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Fin Transactions Tax Audit & Information ServicesDocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB AGREEMENT FOR TRANSACTIONS TAX AUDIT & INFORMATION SERVICES This Agreement is made and entered into as of tha4L day of - 0 1642020 by and between the CITY OF SAN RAFAEL, hereinafter referred to as "CITY" and HINDERLITER, DE LLAMAS AND ASSOCIATES a California Corporation, hereinafter referred to as "CONTRACTOR". I. RECITALS WHEREAS, transactions tax revenues can be increased through a system of continuous monitoring, identification and correction of allocation errors and reporting deficiencies, and WHEREAS, an effective program of transactions and use tax management can provide for more accurate budget forecasting and financial planning; and WHEREAS, CITY desires the combination of data entry, report preparation, and data analysis necessary to effectively manage its Measure "R" transactions and use tax base the recovery of revenues either unreported or erroneously allocated to other jurisdictions; and WHEREAS, CONTRACTOR has the programs, equipment and personnel required to deliver the transactions and use tax related services referenced herein; THEREFORE, CITY and CONTRACTOR, for the consideration hereinafter described, mutually agree as follows: DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB II. SERVICES The CONTRACTOR shall perform the following services: A. DEFICIENCY/ALLOCATION REVIEWS AND RECOVERY 1. CONTRACTOR shall conduct on-going reviews to identify and correct unreported transactions and use tax payments and distribution errors thereby generating previously unrealized revenue for the CITY. Said reviews shall include: (i) Comparison of county -wide local tax allocations to transactions tax for brick and mortar stores and other cash register -based businesses, where clearly all transactions are conducted on-site within the Measure "R" CITY boundaries, and therefore subject to transactions tax. (ii) Review of any significant one-time use tax allocations to ensure that there is corresponding transaction tax payments for taxpayers with nexus within the CITY boundaries. (iii) Review of state-wide transactions tax allocations and patterns to identify any obvious errors and omissions. (iv) Identification and follow-up with any potentially large purchasers of supplies and equipment (e.g. hospitals, universities, manufacturing plants, agricultural operations, refineries) to ensure that their major vendors are properly reporting corresponding transactions tax payments to the Measure "R" Transactions Tax District. 2. CONTRACTOR will initiate, where the probability of an error exists, contacts with the appropriate taxpayer management and accounting officials to verify DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner so as to enhance CITY's relations with the business community. 3. CONTRACTOR shall prepare and submit to the Department of Tax and Fee Administration all information necessary to correct any allocation errors and deficiencies that are identified, and shall follow-up with the individual businesses and the California Department of Tax and Fee Administration to ensure that all back quarter payments due the CITY are recovered. B. DATA BASE MANAGEMENT, REPORTS AND STAFF SUPPORT 1. CONTRACTOR shall establish a database containing all applicable Department of Tax and Fee Administration (CDTFA) registration data for each business within the Measure "R" District boundaries holding a seller's permit account. Said database shall also identify the quarterly transactions and use tax allocations under each account for the most current and previous quarters where available. 2. CONTRACTOR shall provide updated reports each quarter identifying changes in allocation totals by individual businesses, business groups and by categories. Quarterly aberrations due to State audits, fund transfers, and receivables, along with late or double payments, will also be identified. Quarterly reconciliation worksheets to assist finance officer with budget forecasting will be included. 3. CONTRACTOR shall advise and work with CITY Staff on planning and economic questions related to maximizing revenues, preparation of revenue projections and general information on sales, transactions and use tax questions. DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB 4. CONTRACTOR shall make available to CITY the HdL proprietary software program and Measure "R" database containing all applicable registration and quarterly allocation information for CITY business outlets registered with the Department of Tax and Fee Administration. The database will be updated quarterly. III. CONFIDENTIALITY Section 7056 of the State of California Revenue and Taxation code specifically limits the disclosure of confidential taxpayer information contained in the records of the California Department of Tax and Fee Administration. This section specifies the conditions under which CITY may authorize persons other than CITY officers and employees to examine State Sales, Use and Transactions Tax records. The following conditions specified in Section 7056 (b), (1) of the State of California Revenue and Taxation Code are hereby made part of this agreement. A. CONTRACTOR is authorized by this Agreement to examine sales, use or transactions and use tax records of the Department of Tax and Fee Administration provided to CITY pursuant to contract under the conditions established by the California Revenue and Taxation law. B. CONTRACTOR is required to disclose information contained in, or derived from, those sales, use or transactions and use tax records only to an officer or employee of the CITY who is authorized by resolution to examine the information. DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB C. CONTRACTOR is prohibited from performing consulting services for a retailer, as defined in California Revenue & Taxation Code Section 6015, during the term of this Agreement. D. CONTRACTOR is prohibited from retaining the information contained in, or derived from those sales or transactions and use tax records, after this Agreement has expired. Information obtained by examination of Department of Tax and Fee Administration records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the CITY as set forth by resolution adopted pursuant to Section 7056 (b) of the Revenue and Taxation Code. The resolution shall designate the CONTRACTOR as a person, authorized to examine sales and use tax records and certify that this Agreement meets the requirements set forth above and in Section 7056 (b), (1) of the Revenue and Taxation Code. IV. CONSIDERATION A. CONTRACTOR shall be paid $200 monthly billed quarterly for the transaction district tax reports that we include with the quarterly sales tax analyses. CONTRACTOR shall be paid 25% of the initial amount of new transactions or use tax revenue received by the CITY as a result of audit and recovery work performed by CONTRACTOR (hereafter referred to as "audit fees"). New revenue shall not include any amounts determined and verified by CITY or CONTRACTOR to be increment attributable to causes other than CONTRACTOR'S work pursuant to this agreement. In the event that CONTRACTOR is responsible for an increase in the tax reported by businesses already properly making tax payments to the CITY, it shall be CONTRACTOR'S responsibility to separate and support the incremental amount attributable to its efforts prior to the application of the audit fee. Said audit DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB fees will apply to state fund transfers received for those specific quarters identified as being missing and/or deficient following completion of the audit by CONTRACTOR and confirmation of corrections by the California Department of Tax and Fee Administration but shall not apply prospectively to any future quarter. CONTRACTOR shall provide CITY with an itemized quarterly invoice showing all formula calculations and amounts due for audit fees. CONTRACTOR shall obtain prior approval from CITY for each specific business for which payment of audit fees will be expected. Said approval shall be deemed given when the City Manager or his/her designated representative, signs a Work Authorization form. CITY shall pay audit fees upon CONTRACTOR'S submittal of evidence of State fund transfers and payments to CITY from businesses identified in the audit and approved by the CITY. B. Above sum shall constitute full reimbursement to CONTRACTOR for all direct and indirect expenses incurred by CONTRACTOR in performing audits including the salaries of CONTRACTOR'S employees, and travel expenses connected with contacting local and out-of-state businesses and the Department of Tax and Fee Administration Staff. C. Extra work beyond the Scope of Services set forth in this agreement shall not be performed by CONTRACTOR or reimbursed or paid for by CITY unless such extra work is specifically authorized in writing by City Manager or his/her designated representative. CONTRACTOR shall be compensated for any additional services in the amounts and in the manner as agreed to by the CITY and CONTRACTOR at the time the CITY's written authorization is given to CONTRACTOR for the performance of said services. DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB D. Any invoices not paid in accordance with the Thirty (30) day payment terms, shall accrue monthly interest at a rate equivalent to ten percent (10%) per annum until paid. E. CONTRACTOR unilaterally retains the right to divide any recovery bills in excess of $25,000 over a one (1) year period (Four (4) quarterly billings). F. CONTRACTOR shall provide CITY with an itemized quarterly invoice showing all formula calculations and amounts due for the audit fee (including, without limitation, a detailed listing of any corrected misallocations), which shall be paid by CITY no later than 30 days following the invoice date. VI. CITY MATERIALS AND SUPPORT CITY shall adopt a resolution in a form acceptable to the California Department of Tax and Fee Administration and in compliance with Section 7056 of the Revenue and Taxation Code, authorizing CONTRACTOR to examine the confidential sales, use, and transactions tax records of CITY. CITY further agrees to continue CONTRACTOR'S authorization to examine the confidential records of the CITY by maintaining CITY's name on the CITY Resolution until such time as all audit adjustments have been completed by the California Department of Tax and Fee Administration and audit fees due the CONTRACTOR have been paid. VII. LICENSE, PERMITS, FEES AND ASSESSENTS CONTRACTOR shall obtain such licenses, permits and approvals (collectively the "Permits") as may be required by law for the performance of the services required by this Agreement. CITY shall assist CONTRACTOR in obtaining such Permits, and DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB CITY shall absorb all fees, assessments and taxes which are necessary for any Permits required to be issued by CITY. VIII. TERMINATION This Agreement may be terminated for convenience by either party by giving 30 days written notice to the other of such termination and specifying the effective date thereof. Upon the presentation of such notice, CONTRACTOR shall continue to work through the date of termination. Upon termination as provided herein, CONTRACTOR shall be paid the value of all tax analysis and reporting work performed less payments previously made by CITY. In ascertaining the value of the work perfonned up to the date of tennination, consideration shall be given to amounts due for any unpaid invoices, and to businesses identified by CONTRACTOR which make tax payments after termination of this Agreement as a result of CONTRACTOR'S work. After CITY receives said tax payments for such businesses, CONTRACTOR shall be paid the audit fees resulting from tax payments made by the business for back quarter reallocations. Compensation for any audit work previously authorized and satisfactorily performed shall be made at the times provided in the preceding section entitled "Consideration." All documents, data, surveys and reports prepared by CONTRACTOR pursuant to this Agreement shall be considered the property of the CITY and upon payment for services performed by CONTRACTOR, such documents and other identified materials shall be delivered to CITY by CONTRACTOR. IX. INDEPENDENT CONTRACTOR CONTRACTOR shall perform the services hereunder as an independent contractor and shall furnish such services in his own manner and method, and under no circumstances DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB or conditions shall any agent, servant, or employee of CONTRACTOR be considered as an employee of CITY. X. COOPERATIVE AGREEMENT It is intended any other public agency (e.g., city, county, district, public authority, public agency, municipality, or other political subdivision of California) located in the state of California shall have an option to procure identical services as set forth in this Agreement. The CITY of San Rafael shall incur no responsibility, financial or otherwise, in connection with orders for services issued by another public agency. The participating public agency shall accept sole responsibility for securing services or making payments to the vendor. XI. NON -ASSIGNMENT This Agreement is not assignable either in whole or in part by CONTRACTOR without the written consent of CITY. XII. ATTORNEY'S FEES In the event a legal action is commenced to enforce any of the provisions of this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney's fees. XIII. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB XIV. INSURANCE A. Scope of Coverage. During the term of this Agreement, CONTRACTOR shall maintain, at no expense to CITY, the following insurance policies: 1. A commercial general liability insurance policy in the minimum amount of one million dollars ($1,000,000) per occurrence/two million dollars ($2,000,000) aggregate, for death, bodily injury, personal injury, or property damage. 2. An automobile liability (owned, non -owned, and hired vehicles) insurance policy in the minimum amount of one million dollars ($1,000,000) dollars per occurrence. 3. If any licensed professional performs any of the services required to be performed under this Agreement, a professional liability insurance policy in the minimum amount of one million dollars ($1,000,000) per occurrence/two million dollars ($2,000,000) aggregate, to cover any claims arising out of the CONTRACTOR's performance of services under this Agreement. Where CONTRACTOR is a professional not required to have a professional license, CITY reserves the right to require CONTRACTOR to provide professional liability insurance pursuant to this section. 4. If it employs any person, CONTRACTOR shall maintain worker's compensation insurance, as required by the State of California, with statutory limits, and employer's liability insurance with limits of no less than one million dollars ($1,000,000) per accident for bodily injury or disease. CONTRACTOR's worker's compensation insurance shall be specifically endorsed to waive any right of subrogation against CITY. B. Other Insurance Requirements. The insurance coverage required of the CONTRACTOR in subparagraph A of this section above shall also meet the following requirements: 1. Except for professional liability insurance or worker's compensation insurance, the insurance policies shall be specifically endorsed to include DocuSign Envelope U 71A79BDD-D56A-4AE1-9873-2025ACE66EOB the CITY, its officers, agents, employees, and volunteers, as additional insureds (for both ongoing and completed operations) under the policies. 2. The additional insured coverage under CONTRACTOR'S insurance policies shall be "primary and noncontributory" with respect to any insurance or coverage maintained by CITY and shall not call upon CITY's insurance or self-insurance coverage for any contribution. The "primary and noncontributory" coverage in CONTRACTOR'S policies shall be at least as broad as ISO form CG20 0104 13. 3. Except for professional liability insurance or worker's compensation insurance, the insurance policies shall include, in their text or by endorsement, coverage for contractual liability and personal injury. 4. By execution of this Agreement, CONTRACTOR hereby grants to CITY a waiver of any right to subrogation which any insurer of CONTRACTOR may acquire against CITY by virtue of the payment of any loss under such insurance. CONTRACTOR agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation, but this provision applies regardless of whether or not CITY has received a waiver of subrogation endorsement from the insurer. 5. If the insurance is written on a Claims Made Form, then, following termination of this Agreement, said insurance coverage shall survive for a period of not less than five years. 6. The insurance policies shall provide for a retroactive date of placement coinciding with the effective date of this Agreement. 7. The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of CITY (if agreed to in a written contract or agreement) before CITY'S own insurance or self-insurance shall be called upon to protect it as a named insured. DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB 8. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits shall be available to CITY or any other additional insured party. Furthermore, the requirements for coverage and limits shall be: (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured; whichever is greater. No representation is made that the minimum Insurance requirements of this agreement are sufficient to cover the obligations of the CONTRACTOR under this agreement. C. Deductibles and SIR's. Any deductibles or self-insured retentions in CONTRACTOR's insurance policies must be declared to and approved by the City Attorney and shall not reduce the limits of liability. Policies containing any self-insured retention (SIR) provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named insured or CITY or other additional insured party. At CITY's option, the deductibles or self-insured retentions with respect to CITY shall be reduced or eliminated to CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and related investigations, claims administration, attorney's fees and defense expenses. D. Proof of Insurance. CONTRACTOR shall provide to the City Attorney all of the following: (1) Certificates of Insurance evidencing the insurance coverage required in this Agreement; (2) a copy of the policy declaration page and/or endorsement page listing all policy endorsements for the commercial general liability policy, and (3) excerpts of policy language or specific endorsements evidencing the other insurance requirements set forth in this Agreement. CITY reserves the right to obtain a full certified copy of any insurance policy and endorsements from CONTRACTOR. Failure to exercise this right shall not constitute a waiver of the right to exercise it later. The insurance shall be approved as to form and sufficiency by the City Attorney. DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB XV. INDEMNIFICATION With respect to losses, claims, liens, demands and causes of action arising out of the CITY's use of the results ofCONTRACTOR's services as provided to the City pursuant to this Agreement, CONTRACTOR hereby agrees to protect, defend, indemnify, and hold the CITY free and harmless from any and all losses, claims, liens, demands, and causes of action of every kind and character including, but not limited to, the amounts of judgments , penalties, interest, court costs, legal fees, and all other expenses incurred by the CITY arising in favor of any party, including claims, liens, debts, personal injuries, death, or damages to property (including employees or property of the CITY). CITY hereby agrees to protect, defend, indemnify, and hold CONTRACTOR free and harmless from any and all losses, claims, liens, demands, and causes of action of every kind and character arising from CONTRACTOR's performance or lack of performance under this Agreement including, but not limited to, the amounts of judgments , penalties, interest, court costs, legal fees, and all other expenses incurred by CONTRACTOR arising in favor of any party, including claims, liens, debts, personal injuries, death, or damages to property (including employees or property of the CONTRACTOR). Each party to this Agreement agrees to investigate, handle, respond to, provide defense for, and defend at its sole expense any such claims, demand, or suit for which it has agreed to indemnify the other party pursuant to this paragraph. Each party also agrees to bear all other costs and expenses related to its indemnity obligation, even if the claim or claims alleged are groundless, false, or fraudulent. This provision is not intended to create any cause of action in favor of any third party against CONTRACTOR or the CITY or to enlarge in any way the liability of CONTRACTOR or the CITY but is intended solely to provide for indemnification of each party from liability for damages DocuSign Envelope ID: 71A79BDD-D56A-4AE1»9873-2025ACE66EOB or injuries to third persons or property arising from this contract or agreement on the terms set forth in this paragraph. XVI. NOTICE All notices sent by a party under this Agreement shall be in writing and shall be deemed properly delivered to the other party as of the date of receipt, if received on a business day prior to 3:00 PM local time, or otherwise on the next business day after receipt, provided delivery occurs personally, by courier service, or by U.S. mail to the other party at its address set forth below, or to such other address as either party may, by written notice, designate to the other party. Notices to CONTRACTOR shall be sent to HINDERLITER, de LLAMAS and ASSOCIATES, 120 S State College Blvd., Suite 200, Brea, CA 92821; and notices to CITY shall be sent to CITY OF SAN RAFAEL, 14005 1h Avenue, San Rafael, California 94901. XVII. ENTIRE AGREEMENT; ETC. This Agreement expresses the full and complete understanding of the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous proposals, agreements, representations and understandings, whether written or oral, with respect to the subject matter. This Agreement may not be amended or modified except in writing signed by each of the parties hereto. This Agreement shall be construed as to its fair meaning and not strictly for or against either party. The headings hereof are descriptive only and not to be construed in interpreting the provisions hereof. XVIII. COUNTERPARTS; AUTHORITY TO SIGN This Agreement may be executed in any number of counterparts, each of which will constitute an original and all of which, when taken together, will constitute one DocuSign Envelope ID: 71A79BDD-D56A-4AE1-9873-2025ACE66EOB agreement. Any signature pages of this Agreement transmitted by facsimile or sent by email in portable document format (PDF) will have the same legal effect as an original executed signature page. Each of the persons signing on behalf of a party hereto represents that he or she has the right and power to execute this Agreement on such party's behalf. (SIGNATURES ON FOLLOWING PAGE) DocuSrgn Envelope ID. 71A79BDD-D56A-4AE1-9873-2025ACE66EOB IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written by their respective officers duly authorized in that behalf. CITY: CITY OF SAN RAFAEL Cit Man ger CONTRACTOR: HINDERLITER, DE LLAMAS & ASSOCIATES A California Corporation Doc�uS�iyg n�c�d� by: `Andrew Ickerson, President 12/17/2020 and Signature of Second Corporate Officer DocuSigncd by: 111171ZUZU Gary Lott, Chief Operations Officer APPROVED AS TO FORM: CITY COUNSEL: La a WAA4,- Robert F. Epstein, City A orney CONTRACT ROUTING FORM INSTRUCTIONS: Use this cover sheet to circulate all contracts for review and approval in the order shown below. TO BE COMPLETED BY INITIATING DEPARTMENT PROJECT MANAGER: Contracting Department: Finance Project Manager: Nadine Hade Extension: 3062 Contractor Name: HdL-Measure R Contract Contractor's Contact: 714-879-5000 Contact's Email: pfickett@hdlcompanies.com ❑ FPPC: Check if Contractor/Consultant must file Form 700 Step RESPONSIBLE DESCRIPTION COMPLETED REVIEWER DEPARTMENT DATE Check/Initial 1 Project Manager a. Email PINS Introductory Notice to Contractor NA ❑ Click here to b. Email contract (in Word) and attachments to City enter a elate. City Attorney Attorney c/o Laraine.Gittens@cityofsanrafael.org a. Review, revise, and comment on draft agreement ❑ N LG 2 12/15/2020 and return to Project Manager 12/15/2020 ❑x LG b. Confirm insurance requirements, create Job on Department Director PINS, send PINS insurance notice to contractor 12/15/2020 ❑x NAH 3 Approval of final agreement form to send to contractor Forward three (3) originals of final agreement to 12/15/2020 4 Project Manager contractor for their signature 5 Project Manager When necessary, contractor -signed agreement ❑x N/A agendized for City Council approval * *City Council approval required for Professional Services ❑ Agreements and purchases of goods and services that exceed Or 115,000; and for Public Works Contracts that exceed $175,000 Date of City Council approval CONTINUE ROUTING PROCESS WITH HARD COPY Forward signed original agreements to City PRINT Project Manager 12/18/2020 6 NAH Attorney with printed copy of this routing form 7 City Attorney Review and approve hard copy of signed ,, / agreement Review and approve insurance in PINS, and bonds I H /g*ZD ,, l 8 City Attorney _ City Manager/ Mayor (for Public Works Contracts) /VhZD �GAtlkm 1. 9 Agreement executed by City Council authorized _ City Clerk official _ _ _ Attest signatures, retains original agreement and 10 IJINI forwards copies to Project Manager