HomeMy WebLinkAboutStaff Report 2409-3460CITY OF PALO ALTO
CITY COUNCIL
Regular Meeting
Monday, November 04, 2024
Council Chambers & Hybrid
5:30 PM
Agenda Item
9.Approval of Professional Services Contract Number C25191557 with The Advantage
Group in an Amount Not to Exceed $231,000 to Provide Third Party Administration
Services for the Palo Alto Retirees Health Benefit Reimbursement Program for a period of
Five Years; CEQA Status - Not a Project.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: November 4, 2024
Report #:2409-3460
TITLE
Approval of Professional Services Contract Number C25191557 with The Advantage Group in an
Amount Not to Exceed $231,000 to Provide Third Party Administration Services for the Palo
Alto Retirees Health Benefit Reimbursement Program for a period of Five Years; CEQA Status -
Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to
execute the attached Contract No C25191557 (Attachment B), with The Advantage Group, to
provide administration services for the Palo Alto Retirees Health Benefit Reimbursement
program for a term of five years and a total amount not-to-exceed $231,000.
BACKGROUND
The City offers medical benefits to retirees and their eligible dependents upon retirement,
which may include partial reimbursement for their CalPERS Public Employees Medical Health
Plan. The reimbursement amount varies based on employee’s date of hire and retirement from
the City. Currently the City has four different reimbursement groups under this benefit
program, Attachment A outlines the different benefit levels by group. The groups impact how
much the City reimburses retirees for their medical deductions. These benefit levels are
negotiated and approved as part of the employee contracts. Employees and retirees have an
open enrollment window in October each year in which they can make changes to their
healthcare plans that take effect in January of the following year.
The reimbursement process for Groups 1, 2 and 3 is managed by an external vendor. This is
because CalPERS deducts the full cost of medical premium from retiree’s pension check, thus
requiring the City to process reimbursement to retirees based on their eligibility. Our service
provider meticulously reviews the CalPERS retiree roster and the specifics of each retiree's
medical plan on a monthly basis. The provider determines the appropriate reimbursement
amount, which is reviewed by City staff for accuracy. Finally, the provider requests approval
from the City’s Administrative Services Department (Treasury Division) for monthly payments
and processes the reimbursement for over 900 City retirees. Group 4 is managed by CalPERS.
Retirees under Group 4 pay their portion of medical deductions directly from their pension
check and CalPERS bills the City their portion on a monthly basis.
ANALYSIS
Procurement Process
A request for proposals (RFP) was issued by the City’s benefit broker, Alliant, on behalf of the
City. Alliant conducted a targeted approach, reaching out to several known retiree health
reimbursement providers. Four qualified retiree health reimbursement contractors responded
to the RFP.
Table 1: Summary of Request for Proposal
Proposal Description Request for Proposal for Retiree Billing
Premium Reimbursement Services
Proposed Length of Project 5 years
Number of Vendors Notified 5
Number of Proposal Packages Downloaded 4
Total Days to Respond to Proposal 21
Pre-Proposal Meeting No
Pre-Proposal Meeting Date N/A
Number of Proposals Received 4
Proposal Price Range $42,000 to $49,000 per year
Public Link to Solicitation N/A
The City evaluated responses based on each respondent's ability to ensure efficiency of
processing reimbursements, reduce errors in the reimbursement processing to retirees, and
enhance retiree satisfaction.
Given that the full medical deduction is directly deducted from retirees' pension checks, many
retirees rely on the monthly reimbursement from this City process to fulfill their financial
obligations. Recognizing the significant impact this process has on retirees' daily lives, it is
critical to ensure that any change to this process would minimize any potential disruptions. To
achieve this, staff focused on selecting a provider that ensured timely and accurate processing
of reimbursements.
The City received proposals from The Advantage Group (current vendor), P&A, WEX Health and
Navia. Staff reviewed the proposals with the assistance of the City’s benefit broker. After
reviewing all submissions against the three main objectives outlined above, staff recommends
continuing services with The Advantage Group (TAG).
TAG has been the City’s administrator for Retiree Health Benefit Reimbursements since 2017.
Prior to TAG being awarded the contract, the Employee Benefits Service administered this
program. TAG has simplified the process for the complex City’s Retiree Health Benefit
Reimbursement program and ensured reimbursements are processed on time and error-free.
Key variables including ensuring eligibility criteria checked monthly, reconciliation to CalPERS
billing or address changes are maintained to ensure accurate retiree reimbursements are
handled by TAG and all necessary coordination, communication, and recordkeeping
maintenance involved.
TAG offered a direct single point of contact for retiree customer service. Other administrators
that responded to the RFP did not offer a single point of contact for retirees; rather they have
larger customer support centers with decentralized services. City’s retirees have developed an
effective service connection with TAG and their representatives. Altering to a customer support
center approach would involve significant transition change management with the retiree
population and seen as a reduction in service provided.
Lastly, the proposal from all vendors provided similar annual cost for their services, ranging
from $42,000 to $49,000. TAG will continue to provide their services with no change to their
current cost. The annual cost for TAG will be $46,200 and is recommended to continue
administering these services due to their expertise and quality service.
FISCAL/RESOURCE IMPACT
Funds for the Retiree Health Benefit Reimbursement contract are included in the FY 2025
Adopted Operating Budget in the General Benefits Fund. Funding for future years will be
factored into the development future operating budgets and subject to City Council approval
through the annual budget process.
The cost associated with this contract are for the administration of City of Palo Alto’s retiree
healthcare benefit.
STAKEHOLDER ENGAGEMENT
Internal stakeholders will be informed of the contract status to ensure continuity in current
processes.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because approval of this contract
for benefit administration services is an organizational or administrative activity that will not
result in direct or indirect physical changes in the environment. CEQA Guidelines section
15378(b)(5).
ATTACHMENTS
Attachment A: Benefit Groups in the CalPERS Retiree Healthcare Benefit Plans
Attachment B: The Advantage Group, Contract C25191557
APPROVED BY:
Sandra Blanch, Human Resources Director
Attachment A: 4 Benefit Groups in the CalPERS Retiree Healthcare benefit plans
City of Palo Alto Retiree Healthcare Benefit Plans and Tiers
Miscellaneous Safety: Fire Safety: Police
Group 1
Retired before January 1, 2007; eligibility starting at
the age 50 and 5 years of service; full premium up
to family coverage
Retired before March 1,
2009; eligibility starting at
the age of 50 and 5 years of
service; full premium up to
family coverage
Group 2
Retired between January
1, 2007
and May 1, 2011;
eligibility starting at the
age 50 and 5 years of
service; same as Group
1, but premium limited to
2nd most expensive
medical plan
Retired between January
1, 2007
and December 1, 2011;
eligibility starting at the
age 50 and 5 years of
service; same as Group
1, but premium limited to
2nd most expensive
medical plan
Retired between March 1,
2009 and April 1, 2015
(POA), between January 1,
2007 and June 1, 2012
(PMA); eligibility starting at
the age 50 and 5 years of
service; same as Group 1,
but premium limited to 2nd
most expensive medical
plan
Group 3
(Retirees)
Retired after Group 2, did not elect into Group 4, benefit same as active
employees
Group 3
(Actives)
Currently active, not in
Group 4. Flat Dollar Caps
equal to actives
N/A
(All active Group 3 IAFF &
FCA elected into Group 4)
N/A
(All active Group 3 POA & PMA
elected into Group 4)
Group 4 Vesting Schedule: 10 years gets 50%, 20 years gets 100%, formula amount
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CITY OF PALO ALTO CONTRACT NO. C25191557
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND DBS ADMINISTRATORS, INC. dba THE
ADVANTAGE GROUP: FLEX ADVANTAGE
This Agreement for Professional Services (this “Agreement”) is entered into as of the 21st day of
October, 2024 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and DBS ADMINISTRATORS, INC. dba THE
ADVANTAGE GROUP: FLEX ADVANTAGE, a California Corporation, located at 473471
Ridge Park Drive Suite B, Temecula, California 92590 (“CONSULTANT”).
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A. CITY intends to implement third party administration for the CITY’s Retiree Medical
Reimbursement program (the “Project”) and desires to engage a consultant to provide
administration service and customer service by reviewing monthly retiree reimbursement
CalPERS plan in connection with the Project (the “Services”, as detailed more fully in Exhibit A).
B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the
necessary professional expertise, qualifications, and capability, and all required licenses and/or
certifications to provide the Services.
C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this
Agreement, the parties agree as follows:
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described
in Exhibit A in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution from January 1, 2025
through December 31, 2029 unless terminated earlier pursuant to Section 19 (Termination) of this
Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance
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of Services under this Agreement. CONSULTANT shall complete the Services within the term of
this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE
OF PERFORMANCE”. Any Services for which times for performance are not specified in this
Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and
timely manner based upon the circumstances and direction communicated to the CONSULTANT.
CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery
of damages for delay if the extension is required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services shall be based on the compensation structure
detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses
specified therein, and the maximum total compensation shall not exceed Forty-Six Thousand
Two Hundred Dollars ($46,200) per year, for a total Five (5) year total not to exceed Two
Hundred Thirty-One Thousand Dollars ($231,000). The hourly schedule of rates, if applicable,
is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses
incurred for which payment would result in a total exceeding the maximum compensation set forth
in this Section 4 shall be at no cost to the CITY.
SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the Services performed and the applicable charges (including, if
applicable, an identification of personnel who performed the Services, hours worked, hourly rates,
and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule
of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of
completion of each task. The information in CONSULTANT’s invoices shall be subject to
verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the
address specified in Section 13 (Project Management) below. CITY will generally process and
pay invoices within thirty (30) days of receipt of an acceptable invoice.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed
by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it,
its employees and subcontractors, if any, possess the professional and technical personnel
necessary to perform the Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subcontractors, if any, have and shall maintain during the term
of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature
that are legally required to perform the Services. All Services to be furnished by CONSULTANT
under this Agreement shall meet the professional standard and quality that prevail among
professionals in the same discipline and of similar knowledge and skill engaged in related work
throughout California under the same or similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
may affect in any manner the Project or the performance of the Services or those engaged to
perform Services under this Agreement, as amended from time to time. CONSULTANT shall
procure all permits and licenses, pay all charges and fees, and give all notices required by law in
the performance of the Services.
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SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such
errors and omissions, any change order markup costs, or costs arising from delay caused by the
errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds the CITY’s
stated construction budget by ten percent (10%) or more, CONSULTANT shall make
recommendations to CITY for aligning the Project design with the budget, incorporate CITY
approved recommendations, and revise the design to meet the Project budget, at no additional cost
to CITY.
SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees
that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be
deemed at all times to be an independent contractor and shall be wholly responsible for the manner
in which CONSULTANT performs the Services requested by CITY under this Agreement.
CONSULTANT and any agent or employee of CONSULTANT will not have employee status
with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY
pertaining to or in connection with any retirement, health or other benefits that CITY may offer its
employees. CONSULTANT will be responsible for all obligations and payments, whether
imposed by federal, state or local law, including, but not limited to, FICA, income tax
withholdings, workers’ compensation, unemployment compensation, insurance, and other similar
responsibilities related to CONSULTANT’s performance of the Services, or any agent or
employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as
creating an employment or agency relationship between CITY and CONSULTANT or any agent
or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY
shall be construed as providing for direction as to policy and the result of CONSULTANT’s
provision of the Services only, and not as to the means by which such a result is obtained.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign
or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s
obligations hereunder without the prior written approval of the City Manager. Any purported
assignment made without the prior written approval of the City Manager will be void and without
effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement
will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the
parties.
SECTION 12. SUBCONTRACTING.
Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the
Services to be performed under this Agreement without the prior written authorization of the City
Manager or designee. In the event CONSULTANT does subcontract any portion of the work to
be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and
omissions of subcontractors.
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SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Debbie Wenglare,
Email: dwenglare@flexasap.com to have supervisory responsibilities for the performance,
progress and execution of the Services and Misty Berkner, Email: mberkner@flexasap.com as
the CONSULTANT’s Project Manager to have supervisory responsibility for the performance,
progress, and execution of the Services and represent CONSULTANT during the day-to-day
performance of the Services. If circumstances cause the substitution of the CONSULTANT’s
Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment
of a substitute Project Manager and the assignment of any key new or replacement personnel will
be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at
CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not
perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate
or timely completion of the Services or a threat to the safety of persons or property.
CITY’s Project Manager is Tarandeep Mann, Human Resources Department, Benefits Division,
250 Hamilton Avenue, Palo Alto, CA, zipcode: 94301, Telephone: (650) 329-2574. CITY’s
Project Manager will be CONSULTANT’s point of contact with respect to performance, progress
and execution of the Services. CITY may designate an alternate Project Manager from time to
time.
SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without
limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications,
computations, models, recordings, data, documents, and other materials and copyright interests
developed under this Agreement, in any form or media, shall be and remain the exclusive property
of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights
which arise from creation of the work product pursuant to this Agreement are vested in CITY, and
CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual
property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall
make any of such work product available to any individual or organization without the prior written
approval of the City Manager or designee. CONSULTANT makes no representation of the
suitability of the work product for use in or application to circumstances not contemplated by the
Scope of Services.
SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized
representatives to audit, at any reasonable time during the term of this Agreement and for four (4)
years from the date of final payment, CONSULTANT’s records pertaining to matters covered by
this Agreement, including without limitation records demonstrating compliance with the
requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain
and retain accurate books and records in accordance with generally accepted accounting principles
for at least four (4) years after the expiration or earlier termination of this Agreement or the
completion of any audit hereunder, whichever is later.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend
and hold harmless CITY, its Council members, officers, employees and agents (each an
“Indemnified Party”) from and against any and all demands, claims, or liability of any nature,
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including death or injury to any person, property damage or any other loss, including all costs and
expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements
(“Claims”) resulting from, arising out of or in any manner related to performance or
nonperformance by CONSULTANT, its officers, employees, agents or contractors under this
Agreement, regardless of whether or not it is caused in part by an Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to
require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active
negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of,
or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its
officers, employees, agents or contractors under this Agreement.
16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not
operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive
the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under
this Agreement is effective unless it is in writing in accordance with Section 29.4 of this
Agreement. No delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. Any waiver granted shall
apply solely to the specific instance expressly stated. No single or partial exercise of any right or
remedy will preclude any other or further exercise of any right or remedy.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in Exhibit
D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall
obtain a policy endorsement naming CITY as an additional insured under any general liability or
automobile policy or policies.
18.2. All insurance coverage required hereunder shall be provided through
carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or
authorized to transact insurance business in the State of California. Any and all contractors of
CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
full force and effect during the term of this Agreement, identical insurance coverage, naming CITY
as an additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be filed with CITY
concurrently with the execution of this Agreement. The certificates will be subject to the approval
of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary
coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except
after filing with the Purchasing Manager thirty (30) days’ prior written notice of the cancellation
or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30)
days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written
notice of the cancellation or modification within two (2) business days of the CONSULTANT’s
receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates
evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term
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of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT’s liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement, including
such damage, injury, or loss arising after the Agreement is terminated or the term has expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written
notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material
obligations under this Agreement, in addition to all other remedies provided under this Agreement
or at law, the City Manager may terminate this Agreement sooner upon written notice of
termination. Upon receipt of any notice of suspension or termination, CONSULTANT will
discontinue its performance of the Services on the effective date in the notice of suspension or
termination.
19.2. In event of suspension or termination, CONSULTANT will deliver to the
City Manager on or before the effective date in the notice of suspension or termination, any and
all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed,
prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such
work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).
19.3. In event of suspension or termination, CONSULTANT will be paid for the
Services rendered and work products delivered to CITY in accordance with the Scope of Services
up to the effective date in the notice of suspension or termination; provided, however, if this
Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be
obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services
provided in material conformity with this Agreement as such determination is made by the City
Manager acting in the reasonable exercise of his/her discretion. The following Sections will
survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25,
27, 28, 29 and 30.
19.4. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made
in accordance with Section 17 (Waivers).
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
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Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the Project Manager at the address of
CONSULTANT recited on the first page of this Agreement.
CONSULTANT shall provide written notice to CITY of any change of address.
SECTION 21. CONFLICT OF INTEREST.
21.1. In executing this Agreement, CONSULTANT covenants that it presently
has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which
would conflict in any manner or degree with the performance of the Services.
21.2. CONSULTANT further covenants that, in the performance of this
Agreement, it will not employ subcontractors or other persons or parties having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any
conflict arises.
21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by
the Regulations of the Fair Political Practices Commission, CONSULTANT will file the
appropriate financial disclosure documents required by the Palo Alto Municipal Code and the
Political Reform Act of 1974, as amended from time to time.
SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.
22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended
from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person due to that person’s race, skin color, gender, gender
identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic
information or condition, housing status, marital status, familial status, weight or height of such
person. CONSULTANT acknowledges that it has read and understands the provisions of Section
2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the
penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining
to nondiscrimination in employment.
22.2. CONSULTANT understands and agrees that pursuant to the Americans
Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to
the public, whether directly or through a contractor or subcontractor, are required to be accessible
to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a
manner that complies with the ADA and any other applicable federal, state and local disability
rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate
against persons with disabilities in the provision of services, benefits or activities provided under
this Agreement.
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SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby
incorporated by reference and as amended from time to time. CONSULTANT shall comply with
waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero
Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and,
third, recycling or composting waste. In particular, CONSULTANT shall comply with the
following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to CITY generated from a
personal computer and printer including but not limited to, proposals, quotes, invoices, reports,
and public education materials, shall be double-sided and printed on a minimum of 30% or greater
post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any
submitted materials printed by a professional printing company shall be a minimum of 30% or
greater post-consumer material and printed with vegetable-based inks.
(b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in
accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended
Producer Responsibility requirements for products and packaging. A copy of this policy is on file
at the Purchasing Department’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from
the facility accepting the pallets to verify that pallets are not being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62
(Citywide Minimum Wage), as amended from time to time. In particular, for any employee
otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a
calendar week within the geographic boundaries of the City, CONSULTANT shall pay such
employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030
for each hour worked within the geographic boundaries of the City of Palo Alto. In addition,
CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in
accordance with Palo Alto Municipal Code Section 4.62.060.
SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of
the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to
time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the
event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal
year in the event that funds are only appropriated for a portion of the fiscal year and funds for this
Agreement are no longer available. This Section shall take precedence in the event of a conflict
with any other covenant, term, condition, or provision of this Agreement.
SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC
WORKS CONTRACTS.
26.1. This Project is not subject to prevailing wages and related
requirements. CONSULTANT is not required to pay prevailing wages and meet related
requirements under the California Labor Code and California Code of Regulations in the
performance and implementation of the Project if the contract:
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(1) is not a public works contract;
(2) is for a public works construction project of $25,000 or less, per California
Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or
(3) is for a public works alteration, demolition, repair, or maintenance project of
$15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and
1773.3(j).
SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For
purposes of this Section 27, a “9204 Public Works Project” means the erection, construction,
alteration, repair, or improvement of any public structure, building, road, or other public
improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code
Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in
Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.
This Project is not a 9204 Public Works Project.
SECTION 28. CONFIDENTIAL INFORMATION.
28.1. In the performance of this Agreement, CONSULTANT may have access to
CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential
Information in strict confidence, not disclose it to any third party, and will use it only for the
performance of its obligations to CITY under this Agreement and for no other purpose.
CONSULTANT will maintain reasonable and appropriate administrative, technical and physical
safeguards to ensure the security, confidentiality and integrity of the Confidential Information.
Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its
employees, agents and subcontractors, if any, to the extent they have a need to know in order to
perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose,
provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality
and security obligations of this Agreement.
28.2. “Confidential Information” means all data, information (including without
limitation “Personal Information” about a California resident as defined in Civil Code Section
1798 et seq., as amended from time to time) and materials, in any form or media, tangible or
intangible, provided or otherwise made available to CONSULTANT by CITY, directly or
indirectly, pursuant to this Agreement. Confidential Information excludes information that
CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it
was provided or has subsequently become publicly known other than by a breach of this
Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of
confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by
CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is
independently developed by employees of CONSULTANT without any use of or access to the
Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an
authorized representative of CITY.
28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential
Information to the extent required by order of a court of competent jurisdiction or governmental
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body, provided that CONSULTANT will notify CITY in writing of such order immediately upon
receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing
so), to give CITY an opportunity to oppose or otherwise respond to such order.
28.4. CONSULTANT will notify City promptly upon learning of any breach in
the security of its systems or unauthorized disclosure of, or access to, Confidential Information in
its possession or control, and if such Confidential Information consists of Personal Information,
CONSULTANT will provide information to CITY sufficient to meet the notice requirements of
Civil Code Section 1798 et seq., as applicable, as amended from time to time.
28.5. Prior to or upon termination or expiration of this Agreement,
CONSULTANT will honor any request from the CITY to return or securely destroy all copies of
Confidential Information. All Confidential Information is and will remain the property of the CITY
and nothing contained in this Agreement grants or confers any rights to such Confidential
Information on CONSULTANT.
28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the
terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.
SECTION 29. MISCELLANEOUS PROVISIONS.
29.1. This Agreement will be governed by California law, without regard to its
conflict of law provisions.
29.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
29.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
29.4. This Agreement, including all exhibits, constitutes the entire and integrated
agreement between the parties with respect to the subject matter of this Agreement, and supersedes
all prior agreements, negotiations, representations, statements and undertakings, either oral or
written. This Agreement may be amended only by a written instrument, which is signed by the
authorized representatives of the parties and approved as required under Palo Alto Municipal
Code, as amended from time to time.
29.5. If a court of competent jurisdiction finds or rules that any provision of this
Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in
full force and effect.
29.6. In the event of a conflict between the terms of this Agreement and the
exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall
control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if
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any), the exhibits shall control.
29.7. The provisions of all checked boxes in this Agreement shall apply to this
Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.
29.8. All section headings contained in this Agreement are for convenience and
reference only and are not intended to define or limit the scope of any provision of this Agreement.
29.9. This Agreement may be signed in multiple counterparts, which, when
executed by the authorized representatives of the parties, shall together constitute a single binding
agreement.
SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is
selected below, is hereby attached and incorporated into this Agreement by reference as though
fully set forth herein:
EXHIBIT A: SCOPE OF SERVICES
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS
THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS
ARE ATTACHED.
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CONTRACT No. C25191557 SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement as of the date first above written.
CITY OF PALO ALTO
________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
DBS ADMINISTRATORS, INC. dba THE
ADVANTAGE GROUP: FLEX
ADVANTAGE
Officer 1
By:
Name:
Title:
Officer 2
By:
Name:
Title:
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Chase Skousen
VP
Anthony Cohen
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EXHIBIT A
SCOPE OF SERVICES
CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF
SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties
and services described in this Scope of Services shall not include preparing or assisting CITY
with any portion of CITY’s preparation of a request for proposals, request for qualifications, or
any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all
times retain responsibility for public contracting, including with respect to any subsequent phase
of this project. CONSULTANT’s participation in the planning, discussions, or drawing of
project plans or specifications shall be limited to conceptual, preliminary, or initial plans or
specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a
subsequent contract on any subsequent phase of this project have access to the same information,
including all conceptual, preliminary, or initial plans or specifications prepared by
CONSULTANT pursuant to this Scope of Services.
RETIREE REIMBURSEMENT ADMINISTRATION SERVICE
CONSULTANT is a third-party retiree reimbursement administration service provider for
CITY’s Retiree Medical Reimbursement program. CONSULTANT will provide ongoing
retirement reimbursement administration services to CITY Human Resource staff and their
employees (retirees), including but not limited to the following:
1. Administering and reviewing the retiree reimbursement program, including the monthly
CalPERS invoice and calculating and processing reimbursements in a timely manner but
paid no later than the 1st of each month.
2. Conducting reimbursement through direct deposit.
3. Distributing retiree reimbursement on a monthly basis either by check or direct deposit as
requested by retiree.
4. Providing retirees with telephonic customer service between regular business hours.
5. Providing committed customer service by professionally explaining reimbursement
structure to retirees and conducting thorough follow up phone calls and/or emailing to
retirees, when needed.
6. Providing the City of Palo Alto with an assigned team with CONSULTANT’s Primary
and Secondary contact to perform the Services.
7. Maintaining good communication with CITY staff and meeting with CITY staff annually
to review the program and as needed to review progress and procedures.
8. Providing monthly reimbursement reports, including notes describing any adjustments or
discrepancies and quarterly reports of uncashed checks.
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9. Maintaining agreement with CalPERS for access to view limited retiree health benefit
information.
10. Completing substantiation forms process as agreed upon between CONSULTANT and
CITY by reconciling receipt of forms and provide tracking report.
11. At close of year, issue 1099’s to all affected retirees, if applicable, and provide report to
CITY.
12. Provide any other documentation related to Retiree Reimbursement program to the City’s
satisfaction for audit purposes to substantiate proper handling of funds.
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so
long as all work is completed within the term of the Agreement. CONSULTANT shall provide a
detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the
notice to proceed (“NTP”) from the CITY.
Milestones
Completion
Number of Days/Weeks (as specified below)
from NTP
1. Retirement Retiree Administration Service Ongoing, as directed by CITY Project Manager
within term of Agreement
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EXHIBIT C
COMPENSATION
CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms
and conditions of this Agreement, and as set forth in the budget schedule below. Compensation
shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed
budget amount for each task set forth below.
CITY’s Project Manager may approve in writing the transfer of budget amounts between any of
the tasks or categories listed below, provided that the total compensation for the Services,
including any specified reimbursable expenses, and the total compensation for Additional Services
(if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this
Agreement.
CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and
Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or
expenses incurred for which payment would result in a total exceeding the maximum amount of
compensation set forth in this Agreement shall be at no cost to the CITY.
BUDGET SCHEDULE
TASK NOT TO
EXCEED
AMOUNT
Year 1
(Jan 1, 25-
Dec 31, 25)
NOT TO
EXCEED
AMOUNT
Year 2
(Jan 1, 26-
Dec 31, 26)
NOT TO
EXCEED
AMOUNT
Year 3
(Jan 1, 27-
Dec 31, 27)
NOT TO
EXCEED
AMOUNT
Year 4
(Jan 1, 28-
Dec 31, 28)
NOT TO
EXCEED
AMOUNT
Year 5
(Jan 1, 29-
Dec 31, 29)
TOTAL
NOT TO
EXCEED
AMOUNT
Task 1
(Monthly,
Retirement Retiree
Administration
Service. Up to
1100 employees)
$46,200 $46,200 $46,200 $46,200 $46,200 $231,000
Sub-total for
Services
$46,200 $46,200 $46,200 $46,200 $46,200 $231,000
Reimbursable
Expenses (if any)
$0 $0 $0 $0 $0 $0
Total for Services
and
Reimbursable
Expenses
$46,200 $46,200 $46,200 $46,200 $46,200 $231,000
Additional
Services (if any,
per Section 4)
$0 $0 $0 $0 $0 $0
Maximum Total
Compensation
$46,200 $46,200 $46,200 $46,200 $46,200 $231,000
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REIMBURSABLE EXPENSES
CONSULTANT’S ordinary business expenses, such as administrative, overhead,
administrative support time/overtime, information systems, software and hardware,
photocopying, telecommunications (telephone, internet), in-house printing, insurance and
other ordinary business expenses, are included within the scope of payment for Services and
are not reimbursable expenses hereunder.
Reimbursable expenses, if any are specified as reimbursable under this section, will be
reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will
be reimbursed are: NONE up to the not-to-exceed amount of: $0.00.
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT’s schedule of rates is as follows:
Monthly Administration fee
• $3.50 Per Retiree Per Month
• Total estimated retirees 1100
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EXHIBIT D
INSURANCE REQUIREMENTS
CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE
CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW,
AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR
AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN.
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY STATUTORY STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED, HIRED,
NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000
YES
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST
AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM
OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY
CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL
INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.
II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE
AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG
III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL
INSUREDS:
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
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B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER
THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE
INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE
INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS
POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON
OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE
CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE
OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT
OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE
FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:
PURCHASINGSUPPORT@CITYOFPALOALTO.ORG
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