5.h Assessment Services Agreement
Staff Report
Date of Meeting: April 17, 2018
To: City Council
From: Neil Soltis, Administrator
Re: Assessment Service Agreement
Background: At the April 4 work session the Council accepted a proposal from Pauszek Inc. (Patrick
Poshek) for assessment services for the period of May 1, 2018 through the Board of Appeals
meeting in 2021. Based on the proposal and the previous agreement, City Attorney Andy Pratt has
drafted the Assessment Service Agreement
Issue: Should the Mayor and Administrator be authorized to execute the agreement on behalf of
the City?
Fiscal Impact: The fee for the assessment years 2019 through 2021 are fixed at $20,400 per year.
There is adequate funding in the 2018 budget for the payments due in 2018 under the proposed
agreement.
Options:
1. Authorize the Mayor and Administrator to execute the agreement
2. Modify the agreement
3. Take no action on the agreement
Recommendation: Option 1
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ASSESSMENT SERVICES AGREEMENT
THIS ASSESSMENT SERVICES AGREEMENT (the “Agreement”), is entered into
and made effective this 1st day of May, 2018 (the “Effective Date”), by and between the CITY
OF SCANDIA, a Minnesota municipal corporation and political subdivision (the “City”), and
PAUSZEK, INC., a Minnesota corporation, PATRICK A. POSHEK, Chief Executive Officer
(the “Assessor”) (collectively, the “Parties”). The City Council of the City conducted a request for
proposal process for assessor services in 2018, and approved the selection of the Assessor at a City
Council meeting on April 4, 2018.
The Parties hereby agree as follows:
1.0 Term; Services. The term of service will be for a period of three (3) years,
commencing on May 1, 2018 and terminating on the date on which the Scandia Local Board of
Appeal and Equalization Meeting, or any successor to its functions (the “Board”) adjourns in 2021,
unless terminated earlier pursuant to the terms of this Agreement (the “Term”). For purposes of
this Agreement, the phrase “Assessment Year” shall refer to each assessment year during the Term
commencing the day following the adjournment of the Board for the prior assessment year and
ending on the date on which the Board adjourns for the current assessment Year. During the
Term, Assessor agrees to provide all assessment services for real property in the City for
Assessment Years 2019 through 2021, including, without limitation: physical inspection of one-
fifth (20%) of all properties within the City each Assessment Year; conducting market studies each
Assessment Year, which include land sales, improved property sales, new construction sales, land
residual/building residual analysis; complete divisions/combinations of tax parcels annually;
review/read blueprints and provide on-site inspection work for new construction by January 2 of
each Assessment Year; maintain good public relations by responding to inquiries regarding
property tax rebates, tax estimates, and homestead applications; assist in the defense of challenged
assessments at the local board of review, working closely with Washington County in the event of
a Tax Court appeal (collectively, the “Services”), and such other tasks and responsibilities which
are mutually agreed to relate to the Services as requested by the City from time to time. Assessor
shall perform such Services in a professional, timely and workmanlike manner.
2.0 Independent Contractor Relationship. It is the intention of the Parties to
establish by this Agreement an independent contractor relationship. Assessor is an independent
contractor and is not an employee, partner, or joint venture of the City for any purpose. Assessor
shall have no authority to bind the City or enter into any contract, obligation, or agreement on the
City’s behalf except with the City’s written permission. The City and Assessor acknowledge that
Assessor shall not be subject to the provisions of any employee handbook, personnel policy,
procedure manual, rules or regulations applicable to employees of the City. Assessor is not entitled
to receive, and hereby waives the right to participate in, any employer-paid or employer-sponsored
employee welfare, retirement, and/or pension benefits of the City, including but not limited to,
paid time off, paid vacation, paid sick leave, health insurance, dental insurance, retirement
contributions, 401(k), etc. Assessor shall fulfill Assessor’s responsibility independent of, and
without supervisory control by, the City and shall utilize his independent professional judgment in
rendering services under this Agreement; provided, however, that the City shall be entitled to
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exercise broad general powers of supervision and control over the results of work performed by
Assessor to ensure satisfactory performance.
3.0 Compensation. The Assessor shall be compensated for the Services provided in
this Agreement. Each Assessment Year during the Term, the City shall pay to the Assessor an
annual fee in the amount of Twenty Thousand Four Hundred Dollars and 00/100 ($20,400.00) (the
“Assessor’s Fee”). The Assessor’s Fee shall be paid in monthly installments of One Thousand
and Seven Hundred Dollars ($1,700.00) commencing on June 10, 2018 and on the tenth day of
each month thereafter. Such monthly payment shall compensate Assessor for the Services provided
for the immediately preceding month. The Assessor shall provide the City an invoice for each
month of Services, which shall include a brief summary of the work performed during the previous
month.
4.0 Taxation. The City will issue to Assessor an IRS Form 1099 at the end of each
calendar year for all payments provided to Assessor under this Agreement. The City shall not, and
shall not be obligated to, withhold or contribute any payroll, federal, state, and/or local income
taxes with respect to such payments. Assessor shall properly report all income received under this
Agreement to the appropriate taxing authorities as required by applicable law and shall be solely
responsible for paying, and hereby agrees to pay, all federal, state, and local income taxes, payroll
taxes, self-employment taxes, and all other taxes and assessments with respect to all payments
received by Assessor under this Agreement. Assessor shall indemnify and hold the City harmless
from and against all taxes, penalties, assessments, fines, audits, liability, claims, damages, and
other expenses, including reasonable attorney’s fees and costs, asserted against or incurred by the
City due to Assessor’s failure to report or pay any taxes due and owing on account of Assessor’s
receipt of payments under this Agreement. Assessor reserves, at his sole discretion, the right to
assign payments due under this Agreement to another entity or third party. The covenants of this
Section survive the termination or expiration of this Agreement for any reason.
5.0 Workers’ Compensation Insurance; Errors and Omissions Insurance.
Assessor understands that the City will not provide workers’ compensation coverage for injury,
death, disease, or occupational injury suffered by Assessor while performing the Services under
this Agreement. Assessor shall be responsible for obtaining any required workers’ compensation
insurance coverage for Assessor. Assessor agrees to indemnify, hold harmless, and protect the
City and its shareholders, owners, officers, directors, employees, and insurers, and their successors
and assigns, from and against any and all damages, liability, attorney’s fees, and costs arising from
or related to any injury, death, disease, or occupational injury suffered by Assessor or his agents
or employees, except to the extent caused by the grossly negligent, intentional, willful, or wanton
acts of the City.
Assessor shall obtain or otherwise maintain existing errors and omissions/malpractice
insurance at all times during the Term of this Agreement. The insurance shall contain a coverage
amount adequate, in the reasonable opinion of the City, to protect the City from any potential
liability. Assessor shall provide a copy of his errors and omissions policy to the City as of the
effective date of this Agreement. The covenants of this Section survive the termination or
expiration of this Agreement for any reason.
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6.0 Discretion and Judgment. The City is relying upon Assessor’s education,
experience, skill, and wisdom in determining how to complete the Services under this Agreement.
Assessor shall use Assessor’s independent judgment and discretion in the performance of the
Services under this Agreement.
7.0 Warranty. Assessor warrants that Assessor will perform the Services hereunder
using Assessor’s best efforts, in compliance with applicable laws and industry standards, and that
to the best of Assessor’s knowledge, Assessor’s entering into this Agreement or performance of
the Services called for by this Agreement does not and shall not violate any applicable law, rule,
or regulation, or any contracts with or obligations to third parties. The covenants of this Section
survive the termination or expiration of this Agreement for any reason.
8.0 Confidentiality. Assessor shall not alter, damage, destroy, delete, disable, conceal,
corrupt, remove, download, reverse-engineer, transfer, transmit, disclose, disseminate, share, sell,
use, transfer, disclose or give away any Confidential Information, except in the performance of the
Services under this Agreement or as required by any applicable law or court order. Assessor shall
return any and all such materials to the City immediately upon the request of the City and
immediately upon termination of this Agreement. The covenants of this Section survive the
termination or expiration of this Agreement for any reason. For purposes of this Agreement,
“Confidential Information” shall mean all non-public information related to or obtained in
connection with Services.
9.0 Indemnification by Assessor. Assessor agrees to protect, defend, indemnify and
hold harmless the City from and against any and all claims, proceedings, and investigations, and
all loss, costs, damages, liability and expenses (including court costs and reasonable attorney's
fees) arising out of any negligent, grossly negligent, willful misconduct, or wanton actions of
Assessor or his agents or employees, or arising out of any breach or violation of this Agreement
by Assessor. The obligation of Assessor arising under this Section during the term of this
Agreement shall survive its expiration or termination.
10.0 Early Termination. The term of this Agreement shall be as provided in Section
1.0 of this Agreement. City or Assessor may earlier terminate this Agreement for any reason upon
the delivery of ninety (90) days written notice to the other. If this Agreement is terminated in
accordance with this provision, City shall be obligated to pay only the outstanding fees and
expenses due and owing through the effective date of termination, prorated daily for any partial
Assessment Years.
11.0 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any provision
contained in this Agreement, or the application thereof, shall be held invalid, illegal or
unenforceable, such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or this Agreement.
12.0 Entire Agreement. This Agreement and the Exhibit attached herein represents the
entire agreement of the Parties regarding its subject matter and supersedes any prior verbal or
written agreements, commitments, or communications regarding the same. The terms and
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provisions of this Agreement may not be changed, waived, altered or amended except in a written
agreement signed by both Parties.
13.0 Governing Law and Venue. The performance, construction, and interpretation of
this Agreement and all disputes between the Parties that arise out of this Agreement or occur during
the term of this Agreement shall be governed and construed in all respects by the laws of the State
of Minnesota, without regard to its conflicts of law principles. The Parties acknowledge and agree
that any disputes or litigation between the parties shall be brought exclusively in the state court
situated in the County of Washington, State of Minnesota. The Parties agree that such courts are
a convenient forum for the resolution of such disputes and waive the right to seek a change of
venue to any different court or forum.
14.0 Assignment. Assessor may not transfer or assign Assessor’s rights or obligations
contained in this Agreement unless approved in writing by the City, nor may Assessor subcontract
for Services which Assessor is to provide pursuant to this Agreement, without prior written
notification to the City. Any individual employed or subcontracted by Assessor for performance
of Services will hold appropriate licensure as required by the Minnesota State Board of Assessors.
15.0 Ancillary Agreements. Termination of this Agreement shall have no impact or
effect upon any other agreement entered into by City and Assessor or its affiliates.
16.0 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be an original, but all of which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Assessment Agreement as of
the date first set forth above.
ASSESSOR:
PAUSZEK, INC.
PATRICK A. POSHEK
CITY:
APPROVED AS TO FORM: CITY OF SCANDIA
By: __________________________ By: _________________________
Scandia City Attorney Date Its: Mayor Date
By: _________________________
Its: City Administrator Date