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HomeMy WebLinkAboutC31610 Post Disaster FEMA Grant ManagementCITY OF PALM DESERTw CITY MANAGER'S OFFICE STAFF REPORT REQUEST: APPROVAL OF AN ON -CALL PROFESSIONAL SERVICES CONTRACT WITH ADJUSTERS INTERNATIONAL (UTICA, NEW YORK) FOR POST - DISASTER FEMA GRANT MANAGEMENT (Contract No. C31610) SUBMITTED BY: Stephen Y. Aryan, Risk Manager DATE: February 9, 2012 CONTENTS: Adjusters International Proposal & Background Information Recommendation By Minute Motion, Approve an on -call contingency professional services contract with Adjusters International (AI), (Utica, New York), for FEMA grant management consulting. Background Adjusters International (Al), an experienced FEMA recovery consultant, has extensive experience with natural and man-made disasters (see attached). The City of Palm Desert entered into a contract three years ago with Al on a non -binding contingency basis and this agreement is set to expire in February 2012. The attached contract continues this relationship and insures that the City, if necessary, has access to the necessary resources in achieving a proper FEMA application submittal and obtains any required adjusting services. AI will also assist in the ongoing process that could take years towards full recovery. This contract is non -binding and establishes a contingency relationship with Al in advance of a disaster. This action eliminates the need for the City establishing a contractual relationship after a disaster, whereby we will be competing with other government entities seeking the same assistance. It locks in current consultant pricing and puts the City first in line to acquire as much consulting services as necessary. Al provides only the contract services we request at the time of the disaster. Approval of this document does not give Al an exclusive contract with the City, nor does it incur any cost until such services are requested post -disaster. The City is free to use the services of any other available contractor, if it desires, although Al would be the contractor of choice. The agreement serves as a no -cost retainer for three years, and locks in the consulting fees at the contractual rate during this term. It also includes annual free training classes for our personnel in managing FEMA grant programs. There is no cost until the services are rendered at the time of the disaster. Once the costs are incurred, some portion of Al fees may also be potentially recoverable from FEMA. FEMA grant programs are of critical importance to the City because the City is 100% self insured for earthquake damage recovery. The value of all City property currently includes City Hall, the Corporation Yard, the Visitor Center, Henderson Building, Desert Willow, and Housing Authority property. Self insured means that the City will be paying for all repairs and recovery out of reserves or other means such as lines of credit. Therefore, FEMA recovery must be considered the City's earthquake insurance. Staff Report -Adjuster's International February 23, 2012 Page 2 of 2 FEMA will, upon submission of appropriate paperwork, potentially reimburse the City for a considerable percentage of property repair and recovery, and the City's extraordinary personnel costs. The City's claim with either FEMA or the State could very well be substantial. All FEMA recovery will be based on a 60-day submission. Therefore, the 60-day FEMA submission is the critical step in the post -disaster financial recovery, but it takes place during the time when, due to the disaster, City personnel and infrastructure are at its most stressed. It will likely be very difficult to track expenditures, personnel time, and determine rebuilding costs. This contract with Al will enable us to receive substantial assistance in this critical financial recovery process. Fiscal Analysis There is no fiscal impact associated with approval of this non -binding contingency contract, unless the City elects in the future to utilize such services for FEMA costs recovery. Prices would be locked in, for the next three years, at the current consulting rate. Their fee for any public adjusting service is also ten (10) percent of the net recovery after deductible. The following table presents Adjusters International's FEMA consultation rates by position (all expenses: meals, travel, auto, etc. are billed at cost): POSITION HOURLY RATE Senior Consultant $295 Consultant/Project Officer $165 Specialist $135 Submitted By: Y. Aryan, Risk Manager Reviewed By: Paul S. Gibson, Director of Finance/City Treasurer Approved By: M. Wohlmuth, City Manager CITY COUNCIL ACTION APPROVED ✓ DENIED RECEIVED OTHER MEETING DATE Q _ AYES: NOES: None. - ABSENT: W-Re ABSTAIN: LC,Ae "RIFIED I3Y: Original on File with City Cicrws Office — ADJUSTERS INTERNATIONAL Contract No. C31610 126 Business Park Drive Utica, NY 13104 800-382-2468 November 16, 2011 Mr. John M. Wohlmuth City Manager City of Palm Desert 73 -5 10 Fred Waring Drive Palm Desert, CA 92260-2578 Subject: Proposal for renewal of Emergency Standby agreement for FEMA Grant Management and Insurance Consulting Services Dear Mr. Wohlmuth, Thank you for allowing Adjusters International (Al) to submit this proposal for FEMA Grant Management and Insurance Adjusting Services to the City of Palm Desert (City). This agreement will authorize Al to begin FEMA consulting and insurance consulting at the direction of the City for any Federal declared and or insured disaster. We propose that our FEMA grant management services under this agreement be delivered in phases. The first phase shall cover the initial emergency response and recovery phase which will include strategic planning and implementation of the City's financial response plan, small project formulation and large project development strategies. We suggest Phase I continue for 120 days. Within the first two weeks of activation, Al will provide the City with a not to exceed cost for the initial phase. At the conclusion of phase I we will provide the City with an assessment as to where the City is in the recovery process, a report on what work needs to be completed and recommendations for the City to move forward. This initial period maybe extended by mutual agreement of both parties. After this time, we will meet with the City and discuss the current workload and prepare scopes of work and estimated fees for the City's approval. With respect to any insurance claim we are directed to adjust, our service will begin immediately and continue throughout the entire claim. The insurance claims will be adjusted by our California based affiliate and a State of California licensed adjuster. In the event, during the next three-year period, that City has a federally declared disaster or suffers an insured loss, the City, at its sole discretion, can activate Adjusters International subject to the terms of this agreement to perform some or all of the following tasks: Contract No. C31610 John Wohlmuth City of Palm Desert Page 2 FEMA Public Assistance Consulting Services Al will provide the City with services designed to help maximize FEMA funding, expedite the process, and retain funds during project closeout and audit. The following bullets present the services that are available under this engagement. Grant Management Tasks: • Provide general grant management advice • Assist in the development of a disaster recovery team • Assist in the development, implementation and oversight of a comprehensive recovery strategy • Work with you to segregate project management costs from other administrative functions to avoid potential reimbursement disputes • Provide advice to disaster recovery team as appropriate and participate in meetings • Coordinate implementation efforts with long-term recovery plan and provide program guidance with respect to eligibility, options, contracting, change orders, documentation and tracking • Assist to develop and prepare Hazard Mitigation projects and grant applications for 404, 406 and related federal and state programs • Prepare draft correspondence to State, FEMA and other relevant agencies as necessary Eligibility Tasks: • At all stages of recovery, review eligibility issues, and work with you to develop justifications for presentation to FEMA, State, and other involved agencies • Assist in developing approach to filing and tracking costs • Review contracts, vendor qualification process, and purchasing documentation • Review documentation prepared by departments • Assist in capturing and summarizing eligible costs for selected departments • Assist in identifying and addressing special consideration issues (e.g., environmental, historical, regulatory, floodplain, insurance, hazardous materials, insurance) • Assist with compiling and summarizing Category A through G costs for presentation to FEMA and the State • Assist to prepare Project Worksheets for small and large projects • Attend meetings with City, State and FEMA to negotiate individual Project Worksheets as needed • Provide oversight to departments having difficulty with their claims John Wohlmuth City of Palm Desert Page 3 Contract No. C31610 • Assist in determining if any eligible damages have not been quantified and presented to inspectors/Project Officers • Work to resolve disputes that may arise • Address issues related to inter -agency funding conflicts • If City disagrees with FEMA determinations, assist to strategize and write appeals • When City has completed all projects and drawn down reimbursement for all eligible costs, assist with finalizing preparations for State/FEMA final inspections and audits, and participate in exit conferences with State/FEMA Project Management Tasks: • Provide project management services related to coordinating the design and construction phases of the recovery process, including HMGP projects • Serve as a centralized resource to facilitate interdepartmental coordination and communication related to assigned projects • Assist with pre -construction project development, procurement and management of A&E services; and construction contract evaluation and approval • Assist with design and scope development and document preparation and review • Assist with construction cost estimate evaluation and development • Assist with codes and standards evaluation and necessary permitting • Review all A&E and contractor payment applications for FEMA acceptability and provide policy- and project -related guidance regarding payment application processing • Make routine site visits to evaluate progress, performance and compliance; provide verification and reporting, as well as appropriate documentation of activities; and attend progress meetings • Prepare and maintain detailed project files, reviewing all addenda for eligibility and compliance • Coordinate and oversee design and construction schedules; maintain schedules of documentation deadlines and construction milestones; and provide ongoing monitoring and status reporting • Assist with change order processing and review • Support City throughout project closeout activities Engagement Management Tasks: • Prepare program management plan • Prepare weekly reports • Attend status meetings Because of the nature of federal funding, Al can make no guarantees concerning the amount of funding City will receive from applicable funding sources. John Wohlmuth City of Palm Desert Page 4 Contract No. C31610 Staffing An assigned project manager will serve as engagement leader and perform the tasks outlined above, taking direction from City's designee. Other Al consulting staff will provide support as required. Insurance Adjusting Services: Property Damage: Building • Investigate and analyze all "on -site" property damage to the building • In accordance with policy requirements, prepare details of the loss, using replacement costs and actual cash values where applicable • Calculate appropriate depreciation where necessary • Prepare all valuations necessitated by coinsurance provisions (if required) • Prepare a concise, detailed, well -documented claim • Recommend to management actions that will mitigate the loss Contents & Stock • Investigate and analyze all "on -site" property damage to the contents, including stock, supplies, furniture, fixtures, machinery, equipment, improvements and betterments, computer systems, etc. • In accordance with policy requirements, prepare details of the loss, using replacement costs and actual cash values where applicable • Calculate appropriate depreciation when necessary • Prepare all valuations necessitated by coinsurance provisions (if required) • Prepare a concise, detailed, well -documented claim Time Element Coverage Business Interruption (if applicable) • Advise management on how to start collecting and developing information (e.g., track impact of loss through the general ledger accounts for extra costs, inefficiencies of operation and payroll for those not working) • Determine the appropriate period of suspension, total or partial • Determine sales projected or the sales value of production • Determine cost of sales/production in compliance with insurance policy definitions • Determine claim limitations (actual loss sustained) • Determine and evaluate discontinued (saved) expenses John Wohlmuth City of Palm Desert Page 5 Contract No. C31610 • Determine expediting expenses; expenses related to reducing the loss • Instruct management on actions that will mitigate the loss • Determine values for coinsurance compliance (if necessary) • Prepare financial projections for the period of suspension and perhaps beyond • Prepare for submission a business interruption valuation claim, supported by multiple schedules • Provide total business interruption claim management to ensure consistency with the property portions of the claim Extra Expense • Analyze and advise management on extra expenses that are necessitated and recoverable under the insurance provisions • Coordinate tracking or extra expense items to ensure collect ability • Determine excess expenses over normal expenses • Continue to track recoverable extra expenses during an extended period of indemnity, if available under the insurance program • Integrate the extra expense claim with the property damage claim • Present and support the claim Staffing An assigned California licensed Adjuster from our California affiliate firm will serve as engagement leader and perform the tasks outlined above, taking direction from City's designee. Other Al staff including estimators and inventory specialists will provide support as required City Responsibilities To assist us in completing the various work tasks described, if activated, the City may need to assemble and provide the following information and resources: • A central contact person • A City organization chart, together with a list of names, roles, and phone numbers of personnel involved in FEMA grant management/insurance claim(s) • Access to all relevant disaster -related files and insurance policies • Access to knowledgeable individuals who can answer questions and assist in obtaining additional information, including engineering staff, finance staff, accounting staff, and grant management staff • Available written explanations of how City calculates its fringe benefit and indirect cost rate John Wohlmuth City of Palm Desert Page 6 Contract No. C31610 • Sample cost summaries • Written grant management guidelines and other correspondence from the State or FEMA • A work area, such as a conference room, including access to phone, internet, and copier COMPENSATION The City shall pay the Consultant according to the following Compensation and Schedule FEMA Consulting Al proposes to perform all FEMA consulting engagements on a time -and -expense basis, which is invoiced monthly. AI's compensation will be a function of the type of expertise provided to the City based on the tasks requested by the City and as generally outlined under this proposal. The following table presents Adjusters International's FEMA consultation rates by position: Hourly Rate 7Seniorultant $295 Project Officer $165 Specialist $135 All expenses (meals, travel, auto, etc.) are billed at cost. Professional fees will be invoiced on a monthly basis. Because of AI's timekeeping system, some invoices may be for periods of less or more than thirty days. As this is a time and expense engagement, the City has the ability to decide which tasks Al will assist them with. Consequently, the overall cost of this engagement is at all times subject to the City's desired level and length of AI's service. Al will provide weekly progress reports to the City as appropriate. These reports will serve as the support for bi-weekly progress invoicing. John Wohlmuth City of Palm Desert Page 7 Public Adjusting Contract No. C31610 Al proposes to provide public adjusting services on a contingency basis. The benefits to the City of using an incentive -based fee are (1) there are no out-of-pocket expenses, thereby increasing cash flow at a time when revenues are reduced, and (2) it allows our team to earn our fees based on our success. Our fee for service is 10 percent of the net recovery after deductible. Al will absorb all expenses related to the preparation and presentation of the claim. This does not include any legal fees, should they become necessary. Our fee is due when the insurance proceeds are received by the City. Thank you again for this opportunity to assist the City. If you have any questions or concerns, please contact me at 315-415-2963 (mobile). Sincerely, John Marini COO & Vice President AGREED TO AND APPROVED BY CITY OF PALM DESERT BY (NAME): SIGNATURE: TITLE: DATE: Adjusters International — A Brief Description When a disaster strikes, communities and organizations face a different challenge every moment and encounter a new crisis at every turn. Before too long, a major question becomes "who will cover the costs of a disaster. Adjusters International successfully navigates organizations through the complicated disaster recovery process. The focus at Adjusters International is twofold. We assist insurance policy holders in the evaluation, documentation, negotiation and settlement of their property insurance claims by: • Fully reviewing insurance policies and determining coverage • Determining policy compliance issues • Developing a claim management strategy • Conduct detailed evaluations of building, contents and/or equipment • Formulate business interruption models • Assemble comprehensive claim presentations with expert reports • Expedited claims settlement process • Maximize Insurance recovery We also guide eligible applicants —political subdivisions: such as counties, port authorities, municipalities, schools, hospitals and, select non profit agencies through their financial recovery under the FEMA Public Assistance program. Successfully recovering all of the eligible costs requires a full understanding of the FEMA Public Assistance Program: • Development of accounting and database systems • Determining eligibility and categorizations of projects • Development of funding plans to support a vision of rebuilding • Preparing Project Worksheets in a FEMA acceptable format • Maximizing hazard mitigation opportunities • Reconciling FMEA and Insurance recoveries • Establishing guidelines for reimbursement and audit compliance In short, we put our expertise to work to help our clients achieve a complete, effective recovery. Because our consultants do this work every day, from 60 Adjusters International offices and over 500 employees throughout the country, responding to all types and sizes of disasters, our team's expertise provides a valuable resource to clients as they navigate their property insurance recovery and/or their recovery under the FEMA Public Assistance program. You may also go to: www.adjustersintemational.com for more information. Please feel free to contact me at any time I may provide assistance: Peter Potemkin, Deputy Director, Adjusters International: 541-944-3896, ppotemkin@aidre.com