HomeMy WebLinkAbout1991 CON Hinderliter, De Llamas & Associates - Sales Tax Audit & Information ServicesNOTE TO FILE
07-29-10
-IN THE MATTER OF: Resolution of the City Council authorizing the
Mayor to execute an Agreement with Hinderliter, De Llamas &
Associates for Sales Tax Audit and Information Services, and
authorizing access to Sales and Use Tax Records pursuant to
Revenue and Taxation Code Section 7056. Please note the
following:
A FULLY EXECUTED ORIGINAL AGREEMENT WAS
NEVER FILED WITH THE OFFICE OF THE CITY CLERK
ORIGINATING DEPARTMENT:
NTF
CDC Housing & Grants
_ City Attorney _ Human Resources
City Manager _ MIS
_ Community Svcs. _ Planning
Engineering _ Police
X Finance Public Works
Fire
AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES
This Agreement is made and entered into as of the 17th day of September ,1991 by and
between the CITY OF NATIONAL CITY, a municipal corporation hereinafter called CITY,
and HINDERLITER, DE LLAMAS AND ASSOCIATES a California Corporation,
hereinafter called CONTRACTOR.
RECITALS
WHEREAS, sales tax revenues can be increased through: a system of continuous monitoring,
identification and correction of "point of sale" allocation errors and;
WHEREAS, City desires to provide for the examination of its sales tax allocations and receipts
to ensure that "point of sale" is being properly recorded to City and to recover revenues
erroneously allocated to other jurisdictions and allocations pools; and
WHEREAS, Contractor has the programs, equipment and personnel required to deliver the
sales tax services referenced herein;
THEREFORE, City and Consultant, for the consideration hereinafter described, mutually
agree as follows:
1
SERVICES
The Contractor shall perform the following services:
A. Contractor shall conduct a sales tax audit in order 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 n»callocations; erroneous consolidation of multiple outlets; misreporting of
'point of sale" from the wrong location; delays in reporting new outlets; misidentifying
transactions as a "use tax" rather than a "sales tax," and erroneous fund transfers and
adjustments.
B. Contractor 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 contracts will
be conducted in a manner to encourage local business retention and expansion.
C. Contractor shall prepare and submit to the Board of Egnal»Ation all information
necessary to correct any allocation errors that are identified and shall follow-up with the
individual businesses and the State Board of Equalization to ensure that all back quarter
payments due the City are recovered.
D. If during the course of its audit, Contractor 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, Contractor will work with those businesses and
the City to encourage such changes.
2
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 hereby made part of this contractual agreement.
A. Contractor is authorized by this Agreement to examine sales 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.
B. Contractor 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. Contractor is prohibited from performing consulting services for a retailer, as defined in
California Revenue & Tax Code Section 6015, during the term of this agreement.
D. Contractor 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 board 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
3
resolution shall designate the Contractor as a person, authorized to examine sales and
use tax records and certify that this Agreement meets the requirements set forth above
and in Section 7056 (b), (1) of the Revenue and Taxation Code.
CONSIDERATION
A. Contractor shall be paid 15% of all new Sales and/or Use tax revenue received by the
City as a result of audit and recovery work performed by Contractor (hereafter referred
to as "audit fees"). New sales and/or use tax revenue shall not include any amounts
determined by City or Contractor to be increment attributable to causes other than
Contractor's work pursuant to this agreement. In the event that Contractor is
responsible for an increase in the tax reported by businesses already properly making
tax payments to the City, it shall be Contractor's responsibility to separate and support
the incremental amount attributable to its efforts prior to the application of the audit
fee. Said audit fees will apply to state fund transfers received for back quarter
reallocations and monies received in the first eight consecutive reporting quarters
following completion of the audit by Contractor and confirmation of corrections by the
State Board of Equalization. Contractor shall provide City with an itemized quarterly
invoice showing all formula calculations and amounts due for audit fees.
Contractor shall obtain City approval prior to beginning the work of correcting tax
reporting methodology or "point of sale" for specific businesses where said payment of
the percentage fee will be expected. Said approval shall be accomplished by the City
Administrator or his designated representative on the Sales Tax Audit Authorization
form, a copy of which is attached as "Exhibit A." City shall pay .audit fees upon
Contractor's submittal of evidence of State Fund Transfers and payments to City from
businesses identified in the audit and approved by the City.
4
B. Above sum shall constitute full reimbursement to Contractor for all direct and indirect
expenses incurred by Contractor in performing audits including the salaries of
Contractor's employees, and travel expenses connected with contacting local and out-of-
state businesses and Board of Equalization representatives.
CITY MATERIALS AND SUPPORT
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 provide copies of the monthly allocation reports received for the most recent
five quarters from the execution of this agreement and to continue to provide 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 percentage
reimbursements clue the Contractor have been paid.
TERMINATION
This Agreement may be terminated by either party by giving 30 days written notice to the other
of such termination and specifying the effective date thereof. Upon the presentation of such
notice, Contractor may continue to work through the date of termination. Upon termination
as provided herein, Contractor shall be paid the value of all tax analysis and reporting work
performed less payments previously made by City. In ascertaining the value of the work
performed up to the date of termination, consideration shall be given to amounts due for any
unpaid invoices, and to businesses identified by Contractor which make tax payments after
5
termination of this Agreement as a result of Contractor's work. After City receives said tax
payments for such businesses, Contractor shall be paid the audit fees resulting from tax
payments made by the business for back quarter reallocations and the first eight consecutive
reporting quarters following completion of the audit by Contractor and confirmation of
corrections by the State Board of Equali-ation. Compensation for any audit work previously
authorized and satisfactorily performed shall be made at the times provided in the preceding
section entitled "Consideration."
All documents, data, surveys and reports prepared by Contractor pursuant to this Agreement
shall be considered the property of the City and upon payment for services performed by
Contractor, such documents and other identified materials shall be delivered to City by
Contractor.
INDEPENDENT CONTRACTOR
Contractor shall perform the services hereunder as an independent contractor and shall
furnish such services in his own manner and method, and under no circumstances or conditions
shall any agent, servant, or employee of Contractor be considered as an employee of City.
NON -ASSIGNMENT
This Agreement is not assignable either in whole or in part by Contractor without the written
consent of City.
6
ATTORNEY'S FEES
In the event a legal action is commenced to enforce any of the provisions of this Agreement,
the prevailing party shall be entitled to recover its costs and reasonable attorney's fees.
GOVERNING LAW
The laws of the State of California shall govern the rights, obligations, duties and liabilities of
the parties to this Agreement and shall also govern the interpretation of this agreement.
CONTROL
Neither the City nor its officers, agents or employees shall have any control over the conduct of
the Consultant or any of the Consultant's employee's except as herein set forth, and the
Consultant expressly agrees not to represent that the Consultant or the Consultant's agents,
servants, or employees are in any manner agents, servants or employees of the City, it being
understood that the Consultant, its agents, servants, and employees are as to the City wholly
independent contractors and that the Consultant's obligations to the City are solely such as are
prescribed by this Agreement.
COMPLIANCE WITH APPLICABLE LAW
The Consultant, in the performance of the services to be provided herein, shall comply with all
State and Federal statues and regulations, and all ordinances, rules and regulations of the City
of National City whether now in force or subsequently enacted. The Consultant, and its
subcontractors, shall obtain a current City of National City business license prior to performing
any work within the City.
STANDARD PROVISIONS
The Consultant will not discriminate against any employee or applicant for employment
because of age, race, color, ancestry, religion, sex, marital status, national origin, physical
handicap, or medical condition. The Consultant will take affirmative action in insure that
applicants are employed without regard to their age, race, color, ancestry, religion, sex, marital
status, national origin, physical handicap, or medical condition. Such action shall include but
not be limited to the following: employment, upgrading, demotion, transfer, recruitment or
recruitment advertising, layoff or termination, rates of pay or other forms of compensation,
and selection for training, including apprenticeship. The Consultant agrees to post in
conspicuous places available to employees and applicants for employment any notices
provided by the City setting forth the provisions of this non-discrimination clause.
OTHER CONSIDERATION
Nothing contained herein shall prevent the Consultant from carrying on its usual business,
including the performance of other additional services for the City, should the City desire
additional services, nor from performing similar services for other agencies, cities, districts or
public or private entities.
INDEMNIFICATION
Contractor hereby agrees to, and chall 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
8
{
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 of the 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 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 been caused, by reason of any of the aforesaid negligent
acts, errors or omissions.
WORKERS' COMPENSATION
Contractor shall comply with all of the provisions of the Workers' Compensation Insurance
and Safety Acts of the State of f alifornia, the applicable provisions of Division 4 and 5 of the
California Government Code and all amendment thereto; and all similar state or Federal acts
or laws applicable; and shall indemnify, defend and hold harmless City and its officers,
employees and volunteers from and against all claims, demands, payments, suits, actions
proceedings and judgments of every nature and description, including attomey's fees and costs
presented, brought or recovered against City of its officers, employees, or volunteers, for or on
account of any liability under any of said acts which may be incurred by reason of any work to
be performed by Contractor under this Agreement.
9
INSURANCE
•
Contractor, at its sole cost and expense, shall purchase and maintain throughout the term of
this agreement, the following insurance policies:
A. Automobile insurance covering all bodily injury and property liability incurred during
the performance of this Agreement, with a minimum coverage of $1,000,000 combined
single limit per accident. Such automobile insurance shall include non -owned vehicles.
B. Comprehensive general liability insurance, with minimum limits of $1,000,000
combined single limit per occurrence, covering all bodily injury and property damage
arising out of its operation under this Agreement.
C. Workers' compensation insurance covering all of its employees and volunteers.
D. The aforesaid policies shall constitute primary insurance as to City, its officers,
employees, and volunteers, so that any other policies held by City shall not contribute to
any loss under said insurance. Said policies shall provide for thirty (30) days prior
written notice to City of cancellation or material change.
E. Said policies, except for the professional liability, workers' compensation, and
automobile policies shall name City and its officers, agents and employees as additional
insureds.
F. This Agreement shall not take effect until certificate(s) or other sufficient proof that
these insurance provisions have been complied with, are filed with and approved by
City's Risk Manager If Contractor does not keep all of such insurance policies in full
10
force and effect at all times during the terms of this Agreement, City may elect to treat
the failure to maintain the requisite insurance a a breach of this Agreement and
terminate the Agreement.
G. If required insurance coverage is provided on a "claims made" rather than "occurrence"
form, Contractor shall maintain such insurance coverage for three years after expiration
of the term (and any extensions) of this Agreement.
H. Any aggregate insurance limits must apply solely to this Agreement.
NOTICE
All notices required by this Agreement shall be given to City and Contractor in writing, by
personal delivery or first class mail postage prepaid, addressed as follows:
City: CITY OF NATIONAL CITY
1243 National City Boulevard
National City, CA 92050
Contractor: HINDERLITER, DE LLAMAS, & ASSOCIATES
2220 E. Alosta Avenue, Suite 205
Glendora, CA 91740
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on
•
the date first above written by their respective officers duly authorized in that behalf.
Clerk
APPROVED AS TO FORM:
CITY:
CITY OF NATIONAL CITY
CONTRACTOR:
HINDERLITER, DE LLAMAS & ASSOCIATES
A California Corporation
12
SAMPLE SAMPLE
EXHIBIT A
Sales Tax Audit
Work Authorization No.
The following business or businesses, located in the City of , have been
identified as having the potential for generating additional sales tax revenue to the City of
. Contractor is hereby 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.
Contractor's compensation shall 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 Contractor, as set forth in the
Agreement between Contractor and City dated ,1990.
CITY OF
By;
Date
H NDERL ITER, DE LLAMAS AND ASSOCIATES
By;
Date
13
RESOLUTION NO. 91-185
RESOLUTION OP THE CITY COUNCIL OF THE CITY OF
NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE
AN AGREEMENT WITH HINDERLITER, DE LLAMAS AND ASSOCIATES
FOR SALES TAX AUDIT AND INFORMATION SERVICES,
AND AUTHORIZING ACCESS TO SALES AND USE TAX RECORDS
PURSUANT TO REVENUE AND TAXATION CODE SECTION 7056
BE IT RESOLVED by the City Council of the City of
National City as follows:
Section 1. The Mayor is hereby authorized to enter
into an agreement with Hinderliter, De Llamas and Associates
for Sales Tax Audit and Information Services. Said agreement
is on file in the Office of the City Clerk.
Section 2. The following City officials are hereby
authorized to receive and review sales and use tax allocation
information from the State Board of Equalization:
City Manager: Tom McCabe
Finance Officer: Alex Caloza, Jr.
Section 3. The following independent contractor for
the City of National City is hereby also authorized to receive
and review sales and use tax data received from the State
Board of Equalization:
Hinderliter, de Llamas & Associates:
Robert Hinderliter, Principal
Lloyd de Llamas, Principal
Section 4. The City of National City hereby
certifies that Hinderliter, de Llamas & Associates:
A. Has, pursuant to this Resolution, a current
confidentiality agreement with the City to
receive sales and use tax records; and
B. Is required by that agreement 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 autho-
rized by this Resolution to examine the infor-
mation; and
C. Is prohibited by that agreement from perform-
ing consulting service for a retailer during
the term of that agreement; and
Continued on Page Two
Resolution No. 91-185
Page 2
D. Is prohibited by that agreement from retaining
the information contained in, or derived from
those sales tax records, after that agreement
has expired.
Section 5. Information obtained by examination of
board of records shall be used only for purposes related to
the collection of local sales and use taxes by the Board for
municipal revenue forecasting and verification.
Section 6. This Resolution supersedes all previous
authorizations.
Section 7. The City Clerk shall certify to the
adoption of this Resolution and send forward a certified copy
to:
State Board of Equalization
2014 "T" Street, Suite 220
Sacramento, CA 95814
Attention: Jim Munekawa
PASSED and ADOPTED this 17th day of September, 1991.
eor' rA�
eorge H. Waters, Mayor
ATTEST:
Lo i Anne Peoples
City Clerk
APPROVED AS TO FORM:
George Ft Eiser, III
City Attorney
c
From=HdL COMPANIES 909 861 7726 08/27/2r 02:49 #535 P.001/029
CDC,
• FL-L'Y&
RESOLUTION NO. 2002 - 4
RESOLUTION OF THE C1TY COUNCIL
OF THE CITY OF NATIONAL CITY
AMENDING SECTIONS 2 AND 3 OF
RESOLUTION NO. 91-185 CONCERNING
SALES AND USE TAX AUDIT AND
INFOR 4AIlON SERVICES
WHEREAS, pursuant to Resolution No. 91-185, adopted on September 17.
1991, the City Council authorized an agreement with Hinderliter, de Llamas dt Associates to
provide sales and use tax audit and information services; and .
WHEREAS, Section 2 of said Resolution authorizes the City Manager and
Finance Director to receive and review sales and use tax allocation information from the State
Board of Equalization; and
WHEREAS, Section 3 of said Resolution authorizes Hinderliter. da Llamas &
Associates, through their principals, Robert Hinderliter and Lloyd de Llamas, to receive and
review tales and use tax information received from the State Board of Equalization; and
WHEREAS, pursuant to Ordinance No. 2001-2191, effective December 20,
2001, the City Council established the Mile of Cart Bvtiarss Improvement District ("MOCA
BID'); and
'WHEREAS, the Community Development Commission of the City of National
City (the "CDC') will administer and operate the MOCA BID; and
WHEREAS, in the course of its operation and adminimation of the MOCA
BID, the CDC has contracted with the accounting firm of Silberman as Sloan, LLP to carry out
the fiscal administration of the MOCA BID; and
WHEREAS, in order to perform the operation and administration of the MOCA
BID, it is necessary to amcad Resolution No. 91-185 to authorize Silberman & Sloan. LLP and
the Executive Director of the CDC to receive and review sales and use tax information
received from the State Board of Equalization.
BE IT
VED
the City
of the City of
National City
NOW,
hereby authorize that Section02L ofResoolution No. 91� 185 be amended to
read as follows:
boo/look ED MOIL
Poet-!t' Fax Note
Date 6 b27 p:°pes� 2,9
[j7671
TO q0 R_[�� A
From
�J`H �1
j •
COADepi.
CO.
Phone 0
Phone e
Fex r 6/ ��}} 7 — 334—L/3gdjex
L/
a
O1/24/2002 THU 13:32 FAX 619 336 4288 CDC OF NATIONAL CITY a003/004
LOUY £9
m'Ana xalooD
:NT110s 01 SY 0)an0
1SELLY
'ZooZ licomIJo 4Cep 441 sm asidoav Pat coSSYd
fd 'MI5 'ytO
PdPalid `trecraoqUS PloAtoH : JTI 'uojS V =ulnae
;uouzf211vfb2.42) PAW Ms yipwa{t pM7aoa.t uopvuua,&1
ivt *Pt puv MVO ht911449.1 $W 2,11231.1 of pazuogmv iCgawr[ asp am Ao puopvlil
�o .fps PIP fO uolss1Wuro, plawdalaAa1 4mmruwej st(s !MD 40 MOWN
le 4r, #Y$ Agi41612wsuau tvaptcsdapur 814x0114ALL '5 I M P'S
'mono; as cabal CO p p
oq SBI-16 'OR troPoto)I Jo £ 50PQS wm CIHA'IO58?T .La 1 t .LI $I
wWyf7Q I'd
Ar Ma1iOrn
24120.3Fir WO
•m '.Known anptmax t
:1a'&Q aauvug
la2vuvpVj
: uapmllvnbr3 fo,puvog atvtt' An
wag uogwwiafily uoyzoo to am an: puv sales iKaptat puv ag9Da1 of pa21JOVPW
ksvol/ am rl?uiIft) p+iv 100 84Ilal *KZ •z uo aS
°Au am
ZOOZ '8t
— WOZ ON UP010=1I
00/300'd 5£rj# 6b:ZO 1Z/LZ/80
9ZLL 198 606 83INV4100 IPH:WOa.]
From:HdL COMPANIES
909 861 7726 08/27/2r 02:50 #535 P.003/029
Passed and adopted by the Council of the City of National City, Califomia, on January 8, 2002,
by the following vote, to -wit:
Ayca: Counciimcmbers Beauchamp, Inzuaza, Morrison, Zarate, Waters.
Nays: None.
Absem: None.
Abstain: None.
AUTHENTICATED BY: GEORGE H. WATERS
Mayor of the City of National City, California
MICHAEL R. DALLA.
City Clerk oldie City of National City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2002-4 of the City of National City, California, passed and adopted by the
Council of said City on January 8.2002.
h
City G lerk of the Ciy National City, California
By:
Deputyy
1/00/t00XLLIO 11NOIIVN d0 040 98ZI1 9t 619 Zt:CI 11H,L ZOOZAV1O