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HomeMy WebLinkAboutFIN 2025-04-28 Item 1A - Contract - Insurance Archaeology, Forensic Accounting and Claims Management wtih Restorical ResearchCity of Tukwila Thomas McLeod, Mayor INFORMATIONAL MEMORANDUM TO: Finance and Governance Committee FROM: Brandon J. Miles, Strategic Initiatives Director CC: Thomas McLeod DATE: April 18, 2025 SUBJECT: Restorical Research, LLC Contract ISSUE Authorize the Mayor to execute a professional services agreement in an amount not to exceed $300,000 for insurance archaeology, forensic accounting, and claims management with Restorical Research, LLC. BACKGROUND Prior to the late 1980s/early 1990s, commercial general liability insurance policies covered environmental cleanup for insured properties and parties. Once the cost of these clean ups became known, insurance companies limited their coverage to exclude environmental cleanup costs. However, if environmental contamination occurred while the property was covered by the insurance policy, a claimant, such as new property owner, could pursue reimbursement against the past insurance policy. These policies can be old and with mergers between insurance companies, it can be difficult to determine which company still holds the policy. Restorical Research provides insurance investigation, forensic accounting, and claims management services to investigate old insurance policies. Restorical receives a small amount of compensation for expenses and receives a ten percent contingency in the event the City can collect against an old policy. DISCUSSION The City has incurred cleanup costs associated with the construction of the Justice Center. The City would like to have Restorical research past insurance policies to determine if the City might be able to pursue a claim against an old insurance policy. Additionally, the City would like to have the consultant under contract in the event similar work needs to be done on other city owned property or rights of way. FINANCIAL IMPACT The City will provide up to $600 per site/project to cover the consultant's costs. Additionally, the consultant will also receive a ten percent contingency fee in the event the City is able to successfully receive funds from a claim. For example, if the City were to receive an insurance settlement of $500,000, the consultant would get $50,000. RECOMMENDATION Forward to the May 5, 2025 consent agenda. ATTACHMENTS • Draft Agreement. 1 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Contract Number: PROFESSIONAL SERVICES AGREEMENT (Includes consultants, architects, engineers, accountants, and other professional services) THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter referred to as "the City", and Restorical Research, LLC, hereinafter referred to as "the Consultant", in consideration of the mutual benefits, terms, and conditions hereinafter specified. 1. Project Designation. The Consultant is retained by the City to perform Insurance archaeology, forensic accounting and Claims management services in connection with projects involving contamination, environmental investigation and remediation. 2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A" attached hereto, including the provision of all labor, materials, equipment and supplies. 3. Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending October 1, 2027, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than October 1, 2027 unless an extension of such time is granted in writing by the City. The parties may extend the duration of this Agreement consistent with the terms of Section 18 below. 4. Payment. The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be paid on a contingency fee basis, as detailed on Exhibit "B" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $300,000.00 per project without express written modification of the Agreement signed by the City. In addition, City agrees to pay for all expenses related to title document production not to exceed $600 per site and $10 for every preliminary investigation and determination if a viable insurance policy and/or coverage exists. B. The Consultant shall submit monthly invoices to the City after such services have been performed and a "Recovery" (as defined in Exhibit B) has been received by the City, and a final bill upon completion of all the services described in this Agreement. Such invoices will be checked by the City and, upon approval thereof, payment shall be made to the Consultant in the amount approved, within 30 days. C. D. Payment as provided in this section shall be full compensation for work performed, services rendered, and for all materials, supplies, equipment and incidentals necessary to complete the work. E. The Consultant's records and accounts pertaining to this Agreement are to be kept available for inspection by representatives of the City and the state of Washington for a period of three (3) years after final payments. Copies shall be made available upon request. 2 5. Ownership and Use of Documents. All documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under this Agreement shall be the property of the City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with the Consultant's endeavors. The Consultant shall not be responsible for any use of the said documents, drawings, specifications or other materials by the City on any project other than the project specified in this Agreement. 6. Compliance with Laws. The Consultant shall, in performing the services contemplated by this Agreement, faithfully observe and comply with all federal, state, and local laws, ordinances and regulations, applicable to the services rendered under this Agreement. 7 Indemnification. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the acts, errors or omissions of the Consultant in performance of this Agreement, except for injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, and volunteers, the Consultant's liability hereunder shall be only to the extent of the Consultant's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Consultant's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. This hold harmless/indemnity does not apply to any declaratory judgement between the City and Insurers. 8. Insurance. The Consultant shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the types and with the limits described below: 1 Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile Liability insurance shall cover all owned, non -owned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage. 2. Commercial General Liability insurance with limits no less than $2,000,000 each occurrence, $2,000,000 general aggregate. Commercial General Liability insurance shall be at least as broad as ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, stop -gap independent contractors and personal injury and advertising injury. The City shall be named as an additional insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City using an additional insured endorsement at least as broad as ISO endorsement form CG 20 26. CA revised May 2020 Page 2 3 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability with limits no less than $2,000,000 per claim and $2,000,000 policy aggregate limit. Professional Liability insurance shall be appropriate to the Consultant's profession. B. Public Entity Full Availability of Contractor Limits. If the Contractor maintains higher insurance limits than the minimums shown above, the Public Entity shall be insured for the full available limits of Commercial General and Excess or Umbrella liability maintained by the Contractor, irrespective of whether such limits maintained by the Contractor are greater than those required by this Contract or whether any certificate of insurance furnished to the Public Entity evidences limits of liability lower than those maintained by the Contractor. C. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. D. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. E. Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Contractor before commencement of the work. Upon request by the City, the Consultant shall furnish certified copies of all required insurance policies, including endorsements, required in this Agreement and evidence of all subcontractors' coverage. F. Notice of Cancellation. The Consultant shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. G. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Consultant from the City. 9. Independent Contractor. The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither the Consultant nor any employee of the Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or for contributing to the state industrial insurance program, otherwise assuming the duties of an employer with respect to the Consultant, or any employee of the Consultant. 10. Covenant Against Contingent Fees. The Consultant warrants that he has not employed or retained any company or person, other than a bonafide employee working solely for the Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay any company or person, other than a bonafide employee working solely for the Consultant, any fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent upon or resulting from the award or making of this contract. For breach or violation of this warrant, the City shall have the right to annul this contract without liability, or in its discretion to deduct CA revised May 2020 4 Page 3 from the contract price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift, or contingent fee. 11. Discrimination Prohibited. Contractor, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation, the presence of any disability, or any other protected class status under state or federal law, in the selection and retention of employees or procurement of materials or supplies. 12. Assignment. The Consultant shall not sublet or assign any of the services covered by this Agreement without the express written consent of the City. 13. Non -Waiver. Waiver by the City of any provision of this Agreement or any time limitation provided for in this Agreement shall not constitute a waiver of any other provision. 14. Termination. A. The City reserves the right to terminate this Agreement for convenience, at any time by giving ten (10) days written notice to the Consultant. B. In the event that this Agreement is terminated by the City for convenience, the Consultant shall continue to receive payment, for all Recovery received by the City, as outlined in Exhibit B. But, if this Agreement is terminated by the City due to material breach of this Agreement, the Consultant shall not be entitled to receive payment, for all Recovery received by the City, as outlined in Exhibit B. C. In the event of the death of a member, partner or officer of the Consultant, or any of its supervisory personnel assigned to the project, the surviving members of the Consultant hereby agree to complete the work under the terms of this Agreement, if requested to do so by the City. This section shall not be a bar to renegotiations of this Agreement between surviving members of the Consultant and the City, if the City so chooses. 15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the Consultant shall at all times comply with, all applicable federal, state and local laws, regulations, and rules, including the provisions of the City of Tukwila Municipal Code and ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising from or related to this Agreement shall be exclusively in King County Superior Court. 16. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. 17. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk City of Tukwila 6200 Southcenter Boulevard Tukwila, WA 98188 Notices to Consultant shall be sent to the following address: Restorical Research, LLC ATTN: Benjamin S. Pariser, Principal CA revised May 2020 Page 4 5 8015 SE 28th Street, Suite 315 Mercer Island, WA 98040 18. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Consultant and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. DATED this day of , 20 CITY OF TUKWILA Thomas McLeod, Mayor ATTEST/AUTHENTICATED: Andy Youn-Barnett, City Clerk APPROVED AS TO FORM: Office of the City Attorney CONSULTANT: By: Printed Name: Title: CA revised May 2020 6 Page 5 EXHIBIT A SCOPE OF WORK 1. SCOPE OF SERVICES: The scope of services to be provided by Restorical Research (hereinafter "Consultant") under this agreement will be referred to as the " Cost Recovery Assistance," and will encompass two tasks: (Task 1) consulting services to assist City in preparing and undertaking an insurance recovery action against insurers who owe City duties of defense and indemnification for the costs of environmental investigation and remediation of contamination on, beneath or potentially migrating to or from the property pursuant to insurance policies; and (Task 2), a cost recovery/contribution action against third parties who (i) have caused, contributed to, or exacerbated contamination on, beneath or potentially migrating to or from the property, (ii), who may have insurance policies which address such contamination, and (iii) who are liable to City for some or all of the costs of environmental investigation and remediation. These actions collectively, or alone, are deemed the "Cost Recovery Assistance". Cost Recovery Assistance shall consist of: a. Perfoiiuing such historical investigation of property records, transactional records, aerial photographs, sanborn maps, and other similar historical documents to identify potentially responsible persons. b. Assist in managing the flow of infoiivation between the City, attorneys, and consultants. City authorizes Consultant to be copied (including blind copy) on all correspondence between City, attorneys and consultants. City authorizes Consultant to receive copies of all invoices. c. Perfoiiuing such historical investigation of insurance records and related documents to identify insurance carriers and policies that may provide insurance coverage for contamination on, beneath or potentially migrating to or from the property that is the subject of claims or demands by the City, by any governmental agency, or a third party. Cost Recovery Assistance does not include: a. Environmental investigation needed to fully delineate the nature and extent of contamination. b. Environmental remediation needed to address such contamination. c. Expert witness services in any cost recovery, contribution, or insurance coverage litigation that City may hire counsel to initiate; and d. Legal Services as City understands that Consultant does not perfoiiu legal services or provide legal advice. 2. Consultant's scope of work for Task 2 includes providing all investigative results and materials from Task 1 to the selected attorney and consultant will provide consultancy, research and coverage support to the chosen attorney during the pendency of the claim. Once coverage has been secured for the City, Consultant will manage the claim (under the direction of the selected attorney) including but not limited to forensic accounting and tracking of invoices and payments. Such support is a requisite part of Task 2 and the related compensation. CA revised May 2020 Page 6 7 EXHIBIT B SCHEDULE OF RATES AND EXPENSES 1. TASK 1: As compensation for services to conduct a preliminary investigation and deteiiuine if a viable insurance policy and/or insurance coverage exists, Consultant shall receive $10.00. Consultant shall present to City an invoice once this investigation is complete. 2. TASK 2: After review of the deliverables from TASK 1, City, in its sole discretion, may elect to proceed to TASK 2. Task 2 involves the City hiring an attorney to pursue Cost Recovery Contribution against any of the insurance identified by Consultant in Task 1. Restorical will provide all investigative results and materials from Task 1 to the selected attorney and will provide consultancy, research and coverage support to the chosen attorney during the pendency of the claim. Such support is a requisite part of Task 2 and the related compensation. a. If City elects to proceed to TASK 2, as compensation for services to perfoiiu Cost Recovery Assistance for City, Consultant shall receive a contingency fee of Ten percent (10%) of "Recovery". Upon receipt of the Recovery, Consultant shall present to City an invoice. City shall pay the full amount of invoice, net 30, after receipt of the invoice. b. The parties understand and agree that a material inducement for Consultant to enter into this Agreement and perfoiiu the Task 1 services is the opportunity to pursue the Task 2 services. If the City elects not to pursue the Task 2 services the City agrees (i) it will not on its own, directly or indirectly, at anytime pursue any cost recovery contribution against any of the insurance identified by Consultant in providing the Task 1 services and (ii) that if the City pursues and Recovers any funds from the insurance identified by Consultant in providing the Task 1 services the City will be obligated to pay Consultant the Task 2 fee. 3. DEFINITION OF RECOVERY: The term "Recovery" as used herein are all payments, flowing to the City directly or indirectly, monetary or otherwise, from any one or more of the insurers of the City or of any potentially responsible party, whether by collection, settlement, judgment or litigation, before consideration of any income tax matters. Recovery includes but is not limited to payments for investigation and remediation work, sums attributable to interest, punitive damages and attorney's fees. 4. EXPENSES: City agrees to pay for all expenses related to title document production not to exceed $600 per site/project. Consultant will not charge for any additional expenses, including but not limited to scanning, copying, travel and/or lodging. CA revised May 2020 8 Page 7