HomeMy WebLinkAboutFin 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
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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.
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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.
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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
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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.
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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
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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
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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
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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.
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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
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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