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HomeMy WebLinkAboutC-8658-1 - PSA for Sales and Use Tax Consulting ServicesW PROFESSIONAL SERVICES AGREEMENT WITH HINDERLITER, DE LLAMAS & ASSOCIATES FOR SALES AND USE TAX CONSULTING SERVICES THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and entered into as of this 1st day of February, 2021 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and HINDERLITER, DE LLAMAS & ASSOCIATES, a California corporation ("Consultant"), whose address is 120 S State College Blvd, Suite 200, Brea, CA 92821, 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. TERM The term of this Agreement shall commence on the Effective Date, and shall terminate on December 31, 2025, 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. 3. TIME OF PERFORMANCE 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 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 on a time and expense not -to - exceed basis 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 Six Hundred Fifty One Thousand Dollars and 00/100 ($651,000.00), 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 quarterly invoices to City describing the Work performed the preceding month. Consultant's bills shall include the name of the person who performed the Work, a brief description of the Services performed and/or the specific task in the Scope of Services to which it relates, the date the Services were performed, the number of hours spent on all Work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar days after approval of the 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. Hinderliter, De Llamas & Associates Page 2 Compensation for any authorized Extra Work shall be paid in accordance with the Schedule of Billing Rates as set forth in Exhibit B. 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 Andrew Nickerson 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. 5.3 If Consultant is performing inspection services for City, the Project Manager and any other assigned staff shall be equipped with a cellular phone to communicate with City staff. The Project Manager's cellular phone number shall be provided to City. 6. ADMINISTRATION 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. Hinderliter, De Llamas & Associates Page 3 8.2 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. 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. Hinderliter, De Llamas & Associates Page 4 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 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. 14. 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 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. 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS 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. Hinderliter, De Llamas & Associates Page 5 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 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. 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. Hinderliter, De Llamas & Associates Page 6 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. 20. RECORDS 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. 21. WITHHOLDINGS 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 due 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. Hinderliter, De Llamas & Associates Page 7 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 §§ 1090 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 Revenue Division 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: Andrew Nickerson Hinderliter, DeLlamas & Associates 120 S State College Blvd, Suite 200 Brea, CA 92821 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 Hinderliter, De Llamas & Associates Page 8 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 filing 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 two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) calendar 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 seven (7) 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. Hinderliter, De Llamas & Associates Page 9 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. 28.6 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] Hinderliter, De Llamas & Associates Page 10 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: l By: a n C. Harp City Attorney ATTEST: Date: /Q. OzV4 is City C CITY OF NEWPORT BEACH, a California municipal corporation Date: l - 2Z8 - Z ( By: BtzgZvery Mayor CONSULTANT: HINDERLITER DE LLAMAS & ASSOCIATES, a California corporation Date: Signed in Counterpart By: Robert Andrew Nickerson Chief Executive Officer/Secretary [END OF SIGNATURES] Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates Exhibit C — Insurance Requirements Exhibit D — Contract Governing Access to Confidential Taxpayer Data Hinderliter, De Llamas & Associates Page 11 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: B �. v. Adon C. Harp City Attorney ATTEST: Date: in Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: By: Brad Avery Mayor CONSULTANT: HINDERLITER DE LLAMAS & ASSOCIATES, a California corporation Date: (— S r 2k By: Ro Andr w Nickerson Chief Executive Officer/Secretary [END OF SIGNATURES] Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates Exhibit C — Insurance Requirements Exhibit D — Contract Governing Access to Confidential Taxpayer Data Hinderliter, De Llamas & Associates Page 11 EXHIBIT SCOPE OF SERVICES Hinderliter, De Llamas & Associates Page A-1 EXHIBIT A SCOPE OF SERVICES As directed by the City, Consultant shall provide the City with Consulting services related to Sales and Use Tax. In particular, Consultant shall perform the following services: Sales and Use Tax 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, and identify errors and/or omissions resulting in deficit payments to the City; 4. Perform periodic and targeted physical field canvassing in areas recommended by Consultant, to identify and evaluate 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 prior to invoicing for recovery; 7. Prepare and submit any required forms and information to CDTFA (or its successor agency) in order to correct misallocations, errors, incorrect fund transfers, and ensure revenue recovery to the City; e-mail a copy of such form to City staff on a quarterly basis, at a minimum, with underlying supporting documentation. For each error/omission identified and confirmed, Consultant shall substantiate and facilitate recovery of revenue due from prior periods (plus applicable interest and penalties) and prevent deficiencies in current and future years; 8. Monitor City's business and sales tax programs and revenues and identify opportunities to maximize revenues; 9. As requested periodically by the City, Consultant shall 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; 10. Track and report misallocations that Consultant's efforts; provide a detailed Consultant. Information shall include: a. Company Name b. Account Number c. Case Number were corrected and remitted to City due to listing of all errors/omissions detected by the 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 11. Provide an aging report with the quarterly invoice, or upon City's request, which shall include all active and non-active accounts for which the Consultant has received payment; 12. 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 report 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; and c. Providing a copy of written communication with the CDTFA (e.g. correspondence and email) regarding the City; 13. 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; 14. Prepare 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, on a quarterly scheduled basis, and as requested by City. Consultant shall provide sales and use tax revenue forecasting; 15. 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; 16. Provide local sales and use tax revenue and cash flow forecasting reports, including reports by geographical area (for example by shopping centers or areas and business districts), in a format requested by City; 17. 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 EXHIBIT A SCOPE OF SERVICES 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; 18. Upon City's request, provide a subscription to INSIGHT Market Analytics, a service providing analytics data for up to 5 targeted trade areas within the City, including a semi- annual update; 19. Meet with designated City staff as necessary to support the City in recovering and preventing tax misallocations; 20. Provide support, including negotiations, for the development of a point -of sale attraction and retention strategy, provided however, that if such support exceeds 10 hours each quarter from Senior Associate level or above, Consultant shall bill City on an hourly basis pursuant to the rates in Exhibit B; 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 approved by City such that the City has a consistent point of contact in these discussions; 23. Provide on-going analysis, reports, legislative support and 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 and/or 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. Starting from March of each year, track bills and pending legislation that may impact City sales tax revenues; provide City staff with a summary and status of such bills on a bi- monthly basis, or more frequently if warranted; provide City with an impact analysis of pending legislation; 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 misallocations and/or deficiencies; 28. 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 shall have access to local tax and pool data. The database shall 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; 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; 30. Provide City staff with training on the use of the Consultant's proprietary software system. Update the data in the system each calendar quarter within 72 hours following receipt from the CDTFA. Consultant shall provide geographical data mapping capability in its proprietary system or provide City staff with address data in a format which would allow staff to export and map data; 31. Provide the City's business license staff with access to Consultant's software system, which shall provide 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. This information should be exportable to Excel; and 32. Provide the City, on a quarterly basis and as requested by the City, a business license discovery leads list which shall provide identification support for use in City's internal compliance processes. a. City shall provide Consultant with City's business license tax data and any leads data already discovered by City; b. City shall provide Consultant with up to five (5) business data sources, which may include alarm billing accounts, property tax data, etc.; c. Consultant shall provide additional business data from Consultant's Enriched Data Portfolio (EDP) which shall contain any data regarding businesses representing in Newport Beach from additional sources not otherwise provided by the City; d. Consultant shall compare the City's business license tax data and discovered leads data with City's business data sources and Consultant's EDP data to remove any licensed businesses; e. Consultant shall create a master discovery leads list of potential unlicensed businesses, which shall be prioritized in order of frequency found in the leads data sources; and f. Consultant shall provide the final master discovery leads list to the City in an electronic format designated by the City. 33. Agree to and sign the "Contract Governing Access to Confidential Taxpayer Data" attached hereto as Exhibit D. EXHIBIT B SCHEDULE OF BILLING RATES Hinderliter, De Llamas & Associates Page B-1 EXHIBIT B SCHEDULE OF BILLING RATES 1. Sales and Use Tax Audit Services (Continaencv Fee Percentaae for Audit Recoveries The City shall compensate Consultant for sales and use tax auditing services through a fee of 15% of all new sales and use tax revenue received by the City resulting from audit and recovery work performed by Consultant. There shall be a ten (10) quarter cap on all petitions for reallocation. Such cap shall include applicable back quarters, time between Date of Knowledge and Date of Correction, and quarters post correction. For example: • If the retroactive fund transfer includes 3 quarterly payments, then billing will include an additional 7 quarters from the Date of Knowledge. • If a retroactive fund transfer includes 7 quarterly payments, then billing will include an additional 3 quarters from the Date of Knowledge. • If a retroactive fund transfer contains 12 quarterly payments, then we will bill on the oldest 10 quarterly payments only. • If there is no retroactive fund transfer, the prospective audit fee applies to monies received in the first eight consecutive reporting quarters beginning with the Date of Knowledge quarter. For a petition that includes prospective recovery and billing, if another error occurs within the active billing cycle Consultant shall initiate further follow-up with the taxpayer and California Department of Tax and Fee Administration ("CDTFA") to correct the error, however this will not reset the incremental count of the number of quarters being invoiced on the original petition. A petition for a onetime correction of a misallocation will be clearly indicated on the invoice detail report, the specific quarterly period will also be referenced. If, subsequent to the initial correction another error occurs impacting a quarter different than the one previously corrected, another petition will be generated, and the city will be invoiced for the subsequent onetime correction only. Audit fees are billed only after completion of the audit, submittal of corrections to the CDTFA and receipt of revenues by City. 100% of all new revenue generated by Consultant flows to the City after the completion of the billable quarters. The fee constitutes the full reimbursement to Consultant and covers all direct and indirect costs incurred by Consultant under this contract. This includes all salaries of Consultant's employees, travel expenses and service contracting costs as well as the software to be delivered to the City of Newport Beach. Invoices are submitted only for recoveries previously approved by the City. Consultant does not bill for audit revenues until the City has 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. Invoices are submitted quarterly after the City has received the revenue from the audit correction. The invoice includes a printout showing the name, address, and sales tax registration number of each company, and the specific amount of revenue allocated by the CDTFA to the City for those businesses. If a misallocation correction involves additional revenue from a company that had already been partially allocating revenues to the City, the City and Consultant will agree in a Work Authorization, prior to billing, the methodology for identifying the incremental revenue attributable to Consultant's work. EXHIBIT B SCHEDULE OF BILLING RATES Should the City identify, document, and notify the CDTFA in writing of a point-of-sale distribution error, reporting error, or misallocation the City agrees to notify Consultant of the City's discovery no later than ten (10) days after the Date of Knowledge. 2. Sales, Use Tax Management Services (Quarterly Delivery Meetings) This service includes access to the City's sales tax database through our web -based software and quarterly meetings with one of our principals. In preparation for each meeting, a principal of the firm analyzes the City's data in detail and meets with appropriate City officials to review trends, point out businesses that should be contacted as part of the City's business retention program and discuss and make recommendations regarding the economic and budget implications of the quarter's data. Also included is a non -confidential newsletter that can be shared with your council and the public. The price for this is $850 per month. 3. Economic Development Services Phase 1: Economic Development Services (Hourly Rates): Economic Development Consulting Services Staff Hourly Rate Managing Director $240 Senior Associate $170 Analyst $100 Phase 2: Additional Services: INSIGHT Market Analytics — two-year subscription at no cost to City, and thereafter, a Fixed Fee of $4,000 An Optional Community Profile - Fixed Fee of $6,000 An Optional Retail Assessment & Marketing Strategy — Fixed Fee of $8,000 Economic Development Action Plan - Fixed Fee of $15,000 4. Business License Discovery Services Electronic Data Matching and Leads: Consultant shall charge a fee of $20,000 per year for electronic data matching and leads. Leads would be generated by Consultant's service team and discovery systems but would not be manually reviewed and qualified by Consultant. City team would need to review and qualify leads prior to contacting or accept a higher error rate. Data is matched into a single entity view and sent to the City with detailed information. Unless and agreed upon by City and Consultant by and through a written amendment to this Agreement, an additional option for the City is $36,000 per year for the same service as above, plus review and qualification of each lead by Consultant prior to sending to City. This includes Consultant's review of every electronic lead to validate and score each lead. 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 Hinderliter, De Llamas & Associates Page C-1 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 ($1,000,000) 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: Hinderliter, De Llamas & Associates Page C-2 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. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. 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 (60) 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. Hinderliter, De Llamas & Associates Page C-3 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. 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. Hinderliter, De Llamas & Associates Page C-4 EXHIBIT D CONTRACT GOVERNING ACCESS TO CONFIDENTIAL TAXPAYER DATA Hinderliter, De Llamas & Associates Page D-1 Mulvey, Jennifer From: Customer Service <customerservice@ebix.com> Sent: Thursday, February 11, 20215:48 PM To: Kessler, Joanne; Insurance Cc: sagar@ebix.com Subject: Compliance Alert -Vendor Number FV00000415 [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. This Account has moved from non-compliant to COMPLIANT status and is currently in compliance for certificate of insurance requirements. FV00000415 Hinderliter de Llamas & Associates Sent by Ebix, designated insurance certificate reviewer for the City of Newport Beach.