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HomeMy WebLinkAbout07/10/2018 11 Gang Proviso Follow-Up DiscussionITEM TITLE: SUBMITTED BY: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Gang Proviso follow-up discussion Ana Cortez, Assistant City Manager SUMMARY EXPLANATION: See attached. ITEM BUDGETED: STRATEGIC PRIORITY: APPROVED FOR SUBMITTAL: 1 Item No. 11. For Meeting of: July 10, 2018 STAFF RECOMMENDATION: BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date D memo 7/3/2015 0 HR memo 7/3/2015 Type Coker Memo Coker Memo 2 MEMORANDUM To: Honorable Mayor and Councilmembers From: Ana Cortez, Assistant City Manager Date: July 10, 2018 Subj: Governor's Proviso- Contractor(s) Selection. At its Study Session on June 19, 2018, the City Council asked staff to provide information about the logistics of hiring a staff member to act as coordinator. The Human Resources Department has prepared a response to this request and it is included with this memorandum. During the study session, questions were asked regarding the use of a contractor or multiple contractors. This memo addresses these questions and concerns. There are clear differences between contractors and employees as defined by the Internal Revenue Service (IRS). A contractor or several contractors would be compensated based on fixed-price billing. This fee would be inclusive of overhead, travel, supplies, etc. Unlike an employee, the contractor(s) would cover all of their expenses including taxes. Generally, contractors are less expensive than public employees given that costs associated with public pensions and benefits are not necessary for contractors, and thus represent savings. Also, a contractor is compensated according to product regardless on the number of hours he/she/they spend preparing the product. Clarifications and Responses: a) Per council agreement, the lead agency for the gang prevention initiative will be the City. b) HR prepared analysis of the implication of assigning current staff to serve as the coordinator of this effort. Based on this analysis, hiring a contractor rather than re- assigning current city employee would be the most expeditious approval for staffing this initiative. c) In keeping with the primary goal of sustainability, the funding will develop skills of those with "boots on the ground." Capacity building efforts will focus on program assessment, performance measures development, outcomes data collection, and fund development to increase capacity of programs that have shown effective results or demonstrate ability to implement best practices. 3 d) The effort will be Yakima centric. 2 e) Council will select an ad-hoc committee. One councilmember suggested that a combination of councilmembers from the Public Safety and Economic Development Committees would be appropriate, but not the only members of this comm ittee. f) This ad-hoc committee will serve as steering committee for the effort and will invite members of other sectors per OJJDP model. g) The ad-hoc committee will select contractor(s) based on the following criteria: 1. Local person 2. Expertize in local youth services delivery 3. Demonstrate ability to learn new skills in program design or fund development 4. Will focus on developing funds for promising practices among local service providers While applicants currently working in youth services in Yakima will be encouraged to apply as contractors, they will have to demonstrate ability to work with all partners. Selected contractors will be expected to work as a team, promote network efficiencies, and shared success between programs. h) The IRS outlines clear distinction between an employee and a contractor. In summary, the contractor has to be independent to accomplish specific results in a manner, place, schedule he/she sees fit. This memo includes two articles that cover nuances about this difference. i) Selected contractors will be expected to meet all insurance and procurement requirements including professional liability, auto and workers compensation insurance. See attachment from City Procurement. On July 3, 2018, the Public Safety Committees indicated that the full Council should consider directing staff to conduct further analysis of the notes from the public safety neighborhood forums to integrate relevant data points into the programs and activities the contractor(s) will coordinate. In addition, the Committee requested: 1) Consolidation of data points from the public forums to avoid duplication and to categorize input in a logical manner. 2) Preparation of questions and answers for publication in the city's website. 3) Presentation of issues raised in the forums by geographic location and to use this information for the delivery of services under the proviso. 4 3 Contractors, Know How the IRS Determines Employee Status Chip Camden offers independent contractors tips on how to be savvy when it comes to the IRS's 20 factors for determining whether a worker is an employee under common law rules. By Chip Camden 1 in IT Contractor, March 5, 2010, 10:19 AM PST While companies have many legitimate reasons for hiring contractors instead of employees (or vice versa), you might not be aware of one reason organizations might avoid signing on IT contractors: the potential tax liability. In the United States, if the IRS determines that a contractor's relationship to a client qualifies as an employer-employee relationship, the client will not only have to pay the employer portion of Social Security and Medicare taxes for the period the contractor was engaged (currently 7.65% of qualifying wages), but also penalties and interest. If it's unclear to the IRS whether the contractor paid income taxes on that amount and the contractor can't be reached, the client could also be held responsible for paying those taxes. So in the worst case, it's possible that a client might have to pay nearly half of what they already paid the contractor to the tax man. In most industries, provisions exist to prevent this kind of catastrophe. So-called "safe harbor" rules seek to insure that as long as your client engaged you as an independent in good faith (and not just to avoid employee status), then they cannot be held liable. In an ill-advised attempt to punish abuses of these provisions by high-tech companies, Congress in 1986 repealed the safe harbor provisions for providers of high- tech services (and only high-tech services). The IRS can punish offenders without warning, whether or not they were previously aware of their non-compliance. Thus, many companies would rather stick with employees to eliminate that risk. What can independent contractors do about this? We must reassure our clients that they are not vulnerable to a decision by the IRS. IRS Revenue Ruling 87-41 lists 20 factors used to determine whether a worker is an employee under common law rules. You can find some good discussion about these factors on MoreBusiness.com and the UNCSA site; here's my take on the 20 factors. 1. Instructions. Employers dictate how, where, and when work must be accomplished, while clients express a need that an independent contractor fills in their own way. Contractors know that, in practice, there are a lot of shades of grey here. Clients always have constraints on how they want the job done, and some employers give their employees just as much freedom in choosing implementations as we have. 2. Training. If the client provides training for you, that demonstrates an employer relationship; to protect against this, you should always acquire your own training. If you really can't afford to obtain the training that your client wants you to have, then 5 4 you need to creatively structure your billing to cover the costs without making them pay for it directly. 3. Integration. This is another tricky one. To the degree that the success of your client's business depends on your efforts, the same degree of employer control may be presumed. If your client can't live without you, then you're considered part of their organization. I know that a number of my clients would be vulnerable on that point. 4. Services rendered personally. If one specific individual must perform the work, then that individual may be considered an employee. That really hits independents hard, because we're usually flying solo. I've even had clients who insisted that our contract explicitly require me to perform all work personally. 5. Responsibility for assistants. If you need assistance in performing your duties for the client, you should hire those assistants yourself. If the assistants are provided by the client, then you might be considered an employee. This is another one that bites us, because it's generally impossible for us to do our work without significant interaction with the client's employees. This always has to be framed in terms of "requirements gathering" or "user feedback" instead of "assistance." 6. Continuing relationship. If the engagement does not have a discrete term, or even if the client keeps coming back to you time and again, that could be construed as an employee relationship. Contractors know that long-term clients are our bread and butter. I have several clients with whom I have had engagements of one form or another for more than a decade. 7. Hours of work. If the client establishes the hours during which you must perform the work, then they are your boss. This requirement is usually easy for independents to meet, because we like to set our own hours; however, I have had clients who insisted that I be available on a regular schedule and that pushes this point a bit. 8. Full time. If you're required to work for a single client full time, that's waving the red cape in front of the IRS's horns. You should never commit to full time for one client. Not only is it potentially a liability for them, but it's putting all your eggs in their company's basket. 9. Work on premises. If you're required to perform the work at the client's site, then you could be considered an employee. Software development contractors generally don't have a problem working remotely, but for those who must interact with the hardware, this could get touchy. Just make sure they don't allocate a cubicle or office for you. 10.Order or sequence. When the client dictates the order of the steps you must take in order to produce a result, that's considered employer control. Again, grey areas abound. What does that say about project milestones? How fine does it have to get to be under their control? 11.Oral or written reports. The requirement of regular progress reports also indicates control by the employer. Contractors know that regular communication with clients is absolutely essential to success. So you need to make those reports look like your firm is seeking feedback or that these reports are simply part of your deliverables, rather than being required to "check in" by your client. 12. Payment by the hour, week, or month. Apparently, the IRS considers anything other than fixed price billing an indication of an employer-employee relationship. As I've often stated, I prefer hourly billing. One way in which that can be made to 6 5 appear more independent is to enumerate the accomplishments of each of those hours in your invoice, like lawyers do. 13. Expenses. If you cover your own expenses for your business and travel, you're not an employee. I usually insist that clients pick up my travel expenses when I'm traveling on their behalf, but that could be construed as control of business operations by the IRS. 14.Tools and materials. You should purchase your own equipment, software licenses, and office supplies. If your client pays for those, you could be considered their employee. 15.Significant investment. Employees generally aren't required to make any investment in the services they provide, while independents who are running their own business must put up some money. Besides office space, equipment, supplies, and advertising, you also have your business licenses, taxes, subscriptions, and membership dues. 16. Profit or loss. If you're truly independent, then any given engagement could result in a loss due to poor planning or unforeseen circumstances. Employees have no such risk. Again, I try to mitigate my risk of loss by billing by the hour, so if asked, I'd have to creatively frame my potential for lost revenue. 17. More than one client. Similar to the full-time factor, having only one client indicates an employee relationship. Again, having multiple clients makes good business sense, in addition to being tax savvy. 18. Publicly available. If you're marketing your services to the general public, that argues for independence. In your quest to obtain new clients, document your expenditures for advertising and promotion. 19. Right to discharge. Your contract should state that either party may terminate for cause; this means that your client can't just let you go on a whim — they must honor the contract unless you breach it. That makes you equal business partners, instead of employer/employee. 20. Right to terminate. The converse is also true. You should be bound by the terms of your contract, not working "at will." ADVERTISING In practice, no single item in the list will make or break the IRS's determination of employee status. If you can make a convincing case for at least several of the factors, your client will probably be okay. If you can make a case for even more factors, it's even better. 7 INDEPENDENT CONTRACTOR RULES OF THUMB 6 • Legal Resources & Guidance • Classroom Policies and Practices • Compliance • Contracts o What to Consider Before Signing a Contract o Contract Signature Authority o Contract Checklist • Contract Checklist Purpose and Procedures Negotiating Prohibited Contract Clauses Prohibited Contract Clauses Alternate Clauses and Negotiation Tips Business Affairs Requirements for Acceptable Invoices • Independent Contractor Rules of Thumb o Guidelines for Accepting Digital or Electronic Signatures • Copyright, Trademark, & Patent Law Resources • Employment Guidelines • External Legal Links • Faculty Policy Guidance • FERPA (Family Educational Rights and Privacy Act) • Field Trip Planning • Insurance • Nondiscrimination • Political Activities • Public Records, Public Bodies, & Open Meetings • Records Retention & Disposition • Title IX • Umstead Act: State Competition with Private Business • University Governance 1. The institution's right of supervision and control over the worker is the critical issue. Many of the other factors are simply tools to uncover evidence of control (or the lack of it). Always focus your attention on the control factor. 2. Start your analysis by determining whether the worker will be integrated into the institution's workforce and operations. a. If the worker is not integrated into the institution's operations and the right of control is not obviously apparent (no training, no work hours, no reports), you are reasonably safe as long as the relationship is short-term and the independent contractor has other customers. b. If the worker is integrated into the institution's operations, the institution is at risk (because control is likely to be inferred from integration) unless several factors point strongly in the direction of independent contractor status. Look for evidence the worker is engaged in a distinct business or occupation 8 requiring specialized skill. Scrupulously avoid any overt expressions of control. 7 3. Be aware that the status of a particular worker usually lies somewhere along a continuum. Your goal is to avoid obvious misclassifications and narrow the area of uncertainty. 4. The decision to hire an independent contractor represents a calculated business risk. Assess the risk of misclassification, including the dollar amount of payment and duration of relationship, probability that worker will voluntarily pay income tax withholding and social security self-employment tax, risk of liability for workplace injury, etc. Internal Revenue Service Safe Harbor Exception Even if the IRS determines that a worker is an employee, it will not assess back employment taxes if the employer qualifies for the so-called "safe harbor exception" (Revenue Act of 1978, Section 530). The IRS safe harbor does not apply to state taxes and withholding, worker's compensation, etc. Nor does it apply to skilled technical services personnel performing services for the institution's clients. Employers should determine in advance whether a prospective independent contractor relationship may qualify for safe harbor protection. It is possible (but not recommended) to obtain an advance opinion from the IRS. To qualify for the safe harbor, the following three requirements must be satisfied: 1. The institution has never treated the independent contractor as an employee, and has filed Form 1099's for him/her in a timely manner. 2. The institution has consistently treated workers in a substantially similar position as independent contractors. 3. The institution has a reasonable basis for treating the worker as an independent contractor. Reasonable basis means: • Reliance on court decisions, published IRS rulings, and certain other kinds of technical advice; or • In a past IRS audit, the institution was not assessed employment taxes for treating workers doing a similar type of work as independent contractors; or • It is a recognized, long-standing practice for a large segment of the industry to treat certain types of workers as independent contractors. Legal Tests of Independent Contractor Status Common Law Test 9 8 1. A worker is an employee if the institution has the right to control the manner and means of accomplishing the result desired. 2. An employee is paid for his/her time and bears no risk of wage loss if the employer's product is unprofitable. An independent contractor has the opportunity to profit from the project and the risk of loss, depending on the worker's managerial skill. 3. An employee is not required to invest in the employer's business. An independent contractor makes some investment in tools, equipment, supplies, and facilities appropriate for his/her business. 4. An employee may receive training. An independent contractor has the skills necessary to perform the task without additional training. 5. An employee enjoys a continuing relationship with the employer. An independent contractor generally works on one project and moves on, accepting additional projects when and if available. 6. An employee provides services that are essential to the employer's business and incorporated into its products and services. Internal Revenue Service Twenty Factor Test Factor 1 No instructions Contractors are not required to follow, nor are they furnished with instructions to accomplish a job. They can be provided job specifications by the hiring firm. Factor 2 No training Contractors typically do not receive training by the hiring firm. They use their own methods to accomplish the work. Factor 3 Services don't have to be rendered personally Contractors are hired to provide a result and usually have the right to hire others to do the actual work. Factor 4 Work not essential to the hiring firm A company's success or continuation should not depend on the service of outside contractor. An example violating this would be a law firm which called their lawyers independent contractors. Factor 5 Set own work hours Contractors set their own work hours. Factor 6 Not a continuing relationship Usually contractors don't have a continuing relationship with a hiring company. The relationship can be frequent, but it must be at irregular intervals, on call or whenever 10 9 work is available. Warning: Part-time, seasonal or short -duration relationships have nothing to do with independent contractor status. Factor 7 Control their own assistants Contractors shouldn't hire, supervise, or pay assistants at the direction of the hiring company. If assistants are hired, it should be at the contractor's sole discretion. Factor 8 Time to pursue other work Contractors should have enough time available to pursue other gainful work. Factor 9 Decide on job location Contractors control where they work. If they work on the premises of the hiring company, it is not under that company's direction or supervision. Factor 10 Order of work set Contractors determine the order and sequence they will perform their work. Factor 11 No interim reports Contractors are hired for the final result and therefore should not be asked for progress or interim reports. Factor 12 Paid by job Contractors are paid by the job, not by time. Payment by the job can include periodic payments based on a percentage of job completed. Payment can be based on the number of hours needed to do the job times a fixed hourly rate. However, this should be determined before the job begins. Factor 13 Work for multiple firms Contractors often work for more than one firm at a time. Factor 14 Pay business expenses Contractors generally are responsible for their incidental expenses. Factor 15 Have own tools Usually contractors furnish their own tools. Some hiring firms have leased equipment to their independent contractors -so they could show the contractor had their own tools and an investment in their business (see # 16). This strategy won't work if the lease is for a nominal amount or can be canceled by the hiring firm at will. In short, the lease must be equivalent to what an independent business person could have obtained in the open market. For more information, contact a labor attorney. 11 10 Factor 16 Significant investment in their business Contractors should be able to perform their services without the hiring company's facilities (equipment, office furniture, machinery, etc.). The contractor's investment in his/her trade must be real, essential and adequate (see #15). Factor 17 Offer services to general public Contractors make their services available to the general public by one or more of the following: • Having an office and assistants • having business signs; • having a business license; • listing their services in a business directory; • advertising their services. Factor 18 Can make entrepreneurial profit or loss Contractors should be able to make a profit or a loss. Employees can't suffer a loss. Five circumstances show that profit or loss is possible: • If the contractor hires, directs and pays assistants; • if the contractor has his/her own office, equipment, materials or facilities; • if the contractor has continuing and reoccurring liabilities; • if the contractor has agreed to perform specific jobs for prices agreed upon in advance; • if the contractor's services affect his/her own business reputation. Factor 19 Can't be fired at will Contractors can't be fired so long as they produce a result which meets the contract specifications. Factor 20 No compensation for non -completion Contractors are responsible for the satisfactory completion of a job or they may be legally obligated to compensate the hiring firm for failure to complete. Economic Realities Test A worker is an employee if he/she is a member of a class of workers intended to be protected by a law designed to protect or benefit employees. Smell Test Takes into account totality of circumstances. Designed to foreclose efforts to artificially structure a relationship to circumvent the applicable criteria. 12 11 Helpful Tips • Watch out for independent contractors who are former employees performing the same job as before. • Watch out for independent contractors who are doing the same job as employees. • Don't rely on industry practice to protect your institution. • If you think your independent contractor will never claim to be an employee, think again! • Your Pi's working relationship with an independent contractor should be based on the terms and conditions of their contract. Don't use the human relations department or the institution's personnel policies to resolve problems. If you have a problem, modify the contract. • Don't invite independent contractors to employee functions. • Try to minimize independent contractors' contact with funding agencies, etc. • Keep independent contractor records in vendor files, not employee files. Require invoices. • Work with your institution's legal office to develop policies and procedures. 13 12 CITY OF YAKIMA PROCUREMENT OFFICE- FINANCE DEPARTMENT For Contractors: Professional Service: Defense & Indemnity Agreement: The Contractor agrees to defend, indemnify and save harmless the City of Yakima/Yakima County, its appointed and elective officers and employees, from and against all loss or expense, including but not limited to judgments, settlements, attorney's fees and costs by reason of any and all claims and demands upon the City of Yakima/Yakima County, its elected or appointed officials or employees for damages, whether such damage is due to the negligence, or errors or omissions of the Contractor, his/her subcontractors, its successor or assigns, or its or their agent, servants, or employees, It is further provided that no liability shall attach to the City of Yakima/Yakima County by reason of entering into this Contract, except as expressly provided herein. Professional Liability: The Contractor shall provide evidence of Professional Liability insurance covering professional errors and omissions. Such policy must provide the following minimum limits: $2,000,000 per Claim If insurance is on a claims made form, its retroactive date, and that of all subsequent renewals, shall be no later than the effective date of this Contract. For Contractors: Contractor's Liability Insurance At all times during performance of the Services and this Contract, Contractor shall secure and maintain in effect insurance to protect the City/County and Contractor from and against any and all claims, damages, losses, and expenses arising out of or resulting from the performance of this Contract. Contractor shall provide and maintain in force insurance in limits no less than that stated below, as applicable. The City/County reserves the right to require higher limits should it deem it necessary in the best interest of the public. 14 13 Contractor will provide a Certificate of Insurance to the City/County as evidence of coverage for each of the policies and outlined herein. A copy of the additional insured endorsement attached to the policy will be included with the certificate. This Certificate of insurance shall be provided to the City/County, prior to commencement of work. Failure of City/County to demand such verification of coverage with these insurance requirements or failure of City/County to identify a deficiency from the insurance documentation provided shall not be construed as a waiver of Contractor's obligation to maintain such insurance. The following insurance is required: a. Commercial Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City/County with a certificate of insurance as proof of commercial liability insurance with a minimum liability limit of Two Million Dollars ($2,000,000.00) per occurrence, combined single limit bodily injury and property damage, and Two Million Dollars ($2,000,000.00) general aggregate. If Contractor carries higher coverage limits, such limits shall be shown on the Certificate of Insurance and Endorsements and the City/County, its elected and appointed officials, employees, agents, attorneys and volunteers shall be named as additional insureds for such higher limits. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Contract. The policy shall name the City of Yakima/Yakima County, its elected and appointed officials, employees, agents, attorneys and volunteers as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City/County prior written notice. The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. The requirements contained herein, as well as City of Yakima/Yakima County's review or acceptance of insurance maintained by Contractor is not intended to and shall not in any manner limit or qualify the liabilities or obligations assumed by Contractor under this contract. b. Automobile Liability Insurance. Before this Contract is fully executed by the parties, Contractor shall provide the City/County with a certificate of insurance as proof of automobile liability insurance with a minimum liability limit of Two Million Dollars ($2,000,000.00) per occurrence. If Contractor carries higher coverage limits, such limits shall be shown on the Certificate of Insurance and Endorsements and the City/County, its elected and appointed officials, 15 14 employees, agents, attorneys and volunteers shall be named as additional insureds for such higher limits. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Contract. The policy shall name the City of Yakima/Yakima County, its elected and appointed officials, employees, agents, attorneys and volunteers as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City/County prior written notice. The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington. The requirements contained herein, as well as City of Yakima/Yakima County's review or acceptance of insurance maintained by Contractor is not intended to and shall not in any manner limit or qualify the liabilities or obligations assumed by Contractor under this contract. The business auto liability shall include Hired and Non -Owned coverage if necessary. c. Employer's Liability (Stop Gap): Contractor and all subcontractor(s) shall at all times comply with all applicable workers' compensation, occupational disease, and occupational health and safety laws, statutes, and regulations to the full extent applicable, and shall maintain Employer's Liability insurance with a limit of no less than $1,000,000.00. The City/County shall not be held responsible in any way for claims filed by Contractor or its employees for services performed under the terms of this Contract. Contractor agrees to assume full liability for all claims arising from this Contract including claims resulting from negligent acts of all subcontractor(s). Contractor is responsible to ensure subcontractor(s) have insurance as needed. Failure of subcontractors(s) to comply with insurance requirements does not limit Contractor's liability or responsibility. Contractor's insurance coverage shall be primary insurance with respect to those who are Additional Insureds under this Contract. Any insurance, self-insurance or insurance pool coverage maintained by the City/County shall be in excess of the Contractor's insurance and shall not contribute to it. If at any time during the life of the Contract, or any extension, Contractor fails to maintain the required insurance in full force and effect, all work under the contract shall be discontinued immediately. Any failure to maintain the required insurance may be sufficient cause for the City/County to terminate the Contract. Should a court of competent jurisdiction determine that this Contract 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 Contractor and the City/County, its officers, elected and appointed 16 15 officials, employees, agents, attorneys and volunteers, Contractor's liability hereunder shall be limited to the extent of the Contractor's negligence. We also include an Indemnity Clause: 1. Indemnification and Hold Harmless a. Contractor shall take all necessary precautions in performing the Services to prevent injury to persons or property. Contractor agrees to defend, indemnify and hold harmless the City/County, its elected and appointed officials, officers, employees, attorneys, agents, and volunteers from any and all claims, demands, losses, liens, liabilities, penalties, fines, lawsuits, and other proceedings and all judgments, awards, costs and expenses (including reasonable costs and attorney fees) which result or arise out of the sole negligent acts or omissions of Contractor, its officials, officers, employees or agents. b. If any suit, judgment, action, claim or demand arises out of, or occurs in conjunction with, the negligent acts and/or omissions of both the Contractor and the City/County, or their elected or appointed officials, officers, employees, agents, attorneys or volunteers, pursuant to this Contract, each party shall be liable for its proportionate share of negligence for any resulting suit, judgment, action, claim, demand, damages or costs and expenses, including reasonable attorneys' fees. c. Contractor's Waiver of Employer's Immunity under Title 51 RCW. If any design or engineering work is done pursuant to this Contract, Contractor intends that its indemnification, defense, and hold harmless obligations set forth above in Section A shall operate with full effect regardless of any provision to the contrary in Title 51 RCW, Washington's Industrial Insurance Act. Accordingly, to the extent necessary to fully satisfy the Contractor's indemnification, defense, and hold harmless obligations set forth above in Section A, Contractor specifically waives any immunity granted under Title 51 RCW, and specifically assumes all potential liability for actions brought by employees of the Contractor against the City/County and its elected and appointed officials, officers, employees, attorneys, agents, and volunteers. The parties have mutually negotiated this waiver. Contractor shall similarly require that its subcontractors, and anyone directly or indirectly employed or hired by Contractor, and anyone for whose acts Contractor may be liable in connection with its performance of this Agreement, shall comply with the terms of this paragraph, waive any immunity granted under Title 51 RCW, and assume all potential liability for actions brought by their respective employees. The provisions of this section shall survive the expiration or termination of this Agreement. 17 16 d. Nothing contained in this Section or this Contract shall be construed to create a liability or a right of indemnification in any third party. e. The terms of this Section shall survive any expiration or termination of this Contract. HUMAN RESOURCES DEPARTMENT 129 North Second Street Yakima, Washington 98901 Phone (509) 575-6090 Fax (509) 576-6358 MEMORANDUM June 27, 2018 TO: Cliff Moore, City Manager FROM: Connie Mendoza, Director of Human Resources SUBJECT: Gang Proviso/YPD Community Services Officer 18 The City does not currently have a classification representing the duties defined in the Gang Proviso. This includes the Community Service Officer classification, which does not address the experience or training (i.e. grant writing, grant administration, etc.) needed to fill the role as proposed. Under our City Charter, if this role is to be filled by a City of Yakima employee, a new classification would need to be created and a recruitment performed following the Charter Civil Service Rules. This would require a class specification be prepared by the Chief Examiner and submitted to the Charter Civil Service Commission for approval. The class specification would establish in general terms, duties to be performed by employees within the class; supervision received; the extent of authority exercised over others; major worker characteristics; unusual working conditions; licenses, registrations and certifications required; and minimum qualifications. The classification would then be added to a Pay Ordinance aligned at the appropriate pay code. Per the Yakima City Charter, Article XV: "A pay and classification plan with job descriptions providing equal pay for equal work shall be devised by the chief examiner with the cooperation and approval of the civil service commission which shall be submitted in ordinance form to the City Council for passage." Once approved, a competitive process is required to fill Civil Service vacancies. Applicants would be screened and tested per Civil Service and the top three (3) candidates would be available for consideration. The Community Services Officer positions at the Yakima Police Department are positions covered by Charter Civil Service Rules and are members of the American Federation of State, County & Municipal Employees (AFSCME). The City does not have the flexibility to reassign duties (even temporarily) without negotiating impacts and wages with the Union. In situations such as this where a permanent position does not exist, Charter Civil Service Rules do allow for temporary appointments to a position. Appointments for a temporary service periods cannot last more than five months or 866 hours in any one fiscal year and must meet the minimum requirements of the classification to which they are appointed. HUMAN RESOURCES DEPARTMENT 129 North Second Street Yakima, Washington 98901 Phone (509) 575-6090 Fax (509) 576-6358 19 Charter Civil Service Rules — Chapter IV, Section C.3: "Temporary Appointment: Temporary appointments may not exceed five months or 866 hours whichever is the greater period in any one fiscal year. The appointing authority shall requisition the Chief Examiner as provided for regular appointments, and shall indicate the date it is estimated the position will terminate. Temporary service shall not be credited on any probationary period." The required skills and duties listed in the Gang Proviso document do not align with those in the Community Services Officer classification. As outlined above, classifications are created by our Chief Examiner, approved by the Commission and they are specific to the needs of the position. Employee's assigned to work out of class even on a temporary basis, still need to possess the experience and training required for the higher classification. They also must meet the minimum qualifications. If qualified, employees may temporarily take on additional duties; however, the City would need to negotiate the change with the Union. Additional compensation and possibly training would also be necessary given the, requirements, skillset, and higher level responsibilities needed to perform these duties. Reassignment of a current City employee would necessitate the steps above, which does require some time, as the classification would need development; union engagement would be required; submission to Civil Service; then submission to Council via a pay ordinance. After those steps have been completed, a recruitment could be performed and/or a City employee could be utilized on a temporary basis. The latter would of course require agreement of the employee and additional conversation and agreement of the union to avoid allegations of skimming, as well as negotiating the impacts to said employee. The other option which could be utilized would be to enter into a professional services agreement to identify and contract with an individual who would have the desired experience, knowledge, skills, and abilities to perform the desired duties. This process would allow more direct control over the selection and pay allocation process.