HomeMy WebLinkAbout03 - Sales and Use Tax Auditing and AnalysisQ SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
August 13, 2019
Agenda Item No. 3
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Theresa Schweitzer, Senior Accountant,
tschweitzer@newportbeachca.gov
PHONE: 949-644-3140
TITLE: Resolution No. 2019-72: Approval and Award of Professional
Services Agreement with Avenu Insights and Analytics, LLC
("Avenu/MuniServices") for Sales and Use Tax Auditing and Analysis
ABSTRACT:
In order to ensure the correct allocation of sales and use taxes to the City, continued
access to historical and current data and analytics, and insight into revenue trends and
projections, staff requests City Council's approval to enter into a one-year agreement with
Avenu/MuniServices, with the option to extend for an additional four years, in one year
increments.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Authorize the Mayor and City Clerk to execute a one-year Professional Services
Agreement with the option to extend for an additional four years, in one-year
increments, with Avenu Insights and Analytics, LLC, for sales and use tax auditing
and analysis, for a total not -to -exceed amount of $531,000 over five years;
c) Authorize the Mayor and City Clerk to execute a Contract Governing Access to
Confidential Taxpayer Data with Avenu/MuniServices describing the legal
requirements within California Revenue & Taxation Code ("RTC") 7056; and
d) Adopt Resolution No. 2019-72, A Resolution of the City Council of the City of Newport
Beach, California, Authorizing Access to Sales or Transaction and Use Tax Records
and Documents Pursuant to California Revenue & Taxation Code Section 7056(b).
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Resolution No. 2019-72: Approval and Award of Professional Services Agreement with
Avenu Insights and Analytics, LLC ("Avenu/Muni Services")
August 13, 2019
Page 2
FUNDING REQUIREMENTS:
If approved, the current adopted budget includes sufficient funding for the Agreement.
Access to the online sales and use tax web portal (known as Clearview) will be expensed
to the Professional Services account in the Finance Department, Revenue Division
(Account No. 0103031-811008). Contingency Fee payments made pursuant to the audit
recovery portion of the Agreement will be paid from Sales Tax Recovery (Account
No. 01003-412010).
DISCUSSION:
Background
Over the last few fiscal years, the City's sales and use tax revenues were between
$33 million and $37 million. In FY 2017-18, sales and use tax receipts made up
approximately 16% of the General Fund. In order to forecast revenues for financial
planning, for budget purposes and to ensure that sales and use taxes have been
accurately remitted, the City works with expert sales and use tax consultants. The
consultant provides updates of trends and legislation that would impact the City's sales
tax base, analyzes economic data, and identifies errors and/or omissions which may have
resulted in deficient sales and use tax payments to the City.
Procurement Process
A Request for Qualifications ("RFQ") solicitation was developed and publicly posted on
the City's online bidding platform, PlanetBids. The RFQ was also distributed directly to
providers of consulting services related to Sales and Use Tax. The RFQ yielded three
submittals to the City.
The evaluation panel for this RFQ evaluated all submittals and ranked them based on
technical factors such as experience, qualifications, demonstrated project history in
dealing with sales and use tax, references, proposed personnel and project approach.
One submittal did not earn a minimum of 70% of the available score and was
subsequently disqualified from award consideration. As part of its due diligence review
and in addition to the evaluation of written submittals, staff contacted references for
Avenu/Muniservices and HdL Companies and compared each proposer's reporting
capabilities and system user interface. The following table provides the results of the
evaluation panel's selection process:
Proposer
Avenu/MuniServices
HdL Companies
Qualifications of Proposer
28.00
27.00
References & Experience
28.00
27.00
Proposed Personnel
19.33
19.33
Project Approach
20.67
18.33
Evaluation Total:
96.00
91.66
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Resolution No. 2019-72: Approval and Award of Professional Services Agreement with
Avenu Insights and Analytics, LLC ("Avenu/MuniServices")
August 13, 2019
Page 3
In accordance with procedures for the procurement of professional services, staff
unsealed the fee proposals from both proposers. While both sets of fee proposals were
deemed reasonable, Avenu/MuniServices provided a lower contingency fee, coinciding
with the evaluation panel's assessment of Avenu/MuniServices as the highest-rated
proposer for sales and use tax consulting services to the City.
Avenu Insights and Analytics, LLC (Avenu/MuniServices)
Avenu/MuniServices was established in 1978, and cited extensive project history and
references in providing sales and use tax appeals and analysis services to various public
agency clients, including the City of San Diego, the City of Sacramento and the City of
Palm Springs.
Avenu/MuniServices shall provide City with economic analysis through consolidated
reports, geographic area reports that review trends and key economic drivers, and
analysis and benchmarking of the City's sales and use tax base in comparison to other
jurisdictions. In addition, Avenu/MuniServices will meet with staff on a quarterly basis to
provide sales and use tax projections based on the City's mix of businesses, an update
of sales and use tax trends on a national level, and legislative analysis and
recommendations.
Avenu/MuniServices shall also identify any errors and omissions which may have resulted
in deficient payments to the City, detect misallocations and prepare documentation to the
California Department of Tax and Fee Administration ("CDTFA") to recover revenue. To
accurately perform these services, Avenu/MuniServices must have access to available
sales tax data which is considered confidential information by the Revenue and Taxation
Code ("RTC"). RTC Section 7056 authorizes the CDTFA to provide access to confidential
records under specific conditions, provided the City Council has entered into a contract,
meeting the requirements of RTC Section 7056(b) (Attachment B) and adopts a resolution
authorizing a person designated by the resolution to access such records (Attachment
C).
This is a contingency agreement in which Avenu/MuniServices receives an 8%
contingency fee for the first $2 million in sales and use tax recovered throughout the term
of the Agreement, including any extensions or options to renew, and 5% on recoveries in
excess of the first $2 million. The City will also pay an annual fee starting at $6,000 for
use of Clearview, Avenu/MuniServices' online sales tax analysis tool. The annual fee will
be adjusted by the percentage change in the Consumer Price Index beginning the
Calendar year following the first full calendar year of service.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
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Resolution No. 2019-72: Approval and Award of Professional Services Agreement with
Avenu Insights and Analytics, LLC ("Avenu/Muni Services")
August 13, 2019
Page 4
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Professional Services Agreement with Avenu Insights and Analytics, LLC
Attachment B —Contract Governing Access to Confidential Taxpayer Data with Avenu
Insights and Analytics, LLC
Attachment C — Resolution No. 2019-72
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH AVENU INSIGHTS & ANALYTICS, LLC FOR
SALES AND USE TAX CONSULTING SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 13th day of August, 2019 ("Effective Date"), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"),
and AVENU INSIGHTS & ANALYTICS, LLC, a Delaware limited liability company
("Consultant"), whose address is 7625 North Palm Ave., Suite 108, Fresno, CA 93711,
and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide Sales and Use Tax Consulting
Services ("Project"),
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows -
1 .
ollows:1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on June 30, 2024, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
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3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A. In the absence of a specific schedule, the Services shall be performed to
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completion in a diligent and timely manner. The failure by Consultant to strictly adhere to
the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely
manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services in accordance with the provisions
of this Section and the Schedule of Billing Rates attached hereto as Exhibit B and
incorporated herein by reference. Consultant's compensation for all Work performed in
accordance with this Agreement, including all reimbursable items and subconsultant fees,
shall not exceed Five Hundred Twenty Five Thousand Dollars and 001100
($525,000.00), without prior written authorization from City. No billing rate changes shall
be made during the term of this Agreement without the prior written approval of City.
4.2 Consultant shall submit invoices to City on no less than a quarterly basis
describing the Work performed. Consultant's bills shall include a brief description of the
Services performed and/or the specific task in the Scope of Services to which it relates
and a description of any reimbursable expenditures. City shall pay Consultant no later
than thirty (30) calendar days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement or specifically approved in writing in advance by
City.
4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
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5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Doug Jensen to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
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This Agreement will be administered by the Finance Department. City's Revenue
Manager or designee shall be the Project Administrator and shall have the authority to
act for City under this Agreement. The Project Administrator shall represent City in all
matters pertaining to the Services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
$.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
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8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers, employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services contemplated
by this Agreement (collectively, the "Indemnified Parties") from and against any and all
claims (including, without limitation, claims for bodily injury, death or damage to property),
demands, obligations, damages, actions, causes of action, suits, losses, judgments,
fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys'
fees, disbursements and court costs) of every kind and nature whatsoever (individually,
a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or
indirectly) to any breach of the terms and conditions of this Agreement, any Work
performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
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mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
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Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this Agreement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
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Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such subcontractor
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other than as otherwise required by law. City is an intended beneficiary of any Work
performed by the subcontractor for purposes of establishing a duty of care between the
subcontractor and City. Except as specifically authorized herein, the Services to be
provided under this Agreement shall not be otherwise assigned, transferred, contracted
or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents" ), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole right to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
17.4 Consultant shall retain ownership (including, without limitation, copyright
ownership) and all rights to use and disclose its ideas, concepts, know-how, methods,
techniques, processes and skills, and adaptations thereof in conducting its business
regardless of whether incorporated in any way in any work product or deliverables
Provided by Consultant hereunder.
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept confidential
unless City expressly authorizes in writing the release of information.
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19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in Consultant's Documents provided under this Agreement.
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3) years,
or for any longer period required by law, from the date of final payment to Consultant
under this Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make transcripts or
copies of such records and invoices during regular business hours. Consultant shall allow
inspection of all Work, data, Documents, proceedings and activities related to the
Agreement for a period of three (3) years from the date of final payment to Consultant
under this Agreement.
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City may withhold payment to Consultant of any disputed sums until satisfaction of
the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall not
discontinue Work as a result of such withholding. Consultant shall have an immediate
right to appeal to the City Manager or designee with respect to such disputed sums.
Consultant shall be entitled to receive interest on any withheld sums at the rate of return
that City earned on its investments during the time period, from the date of withholding of
any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are clue to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by Consultant,
the additional design, construction and/or restoration expense shall be borne by
Consultant. Nothing in this Section is intended to limit City's rights under the law or any
other sections of this Agreement.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
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24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1094 et
seq., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seq., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Revenue Manager
Finance Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Doug Jensen
Avenu Insights & Analytics, LLC
7625 North Palm Ave., Suite 108
Fresno, CA 93711
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
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identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims tiling requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of five (5) business days, or if more than five (5) business days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within five (5) business days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than fifteen (15) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
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28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.5 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 the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. if any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
Avenu Insights & Analytics, LLC Page 15
3-14
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: /Id
By-
Airan C. Ha 0
City Attorneyo��'&
ATTEST:
Date:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Diane B. Dixon
Mayor
CONSULTANT: AVENU INSIGHTS &
ANALYTICS, LLC, a Delaware limited
liability company
BY: AVENU HOLDINGS, LLC, a
Delaware limited liability
company
Date:
ITS:
Paul Colangelo
Chief Executive Officer
Date:
ITS:
Michael Melka
Chief Financial Officer
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Exhibit ❑ — Contract Governing Access to
Confidential Taxpayer Data
Avenu Insights & Analytics, LLC Page 1
3-15
EXHIBIT A
SCOPE OF SERVICES
Avenu Insights & Analytics, LLC Page A-1 3-16
EXHIBIT A
SCOPE OF SERVICES
As directed by the City, the Consultant will provide the City with auditing services related to Sales
and Use Tax. In particular, the selected Consultant shall perform the following services:
1. Review the applicable provisions of the City's municipal code and ordinances as
appropriate;
2. Evaluate the revenue generating elements of the City's economic base, such as land
parcels, major buildings and various users as it relates to sales and use tax;
3. Verify California Department of Tax and Fee Administration (CDTFA) quarterly sales and
use tax allocations to the City. Identify errors and/or omissions resulting in deficit payments
to the City;
4. Include physical canvassing and evaluation of sales and use tax generating businesses
located in the City to detect misallocations. Field audits shall focus on those businesses
located in the City from which the City has not been receiving sales and use tax revenue
or appear to be under -reporting revenues;
5. Facilitate the identification and correction of improperly registered permits for companies
including, but not limited to, wholesalers, contractors, processors, manufacturers, and
other non -retail businesses having potential point-of-sale use tax operations in the City;
6. Provide to City a list of identified errors and/or omissions and obtain City approval prior to
submission to CDTFA (i.e. work authorization or similar), quarterly at minimum;
7. Prepare and submit a CDTFA-549L, Claimed Incorrect Distribution of Local Tax (or
succeeding form) forms and AB990 submittals and all other requests for corrective action
and revenue recovery to the appropriate parties and provide copy to the City immediately
after submission. For each error/omission identified and confirmed, Consultant shall
prepare documentation to the City and CDTFA to substantiate and facilitate recovery of
revenue due from prior periods (plus applicable interest and penalties) and prevent
deficiencies in current and future years;
8. Prepare all information necessary to correct any identified allocation errors;
9. Monitor City's business and sales tax programs and revenues and identify opportunities
to maximize revenues;
10 - As requested periodically by the City, Consultant will review specific City purchases to
identify opportunities for the City to capture the current local allocation on purchases
subject to use tax and the local district tax where applicable. In this regard, Consultant
shall prepare the documentation to facilitate the City's election of such taxes, including
related guidance in preparing and filing the City tax returns;
11. Track and report misallocations corrected because of Consultant's efforts and remitted to
the City by the CDTFA. Provide a detailed listing of all errors/omissions detected by the
Consultant. Information shall include:
a. Company Name
b. Account Number
c. Case Number
3-17
EXHIBIT A
SCOPE OF SERVICES
d. Work Authorization Number
e. Error Type
f_ Correction Status
g. Total number of billable quarters to the City for the account
h. Current number of quarters billed to the City
i. Payment amount received by the City
j. Invoiced amount by the Consultant
k. Total invoice amount
I. The reporting period for which the payment is related
m. Any additional information deemed necessary by the Consultant or City
12. Provide an aging report with the quarterly invoice, or upon City's request, that includes all
active and non-active accounts for which the Consultant has received payment report;
13. Provide on-going communication to the City concerning revenue recovery work in
progress. This requirement will include, but is not limited to:
a. Providing a quarterly reports of all inquiries filed on behalf of the City and the status
of outstanding past inquiries filed with the CDTFA;
b. Providing copies of decision letters from CDTFA upon request;
c. Notifying the City of all oral communications with the CDTFA regarding the City;
d. Providing a copy of written communication with the CDTFA (e.g. correspondence
and email) with the CDTFA regarding the City; and
14. Prepare petition letters and any supporting information for submittal, and include the
tracking of petitions in the quarterly aging reports. Petitions shall include appeals of
negative and positive fund transfers as well as appeals of CDTFA-549 allocations;
15. Provide current and historical sales tax data on sales tax remittances including, but not
limited to, the following data types: fiscal year and calendar quarter of remittance, fiscal
year and calendar quarter of revenue earned, high level economic sector and more
detailed subsector identifiers, top sales generators and the revenue generated by each,
analysis of sales tax by business category, including comparisons to statewide and other
comparable averages, major business analysis, including analysis of reporting and
accounting aberrations that could distort revenue patterns, address, geocoding or other
neighborhood designation, geographic performance and trends for areas specified by the
City, and name of owner or permit holder;
16. Prepare at a minimum, quarterly analysis of sales tax revenues, projections and
adjustments on the City's sales and use tax trends in relation to the surrounding market
region, by individual business type and geographic areas specified by the City. Consultant
shall provide sales and use tax revenue forecasting;
17. Provide sales and use tax analysis reports benchmarked to previous years. Analysis
should include information on the top revenue producers, indication of revenue changes
by business and economic category, identification of major businesses that influence
change in the City's tax revenue, and analysis of key businesses that grew or declined
during the reporting period;
3-18
EXHIBIT A
SCOPE OF SERVICES
18. Provide local sales and use tax revenue and cash flow forecasting reports. Provide reports
by geographical area (for example by shopping centers or areas and business districts).
The Consultant should have the ability to tailor reports to the City's needs;
19. Provide City with specialized charts and data tables, presentation data and presenters for
public meetings and events, if requested, and provide the City with business specific
revenue estimates and economic development consulting. Consultant shall provide a
quarterly summary of economic news that is one quarter more current than the most
current sales tax data available for the City's use in making projections;
20. Meet with designated City staff as necessary to support the City in recovering and
preventing tax misallocations. Provide support, including negotiations, for the
development of a point -of sale attraction and retention strategy;
21. Coordinate corrective action with taxpayers and the CDTFA. Represent the City before
State officials, boards, commissions and committees for the purpose of correcting local
sales tax distribution errors. This includes representing the City before the CDTFA related
to incorrect allocations of tax;
22. Attend quarterly meetings to discuss analytical reports for local sales and use. Provide
charts and graphs to illustrate the data. Assign a staff member such that the City has a
consistent point of contact in these discussions;
23. Provide on-going analysis, reports, legislative support and unlimited access to
Consultant's team members for sales and use tax related questions, as well as training
and support for City staff;
24. Conduct technical research and analysis to support the City in securing adoption of
clarifying administrative rules, resolutions, ordinance revisions, regulatory amendments,
and legislation to facilitate correction and prevention of these errors andlor omissions;
25. Assist in defining specific geographic areas for which the City would have an interest in
knowing the Sales and Use Tax produced;
26. Remain attentive to any future proposed changes to regulatory language in national, state
and CDTFA's laws and regulations related to the allocation of local sales tax revenues.
This could include attending legislative hearings and explaining the potential effect of
proposed legislation on the City;
27. Provide policy, regulatory, and legislative technical support services to the City in
conjunction with the Sales and Use Tax program with the intent of preventing and/or
correcting misailocations and/or deficiencies;
28. Have the ability to provide data of all Newport Beach local sales and use tax permits in a
format compatible with the City's computer operating system. The City will have access to
local tax and pool data. At a minimum, the database will include the names, addresses,
seller's permit numbers, social security numbers or federal employer identification
numbers where available, the period and tax allocation for each business, start and
closeout dates;
3-19
EXHIBIT A
SCOPE OF SERVICES
29. Provide the data in a proprietary software system maintained by the Consultant or through
a non-proprietary system. Perform monthly updates of sales tax permit registration
information. In either case, the data shall be provided in a format allowing the City to
export data into an Excel compatible format, allowing for integration of various databases;
39. Provide City staff with training on the use of the system. Update the data in the system
each calendar quarter as soon as possible following receipt from the CDTFA. Consultant
shall provide geographical data mapping capability in its proprietary system or else provide
City staff with address data in a format which would allow staff to export and map data;
and
31. Provide the City's Business License staff with a quarterly file, in Excel format, consisting
of the registration information, permit number, business name, ownership, mailing and
business addresses, date return was received from CDTFA, permit open date, permit
closed date, the preceding 40 quarters of quarterly tax return amounts, and any other
information deemed necessary by City staff.
32. Agree to and sign the "Contract Governing Access to Confidential Taxpayer Data'
attached hereto as Exhibit D.
3-20
EXHIBIT B
SCHEDULE OF BILLING RATES
Avenu Insights & Analytics, LLC Page B-1 3-21
EXHIBIT B
SCHEDULE OF BILLING RATES
Sales Tax Audit, Analysis, Reports and Forecasting services
Compensation for the Sales and Use Tax Audit (S UTA) service for the 1 % Bradley -Bums Sales Tax
is through a tiered pricing structure:
a 8% contingency fee applies to the first $2 million in sales and use tax revenue recovered
throughout the term of the Agreement, including any extensions or options to renew; and
■ 5% for recoveries in excess of the first $2 million.
This contingency fee applies to revenue received for four (4) consecutive quarters after the Date of
Correction, no more than three (3) quarters inclusive of, and between, the Date of Knowledge and
Date of Correction quarter, and no more than three (3) quarters prior to the Date of Knowledge
quarter. Total quarters billed will not exceed ten (10) quarters.
The Date of Knowledge is the quarter during which Avenu/MuniServices notifies the California
Department of Tax and Fee Administration (CDTFA) of the existence of a misallocation. The Date
of Correction refers to the quarter in which the taxpayer has correctly reported the local tax and
the CDTFA distributes the local tax properly to City based on the taxpayer's reporting, together
with any prior period reallocations. For Quarterly Distribution Report (QDR) Misallocations
detected and corrected, AvenulMuniServices compensation will only include the quarters in which
the misallocation actually occurred. If any petition submitted by Avenu/MuniServices is denied for
any reason, AvenulMuniServices is not eligible for any compensation.
Consultant will invoice the City for the fees only after completion of the audit, submittal of petitions
to CDTFA, receipt by the City of the decision letter granting the petition, and receipt of Revenues
by the City. The fee constitutes the full reimbursement to Consultant and covers all direct and
indirect costs incurred by the Consultant under this Agreement. This includes all salaries of
Consultant's employees, travel expenses, and service contracting costs.
Ave n u/Mu n i Se rvi ces shall be entitled to full payment of all compensation as provided herein even
if any one or more of City, its personnel, agents, or representatives, or any third party or parties
provide(s) information to Avenu/MuniServices that assists or is used by AvenulMuniServices in
the identification, detection, and correction of point-of-sale distribution errors or the reporting
and/or misallocation of revenue.
Should the City identify, document, and notify the CDTFA in writing of a point-of-sale distribution
error, reporting error or misallocation as those terms are used herein, the City agrees to notify
Avenu/MuniServices of the City's discovery no later than ten (10) days after the Date of
Knowledge as defined in Title 18 of the California Code of Regulations, Regulation 1807 ("Date
of Knowledge.") If the City fails to so notify Avenu/MuniServices as provided above and
AvenulMuniServices later detects, documents, and reports the misallocation or reporting error to
the CDTFA, or if AvenulMuniServices has established a Date of Knowledge with the CDTFA prior
to notification to the Board by the City. then AvenulMuniServices is entitled to full compensation
for the affected account as provided herein.
Completion of Services
Because the services performed by AvenulMuniServices result in corrections of misallocations
and other revenue after cessation of services performed by AvenulMuniServices for the City, the
City agrees that with regards to misallocations identified to the CDTFA whose Date of Knowledge
occurred during AvenulMuniServices performance of services for the City or for other revenue
resulting from AvenulMuniServices actions taken during the term of the Agreement, that the City's
obligation to pay Avenu/MuniServices in accordance with the compensation language of the
3-22
EXHIBIT B
SCHEDULE OF BILLING RATES
Agreement will survive expiration or termination of the Agreement for any reason. Additionally,
notwithstanding any other provision of the Agreement, if the Agreement is terminated or expires,
Avenu/MuniServices will continue to pursue corrections of accounts identified during the term of
the Agreement that have not been corrected by the CDTFA as of the effective date of termination
or expiration. The period after termination during which AvenulMuniServices is pursuing
correction of accounts identified before termination is referred to as the "completion period." The
City will compensate AvenulMuniServices in accordance with the compensation language of the
Agreement for corrected misallocations that result from AvenulMuniServices efforts during the
completion period. The City will also take all necessary steps to allow Avenu/MuniServices to
continue to receive the required information from the CDTFA during this completion period_
Sales & Use Tax Analytics (Clearview), Reporting & Forecasting
Clearview is available for an annual fixed fee of $5,000 paid $1,500 quarterly, which includes the
latest edition of the Clearview software as shown to the City in the demo during the Request for Proposal
(RFP) process, accessible via web portal. The Annual Fee will be adjusted at the beginning of each
calendar year by the percentage change in the Consumer Price Index that pertains to City's
particular geographic area as reported by the Bureau of Labor Statistics. The initial Consumer
Price Index used for the first CPI adjustment will be the CPI for the month in which the agreement
is fully signed with the first adjustment to occur at the beginning of the Calendar year following
the first full calendar year of service. When new editions of the Clearview software become
available there may be the option to purchase additional services, new Clearview services, which
involve an additional fee will be available at a mutually agreed upon additional price.
Additional Consulting Services
The City may request that AvenulMuniServices provide additional consulting services at any time
during term of the Agreement. If AvenulMuniServices and the City agree, in writing, on the scope
of the additional consulting services requested, then AvenulMuniServices shall provide the
additional consulting services on a Time and Materials basis. Depending on the personnel
assigned to perform the work, AvenulMuniServices' standard hourly rates range from $75 per
hour to $325 per hour. These additional consulting services will be invoiced at least monthly based
on actual time and expenses incurred. The following are sample hourly rates based on the job
classification (these rates are subject to change):
Position
Hourly Rate
Legal
$325
Principal
$200
Project Manager/Director
$175
Client Services Executive
$150
Senior Analyst
$125
Information Technology $175
Analyst $100
Administrative $75
3-23
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers, employees and any person
or entity owning or otherwise in legal control of the property upon which
Consultant performs the Project and/or Services contemplated by this
Agreement.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Avenu Insights & Analytics, LLC Page C-1 3-24
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,004,000) per claim and two million dollars
($2,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement and
Consultant agrees to maintain continuous coverage through a period no
less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers,
employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement or shall specifically allow Consultant or
others providing insurance evidence in compliance with these requirements
to waive their right of recovery prior to a loss. Consultant hereby waives its
own right of recovery against City, and shall require similar written express
waivers from each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers,
employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement shall be included as insureds under such
policies.
C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
Avenu Insights & Analytics, LLC Page C-2 3-25
A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance, Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (66) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
E. Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
Avenu Insights & Analytics, LLC Page C-3 3-26
G. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
Avenu Insights & Analytics, LLC Page C-4 3-27
EXHIBIT D
CONTRACT GOVERNING ACCESS TO
CONFIDENTIAL TAXPAYER DATA
Avenu Insights & Analytics, LLC Page D-1 3-28
CONTRACT GOVERNING ACCESS TO CONFIDENTIAL TAXPAYER DATA
The City of Newport Beach ("City") has retained Avenu Insights and Analytics, LLC
("Avenu/MuniServices") to provide sales and use tax analysis, identify errors and
omissions which may have resulted in deficient payments to the City, detect
misallocations and prepare documentation to the California Department of Tax and Fee
Administration ("CDTFA") to recover revenue.
In order to provide such services, it is necessary for Avenu/MuniServices staff to have
access to confidential sales and use tax records of the CDTFA pertaining to its
administration and collection of sales and use taxes.
Section 7056(b) of the California Revenue & Taxation Code ("RTC") provides that access
to such confidential data by any person other than an employee or officer of a city is
conditioned upon there being an existing Resolution by the City designating the person
to examine the records, data and other information and certifying that the individual meets
the conditions specified in RTC Section 7056(b)(1), including the requirement of RTC
Section 7056(b)(1)(A), that there be an existing contract with the City to examine the sales
and use tax records that meets all requirements of RTC Section 7056(b)(1), subdivisions
(A) through (D).
The City and Avenu/MuniServices wish to enter into a Contract complying with the legal
requirements described in RTC Section 7056.
Therefore, Avenu/MuniServices and the City do hereby further agree as follows:
In connection with the sales and use tax analysis and other functions described
above, Avenu/MuniServices (acting through its partners, associates and
employees, whose identities shall be set out in a list maintained by the Finance
Department) is hereby authorized to examine all confidential records and data of
the CDTFA, pertaining to the ascertainment of the sales and use taxes collected
or to be collected by the CDTFA.
2. Avenu/MuniServices, and its partners, associates and employees, will disclose
any information contained in, or derived from, those sales and use tax records only
to officers or employees of the City who are authorized by resolution to examine
the information.
3. Avenu/MuniServices will ensure that each of its partners, associates and
employees who will have access to confidential sales and use tax records has
done each of the following prior to, and as a condition of, access to such records:
a. Read this Contract;
b. Signed the list of Avenu/MuniServices personnel who will be provided with
access to confidential sales and use tax records and information pursuant
to this Contract;
3-29
C. Acknowledged through such signature on the Finance Director's list that he
or she is bound by this Contract and by the legal requirements of RTC
Section 7055 with respect to the confidentiality of sales and use tax records,
and
d. Agreed through such signature not to provide consulting services to any
retailer during the term of this Contract.
4. Avenu/MuniServices will return or (at the City's request) ensure the destruction of
all sales and use tax documents disclosed pursuant to this Contract, as well as all
other documents containing information derived from those sales and use tax
documents, prior to the termination of this Contract.
5. This Contract shall terminate ninety (90) days after the termination of the
Avenu/MuniServices' services to the City. Avenu/MuniServices and its personnel
who have been provided with confidential sales and use tax records and
information pursuant to this Contract shall not retain in their files or in any other
document the confidential state sales and use tax information to which they have
received access after this Contract.
(SIGNATURES ON NEXT PAGE]
3-30
In witness whereof, Avenu Insights and Analytics, LLC have executed this Contract as of
this day of 2019.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:/
By:_
-.
Aman C. Harp `\a
City Attorney p�-
ATTEST:
Date:
By:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
A California municipal corporation
Date:
By:
Grace K. Leung
City Manager
CONSULTANT: AVENU INSIGHTS &
ANALYTICS, LLC, a Delaware limited
liability company
BY: AVENU HOLDINGS, LLC, a
Delaware limited liability
company
Date:
ITS:
Paul Colangelo
Chief Executive Officer
Date:
ITS:
[END OF SIGNATURES]
Michael Melka
Chief Financial Officer
3-31
ATTACHMENT B
CONTRACT GOVERNING ACCESS TO CONFIDENTIAL TAXPAYER DATA
The City of Newport Beach ("City") has retained Avenu Insights and Analytics, LLC
("Avenu/MuniServices") to provide sales and use tax analysis, identify errors and
omissions which may have resulted in deficient payments to the City, detect
misallocations and prepare documentation to the California Department of Tax and Fee
Administration ("CDTFA") to recover revenue.
In order to provide such services, it is necessary for Avenu/MuniServices staff to have
access to confidential sales and use tax records of the CDTFA pertaining to its
administration and collection of sales and use taxes.
Section 7056(b) of the California Revenue & Taxation Code ("RTC") provides that access
to such confidential data by any person other than an employee or officer of a city is
conditioned upon there being an existing Resolution by the City designating the person
to examine the records, data and other information and certifying that the individual meets
the conditions specified in RTC Section 7056(b)(1), including the requirement of RTC
Section 7056(b)(1)(A), that there be an existing contract with the City to examine the sales
and use tax records that meets all requirements of RTC Section 7056(b)(1), subdivisions
(A) through (D).
The City and Avenu/MuniServices wish to enter into a Contract complying with the legal
requirements described in RTC Section 7056.
Therefore, Avenu/MuniServices and the City do hereby further agree as follows:
In connection with the sales and use tax analysis and other functions described
above, Avenu/MuniServices (acting through its partners, associates and
employees, whose identities shall be set out in a list maintained by the Finance
Department) is hereby authorized to examine all confidential records and data of
the CDTFA, pertaining to the ascertainment of the sales and use taxes collected
or to be collected by the CDTFA.
2. Avenu/MuniServices, and its partners, associates and employees, will disclose
any information contained in, or derived from, those sales and use tax records only
to officers or employees of the City who are authorized by resolution to examine
the information.
3. Avenu/MuniServices will ensure that each of its partners, associates and
employees who will have access to confidential sales and use tax records has
done each of the following prior to, and as a condition of, access to such records:
a. Read this Contract;
b. Signed the list of Avenu/MuniServices personnel who will be provided with
access to confidential sales and use tax records and information pursuant
to this Contract;
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C. Acknowledged through such signature on the Finance Director's list that he
or she is bound by this Contract and by the legal requirements of RTC
Section 7055 with respect to the confidentiality of sales and use tax records,
and
d. Agreed through such signature not to provide consulting services to any
retailer during the term of this Contract.
4. Avenu/MuniServices will return or (at the City's request) ensure the destruction of
all sales and use tax documents disclosed pursuant to this Contract, as well as all
other documents containing information derived from those sales and use tax
documents, prior to the termination of this Contract.
5. This Contract shall terminate ninety (90) days after the termination of the
Avenu/MuniServices' services to the City. Avenu/MuniServices and its personnel
who have been provided with confidential sales and use tax records and
information pursuant to this Contract shall not retain in their files or in any other
document the confidential state sales and use tax information to which they have
received access after this Contract.
(SIGNATURES ON NEXT PAGE]
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In witness whereof, Avenu Insights and Analytics, LLC have executed this Contract as of
this day of 2019.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:/
By:_
-.
Aman C. Harp `\a
City Attorney p�-
ATTEST:
Date:
By:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
A California municipal corporation
Date:
By:
Grace K. Leung
City Manager
CONSULTANT: AVENU INSIGHTS &
ANALYTICS, LLC, a Delaware limited
liability company
BY: AVENU HOLDINGS, LLC, a
Delaware limited liability
company
Date:
ITS:
Paul Colangelo
Chief Executive Officer
Date:
ITS:
[END OF SIGNATURES]
Michael Melka
Chief Financial Officer
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ATTACHMENT C
RESOLUTION NO. 2019- 72
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, AUTHORIZING
ACCESS TO SALES OR TRANSACTION AND USE TAX
RECORDS AND DOCUMENTS PURSUANT TO
CALIFORNIA REVENUE & TAXATION CODE SECTION
7056(b)
WHEREAS, the City has retained the firm of Avenu Insights and Analytics, LLC
("Avenu/MuniServices") to provide sales and use tax analysis, identify errors and
omissions which may have resulted in deficient payments to the City, detect
misallocations and prepare documentation to the California Department of Tax and Fee
Administration ("CDTFA") to recover revenue;
WHEREAS, Avenu/MuniServices requires access to the City's sales tax data in
order to provide such analysis;
WHEREAS, Section 7056(b) of the Revenue and Taxation Code ("RTC") provides,
in pertinent part, that "When requested by resolution of the legislative body of any ... city
... the board [CDTFA] shall permit any duly authorized ... person designated by that
resolution, to examine all of the sales or transactions and use tax records of the board
pertaining to the ascertainment of those sales or transactions and use taxes to be
collected for the ... city ... "; and
WHEREAS, City wishes to provide access to all such tax records otherwise
confidential under RTC Section 7056 to certain staff at Avenu/MuniServices.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: Pursuant to RTC Section 7056(b), the City hereby provides and
requests the CDTFA to provide access to the staff working with Avenu/MuniServices on
the sales and use tax analysis to examine and use all confidential records and data of the
CDTFA pertaining to the ascertainment of the sales and use taxes collected or to be
collected by the CDTFA that are the subject of the sales and use tax analysis.
Section 2: To identify each person to whom access to records is to be provided
pursuant to RTC Section 7056(b), the Finance Director shall designate and maintain a list
of all staff members of Avenu/MuniServices who will be given such access pursuant to
this Resolution.
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Resolution No. 2019 -
Page 2 of 3
Section 3: Pursuant to RTC Section 7056(b)(1), the City hereby certifies that:
A. The City has an existing contract with Avenu/MuniServices to examine the
aforementioned sales and use tax records to effectively advise the City;
B. The City's contract with Avenu/MuniServices requires that
Avenu/MuniServices shall disclose confidential taxpayer information
contained in, or derived from, the aforementioned sales or transaction and
use tax records only to officers or employees of the City who are authorized
by resolution to examine the information;
C. Under the City's contract with Avenu/MuniServices, all staff members of
Avenu/MuniServices are prohibited from providing consulting services to
any retailer during the term of the City's contract with Avenu/MuniServices;
and
D. Under the City's contract with Avenu/MuniServices, Avenu/MuniServices is
prohibited from retaining the confidential taxpayer information contained in
or derived from the aforementioned sales and use tax records after that
contract has terminated.
Section 4: The records and information to be provided to Avenu/MuniServices
shall be used solely for the purpose of providing sales and use tax analysis, identifying
errors and omissions which may have resulted in deficient payments to the City, detecting
misallocations and preparing documentation to the CDTFA, and for no other purpose,
and shall be returned to the City after the contract has terminated.
Section 5: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 6: If any section, subsection, sentence, clause or phrase of this resolution
is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this resolution. The City Council
hereby declares that it would have passed this resolution, and each section, subsection,
sentence, clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses or phrases be declared invalid or unconstitutional.
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Resolution No. 2019 -
Page 3 of 3
Section 7: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
Section 8: This Resolution shall take effect immediately upon its adoption by the
City Council and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 13th day of August, 2019
Diane B. Dixon
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
C
Aaron C. Harp
City Attorney
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