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1985-0571030L NO VS-,57 AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF DENTON AND AMERICAN APPRAISAL ASSOCIATES, INC FOR INVENTORY AND APPRAISAL SERVICES, AND PROVIDING FOR AN EFFECTIVE DATE WHEREAS, the City Council has determined that an inventory and appraisal of the City's fixed assets is needed, and WHEREAS, the city staff and the Finance Department has recommended that American Appraisal Associates, Inc , be retained to perform an inventory and appraisal services, and WHEREAS, Section 2 36 (f) of the Code of Ordinances requires that the City Council approve all expenditures of more than $3,000, and WHEREAS, Section 2 09 of the Charter of the City of Denton, Texas requires that every act of the Council providing for the expenditure of funds or for the contracting for indebtedness shall be by ordinance, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS SECTION I That the City Council hereby approves and authorizes the Mayor and City Secretary to execute and attest, respectively, the agreement between the City of Denton, and American Appraisal Associates, Inc , providing for inventory and appraisal services under the terms and conditions being contained in said agreement which is attached hereto and made a part hereof SECTION II That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the ~ day of Q , 1985 R F ARD 0 ST W R , M OR CITY OF DENTON, TEXAS ATTEST 4,t ~e OTTF~ ALLEN, CITY OF DENTON, TEXAS APPROVED AS TO LEGAL FORM JOE D MORRIS, ACTING CITY ATTORNEY CITY OF DENTON, TEXAS BY, ~p/Y~, AGREEMENT FOR INVENTORY AND APPRAISAL SERVICES This Agreement, effective the day of ~ 1985, by and between the CITY OF DENTON,' TEXAS, (hereinafter referred to as City), and AMERICAN APPRAISAL ASSOCIATES, INC , (hereinafter referred to as American), a corporation with business offices at Richardson, Texas WITNESSETH WHEREAS, City wishes to have a complete inventory and appraisal of its property performed (hereinafter referred to as Services), and WHEREAS, American is prepared to provide such services, NOW, THERUORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows 1 SERVICES TO BE PERFORMED BY AMERICAN American agrees to accomplish the following activities to provide the Owner appropriate and necessary results from such activities A American will perform a complete inventory and appraisal of all property owned by City, as more specifically described herein Property to be included in this appraisal will consist of the buildings, appurtenances, machinery and equipment of the City, including those assets of the water and sewer depart- ment and the power system Land will be included and valued based on information provided by the City Similarly, streets will be valued on a depreciated cost basis Excluded from the study will be landscaping, supplies, inventory, water and parking meters, and spare parts The Services described assume the use of City owned docu- ments, such as plats, plans, and blue prints and drawings of city-owned property This includes construction costs on existing buildings, where available B American will perform the services as follows 1 General inspection of the respective buildings by experienced, qualified appraisers from American's permanent staff They will obtain and record data concerning size, type of construction, as well as classification of the building fixtures and exterior and interior finish They also will obtain pertinent information, as applicable, for local prices of material and labor An inspection of the machinery and equipment and preparation of an inventory base by experienced, qualified appraisers from American's permanent staff These appraisers will, upon completion of their inspection and through their experience, place the contents in two categories PAGE 1 I Major equipment units which will be inventoried on an individual basis 2 Repetitive items, such as furniture and equipment of relatively small unit value (less than $100) will be inventoried by groups or classes of property 3 The appraisers will also record their estimate of the accrued depreciation for insurance purposes as evidenced by observed condition in comparison with the new units of like kind, with such regard to functional and economic factors as are deemed relevant 4 A summary for insurance purposes, by properties broken down as above, with the replacement cost new and replace- ment cost less depreciation and exclusions distributed by buildings in accordance with the insurance forms applying to the property S Based on an analysis, pricing, and processing of these records by qualified technicians, American will furnish its opinion of the estimated replacement cost new and estimated replacement cost less depreciation for insurance purposes for the appraised property 6 Acquisition costs and acquisition dates will be provided through use of American's back trend modifiers American will search City records for purchase orders as appro- priate and use information pertaining to acquisition costs and dates as provided by City's staff C American will prepare a report, printed in EDP format, furnished in duplicate and a machine readable type, in EDP format, for immediate input to the City's fixed asset system, which will consist of 1 An appraisal certification 2 An inventory section arranged by buildings and classifi- cations Each page will contain the following data Property Building Room or Area Fund Accountability Computer I D No Class Code Quantity Description Model Number* Serial Number* Manufacturer* Acquisition Cost** Acquisition Date** Replacement Cost New Depreciated Replacement Cost *This information will be furnished whenever actually located on the asset being appraised **Estimated by the appraiser through use of the back trend modifier with the assistance of City staff for general information 2 OTHER TERMS AND CONDITIONS A The services provided by American will be performed in accordance with recognized professional appraisal standards American's compensation is not contingent in any way upon their conclusions of value American will assume, without independent verification, the accuracy of all data provided to it by the City American reserves the right to use PAGE 2 subcontractors All files, work papers, or documents developed during the course of the services shall be American's property American will retain this data for at least five years B American's appraisal is valid only for the purpose for which it is stated herein Any other use or reliance by City or third parties is invalid The City may show American's report in its entirety to interested parties outside their organization, however, City agrees not to reference American's name or their report, in whole or in part, in any document distributed to third parties without American's prior written consent American will, unless otherwise directed by appropriate legal orders, maintain the confiden- tiality of all conversations, documents provided to them, and their report These conditions can only be modified in writing by both parties 3 City will pay to American for the services performed herein, as billed monthly, for the work done during that month The total cost of the services performed by American shall be as follows 1 Physical inventory, asset evaluation and reports thereon $54,000 00 2 Accounting policies and procedures manual 6,400 00 Total Cost $60,400 00 D American agrees to use its best efforts to perform and complete the services specified herein by June 30, 1985 with an update on asset changes from June 30, 1985 to September 30, 1985, to be completed by October 30, 1985 E The term of this Agreement shall begin on the effective date and end when all services by American have been performed, or by December 31, 1985, whichever is later INDEPENDENT CONTRACTOR American undertakes performance of the Services as an indepen- dent contractor and shall be wholly responsible for the methods of performance City shall have no right to supervise directly the methods used but City shall have the right to observe such performance American shall work closely with City in per- forming Services under this Agreement 4 GOVERNING LAW This Agreement shall be governed by the laws of the State of Texas IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives effective the day and year first above written AMERICAN APPRAISAL ASSOCIAfTES, INC BY PAGE 3 CITY OF DENTON, TEXAS BY ATTEST 19 CHARLOTTE METARY CITY OF DENTON$ TEXAS APPROVED AS TO LEGAL FORM JOE D MORRIS, ACTING CITY ATTORNEY CITY OF DENTON, TEXAS BY Mn PAGE 4