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HomeMy WebLinkAbout26-085 Vasquez & Company LLP Service Business for Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff ServicesReview of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 1 of 9 Professional/Consulting Contracts /Version: March 2025 PROFESSIONAL/CONSULTING SERVICES AGREEMENT 1. PARTIES This Agreement is made by and between the City of Cupertino, a municipal corporation (“City”), and Vasquez & Company LLP (“Contractor”), a Service Business for Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services, and is effective on the last date signed below (“Effective Date”). 2. SERVICES 2.1 Contractor agrees to provide the services and perform the tasks (“Services”) set forth in detail in Scope of Services, attached here and incorporated as Exhibit A. Contractor further agrees to carry out its work in compliance with any applicable local, State, or Federal order regarding COVID-19. 2.2 Contractor’s duties and services under this agreement shall not include preparing or assisting the City with any portion of the City’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with the City. The City shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. Contractor’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. Contractor shall cooperate with the 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 contractor pursuant to this agreement. 2.3 The quality and sufficiency of Contractor’s professional work shall be measured by this professional standard of care and by compliance with applicable auditing standards (GAAS and GAGAS), and not by the subjective satisfaction of the City. The City may review deliverables for completeness and conformity with the agreed-upon scope (Exhibit A); however, the City shall not direct, approve, or exercise control over the auditor’s professional judgements, audit methodology, findings, conclusions, or the content of audit reports. 3. TIME OF PERFORMANCE 3.1 This Agreement begins on the Effective Date and ends on August 15, 2026 (“Contract Time”), unless terminated earlier as provided herein. The City’s appropriate department head or City Manager may extend the Contract Time through a written amendment to this Agreement, provided such extension does not include additional contract funds. Extensions requiring additional contract funds are subject to the City’s purchasing policy. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 2 of 9 Professional/Consulting Contracts /Version: March 2025 3.2 Schedule of Performance. Contractor must deliver the Services in accordance with the Schedule of Performance, attached and incorporated here Exhibit B. 3.3 Time is of the essence for the performance of all the Services. Contractor must have sufficient time, resources, and qualified staff to deliver the Services on time. 4. COMPENSATION 4.1 Maximum Compensation. City will pay Contractor for satisfactory performance of the Services an amount that will based on actual costs but that will be capped so as not to exceed $35,000 (“Contract Price”), based upon the scope of services in Exhibit A and the budget and rates included in Exhibit C, Compensation attached and incorporated here. The maximum compensation includes all expenses and reimbursements and will remain in place even if Contractor’s actual costs exceed the capped amount. No extra work or payment is permitted without prior written approval of City. 4.2 Invoices and Payments. Monthly invoices must state a description of the deliverable completed and the amount due for the preceding month. Within thirty (30) days of completion of Services, Contractor must submit a requisition for final and complete payment of costs and pending claims for City approval. Failure to timely submit a complete and accurate payment requisition relieves City of any further payment or other obligations under the Agreement. 5. INDEPENDENT CONTRACTOR 5.1 Status. Contractor is an independent contractor and not an employee, partner, or joint venture of City. Contractor is solely responsible for the means and methods of performing the Services and for the persons hired to work under this Agreement. Contractor is not entitled to health benefits, worker’s compensation, or other benefits from the City. 5.2 Contractor’s Qualifications. Contractor warrants on behalf of itself and its subcontractors that they have the qualifications and skills to perform the Services in a competent and professional manner and according to the highest standards and best practices in the industry. 5.3 Permits and Licenses. Contractor warrants on behalf of itself and its subcontractors that they are properly licensed, registered, and/or certified to perform the Services as required by law and have procured a City Business License, if required by the Cupertino Municipal Code. 5.4 Subcontractors. Only Contractor’s employees are authorized to work under this Agreement. Prior written approval from City is required for any subcontractor, and the terms and conditions of this Agreement will apply to any approved subcontractor. 5.5 Tools, Materials, and Equipment. Contractor will supply all tools, materials and equipment required to perform the Services under this Agreement. 5.6 Payment of Benefits and Taxes. Contractor is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes. Contractor and any of its employees, agents, and subcontractors shall not have any claim under this Agreement or Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 3 of 9 Professional/Consulting Contracts /Version: March 2025 otherwise against City for seniority, vacation time, vacation pay, sick leave, personal time off, overtime, health insurance, medical care, hospital care, insurance benefits, social security, disability, unemployment, workers compensation or employee benefits of any kind. Contractor shall be solely liable for and obligated to pay directly all applicable taxes, fees, contributions, or charges applicable to Contractor’s business including, but not limited to, federal and state income taxes. City shall have no obligation whatsoever to pay or withhold any taxes or benefits on behalf of Contractor. In the event that Contractor or any employee, agent, or subcontractor of Contractor providing services under this Agreement is determined by a court of competent jurisdiction, arbitrator, or administrative authority, including but not limited to the California Public Employees Retirement System (PER S) to be eligible for enrollment in PERS as an employee of City, Contractor shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Contractor or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the r esponsibility of City, and actual attorney’s fees incurred by City in connection with the above. 6. PROPRIETARY/CONFIDENTIAL INFORMATION In performing this Agreement, Contractor may have access to private or confidential information owned or controlled by the City, which may contain proprietary or confidential details the disclosure of which to third parties may be damaging to City. Contractor shall hold in confidence all City information provided by City to Contractor and use it only to perform this Agreem ent. Contractor shall exercise the same standard of care to protect City information as a reasonably prudent contractor would use to protect its own proprietary data. 7. OWNERSHIP OF MATERIALS 7.1 Property Rights. Any interest (including copyright interests) of Contractor in any product, memoranda, study, report, map, plan, drawing, specification, data, record, document, or other information or work, in any medium (collectively, “Work Product”), prepared by Contractor in connection with this Agreement will be the exclusive property of the City upon completion of the work to be performed hereunder or upon termination of this Agreement, to the extent requested by City. In any case, no Work Product shall be shown to any third-party without prior written approval of City. 7.2 Copyright. To the extent permitted by Title 17 of the U.S. Code, all Work Product arising out of this Agreement is considered “works for hire” and all copyrights to the Work Product will be the property of City. Alternatively, Contractor assigns to City all Work Product copyrights. Contractor may use copies of the Work Product for promotion only with City’s written approval. 7.3 Patents and Licenses. Contractor must pay royalties or license fees required for authorized use of any third party intellectual property, including but not limited to patented, trademarked, or copyrighted intellectual property if incorporated into the Services or Work Product of this Agreement. 7.4 Re-Use of Work Product. Unless prohibited by law and without waiving any rights, City may use or modify the Work Product of Contractor or its sub-contractors prepared or created under this Agreement, to execute or implement any of the following: Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 4 of 9 Professional/Consulting Contracts /Version: March 2025 (a) The original Services for which Contractor was hired; (b) Completion of the original Services by others; (c) Subsequent additions to the original Services; and/or (d) Other City projects. 7.5 Deliverables and Format. Contractor must provide electronic and hard copies of the Work Product, on recycled paper and copied on both sides, except for one single-sided original. 7.6 Notwithstanding the foregoing, audit workpapers, including but not limited to computations, analyses, memoranda, correspondence, and other records prepared by contractor in connection with the audit engagement and in accordance with auditing standards, shall remain the sole property of contractor. Contractor shall retain such workpapers for a minimum of seven (7) years in accordance with professional standards and California Business and Professions Code Section 5097. The City shall have access to such workpapers upon reasonable written request, subject to applicable professional standards. Nothing herein shall restrict contractor from providing workpapers to its professional peer reviewers, regulatory bodies, successor auditors, or other parties as required or permitted by professional auditing standards, Government Auditing Standards, or applicable law. Audit workpapers shall be made available to authorized representatives of the City upon reasonable written request and at mutually convenient times, subject to the confidentiality requirements of professional auditing standards. Nothing in this section shall be construed to transfer ownership of audit workpapers to the City or to restrict contractor’s ability to comply with professional standards regarding workpaper access by peer reviewers, regulators, or successor auditors. The City shall own the final deliverables identified in the Scope (e.g., auditors’ reports and management letter) in the form issued, and contractor grants the City a perpetual, nonexclusive, royalty-free license to use and reproduce such final deliverables for internal and statutory purposes. 8. RECORDS Contractor must maintain complete and accurate accounting records relating to its performance in accordance with generally accepted accounting principles. The records must include detailed information of Contractor’s performance, benchmarks and deliverables, which must be available to City for review and audit. The records and supporting documents must be kept separate from other records and must be maintained for four (4) years from the date of City’s final payment. Contractor acknowledges that certain documents generated or received by Contractor in connection with the performance of this Agreement, including but not limited to correspondence between Contractor and any third party, are public records under the California Public Records Act, California Government Code section 6250 et seq. Contractor shall comply with all laws regarding the retention of public records and shall make such records available to the City upon request by the City, or in such manner as the City reasonably directs that such records be provided. 9. ASSIGNMENT Contractor shall not assign, sublease, hypothecate, or transfer this Agreement, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of City. Any attempt to do so will be null and void. Any changes related to the financial control or Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 5 of 9 Professional/Consulting Contracts /Version: March 2025 business nature of Contractor as a legal entity is considered an assignment of the Agreement and subject to City approval, which shall not be unreasonably withheld. Control means fifty percent (50%) or more of the voting power of the business entity. 10. PUBLICITY / SIGNS Any publicity generated by Contractor for the project under this Agreement, during the term of this Agreement and for one year thereafter, will reference the City’s contributions in making the project possible. The words “City of Cupertino” will be displayed in all pieces of publicity, including flyers, press releases, posters, brochures, public service announcements, interviews and newspaper articles. No signs may be posted, exhibited or displayed on or about City property, except signage required by law or this Contract, without prior written approval from the City. 11. INDEMNIFICATION 11.1 To the fullest extent allowed by law, and except for losses caused by the sole and active negligence or willful misconduct of City personnel, Contractor shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, officials, employees, agents, servants, volunteers, and consultants (“Indemnitees”), through legal counsel acceptable to City, from and against any and all liability, damages, claims, actions, causes of action, demands, charges, losses, costs, and expenses (including attorney fees, legal costs, and expenses related to litigation and dispute resolution proceedings) of every natur e, arising directly or indirectly from this Agreement or in any manner relating to any of the following: (a) Breach of contract, obligations, representations, or warranties; (b) Negligent or willful acts or omissions committed during performance of the Services; (c) Personal injury, property damage, or economic loss resulting from the work or performance of Contractor or its subcontractors or sub-subcontractors; (d) Unauthorized use or disclosure of City’s confidential and proprietary Information; (e) Claim of infringement or violation of a U.S. patent or copyright, trade secret, trademark, or service mark or other proprietary or intellectual property rights of any third party. 11.2 Contractor must pay the costs City incurs in enforcing this provision. Contractor must accept a tender of defense upon receiving notice from City of a third-party claim. At City’s request, Contractor will assist City in the defense of a claim, dispute, or lawsuit arising out of this Agreement. 11.3 Contractor’s duties under this section are not limited to the Contract Price, workers’ compensation payments, or the insurance or bond amounts required in the Agreement. Nothing in the Agreement shall be construed to give rise to an implied right of indemnity in favor of Contractor against City or any Indemnitee. 11.4 Contractor’s payments may be deducted or offset to cover any money the City lost due to a claim or counterclaim arising out of this Agreement, or a purchase order, or other transaction. 11.5 Contractor agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this Section 11 from each and every subcontractor, or any other person or entity involved by, for, with, or on behalf of Contractor in the performance of this Agreement. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 6 of 9 Professional/Consulting Contracts /Version: March 2025 Failure of City to monitor compliance with these requirements imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. 11.6 This Section 11 shall survive termination of the Agreement. 12. INSURANCE Contractor shall comply with the Insurance Requirements, attached and incorporated here as Exhibit D, and must maintain the insurance for the duration of the Agreement, or longer as required by City. City will not execute the Agreement until City approves receipt of satisfactory certificates of insurance and endorsements evidencing the type, amount, class of operations covered, and the effective and expiration dates of coverage. Failure to comply with this provision may result in City, at its sole discretion and without notice, purchasing insurance for Contractor and deducting the costs from Contractor’s compensation or terminating the Agreement. 13. COMPLIANCE WITH LAWS 13.1 General Laws. Contractor shall comply with all local, state, and federal laws and regulations applicable to this Agreement. Contractor will promptly notify City of changes in the law or other conditions that may affect the Project or Contractor’s ability to perform. Contractor is responsible for verifying the employment authorization of employees performing the Services, as required by the Immigration Reform and Control Act. 13.2 Labor Laws. Contractor shall comply with all labor laws applicable to this Agreement. If the Scope of Services includes a “public works” component, Contractor is required to comply with prevailing wage laws under Labor Code Section 1720 and other labor laws. 13.3 Discrimination Laws. Contractor shall not discriminate on the basis of race, religious creed, color, ancestry, national origin, ethnicity, handicap, disability, marital status, pregnancy, age, sex, gender, sexual orientation, gender identity, Acquired-Immune Deficiency Syndrome (AIDS), or any other protected classification. Contractor shall comply with all anti-discrimination laws, including Government Code Sections 12900 and 11135, and Labor Code Sections 1735, 1777, and 3077.5. Consistent with City policy prohibiting harassment and discrimination, Contractor understands that harassment and discrimination directed toward a job applicant, an employee, a City employee, or any other person, by Contractor or its employees or sub-contractors will not be tolerated. Contractor agrees to provide records and documentation to the City on request necessary to monitor compliance with this provision. 13.4 Conflicts of Interest. Contractor shall comply with all conflict of interest laws applicable to this Agreement and must avoid any conflict of interest. Contractor warrants that no public official, employee, or member of a City board or commission who might have been i nvolved in the making of this Agreement, has or will receive a direct or indirect financial interest in this Agreement, in violation of California Government Code Section 1090 et seq. Contractor may be required to file a conflict of interest form if Contractor makes certain governmental decisions or serves in a staff capacity, as defined in Section 18700 of Title 2 of the California Code of Regulations. Contractor agrees to abide by the City’s rules governing gifts to public officials and employees. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 7 of 9 Professional/Consulting Contracts /Version: March 2025 13.5 Remedies. Any violation of Section 13 constitutes a material breach and may result in City suspending payments, requiring reimbursements or terminating this Agreement. City reserves all other rights and remedies available under the law and this Agreement, including the right to seek indemnification under Section 11 of this Agreement. 14. PROJECT COORDINATION City Project Manager. The City assigns Jonathan Orozco as the City’s representative for all purposes under this Agreement, with authority to oversee the progress and performance of the Scope of Services. City reserves the right to substitute another Project manager at any time, and without prior notice to Contractor. Contractor Project Manager. Subject to City approval, Contractor assigns Cristy Canieda as its single Representative for all purposes under this Agreement, with authority to oversee the progress and performance of the Scope of Services. Contractor’s Project manager is responsible for coordinating and scheduling the Services in accordance with the Scope of Services and the Schedule of Performance. Contractor must regularly update the City’s Project Manager about the progress with the work or any delays, as required under the Scope of Services. City written approval is required prior to substituting a new Representative. The City may raise reasonable objections within ten (10) business days of such notice; however, final staffing decisions, including the designation of the Responsible Principal, shall remain with contractor to preserve auditor independence under Auditing Standards. Contractor shall ensure that any replacement Responsible Principal possesses qualifications and experience comparable to the individual being replaced. 15. ABANDONMENT OF PROJECT City may abandon or postpone the Project or parts therefor at any time. Contractor will be compensated for satisfactory Services performed through the date of abandonment, and will be given reasonable time to assemble the work and close out the Services. With City’s pre-approval in writing, the time spent in closing out the Services will be compensated up to a maximum of ten percent (10%) of the total time expended to date in the performance of the Services. 16. TERMINATION City may terminate this Agreement for cause or without cause at any time. Contractor will be paid for satisfactory Services rendered through the date of termination, but final payment will not be made until Contractor closes out the Services and delivers the Work Product. Contractor may also terminate this Agreement if conditions arise that would impair its independence under AICPA Auditing Standards, or if the City fails to provide access to records or personnel necessary to complete the audit after written notice and a reasonable cure period. Upon receipt of termination notice, contractor shall cease all work on or before the effective date of termination, except for work reasonably necessary to preserve the integrity of work in progress. Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 8 of 9 Professional/Consulting Contracts /Version: March 2025 17. GOVERNING LAW, VENUE, AND DISPUTE RESOLUTION This Agreement is governed by the laws of the State of California. Any lawsuits filed related to this Agreement must be filed with the Superior Court for the County of Santa Clara, State of California. Contractor must comply with the claims filing requirements under the Government Code prior to filing a civil action in court. If a dispute arises, Contractor must continue to provide the Services pending resolution of the dispute. If the Parties elect arbitration, the arbitrator’s award must be supported by law and substantial evidence and include detailed written findings of law and fact. 18. ATTORNEY FEES If City initiates legal action, files a complaint or cross-complaint, or pursues arbitration, appeal, or other proceedings to enforce its rights or a judgment in connection with this Agreement, the prevailing party will be entitled to reasonable attorney fees and costs. 19. THIRD PARTY BENEFICIARIES There are no intended third party beneficiaries of this Agreement. 20. WAIVER Neither acceptance of the Services nor payment thereof shall constitute a waiver of any contract provision. City’s waiver of a breach shall not constitute waiver of another provision or breach. 21. ENTIRE AGREEMENT This Agreement represents the full and complete understanding of every kind or nature between the Parties, and supersedes any other agreement(s) and understanding(s), either oral or written, between the Parties. Any modification of this Agreement will be effective only if in writing and signed by each Party’s authorized representative. No verbal agreement or implied covenant will be valid to amend or abridge this Agreement. If there is any inconsistency between any term, clause, or provision of the main Agreement and any term, clause, or provision of the attachments or exhibits thereto, the terms of the main Agreement shall prevail and be controlling. 22. INSERTED PROVISIONS Each provision and clause required by law for this Agreement is deemed to be included and will be inferred herein. Either party may request an amendment to cure mistaken insertions or omissions of required provisions. The Parties will collaborate to implement this Section, as appropriate. 23. HEADINGS The headings in this Agreement are for convenience only, are not a part of the Agreement and in no way affect, limit, or amplify the terms or provisions of this Agreement. 24. SEVERABILITY/PARTIAL INVALIDITY Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 9 of 9 Professional/Consulting Contracts /Version: March 2025 If any term or provision of this Agreement, or their application to a particular situation, is found by the court to be void, invalid, illegal, or unenforceable, such term or provision shall remain in force and effect to the extent allowed by such ruling. All other terms and provisions of this Agreement or their application to specific situations shall remain in full force and effect. The Parties agree to work in good faith to amend this Agreement to carry out its intent. 25. SURVIVAL All provisions which by their nature must continue after the Agreement expires or is terminated, including the Indemnification, Ownership of Materials/Work Product, Records, Governing Law, and Attorney Fees, shall survive the Agreement and remain in full force and effect. Professional Communications and Regulatory Compliance: Notwithstanding any other provision of this Agreement, Contractor shall be permitted, without prior City approval, to communicate with and provide information to: (a) federal, state, or local regulatory and oversight bodies, including but not limited to the California Board of Accountancy and the State Controller’s Office; (b) Contractor’s professional peer reviewers in connection with quality control reviews required by professional standards; (c) successor auditors, in accordance with AU-C Section 210 and Government Auditing Standards; and (d) any other parties as required or permitted by professional auditing standards, Government Auditing Standards, or applicable law. Contractor shall maintain the confidentiality of the City’s non-public financial information and shall not disclose such information to unauthorized third parties except as required by the foregoing professional and legal obligations. 26. NOTICES All notices, requests and approvals must be sent in writing to the persons below, which will be considered effective on the date of personal delivery or the date confirmed by a reputable overnight delivery service, on the fifth calendar day after deposit in the United States Mail, postage prepaid, registered or certified, or the next business day following electronic submission: To City of Cupertino Office of the City Manager 10300 Torre Ave. Cupertino, CA 95014 Attention: Jonathan Orozco Email: jonathano@cupertino.gov To Contractor: Vasquez & Company LLP 655 N. Central Avenue Ste. 1550 Glendale, CA 91203 Attention: Cristy Canieda Email: c_canieda@vasquezcpa.com 27. EXECUTION The person executing this Agreement on behalf of Contractor represents and warrants that Contractor has full right, power, and authority to enter into and carry out all actions contemplated Review of Cost Allocation Methodology of the County of Santa Clara for Sheriff Services Page 10 of 9 Professional/Consulting Contracts /Version: March 2025 by this Agreement and that he or she is authorized to execute this Agreement, which constitutes a legally binding obligation of Contractor. This Agreement may be executed in counterparts, each one of which is deemed an original and all of which, taken together, constitute a single b inding instrument. IN WITNESS WHEREOF, the parties have caused the Agreement to be executed. CITY OF CUPERTINO CONTRACTOR A Municipal Corporation By By Name Jonathan Orozco Name Cristy Canieda Title Acting Director of Administrative Services Title Audit Partner Date Date APPROVED AS TO FORM: MICHAEL K. WOO Senior Assistant City Attorney ATTEST: LAUREN SAPUDAR City Clerk Date 06/05/202606/05/2026 Jennifer Woodworth for 06/05/2026 City of Cupertino Proposal to Provide Professional Services Exhibit A - Scope of Work Objective To evaluate whether costs charged to cities under county sheriff department contracts represent only the actual and reasonable costs incurred to provide public safety protection and related services, and whether general county overhead or countywide services prohibited by Government Code §51350 have been excluded from billings. Key §51350 Considerations Unique to Sheriff Services Sherrif contracts present heightened risk under §51350 because they often involve: • •Allocation of “contract law enforcement overhead” • • o o o • Phase 1 – Service Model + Allowability Step 1 - Understand the Sheriff Service Delivery Model • • • • • • Step 2 – Test Direct Law Enforcement Costs • o o o City of Cupertino Proposal to Provide Professional Services 13 Evaluation Criteria •Direct patrol and investigative costs attributable to the City are allowable •Costs must be: o Actually incurred o Clearly linked to service delivery within the City •Unsupported “average cost per deputy” without reconciliation to actuals is a risk indicator Step 3 – Evaluate Patrol and Station-Level Cost Allocation Procedures •Identify the station(s) serving the City •Review: o Staffing allocations by shift o Call-for-service data by jurisdiction o Time studies or workload metrics Evaluation Criteria •If a station serves multiple jurisdictions: o Costs must be allocated based on actual service usage (e.g., calls, workload, or time) •Charging a city for: o Unused patrol capacity o Coverage for other jurisdictions creates §51350 exposure Step 4 – Scrutinize “Contract Law Enforcement Overhead” High-Risk Cost Pools •Division chiefs and area commanders •Administrative bureaus •Planning, policy, and executive management •Internal affairs, legal support, media relations Procedures For each overhead component: 1.Determine whether the function: o Supports day-to-day policing of the City, or o Supports the Sheriff’s Department as a whole 2.Evaluate allocation basis: o Per deputy o Percentage add-on o Flat overhead rate Evaluation Criteria •Allowable: Supervision and support necessary to deliver city policing •Not allowable: o General department leadership and governance o Systemwide administrative functions that exist regardless of city contracts Per §51350, costs that would exist even without the contract are general overhead and prohibited. City of Cupertino Proposal to Provide Professional Services 14 Step 5 – Reconcile to CAP and Financial Records Procedures •Trace billed costs back to: o Countywide CAP allocations o Sheriff department financial records •Identify adjustments made to remove: o General county overhead o Non-contract functions Evaluation Criteria •CAP-derived costs must be adjusted for §51350 compliance •Failure to adjust = common root cause of overbilling Step 6 – Evaluate Transparency and Contract Support Procedures Assess whether the City is provided with: •Detailed cost breakdowns (not just % overhead) •Staffing models and assumptions •Allocation methodologies for shared services •Explicit exclusions of general overhead Evaluation Criteria •Lack of transparency is a key risk indicator •§51350 compliance is difficult to demonstrate without clear, supportable schedules Reporting Considerations (Sheriff-Specific) Clearly conclude whether: •Patrol and investigative costs are properly supported and attributable to the City •Overhead charges include prohibited general department or countywide costs •Shared services (dispatch, air support, specialized units) are allocated on a reasonable and supportable basis •Adjustments to CAP-derived costs are sufficient for §51350 compliance Common §51350 Findings in Sheriff Contracts From an audit perspective, the most frequent issues are: •Inclusion of department-wide administrative overhead •Allocation of command staff not tied to city operations •Charging for systemwide readiness (e.g., helicopters, SWAT) without usage basis •Use of blended overhead rates without transparency •Failure to distinguish CAP-allowable vs. §51350-allowable costs Exhibit B - Timeframe The engagement may be scheduled to occur from June through the end of July. Completion is contingent upon a timely engagement start and timely access to, as well as the availability of, information from the County. City of Cupertino Proposal to Provide Professional Services 15 Exhibit C - Proposed Fee Our fees for the services outlined in this proposal are based on the assumption that unexpected circumstances will not be encountered during the engagement, along with the following: $35,000 www.vasquez.cpa Vasquez & Company LLP has over 55 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. 06/02/2026 The Liberty Company Insurance Brokers Lic #0D79653 5955 De Soto Ave, Ste 250 Woodland Hills CA 91367 Kelle Kelley (888) 918-3960 Kelle.Kelley@libertycompany.com Vasquez & Company Llp 655 N Central Ave Ste 1550 Glendale CA 91203 Allmerica Financial Benefit Insurance Co 41840 26-27 COIs KK signature A Y Y Z2FH550106 04/01/2026 04/01/2027 2,000,000 1,000,000 10,000 2,000,000 4,000,000 included Business Interruption included A Y Y Z2FH550106 04/01/2026 04/01/2027 2,000,000 A Z2FH550106 04/01/2026 04/01/2027 5,000,000 5,000,000 A Business Personal Property Z2FH550106 04/01/2026 04/01/2027 Replacement Cost Limit $297,200 Deductible $1,000 The City of Cupertino, its City Council, officers, officials, employees, agents, and volunteers are included as an Additional Insureds under the Commercial General Liability and Auto Liability on a Primary/Non-Contributory basis when required by written contract. A Waiver of Subrogation in favor of the Additional Insureds applies to the General Liability and Auto Liability when required by written contract. City of Cupertino 10300 Torre Ave nue Cupertino CA 95014 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). 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LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED? (Mandatory in NH) DESCRIPTION OF OPERATIONS below If yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIRED AUTOS ONLY Waiver of Subrogation WVSUB $13.00 Umbrella(C)CUMBR ADDITIONAL COVERAGES Ref #Description Edition DateForm No.Coverage Code Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref #Description Coverage Code Form No.Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Copyright 2001, AMS Services, Inc.OFADTLCV