HomeMy WebLinkAbout2014-04-22; City Council; 21569; Agreement MuniServices LLC Sales, Use Tax Auditing Analysis, Reporting ServicesCITY OF CARLSBAD - AGENDA BILL
AB#
MTG.
DEPT.
21,569
04/22/14
FIN
AGREEMENT WITH MUNISERVICES,
LLC FOR SALES AND USE TAX
AUDITING, ANALYSIS AND
REPORTING SERVICES
DEPT. HEAD On
CITY ATTY. ^^^^^
CITY MGR.
RECOMMENDED ACTION:
Adopt Resolution No. 2014-066 authorizing the Mayor to enter into an agreement with
MuniServices, a Limited Liability Company (MuniServices) to perform sales and use tax
auditing, analysis and reporting services.
Adopt Resolution No. 2014-067 designating MuniServices as the consultant authorized to
examine sales and use tax records of the State Board of Equalization on the city's behalf.
ITEM EXPLANATION:
Sales Tax revenues are a primary revenue source for the city, and assurance that all tax,
revenues which the city is entitled to are received, is key in maintaining the city's fiscal integrity.^
The city retained MuniServices, (previously known as Municipal Resource Consultants) in 1993
to provide sales and use tax audit, analysis, and reporting services. The Finance Department
has been pleased with their services, but periodically it is appropriate and recommended to
solicit proposals to assure best value service. Requests for proposals were solicited; due to the
specialized nature of these services, only two (2) firms responded.
A selection committee examined the proposals and is recommending MuniServices for
provision of the solicited services. MuniServices has a solid track record and has been
assisting cities by auditing sales tax revenues for over 35 years, 20 of those years for the city.
It should be noted that the sales tax audit work does not result in any additional cost to the city.
MuniServices is only paid if and when they recover taxes.
Section 7056 of the California Revenue and Taxation Code (RTC) sets forth certain
requirements and conditions for the disclosure of State Board of Equalization (BOE) records,
including requiring the adoption of a resolution designating the representative (MuniServices)
as a person authorized to view such confidential sales and use tax records on the jurisdiction's
behalf. The resolution must certify that the designated person has an existing contract with the
jurisdiction to examine records of the BOE pertaining to the ascertainment of the sales or
transactions and the use taxes to be collected by the BOE on the jurisdiction's behalf. The
DEPARTMENT CONTACT: Helga Stover 760-602-2429 helga.stover@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER-SEE MINUTES •
AMENDED •
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resolution must also certify that the contract behween the jurisdiction and the person designated
by the resolution has met all of the following conditions:
1. Is required by the contract to disclose information contained or derived from those
confidential records only to an officer or employee of the jurisdiction who is also
authorized by the resolution to examine the records;
2. Is prohibited by the contract from performing consulting services for a retailer during
the term of that contract; and
3. Is prohibited by the contract from retaining the information contained in or derived from
the confidential records after that contract has expired.
The RTC section 7056(b)(2) further provides that information obtained by examination of BOE's
records may be used only for purposes related to the collection of the local or district tax
pursuant to the contract, or for purposes related to other governmental functions of the
jurisdiction as set forth in the jurisdiction's resolution. The required contract provisions have
been incorporated into the Agreement with MuniServices, attached as Exhibit 3.
FISCAL IMPACT:
The cost is divided into two categories, Sales and Use Tax Audit (SUTA) services and Sales
and Use Tax Analysis and Reporting Services (STARS). Payment for SUTA services will be
based on an eighteen percent (18%) contingency fee, and shall be paid quarterly, after the city
has received the revenue from any corrections, and the quarterly distribution report has verified
this receipt. The contingency fee shall apply to six (6) quarters after the Date of Correction
(Exhibit 3, Section 5) and all eligible prior quarters back to and including the three (3) quarters
prior to the Date of Knowledge (Exhibit 3, Section 5) quarter.
Sales and Use Tax Analysis and Reporting Services shall not exceed four thousand dollars
($4,000) per Agreement year, plus an adjustment at the beginning of each calendar year by the
percentage change in the Consumer Price Index - West Urban (CPI-WU) as reported by the
Bureau of Labor Statistics.
Sufficient funds are available in the current budget to cover the Fiscal Year 2013-14 costs.
Audit costs for the remaining four (4) years will be budgeted annually in those years.
ENVIRONMENTAL REVIEW:
Pursuant to Public Resources Code section 21065, this action does not constitute a "project"
within the meaning of CEQA in that it has no potential to cause either a direct physical change
in the environment, or a reasonably foreseeable indirect physical change in the environment,
and therefore does not require environmental review.
EXHIBITS:
1. Resolution No. 2014-066 authorizing the Mayor to enter into an agreement with MuniServices,
a Limited Liability Corporation (MuniServices) to perform sales and use tax auditing,
analysis and reporting services.
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2. Resolution No. 2014-067 designating MuniServices as the consultant authorized to examine
sales and use tax records of the State Board of Equalization on the city's behalf.
3. Agreement between the City of Carlsbad and MuniServices, LLC for sales and use tax
auditing (SUTA) and analysis and reporting services (STARS).
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1 RESOLUTION NO. 2014-066
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2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE MAYOR
TO ENTER INTO AN AGREEMENT WITH
4 MUNISERVICES, A LIMITED LIABILITY COMPANY, TO
PERFORM SALES AND USE TAX AUDITING, ANALYSIS
5 AND REPORTING SERVICES
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WHEREAS, the auditing and analysis of the State Board of Equalization records
pertaining to the ascertainment of the sales or transaction and use taxes to be collected
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g on the city's behalf is key in maintaining the city's fiscal integrity; and
10 WHEREAS, proposals from two firms qualified to perform such services were
11 evaluated; and
12 WHEREAS, staff believes that MuniServices, LLC (MuniServices) is the best
1^ value in providing sales tax audit, analysis and reporting services.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. The firm of MuniServices is selected to provide the auditing, analysis and
19 reporting services.
20 3. That the Mayor is hereby authorized to execute the Agreement (Exhibit 3)
21 between MuniServices and the City of Carlsbad.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City
of Carlsbad on the 22"'' day of April, 2014, by the following vote to wit:
AYES:
NOES:
Council Members Packard, Wood, Schumacher and Blackburn.
None.
ABSENT: Council Member Hall.
MARK PACKARD, Mayor Pro Tem
ATTEST:
JARA ENGLESON, City
(SEAL)
V\l»>"""//
1 RESOLUTION NO. 2014-067
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, DESIGNATING
^ MUNISERVICES, LLC AS THE CONSULTANT
4 AUTHORIZED TO EXAMINE SALES AND USE TAX
RECORDS OF THE STATE BOARD OF EQUALIZATION
5 ON THE CITY'S BEHALF
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7 WHEREAS, the State Board of Equalization (BOE) administers and collects the
8 California Sales and Use Taxes; and
9 WHEREAS, pursuant to California Revenue and Taxation Code (RTC) Section
10 7056, the City of Carlsbad, by resolution, may designate any officer, employee or any
11 other person to examine all of the sales and use tax records of the BOE pertaining to
12 sales and use taxes collected for the city; and
13 WHEREAS, the City of Carlsbad has entered into an agreement for sales tax
14 audit, analysis, and reporting services with MuniServices, and therefore must designate
15 MuniServices as the authorized consultant to examine such sales tax records maintained
16 by the BOE on behalf of the city; and
17 WHEREAS, the RTC section 7056 (b)(2) further provides that information
18 obtained by examination of BOE's records may be used only for purposes related to the
19 collection of the local or district tax pursuant to the contract, or for purposes related to
20 other governmental functions of the city.
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24 1. That the above recitations are true and correct.
25 2. In all respects as set forth above, the City Council of the City of Carlsbad
hereby certifies to the State Board of Equalization that MuniServices is the designated
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representative of the City of Carlsbad to examine sales and use tax records of the State
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
California, as follows:
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3. That the city has entered into an agreement with MuniServices
(consultant) which meets all ofthe following conditions:
a) Consultant has an existing contract with the city to examine sales tax
records;
1 Board of Equalization pertaining to sales and use taxes collected on the city's behalf;
2 and
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g b) Consultant is required by that contract to disclose information contained
9 in, or derived from, those sales tax records only to an officer or employee of the city who
10 is authorized by resolution to examine the information; and
11 c) Consultant is prohibited by the contract from performing consulting
12 services for a retailer during the term of the contract; and
d) Consultant is prohibited by the contract from retaining the information
contained in, or derived from, those sales tax records after the contract has expired.
4. That the city shall certify to the adoption of this Resolution.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City
of Carlsbad on the 22"'' day of April, 2014, by the following vote to wit:
AYES:
NOES:
Council Members Packard, Wood, Schumacher and Blackburn.
None.
ABSENT: Council Member Hall.
MARK I^CKARD, Mayor Pro Tem
ATTEST:
BARBARA ENGLESON, City Qj^rk
(SEAL)
AGREEMENT FOR SALES AND USE TAX AUDITING,
ANALYSIS AND REPORTING SERVICES
(MUNISERVICES, LLC)
THIS AGREEMENT is made and entered into as of the ^^"^ day of
April , 2014, by and between the CITY OF CARLSBAD, a municipal
corporation, ("City"), and MuniSen/ices, LLC, a Limited Liability Company, ("Contractor").
RECITALS
A. City requires the professional services of a consulting firm that is experienced in
sales tax auditing, analysis and reporting.
B. Contractor has the necessary experience in providing professional services and
advice related to sales tax auditing, analysis and reporting.
C. Contractor has submitted a proposal to City and has affirmed its willingness and
ability to perform such work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, City and Contractor agree as follows:
1. SCOPE OF WORK
City retains Contractor to perform, and Contractor agrees to render, those services (the
"Sen/ices") that are defined in attached Exhibit "A", which is incorporated by this reference in
accordance with this Agreement's terms and conditions.
2. STANDARD OF PERFORMANCE
While performing the Services, Contractor will exercise the reasonable professional care and
skill customarily exercised by reputable members of Contractor's profession practicing in the
Metropolitan Southern California Area, and will use reasonable diligence and best judgment
while exercising its professional skill and expertise.
3. TERM
The term of this Agreement will be effective for a period of five (5) years from the date first
above written. The City Manager may amend the Agreement to extend it for one (1) additional
five (5) year period or part thereof.
Sales and Use Tax Analysis and Reporting Services (STARS) shall not exceed four thousand
dollars ($4,000) per Agreement year, plus an adjustment at the beginning of each calendar year
by the percentage change in the Consumer Price Index - West Urban (CPI-WU) as reported by
the Bureau of Labor Statistics, with the base year and month being that of the effective date of
this Agreement.
The Sales and Use Tax Audit (SUTA) sen/ices performed by Contractor may result in
corrections of misallocations and other revenue after cessation of services performed for the
City; in which case, the City will pay MuniServices per the terms of the Agreement for services
begun before termination or expiration of the Agreement, even if the monies are received after
termination or expiration. Contractor will provide the City with the list of accounts submitted but
not yet corrected as of the expiration or termination within a reasonable time after the expiration
or termination ("completion list"). MuniServices is allowed to continue working those accounts
on the completion list for a reasonable time to obtain correction. MuniSen/ices will be entitled to
payment for corrections that occur after termination that are on the completion list, and to
payment for accounts that have corrected before termination, but still have fonward quarters left
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to bill at the time of termination. City will take necessary steps to allow Contractor to continue
to receive the required information from the SBE during this completion period.
Sales and Use Tax Audit (SUTA) services will be provided on an eighteen percent (18%)
contingency fee of the payment corrections received by the City.
Extensions will be based upon a satisfactory review of Contractor's performance. City needs,
and appropriation of funds by the City Council. The parties will prepare a written amendment
indicating the effective date and length of the extended Agreement.
4. TIME IS OF THE ESSENCE
Time is of the essence for each and every provision of this Agreement.
5. COMPENSATION
Payment for Sales and Use Tax Analysis and Reporting Services (STARS) shall be four
thousand dollars ($4,000) per Agreement year (paid quarterly), plus an adjustment at the
beginning of each calendar year by the percentage change in the Consumer Price Index - West
Urban (CPI-WU) as reported by the Bureau of Labor Statistics. The initial Consumer Price Index
used for the first CPI adjustment will be the CPI-WU for the month in which the agreement is
fully signed with the first adjustment to occur at the beginning of the Calendar year following the
first full calendar year of service.
Payment for Sales and Use Tax Audit (SUTA) services will be based on an eighteen percent
(18%) contingency fee, and shall be paid quarterly, after the City has received the revenue from
the correction and the quarterly distribution report has verified this receipt. This fee shall apply
to six (6) quarters after the Date of Correction and all eligible prior quarters back to and
including the three (3) quarters prior to the Date of Knowledge quarter As used herein, the
Date of Knowledge is the quarter during which MuniSen/ices notifies the State Board of
Equalization (SBE) of the existence of a misallocation. As used herein, the Date of Correction
refers to the quarter in which the taxpayer has correctly reported the local tax and the SBE
distributes the local tax properly to City based on the taxpayer's reporting, together with any
prior period reallocations. For Quarterly Distribution Report (QDR) Misallocations detected and
corrected, MuniServices compensation will only include the quarters in which the misallocation
actually occurred.
No other compensation for the Services will be allowed except for items covered by subsequent
amendments to this Agreement.
6. STATUS OF CONTRACTOR
Contractor will perform the Services in Contractor's own way as an independent contractor and
in pursuit of Contractor's independent calling, and not as an employee of City. Contractor will be
under control of City only as to the result to be accomplished, but will consult with City as
necessary. The persons used by Contractor to provide services under this Agreement will not
be considered employees of City for any purposes.
The payment made to Contractor pursuant to the Agreement will be the full and complete
compensation to which Contractor is entitled. City will not make any federal or state tax
withholdings on behalf of Contractor or its agents, employees or subcontractors. City will not be
required to pay any workers' compensation insurance or unemployment contributions on behalf
of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within
thirty (30) days for any tax, retirement contribution, social security, overtime payment,
unemployment payment or workers' compensation payment which City may be required to
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make on behalf of Contractor or any agent, employee, or subcontractor of Contractor for work
done under this Agreement. At the City's election, City may deduct the indemnification amount
from any balance owing to Contractor, but only to the extent Contractor has not already made
such a payment or contribution.
7. SUBCONTRACTING
Contractor will not subcontract any portion of the Services without prior written approval of City.
If Contractor subcontracts any of the Services, Contractor will be fully responsible to City for the
acts and omissions of Contractor's subcontractor and of the persons either directly or indirectly
employed by the subcontractor, as Contractor is for the acts and omissions of persons directly
employed by Contractor. Nothing contained in this Agreement will create any contractual
relationship between any subcontractor of Contractor and City. Contractor will be responsible for
payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of
a subcontractor by the terms of this Agreement applicable to Contractor's work unless
specifically noted to the contrary in the subcontract and approved in writing by City.
8. OTHER CONTRACTORS
The City resen/es the right to employ other Contractors in connection with the Services.
9. INDEMNIFICATION
Contractor agrees to indemnify and hold harmless the City and its officers, officials, employees
and volunteers from and against all claims, damages, losses and expenses including attorney's
fees arising out of the performance of the work described herein caused by any negligence,
recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or
indirectly employed by any of them or anyone for whose acts any of them may be liable.
The parties expressly agree that any payment, attorney's fee, costs or expense City incurs or
makes to or on behalf of an injured employee of the Contractor under the City's self-
administered workers' compensation is included as a loss, expense or cost for the purposes of
this section, and that this section will survive the expiration or early termination of this
Agreement.
10. INSURANCE
Contractor will obtain and maintain for the duration of the Agreement and any and all
amendments, insurance against claims for injuries to persons or damage to property which may
arise out of or in connection with performance of the services by Contractor or Contractor's
agents, representatives, employees or subcontractors. The insurance will be obtained from an
insurance carrier admitted and authorized to do business in the State of California. The
insurance carrier is required to have a current Best's Key Rating of not less than "A-:VH". OR
with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers
(LESLI) with a rating in the latest Best's Key Rating Guide of at least "A:X".
10.1 Coverages and Limits.
Contractor will maintain the types of coverages and minimum limits indicated below, unless Risk
Manager or City Manager approves a lower amount. These minimum amounts of coverage will
not constitute any limitations or cap on Contractor's indemnification obligations under this
Agreement. City, its officers, agents and employees make no representation that the limits of
the insurance specified to be carried by Contractor pursuant to this Agreement are adequate to
protect Contractor. If Contractor believes that any required insurance coverage is inadequate.
Contractor will obtain such additional insurance coverage, as Contractor deems adequate, at
Contractor's sole expense.
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10.1.1 Commercial General Liabilitv Insurance. $1,000,000 combined single-limit
per occurrence for bodily injury, personal injury and property damage. If the submitted policies
contain aggregate limits, general aggregate limits will apply separately to the work under this
Agreement or the general aggregate will be twice the required per occurrence limit.
10.1.2 Automobile Liabilitv. (if the use of an automobile is involved for
Contractor's work for City). $1,000,000 combined single-limit per accident for bodily injury and
property damage.
10.1.3 Workers' Compensation and Emplover's Liabilitv. Workers' Compensation
limits as required by the California Labor Code. Workers' Compensation will not be required if
Contractor has no employees and provides, to City's satisfaction, a declaration stating this.
10.1.4 Professional Liabilitv. Errors and omissions liability appropriate to
Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be
maintained for a period of two years following the date of completion of the work.
I I If box is checked. Professional Liability
City's Initials Contractor's Initials Insurance requirement is waived.
10.2. Additional Provisions. Contractor will ensure that the policies of insurance required under
this Agreement contain, or are endorsed to contain, the following provisions:
10.2.1 The City will be named as an additional insured on Commercial General
Liability which shall provide primary coverage to the City.
10.2.2 Contractor will obtain occurrence coverage, excluding Professional
Liability, which will be written as claims-made coverage.
10.2.3 This insurance will be in force during the life of the Agreement and any
extensions of it and will not be canceled without thirty (30) days prior written notice to City,
except in cases of non-payment; in that case, the notice is ten (10) days. Notice must be sent
by certified mail pursuant to the Notice provisions ofthis Agreement.
10.3 Providing Certificates of Insurance and Endorsements. Prior to City's execution of this
Agreement, Contractor will furnish certificates of insurance and endorsements to City.
10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these insurance
coverages, then City will have the option to declare Contractor in breach, or may purchase
replacement insurance or pay the premiums that are due on existing policies in order to
maintain the required coverages. Contractor is responsible for any payments made by City to
obtain or maintain insurance and City may collect these payments from Contractor or deduct the
amount paid from any sums due Contractor under this Agreement.
10.5 Submission of Insurance Policies. City reserves the right to require, at any time,
complete and certified copies of any or all required insurance policies and endorsements.
11. BUSINESS LICENSE
Contractor will obtain and maintain a City of Carlsbad Business License for the term of the
Agreement, as may be amended from time-to-time.
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12. ACCOUNTING RECORDS
Contractor will maintain complete and accurate records with respect to costs incurred under this
Agreement. All records will be clearly identifiable. Contractor will allow a representative of City
during normal business hours to examine, audit, and make transcripts or copies of records and
any other documents created pursuant to this Agreement. Contractor will 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 under this Agreement.
13. OWNERSHIP OF DOCUMENTS
All work product that Contractor provides to City, produced by Contractor or its agents,
employees, and subcontractors pursuant to this Agreement is the property of City. In the event
this Agreement is terminated, all work product produced by Contractor or its agents, employees
and subcontractors pursuant to this Agreement will be delivered at once to City. Contractor will
have the right to make one (1) copy of the work product for Contractor's records.
14. CERTIFICATION OF 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 State Board of
Equalization. This section specifies the conditions under which a City or county may authorize
persons other than officers and employees to examine State Sales and Use Tax records.
A. The Consultant is authorized by this Agreement to examine sales and use tax
records of the State Board of Equalization provided to City pursuant to contract
under the Bradley-Burns Uniform Sales and Use Tax Law.
B. The Consultant is required to disclose information contained in, or derived from,
those sales and use tax records only to an officer or employee of the City who is
authorized by resolution to examine the information.
C. The Consultant is prohibited from performing consulting services for a retailer during
the term of the Agreement.
D. The Consultant is prohibited from retaining the information contained in, or derived
from, those sales and use tax records, after this Agreement has expired.
Information obtained by examination of State Board of Equalization 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 Consultant as a person authorized to examine sales and use
tax records and certify that this Agreement meets the requirements set for above and in Section
7056(b)(1) ofthe Revenue and Taxation Code.
The Consultant hereby certifies that any and all information examined in the conduct of work
performed is to be utilized only for those purposes authorized by the City and by the Bradley-
Burns Local Sales and Use Tax Law.
15. COPYRIGHTS
Contractor agrees that all copyrights in work product excluding software will be vested in City
and Contractor relinquishes all claims to the copyrights in favor of City.
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16. NOTICES
The name of the persons who are authorized to give written notices or to receive written notice
on behalf of City and on behalf of Contractor under this Agreement.
For Citv
Name Charles McBride
Title Admin Services Director
For
Contractor
Name Doug Jensen
Title SVP Client Services
Department Administrative Services
City of Carlsbad
Address 1635 Faraday Avenue
Carlsbad, CA 92008-7314
Phone No. 760-602-2430
Address 7625 N. Palm Ave., Ste. 108
Fresno, CA 93711
Phone
No. 800.800.8181 ext 5012
Email Doug.Jensen@MuniServices.com
Each party will notify the other in a reasonable period of time, of any changes of address that
would require any notice or delivery to be directed to another address.
17. CONFLICT OF INTEREST
Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the
requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report
investments or interests in all four categories.
18. GENERAL COMPLIANCE WITH LAWS
Contractor will keep fully informed of federal, state and local laws and ordinances and
regulations which in any manner affect those employed by Contractor, or in any way affect the
performance of the Services by Contractor. Contractor will at all times observe and comply with
these laws, ordinances, and regulations and will be responsible for the compliance of
Contractor's services with all applicable laws, ordinances and regulations.
Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986
and will comply with those requirements, including, but not limited to, verifying the eligibility for
employment of all agents, employees, subcontractors and consultants whose services are
required by this Agreement.
19. DISCRIMINATION AND HARASSMENT PROHIBITED
Contractor will comply with all applicable local, state and federal laws and regulations prohibiting
discrimination and harassment
20. DISPUTE RESOLUTION
If a dispute should arise regarding the performance of the Services the following procedure will
be used to resolve any questions of fact or interpretation not othenwise settled by agreement
between the parties. Representatives of Contractor or City will reduce such questions, and their
respective views, to writing. A copy of such documented dispute will be fonwarded to both
parties involved along with recommended methods of resolution, which would be of benefit to
both parties. The representative receiving the letter will reply to the letter along with a
recommended method of resolution within ten (10) business days. If the resolution thus
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obtained is unsatisfactory to the aggrieved party, a letter outlining the disputes will be fonwarded
to the City Manager. The City Manager will consider the facts and solutions recommended by
each party and may then opt to direct a solution to the problem. In such cases, the action of the
City Manager will be binding upon the parties involved, although nothing in this procedure will
prohibit the parties from seeking remedies available to them at law.
21. TERMINATION
In the event of the Contractor's failure to prosecute, deliver, or perform the Sen/ices, City may
terminate this Agreement for nonperformance by notifying Contractor by certified mail of the
termination. If City decides to abandon or indefinitely postpone the work or sen/ices
contemplated by this Agreement, City may terminate this Agreement upon written notice to
Contractor. Upon notification of termination. Contractor has five (5) business days to deliver any
documents owned by City and all work in progress to City address contained in this Agreement.
The City will pay Contractor for services begun before termination or expiration of the
Agreement, even if the monies are received after termination or expiration. Contractor will
provide the City with a list of accounts submitted but not yet corrected as of the expiration or
termination within a reasonable time to obtain a correction. Contractor is also entitled to
payment for corrections that occur after termination that are on the completion list, and remains
entitled to payment for accounts that have corrected before termination but that still have
fonward quarters left to bill at the time of termination. City will also take all necessary steps to
allow Contractor to continue to receive the required information from the State Board of
Equalization during this completion period.
Either party upon tendering thirty (30) days written notice to the other party may terminate this
Agreement. In this event and upon request of City, Contractor will assemble the work product
and put it in order for proper filing and closing and deliver it to City. City will pay Contractor for
services begun before termination or expiration of the Agreement, even if the monies are
received after termination or expiration. Contractor will provide City with a list of accounts
submitted ("completion list") but not yet corrected as of the termination date. Contractor will be
allowed to continue working those accounts on the completion list for a reasonable time to
obtain a correction, and are entitled to payment for corrections that occur after termination that
are on the completion list. The total will not exceed the lump sum fee payable under this
Agreement. City will make the final determination as to the portions of tasks completed and the
compensation to be made.
22. COVENANTS AGAINST CONTINGENT FEES
Contractor warrants that Contractor has not employed or retained any company or person, other
than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that
Contractor has not paid or agreed to pay any company or person, other than a bona fide
employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration
contingent upon, or resulting from, the award or making of this Agreement. For breach or
violation of this warranty, City will have the right to annul this Agreement without liability, or, in
its discretion, to deduct from the Agreement price or consideration, or othenwise recover, the full
amount ofthe fee, commission, percentage, brokerage fees, gift, or contingent fee.
23. CLAIMS AND LAWSUITS
By signing this Agreement, Contractor agrees that any claim submitted to City, related to this
Agreement, must first be asserted as part of the Dispute Resolution process as set forth in this
Agreement. Contractor acknowledges that if a false claim is submitted to City, it may be
considered fraud and Contractor may be subject to criminal prosecution. Contractor
acknowledges that California Government Code sections 12650 et seq., the False Claims Act
applies to this Agreement and, provides for civil penalties where a person knowingly submits a
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false claim to a public entity. These provisions include false claims made with deliberate
ignorance of the false information or in reckless disregard of the truth or falsity of information. If
City seeks to recover penalties pursuant to the False Claims Act, it is entitled to recover its
litigation costs, including attorney's fees. Contractor acknowledges that the filing of a false claim
may subject Contractor to an administrative debarment proceeding as the result of which
Contractor may be prevented to act as a Contractor on any public work or improvement for a
period of up to five (5) years. Contractor acknowledges debarment by another jurisdiction is
grounds for City to terminate this Agreement.
24. JURISDICTIONS AND VENUE
Any action at law or in equity brought by either of the parties for the purpose of enforcing a right
or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the
County of San Diego, State of California, and the parties waive all provisions of law providing for
a change of venue in these proceedings to any other county.
25. SUCCESSORS AND ASSIGNS
It is mutually understood and agreed that this Agreement will be binding upon City and
Contractor and their respective successors. Neither this Agreement nor any part of it nor any
monies due or to become due under it may be assigned by Contractor without the prior consent
of City, which shall not be unreasonably withheld.
26. ENTIRE AGREEMENT
This Agreement, together with any other written document referred to or contemplated by it,
along with the purchase order for this Agreement and its provisions, embody the entire
Agreement and understanding between the parties relating to the subject matter of it. In case of
conflict, the terms of the Agreement supersede the purchase order. Neither this Agreement nor
any of its provisions may be amended, modified, waived or discharged except in a writing
signed by both parties.
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27. AUTHORITY
The individuals executing this Agreement and the Instruments referenced in it on behalf of
Contractor each represent and warrant that they have the legal power, right and actual authority
to bind Contractor to the terms and conditions ofthis Agreement.
CONTRACTOR
(sign here)
Doug Jensen, SVP Client Services
(print name/title)
By:
(sign here)
(print name/title)
CITY OF CARLSBAD, a municipal
corporation ofthe State of California
By:
Mayor Matt Hall
Mark Packard, Mayor Pro Tem
ATTEST:
BARBARA ENGLESON
City Clerk
If required by City, proper notarial acknowledgment of execution by contractor must be
attached. If a corporation. Agreement must be signed by one corporate officer from each ofthe
following two groups.
Group A
Chairman,
President, or
Vice-President
Group 8
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the offlcer(s) signing to bind the corporation.
APPROVED AS TO FORM:
CELIA A. ifiS^R, City Attorney
/Assistant City Attorney
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EXHIBIT "A"
SCOPE OF SERVICES
SALES AND USE TAX REPORTING SERVICES
1. Reporting and Analysis
a. Provide an electronic database of the city's sales and use tax data to
the city to facilitate monitoring, analysis and forecasting. The
database will include the following features at a minimum:
i) All sales tax producers in the city, including business name,
address, SBOE account number, and current and historical sales
tax allocations.
ii) Quarterly updates.
iii) Ability for the city to create and maintain subsets of the
information based on geographic features.
iv) Ability to define and print reports.
v) Ability to export all data to a spreadsheet.
vi) Provide graphs and charts showing trends and historical data.
b. Provide written quarterly sales tax reports and attend quarterly
meetings with the city to discuss activity in the reports. The reports will
include the following:
i) Top sales tax generators ranked by the amount of sales and use
tax produced.
ii) Analysis of sales trends by business category, identifying by
business the major increases and decreases each quarter.
iii) Comparisons to other local, county and state jurisdictions.
iv) Sales and use tax projections, updated quarterly.
v) Information regarding state and federal legislative issues,
including an analysis of their potential impact on the city.
vi) Other reports as mutually agreed upon.
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2. Sales and Use Tax Forecasting
a. Provide a multi-year sales and use tax forecast including impacts of
triple flip and catch-up provisions.
b. Provide new commercial forecasting as needed by staff.
3. On-Going Consultation
a. During the term of the contract, Consultant shall serve as the city's
resource for questions relating to sales tax and assist in estimating
future sales tax revenues.
b. Consultant shall be available to meet with Council if requested.
c. Consultant shall keep up with State and SBOE changes affecting
state sales tax.
PRICE: Four thousand dollars ($4,000) per Agreement year (paid quarterly), plus an
adjustment at the beginning of each calendar year by the percentage change in the Consumer
Price Index - West Urban (CPI-WU) as reported by the Bureau of Labor Statistics. The initial
Consumer Price Index used for the first CPI adjustment will be the CPI-WU for the month in
which the agreement is fully signed with the first adjustment to occur at the beginning of the
Calendar year following the first full calendar year of service.
SALES AND USE TAX AUDITING SERVICES
1. General Strategy
a. Describe the general strategy for sales and use tax auditing.
b. Define the role of city staff and records as it relates to your efforts.
c. Describe your interaction with the State Board of Equalization (SBOE)
and with businesses being audited.
d. Identify what sources of information will be needed and the means
with which they will be acquired.
2. Objectives and Methodology
a. Detect, correct, and recover misallocated revenue for the city,
including, but not limited to:
i) Sales/use tax reporting errors and omissions of businesses within
the city that are not properly registered, based on their business
activities in the city.
ii) Reporting of businesses that are improperiy reporting tax to state
and county pools (i.e. classifying sales tax as use tax), thereby
depriving the city of sales tax revenue.
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iii) Sales/use tax reports errors and omissions in order to generate
new, previously unrealized revenue for the city.
iv) Determine if the SBOE had prior knowledge ofthe error(s), which
could entitle the city to collect revenue from additional periods.
b. Monitor and analyze the quarteriy distribution reports with a focus on
the following:
i) Those accounts with previously reported point-of-sale distribution
errors to ensure that the corrections are made for current quarters
and all eligible back quarters.
ii) Those major accounts comprising ninety (90) percent or more of
the city's total sales and use tax revenue to identify any
irregularities or unusual deviations from the normal pattern (e.g.
negative funds transfers, significant decreases, unusual
increases, etc.) and ensure that the city is not receiving less
revenue than it is entitled to receive.
c. Identify opportunities for the city to recover the local allocation on
purchase transactions subject to tax, and facilitate the recovery of
such funds.
d. Assist the city with strategies to preserve and enhance sales and use
tax generated by existing businesses within the city.
PRICE: Eighteen percent (18%) contingency fee, paid quarterly, after the City has
received the revenue from the correction and the quarteriy distribution report has verified this
receipt. This fee shall apply to six (6) quarters after the Date of Correction and all eligible prior
quarters back to and including the three (3) quarters prior to the Date of Knowledge quarter. As
used herein, the Date of Knowledge is the quarter during which MuniServices notifies the State
Board of Equalization (SBE) of the existence of a misallocation. As used herein, the Date of
Correction refers to the quarter in which the taxpayer has correctly reported the local tax and the
SBE distributes the local tax properly to City based on the taxpayer's reporting, together with
any prior period reallocations. For Quarterly Distribution Report (QDR) Misallocations detected
and corrected, MuniSen/ices compensation will only include the quarters in which the
misallocation actually occurred.
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