REPORT/RECOMMENDATION TO THE BOARD OF DIRECTORS
OF BIG BEAR VALLEY RECREATION AND PARK DISTRICT
AND RECORD OF ACTION
March 14, 2023
FROM
BRENDON BIGGS, Director, Department of Public Works - Special Districts
SUBJECT
Title
Amendment to Merchant Services Agreement Providing for Special Provisions for Clover Point-of-Sale Services
End
RECOMMENDATION(S)
Recommendation
Acting as the governing body of the Big Bear Valley Recreation and Park District, approve Amendment No. 2 to the Merchant Services Agreement, including non-standard terms, with Wells Fargo Merchant Services, LLC, adding special provisions regarding Clover services for specific point-of-sale systems and services at no additional cost.
(Presenter: Brendon Biggs, Director, 387-7906)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The Big Bear Valley Recreation and Park District (District) contracts with Wells Fargo Merchant Services, LLC (Processor) for point-of-sales systems and services at the Big Bear Alpine Zoo (Zoo). The recommended amendment is an addendum to the Merchant Services Agreement (Agreement) providing for special provisions regarding Clover service and will not increase the monthly fee amount paid by the District for the point-of-sales systems and services. Sufficient appropriation for the payment of such services is included in the District’s 2022-23 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
The Zoo was established in 1959 to provide animal rehabilitation and educational opportunities to the citizens and visitors of San Bernardino County (County). The Zoo is a popular attraction within the community of Big Bear and is visited by more than 100,000 guests per year.
Since 2017, the Zoo has utilized the Processor, pursuant to an existing Agreement, for payment processing and point-of-sale transactions, including on-site ticket and gift shop sales, which includes the “Clover Service”. The initial Agreement was executed by the Director of Special Districts (Department) on October 23, 2017. On October 26, 2017, the Director of the Department also executed a first amendment to the Agreement, adding the Addendum to Agreement: Special Provisions Regarding Clover Service document. Clover Service consists of additional hardware, software and services delivered through mobile or fixed pieces of equipment, including tablets, smartphones and other similar devices, that are designed to assist the District with the management of payment processing at the point of service or sale, including, websites, apps, and devices.
The Processor has since further updated the standard terms and special provisions regarding Clover Service, which include terms that differ from the standard County contract and omit certain County standard language. Approval of this item will further amend the Agreement to provide for a new Addendum to Agreement for Special Provisions Regarding Clover Service (Addendum), which includes non-standard and missing terms that include the following:
1. Limitation on Warranties. The Addendum’s Special Provisions states that use of the Clover Service and Clover Hardware is at the user’s own risk, is provided “as is,” and disclaims all warranties of any kind.
• The District standard contract provides that a vendor/contractor fully warrants its services and products it provides to the District.
• Potential Impact: The District’s use of the hardware and software is at its own risk. Under California law, sellers are not required to provide any warranty.
2. Indemnification (by District). The Addendum’s Special Provisions requires the District to indemnify and hold the Processor harmless from and against all losses, liabilities, damages, and expenses (including reasonable attorneys’ fees) arising out of or relating to: (a) District’s failure to comply with all terms and conditions in the Addendum; (b) District’s use, sharing or disclosure of any Customer Information obtained in connection with use of the Clover Service in violation of the Addendum; (c) The content or delivery of any marketing messages that are sent to any Customer phone number or email address collected through the use of the Clover Service; or (d) Any other party’s access and/or use of the Clover Service with District’s unique username, password, or other appropriate security code.
• The District standard contract does not include any indemnification or defense by the District of a Vendor.
• Potential Impact: By agreeing to indemnify, the District could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the District, time limited, or expense limited could be brought against Processor without such limitations and the District would be responsible to defend and reimburse Processor for costs, expenses, and damages, which could exceed the total Agreement amount.
3. Indemnification (none by Vendor). The Addendum’s Special Provisions does not require the Processor to indemnify and hold harmless the District, including for intellectual property infringement claims.
• The District standard contract indemnity provision requires the vendor/contractor to indemnify, defend, and hold the District harmless from third party claims arising out of the acts, errors, or omissions of any person. The standard contract provision for intellectual property indemnity is: Contractor will indemnify, defend, and hold harmless the District and its officers, employees, agents, and volunteers, from any and all third-party claims, costs (including without limitation reasonable attorneys’ fees), and losses for infringement of any United States patent, copyright, trademark, or trade secrets (Intellectual Property Rights) by any goods or services.
• Potential Impact: The Processor is not required to defend, indemnify, or hold the District harmless from any claims, including indemnification for claims arising from their negligent or intentional acts and intellectual property infringement. If the District is sued for any claim, including intellectual property infringement based on its use of the Processor’s software or services, the District may be solely liable for the costs of defense and damages, which could exceed the total Agreement amount.
4. Insurance. The Addendum does not require the Processor to meet the District’s insurance standards as required pursuant to County Policy 11-07.
• County Policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and set forth in the County standard contract.
• Potential Impact: The Addendum does not include District standard insurance requirements. This means that the District has no assurance that Processor will be financially responsible for claims that may arise from the District’s use of the Clover Services, which could result in expenses to the District that could exceed the total Agreement amount.
The Department recommends approval of the Addendum, including the non-standard terms, in order to continue utilizing the Clover Service point-of-sale systems and services. These systems/services are needed to assist with the processing of the Zoo’s various sales and collection of revenue, which is critical for funding the Zoo’s operating costs.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Aaron Gest, Deputy County Counsel, 387-5455) on March 8, 2023; Finance (Tom Forster, Administrative Analyst, 387-4635) on February 21, 2023; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on February 27, 2023.