CONTRACT 3313 Professional Services AgreementAgreement No. 3313. . 0 .J
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF EL SEGUNDO AND
HINDERLITER, DE LLAMAS & ASSOCIATES
FOR
SALES AND USE TAX AUDIT AND INFORMATION SERVICES
This AGREEMENT is entered into this 1st day of April 1, 2004, by and between the
CITY OF EL SEGUNDO, a general law city and municipal corporation ( "CITY ") and
HINDERLITER, DE LLAMAS AND ASSOCIATES, a California Corporation
( "CONSULTANT ").
1. CONSIDERATION.
A. As partial consideration, CONSULTANT agrees to perform the work listed in the
SCOPE OF SERVICES, below;
B. As additional consideration, CONSULTANT and CITY agree to abide by the
terms and conditions contained in this Agreement;
C. As additional consideration, CITY agrees to pay CONSULTANT as specified
below.
2. SCOPE OF SERVICES.
A. CONSULTANT will perform the services set forth in attached Exhibit "A,"
which is incorporated by reference.
B. CONSULTANT will, in a professional manner, furnish all of the labor, technical,
administrative, professional and other personnel, all supplies and materials,
equipment, printing, vehicles, transportation, office space and facilities, and all
tests, testing and analyses, calculation, and all other means whatsoever, except as
herein otherwise expressly specified to be furnished by CITY, necessary or proper
to perform and complete the work and provide the professional services required
of CONSULTANT by this Agreement.
3. PERFORMANCE STANDARDS. While performing this Agreement, CONSULTANT
will use the appropriate generally accepted professional standards of practice existing at the time
of performance utilized by persons engaged in providing similar services. CITY will
continuously monitor CONSULTANT's services. CITY will notify CONSULTANT of any
deficiencies and CONSULTANT will have fifteen (15) days after such notification to cure any
shortcomings to CITY's satisfaction. Costs associated with curing the deficiencies will be borne
by CONSULTANT.
Page 1 of 17
g�
4. NONDISCLOSURE.
A. "Information," as used in this Section, includes information considered to be
confidential, valuable and proprietary by CONSULTANT whether communicated
or contained in oral, written, electronic or any other form or medium. Information
includes, without limitation, technical; employee information; software programs;
and like information of, or provided by, CONSULTANT. Information does not
include:
Any information subject to disclosure by the California Public Records
Act;
ii. Any information CONSULTANT in writing authorizes CITY to disclose
without restriction;
iii. Any information CITY already lawfully knows at the time it is disclosed
by CONSULTANT, without an obligation to keep it confidential;
iv. Any information CITY lawfully obtains from any source other than
CONSULTANT, provided that such source lawfully disclosed such
information; or
V. Any information CITY independently develops without use of or
reference to CONSULTANT's Information.
B. CITY will protect Information provided to CITY by or on behalf of
CONSULTANT from any use, distribution or disclosure except as permitted
herein. CITY will use the same standard of care to protect Information as CITY
uses to protect its own similar confidential and proprietary information, but not
less than a reasonable standard of care.
C. CITY agrees to use Information solely in connection with this Agreement and for
no other purpose. CITY may provide Information only to CITY's employees
who: (a) have a substantive need to know such Information in connection with
this Agreement; and (b) have been advised of the confidential and proprietary
nature of such Information;
D. If CITY is required to provide Information to any court or government agency
pursuant to written court order, subpoena, regulation or process of law, CITY
must first provide CONSULTANT with prompt written notice of such
requirement and cooperate with CONSULTANT to appropriately protect against
or limit the scope of such disclosure.
E. CITY may make tangible or electronic copies, notes, summaries or extracts of
Information only as necessary for use as authorized herein and such copies, notes,
summaries and extracts shall also be deemed Information for purposes of this
Page 2of17
Agreement.
5. PAYMENTS. CITY will pay CONSULTANT for its services as follows:
A. For creating databases; providing reports and analysis; and making software
available to CITY, as described in Exhibit A, CITY will pay CONSULTANT
$500.00 per month, invoiced quarterly ( "monthly fee ").
B. CITY will also pay CONSULTANT fifteen percent (15 %) of all new tax revenue
received by CITY as a result of audit and recovery work performed by
CONSULTANT ( "audit fees ").
Such revenue does not include any amounts determined by CITY or
CONSULTANT to be attributable to causes other than CONSULTANT'S
work pursuant to this Agreement.
ii. In the event that CONSULTANT is responsible for an increase in the tax
reported by businesses already properly making tax payments to the
CITY, it is CONSULTANT'S responsibility to separate and support the
incremental amount attributable to its efforts before CITY pays the audit
fee.
iii. Audit fees apply to state fund transfers received for up to three (3) back
quarter reallocations and monies received in the first eight (8) consecutive
reporting quarters not to exceed a total of eleven (11) after
CONSULTANT completes the audit contemplated by this Agreement and
the State Board of Equalization verifies such corrections.
iv. CONSULTANT must provide CITY with an itemized quarterly invoice
showing all formula calculations and amounts due for audit fees.
V. CONSULTANT must obtain CITY approval before beginning the work of
correcting tax reporting methodology or "point of sale" for specific
businesses where payment of the audit fee is expected. CITY approval is
given when the city manager, or designee, signs a Sales Tax Audit
Authorization form, a copy of which is attached as "Exhibit B."
vi. Subject to the foregoing, CITY will pay audit fees upon
CONSULTANT'S submittal of evidence of State Fund Transfers and
payments to CITY from businesses identified in the audit and approved by
the CITY.
C. The monthly fee and audit fee constitutes full reimbursement to CONSULTANT
for all direct and indirect expenses incurred by CONSULTANT in performing
audits including the salaries of CONSULTANT'S employees, and travel expenses
connected with contacting local and out -of -state businesses and Board of
Page 3 of 17
13
Equalization representatives.
6. PAYMENTS. For CITY to pay CONSULTANT for audit fees as specified by this
Agreement, CONSULTANT must submit a detailed invoice after showing evidence of State
Fund Transfers and payments to CITY from businesses identified in the audit and approved by
the CITY. The detailed invoice should demonstrate if the audit fees are for back misallocations
up to three (3) quarters and/or what quarter going forward up to eight (8) quarter, not to exceed a
total of eleven (11) quarters.
7. CHANGES. CITY may order changes in the services within the general scope of this
Agreement, consisting of additions, deletions, or other revisions, and the contract sum and the
contract time will be adjusted accordingly. All such changes must be authorized in writing,
executed by CONSULTANT and CITY. The cost or credit to CITY resulting from changes in
the services will be determined in accordance with written agreement between the parties.
8. CONSISTENCY. In interpreting this Agreement and resolving any ambiguities, the main
body of this Agreement takes precedence over the attached Exhibits; this Agreement supersedes
any conflicting provisions. Any inconsistency between the Exhibits will be resolved in the order
in which the Exhibits appear below:
A. Exhibit A: Scope of Work;
B. Exhibit B: Sales Tax Audit Authorization Form
9. TERM. The term of this Agreement will be one (1) year. The Agreement will automatically
be renewed on an annual basis unless cancelled at least thirty (30) days before the end of the
term.
10. TIME FOR PERFORMANCE. CONSULTANT will not perform any work under this
Agreement until:
A. CONSULTANT furnishes proof of insurance as required under this Agreement;
and
B. CITY gives CONSULTANT a written, signed, Notice to Proceed. Should
CONSULTANT begin work on any phase in advance of receiving written
authorization to proceed, any such professional services are at CONSULTANT's
own risk.
11. TAXPAYER IDENTIFICATION NUMBER. CONSULTANT will provide CITY with a
Taxpayer Identification Number.
12. PERMITS AND LICENSES. CONSULTANT, at its sole expense, will obtain and
maintain during the term of this Agreement, all necessary permits, licenses, and certificates that
may be required in connection with the performance of services under this Agreement.
Page 4 of 17
33 13
13. PROJECT COORDINATION AND SUPERVISION.
A. Director of Administrative Services or designee will be assigned as Project
Manager and will be responsible for job performance, negotiations, contractual
matters, and coordination with CITY's Project Manager.
B. Director of Administrative Services or designee will be assigned as CITY's
Project Manager and will be personally in charge of and personally supervise or
perform the technical execution of the Project on a day -to -day basis on behalf of
CITY and will maintain direct communication with CONSULTANT's Project
Manager.
14. WAIVER. CITY's review or acceptance of, or payment for, work product prepared by
CONSULTANT under this Agreement will not be construed to operate as a waiver of any rights
CITY may have under this Agreement or of any cause of action arising from CONSULTANT's
performance. A waiver by CITY of any breach of any term, covenant, or condition contained in
this Agreement will not be deemed to be a waiver of any subsequent breach of the same or any
other term, covenant, or condition contained in this Agreement, whether of the same or different
character.
15. TERMINATION.
A. Except as otherwise provided, CITY may terminate this Agreement at any time
with or without cause, verbally or in writing.
B. CONSULTANT may terminate this Agreement at any time with CITY's mutual
consent. Notice will be in writing at least thirty (30) days before the effective
termination date.
C. Upon receiving a termination notice, CONSULTANT will immediately cease
performance under this Agreement unless otherwise provided in the termination
notice. Except as otherwise provided in the termination notice, any additional
work performed by CONSULTANT after receiving a termination notice will be
performed at CONSULTANT" own cost; CITY will not be obligated to
compensate CONSULTANT for such work.
D. Should termination occur, all finished or unfinished documents, data, studies,
surveys, drawings, maps, reports and other materials prepared by CONSULTANT
will, at CITY's option, become CITY's property, and CONSULTANT will
receive just and equitable compensation for any work satisfactorily completed up
to the effective date of notice of termination.
E. Should the Agreement be terminated pursuant to this Section, CITY may procure
on its own terms services similar to those terminated.
F. By executing this document, CONSULTANT waives any and all claims for
Page 5of17
3 7 1 3 . _1 771
damages that might otherwise arise from CITY's termination under this Section.
16. OWNERSHIP OF DOCUMENTS. Except as otherwise provided, all documents, data,
studies, drawings, maps, models, photographs and reports prepared by CONSULTANT under
this Agreement are CITY's property. CONSULTANT may retain copies of said documents and
materials as desired, but will deliver all original materials to CITY upon CITY's written notice.
CITY agrees that use of CONSULTANT's completed work product, for purposes other than
identified in this Agreement, or use of incomplete work product, is at CITY's own risk.
17. INDEMNIFICATION.
A. CONSULTANT 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
CONSULTANT'S willful or negligent acts, errors or omissions or those of its
employees or agents. CONSULTANT 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 cause, by
reason of any of the aforesaid willful or negligent acts, errors or omissions.
B. CITY hereby agrees to, and shall hold CONSULTANT, 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 CONSULTANT under this
Agreement. CITY agrees to and shall defend CONSULTANT and its officers,
agents and employees from any suits or actions at law or in equity for damage
caused, or alleged to have been caused, by reason of any of the aforesaid
negligent acts, errors or omissions and/or misuse or improper disclosure of
confidential information.
C. For purposes of this section "CITY" includes CITY's officers, officials,
employees, agents, representatives, and certified volunteers.
D. CONSULTANT expressly agrees that this release, waiver, and indemnity
agreement is intended to be as broad and inclusive as is permitted by the law of
the State of California and that if any portion is held invalid, it is agreed that the
balance will, notwithstanding, continue in full legal force and effect.
E. It is expressly understood and agreed that the foregoing provisions will survive
termination of this Agreement.
F. The requirements as to the types and limits of insurance coverage to be
maintained by CONSULTANT, and any approval of said insurance by CITY, are
Page 6 of 17
3313
not intended to and will not in any manner limit or qualify the liabilities and
obligations otherwise assumed by CONSULTANT pursuant to this Agreement,
including, without limitation, to the provisions concerning indemnification.
18. ASSIGNABILITY. This Agreement is for CONSULTANT's professional services.
CONSULTANT's attempts to assign the benefits or burdens of this Agreement without CITY's
written approval are prohibited and will be null and void.
19. INDEPENDENT CONTRACTOR. CITY and CONSULTANT agree that
CONSULTANT will act as an independent contractor and will have control of all work and the
manner in which is it performed. CONSULTANT will be free to contract for similar service to
be performed for other employers while under contract with CITY. CONSULTANT is not an
agent or employee of CITY and is not entitled to participate in any pension plan, insurance,
bonus or similar benefits CITY provides for its employees. Any provision in this Agreement that
may appear to give CITY the right to direct CONSULTANT as to the details of doing the work
or to exercise a measure of control over the work means that CONSULTANT will follow the
direction of the CITY as to end results of the work only.
20. AUDIT OF RECORDS. CONSULTANT will maintain full and accurate records with
respect to all services and matters covered under this Agreement. CITY will have free access at
all reasonable times to such records, and the right to examine and audit the same and to make
transcript therefrom, and to inspect all program data, documents, proceedings and activities.
CONSULTANT will retain such financial and program service records for at least three (3) years
after termination or final payment under this Agreement.
21. INSURANCE.
A. Before commencing performance under this Agreement, and at all other times this
Agreement is effective, CONSULTANT will procure and maintain the following
types of insurance with coverage limits complying, at a minimum, with the limits
set forth below:
Type of Insurance Limits
Commercial general liability: $1,000,000
Professional Liability $1,000,000
Workers compensation $1,000,000
B. Commercial general liability insurance will meet all of the requirements of the
most current ISO -CGL Form Number. The amount of insurance set forth above
will be a combined single limit per occurrence for bodily injury, personal injury,
and property damage for the policy coverage. Liability policies will be endorsed
to name CITY, its officials, and employees as "additional insureds" under said
insurance coverage and to state that such insurance will be deemed "primary"
Page 7of17
3i3�.
such that any other insurance that may be carried by CITY will be excess thereto.
Such endorsement must be reflected on ISO Form No. CG 20 10 11 85 or 88, or
equivalent. Such insurance will be on an "occurrence," not a "claims made," basis
and will not be cancelable or subject to reduction except upon thirty (30) days
prior written notice to CITY.
C. Professional liability coverage will be on an "occurrence basis" if such coverage
is available, or on a "claims made" basis if not available. When coverage is
provided on a "claims made basis," CONSULTANT will continue to renew the
insurance for a period of three (3) years after this Agreement expires or is
terminated. Such insurance will have the same coverage and limits as the policy
that was in effect during the term of this Agreement, and will cover
CONSULTANT for all claims made by CITY arising out of any errors or
omissions of CONSULTANT, or its officers, employees or agents during the time
this Agreement was in effect. If the term of this Agreement extends beyond the
effective date of CONSULTANT's insurance policies existing at the time this
Agreement was executed, CONSULTANT will, with or without notice from
CITY, submit to CITY new proofs of insurance complying in all respects with the
requirements of this Agreement.
D. CONSULTANT will furnish to CITY duly authenticated Certificates of Insurance
evidencing maintenance of the insurance required under this Agreement and such
other evidence of insurance or copies of policies as may be reasonably required
by CITY from time to time. Insurance must be placed with insurers with a current
A.M. Best Company Rating equivalent to at least a Rating of "A:VII."
E. Should CONSULTANT, for any reason, fail to obtain and maintain the insurance
required by this Agreement, CITY may obtain such coverage at
CONSULTANT's expense and deduct the cost of such insurance from payments
due to CONSULTANT under this Agreement or terminate pursuant to Section 15.
22. USE OF SUBCONTRACTORS. CONSULTANT must obtain CITY's prior written
approval to use any consultants while performing any portion of this Agreement. Such approval
must approve of the proposed consultant and the terms of compensation. The consultants listed
in Exhibit `B" are hereby approved.
23. NOTICES. All communications to either party by the other party will be deemed made
when received by such party at its respective name and address as follows:
Page 8of17
CITY
CONSULTANT
City of El Segundo Hinderliter, de Llamas & Associates
350 Main Street 1340 Valley Vista Drive, #300
El Segundo, CA Diamond Bar, CA 91765
Attn: Director of Administrative Services Attn: Lloyd de Llamas
Fax: (310) 640 -2543 Fax: (909) 861 -7726
Any such written communications by mail will be conclusively deemed to have been received by
the addressee upon deposit thereof in the United States Mail, postage prepaid and properly
addressed as noted above. In all other instances, notices will be deemed given at the time of
actual delivery. Changes may be made in the names or addresses of persons to whom notices are
to be given by giving notice in the manner prescribed in this paragraph.
24. INTELLECTUAL PROPERTY WARRANTY. CONSULTANT represents and warrants
that any software or process developed or used in accordance with this Agreement is the result of
CONSULTANT's sole efforts unless otherwise stated in this Agreement. Except as otherwise
disclosed in this Agreement, the software is unique and original and does not infringe upon any
copyright or patent. With regard to bundled software, CONSULTANT represents that it has
verified that the software is unique and original and to the best of CONSULTANT's belief does
not infringe upon any copyright or patent.
25. PROTECTION AGAINST INFRINGEMENT; INDEMNIFICATION FOR
INTELLECTUAL PROPERTY WARRANTIES. CONSULTANT will, at its own expense,
defend CITY against any claim that the software furnished under this Agreement infringes a
patent or copyright in the United States or Puerto Rico. In such event, CONSULTANT will pay
all costs damages and attorney's fees that a court finally awards as a result of such claim. To
qualify for such defense and payment, CITY must (i) give CONSULTANT prompt written
notice of any such claim; and (ii) allow CONSULTANT to control, and fully cooperate with
CONSULTANT in the defense and all related settlement negotiations. CITY agrees that if the
use of the software becomes, or CONSULTANT believes is likely to become, the subject of such
an intellectual property claim, CITY will permit CONSULTANT, at its option and expense,
either to secure the right for CITY to continue using the software or to replace it with
comparable software, with a pro rata refund of the money paid by CITY for the then current term
of the Agreement. This Section states CONSULTANT's entire obligation to CITY regarding
infringement or the like.
26. PUBLIC RECORDS ACT. The Parties to this Agreement understand and agree that the
software and other data affected by this Agreement are subject to the requirements, exceptions
and exemptions set forth in the California Public Records Act.
27. SOLICITATION. CONSULTANT maintains and warrants that it has not employed nor
retained any company or person, other than CONSULTANT's bona fide employee, to solicit or
secure this Agreement. Further, CONSULTANT warrants that it has not paid nor has it agreed
to pay any company or person, other than CONSULTANT's bona fide employee, any fee,
commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting
Page 9of17
331 3 . , ..
from the award or making of this Agreement. Should CONSULTANT breach or violate this
warranty, CITY may rescind this Agreement without liability.
28. NO THIRD PARTY BENEFICIARY. This Agreement and every provision herein is for
the exclusive benefit of CONSULTANT and CITY and not for the benefit of any other party.
There will be no incidental or other beneficiaries of any of CONSULTANT's or CITY's
obligations under this Agreement.
29. INTERPRETATION. This Agreement was drafted in, and will be construed in accordance
with the laws of the State of California, and exclusive venue for any action involving this
agreement will be in Los Angeles County.
30. ENTIRE AGREEMENT. This Agreement, and its Attachments, sets for the entire
understanding of the parties. There are no other understandings, terms or other agreements
expressed or implied, oral or written. There are two (2) Attachments to this Agreement. This
Agreement will bind and inure to the benefit of the parties to this Agreement and any subsequent
successors and assigns.
31. RULES OF CONSTRUCTION. Each Party had the opportunity to independently review
this Agreement with legal counsel. Accordingly, this Agreement will be construed simply, as a
whole, and in accordance with its fair meaning; it will not be interpreted strictly for or against
either Party.
32. SEVERABILITY. If any portion of this Agreement is declared by a court of competent
jurisdiction to be invalid or unenforceable, then such portion will be deemed modified to the
extent necessary in the opinion of the court to render such portion enforceable and, as so
modified, such portion and the balance of this Agreement will continue in full force and effect.
33. AUTHORITY/MODIFICATION. The Parties represent and warrant that all necessary
action has been taken by the Parties to authorize the undersigned to execute this Agreement and to
engage in the actions described herein. This Agreement may be modified by written amendment.
CITY's city manager, or designee, may execute any such amendment on behalf of CITY.
34. ACCEPTANCE OF FACSIMILE SIGNATURES. The Parties agree that this Agreement,
agreements ancillary to this Agreement, and related documents to be entered into in connection
with this Agreement will be considered signed when the signature of a party is delivered by
facsimile transmission. Such facsimile signature will be treated in all respects as having the
same effect as an original signature.
35. TIME IS OF ESSENCE. Time is of the essence for each and every provision of this
Agreement.
36. STATEMENT OF EXPERIENCE. By executing this Agreement, CONSULTANT
represents that it has demonstrated trustworthiness and possesses the quality, fitness and capacity
to perform the Agreement in a manner satisfactory to CITY. CONSULTANT represents that its
financial resources, surety and insurance experience, service experience, completion ability,
Page 10 of 17
personnel, current workload, experience in dealing with private consultants, and experience in
dealing with public agencies all suggest that CONSULTANT is capable of performing the
proposed contract and has a demonstrated capacity to deal fairly and effectively with and to
satisfy a public agency.
Page 11 of 17
IN WITNESS WHEREOF the parties hereto have executed this contract the day and year first
hereinabove written.
CITY OF EL SEGUNDO, HINDERLITER, DE LLAMAS AND ASSOCIATES
a municipal co oration. a Calif is Corpor on.
Mapf Strerg Lloyd fe Llamas
City Manager President
0 it * Taxpayer ID No. 33- 0008507
ATTEST:
Cindy Mortes n,
City Clerk
APPROVED AS
MARK D. HEV
Karl H. Ber;
Assistant Ci
Page 12 of 17
145.s 3 • ..�:
Agreement No.
Exhibit A
Scope of Work
The CONSULTANT will perform the following services:
A. SALES TAX AND ECONOMIC ANALYSIS
i. CONSULTANT will 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 previous eight quarters, 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, business districts or redevelopment areas,
identification of reporting aberrations, and per capita and outlet
comparisons with regional and statewide sales.
ii. CONSULTANT will provide updated reports each quarter identifying
changes in sales by individual businesses, business groups and categories
and by geographic area. Quarterly aberrations due to State audits, fund
transfers, and receivables along with late or double payments will be
identified. Quarterly reconciliation worksheets to assist finance officer
with budget forecasting will be included. CONSULTANT will also
provide special ad hoc custom reports including sales & use tax quarterly
reports based on the prior fiscal year on a cash basis for business license
renewal credits.
iii. CONSULTANT will also provide a quarterly summary analysis for the
CITY to share with Chambers of Commerce and other economic
development interest groups that analyze CITY'S sales tax trends by
major groups, and geographic areas without disclosing confidential
information.
iv. CONSULTANT will make available to CITY Staff the HdL sales tax
computer software program and database containing sellers permit and
quarterly allocation information for all in -city business outlets registered
with the Board of Equalization and update quarterly. In addition,
CONSULTANT will process for CITY the monthly registration and
allocation files provided by the Board in magnetic media. Printouts of
registration changes and dollars allocated by business name and number
will be provided from these files on a monthly basis.
V. CONSULTANT will assist City staff to develop a database of sales tax
and property tax.
Page 13 of 17
vi. CONSULTANT will notify City staff immediately upon obtaining
information about material changes in existing or new sales and use tax
producers once they become aware of it.
B. ALLOCATION AUDIT AND RECOVERY
i. CONSULTANT will conduct an initial and on -going sales and use tax
audit to identify and correct "point -of- sale" distribution errors and thereby
generate previously unrealized sales tax income for the CITY. Common
errors that will be monitored and corrected include: transposition errors
resulting in misallocations; erroneous consolidation of multiple outlets;
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.
ii. CONSULTANT will initiate contacts with the appropriate sales
management and accounting officials in companies that have businesses
where a probability of error exists to verify 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.
iii. CONSULTANT will prepare and submit to the Board of Equalization all
information necessary to correct any allocation errors that are identified
and will follow -up with the individual businesses and the State Board of
Equalization to ensure that all back quarter payments due the CITY are
recovered.
iv. If during the course of its audit, CONSULTANT finds businesses located
in the CITY that are properly reporting sales tax but have the potential for
modifying their operation to provide an even greater share to the CITY,
CONSULTANT will so advise CITY and upon request, will work with
those businesses and the CITY to encourage such changes.
C. ON GOING CONSULTATION
Throughout the term of this agreement, CONSULTANT will advise and work with CITY
Agency Staff on questions related to tenant mix alternatives for maximum sales tax
returns; advise CITY Business License staff on utilization of reports to enhance business
license collection efforts; provide sales tax projections for economic development
projects and budget planning; and provide general information and support on sales and
use tax related questions. CONSULTANT will provide periodic special ad hoc reports
based on requests of City staff.
Page 14 of 17
D. 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 may
authorize persons other than CITY officers and employees to examine State Sales and
Use Tax records.
The following conditions specified in Section 7056 (b), (1) of the State of California
Revenue and Taxation Code are made part of this Agreement by reference:
CONSULTANT 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 -Burns Uniform Sales and
Use Tax Law.
ii. CONSULTANT 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.
iii. CONSULTANT is prohibited from performing consulting services for a
retailer, as defined in California Revenue & Taxation Code Section 6015,
during the term of this Agreement.
iv. CONSULTANT 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 Board of
Equalization records will 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 will designate the
CONSULTANT 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.
E. CITY MATERIALS AND SUPPORT
CITY will 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
CONSULTANT 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 CONSULTANT with proper
identification for contacting businesses. CITY further agrees to continue
CONSULTANT'S authorization to examine the confidential sales tax records of the
CITY by maintaining CONSULTANT'S name on the CITY Resolution or by providing
Page 15 of 17
3313..,;
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
audit fees due the CONSULTANT have been paid.
Page 16 of 17
3313,..]
EXHIBIT B
Sales Tax Audit
Work Authorization No.
The following business or businesses, located in the City of El Segundo, have been identified as
having the potential for generating additional sales tax revenue to the City of El Segundo.
CONSULTANT is authorized to contact the given business(s) and the State Board of
Equalization to verify the accuracy of the current reporting methodology and obtain the
necessary documentation for the Board of Equalization, to modify allocation formulas, and to
return previous misallocated revenue that may be due to City.
CONSULTANT's compensation will be 15% of the new sales and/or use tax revenue received
by the City as a result of audit and recovery work performed by CONSULTANT, as set forth in
the Agreement between CONSULTANT and City.
CITY OF EL SEGUNDO
By:
Date:
HINDERLITER, DE LLAMAS AND ASSOCIATES
By:
Date:
Page 17 of 17