HomeMy WebLinkAboutReso - CC - 096-2018RESOLUTION NO. 096-20I8
A RESOLUTION OF THE CITY COT]NCIL OF THE CITY OF BURLINGAME-
AMENDING AI\D RESTATING A CONSULTING SERYICES AGREEMENT BETWEEN
THE CITY OF BT]RLINGAME AND HINDERLITER, de LLAMAS AND ASSOCIATES
WIIEREAS, pursuant to Ordinance 1944, the City of Burlingame entered into a contract with the
Califomia Department of Tax and Fee Administration to perform all functions incident to the administration
and collection of local sales, use and transactions taxes; and
WIIERf,AS, the City Council of the City of Burlingame and Hinderliter, de Llamas and Associates
(Consultant) entered into an agreement on October 7, l99l to investigate and review sales and use tax
transactions and collections for the City, contained in the records ofthe Califomia Department of Tax and
Fee Administration; and
WHEREAS, the City and the Consultant now wish to amend and restate the Agreement to update
the Agreement terms to reflect the City's current needs and to increase the compensation as to reflect the
updated scope of services.
NOW, TIIEREFORE BE IT RESOLVED that the City Council of the City of Burlingame
approves the amended and restated consulting services agreement with Hinderliter, de Llamas and
Associates, as attached as Exhibit A.
Mich
I, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, certiry that the foregoing
resolution was introduced, approved, and adopted at a regular meeting of the City Council held on the 2nd
day ofJuly 2018, by the following vote:
AYES: COUNCILMEMBERS: BEACH, BROWNRIGG, COLSON, KEIGHRAN, ORTZ
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
Clerk
t
AGREEMENT FOR SALES, USE AND TRANSACTIONS TAX AUDIT AND
INFORMATION SERVICES
This Agreement is made and entered into as of the _ day of 2018 (the
"Effective Date") by and between the CITY OF BLJRLINGAME, a municipal corporation hereinafter
called ("CITY'), and HINDERLITER, de LLAMAS AND ASSOCIATES a Califomia Corporation,
hereinafter called ('CONTRACTOR').
I. RECITALS
WHEREAS, sales, use and transactions tax (sometimes collectively referred to herein as
"sales and use tax") revenues can be increased through a system of continuous monitoring,
identification and correction ofallocation errors, and
WHEREAS, an effective program of sales and use tax management will improve
identification of economic opportunities; provide for more accurate sales and use tax
forecasting; and assist in related revenue collections; and
WHEREAS, CITY desires the combination of data entry, report preparation and analysis
necessary to effectively manage its sales and use tax base; the recovery of revenues
erroneously allocated to other jurisdictions and allocation pools; and to maximize its frnancial
and economic planning; and
WHEREAS, CONTRACTOR has the programs, equipment and personnel required to deliver
the sales and use tax related services referenced herein;
THEREFORE, CITY and CONTRACTOR, for the consideration hereinafter described,
mutually agree as follows:
940431.4-6 Page I of 15
II. SER!'ICES
The CONTRACTOR shall perlorm the following services (collectively, the "Services"):
A. SALES TAX AND ECONOMIC ANALYSIS SERVICES
l. CONTRACTOR shall establish a special database that identifies the name, address
and quarterly allocations of all sales tax producers within the CITY for the most
current and all quarters back to fiscal year 1988-1989 or earlier, if the CITY has prior
historical sales tax data available on computer readable magnetic media. This
database will be utilized to generate special reports to the CITY on: major sales tax
producers by rank and category, sales tax activity by categories, or business districts,
identification of reporting aberrations, and per capita and outlet comparisons with
regional and statewide sales.
2. CONTRACTOR shall provide updated reports following each calendar quarter
identifring changes in sales by individual businesses, business gtoups and categories
and by geographic area. These reports may include, without limitation, quarterly
aberrations due to State audits, fimd transfers, and receivables along with late or
double payments, and quarterly reconciliation worksheets to assist with budget
forecasting. CONTRACTOR shall meet quarterly with CITY.
3. CONTRACTOR shall additionally provide following each calendar quarter a
summary analysis for the CITY to share with Council Members Chambers of
Commerce, other economic development interest groups and the public that analyze
CITY'S sales tax trends by major groups, and geographic areas without disclosing
confrdential information.
94M3t.4-6 Page 2 of 15
B. ALLOCATION AUDIT AND RECOVERY SERVICES
1 CONTRACTOR shall conduct initial and on-going sales, use and transactions tax
audits to identifr and correct distribution and allocation erors, and to proactively
affect favorable registratiorl reporting or formula changes thereby generating
previously unrealized sales, use and tansactions tax income for the CITY and/or
recovering misallocated tax fiom previously properly registered taxpayers. Common
errors that will be monitored and corrected include, but are not limited to:
transposition errors resulting in misallocations; erroneous consolidation of multiple
outlets; formula errors, misreporting of "point of sale" to the wrong location; delays
in reporting new outlets; misallocating use tax payments to the allocation pools or
wrong jurisdiction; and erroneous fund transfers and adjustments.
2. CONTRACTOR shall initiate contacts with state agencies, and sales management
and accounting officials in companies that have businesses where a probability of
error exists to verifr whether current tax receipts accumtely reflect the local sales
activity. Such contacts will be conducted in a professional and courteous manner.
3. CONTRACTOR shall (i) prepare and submit to the Board of Equalization
information for the purpose of correcting allocation enors that are identified and (ii)
follow-up with individual businesses and the State Board of Equalization to promote
recovery by the CITY ofback or prospective quarterly payments that may be owing.
9.1043 t .4-6 Page 3 of l5
4. CONTRACTOR shall make available to CITY staff CONTRACTOR's web-based
sales tax computer software program containing sellers permit and quarterly
allocation information for all in-city business outlets registered with the Board of
Equalization and updated quarterly. This software shall allow CITY staff to search
businesses by street address, account number, business name, business type and
keyword, arrange data by geographic are4 and print out a variety of reports.
4. If during the course of its audit, CONTRACTOR finds businesses located in the
CITY that are properly reporting sales and use tax but have the potential for
modifuing their operation to provide an even grealer shme to the CITY,
CONTRACTOR may so advise CITY and work with those businesses and the CITY
to encourage such changes.
C. CONSULTING AND OT}IER OPTIONAL SERVICES
III. CONSIDERATION
A. CONTRACTOR shall provide the sales tax and economic analysis Services described in
Section tr-A above for a fee of $650 per month, commencing with the month of the
Effective Date (hereafter referred to as "monthly fee"). The monthly fee shall be invoiced
quarterly in arrears, and shall be paid by CITY no later than 30 days after the invoice date.
The monthly fee shall increase annually following the month of the Effective Date by the
percentage increase in the "CPI" for the preceding twelve month period. In no event shall
the monthly fee be reduced by this calculation. For purposes of this Agreement, the
"CPI" shall mean the Consumer Price lndex - All Urban Consumers for the surrorurding
statistical metopolitan area nearest CITY, All Items (1982-84: 100), as published by the
94043t.4-6 Page ,l of l5
CONTRACTOR may, from time to time in its sole discretion, consult with CITY staff,
including without limitation, regarding (i) technical questions and other issues related to
sales, use and transactions tax; (ii) utilization of reports to enhance business license
collection efforts; and (iii) sales tax projections for proposed annexations, economic
development projects and budget planning. In addition to the foregoing optional
consulting services, CONTRACTOR may, from time to time in its sole discretion,
perform other optional Services, including without limitation, negotiating/review of tax
sharing agreements, establishing purchasing corporations, and meeting with taxpayers to
encouage self-assessment of use tax.
B. 1.
U.S. Department of Labor, Bureau of Labor Statistics, or, ifsuch index should cease to be
published, any reasonably comparable index selected by CONTRACTOR.
CONTRACTOR shall be further pud, 15% of all new and recovered sales, use and
transactions tax revenue received by the CITY as a result, in whole or in part, of the
allocation audit and recovery services described in Section II-B above (hereafter
referred to as "audit fee"), including without limitation, any reimbursement or other
payment from any state fimd and any point of sale misallocations.
2. The audit fee shall be paid even if CITY assists, works in pmallel with, and/or incurs
attomeys' fees or other costs or expenses in connection with any of the relevant
Services. Among other things, the audit fee applies to state fund transfers received
for back quarter reallocations and monies received in the first eight consecutive
reporting quarters following completion of the allocation audit by CONTRACTOR
and coofirmation of corrections by the State Board of Equalization. CITY shall pay
audit fees upon CONTRACTOR'S submittal of evidence of CONTRACTOR'S work
in support of recovery of subject revenue, including, without limitation, copies of
BOE 549-5 petition forms of any other correspondence between CONTRACTOR
and the Board ofEqualization or the taxpayer.
3. For any increase in the tax rcported by businesses already properly making tax
payments to CITY, it shall be CONTRACTOR's responsibility to support in its
invoices the audit fee attributable, in whole or in part, to CONTRACTOR's Services.
940431.,t{Page 5 of 15
Principal
Programmer
Senior Analyst
Analyst
$295 per hour
$250 per hour
$195 per hour
$ 100 per hour
CONTRACTOR may change such hourly rates from time to time upon not less than 30
days' prior wriuen notice to CITY.
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 (l) 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.
9,10,131.4-6 Page 6 of 15
C. CONTRACTOR shall invoice CITY for any consulting and other optional Services
rendered to CITY in accordance with Section II-C above based on the following hourly
rates on a monthly or a quarterly basis, at CONTRACTOR's option. All such invoices
shall be payable by CITY no later than 30 days following the invoice date. CITY shall not
be invoiced for any consulting Services totaling less than an hour in any month. The
hourly rates in effect as of the Effective Date are as follows:
IV. CONFIDENTIALITY;OWNERSHIPruSEOFINFORMATION
A. Section 7056 of the State of Califomia Revenue and Taxation Code specifically limits the
disclosure of confrdential taxpays information contained in the records of the State
Board of Equalization. Section 7056 specifies the conditions under which a CITY may
authorize persons other than CITY officers and employees to examine State Sales and
Use Tax records.
2. CONTRACTOR is required to disclose information contained in. or derived from,
those sales, use or transactions and use tax records only to an offrcer or employee of
the CITY who is authorized by resolution to examine the information.
3. CONTRACTOR is prohibited from performing consulting services for a retailer, as
defined in Califomia Revenue & Taxation Code Section 60 1 5 , during the term of this
Agteement.
4- CONTRACTOR is prohibited from retaining the information contained in, or
derived from those sales, use or transactions and use tax records, after this
Agreement has expired. Information obtained by examination of Board of
Equalization records shall be used only for purposes related to collection of local
sales and use tax or for other govelnmental functions of the CITY as set forth by
resolution adopted pursuant to Section 7056 (b) ofthe Revenue and Taxation Code.
Page 7 of 1594M3 t.4-6
B. The following conditions specified in Section 7056-0), (l) of the State of Califomia
Revenue and Taxation Code are hereby made part ofthis Agreement:
l. CONTRACTOR is authorized by this Agreement to examine sales, use or
transactions and use tax records of the Board of Equalization provided to CITY
pursuant to contract under the Bradley-Bums Uniform Sales and Use Tax Law
Revenue and Taxation Code section 7200 et.seq.
The resolution shall designate the CONTRACTOR as a person authorized to
examine sales and use tar records and certi! that this Agreement meets the
requirements set forth above and in Section 7056 (b), (1) of the Revenue and
Ta.xation Code.
C. Software Use- CONTRACTOR hereby provides authorization to CITY to access
CONTRACTOR'S Sales Tax website if CITY chooses to subscribe to the software and
reports option. The website shall only be used by authorized CITY staff. No access will
be ganted to any third party without explicit written authorization by CONTRACTOR.
CITY shall not sublet, duplicate, modifi, decompile, reverse engineer, disassemble, or
attempt to derive the source code of said software. The software use gralted hereunder
shall not imply ownership by CITY of said software, or any right of CITY to sell said
software or the use of same, or any right to use said software for the benefit of others.
This software use authorization is not transferable. Upon termination or expiration of
this Agreement, the software use authorization shall expire, and all CITY staff website
logins shall be de-activated.
D. Proprietarv Information. As used here in, the term "proprietary information" means all
information or material that has or could have commercial value or other utility in
CONTRACTOR's business, including without limitation: CONTRACTOR'S (i)
computer or data processing programs; (ii) data processing applications, routines,
subroutines, techniques or systems; desklop or web-based software; (iii) business
processes; (iv) marketing plans, analysis and strategies; and (v) materials and techniques
used; as well as the terms and conditions of this Agreement. Except as otherwise
required by law, CITY shall hold in confidence and shall not use (except as expressly
authorized by this Agreement) or disclose to any other party any proprietary information
provided, leamed of or obtained by CITY in connection with this Agteement. The
obligations imposed by this Section IV-D shall suwive any expiration or termination of
g.10,13l 4-5 Pase 8 of l5
V. CITYMATERIALSANDSUPPORT
CITY shall adopt a resolution in a form acceptable to the State Board of Equalization and in
compliance with Section 7056 of the Revenue and Taxation Code, authorizing
CONTRACTOR to examine the confidential sales tax records of CITY. CITY further agrees
to provide any information or assistance that may readily be available such as business license
records within the CITY and to provide CONTRACTOR with proper identification for
contacting businesses. CITY further agrees to continue CONTRACTOR's authorization to
examine the confidential sales tax records of the CITY by maintaining CONTRACTOR's
nirme on the CITY resolution or by providing copies of future allocation reports on computer
readable magnetic media until such time as all audit adjustments have been completed by the
State Board of Equalization and any audit fee owing to CONTRACTOR has been paid.
VI. LICENSE, PERMITS, FEES AND ASSESSMENTS
CONTRACTOR shall obtain such licenses, permits and approvals (collectively the "Permits")
as may be required by law for the performance of the Services. CITY shall assist
CONTRACTOR in obtaining such Permits, and CITY shall absorb all fees, assessments and
taxes which are necessary for any Permits required to be issued by CITY.
VII. TERMINATION
This Agreement may be terminated for convenience by either party by grving 30 days written
notice to the other of such termination and sp€cirying the effective date thereof. Upon the
presentation of such notice, CONTRACTOR may continue to perform Services through the
date of termination. Following termination of this Agreement, CITY shall continue to timely
pay CONTRACTOR's invoices for Services performed and not paid for prior to termination.
94M31.44 Page 9 of 15
this Agreement or otherwise. The terms of this Section IV-D shall not apply to any
information that is public information.
Anything to the contrary herein notwithstanding (and without limitation on the foregoing
sentence), CITY shall continue to pay to CONTRACTOR the audit fee for tax payments
received by CITY after termination of this Agreement from (i) state fund transfers for back
quarter reallocations and the frrst eight consecutive calendar quarters following completion of
the allocation audit by CONTRACTOR and confirmation of corrections by the State Board of
Equalization; and (ii) businesses identified by CONTRACTOR pursuant to Section III-B-3
above, to the extent such businesses commence or continue to make increased tax payments
during the first 24 months following termination of this Agreement.
VIII. INDEPENDENTCONTRACTOR
CONTRACTOR shall perform the services hereunder as an independent contractor and shall
fumish such services in its own manner and melhod, and under no circumstances or
conditions shall any agent, servant, or employee of CONTRACTOR be considered as an
employee of CITY.
Ix. NON-ASSIGNMENT
This Agreement is not assignable either in whole or in part by CONTRACTOR without the
written consent of CITY.
X. INSURANCE
CONTRACTOR shall maintain the policies set out below, and in amounts of coverage not
less than those indicated herein. Additionally, where required by CITY, CONTRACTOR
shall name the CITY as an additional insured on CONTRACTOR'S comprehensive general
liability policy and provide a Certificate of lnsurance.
94U31.4-6 Page l0 of 15
1. Worker's Compensation and Emoloyer's Liabilitv. In accordance with applicable law.
2. Comorehensive General Liabilitv. Bodily injury liability in the amount of $1,000,000 for
each person in any one accident, and $1,000,000 for injuries sustained by two or more
persons in any one accident. Property damage liability in the amount of $1,000,000 for
each accident, and $2,000,000 aggregate for each year of the policy period.
3. Comprehensive Automobile Liabilitv Bodily injury liability coverage of $1,000,000 for
each accident.
4. Enors and Omissions. In addition to any other insurance required by this Agreement,
CONTRACTOR shall provide and maintain, during the term of this Agreement,
professional liability insurance in the amount of $1,000,000 as evidenced by a Certificate
of lnsurance.
XI. INDEMNIFICATION
CONTRACTOR hereby agrees to, and shall hold CITY, its elective and appointive boards,
officers, agents and employees, harmless from any liability for damage or claims for damage
for personal injury, including death, as well as from claims for breach of confidentiality or
property damage which may arise from CONTRACTOR'S willful or negligent acts, errors or
omissions or those of its employees or agents. CONTRACTOR agrees to and shall defend
CITY and its elective and appointive boards, officers, agents and employees from any suits or
actions at law or in equity for damages caused, or alleged to have been caused, by reason of
any ofthe aforesaid willful or negligent acts, errors or omissions.
CITY hereby agrees to, and shall hold CONTRACTOR, its officers, agents and employees,
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for breach of confidentiality or property damage which may
arise from CITY'S negligent acts, errors or omissions including misuse or improper disclosure
of confidential information contained in reports submitted by contractor under this
Agreement. CITY agrees to and shall defend CONTRACTOR and its officers, agents and
employees from any suits or actions at law or in equity for damage caused, or alleged to have
940431.4-6 Page ll of l5
been caused, by reason of any of the aforesaid negligent acts, errors or omissions and/or
misuse or improper disclosure of confidential information.
XII. IRREPARA.BLE HARM
CONTRACTOR and CITY each understands and agrees that any breach of this Agreement by
either of them may cause the other party hereto irreparable harm, the amount of which may be
difhcult to ascertain, and therefore agrees that such other party shall have the right to apply to
a court of competent jurisdiction for specific performance and/or an order restraining and
enjoining any further breach and for such other relief as such other party shall deem
appropriate. Such right is to be in addition to the remedies otherwise available to such other
party at law or in equity. The parties hereto expressly waive the defense that a remedy in
damages will be adequate and any requirement in an action for specific performance or
injunction hereunder for the posting of a bond.
XIII. GOVERNING LAW
This Agreement shall be govemed by and construed in accordance with the laws of the State
of Califomia (without regard to its choice of law provisions). If any legal action is necessary
to enforce or interpret this Agreement, the parties agree that such action shall be brought in
the Superior Court for the State of Califomia, County of Los Angeles, or the U.S. District
Court for the Central District of Califomi4 Westem Division. The parties hereby submit to
the exclusive jwisdiction of such courts and waive any other venue to which either party
might be entitled by domicile or otherwise.
XIV. ATTORNEYS'FEES
If any party hereto brings an action or proceeding under this Agreement or to declare rights
hereunder, the Prevailing Party in any such proceeding, action, or appeal thereon shall be
entitled to recover all reasonable fees, costs and expenses, including reasonable attomeys'
94M31.4-6 Page 12 of !5
XV. SEVERABILITY; NO WAIVER
The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of the other provisions of this Agreement, which shall remain in full
force and effect. If any of the provisions of this Agreement shall be deemed to be
unenforceable by reason of its extent, duration, scope or otherwise, then the parties
contemplate that the court making such determination shall enforce the remaining provisions
of this Agreement, and shall reduce such extent, duration, scope, or other provision and shall
enforce them in their reduced form for all purposes contemplated by this Agreement. No
failure or delay by either party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any right, power or privilege hereunder.
XVI. NOTICES
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 receip, 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 ro HINDERLITER, de LLAMAS and
ASSOCIATES, 1340 Valley Vista Drive, Suite 200, Diamond Bar, CA 91765; and notices to
940/3t .44 Page I 3 of I 5
fees. Such fees, costs and expenses may be awarded in fhe same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision or judgnent.
The attomeys' fees award shall not be computed in accordance with any court fee schedule,
but shall be such as to fully reimburse all attomeys' fees reasonably incurred. "Prevailing
Party" shall mean and include, without limitation, a party who substantially obtains or defeats
the relief sought, as the c.rse may be, whether by compromise, settlement, judgment, or the
abandonment by the other party of its claim or defense.
CITY shall be sent to CITY OF BURLINGAME,50l Primrose Road, Burlingame, CA
94010.
X!,II. 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.
This Agreement may be executed in any number of counterparts, each of which will constitute
an original and all of which, when taken togethel will constitute one 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 sigring 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.
940411.4-6 Page 14 of l5
XVm. COUNTERPARTS; AUTHORITY TO SIGN
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 their behalf.
CITY:
CITY OF BURLINGAME
City Manager
Citv Clerk
CONTRACTOR:
HINDERLITE& DE LLAMAS & ASSOCIATES
A Califomia Corporation
By
Andrew Nickerson, President
APPROVED AS TO FORM:
City Attomey
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