CC SR 20170718 E - Sales, Use, and Transaction Tax Records PSA with HdLRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
AGENDA DESCRIPTION:
MEETING DATE: 07/18/2017
AGENDA HEADING: Consent Calendar
Consideration and possible action to adopt a resolution authorizing examination of
sales, use and transaction tax records; and award a contract for sales, use and
transaction tax reporting and consulting to Hinderliter, de Llamas & Associates.
RECOMMENDED COUNCIL ACTION:
(1) Adopt Resolution No. 2017- authorizing Hinderliter, de Llamas & Associates
(HdL) to examine the sales, use, and transactions tax records collected by the
State Board of Equalization for the City;
(2) Award a Professional Services Agreement to Hinderliter, de Llamas & Associates
(HdL) for reporting and consulting services related to sales, use and transaction
taxes in the amount of $200 per month and 15% of new sales and use tax
revenue, if any, received by the City as a result of HdL's services; and,
(3) Authorize the Mayor and City Clerk to execute the Professional Services
Agreement with HdL, subject to approval as to form by the City Attorney.
FISCAL IMPACT: There is no direct cost to adopting the resolution. The annual cost
to the City for sales and use tax services by HdL is $2,400.
Amount Budgeted: $2,400
Additional Appropriation: N/A
Account Number(s): 101-400-2999-5101
ORIGINATED BY: Deborah Cullen, Director of Finance !�L---
REVIEWED BY: Same as above
APPROVED BY: Doug Willmore, City Manager,
ATTACHED SUPPORTING DOCUMENTS:
A. Resolution No. 2017- (page A-1)
B. HdL Professional Services Agreement (page B-1)
BACKGROUND AND DISCUSSION:
One of the most essential aspects of prudent financial management of the City is
ensuring that all revenues that the City is entitled to receive and future revenues are
accurately allocated and forecasted. In the area of sales tax revenue, audit and
recovery services is a highly specialized area that requires expertise in working with the
State Board of Equalization to research, identify, and correct sales tax misallocations.
Since 2004, the City has contracted with MuniServices to provide comprehensive sales
tax revenue enhancement services. While MuniServices has served the City well, Staff
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believes it is advantageous to rotate to a new sales tax consultant. Hinderliter, de
Llamas & Associates (HdL) was founded in 1983 and provides sales and use tax
analysis and auditing services to many cities and counties throughout the state. HdL's
services also include enhanced budget forecasting and non -confidential publications
that can be utilized for presentation to the public, which staff believes will be of benefit
to the City.
Using confidential taxpayer records as authorized by Revenue and Taxation Code
Section 7056, HdL will find and correct errors that result in underpayments of sales tax
to the City. The firm will employ a series of analyses, comparisons with other data
sources and physical canvassing of the City to find, document and submit for correction
all taxpayer errors that result in lost revenue or could result in lost revenue in the future.
In conducting these activities on behalf of the City, HdL will provide reports that
accurately depict the City's sales tax base, tax collections and revenues. All reports,
graphs, tables and revenue forecasts are designed to enhance the City's capacity to
plan for, expand and manage its various sales tax revenues.
In addition to the annual service cost of $2,400, HdL assesses a fee of 15% of all new
sales and use tax revenue received by the City as a result of audit and recovery work
performed by the firm. This audit fee applies to monies received in the first eight (8)
consecutive reporting quarters. This fee is standard in the industry to recoup some of
the administrative costs associated with the tasks that HdL is required to perform for the
tax audit and recovery. Staff has reviewed the annual service cost of both MuniServices
and HdL and has determined the transition to HdL will have no impact on the FY17-18
budget.
In order for the City to enter into a contract with HdL for sales tax advisory services, the
California State Board of Equalization requires the City Council to adopt the attached
resolution (Attachment A) authorizing HdL's examination of confidential taxpayer
records related to sales, use and transactions taxes.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council's consideration:
Do not approve the draft resolution or professional services agreement
with HdL, and provide additional direction to Staff.
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RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO PALOS VERDES AUTHORIZING EXAMINATION
OF SALES, USE AND TRANSACTIONS TAX RECORDS
WHEREAS, pursuant to Ordinance 36, the City of Rancho Palos Verdes ("City")
entered into a contract with the California State Board of Equalization ("Board of
Equalization") to perform all functions incident to the administration and collection of local
sales, use, and transactions taxes for the City; and
WHEREAS, the City Council of the City of Rancho Palos Verdes deems it desirable
and necessary for authorized representatives of the City to examine confidential sales, use
and transactions tax records of the Board of Equalization pertaining to sales, use, and
transactions taxes collected by the Board for the City pursuant to that contract; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth
certain requirements and conditions for the disclosure of Board of Equalization records,
and establishes criminal penalties for the unlawful disclosure of information contained in, or
derived from, the sales, use, and transactions tax records of the Board.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES HEREBY RESOLVES AS FOLLOWS:
Section 1. That the following City officials are hereby authorized to examine sales,
use and transactions tax records of the Board of Equalization pertaining to sales, use and
transactions taxes collected for the City by the Board of Equalization:
Mayor
Councilmembers
City Manager
Finance Director
Community Development Director
Section 2. That the foregoing persons are authorized to examine the Board of
Equalization's records pertaining to sales, use and transactions taxes collected for the City
by the Board of Equalization only for purposes related to the collection of local sales or
transactions and use taxes by the Board of Equalization, or for purposes related to the
governmental functions of city administration, revenue management, budgeting, and
forecasting, community and economic development, and business license tax
administration.
Section 3. That Hinderliter, de Llamas & Associates ("HDL") is hereby designated to
examine the sales, use, and transactions tax records of the Board of Equalization
pertaining to sales, use, and transactions taxes collected for the City by the Board of
Equalization. That HDL meets all of the following conditions:
(a) Has an existing contract with the City to examine those sales, use, and
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transactions tax records;
(b) Is required by that contract to disclose information contained in, or derived
from, those sales, use and transactions tax records only to the officer or employee
authorized under Section 1 of this resolution to examine the information;
(c) Is prohibited by that contract from performing consulting services for a retailer
during the term of that contract; and
(d) Is prohibited by that contract from retaining the information contained in, or
derived from those sales, use, and transactions tax records, after that contract has expired.
The information HDL obtains by examination of Board records shall be used only for
purposes related to the collection of City sales, use, and transactions taxes by the Board of
Equalization pursuant to the contract between the City and the Board of Equalization and
for purposes relating to the governmental functions of the City listed in section 2 of this
resolution.
Section 4. The City Clerk shall certify to the passage, approval, and adoption of this
Resolution, and shall cause this Resolution and her certification to be entered in the Book
of Resolutions of the City Council.
PASSED, APPROVED and ADOPTED the 18th day of July 2017.
ATTEST:
Emily Colborn, City Clerk
State of California
County of Los Angeles
City of Rancho Palos Verdes
Brian Campbell, Mayor
I, EMILY COLBORN, City Clerk of The City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2017- was duly and regularly passed and adopted by the said City
Council at regular meeting thereof held on July 18, 2017.
CITY CLERK
01203.0007/389508.1
A-2
AGREEMENT FOR CONTRACT SERVICES
By and Between
CITY OF RANCHO PALOS VERDES
and
HINDERLITER, DE LLAMAS AND ASSOCIATES
AGREEMENT FOR CONTRACT SERVICES
BY AND BETWEEN THE CITY OF RANCHO PALOS VERDES AND
HINDERLITER, DE LLAMAS AND ASSOCIATES
THIS AGREEMENT FOR CONTRACT SERVICES (herein "Agreement") is made and
entered into this 18th day of July, 2017 by and between the City of Rancho Palos Verdes, a
California municipal corporation ("City") and Hinderliter, de Llamas and Associates, a
California corporation ("Consultant"). City and Consultant are sometimes hereinafter
individually referred to as "Party" and hereinafter collectively referred to as the "Parties."
RECITALS
A. Pursuant to the City of Rancho Palos Verdes Municipal Code, City has authority
to enter into and execute this Agreement.
B. The Parties desire to formalize the selection of Consultant for performance of
those services defined and described particularly in Article 1 of this Agreement and desire that
the terms of that performance be as particularly defined and described herein.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by
the Parties and contained herein and other consideration, the value and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE 1. SERVICES OF CONSULTANT
1.1 Scope of Services.
In compliance with all terms and conditions of this Agreement, the Consultant shall
provide those services specified in the "Scope of Services" attached hereto as Exhibit "A" and
incorporated herein by this reference, which may be referred to herein as the "services" or
"work" hereunder. As a material inducement to the City entering into this Agreement,
Consultant represents and warrants that it has the qualifications, experience, and facilities
necessary to properly perform the services required under this Agreement in a thorough,
competent, and professional manner, and is experienced in performing the work and services
contemplated herein. Consultant shall at all times faithfully, competently and to the best of its
ability, experience and talent, perform all services described herein. Consultant covenants that it
shall follow the highest professional standards in performing the work and services required
hereunder and that all materials will be both of good quality as well as fit for the purpose
intended. For purposes of this Agreement, the phrase "highest professional standards" shall
mean those standards of practice recognized by one or more first-class firms performing similar
work under similar circumstances.
1.2 Consultant's Proposal.
The Scope of Service shall include the Consultant's scope of work or bid which shall be
incorporated herein by this reference as though fully set forth herein. In the event of any
inconsistency between the terms of such proposal and this Agreement, the terms of this
Agreement shall govern.
1.3 Compliance with Law.
Consultant shall keep itself informed concerning, and shall render all services hereunder
in accordance with, all ordinances, resolutions, statutes, rules, and regulations of the City and any
Federal, State or local governmental entity having jurisdiction in effect at the time service is
rendered.
1.4 Licenses, Permits, Fees and Assessments.
Consultant shall obtain at its sole cost and expense such licenses, permits and approvals
as may be required by law for the performance of the services required by this Agreement.
Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus
applicable penalties and interest, which may be imposed by law and arise from or are necessary
for the Consultant's performance of the services required by this Agreement, and shall
indemnify, defend and hold harmless City, its officers, employees or agents of City, against any
such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City
hereunder.
1.5 Familiarity with Work.
By executing this Agreement, Consultant warrants that Consultant (i) has thoroughly
investigated and considered the scope of services to be performed, (ii) has carefully considered
how the services should be performed, and (iii) fully understands the facilities, difficulties and
restrictions attending performance of the services under this Agreement. If the services involve
work upon any site, Consultant warrants that Consultant has or will investigate the site and is or
will be fully acquainted with the conditions there existing, prior to commencement of services
hereunder. Should the Consultant discover any latent or unknown conditions, which will
materially affect the performance of the services hereunder, Consultant shall immediately inform
the City of such fact and shall not proceed except at Consultant's risk until written instructions
are received from the Contract Officer.
1.6 Care of Work.
The Consultant shall adopt reasonable methods during the life of the Agreement to
furnish continuous protection to the work, and the equipment, materials, papers, documents,
plans, studies and/or other components thereof to prevent losses or damages, and shall be
responsible for all such damages, to persons or property, until acceptance of the work by City,
except such losses or damages as may be caused by City's own negligence.
1.7 Further Responsibilities of Parties.
Both parties agree to use reasonable care and diligence to perform their respective
obligations under this Agreement. Both parties agree to act in good faith to execute all
instruments, prepare all documents and take all actions as may be reasonably necessary to carry
out the purposes of this Agreement. Unless hereafter specified, neither party shall be responsible
for the service of the other.
01203.0007/389505.1 -2-3
1.8 Additional Services.
City shall have the right at any time during the performance of the services, without
invalidating this Agreement, to order extra work beyond that specified in the Scope of Services
or make changes by altering, adding to or deducting from said work. No such extra work may be
undertaken unless a written order is first given by the Contract Officer to the Consultant,
incorporating therein any adjustment in (i) the Contract Sum for the actual costs of the extra
work, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the
written approval of the Consultant. Any increase in compensation of up to ten percent (10%) of
the Contract Sum or $25,000, whichever is less; or, in the time to perform of up to one hundred
eighty (180) days, may be approved by the Contract Officer. Any greater increases, taken either
separately or cumulatively, must be approved by the City Council. It is expressly understood by
Consultant that the provisions of this Section shall not apply to services specifically set forth in
the Scope of Services. Consultant hereby acknowledges that it accepts the risk that the services
to be provided pursuant to the Scope of Services may be more costly or time consuming than
Consultant anticipates and that Consultant shall not be entitled to additional compensation
therefor. City may in its sole and absolute discretion have similar work done by other
contractors. No claims for an increase in the Contract Sum or time for performance shall be
valid unless the procedures established in this Section are followed.
1.9 Special Requirements.
Additional terms and conditions of this Agreement, if any, which are made a part hereof
are set forth in the "Special Requirements" attached hereto as Exhibit `B" and incorporated
herein by this reference. In the event of a conflict between the provisions of Exhibit `B" and any
other provisions of this Agreement, the provisions of Exhibit `B" shall govern.
ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT.
2.1 Contract Sum.
Subject to any limitations set forth in this Agreement, City agrees to pay Consultant the
amounts specified in the "Schedule of Compensation" attached hereto as Exhibit "C" and
incorporated herein by this reference. The total compensation, including reimbursement for
actual expenses, shall not exceed n/a (See Exhibit "C")_ (the "Contract Sum"), unless
additional compensation is approved pursuant to Section 1.8.
2.2 Method of Compensation.
The method of compensation may include: (i) a lump sum payment upon completion; (ii)
payment in accordance with specified tasks or the percentage of completion of the services, less
contract retention; (iii) payment for time and materials based upon the Consultant's rates as
specified in the Schedule of Compensation, provided that (a) time estimates are provided for the
performance of sub tasks, (b) contract retention is maintained, and (c) the Contract Sum is not
exceeded; or (iv) such other methods as may be specified in the Schedule of Compensation.
2.3 Reimbursable Expenses.
Compensation may include reimbursement for actual and necessary expenditures for
reproduction costs, telephone expenses, and travel expenses approved by the Contract Officer in
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advance, or actual subcontractor expenses of an approved subcontractor pursuant to Section 4.5,
and only if specified in the Schedule of Compensation. The Contract Sum shall include the
attendance of Consultant at all project meetings reasonably deemed necessary by the City.
Coordination of the performance of the work with City is a critical component of the services. If
Consultant is required to attend additional meetings to facilitate such coordination, Consultant
shall not be entitled to any additional compensation for attending said meetings.
2.4 Invoices.
Each month Consultant shall furnish to City an original invoice for all work performed
and expenses incurred during the preceding month in a form approved by City's Director of
Finance. By submitting an invoice for payment under this Agreement, Consultant is certifying
compliance with all provisions of the Agreement. The invoice shall detail charges for all
necessary and actual expenses by the following categories: labor (by sub -category), travel,
materials, equipment, supplies, and sub -contractor contracts. Sub -contractor charges shall also
be detailed by such categories. Consultant shall not invoice City for any duplicate services
performed by more than one person.
City shall independently review each invoice submitted by the Consultant to determine
whether the work performed and expenses incurred are in compliance with the provisions of this
Agreement. Except as to any charges for work performed or expenses incurred by Consultant
which are disputed by City, or as provided in Section 7.3, City will use its best efforts to cause
Consultant to be paid within forty-five (45) days of receipt of Consultant's correct and
undisputed invoice; however, Consultant acknowledges and agrees that due to City warrant run
procedures, the City cannot guarantee that payment will occur within this time period. In the
event any charges or expenses are disputed by City, the original invoice shall be returned by City
to Consultant for correction and resubmission. Review and payment by City for any invoice
provided by the Consultant shall not constitute a waiver of any rights or remedies provided
herein or any applicable law.
2.5 Waiver.
Payment to Consultant for work performed pursuant to this Agreement shall not be
deemed to waive any defects in work performed by Consultant.
ARTICLE 3. PERFORMANCE SCHEDULE
3.1 Time of Essence.
Time is of the essence in the performance of this Agreement.
3.2 Schedule of Performance.
Consultant shall commence the services pursuant to this Agreement upon receipt of a
written notice to proceed and shall perform all services within the time period(s) established in
the "Schedule of Performance" attached hereto as Exhibit "D" and incorporated herein by this
reference. When requested by the Consultant, extensions to the time period(s) specified in the
Schedule of Performance may be approved in writing by the Contract Officer but not exceeding
one hundred eighty (180) days cumulatively.
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3.3 Force Majeure.
The time period(s) specified in the Schedule of Performance for performance of the
services rendered pursuant to this Agreement shall be extended because of any delays due to
unforeseeable causes beyond the control and without the fault or negligence of the Consultant,
including, but not restricted to, acts of God or of the public enemy, unusually severe weather,
fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes,
wars, litigation, and/or acts of any governmental agency, including the City, if the Consultant
shall within ten (10) days of the commencement of such delay notify the Contract Officer in
writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of
delay, and extend the time for performing the services for the period of the enforced delay when
and if in the judgment of the Contract Officer such delay is justified. The Contract Officer's
determination shall be final and conclusive upon the parties to this Agreement. In no event shall
Consultant be entitled to recover damages against the City for any delay in the performance of
this Agreement, however caused, Consultant's sole remedy being extension of the Agreement
pursuant to this Section.
3.4 Term.
Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement
shall continue in full force and effect until completion of the services but not exceeding one (1)
years from the date hereof, except as otherwise provided in the Schedule of Performance (Exhibit
«D„
ARTICLE 4. COORDINATION OF WORK
4.1 Representatives and Personnel of Consultant.
The following principals of Consultant ("Principals") are hereby designated as being the
principals and representatives of Consultant authorized to act in its behalf with respect to the
work specified herein and make all decisions in connection therewith:
Robin Sturvidant Princi
(Name) (Title)
Howard Longballa Principal
(Name) (Title)
Tom Bachman
(Name) (Title)
Principal
It is expressly understood that the experience, knowledge, capability and reputation of the
foregoing principals were a substantial inducement for City to enter into this Agreement.
Therefore, the foregoing principals shall be responsible during the term of this Agreement for
directing all activities of Consultant and devoting sufficient time to personally supervise the
services hereunder. All personnel of Consultant, and any authorized agents, shall at all times be
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under the exclusive direction and control of the Principals. For purposes of this Agreement, the
foregoing Principals may not be replaced nor may their responsibilities be substantially reduced
by Consultant without the express written approval of City. Additionally, Consultant shall utilize
only competent personnel to perform services pursuant to this Agreement. Consultant shall make
every reasonable effort to maintain the stability and continuity of Consultant's staff and
subcontractors, if any, assigned to perform the services required under this Agreement.
Consultant shall notify City of any changes in Consultant's staff and subcontractors, if any,
assigned to perform the services required under this Agreement, prior to and during any such
performance.
4.2 Status of Consultant.
Consultant shall have no authority to bind City in any manner, or to incur any obligation,
debt or liability of any kind on behalf of or against City, whether by contract or otherwise, unless
such authority is expressly conferred under this Agreement or is otherwise expressly conferred in
writing by City. Consultant shall not at any time or in any manner represent that Consultant or
any of Consultant's officers, employees, or agents are in any manner officials, officers,
employees or agents of City. Neither Consultant, nor any of Consultant's officers, employees or
agents, shall obtain any rights to retirement, health care or any other benefits which may
otherwise accrue to City's employees. Consultant expressly waives any claim Consultant may
have to any such rights.
4.3 Contract Officer.
The Contract Officer shall be the City's Director of Finance or such person as may be
designated by the City Manager. It shall be the Consultant's responsibility to assure that the
Contract Officer is kept informed of the progress of the performance of the services and the
Consultant shall refer any decisions which must be made by City to the Contract Officer. Unless
otherwise specified herein, any approval of City required hereunder shall mean the approval of
the Contract Officer. The Contract Officer shall have authority, if specified in writing by the City
Manager, to sign all documents on behalf of the City required hereunder to carry out the terms of
this Agreement.
4.4 Independent Consultant.
Neither the City nor any of its employees shall have any control over the manner, mode or
means by which Consultant, its agents or employees, perform the services required herein, except
as otherwise set forth herein. City shall have no voice in the selection, discharge, supervision or
control of Consultant's employees, servants, representatives or agents, or in fixing their number,
compensation or hours of service. Consultant shall perform all services required herein as an
independent contractor of City and shall remain at all times as to City a wholly independent
contractor with only such obligations as are consistent with that role. Consultant shall not at any
time or in any manner represent that it or any of its agents or employees are agents or employees
of City. City shall not in any way or for any purpose become or be deemed to be a partner of
Consultant in its business or otherwise or a joint venturer or a member of any joint enterprise
with Consultant.
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4.5 Prohibition Against Subcontracting or Assignment.
The experience, knowledge, capability and reputation of Consultant, its principals and
employees were a substantial inducement for the City to enter into this Agreement. Therefore,
Consultant shall not contract with any other entity to perform in whole or in part the services
required hereunder without the express written approval of the City. In addition, neither this
Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or
encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise,
without the prior written approval of City. Transfers restricted hereunder shall include the
transfer to any person or group of persons acting in concert of more than twenty five percent
(25%) of the present ownership and/or control of Consultant, taking all transfers into account on
a cumulative basis. In the event of any such unapproved transfer, including any bankruptcy
proceeding, this Agreement shall be void. No approved transfer shall release the Consultant or
any surety of Consultant of any liability hereunder without the express consent of City.
ARTICLE 5. INSURANCE AND INDEMNIFICATION
5.1 Insurance Coverages.
The Consultant shall procure and maintain, at its sole cost and expense, in a form and
content satisfactory to City, during the entire term of this Agreement including any extension
thereof, the following policies of insurance which shall cover all elected and appointed officers,
employees and agents of City:
(a) Commercial General Liability Insurance (Occurrence Form CG0001 or
e uivalent). A policy of comprehensive general liability insurance written on a per occurrence
basis for bodily injury, personal injury and property damage. The policy of insurance shall be in
an amount not less than $1,000,000.00 per occurrence or if a general aggregate limit is used,
then the general aggregate limit shall be twice the occurrence limit.
(b) Worker's Compensation Insurance. A policy of worker's compensation
insurance in such amount as will fully comply with the laws of the State of California and which
shall indemnify, insure and provide legal defense for the Consultant against any loss, claim or
damage arising from any injuries or occupational diseases occurring to any worker employed by
or any persons retained by the Consultant in the course of carrying out the work or services
contemplated in this Agreement.
(c) Automotive Insurance (Form CA 0001 (Ed 1/87,) including "any auto" and
endorsement CA 0025 or equivalent). A policy of comprehensive automobile liability insurance
written on a per occurrence for bodily injury and property damage in an amount not less than
$1,000,000. Said policy shall include coverage for owned, non -owned, leased, hired cars and any
automobile.
(d) Professional Liability. Professional liability insurance appropriate to the
Consultant's profession. This coverage may be written on a "claims made" basis, and must
include coverage for contractual liability. The professional liability insurance required by this
Agreement must be endorsed to be applicable to claims based upon, arising out of or related to
services performed under this Agreement. The insurance must be maintained for at least 5
consecutive years following the completion of Consultant's services or the termination of this
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Agreement. During this additional 5 -year period, Consultant shall annually and upon request of
the City submit written evidence of this continuous coverage.
(e) Subcontractors. Consultant shall include all subcontractors as insureds
under its policies or shall furnish separate certificates and certified endorsements for each
subcontractor. All coverages for subcontractors shall include all of the requirements stated
herein.
(f) Additional Insurance. Policies of such other insurance, as may be required
in the Special Requirements in Exhibit `B".
5.2 General Insurance Requirements.
All of the above policies of insurance shall be primary insurance and shall name the City,
its elected and appointed officers, employees and agents as additional insureds and any insurance
maintained by City or its officers, employees or agents may apply in excess of, and not
contribute with Consultant's insurance. The insurer is deemed hereof to waive all rights of
subrogation and contribution it may have against the City, its officers, employees and agents and
their respective insurers. Moreover, the insurance policy must specify that where the primary
insured does not satisfy the self-insured retention, any additional insured may satisfy the self-
insured retention.
All of said policies of insurance shall provide that said insurance may not be amended or
cancelled by the insurer or any party hereto without providing thirty (30) days prior written notice
by certified mail return receipt requested to the City. In the event any of said policies of
insurance are cancelled, the Consultant shall, prior to the cancellation date, submit new evidence
of insurance in conformance with Section 5.1 to the Contract Officer.
No work or services under this Agreement shall commence until the Consultant has
provided the City with Certificates of Insurance, additional insured endorsement forms or
appropriate insurance binders evidencing the above insurance coverages and said Certificates of
Insurance or binders are approved by the City. City reserves the right to inspect complete,
certified copies of and endorsements to all required insurance policies at any time. Any failure to
comply with the reporting or other provisions of the policies including breaches or warranties
shall not affect coverage provided to City.
All certificates shall name the City as additional insured (providing the appropriate
endorsement) and shall conform to the following "cancellation" notice:
CANCELLATION:
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATED THEREOF, THE ISSUING COMPANY SHALL MAIL
THIRTY (30) -DAY ADVANCE WRITTEN NOTICE TO CERTIFICATE HOLDER
NAMED HEREIN.
[to be initialed]
Consultant Initials
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City, its respective elected and appointed officers, directors, officials, employees, agents
and volunteers are to be covered as additional insureds as respects: liability arising out of
activities Consultant performs; products and completed operations of Consultant; premises
owned, occupied or used by Consultant; or any automobiles owned, leased, hired or borrowed by
Consultant. The coverage shall contain no special limitations on the scope of protection afforded
to City, and their respective elected and appointed officers, officials, employees or volunteers.
Consultant's insurance shall apply separately to each insured against whom claim is made or suit
is brought, except with respect to the limits of the insurer's liability.
Any deductibles or self-insured retentions must be declared to and approved by City. At
the option of City, either the insurer shall reduce or eliminate such deductibles or self-insured
retentions as respects City or its respective elected or appointed officers, officials, employees and
volunteers or the Consultant shall procure a bond guaranteeing payment of losses and related
investigations, claim administration, defense expenses and claims. The Consultant agrees that
the requirement to provide insurance shall not be construed as limiting in any way the extent to
which the Consultant may be held responsible for the payment of damages to any persons or
property resulting from the Consultant's activities or the activities of any person or persons for
which the Consultant is otherwise responsible nor shall it limit the Consultant's indemnification
liabilities as provided in Section 5.3.
In the event the Consultant subcontracts any portion of the work in compliance with
Section 4.5 of this Agreement, the contract between the Consultant and such subcontractor shall
require the subcontractor to maintain the same policies of insurance that the Consultant is
required to maintain pursuant to Section 5.1, and such certificates and endorsements shall be
provided to City.
5.3 Indemnification.
To the full extent permitted by law, Consultant agrees to indemnify, defend and hold
harmless the City, its officers, employees and agents ("Indemnified Parties") against, and will
hold and save them and each of them harmless from, any and all actions, either judicial,
administrative, arbitration or regulatory claims, damages to persons or property, losses, costs,
penalties, obligations, errors, omissions or liabilities whether actual or threatened (herein "claims
or liabilities") that may be asserted or claimed by any person, firm or entity arising out of or in
connection with the negligent performance of the work, operations or activities provided herein
of Consultant, its officers, employees, agents, subcontractors, or invitees, or any individual or
entity for which Consultant is legally liable ("indemnitors"), or arising from Consultant's or
indemnitors' reckless or willful misconduct, or arising from Consultant's or indemnitors'
negligent performance of or failure to perform any term, provision, covenant or condition of this
Agreement, and in connection therewith:
(a) Consultant will defend any action or actions filed in connection with any
of said claims or liabilities and will pay all costs and expenses, including legal costs and
attorneys' fees incurred in connection therewith;
(b) Consultant will promptly pay any judgment rendered against the City, its
officers, agents or employees for any such claims or liabilities arising out of or in connection
with the negligent performance of or failure to perform such work, operations or activities of
01203.0007/389505.1
-9- B-10
Consultant hereunder; and Consultant agrees to save and hold the City, its officers, agents, and
employees harmless therefrom;
(c) In the event the City, its officers, agents or employees is made a party to
any action or proceeding filed or prosecuted against Consultant for such damages or other claims
arising out of or in connection with the negligent performance of or failure to perform the work,
operation or activities of Consultant hereunder, Consultant agrees to pay to the City, its officers,
agents or employees, any and all costs and expenses incurred by the City, its officers, agents or
employees in such action or proceeding, including but not limited to, legal costs and attorneys'
fees.
Consultant shall incorporate similar indemnity agreements with its subcontractors and if
it fails to do so Consultant shall be fully responsible to indemnify City hereunder therefore, and
failure of City to monitor compliance with these provisions shall not be a waiver hereof. This
indemnification includes claims or liabilities arising from any negligent or wrongful act, error or
omission, or reckless or willful misconduct of Consultant in the performance of professional
services hereunder. The provisions of this Section do not apply to claims or liabilities occurring
as a result of City's sole negligence or willful acts or omissions, but, to the fullest extent
permitted by law, shall apply to claims and liabilities resulting in part from City's negligence,
except that design professionals' indemnity hereunder shall be limited to claims and liabilities
arising out of the negligence, recklessness or willful misconduct of the design professional. The
indemnity obligation shall be binding on successors and assigns of Consultant and shall survive
termination of this Agreement.
5.4 Sufficiency of Insurer.
Insurance required by this Agreement shall be satisfactory only if issued by companies
qualified to do business in California, rated "A" or better in the most recent edition of Best
Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial
category Class VII or better, unless such requirements are waived by the Risk Manager of the
City ("Risk Manager") due to unique circumstances. If this Agreement continues for more than 3
years duration, or in the event the risk manager determines that the work or services to be
performed under this Agreement creates an increased or decreased risk of loss to the City, the
Consultant agrees that the minimum limits of the insurance policies may be changed accordingly
upon receipt of written notice from the Risk Manager.
ARTICLE 6. RECORDS, REPORTS, AND RELEASE OF INFORMATION
6.1 Records.
Consultant shall keep, and require subcontractors to keep, such ledgers, books of
accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the
disbursements charged to City and services performed hereunder (the "books and records"), as
shall be necessary to perform the services required by this Agreement and enable the Contract
Officer to evaluate the performance of such services. Any and all such documents shall be
maintained in accordance with generally accepted accounting principles and shall be complete
and detailed. The Contract Officer shall have full and free access to such books and records at all
times during normal business hours of City, including the right to inspect, copy, audit and make
records and transcripts from such records. Such records shall be maintained for a period of three
01203.0007/389505.1 -10- B-11
(3) years following completion of the services hereunder, and the City shall have access to such
records in the event any audit is required. In the event of dissolution of Consultant's business,
custody of the books and records may be given to City, and access shall be provided by
Consultant's successor in interest. Notwithstanding the above, the Consultant shall fully
cooperate with the City in providing access to the books and records if a public records request is
made and disclosure is required by law including but not limited to the California Public Records
Act.
6.2 Reports.
Consultant shall periodically prepare and submit to the Contract Officer such reports
concerning the performance of the services required by this Agreement as the Contract Officer
shall require. Consultant hereby acknowledges that the City is greatly concerned about the cost
of work and services to be performed pursuant to this Agreement. For this reason, Consultant
agrees that if Consultant becomes aware of any facts, circumstances, techniques, or events that
may or will materially increase or decrease the cost of the work or services contemplated herein
or, if Consultant is providing design services, the cost of the project being designed, Consultant
shall promptly notify the Contract Officer of said fact, circumstance, technique or event and the
estimated increased or decreased cost related thereto and, if Consultant is providing design
services, the estimated increased or decreased cost estimate for the project being designed.
6.3 Ownership of Documents.
All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes,
computer files, reports, records, documents and other materials (the "documents and materials")
prepared by Consultant, its employees, subcontractors and agents in the performance of this
Agreement shall be the property of City and shall be delivered to City upon request of the
Contract Officer or upon the termination of this Agreement, and Consultant shall have no claim
for further employment or additional compensation as a result of the exercise by City of its full
rights of ownership use, reuse, or assignment of the documents and materials hereunder. Any
use, reuse or assignment of such completed documents for other projects and/or use of
uncompleted documents without specific written authorization by the Consultant will be at the
City's sole risk and without liability to Consultant, and Consultant's guarantee and warranties
shall not extend to such use, reuse or assignment. Consultant may retain copies of such
documents for its own use. Consultant shall have the right to use the concepts embodied therein.
All subcontractors shall provide for assignment to City of any documents or materials prepared
by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify
City for all damages resulting therefrom. Moreover, Consultant with respect to any documents
and materials that may qualify as "works made for hire" as defined in 17 U.S.C. § 101, such
documents and materials are hereby deemed "works made for hire" for the City.
6.4 Confidentiality and Release of Information.
(a) All information gained or work product produced by Consultant
in performance of this Agreement shall be considered confidential, unless such information is in
the public domain or already known to Consultant. Consultant shall not release or disclose any
such information or work product to persons or entities other than City without prior written
authorization from the Contract Officer.
01203.0007/389505.1 -11- B-12
(b) Consultant, its officers, employees, agents or subcontractors,
shall not, without prior written authorization from the Contract Officer or unless requested by the
City Attorney, voluntarily provide documents, declarations, letters of support, testimony at
depositions, response to interrogatories or other information concerning the work performed
under this Agreement. Response to a subpoena or court order shall not be considered "voluntary"
provided Consultant gives City notice of such court order or subpoena.
(c) If Consultant, or any officer, employee, agent or subcontractor of
Consultant, provides any information or work product in violation of this Agreement, then City
shall have the right to reimbursement and indemnity from Consultant for any damages, costs and
fees, including attorneys fees, caused by or incurred as a result of Consultant's conduct.
(d) Consultant shall promptly notify City should Consultant, its
officers, employees, agents or subcontractors be served with any summons, complaint, subpoena,
notice of deposition, request for documents, interrogatories, request for admissions or other
discovery request, court order or subpoena from any party regarding this Agreement and the work
performed there under. City retains the right, but has no obligation, to represent Consultant or be
present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully
with City and to provide City with the opportunity to review any response to discovery requests
provided by Consultant. However, this right to review any such response does not imply or mean
the right by City to control, direct, or rewrite said response.
ARTICLE 7. ENFORCEMENT OF AGREEMENT AND TERMINATION
7.1 California Law.
This Agreement shall be interpreted, construed and governed both as to validity and to
performance of the parties in accordance with the laws of the State of California. Legal actions
concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be
instituted in the Superior Court of the County of Los Angeles, State of California, or any other
appropriate court in such county, and Consultant covenants and agrees to submit to the personal
jurisdiction of such court in the event of such action. In the event of litigation in a U.S. District
Court, venue shall lie exclusively in the Central District of California, in the County of Los
Angeles, State of California.
7.2 Disputes; Default.
In the event that Consultant is in default under the terms of this Agreement, the City shall
not have any obligation or duty to continue compensating Consultant for any work performed
after the date of default. Instead, the City may give notice to Consultant of the default and the
reasons for the default. The notice shall include the timeframe in which Consultant may cure the
default. This timeframe is presumptively thirty (30) days, but may be extended, though not
reduced, if circumstances warrant. During the period of time that Consultant is in default, the
City shall hold all invoices and shall, when the default is cured, proceed with payment on the
invoices. In the alternative, the City may, in its sole discretion, elect to pay some or all of the
outstanding invoices during the period of default. If Consultant does not cure the default, the
City may take necessary steps to terminate this Agreement under this Article. Any failure on the
part of the City to give notice of the Consultant's default shall not be deemed to result in a waiver
of the City's legal rights or any rights arising out of any provision of this Agreement.
01203.0007/389505.1 -12- B-13
7.3 Retention of Funds.
Consultant hereby authorizes City to deduct from any amount payable to Consultant
(whether or not arising out of this Agreement) (i) any amounts the payment of which may be in
dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or
damages suffered by City, and (ii) all amounts for which City may be liable to third parties, by
reason of Consultant's acts or omissions in performing or failing to perform Consultant's
obligation under this Agreement. In the event that any claim is made by a third party, the amount
or validity of which is disputed by Consultant, or any indebtedness shall exist which shall appear
to be the basis for a claim of lien, City may withhold from any payment due, without liability for
interest because of such withholding, an amount sufficient to cover such claim. The failure of
City to exercise such right to deduct or to withhold shall not, however, affect the obligations of
the Consultant to insure, indemnify, and protect City as elsewhere provided herein.
7.4 Waiver.
Waiver by any party to this Agreement of any term, condition, or covenant of this
Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by
any party of any breach of the provisions of this Agreement shall not constitute a waiver of any
other provision or a waiver of any subsequent breach or violation of any provision of this
Agreement. Acceptance by City of any work or services by Consultant shall not constitute a
waiver of any of the provisions of this Agreement. No delay or omission in the exercise of any
right or remedy by a non -defaulting party on any default shall impair such right or remedy or be
construed as a waiver. Any waiver by either party of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provision of this Agreement.
7.5 Rights and Remedies are Cumulative.
Except with respect to rights and remedies expressly declared to be exclusive in this
Agreement, the rights and remedies of the parties are cumulative and the exercise by either party
of one or more of such rights or remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the
other party.
7.6 Legal Action.
In addition to any other rights or remedies, either party may take legal action, in law or in
equity, to cure, correct or remedy any default, to recover damages for any default, to compel
specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain
any other remedy consistent with the purposes of this Agreement. Notwithstanding any contrary
provision herein, Consultant shall file a statutory claim pursuant to Government Code Sections
905 et seq. and 910 et seq., in order to pursue a legal action under this Agreement.
7.7 Termination Prior to Expiration of Term.
This Section shall govern any termination of this Contract except as specifically provided
in the following Section for termination for cause. The City reserves the right to terminate this
Contract at any time, with or without cause, upon thirty (30) days' written notice to Consultant,
except that where termination is due to the fault of the Consultant, the period of notice may be
such shorter time as may be determined by the Contract Officer. In addition, the Consultant
01203.0007/389505.1 - 13 - B-14
reserves the right to terminate this Contract at any time, with or without cause, upon sixty (60)
days' written notice to City, except that where termination is due to the fault of the City, the
period of notice may be such shorter time as the Consultant may determine. Upon receipt of any
notice of termination, Consultant shall immediately cease all services hereunder except such as
may be specifically approved by the Contract Officer. Except where the Consultant has initiated
termination, the Consultant shall be entitled to compensation for all services rendered prior to the
effective date of the notice of termination and for any services authorized by the Contract Officer
thereafter in accordance with the Schedule of Compensation or such as may be approved by the
Contract Officer, except as provided in Section 7.3. In the event the Consultant has initiated
termination, the Consultant shall be entitled to compensation only for the reasonable value of the
work product actually produced hereunder. In the event of termination without cause pursuant to
this Section, the terminating party need not provide the non -terminating party with the
opportunity to cure pursuant to Section 7.2.
7.8 Termination for Default of Consultant.
If termination is due to the failure of the Consultant to fulfill its obligations under this
Agreement, City may, after compliance with the provisions of Section 7.2, take over the work
and prosecute the same to completion by contract or otherwise, and the Consultant shall be liable
to the extent that the total cost for completion of the services required hereunder exceeds the
compensation herein stipulated (provided that the City shall use reasonable efforts to mitigate
such damages), and City may withhold any payments to the Consultant for the purpose of set-off
or partial payment of the amounts owed the City as previously stated.
7.9 Attorneys' Fees.
If either party to this Agreement is required to initiate or defend or made a party to any
action or proceeding in any way connected with this Agreement, the prevailing party in such
action or proceeding, in addition to any other relief which may be granted, whether legal or
equitable, shall be entitled to reasonable attorney's fees. Attorney's fees shall include attorney's
fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other
reasonable costs for investigating such action, taking depositions and discovery and all other
necessary costs the court allows which are incurred in such litigation. All such fees shall be
deemed to have accrued on commencement of such action and shall be enforceable whether or
not such action is prosecuted to judgment.
ARTICLE 8. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION
8.1 Non -liability of City Officers and Employees.
No officer or employee of the City shall be personally liable to the Consultant, or any
successor in interest, in the event of any default or breach by the City or for any amount which
may become due to the Consultant or to its successor, or for breach of any obligation of the terms
of this Agreement.
8.2 Conflict of Interest.
Consultant covenants that neither it, nor any officer or principal of its firm, has or shall
acquire any interest, directly or indirectly, which would conflict in any manner with the interests
of City or which would in any way hinder Consultant's performance of services under this
01203.0007/389505.1 -14- B-15
Agreement. Consultant further covenants that in the performance of this Agreement, no person
having any such interest shall be employed by it as an officer, employee, agent or subcontractor
without the express written consent of the Contract Officer. Consultant agrees to at all times
avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City
in the performance of this Agreement.
No officer or employee of the City shall have any financial interest, direct or indirect, in
this Agreement nor shall any such officer or employee participate in any decision relating to the
Agreement which affects her/his financial interest or the financial interest of any corporation,
partnership or association in which (s)he is, directly or indirectly, interested, in violation of any
State statute or regulation. The Consultant warrants that it has not paid or given and will not pay
or give any third party any money or other consideration for obtaining this Agreement.
8.3 Covenant Against Discrimination.
Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons
claiming under or through them, that there shall be no discrimination against or segregation of,
any person or group of persons on account of race, color, creed, religion, sex, gender, sexual
orientation, marital status, national origin, ancestry or other protected class in the performance of
this Agreement. Consultant shall take affirmative action to insure that applicants are employed
and that employees are treated during employment without regard to their race, color, creed,
religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other
protected class.
8.4 Unauthorized Aliens.
Consultant hereby promises and agrees to comply with all of the provisions of the Federal
Immigration and Nationality Act, 8 U.S.C.A. §§ 1101, et seq., as amended, and in connection
therewith, shall not employ unauthorized aliens as defined therein. Should Consultant so employ
such unauthorized aliens for the performance of work and/or services covered by this Agreement,
and should any liability or sanctions be imposed against City for such use of unauthorized aliens,
Consultant hereby agrees to and shall reimburse City for the cost of all such liabilities or
sanctions imposed, together with any and all costs, including attorneys' fees, incurred by City.
ARTICLE 9. MISCELLANEOUS PROVISIONS
9.1 Notices.
Any notice, demand, request, document, consent, approval, or communication either party
desires or is required to give to the other party or any other person shall be in writing and either
served personally or sent by prepaid, first-class mail, in the case of the City, to the City Manager
and to the attention of the Contract Officer (with her/his name and City title), City of Rancho Palos
Verdes, 30940 Hawthorne Blvd., California 90275 and in the case of the Consultant, to the person(s)
at the address designated on the execution page of this Agreement. Either party may change its
address by notifying the other party of the change of address in writing. Notice shall be deemed
communicated at the time personally delivered or in seventy-two (72) hours from the time of
mailing if mailed as provided in this Section.
-15- B-16
01203.0007/389505.1
9.2 Interpretation.
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the authorship of
this Agreement or any other rule of construction which might otherwise apply.
9.3 Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed to be an
original, and such counterparts shall constitute one and the same instrument.
9.4 Integration; Amendment.
This Agreement including the attachments hereto is the entire, complete and exclusive
expression of the understanding of the parties. It is understood that there are no oral agreements
between the parties hereto affecting this Agreement and this Agreement supersedes and cancels
any and all previous negotiations, arrangements, agreements and understandings, if any, between
the parties, and none shall be used to interpret this Agreement. No amendment to or
modification of this Agreement shall be valid unless made in writing and approved by the
Consultant and by the City Council. The parties agree that this requirement for written
modifications cannot be waived and that any attempted waiver shall be void.
9.5 Severability.
In the event that any one or more of the phrases, sentences, clauses, paragraphs, or
sections contained in this Agreement shall be declared invalid or unenforceable by a valid
judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall
not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this
Agreement which are hereby declared as severable and shall be interpreted to carry out the intent
of the parties hereunder unless the invalid provision is so material that its invalidity deprives
either party of the basic benefit of their bargain or renders this Agreement meaningless.
9.6 Warranty & Representation of Non -Collusion.
No official, officer, or employee of City has any financial interest, direct or indirect, in
this Agreement, nor shall any official, officer, or employee of City participate in any decision
relating to this Agreement which may affect his/her financial interest or the financial interest of
any corporation, partnership, or association in which (s)he is directly or indirectly interested, or
in violation of any corporation, partnership, or association in which (s)he is directly or indirectly
interested, or in violation of any State or municipal statute or regulation. The determination of
"financial interest" shall be consistent with State law and shall not include interests found to be
"remote" or "noninterests" pursuant to Government Code Sections 1091 or 1091.5. Consultant
warrants and represents that it has not paid or given, and will not pay or give, to any third party
including, but not limited to, any City official, officer, or employee, any money, consideration, or
other thing of value as a result or consequence of obtaining or being awarded any agreement.
Consultant further warrants and represents that (s)he/it has not engaged in any act(s),
omission(s), or other conduct or collusion that would result in the payment of any money,
consideration, or other thing of value to any third party including, but not limited to, any City
official, officer, or employee, as a result of consequence of obtaining or being awarded any
agreement. Consultant is aware of and understands that any such act(s), omission(s) or other
01203.0007/389505.1 -16- B-17
conduct resulting in such payment of money, consideration, or other thing of value will render
this Agreement void and of no force or effect.
Consultant's Authorized Initials
9.7 Corporate Authority.
The persons executing this Agreement on behalf of the parties hereto warrant that (i) such
party is duly organized and existing, (ii) they are duly authorized to execute and deliver this
Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally
bound to the provisions of this Agreement, and (iv) that entering into this Agreement does not
violate any provision of any other Agreement to which said party is bound. This Agreement shall
be binding upon the heirs, executors, administrators, successors and assigns of the parties.
[SIGNATURES ON FOLLOWING PAGE]
-17- B_18
01203.0007/389505.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first -above written.
ATTEST:
Emily Colborn, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
David J. Aleshire, City Attorney
CITY:
CITY OF RANCHO PALOS VERDES
Brian Campbell, Mayor
CONSULTANT:
HINDERLITER, DE LLAMAS &
ASSOCIATES, a California
Lo
Name: Andrew Nickerson
Title: President
By:
Name:
Title:
Address: 1340 Valley Vista Drive
Suite 200
Diamond Bar, CA 91765
Two corporate officer signatures required when Consultant is a corporation, with one signature required
from each of the following groups: 1) Chairman of the Board, President or any Vice President; and 2)
Secretary, any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. CONSULTANT'S
SIGNATURES SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE
INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR
OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT'S BUSINESS ENTITY.
01203.0007/389505.1 -18- B-19
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On , 2017 before me, , personally appeared , proved to me on
the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
Signature:
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form
CAPACITY CLAIMED BY SIGNER
❑
INDIVIDUAL
❑
CORPORATE OFFICER
TITLE(S)
❑
PARTNER(S) ❑ LIMITED
❑ GENERAL
❑
ATTORNEY-IN-FACT
❑
TRUSTEE(S)
❑
GUARDIAN/CONSERVATOR
❑
OTHER
SIGNER
IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
01203.0007/389505.1
DESCRIPTION OF ATTACHED DOCUMENT
TITLE OR TYPE OF DOCUMENT
NUMBER OF PAGES
DATE OF DOCUMENT
SIGNER(S) OTHER THAN NAMED ABOVE
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On , 2017 before me, , personally appeared , proved to me on
the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
Signature:
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
❑
INDIVIDUAL
❑
CORPORATE OFFICER
TITLE(S)
❑
PARTNER(S) ❑ LIMITED
❑ GENERAL
❑
ATTORNEY-IN-FACT
❑
TRUSTEE(S)
❑
GUARDIAN/CONSERVATOR
❑
OTHER
SIGNER
IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
01203.0007/389505.1
DESCRIPTION OF ATTACHED DOCUMENT
TITLE OR TYPE OF DOCUMENT
NUMBER OF PAGES
DATE OF DOCUMENT
SIGNER(S) OTHER THAN NAMED ABOVE
B-21
EXHIBIT "A"
SCOPE OF SERVICES
I. Consultant will perform the following tasks ("Services"):
A. Sales Tax Database, Analyses, and Reporting:
01203.0007/389505.1
Consultant shall maintain a sales tax database that identifies the name,
seller's permit (issued by the California Board of Equalization ("BOE")),
address and all current and historical allocations of all sales tax producers
within the City for the most current and all quarters back to fiscal year
1991-1992, or earlier if the City or BOE has prior historical sales tax data
available ("Sales Tax Database"). The Sales Tax Database shall also
contain all of the City's archived Quarterly Sales Tax Reports and
Newsletters.
ii. Consultant shall prepare Quarterly Sales Tax Reports identifying, at
minimum: major sales tax producers in the City by rank and category;
Citywide sales tax activity by categories, industries, and business districts;
sales tax reporting aberrations; per capita, outlet, and industry comparisons
with regional and statewide sales; and changes in sales by individual
businesses, business groups and categories, and geographic areas. These
reports shall also include, at minimum: quarterly aberrations due to State
audits, fund transfers, receivables, late or double payments, reconciliation
worksheets, year-to-date receipts, and recommendations regarding the
economic and budget implications of the quarter's data.
iii. Consultant shall prepare quarterly analyses of the City's sales tax trends by
major groups, industries, and geographic areas information, including
comparisons to regional, county, and statewide markets, for the purpose of
public presentation to the City Council, Chamber of Commerce, or
interested groups and the public ("Newsletter"). These Newsletters shall
be in a format intended for presentation to any member of the public and
shall not include any confidential information.
iv. The Quarterly Sales Tax Reports and Newsletters shall be mailed to the
City quarterly.
v. Consultant shall provide to the City staff all training and technical
assistance on use of the Sales Tax Database software and upgrades as
necessary to insure unlimited access.
vi. As of the Effective Date of this Agreement, the City has not adopted a
transactions and use tax. Should the City adopt a transactions and use tax
B-22
measure in the future, the City may obtain the Sales Tax Database,
Analyses, and Reporting set forth in this Subsection A for the transactions
and use tax for the additional fee set forth in Subsection A of Section I of
Exhibit C provided that the City first adopt a separate resolution
authorizing Consultant's access to the confidential taxpayer data as
required by the California Revenue and Taxation Code.
B. Sales Tax Allocation Audit and Recovery Services: Consultant shall conduct
initial and on-going sales, use and transactions tax audits to identify, document,
and correct distribution and allocation errors that result in underpayments of tax
and lost revenue to the City or could result in lost revenue in the future.
("Allocation Audit"). Common errors that will be monitored and corrected
through use of the Allocation Audit include, but are not limited to: transposition
errors resulting in misallocations; erroneous consolidation of multiple outlets;
formula errors; misreporting of "point of sale" from the wrong location, as such
term is defined by the California Revenue and Taxation Code; delays in reporting
new outlets; misallocating use tax payments to the allocation pools or wrong
jurisdiction; and erroneous fund transfers and adjustments. The Allocation Audit
shall include the following techniques and programs:
01203.0007/389505.1
Field Surveys: Field inventories of the City's business and industrial areas
every 10-12 months to identify businesses located within the City that
appear to be under -reporting revenues or are not on the BOE's allocation
rolls. Consultant's field auditors, using mapping, GPS, and digital
recording technology, shall document the existence of sales tax producing
businesses, including their relevant factors such as size, presence of a large
stock of goods, will -call windows and any specific references to sales
activity.
ii. Tax Area Code ("TAC") Review: Consultant shall review every active
account on the BOE's allocation rolls reporting $50 or more in local tax to
ensure proper TAC assignment. Government and private sector mapping
and GIS databases shall be utilized for this process.
iii. Deviation Assessment: Every three months, Consultant shall apply
proprietary queries and analyses to Consultant's Sales Tax Database to
identify all accounts for which there has been a significant change in
allocation pattern.
iv. Use Tax Errors and Opportunities: Consultant shall analyze the use tax
allocation pools of the 58 counties and the state each quarter to identify
direct allocation opportunities of local use tax. This assessment shall
include, but is not limited to, identifying instances where a taxpayer may
have misidentified a transaction as use tax rather than sales tax.
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v. Regulation 1699 Evaluations: Consultant shall identify, document, and
correct instances where businesses should have, but did not, obtain permits
pursuant to Section 1699 of Title 18 of the California Code of Regulations,
as it shall be amended from time to time. These instances include, for
example, where wholesalers, contractors, processors, manufacturers, and
other non -retail businesses that do not normally sell merchandise but
conduct occasional sales, self -accrue use tax, or are levied deficiency
assessments by the state.
vi. Contact with Businesses Misallocating Revenue: Consultant shall initiate
contacts with state agencies, and sales management and accounting
officials in companies that have businesses where a probability of error
exists, to verify whether current tax receipts accurately reflect the local
sales activity. Such contacts will be conducted in a professional,
courteous manner, and non -intrusive manner.
vii. BOE Petitions: Consultant shall (i) prepare and submit petitions to the
BOE (BOE Form 549-S or 549-L) for the purpose of identifying and
correcting allocation errors and (ii) follow-up with individual businesses
and the BOE to promote recovery by the City of back or prospective
quarterly payments that may be owing. Copies of all petitions and
correspondence with the BOE and taxpayers shall be provided to the City.
If the BOE denies a petition, Consultant shall file and defend an appeal or
petition for redetermination to the BOE.
viii. Increase of Revenue Potential: If during the course of its Allocation Audit,
Consultant finds businesses located in the City that are properly reporting
sales and use tax but have the potential for modifying their operation to
provide an even greater share to the City, Consultant may so advise the
City and, if so authorized by the Contract Officer, work with those
businesses and the City to encourage such changes.
ix. Optional Transactions and Use Tax Audit: As of the Effective Date of this
Agreement, the City has not adopted a transactions and use tax. Should
the City adopt a transactions and use tax measure in the future, the City
may obtain the Sales Tax Allocation Audit and Recovery Services set forth
in this Subsection B for the transactions and use tax for the additional fee
set forth in Subsection B of Section I of Exhibit C provided that the City
first adopt a separate resolution authorizing Consultant's access to the
confidential taxpayer data as required by the California Revenue and
Taxation Code.
C. Consulting and Other Optional Services: Consultant may, only with prior
authorization from the Contract Officer, consult with the City, including without
limitation, regarding (i) technical questions and other issues related to special
01203.0007/389505.1
I
projects for sales, use and transactions tax; (ii) utilization of reports to enhance
business license collection efforts; and (iii) sales tax projections for proposed
annexations, economic development projects and budget planning. In addition to
the optional consulting services set forth in this Subsection C, Consultant may,
with prior authorization from the Contract Officer, perform other optional
Services, including without limitation, negotiating/review of tax sharing
agreements, establishing purchasing corporations, and meeting with taxpayers to
encourage self-assessment of use. The Services covered by this Subdivision (C)
shall not include any activities covered by Subsections (A) and (B) above.
Consultant shall obtain the Contract Officer's prior written authorization before
Consultant performs any services for which it may charge an hourly fee. The City
shall not be required to pay Consultant for any hourly services for which
Consultant did not obtain the Contract Officer's prior written authorization.
II. All work product is subject to review and acceptance by the City, and must be
revised by the Consultant without additional charge to the City until found
satisfactory and accepted by City.
V. City Access to Consultant's Database. The Contract Officer, or such other City staff
expressly authorized by the Contract Officer, shall have unlimited access to search and
generate and print reports from the Sales Tax Database described above in Section LA of
this Exhibit A. Consultant shall provide the Contract Officer a username and login to the
Sales Tax Database and such technical assistance and training as needed to allow for
access to all the information Consultant collects, generates, and maintains pursuant to
Section I of this Exhibit A.
The Sales Tax Database shall only be used by the Contract Officer and such other City
staff expressly authorized by the Contract Officer. The City shall not provide access to
any third party without explicit written authorization by Consultant. City shall not sublet,
duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the
source code of the Sales Tax Database. The database use granted hereunder shall not
imply ownership by City of said software, or any right of City to sell said software or the
use of same, or any right to use said software for the benefit of others. This software use
authorization is not transferable. Upon termination or expiration of this Agreement, the
software use authorization shall expire, and all City staff website logins shall be de-
activated.
VI. California Revenue and Taxation Code Section 7056. Section 7056 of the California
Revenue and Taxation Code specifically limits the disclosure and use of taxpayer
information contained in BOE records pertaining to the ascertainment of sales or
transactions and use taxes. Section 7056 specifies the conditions under which a City may
authorize persons other than City officers and employees to examine such information. In
recognition of Section 7056, as such section may be amended from time to time, the
following conditions are hereby incorporated into this Agreement:
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A. City shall adopt a resolution which meets the requirements of Section 7056,
subdivision (b)(1) of the California Revenue and Taxation Code. Said resolution
authorizes Consultant to examine all of the sales or transactions and use tax
records of the BOE pertaining to the ascertainment of those sales or transactions
and use taxes to be collected for the City by the BOE pursuant to contract under
the Bradley -Burns Uniform Local Sales and Use Tax Law (Rev. & Tax. Code §
7200, et seq.) or the Transactions and Use Tax Law (Rev. & Tax. Code § 7251).
B. Consultant is required to disclose information contained in, or derived from, those
sales or transactions and use tax records only to the Contract Officer, who is
authorized by resolution to examine the information.
C. Consultant is prohibited from performing consulting services for a retailer, as
defined in California Revenue and Taxation Code section 6015, during the term of
this Agreement.
D. Consultant is prohibited from retaining the information contained in, or derived
from, those sales or transactions and use tax records of the BOE after this
Agreement has expired. Consultant shall use the information it obtains by
examination of BOE records only for purposes related to collection of local sales
or transactions and use taxes by the BOE pursuant to this Agreement, or for
purposes related to other governmental functions of the City as set forth in the
resolution referenced above in this Subdivision A of this Section VII of Exhibit A.
VII. City Materials and Support.
A. City shall maintain Consultant's authorization per the resolution described above
in Section VI.A of this Exhibit A until such time as all audit adjustments have
been completed by the BOE and any audit fee owing to Consultant has been paid.
In the alternative, the City shall provide to Consultant copies of future allocation
reports until such time as all audit adjustments have been completed by the BOE
and any audit fee owing to Consultant has been paid.
B. City shall use its best efforts to provide to Consultant assistance or information to
facilitate performance of the Services, such as readily available business license
records and contact information for businesses within the City.
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EXHIBIT "B"
SPECIAL REQUIREMENTS
(Superseding Contract Boilerplate)
Section 1.2, "Consultant's Proposal," is deleted in its entirety.
Section 2.4, "Invoices," is hereby amended and shall now read as follows:
Each month quarter Consultant shall furnish to City an original invoice for all work
performed and expenses incurred during the preceding month quarter in a form approved by
City's Director of Finance. By submitting an invoice for payment under this Agreement,
Consultant is certifying compliance with all provisions of the Agreement. The invoice shall
detail charges for all necessary and actual expenses by the following categories: labor (by sub-
category), travel, materials, equipment, supplies, and sub -contractor contracts. Sub -contractor
charges shall also be detailed by such categories. Consultant shall not invoice City for any
duplicate services performed by more than one person.
In order to obtain the Audit Fee (defined below in Section I.B of Exhibit C), Consultant
shall also submit evidence in support of the Audit Fee set forth in each Invoice showing that the
increase in tax revenue is attributable to Consultant's work pursuant to this Agreement. Such
evidence includes, but is not limited to, the itemized revenues and formula calculations
constituting the basis for the Audit Fee, detailed listing of any corrected misallocation, and
copies of BOE petition forms or any other correspondence between Consultant and the BOE or
taxpayer. Each invoice shall include the name, address, and sales tax registration number of each
company, and the specific amount of revenue allocated by the BOE to the City for those
businesses.
City shall independently review each invoice submitted by the Consultant to determine
whether the work performed and expenses incurred are in compliance with the provisions of this
Agreement. Except as to any charges for work performed or expenses incurred by Consultant
which are disputed by City, or as provided in Section 7.3, City will use its best efforts to cause
Consultant to be paid within forty-five (45) days of receipt of Consultant's correct and
undisputed invoice; however, Consultant acknowledges and agrees that due to City warrant run
procedures, the City cannot guarantee that payment will occur within this time period. In the
event any charges or expenses are disputed by City, the original invoice shall be returned by City
to Consultant for correction and resubmission. Review and payment by City for any invoice
provided by the Consultant shall not constitute a waiver of any rights or remedies provided
herein or any applicable law.
Subdivision (d) of Section 5.1, "Insurance," is hereby amended and shall now read as
follows:
Professional Liability. Professional liability insurance in an amount not less than
$1,000,000 . This coverage may be written on a
"claims made" basis, and must include coverage for contractual liability. The professional
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liability insurance required by this Agreement must be endorsed to be applicable to claims based
upon, arising out of or related to services performed under this Agreement. The insurance must
be maintained for at least 5 consecutive years following the completion of Consultant's services
or the termination of this Agreement. During this additional 5 -year period, Consultant shall
annually and upon request of the City submit written evidence of this continuous coverage.
Section 6.3, "Ownership of Documents," is hereby amended and shall now read as follows:
All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes,
computer files, reports, records, documents and other materials (the "documents and materials")
prepared by Consultant, its employees, subcontractors and agents in the performance of this
Agreement shall be the property of City and shall be delivered to City upon request of the
Contract Officer or upon the termination of this Agreement, and Consultant shall have no claim
for further employment or additional compensation as a result of the exercise by City of its full
rights of ownership use, reuse, or assignment of the documents and materials hereunder. Any
use, reuse or assignment of such completed documents for other projects and/or use of
uncompleted documents without specific written authorization by the Consultant will be at the
City's sole risk and without liability to Consultant, and Consultant's guarantee and warranties
shall not extend to such use, reuse or assignment.
All subcontractors shall provide for assignment to City of any documents or materials prepared
by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify
City for all damages resulting therefrom. Moreover, Consultant with respect to any documents
and materials that may qualify as "works made for hire" as defined in 17 U.S.C. § 101, such
documents and materials are hereby deemed "works made for hire" for the City.
The City's ownership of the "documents and materials" described above shall not apply
to Consultant's "propriety information," which means for purposes of this Agreement all
information or material that has or could have commercial value or other utility in Consultant's
business, including without limitation: Consultant's (i) computer or data processing programs;
(ii) data processing applications, routines, subroutines, techniques or systems; desktop or web -
based software; (iii) business processes; (iv) marketing plans, analysis and strategies; and (v)
materials and techniques used. Except as otherwise required by law, City shall hold in
confidence and shall not use (except as expressly authorized by this Agreement) or disclose to
any other party any proprietary information provided, learned of or obtained by City in
connection with this Agreement. The obligations imposed by this paragraph shall survive any
expiration or termination of this Agreement or otherwise. The terms of this paragraph shall not
apply to any information that is public information. This paragraph also shall not alter or limit
the confidentiality and nondisclosure requirements set forth above in Section 6.4 or Section VI of
Exhibit A.
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EXHIBIT "C"
SCHEDULE OF COMPENSATION
I. Consultant shall perform the following tasks at the following rates, billed to the City
quarterly in arrears commencing with the month following the date of this
Agreement:
A. For the Services set forth above in Subdivision (A) of Section I of Exhibit A,
"Sales Tax Database, Analysis, and Reporting," City shall pay Consultant two
hundred dollars ($200) per month. This monthly fee shall include the training,
technical assistance, Quarterly Sales Tax Reports, and Newsletters set forth in
Subdivision (A) of Section I of Exhibit A. Quarterly Sales Tax Reports and
Newsletters will be mailed to the City. Should the City adopt a transactions and
use tax measure in the future and elect to obtain these Sales Tax Database,
Analysis, and Reporting services for that tax, the monthly fee shall be an
additional one hundred dollars ($100).
B. For the Services set forth in Subdivision (B) of Section I of Exhibit A, "Sales Tax
Allocation Audit and Recovery Services," City shall pay Consultant an amount
equal to fifteen percent (15%) of all new sales and use tax revenue received
by the City (including reimbursement from the sales and use tax
compensation fund outlined in Section 97.68 of the California Revenue and
Taxation Code) as a result of Consultant's Services, subject to proof ("Audit
Fee"). The Audit Fee shall be calculated from only those sales tax revenues
received by the City: (i) in excess of the sales tax revenues received in the prior
quarter; and (ii) as a result of and attributable to the Consultant's Services. For
instance, Consultant's Audit Fee shall not include revenue due to a new or
existing business reporting to the BOE or correcting misallocations on its own
initiative independent of Consultant's Services. Consultant shall have the burden
to prove and support, to the City's satisfaction, the Audit Fee and how it is
attributable to the Consultant's Services.
The Audit Fee applies to monies received in the first eight consecutive reporting
quarters beginning with the receipt of the audit revenue and includes retroactive
back quarter adjustments obtained by Consultant. The Audit Fee is all inclusive
for the work required to perform the Sales Tax Allocation Audit and Recovery
Services, including all direct and indirect costs, Consultant's employee salaries,
travel expenses, service contracting costs, and the Sales Tax Database software.
If a misallocation correction involves additional revenue from a company that had
already partially allocated revenues to the City, the City and Consultant shall
confer and agree, prior to submission of any invoice, the methodology for
identifying the revenue portion attributable to Consultant's Services.
01203.0007/389505.1
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Audit Fees are billed only after completion of the Allocation Audit, submittal of
petitions to the BOE, and receipt of revenues by the City. 100% of all new
revenue generated by Consultant flows to the City after completion of the eight
quarters. Invoices are submitted only for recoveries previously approved by the
City. Consultant shall not bill for audit revenues until the City has actually
received said monies. Further, if during the billing cycle, a taxpayer receives a
refund for overpayment of taxes generated during that cycle, Consultant credits
back any proportionate share of the fee that may have been levied.
Should the City adopt a transactions and use tax measure in the future and elect to
obtain these Sales Tax Allocation Audit and Recovery Services for that tax, the
Audit Fee shall be 25% of the retroactive adjustments resulting from Consultant's
Services. The Audit Fee pertaining to the transactions and use tax shall be subject
to the same requirements and limitations set forth above for the Audit Fee
pertaining to sales tax.
C. For the Services set forth in Subdivision (C) of Section I of Exhibit A,
"Consulting and Other Optional Services," City shall pay Consultant for the
authorized hours of work at the following hourly rates:
Principal $295/hour
Programmer $250/hour
Senior Analyst $195/hour
Analyst $100/hour
Except that in no event shall the City be invoiced for Consulting and Other
Optional Services totaling less than one (1) hour in any month.
IV. The City will compensate Consultant for the Services performed upon submission of
a valid invoice and all supporting documentation for the Audit Fee as set forth in
Section 2.4.
01203.0007/389505.1
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EXHIBIT "D"
SCHEDULE OF PERFORMANCE
I. Consultant shall perform all Services during the term of this Agreement which shall
not exceed three (3) years from the date of this Agreement ("Term").
II. The City may, in its sole and unfettered discretion, extend the Term of this
Agreement without change to the compensation formula up to two (2) times, each
time for a period of one (1) year.
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