- in aircraft scaffolding work to Kern steel. ' · It is our policy to sub-contract work in Bakersfield and Kern .County whenever possible. Metal-Tek, Lortz Mfg., Custom Thread Grinding, Patco and others have benefited from our efforts. AdditionallY we buy raw material, hardware and supplies locally when possible. · We hire locally and train qualified applicants to be machinists and tool makers whenever possible. We have been instrumental in expanding the Industrial Arts Program at Bakersfield College and helped, to institute the Manufacturing Academy at Arvin High. School. · Companies that are planning to locate in Bakersfield view Kern-Tech as a source for maintai.ning, revising, designing and building the equipment needed for production. We have worked closely with the KEDC to attract manufacturers to the area. · Our company earned the "Welfare to Work" Award from the SBA in 1998 for our efforts in hiring people off of public assistance. We have also met the terms of our agreement with Bakersfield to hire 51% of our. employees from low and moderate income population pools. · Kern-Tech has been responsible for bringing approximately $6,000,000- to Bakersfield and Kern County since 1995. AGREEMENT NO. 97-65(1) AMENDMENT NO. I TO AGREEMENT NO. 97-6~ THIS AMENDMENT NO. 1 TO AGREEMENT NO. 97-65 is made and entered into on , by and between the CITY OF BAKERSFIELD, a charter city and municipal corporation ("CITY" herein) and KERN-TECH, INC., a corporation authorized to conduct business .in the State of California ("CORPORATION" herein). RECITALS. WHEREAS, on March 26, 1997, CITY and CORPORATION entered into Agreement No. 97~65 ("the Agreement") whereby CITY loaned CORPORATION money to purchase equipment that would be installed in CORPORA-~ION's facility at 405 East 19~h Street in the City of Bakersfield; and WHEREAS, in order to be eligible to receive :the loan, CORPORATION was to retain 10 jobs and create 18 jobs and have a majority of those jobs available to Iow and moderate-income persons; and 'WHEREAS, the amoUnt of the-loan was ONE HUNDRED SIXTY, NINE THOUSAND, SEVEN HUNDRED NINETY-SEV~EN AND NO/100 DOLLARS ($169,797.00); and WHEREAS, pursuant to the Agreement, the loan bears no interest and was to be paid in one balloon payment five (5) years from the. effective date of the Agreement or March 26, 2002; and WHEREAS, throughout the five-year term of the Agreement, CORPORATION has hired 41 individuals and 67.5% of them have .been Iow- and moderate-income persons; and WHEREAS, CORPORATION'has requested a restructuring of the loan payment and desires to make monthly .payments of ONE THOUSAND AND NO/100 DOLLARS ($1,000.00) commencing April 1, 2002 and continuing until the entire loan amount is paid · in full; and WHEREAS, additionally, after a three-year period, CITY and CORPORATION Would review CORPORATION"s financial situation to determine whether CORPORATION can increase .its monthly payments. Page I of 3 Pages NOW, THEREFORE, incorporating the above recitals herein, CITY and CORPORATION mutually agree as follows: 1. Paragraph IV. A. is amended to read as follows: "The loan shall accrue interest at an annual rate of zero percent (0%).. CORPORATION shall begin making monthly payments of ONE T-HOUSAND AND NO/100 DOLLARS ($1,000.00) to CITY.commencing April 1,2002 and the first of each month thereafter. Such payments shal! continue until the entire loan amount has 'been repaid. I.n April, 2002, CITY and CORPORATION shall review CORPORATION's financial position and determine whether CORPORATION can increase its monthly payments to CITY and, if so, by how much. If it-is determined that CORPORATION can increase Suoh monthly payments, commencing the month following such determination, CORPORATION shall pay that increased amount until the entire loan amount is repaid." 2. All security for the loan repayment shall remain in place. 3. CORPORATION has met its requirements for retaining and creating Iow- and moderate-income jobs and will no longer-be required to submit proof of such job creation and retention. 4. All other terms 'and conditions of Agreement No. 97-65 shall remain in full force and effect. IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to Agreement No. 97-65 to be executed by their respective officers and agents thereunto duly authorized as of the day and year first above written. "CITY" "CORPORATION" CITY OF *BAKERSFIELD KERN,,'TE_C.CH. INC./'] By: By:. ,. HARVEY L. HALL MICHAEL K. MILLER. Mayor . Partner \ ~.~IAMES C.-DA~Vi D -- Partner Page2 of 3 Pages APPROVED AS TO .FORM: APPROVED AS TO CONTENT:. BART J. THILTGEN EcOnomic and Community Development City Attorney Department. JANICE $CANLAN DONNA L. KU,NZ <:~' Deputy City Attorney Economic Development Director COUNTERSIGNED: By: G'REGORY J. KLIMKO Finance Director Page 3 of 3 Pages BAKERSFIELD Economic and Community Development Department MEMORANDUM February 15, 2002 TO: Budget and Finance Committee FROM: Donna L. Kunz, Economic Development Director SUBJECT: Economic Development Loan Application and Portfolio Status Report To assist with discussion concerning the City's loan procedures, attached is theFact Sheet and application, along with a status report of our loan portfolio. k:C \Documents and Settmgs\jparks. BAKERSFIELD~ocal Settings\Temp\edloanpo.wlxl Economic Development Loans Status as of February 13, 2002 Company Agreement # Loan Loan Forgivable or If Repayable, is it repaid Final payment due if Comments amount balance Repayable? annually or lump sum? lump sum Hammons Meat Sales 96-337 $ 35,000 $ 7,000 F NA NA Agreement expired; awaiting submittal of final employment report. Loan will be forgiven in full if loan terms have been met in the last year. ARB, Inc. (Southwest 96-336(1) 150,000 30,000 F NA NA Agreement expired; awaiting submittal of fina'l employment Contractors) report. Loan will be forgiven in full if loan terms have been met in the last year. NOTE: Company failed' to meet requirements in Year 2, and repaid $30,000. Kern-Tech, Inc. 97-65 170,000 170,000 R Lump Sum 3/26/02 Company cannot make payment. Dopaco, Inc. 98-009 200,000 40,000 F NA NA Current. Galey's Marine Supply 98-045 60,000 24,000 R Annually NA Company has not submitted employment report. Staff has formally requested submittal of report. Harvel Plastics, Inc. 98-052 123,020 49,208 F NA NA Current. Step 2, Inc. 98-190 137,'200 54,880 F NA NA Current. Noriega House 99-009 ~ 22,800 20,520 F/R ¼ forgivable ~ 20% per 1/13/04 Staff has requested submittal of most recent employment year, ¼ due at 5 years, report. Steir's RV Sales 99-083 I .60,000 60,000 R Lump Sum 4/14/04 Current. Pleasant Holidays 99-175 250,000 I00,000 F NA NA Current. Sangera Buick 00-014 47,957 47,957 R Lump Sum 1/26/05 Current. Bakersfield Civic Light 00-140 50,000 40,000 F NA NA 'Current. Opera Association Victory'Circle 00-207 50,000 50,000 R Lump Sum 8/16/05 Current. CITY OF BAKERSFIELD BUSINESS ASSISTANCE PROGRAM FACT SHEET PROGRAM DESCRIPTION: The Business Assistance Program is.deSigned to enhance economic activity, encourage the growth of small businesses and promote commercial revitalization in targeted areas of the City. The major goal-of this program is to retain and/or create the availability of jobs for Iow income (LI) persons; and/or predominantly target a firm's goods and services to LI residents of the City of Bakersfield. 'USE OF :FUNDS: Loan funds can typically be used for property rehabilitation (including leasehold improvements), procurement of machinery/equipment, and acquisition of real property (in conjunction with business expansion activities). ELIGIBILITY CRITERIA: T-he business must be an established (ongoing)concern, looking to expand or relocate where 51% of the new jobs created will. be to LI persons. The business.must have a good credit history and show evidence of sufficient income to repay the loan. An annual employment report is required to document the number of jobs · created and that 51% of the jobs will be filled by LI persons. MAXIMUM LOAN AMOUNT: The maximum amount for financial assistance may vary from year to year. Typically, loan assistance does not exceed $100,000. INTEREST RATE: Negotiated. / TERM: The term of the loan shall be determined on a case by case basis; however, the maximum term shall not exceed the economic life .of the assets, normally .up to 15 years. COLLATERAL: The Business AssiStance 'Program must be secured by real property, equipment and/or other personal/business assets. The City.may subordinate to a private lender. HOW TO A. PPLY: For further information contact: City of-Bakersfield Economic and Community Development Department 515 Truxtun Avenue Bakersfield, CA 93301 (661) 326-3764 (661) 328-1548 FAX (661) 324-3631 TDD S:\New Folder~NCD Forms\NCD003 Bus Assist Program.wpd REV: 8/01 TO: Business Assistance Program Applicants SUBJECT: City of Bakersfield Program Requirements BACKGROUND The Program has been established to enhance economic activity, encourage the growth of small business, and to promote physical revitalization of targeted areas in the City of Bakersfield. This is accomplished, through .funds which are,provided through the City's federally funded Community Development Block Grant (CDBG) Program. The major goal of the Program is to retain and/or create the availability.of jobs for Iow income (LI) persons; or predominantly target a firm's goods an~l services to LI residents of the City of Bakersfield. ' All applicants must complete an application package and submit it to the Economic and Community Development Departmer~t, c/o .Donna L. Kunz, Economic Development Director at 515 Truxtun Avenue, Bakersfield, CA 93301. The following is an -example of the format and contents for a completed application package. 1. A completed application inclu6ting any pertinent attachments' (see attached application). 2. Financial Statements - prior three (3) years and current within ninety (90) days. a. Balance sheets. b. Income statements (profit/loss); or cash flow/operating statement (for real estate projects). 3. Pro Forma Financial Statements a. One (1) year income/cash flow statement (monthly). b. Additional two (4) years income statements (annual). c. 'Narrative, supported by the pro forma of how the Business Assistance Program funds will help the business with its shortfall. 4. Individual Federal income tax returns for the last three (3) years (all owners, partners or corporate officers). OR 5. Federal income tax returns for your business for the last three (3) years (sole proprietorship, partnership or corporation). ' 6. Personal financial statements - current as of date of application and signed (all owners, partners or corporate officers). 7. Source(s) of other funds, including terms and conditions. S:Wew Folder~NCD Forms~",~CDO03 Bus Assist Program.wpd REV: 8/01 2 8. Copy of current or proposed lease/purchase agreement (if applicable). 9. Articles of incorporation or partnership agreement (if applicable). 10. Copy of City business license. 11. Resume of principals involved with the project. 12. Pict plan for the project site. 13. Relevant market and feasibility studies (if available). Information on the Business Assistance Program can be obtained by contacting the Economic and Community Development Department at (661) 326-3764. Thank you .for your interest in the City's Business Assistance Program. Donna L. Kunz Economic Development Director S:~New Folde~NCD Forms\NCD003 Bus Assist Program.wpd REV: 8/01 3 APPLICATION FOR CITY OF BAKERSFIELD BUSINESS ASSISTANCE _PROGRAM Applic,ant's History Name of Applicant (Contact Person): Applicant's (Personal) Address: City/State/Zip Code: Telephone Number: Applicant's Social Security Number: -Business Name: . Business Address: City/State/Zip Code: Telephone Number: Business Taxpayer !D Number: Date Business Established: Sole Proprietorship ~ Partnership ~ Corporation ~ Type of Business .(i.e., products/services): Firm's Management List of management personnel (Proprietor, Partners, Officers, Directors and Stockholders owning 20% or more of stock) Name Address Title/Relationship/Percent Owned S:\New Folder~qCD Forms~lCD003 Bus Assist Program.wpd REV: 8/01 4 If one of the Principals proposes to act as owner/builder, please provide the following information: Name of principal, contractor's license number(s), 'building trade specialty, current construction bonding limits,. Social Security number, and two business references. .Project Information Describe the total project and the purpose of the assistance request (i.e., what component(s) of the.project will it be used for?) Address/location of project: Total estimated cost of project: $ .... Amount of assistance requested: $ Private Financing: $. Owner's equity: $ Proposed terms of assistance: Name of financial institution providing private financing: Contact person and telephone number: Note: Federal regulations require that applicants make a good faith effort to maximize private sources of project funding. Both private debt and equity must be verified. This includes ascertaining that funding sources are committed, terms and conditions of the committed funds are known; and funding sources have the capacity to deliver. Lack of maximized non-CDBG debt financing must be documented (i.e., rejection letters from private financial institutions). S:\New Folder~NCD Forms\NCO003 Bus Assist Program.wpd REV: 8/01 .5 If project site has been deter, mined, please identify the current zoning and whether a zone change or conditional use permit will be required. If a.project site has been selected, identify.the type and number of structures (i.e., commercial, residential) that are currently on site (if any) and whether they are presently occupied. If so, provide the number of tenants to be displaced (if any). For a construction project, please indicate if plans and specifications are complete and whether they have been submitted to the City Development Services Department for site plan review. If plan check is complete, please indicate if you have made application to the City for a building permit and if so, the status of your application. Please indicate if you have title of the projec.t property or control of the site (if your answer is yes-please Provide documentation). If the answer is no, please explain (i.e., who currently owns the site, is the seller willing to take an option, etc.). S:\New'Folder~NCD FormsV,,ICD003 Bu~ Assist Program.wpd REV: 8/01 6 Use of Proceeds (Enter Gross Dollar Amounts): Assistance Use of Private Use of Owner's Requested Funds Equity Land Acquisition New Plant or Building Const. Building Expansion or-Rehab Acquisition and/or Repair of Machinery and Equipment Inventor)/Purchase Working Capital Interior Remodeling Developer's Soft Costs (i.e., · design, permit fees, relocation expenses) Site Preparation Off-Site Improvements Other TOTAL: Summary of Collateral: Present Market Depreciation Present Mortgage Equity Value 'Balance Land * Building Machinery & Equipment Furniture & Fixtures Net Accounts Receivable Inventory ** Other TOTAL COLLATERAL · Please provide any support in land value documentation. · *Please indicate method of valuation. S:\New Folder~NCD Forrns~lCD003 Bus Assist Prograrn.wpd REV: 8/01 7 Identify the number of job to be created or retained by your project and indicate what percentage of these jobs will be filled or made available to LMI persons. Business History Briefly state a history of your company. Include such items as dates of pertinent changes in management, or goods/services and an overview of the growth of the company in recent years. Also discuss why the Business Assistance Program is important to your .project and company goals (i.e., how will the assistanCe affect your production or what do you expect for the company as a result of getting this asSistance) and what consequence would occur if assistance was unavailable. Have you or your business ever filed for bankruptcy? Yes No If yes, please attach explanation on separate sheet. -- -- I affirm under penalty of perjury that this application and attachments are to the best of my knowledge true and accurate and that I have the authority-to submit this application for consideration for funding under the City of Bakersfield Program. Furthermore, I understand that the City may NOT approve this application. However, if approved, I reserve the right to accept the assistance according to the terms and conditions thereto, or I may withdraw my application. If funded, I understand and agree that in order to determine that the job employment goals are met, a Semiannual Employment Report shall be filed with the City. I understand that failure to meet the objectives set forth in the Employment Plan or failure to comply with the requirements of filing the Semiannual Employment Report may result in the entire outstanding balance of the loan plus interest, being due upon Written demand by the City. Signature of Applicant Title Date S:~lew FoldeANCD Forrns'~NCD003 Bus Assist Program.wpd REV: 8101 8 CITY OF BAKERSFIELD FOR INTERNAL USE BUSI'NESS ASSISTANCE PROGRAM DOCUMENT CHECKLIST DATE: PLANNER: PROJECT: THIS 'PACKAGE INCLUDES THE FOLLOWING DOCUMENTATION AS INDICATED BY "X": 1. Application 2. Signed Financial Statements - Prior Three (3) Years and Current within Ninety (90) Days a. Balance Sheets b. Income Statements (Profit/Loss) 3. -Pro Forma Finar~cial Statements o Including all Notes and Schedules a. One (1) Year Income/Cash Flow Statement (Monthly) b. Additional Two (2) Years Income Statement (Annual) c.~ Three (3) Years Repayment Analysis (Annual) 4. Aging of Accounts Receivable within Ninety (90) Days 5. Aging of Accounts Payable within Ninety (90) Days __ 6. Federal Income Tax Returns - Individual (PriorThree (3) Years) Including All Related Schedules Siqned a. Sole Proprietorship b. Partnership c. Corporate Officers 7. Federal Income Tax Returns - Business (Prior Three (3) Years) Including'All Related Schedules a. Sole Proprietorship b. Partnership (Form 1065) c. Corporation Officers 8. Personal Financial Statements - Current to Date.of Application and Siqned a. Owner(s) b. Partners c. Corporate Officers 9. Source(s) of Matching-Funds, Including Terms and Conditions 10. Source(s) of Collateral, Including .Copies of Grant Deeds, Notes and Trust Deeds 11. Cost Estimates a. Contractor Estimates for.Construction, Materials and Labor (including Davis-Bacon) b. Equipment 'and Supply Purchases 12. Copy of FTC Disclosure Statement, if Applicable. 13. Copy of Current or Proposed Lease Agreement. 14. Articles of Incorporation or Partnership Agreement, if applicable. 15. Copy of City Business License 16. Resume of Principals Involved with the Project. 17. Plot Plan for the Project Site. 18. Relevant market and feasibility studies. 19. Appendix Approval: Yes No CD Coordinator Signature' Comments' S:~lew Folder~NCD Forms'.NCD003 Bus Assist Program.wpd REV: 8/01 9 BAKERSFIELD Economic and Community Development Department MEMORANDUM February 8, 2002 TO: Budget and Finance Committee FROM: Donna L. K-unz, Economic'Development Director SUBJECT: Funding requests by Greater Ba'kersfield Vision 2020, Inc. The City of Bakersfield was a Founding Visionary of Greater Bakersfield Vision.2020. Vision 2020 has requested the City continue this commitment for the next year with a sponsorship of $2,500. These funds would be used toward the continued operation of the Vision 2020 program. Vision 2020 will continue to monitor and report on the progress of the community vision goals. There are a number of task force committees meeting regularly that are charged with the oversight and reporting of the Vision goals. As was recently done, an annual progress report is given in a community forum. One of the Vision 2020's projects is an image study of Greater Bakersfield. Vision 2020 has secured financial commitments from several community organizations toward this study. The-City is also being requested to provide funding toward the completion of this product. Vision 2020 solicited proposals and seleoted Cogent Research LLC, a Massachusetts Corporation, to provide the necessary data, information and analysis to develop critical elements of an image campaign that will communicate the benefits of Bakersfield to residents and key business people in California. The research is intended to facilitate the understanding of how these groups formed their opinions, and how to improve these opinions through a public image marketing campaign. In addition, the campaign is intended to enhance efforts to recruit and attract .new businesses to Bakersfield. Differing opinions abound concerning the image perception of Bakersfield. This study will'refir~e the key issues, propose strategies to improve the image perceptions and develop a campaign to send the positive benefits messages. Key questions and topics of the study would include overall opinions of'Bakersfield as a suitable place to live, visit, and start and grow a business; key experiences that helPed form those opinions; reactions to messages about Bakersfield and an assessment of any change in opinions; and barriers to enhanced perceptions of Bakersfield. dlk:S:\DEBBIE'S\vision 2020 to B&F.wpd ¥ision 2020 has requested a financial contribution from the City of Bakersfield of $11,000 toward Phase I, the qualitative phase of the study. The total amount of this phase is approximately $54,000, with an additional $3,000 budgeted for travel costs of the consultant. The following table shows the total costs and the amounts that other government and community organizations have contributed: Costs of Image Study · Phase I report (fixed cost) $54,000 · Consultant travel .expenses (variable <_ 3,000 cost) Total cost of image study <_ $57,000 Less: Community Financial Contributions · Employers' Training Resource $25,00 0 · Kern County Board of Trade 11,000 · Kern Economic Development Corp. 5,000 · Vision 2020 organization 5,000 Total contributions to date ($46,000) Amount 'Remaininq to be Funded <_ $11,000 The City will benefit from its .participation in the development of the questionnaires that will serve as the basis for the research and will have full access to all data, information and analysis developed by the Consultant as .part of the research. This information will be helpful in our economic development recruitment efforts. The study will provide critical information concerning any negative image issues and assist key economic development entities in Bakersfield and Kern county in the development of a action plan to improve on these aspects. Staff recommends that the financial contribution to this study be structured as follows: a. provide $8,000 toward funding Phase I; and b. provide an amount not to exceed $3,000 to pay for actual travel costs incurred by the consultant. City funds would only be used to reimburse actual costs, which could be less than $3,000. A draft agreement outlining the terms of this contribution is attached for your consideration. dlk:S:\DEBBlE'S\vision 2020 to B&F.wpd BBNT BY: CItY OF BAKERSFIELD; 324i850; FEB-4-02 3:37PM; PAQE 2 · , V 151-ON.2020. Mr,~Ai TanNOVernber lg. 2001 dy City ofaa~mfield ~.,~-~ 1501 T_f?Xtui~venue Bakersfield, Dear'Mr. Tandy: In January 2001 Greater Bakersfield Vision 2020'handed back to -the community a -Vision and Action Plan for.our community's future. This 18-month project Involving more than 13;000 · area residents was completed on time and under budgetl Since then all aspects of the community - city and.county government, the business and-education communiflas, the-non.profit sector, and individual-citizens - have embraced *the Vision and gotten to work on bringing the 20- year Action Plan to life. VisiOn 202(:l has.been an active and vital.part of this effort in its role of monitoring and championing the implementation. In :the year ahead as the hand back to the community-is further defined, tho .work of Vision 2020 must also continue. And to do {his, we -need your continued .support. Much of the work of V'~on 2020 is accomplished by the.more than 150 volunteers who serve on the Facilitation Team an(/seven Vision Forces plus the countless other volunteem who supped, these teams. But there are expenses associated with this work, and this is where you come in. This:is a critical stage in the implementation of~e Vision and Action Plan. The overall Action Plan includes strategies and action .items in seven areas - Quality of Life and Youth and Family. Economic 'Development, Community Planning and Transportation, Downtown, Education, and Image. Seven Vision Forces monitor progress :in each area and develop scorecards or measures to .monitor progress. In addition, as you :might-expect with such a comprehensive Action Plan, the individual V'~ion Forces have been actively engaged with the organizations actually implementing the .plans to further:refine the strategies, review and as needed appropriate lead agencies, eliminate duplication, an(/close any gaps. In some .instances, the Vision Forces have served as catalysts for action. The Vision Forces come together through the Facilitation Team to look at the big .picture and coordinate implementation across functional lines. In short, through the Vision Forces and Facilitation Team, Vision 2020 serves a pivotal role in this early stage of implementation as a forum for coordination, collaboration, and communication across all sectors of community. And in its role as champion of the process, Vision 2020 serves to keep the momentum going by monitoring progress and prodding as necessary, encouraging and recognizing those working diligently to implement the Vision, and reporting progress back to the community. nco.: CITY 'OF BAKERSFIELD;- 324t8~0; FEB-4-02 3:37PM; PAOE 3/4 &ENT It .IS impo~tant that we .mai~,ain the excitement and momentum that ~.lad to the many successes already seen as a:m~ult of this tremendous oommunily effort. In ~ome ways, ptl~.~a-of .tl~e process is a much mom difficult tack.than the previous four pirates. Your c~mlJnued financial Investment in VISIon 2020 will help ensure that the Vl~on ami Aclioa Plan developed by the community become a real~. VL~on 2020's non-pmat status remains the same and ou~ tax-eXmnl~ number is 77-0521204. We could n~t have achleve<~ w~at we have wltlm~ you. VVe to your continued support, ff you'have questions or need mom infon'nafJon, don't hesitate to c~ntac~ me-at 3254454 ext. 20. SENT BY:, CITY Of BAKERSFIELD; 3241850; FEB-4-02 3:37PM; PA~E 4/4 Greater *Bakersfield Vision 2020 Commitment 2002 Ceu~t u~ trd We-want tocontinue to contribute t~ the.futum.of..Gmater ~:by .... providing the-following financial support: Founding Visionary (continued) $2,500 Sponsoring Visionary (continued) $1~000 Enclosed is my check for $ I pledge $ payable in one*installment-by (date). ~1 pledge.$ .,, payable In.two installments of $ · by (date) and (date) _ , O__ization:man, . . Add~: Contact Name: , Telephone: Authorized Signature: Make checks payable to Greater Bakersfield ViSion 2020, Ira;. Tax Exempt ID 7'/-0521204 Retum to Vision 2020, P.O. Box 1947, Bakemfield, CA 93303 AGREEMENT NO. CONSULTANT'S AGREEMENT THIS AGREEMENT is made and entered into on , by and between the.GREATER BAKERSFIELD-VISION 2020, INC, a California non-profit public-benefit corporation ("VISION 2020" herein), and COGENT RESEARCH LLC, a MASSACHUSETTS Corporation ("CONSULTANT" herein). RECITALS WHEREAS, VISION 2020 issued a Request for Proposals and CONSULTANT has submitted a proposal concerning a Market Research Project on the-Image of Greater .Bakersfield; and WHEREAS, CONSULTANT represents CONSULTANT is experienced, well . qualified and a specialist in market research; and WHEREAS, CONSULTANT is aware that information may come into CONSULTANT's possession which may impact VISION 2020's legal position in the event such .information was released to-outside parties. NOW, THEREFORE, incorporating the foregoing recitals herein, VISION 2020 and CONSULTANT mutually agree as follows: 1. SCOPE OF WORK. The scope of work is the completion .of the necessary research to enable VISION 2020 to develop critical elements of an image campaign that will communicate the benefits of .Bakersfield to residents and key business people in California. The research shall facilitate the understanding of how these groups formed their opinions, and how to improve these opinions through a public image campaign. The final scope of work tasks will include the items as set out inSchedule "A" attached and incorporated by reference as if set forth in full. The scope of work shall include all 'key items contained in'CONSULTANT's Proposal and VISION 2020's Request for Proposals. CONSULTANT's Proposal and VISION 2020's Request for Proposals are incorporated herein by reference as though fully set forth. CONSULTANT's services will include all the procedures necessary to properly complete the tasks CONSULTANT has been hired to perform whether specifically included in the scope of work or not. 2. COMPENSATION. A. FEE. Compensation for all work, services or products called for under this Agreement, except for travel shall consist of a fixed payment of FIFTY FOUR THOUSAND and TWO HUNDRED FIFTY Dollars ($54,250), which shall be paid as follows: See" Schedule A" for payment schedule by work task. Except for travel the compensation set forth in this section shall be the CONSULTANT'S AGREEMENT CogentConsultantContract.doc - 1 - -Updated - August 23, 2001 total compensation under this Agreement including, but not .limited to, all Out-of-pocket costs and taxes. VISION 2020 shall pay only the compensation listed unless otherwise agreed to in writing by both parties. Travel related costs shall be reimbursed only after proper documentation has been submitted to VISION 2020 but shall not exceed THREE THOUSAND .DOLLARS ($3,000). No travel costs shall be incurred by CONSULT-ANT without prior written approval by VISION 2020. B. PAYMENT PROCEDURE. CONSULTANT shall be paid for satisfactory services rendered after receipt of an itemized invoice for the work completed and approved .by VISION 2020 in accordance with the terms of this Agreement. Payment by VISION 2020 to CONSULTANT shall be made within thirty (30) days after receipt and approval by VISION 2020 of CONSULTANT's itemized-invoice. 3. -KEY PEI~SONNE.L. At the request of VISION 2020, CONSULTANT shall name all key personnel to be assigned to the work set forth herein. CONSULTANT shall provide background for each of the .key personnel including, without ~imitation, resumes and work experience in the type of work called for herein. VISION 202Oreserves the right to approve key personnel. Once the key personnel are approved CONSULTANT shall not change such personnel without the .written approval of VISION 2020. 4. INCLUDED DOCUMENTS. Any bid documents, including, without limitation, special provisions and standard specifications and any Request for Proposals, Request for Qualifications and responses thereto relating to this Agreement are incorporated by reference as though fully set forth. 5. STARTING WORK. CONSULTANT shall not begin work until authorized to do so in writing by VISION 2020. No work will be authorized until the contract has been fully executed by CONSULTANT and VISION 2020. 6. TITLE TO DOCUMENTS. All documents, plans, and drawings, maps, photographs, and other papers, or copies thereof prepared by CONSULTANT pursuant to the terms of this Agreement, shall, upon preparation, become the property of VISION 2020. 7. LICENSES. CONSULTANT shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement any licenses, permits and approvals which are-legally required for CONSULTANT to practice its profession. 8. CONFIDENTIALITY. During the term of this Agreement, CONSULTANT will be dealing with information of a legal and confidential nature. CONSULTANT will not disclose to any person, directly or !ndirectly, either during the term of this Agreement or at any time thereafter, any such information or use such information other than as necessary in the course of this Agreement. All documents CONSULTANT prepares and confidential information given to CONSULTANT under this Agreement are the exclusive property of VISION 2020. Under no circumstances shall any such information or documents be removed from VISION 2020 without VISION 2020's prior written consent. CONSULTANT'S AGREEMENT CogentConsultantContract. doc - 2 - -Updated - August 23, 2001 9. NEWS RELEASES/INTERVIEWS. All news releases, media interviews, testimony at hear~ings and public comments relating to this Agreement'by CONSULTANT shall be 'prohibited unless authorized 'by VISION 2020. 10. - NO WAIVER OF DEFAULT. The failure of any party to enforce against another party any provision of this Agreement shall not constitute a waiver of that party's right to enforce such a provision at a later time, and shall not serve to vary the terms of this Agreement. 11. GOVERNING .LAW. The laws of the State of California will govern the validity of this Agreement, its interpretation and performance. Any litigation arising in any way from this Agreement shall be brought in Kern County, California. 12. FURTHER AS,Sl;IRANCES. Each party shall execute and deliver such .papers, documents, and instruments, and perform such acts as are-necessary or appropriate, to implement the terms of this Agreement and the intent .of the parties to this Agreement. 13. .NOTICES. All notices relative to this Agreement shall be given in writing and shall be personally served or sent by certified or registered mail and be effective upon depositing in the United States mail. The parties shall be addressed as follows, or at any other address designated by notice: VISION 2020: GREATER BAKERSFIELD V. ISION 2020, INC C/O Danielle McKinney Kern EDC 2700 M Street, Suite 200 Bakersfield, CA 93302 CONSULTANT: Cogent Research, LLC 2 Tyler Court Cambridge, MA 02140 14. ASSIGNMENT. Neither this Agreement, nor any interest in it, may be assigned or transferred ~by any party without the prior written consent of all the parties. Any such assignment will 'be subject to such terms and conditions as VISION 2020 may choose to impose. 15. BliNDING EFFECT. The rights and obligations of this Agreement shall inure to the benefit of, and be binding upon, the parties ~to the contract and their heirs, administrators, executors, personal representatives, successors and assigns, and whenever the context so requires, the masculine gender includes the feminine and neuter, and the singular number includes the plural. This Agreement may be executed in any number of counterparts, each of which shall be considered as an original and be effective as such. CONSULTANT'S AGREEMENT Cogent¢onsultantContract. doc -Updated - August 23, 2001 1'6. EXHIBITS. In the event of a conflict between the-terms, conditions or specifications set forth in this Agreement and those in exhibits attached hereto, the terms, conditions, or specifications set forth in this Agreement shall prevail. All exhibits to which reference is made in this Agreement are deemed incorporated in this Agreement, whether or not actually attached. 17. MERGER AND 'MODIFICATION. This contract sets forth the entire Agreement between theParties and supersedes all other oral o¢ written representations. This contract may be modified only in a writing approved .bY'VISION '2020 and CONSULTANT. 18. CO'NFLICTS OF INTEREST. CONSULTANT stipulates that corporately, or individually, the firm, its employees and subconsultants have no financial .interest in -either the success or failure of any project which is dependent upon the result of the work-prepared pursuant to this Agreement. 19. CORPORATE AUTHORITY. Each individual .signing this Agreement on behalf of entities represent and warrant that they are, respectively, duly authorized to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement. 20. TERMINATION FOR CAUSE. If at any time VISION 2020 becomes dissatisfied with the performance of CONSULTANT under this Agreement, VISION 2020 may terminate this Agreement on ten (10) days written notice. Written notice shall be given pursuant to the notices paragraph-of this Agreement. In the event of early termination, CONSULTANT shall be compensated only for work satisfaotorily completed up to the date .of termination and delivered to 'and .accepted by VISION 2020. 21. INDEPENDENT CONTRACTOR. This Agreement calls for the performance of the services of CONSULTANT as an independent contractor. CONSULTANT is not an agent or employee of VISION 2020 for any purpose and is not entitled to any of the benefits provided by VISION 2020 to its employees. This Agreement shall not be construed as forming a partnership or any other association with CONSULTANT other than that of an independent contractor. 22. DIRECTION. CONSULTANT retains the right to control or direct the manner, in which the services described herein are performed. 23. -EQUIPMENT. CONSULTA'NT will supply all equipment, tools, materials and supplies necessary to perform the services under this Agreement. 24. INSURANCE. In addition to any other insurance or bond required under this Agreement, the CONSULTANT shall procure and maintain for the duration of this Agreement the following types and limits of insurance ("basic insurance requirements" herein): CONSULTANT'S AGREEMENT . ~ . CogentConsultantContract.doc -Updated - August 23, 2001 24.1 Automobile liability insurance, providing coverage on an occurrence basis for bodily .injury, including death, of one or more persons, property damage and personal injury, with limits .of not less than One Hundred Thousand ($100,'000)per occurrence; and the policy shall: 24.1.1 Provide coverage for owned, non-owned and hired autos. 24.2 Broad form commercial general ~iability insurance, ISO form CG00 01 11 85 or 88 providing coverage on an occurrence basis for bodily injury, including death, of one or more persons, property damage and personal injury, with .limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: 24.2.1 Provide contractual liability coverage for:the terms of this Agreement. 24.3 Workers' compensation insurance with statutory'limits and employer's liability insurance with limits of not less than-One Hundred Thousand ($100,000) per occurrence. 24.4 Except for workers' compensation, insurance is to be placed with insurers with a Bests' rating of no less than A:VII. Any deductibles, self-insured retentions or insurance in lesser amounts, or lack of certain types of insurance otherwise required by.this Agreement, or insurance rated below Bests' A:VII, must be declared prior to execution of this Agreement and approved by VISION 2020 in writing. 24.5 The insurance required in this Agreement shall be maintained until all work required to be performed by this Agreement 'is satisfactorily completed as evidenced by written acceptance by VISION 2020. 24.6 The CONSULTANT shall furnish VISION 2020 with a certificate of insurance and any required endorsrements evidencing the insurance required. VISION 2020 may withdraw its offer of contract or cancel this contract if certificates of insurance and endorsements required have not been provided prior to the execution of this Agreement. 24.7 Full compensation for all premiums which the CONSULTANT is required to pay on all the insurance described herein shall be considered as included in the prices paid for the various items of work to be performed under this Agreement, and no additional allowance will be made for additional premiums which may be -required by extensions of the policies of insurance. 24.8 It is further understood and agreed by ,the CONSULTANT that its liability to VISION 2020 shall not in any way be limited to or affected by the amount of insurance obtained and carried by the CONSULTANT in connection with this Agreement. CONSULTANT'S AGREEMENT CogentConsultantContract.doc -Updated - August 23. 2001 24.9 Unless otherwise approved by VISION 2020, if any part of the work under this Agreement is subcontracted, the "basic insurance requirements" set forth, above shall be provided by, or on behalf of, all subcontractors even if VISION 2020 has approved lesser insurance requirements for CONSULTANT. '25. INDEMNITY. CONSULTANT shall indemnify, defend, and hold harmless VISION 2020, its officers, agents and employees .against any and all liability, claims, actions, causes of action or demands whatsoever against them, or any of them, before administrative or judicial tribunals of any kind whatsoever, arising out of, connected with, or caused by CONSULTANT, CONSULTAN¥'s employees, agents, independent contractors, companies, or subcontractors in the performance of, or in any way arising from, the .terms and provisions of this Agreement whether or not caused in part by a party indemnified hereunder, except as limited byCalifornia Civil Code section 2782 or VISION 2020's sole active negligence or willful .misconduct, 26. EXECUTION. This Agreement is effective upon execution. It is the product of negotiation and all parties are equally responsible -for authorship of this Agreement. Section 1654 of the California Civil Code shall-not apply to the interpretation of this Agreement. 27. CONTRACT ADMINISTRATOR. The .Contract Administrator for the VISION 2020 is: ° Danielle McKinney ° Investor Relations - Kern EDC ° 2700 M St., Suite 200 ° BakerSfield, CA 93302 ° Telephone - 661/862-5162 CONSULTANT's project manager shall be: °John Meunier °Cogent Research, LLC °2 Tyler Court °Cambridge, MA 02140 °Telephone - 617/441-9944 · 27.1The Contract Administrator and the Project 'Manager shall-be the primary contact-persons for VISION 2020 and CONSULTANT. 28. ACCOUNTING RECORDS. CONSULTANT shall maintain accurate accounting records and other written documentation pertaining to all costs incurred in performance of this Agreement. Such records and documentation shall be kept atC,ONSULTANT's office during the term of this Agreement, and for a.period of three years from the date of the final payment hereunder, and said records shall be made available to VISION 2020. representatives upon request at any time during regular business hours. CONSULTANT'S AGREEMENT ' O ' Cogent¢onsultantContract. doc -Updated - August 23, 2001 29. TAX IDENTIFICATION NUMBERS. CONSULTANT's Federal Tax ID Number 04-330-7079 CONSULTANT is a corporation? Yes X No__ IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, the day and year first-above written. "VISION 2020 .... CONSULTANT" GREATER-BAKERSFIELD VISION 2.020, INC COGENT RESEARCH LLC By: By: Sheryl Barbich John Meunier President Executive Director AttaChment: Schedule"A" CONSULTANT'S AGREEMENT ' 7 ' CogentConsultantContract. doc -Updated - August 23, 2001 Schedule "A" PURPOSE The purpose of this study 'is to provide the necessary data, information and analysis to develop critical elements of an image .campaign that will communicate the benefits of Bakersfield to residents and .key business people in California. The research is intended to facilitate the understanding of how these groups formed their opinions, and how to improve these opinions through a'l~ublic image campaign. This baseline-perception researcli .is needed in order to allow the community to measurably improve the image of Greater Bakersfield among key audiences. DESCRIPTION OF 'STUDY Before the Greater Bakersfield Metropolitan area can improve their image they must begin to understand the City's ,image outside of Bakersfield (but within California) among key audiences, such .as residents and businesses. Based on overwhelming community consensus on a community vision that includes improvement of the image of Greater Bakersfield, the Image Vision Force, chartered by the lead agency Greater Bal(ersfield Vision 2020, has developed a process to hire Cogent Research LLC, a strategic marketing research firm, to conduct baseline perception research. The Consultant's primary task will include recommending a methodology and conducting both quantitative and .qualitative (with.an emphasis on quantitative) research to .understand the current opinion identified audiences have of Bakersfield/Kern County, how that opinion was formed, and what would improve the opinions of that audience. SCOPE OF WORK Phase I - Qualitative Task I - Planning. Consultant will begin with a k, ick-off planning meeting in person between Vision 2020 and Consultant personnel. During this meeting Consultant will review the ,project objectives in detail, discuss the research methodology, and 'determine a final project schedule. In addition, Consultant will determine the exact dates and screening criteria (screener) for the interviews. Task'll -:Developing Guidelines. Consultant will develop interview guidelines based on the planning meeting. Shortly after the planning meeting, Consultant will provide Vision 2020 with a first draft of the guidelines for review. Guidelines will. not.be considered finalized until both parties feel they have gathered all the necessary information. The purpose of the guidelines in an interview is to provide the interviewer with an outline or "road map" for the discussion, and also to provide the.client with a clear understanding of the issues to be covered. Task III - Recruit Interview Participants. Using an approved script, developed by the Consultant and approved by Vision 2020, Consultant will set up the recruiting and recruit ten people from the general population of California residents,' representing various geographies within the state, and ten people from the business community, representing varied industries of interest to Bakersfield. All potential interview CONSULTANT'S AGREEMENT Cogenl:Consull:anl:Contract.doc - 8 ' -Updated - August 23, 2001 participants will 'be offered an incentive to increase the participation rate, thereby minimizing non-participation bias ($50 for residents and $100 for business.executives). Task IV - Conduct Interviews. Consultant will handle all logistical details for the interview. The respondents will be interviewed over the phone by experienced interviewers selected by Consultant. The interviews will last approximately 30 minutes and will be audiotaped for the .purpose of improving the reporting process. Task V - Provide Research Results/Report. After.completing all of the interviews, Consultant will review them for a deeper, more thoughtful assessment of the research. Consultant will provide a memorandum-style written analysis of findings. The primary purpose of this phase is to provide input and insights for the survey instrument to be used in Phase II .of the. research and the .report will focus on that objective. Phase II - Quantitative Phase Task I -Project.Planning. As the qualitative portion of the .research is a foundation for the quantitative phase, Consultant will begin the second phase of research by reviewing qualitative results. At this time, Consultant will also .review the logistics for conducting the second phase of the research. A planning meeting with. Vision 2020 personnel via satellite or phone will 'be scheduled if warranted. Task II - Questionnaire Development. Consultant will begin by developing a draft questionnaire, which closely approximates the length and subject areas necessary to meet the research objectives. Consultant will then submit this draft to Vision 2020 for discussion, comment, and review. Based upon responses, Consultant will make any necessary.changes and provide a revised draft for Vision 2020 approval. This process will continue until all parties are satisfied with the research instrument. Consultant will then pretest the survey instrument among two to three qualified respondents to .ensure proper flow of the questionnaire and respondent comprehension. Upon completion of these interviews, Consultant and Vision 2020 Will review the pretests and discuss any final modifications .prior to fielding the study. Task III - Data Collection. Consultant will begin choosing quality telephone .interviewers, training them thoroughly in the objectives of the study, and monitoring them closely. a. Training. All interviewers used for this study will participate in a comprehensive training session to ensure that they understand the overall objectives of the study and the purpose of each survey question. Each interviewer will conduct a minimum of three practice interviews to ensure that they can administer the survey instrument completely and accurately. b. Quality Control. Throughout the project, the Consultant's Field Coordinator will conduct random monitoring of all interviewers used for this study. Furthermore, all data will be collected via Computer-Assisted Telephone Interviewing (CATI)..CATI has the advantage of on-line sample management, immediate data entry, and sophisticated skip- pattern capability. CONSULTANT'S AGREEMENT CogentConsultantContract. doc -Updated - August 23, 2001 c. Protocol. Telephone interviewing for this study will adhere to the following protocol: 1. Each potential respondent will be called a minimum of five times .prior to being considered unreachable; This will minimize non-response bias associated with surveying only those respondents available at the time of the initial contact. 2. All business interviewing will be co.nducted during standard business hours (i.e., 9:00 a~m. to 5:00 p.m., 'Monday.through Friday), All residential interviewing will be conducted during.the .hours of 5:00 p.m. to 9:00 p.m. Monday through Friday, 9:00 a..m. to 9:00 p.m. on Saturday, and 12:00 p.m. to ~6:00 p.m. on Sunday. 3. To maximize participation, interviewers will offer to schedule appointments with those unable to respond at the time of the call. 4. Furthermore, all-potential respondents will be given the option of returning the call at their convenience. Task IV -'Data Processing and Tabulation. In preparing the data for analysis, Consultant will code all.open-ended questions. They will then conduct a.full range of tests on all data (open and closed-ended) ranging from simple tests to ensure that all variables have valid values to more complex testing of the relationships between variables. The keyed data will then be processed using SPSS, a comprehensive statistical analysis and data management .system. Consultant will-then produce and provide the following: a.. A survey instrument including the aggregate responses of the population (i.e., topline). b. Data tables including every survey question cross-tabulated by. a key set of demographic and attitudinal variables. Tables will .be created in WinCross, which allows for significance testing. c. Any other analyses determined .necessary to fully understanddata collected. At no extra charge, Consultant will .provide special runs of the data that may not have been apparent at the beginning of data processing. Task V - Research Report. In preparing research results, Consultant will conduct two tasks as follows. First, Consultant will provide Vision 2020 with the topline results, and conduct a briefing session to discuss Consultant's initial reactions and summary observations. Consultant will then conduct a thorough review of the subgroup analysis for a deeper, more thoughtful assessment of the findings. Based upon these two steps, Consultant will move to the formal reporting phase. Also, Consultant will confer with co.su,TA.T's AG.EEME.T ' 10 ' CogentConsultantContract. c~oc -Updated - August 23, 2001 Vision 2020 to determine what will be the most appropriate and useful format for reporting. Once a format has been agreed upon, Consultant will produce a draft for Vision 2020' review. This draft will focus on the quantitative portion, including commentS from the qualitative results as relevant. After receiving feedback on the draft, Consultant will make changes or conduct additional analyses as needed before producing the final report. Consultant will provide Vision 2020 with two bound copies of the final report, as well as an unbound report suitable for copying and a computer-readable copy. Consultant will als0 provide all survey data in a format compatible with Project Manager's computer system. Finally, Consultant will provide Vision 2020 with an electronic copy of the final"report (Microsoft Word version). PROJECT SCHEDULE SCOPE OF WORK (TASK) FROM A GREEMENT.EXECUTION DA TE Phase h Qualitative research Project'Planning Meeting Week 1 (In person) Develop Screener Week 1 Recruiting Set-up Week 1 Develop Guidelines Week 3 Recruit 'Participants Week 3-4 Conduct Interviews Week 3-4 Provide Final Report Week 5-6 Phase I1: Quantitative research Project Planning Meeting Week 5 (via satellite) Sample Preparation/Instrument Development Week 5-6 CATI programming Week 7 Data Collection Week 7-8 Data .Processing Week 9 Provide Topline Results Week 9 Conduct Analysis. Week 10 Provide Final Report and Crosstabulations Week 10-11 PA YMENT (FIXED FEE) SCHEDULE Phase h Qualitative research (20% of Fee as described below) Task Fee % $ Project Planning Meeting - Task I 6% - $3,256 (Output - detailed project schedule with methodology) Develop Interview Guidelines - Task II 7% - $3,797 (Output- final written guidelines) Provide Satisfactory Report - Task V 7% - $3,797 (Output - final-qualitative research report) Subtotal - $10,850 CONSULTANT'S AGREEMENT CogentConsultantContract. doc - 1 ~ - -Updated - August 23, 2001 Phase Ih Quantitative research (80% of Fee as described below) Task Fee % $ Project Planning Meeting- Task I 15% - $8,137 (Output - summary report of meeting) Sample Preparation and Instrument 20% -$10,850 Development - Task II (Output. final survey instrument) Provide Topline Results - Task IV 20% - $10,850 (Output - preliminary analysis of aggregate responses report) Provide Satisfactory Report 25% - $13,563 and Crosstabulations - Task V (Output- final quantative report) Subtotal- $43,400 Total $54,250 CONSULTANTS AGREEMENT '12- CogentConsultantContract.doc -Updated - August 23, 2001 ..CONFIDENTIAl. . PROTECTED BY ATTORNEY- CLIENT AND ATTORNEY WORK-PRODUCT PRIVILEGES Cl~ ATTORNEY'S OFFICE Janua~ 30 2002 TO: BUDGET & FINANCE COMMITTEE Mike Maggard - Chair Harold Hanson Mark Salvaggio FROM: BART J. THILTGEN, City Attorney SUBJECT: BUSINESS LICENSE T~ In accordance with the direction of the Budget & Finance Committee, the following lists numerous alternatives to taxing of commercial and residential rental activities and an accompanying legal analysis. These alternatives are related to taxation. In order to clarify the legal analysis portion of the listing, the following applicable points and authorities are presented. 1) The levy and collection of business license taxes is a "municipal affair." (Fox Bakersfield Theatre Corporation v. City of Bakersfield, 36 Cal.2d 13.6 (1950).) 2) A city may enforce a licensing ordinance against a person doing business within the city where such ordinance was solely enacted to raise money for municipal purposes; such taxation is not excluded merely because the state has occupied the field of regulation. Moreover, a city business tax ordinance providing for criminal penalties in the form of fines, forfeitures and penalties is not invalid for that reason. (Arnke v. City of Berkeley, 185 CaI.App.2d 842 (1960).) 3) A city is constitutionally free to tax the business presence within its jurisdiction by reference to "taxable events" occurring there. (Fox Bakersfield Theatre Corporation, supra.) 4) The measure of taxation must not be apnc~ous, arbitrary or discriminatory." (Security Truck Line v. City of Monterey, 117 CaI.App.2d (1953).) A business tax may be based on the preceding year's calendar gross receipts. (Web Service Company, Inc. v. Spencer, 252 CaI.App.2d (1967).) BUDGET & FINANCE COMMITTEE January 30, 2002 Page 2 5) There is no requirement that an excise tax levied for revenue by a municipality be reasonable in amount. The only restrictions on the exercise of a power to impose a tax are the constitution, the charter for charter cities, and the statutes for general law cities. (Fox Bakersfield Theatre Corporation, supra.) There is, of course, the overriding limitation a tax may not be prohibitive or confiscatory. 6) In order for a municipality to properly tax an entity, the latter must have a substantial presence within the city's jurisdictional borders. (Mobil Oil Corporat/on v. Commissioner of Taxes, 445 U.S. 425 (1980).) '7) No constitutional rights are violated if the burden of a license tax falls equally on all members of a class, though other classes have lighter burdens or are wholly exempt. The classification must be reasonable, must be based on substantial differences between the pursuits separately grouped and must not be arbitrary. (See, U.S. Constitution, Amendment XIV (equal protection clause); Fox Bakersfield Theatre Corporation, supra.) 8) Any increase in taxes imposed by a municipality must be approved by the voters (general tax increase requires majority approval; special tax requires two-thirds voter approval). (See, California Constitution, Article XIII C (Proposition 218).) 9) Bakersfield Municipal Code section 5.02.010(A), which defines "business" to include "professions, trades, and occupation and all and every kind of calling whether or not carried on for profit" is a "catch-all" provision designed to ensure that certain businesses do not escape local taxation simply because they are not otherwise expressly speoified within a taxing ordinance. (See, generally, Rexall Drug Co. v. Peterson (City.of Los Angeles), 113 Cal.App.2d 528 (1952); Programming-Enterprises, Inc. v. City of Los Angeles), 215 Cal.App.3d 281 (1989).) 10) Bakersfield Municipal Code section 5.02 is consistent with the principle that a local tax ordinance is not required to specifically identify and enumerate each and every business activity subject to taxation. (Edwards v. City of Los Angeles, 48 CaI.App.2d 62, 68 (1941).) Indeed, the .rental of property has repeatedly been recognized as a "business" for purposes of local business license taxation. (See, e.g., Clark v. City of San Pablo, 270 CaI.App.2d 121, 126 (1969); City of Berkeley v. Cukierman, 14 Cai.App.4th 1331, 1339 (1993).) Nor may a taxpayer escape the local tax consequences of his/her treatment of certain receipts on federal and state income tax returns. (Indep. Casting Television, Inc. v. City of Los Angeles, 49 CaI.App.3d 502, 508-509 (1975) - any person seeking to avoid taxation for property rental receipts may be required to produce federal and state tax returns establishing that rental receipts were not treated as "gross income" for federal and state taxation purposes, and that expenses associated with the rental activity were not treated as deductions.) BUDGET &-FINANCE COMMITTEE January 30, 2002 Page 3 ALTERNATIVES 1) Exempt from taxation the commercial rental businesses when ownership is based upon a passive investment. A: Subject to challenge by other commercial rental businesses as Unequal taxation of members of the same class of business in violation of U.S. Constitution (equal protection clause) without a substantial difference between the underlying business pursuit (commercial space rental) [challenge would likely prevail]. 2) Exempt all "passive investment" operations from taxation. A: Subject to challenge on equal protection basis with no rational basis for exemption [challenge would likely prevail]. [Practical Effect: significant potential revenue loss based upon potential reclassification of businesses to conform to IRS passive investment standards.] [Administrative Effect: would require staff auditing based upon IRS tax laws versus current audit of only "gross receipts."] [Legal Effect: loss of local autonomy in taxation by linking to federal standards which are subject to change.] 3) Exempt from taxation commercial rental business unless a property manager is used to operate the business. A: Same challenge as (1), above. 4) Exempt from taxation all commercial rental businesses. A: May be challenged on the basis that the business is not burdened with taxation while other businesses, which also use municipal services, must pay a tax. [City would most likely prevail, if a "rational basis" for this exemption can be shown (e.g., administrative convenience and expense in the collection or measurement of the tax).] [Practical Effect: loss of revenue to City which could impact provision of public services.] 5) Exempt from taxation all residential rental business (single family residential). A: May be challenged by multi-family residential business under equal protection clause. [C!ty likely to prevail.] [Practical Effect: some lost revenue.] 6) Exempt from taxation all R-1 and R-2 residential rental business. A: Same as (4), above, but R-2 based on square footage rather than number of units and may be deemed arbitrary. 7) Exempt from taxation three (3) or fewer residential unit rental businesses. A: Subject to challenge from four-plex owners and commercial rental business. [If City makes finding that three or fewer is not a business and not a member of the residential rental business class, then City likely to prevail.] [NOTE: Can also exempt four (4) or fewer residential unit rental businesses with appropriate finding, to exempt four-plexes, three-plexes, duplexes and four single family units.] BUDGET & FINANCE COMMITTEE January 30, 2002 Page 4 8) Exempt from taxation all residential rental business. A: Subject to challenge by commercial since multi-family and · apartments construed as commercial in Bakersfield Municipal Code. [Challenge would likely prevail.] 9) Differentia in tax rate between commercial and residential rentals. A: While may be challenged on basis of equal protection, City most likely would prevail if rational basis for differentiation established (e.g., lesser amount of general public services in residential area versus a commercial area). 10) Exempt from taxation -based upon number of commercial units being rented, square footage being rented, or some other criteria other than gross receipts. A: Subject to'challenge on basis that tax does not fall equally on all members of the class (type of business) pursuant to equal protection. [Challenge would likely prevail.] 11) Establish differential rates based upon amount of gross receipts generated by the business (e.g., exempt under a certain amount; graduated tax as gross receipts increase or decrease; or some other criteria). A: Subject to challenge under equal protection and as discriminatory within same type of business (e.g., discrimination or protection of small businesses, no ratiOnal basis or nexus related to City service provision). [Challenge would likely prevail.] BJT:las cc: Gregory Klimko, Finance Director Bill Descary, Treasurer Darnell Haynes, Assistant to the City Manager S:\COUNCIL\MEMOS\BUSINESS LICENSE TAXES - BUDG&FIN 2.DOC