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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