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
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