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HomeMy WebLinkAbout2019 CON Hinderliter, De Llamas and Associates dba HdL Companies - Property Tax Consulting Auditing Services - Amendment #2SECOND AMENDMENT TO THE AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES BY AND BETWEEN THE CITY OF NATIONAL CITY AND HIND R, I;F LLAMAS AND ASSOCIATES THIS f S-P A I ►' I NT TO HE AGREEMENT, is entered into this 1st day of July, 2019, by and betwe ' the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and THE HDL COMPANIES, dba HINDERLITER, DE LLAMAS AND ASSOCIATES, a California corporation (the "CONSULTANT"). SeCOR1 RECITALS WHEREAS, the CITY and the CONSULTANT entered into an Agreement on July 14, 1998, (the "Agreement") wherein the CONSULTANT agreed to provide the combination of data entry, report preparation, and data analysis necessary to effectively manage the municipal sales tax and recover revenues erroneously allocated to other jurisdictions and allocation pools; and WHEREAS, the parties desire to amend the Agreement to increase the scope of work to include cannabis management services as described in CONSULTANT'S Proposal, attached hereto as Exhibit "1", and by this reference made a part hereof, for the not -to -exceed amount of $28,900; and WHEREAS, CONSULTANT will provide written invoices to the City for compensation for services performed in accordance with Exhibit "1" in a form acceptable to CITY; and WHEREAS, Section XIII, Insurance, of the Agreement is hereby amended to read as follows: 17. INSURANCE. The CONSULTANT, at its sole cost and expense, shall purchase and maintain, and shall require its SUBCONSULTANT(S), when applicable, to purchase and maintain throughout the term of this Agreement, the following insurance policies: A. ❑ If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile Insurance covering all bodily injury and property damage 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 owned, non -owned, and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. C. Commercial General Liability Insurance, with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate with a $2,000,000 umbrella policy, covering all bodily injury and property damage arising out of its operations, work, or performance under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate limit must apply solely to this "project" or "location". The "project" or "location" should be noted with specificity on an endorsement that shall be incorporated into the policy. D. Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of CONSULTANT'S employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the CITY. Said endorsement shall be provided prior to commencement of work under this Agreement. If CONSULTANT has no employees subject to the California Workers' Compensation and Labor laws, CONSULTANT shall execute a Declaration to that effect. Said Declaration shall be provided to CONSULTANT by CITY. E. The aforesaid policies shall constitute primary insurance as to the CITY, its officers, officials, employees, and volunteers, so that any other .policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY's Risk Manager, at the address listed in subsection G below, of cancellation or material change. F. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, the CONSULTANT shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. G. The Certificate Holder for all policies of insurance required by this Section shall be: City of National City do Risk Manager 1243 National City Boulevard National City, CA 91950-4397 H. Insurance shall be written with only insurers authorized to conduct business in California that hold a current policy holder's alphabetic and financial size category rating of not less than A:VII according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. I. 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 the CITY'S Risk Manager. If the CONSULTANT does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. J. All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. K. If the CONSULTANT maintains broader coverage or higher limits (or both) than the minimum limits shown above, the CITY requires and shall be entitled to the broader coverage or higher limits (or both) maintained by the CONSULTANT. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. WHEREAS, in the event any conflict or inconsistencies between the Agreement and the Proposal (Exhibit "1"), the terms of the Agreement shall control. NOW, THEREFORE, the parties hereto agree that the Agreement entered into on July 14, 1998, shall be amended to increase the scope of work to cannabis management services as described in CONSULTANT'S Proposal, attached hereto as Exhibit "1", and by this reference made a part hereof, for the not -to -exceed amount of $28,900. The parties further agree that with the foregoing exception of the provisions provided herein, each and every term and provision of the Agreement dated July 14, 1998, shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Fir& AAK Tixf Agreement on the date and year first above written. CITY OF NATIONA By: Alejandra Sotelo-Solis, Mayor APPROVED AS TO FORM: Af I I I �, . • Attorney HINDERLITER, DE LLAMAS AND ASSOCIATES (Signat of corporate officers required) By: (Name) Andrew Nickerson (Print) President (Title) By: (Name) Gary Lott (Print) Chief Operation Officer (Title) A o® CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY) 5/29/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER Woodruff Sawyer 2 Park Plaza, Suite 500 Irvine CA 92614 CONTACT NAME: Sergio Nilchian PHONE FAX 1wc No at); 949A35 7353 � (Arc um: 949A76.3118 ADDRESS: snilchian@woodruffsawyer.com INSURER(S) AFFORDING COVERAGE NAICN INSURER A: National Fire Insurance Company of Hartford 20478 INSURED HDLCOMP-01 Hinderliter de Llamas & Associates HdL Software, LLC. 120 S State College Blvd., Suite 200 Brea CA 92821 INSURER B: Continental Insurance Company 35289 INSURER C: Brit Insurance Limited INSURER D: Continental Casualty Company 20443 INSURER E: Federal Insurance Company 20281 INSURER F: COVERAGES CERTIFICATE NUMBER: 109716262 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE ADDL INSD SUBR WVD POLICY NUMBER POLICY EFF (MM/DD/Y) YYY POLICY EXP (MM/DD/YYYY) LIMITS A X COMMERCIAL GENERAL LIABILITY Y Y 6056953483 5/26/2019 5/26/2020 EACH OCCURRENCE $1,000,000 CLAIMS -MADE X OCCUR AMAGE TO RENTED PREMSES Ea occurrence) $1,000,000 MED EXP (Any ono person) $15,000 PERSONAL &ADV INJURY $1,000,000 GENERAL AGGREGATE $ 2,000,000 GEN'L X AGGREGATE POLICY OTHER: LIMIT APPLIES PRO JECT PER: LOC PRODUCTS - COMP/OPAGG $2,000,000 $ A AUTOMOBILE X LIABILITY ANY AUTO OWNED AUTOS ONLY HIRED SCHEDULED AUTOS NON -OWNED AUTOS ONLY Y Y 6056953466 5/262019 5/26/2020 COMBINED SINGLE LIMIT (Ea accident) BODILY INJURY (Per person) BODILY INJURY (Per accident) $1,00D,000 $ $ PROPERTYOAMAGE (Per accident) $ $ B X UMBRELLALIAB EXCESS LIAB X OCCUR CLAIMS -MADE Y Y 6056953502 5/26/2019 5/26/2020 EACH OCCURRENCE $3,000,000 AGGREGATE $3,000,000 $ DED X RETENTION Sin CM g WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANYPROPRIETOR/PARTNER/EXECUTIVE Y� OFFICERIMEMBEREXCLUDED? (Mandatory in NH) If yes, describe under DESCRIPTION OF OPERATIONS below NIA Y 6056953497 5/26/2019 5/26/2020 XOTH- STATUTE ER E.L. EACH ACCIDENT $1,000,000 E.L. DISEASE - EA EMPLOYEE $1,000,000 E.L. DISEASE - POLICY LIMIT $1,000,000 C D E `;ionai La. it,.., {m Made Cyber Liability crime82556901 MPL1007919 6078657761 512/201$ 5/26/2019 12/1/2018 5/20/2020 5/26/2020 5/26/2020 EachClaim/Aggregate Cyber Limtt Crime Limit $2,900,000 $2,000,000 $1 ,000,000 DESCRIPTION OF OPERATIONSI LOCATIONS (VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached H more space is required) The city of National City, its officers, agents, employees, and volunteers are included as additional insured per written contract. And a Waiver of Subrogation applies regarding the Workers Comp coverage. A 30-day notice of cancellation applies except 10 days for non-payment. CERTIFICATE HOLDER CANCELLATION City of National City c/o Risk Management 1243 National City Blvd National City CA 91950-4397 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ACORD 25 (2016103) © 1988.2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD CIA Technology General Liability Extension Endorsement It is understood and agreed that this endorsement amends the COMMERCIAL GENERAL LIABILITY COVERAGE PART as follows. If any other endorsement attached to this policy amends any provision also amended by this endorsement, then that other endorsement controls with respect to such provision, and the changes made by this endorsement with respect to such provision do not apply. SCHEDULE: City of National City c/o Risk Management 1243 National City Blvd National City, CA 91950-4397 TABLE OF CONTENTS 1. Additional Insureds 2. Additional Insured - Primary And Non -Contributory To Additional Insured's Insurance 3. Bodily Injury— Expanded Definition 4. Broad Knowledge of Occurrence/ Notice of Occurrence 5. Broad Named Insured 6. Estates, Legal Representatives and Spouses 7. Expected Or Intended Injury —Exception for Reasonable Force 8. In Rem Actions 9. Incidental Health Care Malpractice Coverage 10. Joint Ventures/Partnership/Limited Liability Companies 11. Legal Liability — Damage To Premises 12. Medical Payments 13. Non -owned Aircraft Coverage 14. Non -owned Watercraft 15. Personal And Advertising Injury— Discrimination or Humiliation 16. Personal And Advertising Injury - Limited Contractual Liability 17. Property Damage - Elevators 18. Supplementary Payments 19. Property Damage — Patterns, Molds and Dies 20. Unintentional Failure To Disclose Hazards 21. Waiver of Subrogation — Blanket CNA74872XX (1-15) Page 1 of 14 Insured Name: Hinderliter, de Llamas & Associates HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement 1. ADDITIONAL INSUREDS a. WHO IS AN INSURED is amended to include as an Insured any person or organization described in paragraphs A. through K. below whom a Named Insured is required to add as an additional insured on this Coverage Part under a written contract or written agreement, provided such contract or agreement: (1) is currently in effect or becomes effective during the term of this Coverage Part; and (2) was executed prior to: (a) the bodily injury or property damage; or (b) the offense that caused the personal and advertising injury, for which such additional insured seeks coverage. b. However, subject always to the terms and conditions of this policy, including the limits of insurance, the Insurer will not provide such additional insured with: (1) a higher limit of insurance than required by such contract or agreement; or (2) coverage broader than required by such contract or agreement, and in no event broader than that described by the applicable paragraph A. through K. below. Any coverage granted by this endorsement shall apply only to the extent permissible by law. A. Controlling Interest Any person or organization with a controlling interest in a Named Insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury arising out of: 1. such person or organization's financial control of a Named Insured; or 2. premises such person or organization owns, maintains or controls while a Named Insured leases or occupies such premises; provided that the coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. B. Co-owner of Insured Premises A co-owner of a premises co -owned by a Named Insured and covered under this insurance but only with respect to such co -owner's liability for bodily injury, property damage or personal and advertising injury as co-owner of such premises. C. Grantor of Franchise Any person or organization that has granted a franchise to a Named Insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury as grantor of a franchise to the Named Insured. D. Lessor of Equipment Any person or organization from whom a Named Insured leases equipment, but only with respect to liability for bodily injury, property damage or personal and advertising injury caused, in whole or in part, by the Named Insured's maintenance, operation or use of such equipment, provided that the occurrence giving rise to such bodily injury, property damage or the offense giving rise to such personal and advertising injury takes place prior to the termination of such lease. E. Lessor of Land Any person or organization from whom a Named Insured leases land but only with respect to liability for bodily injury, property damage or personal and advertising injury arising out of the ownership, CNA74872XX (1-15) Policy No: 6056953483 Page 2 of 14 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA Technology General Liability Extension Endorsement maintenance or use of such land, provided that the occurrence giving rise to such bodily injury, property damage or the offense giving rise to such personal and advertising injury takes place prior to the termination of such lease. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. F. Lessor of Premises An owner or lessor of premises leased to the Named Insured, or such owner or lessor's real estate manager, but only with respect to liability'for bodily injury, property damage or personal and advertising injury arising out of the ownership, maintenance or use of such part of the premises leased to the Named Insured, and provided that the occurrence giving rise to such bodily injury or property damage, or the offense giving rise to such personal and advertising injury, takes place prior to the termination of such lease. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. G. Mortgagee, Assignee or Receiver A mortgagee, assignee or receiver of premises but only with respect to such mortgagee, assignee or receiver's liability for bodily injury, property damage or personal and advertising injury arising out of the Named Insured's ownership, maintenance, or use of a premises by a Named Insured. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. H. State or Governmental Agency or Subdivision or Political Subdivisions — Permits A state or governmental agency or subdivision or political subdivision that has issued a permit or authorization but only with respect to such state or governmental agency or subdivision or political subdivision's liability for bodily injury, property damage or personal and advertising injury arising out of: 1. the following hazards in connection with premises a Named Insured owns, rents, or controls and to which this insurance applies: a. the existence, maintenance, repair, construction, erection, or removal of advertising signs, awnings, canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoistaway openings, sidewalk vaults, street banners, or decorations and similar exposures; or b. the construction, erection, or removal of elevators; or c. the ownership, maintenance or use of any elevators covered by this insurance; or 2. the permitted or authorized operations performed by a Named Insured or on a Named Insured's behalf. The coverage granted by this paragraph does not apply to: a. Bodily injury, property damage or personal and advertising injury arising out of operations performed for the state or governmental agency or subdivision or political subdivision; or b. Bodily injury or property damage included within the products -completed operations hazard. With respect to this provision's requirement that additional insured status must be requested under a written contract or agreement, the Insurer will treat as a written contract any governmental permit that requires the Named Insured to add the governmental entity as an additional insured. I. Trade Show Event Lessor 1. With respect to a Named Insured's participation in a trade show event as an exhibitor, presenter or displayer, any person or organization whom the Named Insured is required to include as an additional insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury caused by: CNA74872XX (1-15) Page 3 of 14 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with Its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement a. the Named Insured's acts or omissions; or b. the acts or omissions of those acting on the Named Insured's behalf, in the performance of the Named Insured's ongoing operations at the trade show event premises during the trade show event. 2. The coverage granted by this paragraph does not apply to bodily injury or property damage included within the products -completed operations hazard. J. Vendor Any person or organization but only with respect to such person or organization's liability for bodily injury or property damage arising out of your products which are distributed or sold in the regular course of such person or organization's business, provided that: 1. The coverage granted by this paragraph does not apply to: a. bodily injury or property damage for which such person or organization is obligated to pay damages by reason of the assumption of liability in a contract or agreement unless such liability exists in the absence of the contract or agreement; b. any express warranty unauthorized by the Named Insured; c. any physical or chemical change in any product made intentionally by such person or organization; d. repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; e. any failure to make any inspections, adjustments, tests or servicing that such person or organization has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; f. demonstration, installation, servicing or repair operations, except such operations performed at such person or organization's premises in connection with the sale of a product; products which, after distribution or sale by the Named Insured, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for such person or organization; or h. bodily injury or property damage arising out of the sole negligence of such person or organization for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (1) the exceptions contained in Subparagraphs d. or f. above; or (2) such inspections, adjustments, tests or servicing as such person or organization has agreed with the Named Insured to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. 2. This Paragraph J. does not apply to any insured person or organization, from whom the Named Insured has acquired such products, nor to any ingredient, part or container, entering into, accompanying or containing such products. 3. This Paragraph J. also does not apply: a. to any vendor specifically scheduled as an additional insured by endorsement to this Coverage Part; b. to any of your products for which coverage is excluded by endorsement to this Coverage Part; nor c. if bodily injury or property damage included within the products -completed operations hazard is excluded by endorsement to this Coverage Part. g• CNA74872XX (1-15) Page 4 of 14 Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA Technology General Liability Extension Endorsement K. Other Person Or Organization / Your Work Any person or organization who is not an additional insured under Paragraphs A. through J. above. Such additional insured is an Insured solely for bodily injury, property damage or personal and advertising injury for which such additional insured is liable because of the Named Insured's acts or omissions. The coverage granted by this paragraph does not apply to any person or organization: 1. who is specifically scheduled as an additional insured on another endorsement to this Coverage Part; nor 2. for bodily injury or property damage included within the products -completed operations hazard except to the extent all of the following apply: a. this Coverage Part provides such coverage; b. the written contract or agreement described in the opening paragraph of this ADDITIONAL INSUREDS Provision requires the Named Insured to provide the additional insured such coverage; and c. the bodily injury or property damage results from your work that is the subject of the written contract or agreement, and such work has not been excluded by endorsement to this Coverage Part. 2. ADDITIONAL INSURED - PRIMARY AND NON-CONTRIBUTORY TO ADDITIONAL INSURED'S INSURANCE A. The Other Insurance Condition in the COMMERCIAL GENERAL LIABILITY CONDITIONS Section is amended to add the following paragraph: If the Named Insured has agreed in writing in a contract or agreement that this insurance is primary and non-contributory relative to an additional insured's own insurance, then this insurance is primary, and the Insurer will not seek contribution from that other insurance. For the purpose of this Provision 2., the additional insured's own insurance means insurance on which the additional insured is a named insured. B. With respect to persons or organizations that qualify as additional insureds pursuant to paragraph 1.K. of this endorsement, the following sentence is added to the paragraph above: Otherwise, and notwithstanding anything to the contrary elsewhere in this Condition, the insurance provided to such person or organization is excess of any other insurance available to such person or organization. 3. BODILY INJURY — EXPANDED DEFINITION Under DEFINITIONS, the definition of bodily injury is deleted and replaced by the following: Bodily injury means physical injury, sickness or disease sustained by a person, including death, humiliation, shock, mental anguish or mental injury sustained by that person at any time which results as a consequence of the physical injury, sickness or disease. 4. BROAD KNOWLEDGE OF OCCURRENCE/ NOTICE OF OCCURRENCE Under CONDITIONS, the condition entitled Duties in The Event of Occurrence, Offense, Claim or Suit Condition is amended to add the following provisions: A. BROAD KNOWLEDGE OF OCCURRENCE The Named Insured must give the Insurer or the Insurer's authorized representative notice of an occurrence, offense or claim only when the occurrence, offense or claim is known to a natural person Named Insured, to a partner, executive officer, manager or member of a Named Insured, or to an employee designated by any of the above to give such notice. B. NOTICE OF OCCURRENCE CNA74872XX (1-15) Page 5 of 14 Insured Name: Hinderliter, de Llamas & Associates j HDL Software, LLC Copyright CNA All Rights Reserved, Includes copyrighted material of Insurance Services Office, Inc., with its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement The Named Insured's rights under this Coverage Part will not be prejudiced if the Named Insured fails to give the Insurer notice of an occurrence, offense or claim and that failure is solely due to the Named Insured's reasonable belief that the bodily injury or property damage is not covered under this Coverage Part. However, the Named Insured shall give written notice of such occurrence, offense or claim to the Insurer as soon as the Named Insured is aware that this insurance may apply to such occurrence, offense or claim. 5. BROAD NAMED INSURED WHO IS AN INSURED is amended to delete its Paragraph 3. in its entirety and replace it with the following: 3. Pursuant to the limitations described in Paragraph 4. below, any organization in which a Named Insured has management control: a. on the effective date of this Coverage Part; or b. by reason of a Named Insured creating or acquiring the organization during the policy period, qualifies as a Named Insured, provided that there is no other similar liability insurance, whether primary, contributory, excess, contingent or otherwise, which provides coverage to such organization, or which would have provided coverage but for the exhaustion of its limit, and without regard to whether its coverage is broader or narrower than that provided by this insurance. But this BROAD NAMED INSURED provision does not apply to: (a) any partnership or joint venture; or (b) any organization for which coverage is excluded by another endorsement attached to this Coverage Part. For the purpose of this provision, and of this endorsement's JOINT VENTURES / PARTNERSHIP / LIMITED LIABILITY COMPANIES provision, management control means: A. owning interests representing more than 50% of the voting, appointment or designation power for the selection of a majority of the Board of Directors of a corporation, or the members of the management board of a limited liability company; or B. having the right, pursuant to a written trust agreement, to protect, control the use of, encumber or transfer or sell property held by a trust. 4. With respect to organizations which qualify as Named Insureds by virtue of Paragraph 3. above, this insurance does not apply to: a. bodily injury or property damage that first occurred prior to the date of management control, or that first occurs after management control ceases; nor b. personal or advertising injury caused by an offense that first occurred prior to the date of management control or that first occurs after management control ceases. 5. The insurance provided by this Coverage Part applies to Named Insureds when trading under their own names or under such other trading names or doing -business -as names (dba) as any Named Insured should choose to employ. 6. ESTATES, LEGAL REPRESENTATIVES, AND SPOUSES The estates, heirs, legal representatives and spouses of any natural person Insured shall also be insured under this policy; provided, however, coverage is afforded to such estates, heirs, legal representatives, and spouses only for claims arising solely out of their capacity or status as such and, in the case of a spouse, where such claim seeks damages from marital community property, jointly held property or property transferred from such natural person Insured to such spouse. No coverage is provided for any act, error or omission of an estate, heir, legal representative, or spouse outside the scope of such person's capacity or status as such, provided however CNA74872XX (1-15) Page 6 of 14 Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with Its permission. C IA Technology General Liability Extension Endorsement that the spouse of a natural person Named Insured and the spouses of members or partners of joint venture or partnership Named Insureds are Insureds with respect to such spouses' acts, errors or omissions in the conduct of the Named Insured's business 7. EXPECTED OR INTENDED INJURY —EXCEPTION FOR REASONABLE FORCE Under COVERAGES, Coverage A — Bodily Injury And Property Damage Liability, the paragraph entitled Exclusions is amended to delete the exclusion entitled Expected or Intended Injury and replace it with the following: This insurance does not apply to: Expected or Intended Injury Bodily injury or property damage expected or intended from the standpoint of the Insured. This exclusion does not apply to bodily injury or property damage resulting from the use of reasonable force to protect persons or property. 8. IN REM ACTIONS A quasi in rem action against any vessel owned or operated by or for the Named Insured, or chartered by or for the Named Insured, will be treated in the same manner as though the action were in personam against the Named Insured. 9. INCIDENTAL HEALTH CARE MALPRACTICE COVERAGE Solely with respect to bodily injury that arises out of a health care incident: A. Under COVERAGES, Coverage A — Bodily Injury And Property Damage Liability, the Insuring Agreement is amended to replace Paragraphs 1.b.(1) and 1.b.(2) with the following: b. This insurance applies to bodily injury provided that the professional health care services are incidental to the Named Insured's primary business purpose, and only if: (1) such bodily injury is caused by an occurrence that takes place in the coverage territory. (2) the bodily injury first occurs during the policy period. All bodily injury arising from an occurrence will be deemed to have occurred at the time of the first act, error, or omission that is part of the occurrence; and B. Under COVERAGES, Coverage A — Bodily Injury And Property Damage Liability, the paragraph entitled Exclusions is amended to: i. add the following to the Employers Liability exclusion: This exclusion applies only if the bodily injury arising from a health care incident is covered by other liability insurance available to the Insured (or which would have been available but for exhaustion of its limits). ii. delete the exclusion entitled Contractual Liability and replace it with the following: This insurance does not apply to: Contractual Liability the Insured's actual or alleged liability under any oral or written contract or agreement, including but not limited to express warranties or guarantees. iii. add the following additional exclusions. This insurance does not apply to: CNA74872XX (1-15) Page 7 of 14 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement Discrimination any actual or alleged discrimination, humiliation or harassment, that includes but shall not be limited to claims based on an individual's race, creed, color, age, gender, national origin, religion, disability, marital status or sexual orientation. Dishonesty or Crime Any actual or alleged dishonest, criminal or malicious act, error or omission. Medicare/Medicaid Fraud any actual or alleged violation of law with respect to Medicare, Medicaid, Tricare or any similar federal, state or local governmental program. Services Excluded by Endorsement Any health care incident for which coverage is excluded by endorsement. C. DEFINITIONS is amended to: add the following definitions: Health care incident means an act, error or omission by the Named Insured's employees or volunteer workers in the rendering of: a. professional health care services on behalf of the Named Insured or b. Good Samaritan services rendered in an emergency and for which no payment is demanded or received. Professional health care services means any health care services or the related furnishing of food, beverages, medical supplies or appliances by the following providers in their capacity as such but solely to the extent they are duly licensed as required: a. Physician; b. Nurse; c. Nurse practitioner; d. Emergency medical technician; e. Paramedic; f. Dentist; g. Physical therapist; h. Psychologist; i. Speech therapist; j. Other allied health professional; or Professional health care services does not include any services rendered in connection with human clinical trials or product testing. ii. delete the definition of occurrence and replace it with the following: Occurrence means a health care incident. All acts, errors or omissions that are logically connected by any common fact, circumstance, situation, transaction, event, advice or decision will be considered to constitute a single occurrence; CNA74872XX (1-15) Page 8of14 Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA Technology General Liability Extension Endorsement iii. amend the definition of Insured to: a. add the following: the Named Insured's employees are Insureds with respect to: (1) bodily injury to a co -employee while in the course of the co -employee's employment by the Named Insured or while performing duties related to the conduct of the Named Insured's business; and (2) bodily injury to a volunteer worker while performing duties related to the conduct of the' Named Insured's business; when such bodily injury arises out of a health care incident. the Named Insured's volunteer workers are Insureds with respect to: (1) bodily injury to a co -volunteer worker while performing duties related to the conduct of the Named Insured's business; and (2) bodily injury to an employee while in the course of the employee's employment by the Named Insured or while performing duties related to the conduct of the Named Insured's business; when such bodily injury arises out of a health care incident. b. delete Subparagraphs (a), (b), (c) and (d) of Paragraph 2.a.(1) of WHO IS AN INSURED. c. add the following: Insured does not include any physician while acting in his or her capacity as such. D. The Other Insurance condition is amended to delete Paragraph b.(1) in its entirety and replace it with the following: Other Insurance b. Excess Insurance (1) To the extent this insurance applies, it is excess over any other insurance, self insurance or risk transfer instrument, whether primary, excess, contingent or on any other basis, except for insurance purchased specifically by the Named Insured to be excess of this coverage. 10. JOINT VENTURES / PARTNERSHIP / LIMITED LIABILITY COMPANIES WHO IS AN INSURED is amended to delete its last paragraph and replace it with the following: No person or organization is an Insured with respect to: the conduct of any current or past partnership or joint venture that is not shown as a Named Insured in the Declarations; nor the conduct of a current or past limited liability company in which a Named Insured's interest does/did not rise to the level of management control; except that if the Named Insured was a joint venturer, partner, or member of such a limited liability company, and such joint venture, partnership or limited liability company terminated prior to or during the policy period, then such Named Insured is an Insured with respect to its interest in such joint venture, partnership or limited liability company but only to the extent that: a. any offense giving rise to personal and advertising injury occurred prior to such termination date, and the personal and advertising injury arising out of such offense, first occurred after such termination date; b. the bodily injury or property damage first occurred after such termination date; and CNA74872XX (1-15) Page 9 of 14 Insured Name: Hinderliter, de Llamas & Associates f HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with Its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement c. there is no other valid and collectible insurance purchased specifically to insure the partnership, joint venture or limited liability company. 11. LEGAL LIABILITY— DAMAGE TO PREMISES A. Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete the first paragraph immediately following subparagraph (6) of the Damage to Property exclusion and replace it with the following: Paragraphs (1), (3) and (4) of this exclusion do not apply to property damage (other than damage by fire) to premises rented to the Named Insured or temporarily occupied by the Named Insured with the permission of the owner, nor to the contents of premises rented to the Named Insured for a period of 7 or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in LIMITS OF INSURANCE. B. Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete its last paragraph and replace it with the following: Exclusions c. through n. do not apply to damage by fire to premises while rented to a Named Insured or temporarily occupied by a Named Insured with permission of the owner, nor to damage to the contents of premises rented to a Named Insured for a period of 7 or fewer consecutive days. A separate limit of insurance applies to this coverage as described in the LIMITS OF INSURANCE Section. C. LIMITS OF INSURANCE is amended to delete Paragraph 6. (the Damage To Premises Rented To You Limit) and replace it with the following: 6. Subject to Paragraph 5. above, (the Each Occurrence Limit), the Damage To Premises Rented To You Limit is the most the Insurer will pay under COVERAGE A for damages because of property damage to: a. any one premises while rented to a Named Insured or temporarily occupied by a Named Insured with the permission of the owner; and b. contents of such premises if the premises is rented to the Named Insured for a period of 7 or fewer consecutive days. The Damage To Premises Rented To You Limit is $500,000. unless a different Damage to Premises Rented to You Limit is shown in the Declarations. D. The Other Insurance Condition is amended to delete Paragraph b.(1)(a)(ii), and replace it with the following: (ii) That is property insurance for premises rented to a Named Insured, for premises temporarily occupied by the Named Insured with the permission of the owner; or for personal property of others in the Named Insured's care, custody or control; E. This Provision 11. does not apply if liability for damage to premises rented to a Named Insured is excluded by another endorsement attached to this Coverage Part. 12. MEDICAL PAYMENTS A. LIMITS OF INSURANCE is amended to delete Paragraph 7. (the Medical Expense Limit) and replace it with the following: 7. Subject to Paragraph 5. above (the Each Occurrence Limit), the Medical Expense Limit is the most the Insurer will pay under Coverage C — Medical Payments for all medical expenses because of bodily injury sustained by any one person. The Medical Expense Limit is the greater of: (1) $15,000 unless a different amount is shown here: @@@@@@@@@@@@@@ ; or (2) the amount shown in the Declarations for Medical Expense Limit. CNA74872XX (1-15) Policy No: 6056953483 Page 10 of 14 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with Its permission. CNA Technology General Liability Extension Endorsement B. Under COVERAGES, the Insuring Agreement of Coverage C — Medical Payments is amended to replace Paragraph 1.a.(3)(b) with the following: (b) The expenses are incurred and reported to the Insurer within three years of the date of the accident; and This Paragraph B. does not apply to medical expenses incurred in the state of Missouri. 13. NON -OWNED AIRCRAFT Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended as follows: The exclusion entitled Aircraft, Auto or Watercraft is amended to add the following: This exclusion does not apply to an aircraftnot owned by any Named Insured, provided that: 1. the pilot in command holds a currently effective certificate issued by the duly constituted authority of the United States of America or Canada, designating that person as a commercial or airline transport pilot; 2. the aircraft is rented with a trained, paid crew to the Named Insured; and 3. the aircraft is not being used to carry persons or property for a charge. 14. NON -OWNED WATERCRAFT Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete subparagraph (2) of the exclusion entitled Aircraft, Auto or Watercraft, and replace it with the following. This exclusion does not apply to: (2) a watercraft that is not owned by any Named Insured, provided the watercraft is: (a) less than 75 feet long; and (b) not being used to carry persons or property for a charge. 15. PERSONAL AND ADVERTISING INJURY —DISCRIMINATION OR HUMILIATION A. Under DEFINITIONS, the definition of personal and advertising injury is amended to add the following tort: • Discrimination or humiliation that results in injury to the feelings or reputation of a natural person. B. Under COVERAGES, Coverage B — Personal and Advertising Injury Liability, the paragraph entitled Exclusions is amended to: 1. • delete the Exclusion entitled Knowing Violation Of Rights Of Another and replace it with the following: This insurance does not apply to: Knowing Violation of Rights of Another Personal and advertising injury caused by or at the direction of the Insured with the knowledge that the act would violate the rights of another and would inflict personal and advertising injury. This exclusion shall not apply to discrimination or humiliation that results in injury to the feelings or reputation of a natural person, but only if such discrimination or humiliation is not done intentionally by or at the direction of: (a) the Named Insured; or (b) any executive officer, director, stockholder, partner, member or manager (if the Named Insured is a limited liability company) of the Named Insured. 2. add the following exclusions: This insurance does not apply to: CNA74872XX (1-15) Policy No: 6056953483 Page 11 of 14 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with Its permission, CIA Technology General Liability Extension Endorsement Employment Related Discrimination Discrimination or humiliation directly or indirectly related to the employment, prospective employment, past employment or termination of employment of any person by any Insured. Premises Related Discrimination discrimination or humiliation arising out of the sale, rental, lease or sub -lease or prospective sale, rental, lease or sub -lease of any room, dwelling or premises by or at the direction of any Insured. Notwithstanding the above, there is no coverage for fines or penalties levied or imposed by a governmental entity because of discrimination. The coverage provided by this PERSONAL AND ADVERTISING INJURY —DISCRIMINATION OR HUMILIATION Provision does not apply to any person or organization whose status as an Insured'derives solely from • Provision 1. ADDITIONAL INSURED of this endorsement; or • attachment of an additional insured endorsement to this Coverage Part. 16. PERSONAL AND ADVERTISING INJURY - LIMITED CONTRACTUAL LIABILITY A. Under COVERAGES, Coverage B —Personal and Advertising Injury Liability, the paragraph entitled Exclusions is amended to delete the exclusion entitled Contractual Liability and replace it with the following: This insurance does not apply to: Contractual Liability Personal and advertising injury for which the Insured has assumed liability in a contractor agreement. This exclusion does not apply to liability for damages: (1) that the Insured would have in the absence of the contractor agreement; or (2) assumed in a contract or agreement that is an insured contract provided the offense that caused such personal or advertising injury first occurred subsequent to the execution of such insured contract. Solely for the purpose of liability assumed in an insured contract, reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an Insured are deemed to be damages because of personal and advertising injury provided: (a) liability to such party for, or for the cost of, that party's defense has also been assumed in such insured contract; and (b) such attorney fees and litigation expenses are for defense of such party against a civil or alternative dispute resolution proceeding in which covered damages are alleged. B. Solely for the purpose of the coverage provided by this paragraph, DEFINITIONS is amended to delete the definition of insured contract in its entirety, and replace it with the following: Insured contract means that part of a written contract or written agreement pertaining to the Named Insured's business under which the Named Insured assumes the tort liability of another party to pay for personal or advertising injury arising out of the offense of false arrest, detention or imprisonment. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. C. Solely for the purpose of the coverage provided by this paragraph, the following changes are made to the Section entitled SUPPLEMENTARY PAYMENTS —COVERAGES A AND B: 1. Paragraph 2.d. is replaced by the following: CNA74872XX (1-15) Pegg 12of14 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. Policy No: 6056953483 Endorsement NO: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement d. The allegations in the suit and the information the Insurer knows about the offense alleged in such suit are such that no conflict appears to exist between the interests of the Insured and the interests of the indemnitee; 2. The first unnumbered paragraph beneath Paragraph 2.f.(2)(b) is deleted and replaced by the following: So long as the above conditions are met, attorneys fees incurred by the Insurer in the defense of that indemnitee, necessary litigation expenses incurred by the Insurer, and necessary litigation expenses incurred by the indemnitee at the Insurer's request will be paid as defense costs. Notwithstanding the provisions of Paragraph e.(2) of the Contractual Liability exclusion (as amended by this Endorsement), such payments will not be deemed to be damages for personal and advertising injury and will not reduce the limits of insurance. D. This PERSONAL AND ADVERTISING INJURY - LIMITED CONTRACTUAL LIABILITY Provision does not apply if Coverage B —Personal and Advertising Injury Liability is excluded by another endorsement attached to this Coverage Part. 17. PROPERTY DAMAGE — ELEVATORS A. Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended such that the Damage to Your Product Exclusion and subparagraphs (3), (4) and (6) of the Damage to Property Exclusion do not apply to property damage that results from the use of elevators. B. Solely for the purpose of the coverage provided by this PROPERTY DAMAGE — ELEVATORS Provision, the Other Insurance conditions is amended to add the following paragraph: This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis that is Property insurance covering property of others damaged from the use of elevators. 18. SUPPLEMENTARY PAYMENTS The section entitled SUPPLEMENTARY PAYMENTS — COVERAGES A AND B is amended as follows: A. Paragraph 1.b. is amended to delete the $250 limit shown for the cost of bail bonds and replace it with a $5,000. limit; and B. Paragraph 1.d. is amended to delete the limit of $250 shown for daily loss of earnings and replace it with a $1,000. limit. 19. PROPERTY DAMAGE - PATTERNS MOLDS AND DIES Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete subparagraphs (3) and (4) of the Exclusion entitled Damage to Property, but only with respect to patterns, molds or dies that are in the care, custody or control of the Insured, and only if such patterns, molds or dies are not being used to perform operations at the time of loss. A limit of insurance of $25,000 per policy period applies to this PROPERTY DAMAGE - PATTERNS MOLDS AND DIES coverage, and this limit: A. is included within the General Aggregate Limit as described in LIMITS OF INSURANCE; and B. applies' excess over any valid and collectible property insurance available to the Insured, including any deductible applicable to such insurance; the Other Insurance condition is changed accordingly. 20. UNINTENTIONAL FAILURE TO DISCLOSE HAZARDS If the Named Insured unintentionally fails to disclose all existing hazards at the inception date of the Named Insured's Coverage Part, the Insurer will not deny coverage under this Coverage Part because of such failure. CNA74872XX (1-15) Page 13 of 14 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with Its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA Technology General Liability Extension Endorsement 21. WAIVER OF SUBROGATION - BLANKET Under CONDITIONS, the condition entitled Transfer Of Rights Of Recovery Against Others To Us is amended to add the following: The Insurer waives any right of recovery the Insurer may have against any person or organization because of payments the Insurer makes for injury or damage arising out of: 1. the Named Insured's ongoing operations; or 2. your work included in the products -completed operations hazard. However, this waiver applies only when the Named Insured has agreed in writing to waive such rights of recovery in a written contract or written agreement, and only if such contract or agreement: 1. is in effect or becomes effective during the term of this Coverage Part; and 2. was executed prior to the bodily injury, property damage or personal and advertising injury giving rise to the claim. All other terms and conditions of the Policy remain unchanged. This endorsement, which forms a part of and is for attachment to the Policy issued by the designated Insurers, takes effect on the effective date of said Policy at the hour stated in said Policy, unless another effective date is shown below, and expires concurrently with said Policy. CNA74872XX (1-15) Page 14 of 14 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. Policy No: 6056953483 Endorsement No: 1 Effective: 5/26/19 - 5/26/20 CNA ADDITIONAL INSURED — PRIMARY AND NON-CONTRIBUTORY It is understood and agreed that this endorsement amends the BUSINESS AUTO COVERAGE FORM as follows: SCHEDULE Name of Additional Insured Persons Or Organizations City of National City c/o Risk Management 1243 National City Blvd National City, CA 91950-4397 In conformance with paragraph A.1.c. of Who Is An Insured of Section II — LIABILITY COVERAGE, the person or organization scheduled above is an insured under this policy. 2. The insurance afforded to the additional insured under this poiicy will apply on a primary and non-contributory basis if you have committed it to be so in a written contract or written agreement executed prior to the date of the "accident" for which the additional insured seeks coverage under this policy. All other terms and conditions of the Policy remain unchanged. This endorsement, which forms a part of and is for attachment to the Policy issued by the designated Insurers, takes effect on the effective date of said Policy at the hour stated in said Policy, unless another effective date is shown below, and expires concurrently with said Policy. CNA71527XX (10-12) Page 1 Insured Name: Hinderliter, de Llamas & Associates I HDL Software, LLC Policy No: 6056953466 Endorsement No: 1 Effective : 5/26/19 - 5/26/20 © CNA All Rights Reserved. POLICY NUMBER: 6056953466 COMMERCIAL AUTO CA 04 44 10 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) This endorsement modifies insurance provided under the following: AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below. Named Insured: Hinderliter, de Llamas & Associates I HDL Software, LLC Endorsement Effective Date: 5/26/2019 SCHEDULE Name(s) Of Person(s) Or Organization(s): City of National City do Risk Management 1243'National City Blvd National City, CA 91950-4397 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. The Transfer Of Rights Of Recovery Against Others To Us condition does not apply to the }iersoriI ) or organization(s) shown in the Schedule, but only to the extent that subrogation is waived prior to the "accident" or the "loss" under a contract with that person or organization. CA 04 4410 13 Copyright, Insurance Services Office, Inc., 2011 Page 1 of 1 DNA • WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) This agreement shall not operate directly or indirectly to benefit anyone not named in the Schedule. Schedule City of National City Go Risk Management 1243 National City Blvd National City, CA 91950-4397 The premium charge for the endorsement is reflected in the Schedule of Operations. All other terms and conditions of the policy remain unchanged. This endorsement, which forms a part of and is for attachment to the policy issued by the designated Insurers, takes effect on the Policy Effective date of said policy at the hour stated in said policy, unless another effective date (the Endorsement Effective Date) is shown below, and expires concurrently with said policy unless another expiration date is shown below. Form No: WC 00 03 13 (04-1984) Endorsement Effective Date: 5/26/19 Endorsement Expiration Date: 5/26/20 Endorsement No: 1 Underwriting Company: Continental Insurance Company Policy No: 6056677063, 6056953497 Policy Effective Date: 5/26/2019 Copyright 1983 National Council on Compensation Insurance. City of National City Cannabis Management Services April 19, 2019 HdL Companies SUBMITTED BY HdL Companies 120 S. State College Blvd., Ste 200 Brea, CA 92821 hdlcompanies.com CONTACT David McPherson T: 714.879.5000 E: dmcpherson@hdlcompanies.com Proposal for Cannabis Management Services for the City of National City April 19, 2019 TABLE OF CONTENTS I. LETTER OF TRANSMITTAL 2 II. PROPOSED SCOPE OF SERVICES 3 III. COST 7 IV. EXPERIENCE AND RESOURCES 8 V. REFERENCES 14 HdL© Companies Proposal for Cannabis Management Services for the City of National City April 19, 2019 I. LETTER OF TRANSMITTAL April 19, 2019 Megan Gamwell Economic Development Specialist City of National City 1243 National City Blvd. National City, CA 91950 Re: Proposal for Cannabis Management Services Dear Ms. Gamwell, Thank you for the opportunity to submit this proposal for cannabis management services for the City of National City. The enclosed scope of services is designed to assist the City with community outreach, development of a draft cannabis ordinance, a merit -based application review process and cost recovery fees, as requested. The proposal also outlines additional services that HdL can provide at the City's request, including ongoing compliance inspections and financial audits of permitted cannabis businesses. HdL was incorporated in 1983 and has over 30 years of experience providing revenue enhancement and consulting services to local governments in California. HdL is a consortium of three companies established to maximize local government revenues by providing audit, compliance, economic development, consulting services and software products. Its audit and consulting services include sales, use and transaction taxes, property taxes, transient occupancy taxes, and a Cannabis Management Program. HdL's systematic and coordinated approach to revenue management and economic data analysis is currently being utilized by over 500 agencies in six states. The firm currently serves 49 counties, 311 cities and 132 transactions tax districts in California. Our knowledgeable team of professionals have more than 46 years' combined experience in the establishment and implementation of cannabis regulatory programs including establishing land - use regulations, registration processes, operation regulations for cannabis facilities, staffing plans, cost recovery, structuring cannabis business taxes and conducting compliance and financial audits. We look forward to the opportunity to partner with the City of National City in developing a strategy which meets your program needs. If you have any questions or require additional information, please feel free to contact me by email at anickersonAhdlcompanies.com or David McPherson at dmcpherson(andlcompanies.com or by phone at 714.879.5000. Sincerely, Q( Andy Nickerson President, HdL Companies HdL© Companies 2 Proposal for Cannabis Management Services for the City of National City April19, 2019 II. PROPOSED SCOPE OF SERVICES The City of National City currently prohibits the establishment or operation of any and all medical or adult -use cannabis businesses in the City. The City is interested in exploring the possibility of the development of an ordinance to permit and regulate commercial cannabis businesses within the City. As a part of this process, the City wishes to conduct a series of community outreach meetings or workshops to explore and identify the range of policy issues and concerns to be considered and addressed by the ordinance. Should an ordinance be adopted, the City would conduct a merit -based application process for awarding permits. The City also desires to apply appropriate fees to recover all City costs associated with the permit process as well as establish a cannabis tax ordinance through a ballot measure process. To meet these objectives, the City is seeking assistance from HdL to help with community outreach, to develop a draft regulatory ordinance, design a merit -based application process and to determine appropriate cost recovery fees and to develop a tax ordinance. This proposal provides a fixed unit cost for each of these items, and includes additional hours for conference calls, technical assistance and subject matter expertise, to be utilized on an as - needed basis at the City's request. The enclosed Scope of Services to be provided by HdL includes all of the following: • Kick-off conference call meeting with City staff; • Attendance, support or presentations at 3 public meetings, including one community outreach workshop, one meeting of the City Council or Planning Commission, and one additional meeting or workshop as may be needed; • Development of a cannabis regulatory ordinance that addresses community concerns and complies with all applicable State and local laws; • Design an application process that includes merit -based review, ranking and final selection of cannabis business permittees; • Conduct a fiscal analysis to determine proper cost recovery fees and to design a tax ordinance with appropriate cannabis tax rates. Fees shall ensure all allowable City costs associated with the development and implementation of the regulatory program are borne by the applicants; • Develop an annual cannabis business regulatory fee to recover ongoing costs associated with administrative oversight of permitted cannabis facilities, including compliance inspections, financial audits and any other regulatory requirements; • Design a cannabis tax ordinance and ballot measure resolution which will be submitted to the County Elections Office. • Provide City staff with technical assistance and subject matter expertise as needed. HdL© Companies 3 Proposal for Cannabis Management Services for the City of National City April 19, 2019 Objective 1: Attendance, Support or Presentations at Public Meetings or Workshops HdL shall provide support or presentations at 3 public meetings or workshops to gauge concerns about the potential community impacts of the various types of cannabis businesses. Input gathered through these meetings will be used to help guide the development of a regulatory ordinance. These meetings will likely include one public workshop and at least one meeting of the City Council and/or Planning Commission. Objective 2: Develop a Draft Cannabis Regulatory Ordinance Consultant shall develop a draft cannabis regulatory ordinance that addresses community concerns. The draft ordinance shall include specific regulations for each of the various cannabis business types as directed by the City, which may include cultivation, manufacturing, distribution, microbusinesses, storefront retailers, non -storefront retailers, and/or testing laboratories. HdL shall ensure that the proposed ordinance complies with all State and local laws and reflects evolving best practices within the industry. Objective 3: Application Process Development Consultant shall design an application process that includes merit -based review, ranking and final selection of cannabis business permittees. The process shall include evaluation criteria consistent with the draft ordinance and shall ensure that all information desired by the City is incorporated into the cannabis business application form and procedures. HdL shall also provide all necessary application forms, as well as procedures, guidelines, indemnification forms, background information releases, and other required documents. Objective 4: Fiscal Analysis, Cost Recovery Fees, Tax Ordinance and Annual Regulatory Fee Consultant shall conduct a fiscal analysis to determine proper cost recovery fees and design a cannabis tax ordinance with appropriate cannabis tax rates. Fees shall ensure all allowable City costs associated with the development of the regulatory program and with the processing and issuance of permits are borne by the applicants. Consultant shall also develop an annual regulatory fee to recover costs associated with administrative oversight of permitted cannabis facilities, including permit renewals, compliance inspections, financial audits and any other requirements deemed necessary by the City. The fiscal analysis shall include a study of the local cannabis industry to guide the City in setting cannabis tax rates for the ballot measure resolution and cannabis tax ordinance which will be prepared by the Consultant. Objective 5: Provide Subject Matter Expertise & Technical Support HdL shall provide up to 20 hours of general consulting in the form of subject matter expertise or technical assistance, to be utilized on an as -needed basis at the City's request. Such assistance may include monitoring of changes to State laws and regulations, participation in conference calls, responding to staff inquires via phone and email, reviewing staff reports to HdL Companies 4 Proposal for Cannabis Management Services for the City of National City April 19, 2019 the City Council, assisting with responses to inquiries from the public, or other issues yet to be determined as requested by the City. Optional Cannabis Consulting Services: Application Reviews and Selection Process HdL has experience reviewing over 1,800 cannabis business applications for counties and cities across California. Our team can provide application reviews, scoring, merit -based ranking and interviews to inform the final selection for cannabis business permits. Our process begins with an initial screening of all applications for completeness based upon a checklist of required documentation. All applications deemed complete will move forward for a full review, including scoring and merit -based ranking based on the applicant's demonstrated ability to meet or exceed minimum requirements in each category. Reviews identify both strengths and weaknesses of each application as well as providing a numerical score to inform the subsequent interview and selection process. HdL can also conduct an interview panel for all applicants that receive passing scores and can prepare a report to inform the final selection of which applicants shall be granted permits. Application reviews, scoring and merit -based ranking: $2,500 per applicant Applicant interviews: $500 per applicant Background Checks HdL is qualified to provide supplemental background checks for principals and employees of cannabis businesses as part of the application process. This service is not included as a part of this proposal but can be provided at an additional cost of $300 per person for owners or managers, and $150 per person for line staff. This price includes an employee identification card designed by HdL with the City logo which will meet all the state regulation requirements. Regulatory Compliance Reviews and Financial Audits HdL's Cannabis Management Team has over 26 years combined experience conducting approximately 16,000 cannabis compliance inspections, financial audits and investigations in Colorado, California and Nevada. HdL can provide annual compliance reviews and financial audits at the following rates for each cannabis business permitted in the City. A. Conduct one (1) financial audit annually for each permit at a rate of $6,000. B. Conduct one (1) compliance review annually for each permit at a rate of $1,250. C. Conduct one (1) financial audit and one (1) compliance review annually for each permit at a rate of $7,250. D. Conduct one (1) financial audit and two (2) compliance reviews annually for each permit at a rate of $8,500. HdL°Companies Proposal for Cannabis Management Services for the City of National City April 19, 2019 E. Conduct one (1) financial audit and three (3) compliance reviews annually for each permit at a rate of $9,750. F. Conduct one (1) financial audit and four (4) compliance reviews annually for each permit at a rate of $11,000. HdL© Companies 6 Proposal for Cannabis Management Services for the City of National City April 19, 2019 III. COST The proposed services are broken down into specific line items in the cost table below. Some of these services may include both fixed costs for developing and initiating each of the various components of the program and variable costs based on the number of applicants or businesses. HdL's fees are based on time, materials and travel -related expenses associated with the execution of the services. The hours and costs in the table below do not include any additional items that are not contemplated by this scope of services. All City costs' would be incorporated into either the application fees or the annual permit fees, to be payable by the applicant or permittee. Any additional services requested by the City will be billed at HdL's hourly rate. Prices are valid for 90 days from April 19, 2019. Scope of Service Objectives Estimated Cost Objective 1: Community meetings, workshops and presentations (assumes 3 site visits) $5,400 Includes travel Objective 2: Develop a draft cannabis regulatory ordinance $5,000 Objective 3: Develop a merit -based application and review process $5,000 Objective 4: Conduct fiscal analysis and develop cost recovery fees $7,500 Objective 5: Subject matter expertise and technical assistance $6,000 ESTIMATE OF TOTAL COSTS $28,900 1 Except for costs associated with setting cannabis tax rates. HdL© Companies 7 Proposal for Cannabis Management Services for the City of National City April 19, 2019 IV. EXPERIENCE AND RESOURCES Company Profile Founded in 1983, HdL is a consortium of three companies established to maximize local government revenues by providing audit, compliance, economic development, consulting services and software products. Its audit and consulting services include sales, use and transaction taxes, property taxes, transient occupancy taxes, and a Cannabis Management Program. The firm also provides a variety of enterprise software processing tools for business licensing, code enforcement, animal control, building permits and tracking/billing of false alarms. HdL's systematic and coordinated approach to revenue management and economic data analysis is currently being utilized by over 500 agencies in six states. The firm currently serves 49 counties, 311 cities and 132 transactions tax districts in California. HdL's key staff has extensive experience serving local government and many have previously held positions in city management, finance, planning, economic development or revenue collection. HdL is a Corporate Partner of the League of California Cities and California State Association of Counties and works extensively with the County Auditor's Association of California, California Society of Municipal Finance Officers (CSMFO) and California Municipal Revenue and Tax Association (CMRTA) on anticipation and planning of programs to strengthen local government revenues. This close understanding of local government needs coupled with extensive databases and advanced methodology provides for the most relevant, productive and responsive revenue recovery; forecasting; and economic services available. Our team of professionals has over 46 years of direct experience establishing and implementing cannabis regulatory and taxation programs, including establishing land -use regulations, permit processes, staffing plans, and cost recovery fees; structuring cannabis business tax fees; regulatory compliance; financial audits; and law enforcement training. Our team has conducted over 16,000 cannabis compliance inspections and investigations in Colorado, California and Nevada. Key Personnel David McPherson, Cannabis Compliance Director David McPherson works with local agencies to prepare them to mitigate regulatory issues surrounding Proposition 64 and SB 94. Prior to joining HdL, David served 28 years in local government for the County of Orange and the cities of Newport Beach, San Jose and Oakland. David's experience as a law enforcement officer, compliance auditor, and tax administrator has provided him a wealth of experience that makes him uniquely qualified to manage HdL's Cannabis Management Program. While working for the City of Oakland, he became the first Tax Administrator in the country to successfully tax, regulate and audit medical marijuana businesses. David has over 8 years of experience working with cannabis regulatory programs. HdL Companies 8 Proposal for Cannabis Management Services for the City of National City April 19, 2019 David is one of the state's most recognized experts in cannabis regulatory policies, compliance implementation and tax policies. His unique knowledge in horticulture, processing and dispensary operations while working for the City of Oakland has made him one of the pioneers in creating a Cannabis Management Program. He uses his experience to assist local and state agencies in developing cannabis policies for regulation, compliance, auditing and economic development. He worked closely with the League of Cities on the development of the Medical Cannabis Regulation and Safety Act (MCRSA) and helped shape SB 94, the Medicinal Adult -Use Cannabis Regulation and Safety Act (MAUCRSA). David provides technical support on cannabis -related matters to the League of Cities, the Police Chief's Association, Rural County Representatives of California and the California State Association of Counties. In addition, David is working collaboratively with the Department of Consumers Affairs, Department of Food & Agriculture, Department of Health Services and the State Board of Equalization on the implementation of best practices for regulating the cannabis industry for local agencies. David received his Bachelor's Degree in History from California State University, Fullerton and his Master's Degree in Public Administration from California State University, Long Beach. While at Long Beach, he was named "Future Urban Administrator of the Year". Matt Eaton, Cannabis Compliance Manager Matt Eaton is the Cannabis Compliance Manager at HdL and plays a critical role in implementing the Cannabis Compliance Program for local agencies. Prior to joining the firm, he was a progressive law enforcement professional with 29 years' experience conducting criminal/regulatory investigations, and corporate/individual background investigations. While working as a Supervisory Investigator at the Colorado Department of Revenue in the Marijuana Enforcement Division (MED), Matt managed criminal investigators and civilian staff in the Denver Metro and Longmont field offices. During his six -year tenure at the MED, he conducted approximately 10,000 criminal investigations and compliance reviews which included regulatory and financial investigations. In addition, he is a subject matter expert on track and trace systems. He understands the complexity of reviewing data to ensure businesses are in compliance with state and local regulations. Matt was responsible for planning, developing and implementing report and field inspection protocols for the agency. He also played an instrumental role in recommending changes to current regulations and identifying essential language for new legislation in Colorado. Matt is well known for his ability to maintain working relationships with cannabis industry leaders and external stakeholders in resolving issues. Matt received his Bachelor of Science Degree from Biola University and currently maintains a Colorado Post Certificate. He has also served as an adjunct instructor teaching law enforcement principle related to criminology, correctional processes, procedural law, interviews, interrogations and criminal evidence at AIMS Community College in Greeley, Colorado. HdL© Companies Proposal for Cannabis Management Services for the City of National City April 19, 2019 Tim Cromartie, Senior Cannabis Advisor Tim Cromartie is a Senior Cannabis Advisor at HdL, in which his primary role is providing policy expertise related to cannabis regulatory and tax policies at the state and local level. Prior to joining HdL, Tim served as the legislative representative covering public safety issues for the League of California Cities since 2013, with a heavy emphasis on shaping legislation governing state and local regulation of marijuana. He has been actively involved in educating cities on changes in the law resulting from the Medical Cannabis Regulation and Safety Act, as well as Proposition 64, the Adult Use of Marijuana Act. When these two Acts were merged into a single regulatory structure in 2017, Tim successfully advocated for clarification of local government's regulatory and enforcement authority in the cannabis context, and for related environmental safeguards in cultivation operations, protections against over -concentration of businesses, regulation of testing labs, and the inclusion of fire safety standards and a definition of volatile solvents in state law governing cannabis manufacturing operations. Since then he has been engaged in educating local governments on the more recent Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), as well as advocating for a reduction in the cumulative state tax rate for cannabis, improvements in the state's track -and -trace program, and the restoration of a statewide cultivation cap. Prior to the League, he held a variety of positions in the Legislature and state government, including legislative representative for CaIPERS Governmental Affairs, legislative director and public safety consultant to former state Senator Gloria Romero, and field representative for Congresswoman Barbara Lee during her term in the state Senate. Mr. Cromartie holds degrees from the University of California at Berkeley (B.A. Political Science) and UC Hastings College of the Law. Tim is an ardent aviation buff and a member of the California Aerospace Museum at the site of the former McClellan Air Force Base in Sacramento. Billie-jo Naysmith, Cannabis Compliance Manager Billie-jo Naysmth is a Cannabis Compliance Manager at HdL in which she plays a diverse role in implementing the Cannabis Compliance Program for local agencies in both California and Colorado. Prior to joining the firm, she was a progressive law enforcement professional with 23 years' experience conducting criminal/regulatory investigations, cannabis applicant background investigations and complex financial investigations. While working in the Office of the Colorado Attorney General as a Criminal Investigator she investigated Financial and Securities Fraud specializing in cannabis business activity. In addition, she worked closely with forensic accountants analyzing financial records to determine if criminal activity occurred. During her tenure as a Supervisory Investigator at the Colorado Department of Revenue in the Marijuana Enforcement Division (MED), Billie-jo managed criminal investigators and civilian staff in the Denver Metro and Longmont field offices. During her five-year stretch at the MED, she conducted approximately 5,000 criminal investigations and compliance reviews which included regulatory and financial investigations. In addition, she is a subject matter expert on track and trace systems where she has conducted data analysis in order to HdL© Companies 10 Proposal for Cannabis Management Services for the City of National City April 19, 2019 assist in complex cannabis regulatory investigations. She understands the complexity of reviewing data to ensure businesses follow state and local regulations. Billie-jo was responsible for assisting in the strategic planning for the division which included providing training for investigators. Furthermore, Billie-jo participated in collaborative rulemaking work groups and focus groups with cannabis industry leaders and external stakeholders to develop best practice regulations. She also provided critical recommendations for the agencies cannabis rules and regulations by addressing key loop holes in the Colorado legislation which was subsequently amended. In addition, Billie-jo formed essential partnerships with federal, state and local law enforcement agencies as well as local licensing authorities. Billie-jo received her Bachelor of Science Degree in Business Administration from Colorado Christian University where she graduated with the distinction of Suma Cum Laude. She also currently maintains a Colorado POST Certificate. Mark Lovelace, Cannabis Policy Advisor Mark Lovelace has 16 years of broad experience in public policy, community engagement and advocacy and is recognized as a leader in advancing the statewide discussion of medical and recreational cannabis as a policy issue in California. Mark served on the Humboldt County Board of Supervisors from 2009 through 2016 where he was instrumental in developing a comprehensive approach to regulating cannabis, including a voter -approved tax on commercial cultivation and an innovative track and trace pilot program. Mark established and co-chaired the Medical Marijuana Working Group for the California State Association of Counties (CSAC) and helped draft CSAC's legislative platform for cannabis issues. Mark pioneered the first -ever six -County regional summit on cannabis issues in 2015 which resulted in the North Coast Counties Marijuana Policy Statement. His work and input were pivotal in guiding the development of SB 643 and AB 243, two components of the Medical Cannabis Regulation and Safety Act (MCRSA). Mark has worked extensively with public agencies and statewide associations on cannabis issues, including CSAC, Rural County Representatives of California, the Association of California Water Agencies, the North Coast Resource Partnership, California Department of Fish and Wildlife, the State Water Board, the North Coast Regional Water Board, the Bureau of Cannabis Control, state legislators, the Department of Justice, members of Congress and others. He has led numerous presentations, workshops and panel discussions on cannabis issues and has been a sought-after speaker on the topic for government agencies, community organizations and cannabis industry groups. Mark received his Bachelor of Science degree in Industrial Design from California State University, San Jose. Prior to his time on the Board, he worked for many years as a respected advocate on land use, planning, development and environmental issues. Kami Miller, Cannabis Senior Auditor Kami Miller is a Cannabis Senior Auditor at HdL whose primary role is to ensure cannabis compliance and identify the risk assessment in the supply chain process of each permitted HdL© Companies �, Proposal for Cannabis Management Services for the City of National City April 19, 2019 business. Prior to joining the firm, she served three years as a Marijuana Compliance Manager for the Department of Public Behavior and Health (DPBH) for the State of Nevada. During this time Kami played a key role in Nevada's implementation of its Medical Marijuana Program in which she was responsible for statewide monitoring of medical marijuana facilities that included cultivation, production, testing labs and retail stores. During her tenure at the DPBH, Kami managed compliance auditors and support staff in the Las Vegas office. She conducted approximately 1,000 compliance and financial inspections for which she developed the inspection protocols documentation to create comprehensive reports. In addition, her experience with various cannabis track and trace systems allowed her to develop industry supply chain practices for the Department of Taxation. Kami received her Bachelor of Business Administration in E-Commerce and Supply Chain Management from Tennessee State University. Elizabeth Eumurian, Cannabis Senior Auditor Elizabeth Eumurian is a Cannabis Senior Auditor at HdL. Her primary role is to conduct financial audits, evaluate cannabis applications and conduct background checks. As part of the audit program, she will be conducting and preparing analytical information through the CATSTM program to prepare Tax Analytical Remittance Reports (TARR) summaries to evaluate under reporting or anomalies in the remittance of tax payments to local jurisdictions. Elizabeth previously worked as a senior auditor in the entertainment industry. In this role, she executed testing procedures for targeted audit programs, analyzed findings and prepared audit and compliance reports. She also has experience working for a large financial institution analyzing data for reporting anomalies and performing internal audits. Elizabeth has recently done work for Blythe, California City, Coachella, Cotati, Desert Hot Springs, Long Beach, Mammoth Lakes, Moreno Valley, Perris, San Bernardino, and Vallejo. She earned her Bachelor of Arts degree in History from California State University, Fullerton. She has also received a certificate in CannaBusiness from Oaksterdam University. Michelle Shaw, Cannabis Compliance Inspector Michelle is a Cannabis Compliance Inspector at HdL and is tasked with conducting onsite inspections, examinations and other actions to monitor compliance with established standards for local licensed cannabis businesses. Prior to joining HdL, she was a Compliance Specialist Officer at a large, multinational bank where she managed, validated and oversaw the effectiveness and accuracy of numerous compliance issues within the consumer retail space. Throughout her eight years of experience at the bank, she performed onsite assessments of affiliate businesses to determine compliance/non-compliance of their processes and procedures pursuant to bank standards and state regulations. A graduate of Cypress College, Michelle holds a Foundations of Banking Risk certificate from the Global Association of Risk Professionals and a paralegal certificate from the Southern California College of Business and Law. HdL© Companies 12 Proposal for Cannabis Management Services for the City of National City April 19, 2019 Alfredo Marquez, Cannabis Senior Auditor Alfredo Marquez is a Cannabis Senior Auditor at HdL. His primary role is to conduct financial audits. Alfredo previously worked for Teledyne Technologies analyzing risk assessments for acquiring new businesses and various units in the organization. In this role he worked with people at various levels in the organization and successfully conducted financial, Sarbanes Oxley and compliance audits across North America, Latin America, Europe, and Asia. Alfredo has recently done work for Cotati, Cloverdale, Desert Hot Springs, Mammoth, Perris, and Vallejo. He earned his Bachelor's Degree in Accounting from the University of La Verne. HdL© Companies 13 Proposal for Cannabis Management Services for the City of National City April 19, 2019 V. REFERENCES City of Chula Vista Kelly Bacon Deputy City Manager Phone: 619.691.5144 Email: kbaconchulavistaca.qov City of La Mesa Yvonne Garrett City Manager Phone: 619.677.1311 Email: ygarrettAci.la-mesa.ca.us City of Imperial Alex Chalupnik Management Analyst Phone: 760.355.4373 Email: Achalupnikcityofimperial.orq City of Oceanside Jane McPherson Finance Director Phone: 760.435.3855 Email: jmcphersonP,ci.oceanside.ca.us City of Imperial Beach Steven Dush Assistant City Manager Phone: 619.628.1354 Email: sdushimperialbeachca.qov HdL° Companies 14 RESOLUTION NO. 2019 — 92 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE THE SECOND AMENDMENT TO THE AGREEMENT WITH HINDERLITER, DE LLAMAS AND ASSOCIATES ("HdL") TO CONDUCT A CANNABIS STUDY WHICH INCLUDES COMMUNITY OUTREACH, MODEL ORDINANCES, RETURN ON INVESTMENT (ROI), COST RECOVERY APPROACHES AND TECHNICAL ASSISTANCE WHEREAS, the City of National City and the Hinderliter, de Llamas and Associates ("HdL") entered into an Agreement on July 14, 1998, (the "Agreement") wherein the HdL agreed to provide the combination of data entry, report preparation, and data analysis necessary to effectively manage the municipal sales tax and recover revenues erroneously allocated to other jurisdictions and allocation pools; and WHEREAS, the parties desire to enter into a Second Amendment to the Agreement to increase the scope of work to include for Cannabis Management Services for the not -to -exceed amount of $28,900; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute a Second Amendment to the Agreement with Hinderliter, de Llamas and Associates to increase the scope of work to include Cannabis study and related services for the not -to -exceed amount of $28,900. PASSED and ADOPTED this 18th day of,Jyje 01 Alejandra Sotelo-Solis, Mayor ATTEST: ii Michael R. Della, City Clerk APPROVED AS TO FORM: Angi Vorris-Jon Ci , torney Passed and adopted by the Council of the City of National City, California, on June 18, 2019 by the following vote, to -wit: Ayes: Councilmembers Cano, Morrison, Quintero, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: ALEJANDRA SOTELO-SOLIS Mayor of the City of National City, California MICHAEL R. DALLA City Clerk of the 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. 2019-92 of the City of National City, California, passed and adopted by the Council of said City on June 18, 2019. City Clerk of the City of National City, California By: CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT (' �K-,70/1d3--.2- I MEETING DATE: June 18, 2019 AGENDA ITEM NO. 17 ITEM TITLE: Resolution of the City Council of the City of National City authorizing the Mayor to execute the Second Amendment to the Agreement for Sales Tax Audit and Information Services between the City of National City and Hinderliter, De Llamas and Associates (HdL Companies) for a cannabis study that includes community outreach, model ordinances, return on investment (ROI), cost recovery approaches, and technical assistance. PREPARED BY: DEPARTMENT: Megan Gamwell, Economic Development Specialist PHONE: 619-336-4216 EXPLANATION: The City of National City currently prohibits the establishment or operation of any,nd all medical or adult -use cannabis businesses in the City. The Mayor and Council appropriated funds with the approval of the fiscal year 2020 budget for a cannabis study. City Manager's Office APPROVED BY: City staff is seeking assistance from HdL to help with the analysis. HdL will work with City staff on an initial return on investment and impact study. Based on the findings of the initial study the City may choose to move forward with the additional services provided in the scope. The additional services in the scope include community outreach, development of a draft cannabis ordinance, a merit -based application review process, and a cost recovery fee analysis. The proposal provided has a fixed unit cost for each of these items for a total amount not to exceed $28,900. FINANCIAL STATEMENT: APPROVED: ��� �� Finance ACCOUNT NO. 001-409-000-213-0000 Professional Services APPROVED: MIS Approval of the appropriation for this item was approved with the fiscal year 2020 Budget. ENVIRONMENTAL REVIEW: n/a ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Staff recommends adopting the Resolution for the Second Amendment to the Agreement with HdL Companies. BOARD / COMMISSION RECOMMENDATION: N/A ATTACHMENTS: 1. HdL Second Amendment to the Agreement and Scope of Services 2. Resolution ' l^ c--44A;i 71-0 - 2 c/ 2 - 7 2- Attachment 1 SECOND AMENDMENT TO THE AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES BY AND BETWEEN THE CITY OF NATIONAL CITY AND HINDERLITER, DE LLAMAS AND ASSOCIATES THIS FIRST AMENDMENT TO THE AGREEMENT, is entered into this day of , 2019, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and THE HDL COMPANIES, dba HINDERLITER, DE LLAMAS AND ASSOCIATES, a California corporation (the "CONSULTANT'). RECITALS WHEREAS, the CITY and the CONSULTANT entered into an Agreement on July 14, 1998, (the "Agreement") wherein the CONSULTANT agreed to provide the combination of data entry, report preparation, and data analysis necessary to effectively manage the municipal sales tax and recover revenues erroneously allocated to other jurisdictions and allocation pools; and WHEREAS, the parties desire to amend the Agreement to increase the scope of work to include cannabis management services as described in CONSULTANT'S Proposal, attached hereto as Exhibit "1", and by this reference made a part hereof, for the not -to -exceed amount of $28,900; and WHEREAS, CONSULTANT will provide written invoices to the City for compensation for services performed in accordance with Exhibit "1" in a form acceptable to CITY; and WHEREAS, Section XIII, Insurance, of the Agreement is hereby amended to read as follows: 17. INSURANCE. The CONSULTANT, at its sole cost and expense, shall purchase and maintain, and shall require its SUBCONSULTANT(S), when applicable, to purchase and maintain throughout the term of this Agreement, the following insurance policies: A. ❑ If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile Insurance covering all bodily injury and property damage 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 owned, non -owned, and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. C. Commercial General Liability Insurance, with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate with a $2,000,000 umbrella policy, covering all bodily injury and property damage arising out of its operations, work, or performance under this Agreement. The policy shall name the CITY and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured endorsement shall be provided. The general aggregate Attachment 1 limit must apply solely to this "project" or "location". The "project" or "location" should be noted with specificity on an endorsement that shall be incorporated into the policy. D. Workers' Compensation Insurance in an amount sufficient to meet statutory requirements covering all of CONSULTANT'S employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the CITY. Said endorsement shall be provided prior to commencement of work under this Agreement. If CONSULTANT has no employees subject to the California Workers' Compensation and Labor laws, CONSULTANT shall execute a Declaration to that effect. Said Declaration shall be provided to CONSULTANT by CITY. E. The aforesaid policies shall constitute primary insurance as to the CITY, its officers, officials, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY's Risk Manager, at the address listed in subsection G below, of cancellation or material change. F. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, the CONSULTANT shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agreement. In addition, the "retro" date must be on or before the date of this Agreement. G. The Certificate Holder for all policies of insurance required by this Section shall be: City of National City do Risk Manager 1243 National City Boulevard National City, CA 91950-4397 H. Insurance shall be written with only insurers authorized to conduct business in California that hold a current policy holder's alphabetic and financial size category rating of not less than A:VII according to the current Best's Key Rating Guide, or a company of equal financial stability that is approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted "surplus lines" carriers, they must be included on the most recent California List of Eligible Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements. I. 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 the CITY'S Risk Manager. If the CONSULTANT does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. J. All deductibles and self -insured retentions in excess of $10,000 must be disclosed to and approved by the CITY. 2 Attachment 1 K. If the CONSULTANT maintains broader coverage or higher limits (or both) than the minimum limits shown above, the CITY requires and shall be entitled to the broader coverage or higher limits (or both) maintained by the CONSULTANT. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. WHEREAS, in the event any conflict or inconsistencies between the Agreement and the Proposal (Exhibit "1"), the terms of the Agreement shall control. NOW, THEREFORE, the parties hereto agree that the Agreement entered into on July 14, 1998, shall be amended to increase the scope of work to cannabis management services as described in CONSULTANT'S Proposal, attached hereto as Exhibit "1", and by this reference made a part hereof, for the not -to -exceed amount of $28,900. The parties further agree that with the foregoing exception of the provisions provided herein, each and every term and provision of the Agreement dated July 14, 1998, shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Agreement on the date and year first above written. CITY OF NATIONAL CITY HINDERLITER, DE LLAMAS AND ASSOCIATES (Signatures of two corporate officers required) By: Alejandra Sotelo-Solis, Mayor APPROVED AS TO FORM: Angil P. Morris -Jones City Attorney By: (Name) (Print) (Title) By: (Name) (Print) (Title) 3 Attachment 1 City of National City Cannabis Management Services April 19, 2019 HdL° Corn • zanies SUBMITTED BY HdL Companies 120 S. State College Blvd., Ste 200 Brea, CA 92821 hdlcompanies.com CONTACT David McPherson T: 714.879.5000 E: dmcpherson@hdlcompanies.com Attachment 1 TABLE OF CONTENTS I. LETTER OF TRANSMITTAL 2 II. PROPOSED SCOPE OF SERVICES 3 III. COST 7 IV. EXPERIENCE AND RESOURCES 8 V. REFERENCES 14 5 Attachment 1 I. LETTER OF TRANSMITTAL April 19, 2019 Megan Gamwell Economic Development Specialist City of National City 1243 National City Blvd. National City, CA 91950 Re: Proposal for Cannabis Management Services Dear Ms. Gamwell, Thank you for the opportunity to submit this proposal for cannabis management services for the City of National City. The enclosed scope of services is designed to assist the City with community outreach, development of a draft cannabis ordinance, a merit -based application review process and cost recovery fees, as requested. The proposal also outlines additional services that HdL can provide at the City's request, including ongoing compliance inspections and financial audits of permitted cannabis businesses. HdL was incorporated in 1983 and has over 30 years of experience providing revenue enhancement and consulting services to local governments in California. HdL is a consortium of three companies established to maximize local government revenues by providing audit, compliance, economic development, consulting services and software products. Its audit and consulting services include sales, use and transaction taxes, property taxes, transient occupancy taxes, and a Cannabis Management Program. HdL's systematic and coordinated approach to revenue management and economic data analysis is currently being utilized by over 500 agencies in six states. The firm currently serves 49 counties, 311 cities and 132 transactions tax districts in California. Our knowledgeable team of professionals have more than 46 years' combined experience in the establishment and implementation of cannabis regulatory programs including establishing land - use regulations, registration processes, operation regulations for cannabis facilities, staffing plans, cost recovery, structuring cannabis business taxes and conducting compliance and financial audits. We look forward to the opportunity to partner with the City of National City in developing a strategy which meets your program needs. If you have any questions or require additional information, please feel free to contact me by email at anickersonhdlcompanies.com or David McPherson at dmcpherson(c�hdlcompanies.com or by phone at 714.879.5000. Sincerely, Andy Nickerson President, HdL Companies 6 Attachment 1 II. PROPOSED SCOPE OF SERVICES The City of National City currently prohibits the establishment or operation of any and all medical or adult -use cannabis businesses in the City. The City is interested in exploring the possibility of the development of an ordinance to permit and regulate commercial cannabis businesses within the City. As a part of this process, the City wishes to conduct a series of community outreach meetings or workshops to explore and identify the range of policy issues and concerns to be considered and addressed by the ordinance. Should an ordinance be adopted, the City would conduct a merit -based application process for awarding permits. The City also desires to apply appropriate fees to recover all City costs associated with the permit process as well as establish a cannabis tax ordinance through a ballot measure process. To meet these objectives, the City is seeking assistance from HdL to help with community outreach, to develop a draft regulatory ordinance, design a merit -based application process and to determine appropriate cost recovery fees and to develop a tax ordinance. This proposal provides a fixed unit cost for each of these items, and includes additional hours for conference calls, technical assistance and subject matter expertise, to be utilized on an as - needed basis at the City's request. The enclosed Scope of Services to be provided by HdL includes all of the following: • Kick-off conference call meeting with City staff; • Attendance, support or presentations at 3 public meetings, including one community outreach workshop, one meeting of the City Council or Planning Commission, and one additional meeting or workshop as may be needed; • Development of a cannabis regulatory ordinance that addresses community concerns and complies with all applicable State and local laws; • Design an application process that includes merit -based review, ranking and final selection of cannabis business permittees; • Conduct a fiscal analysis to determine proper cost recovery fees and to design a tax ordinance with appropriate cannabis tax rates. Fees shall ensure all allowable City costs associated with the development and implementation of the regulatory program are borne by the applicants; • Develop an annual cannabis business regulatory fee to recover ongoing costs associated with administrative oversight of permitted cannabis facilities, including compliance inspections, financial audits and any other regulatory requirements; • Design a cannabis tax ordinance and ballot measure resolution which will be submitted to the County Elections Office. • Provide City staff with technical assistance and subject matter expertise as needed. Attachment 1 Objective 1: Attendance, Support or Presentations at Public Meetings or Workshops HdL shall provide support or presentations at 3 public meetings or workshops to gauge concerns about the potential community impacts of the various types of cannabis businesses. Input gathered through these meetings will be used to help guide the development of a regulatory ordinance. These meetings will likely include one public workshop and at least one meeting of the City Council and/or Planning Commission. Objective 2: Develop a Draft Cannabis Regulatory Ordinance Consultant shall develop a draft cannabis regulatory ordinance that addresses community concerns. The draft ordinance shall include specific regulations for each of the various cannabis business types as directed by the City, which may include cultivation, manufacturing, distribution, microbusinesses, storefront retailers, non -storefront retailers, and/or testing laboratories. HdL shall ensure that the proposed ordinance complies with all State and local laws and reflects evolving best practices within the industry. Objective 3: Application Process Development Consultant shall design an application process that includes merit -based review, ranking and final selection of cannabis business permittees. The process shall include evaluation criteria consistent with the draft ordinance and shall ensure that all information desired by the City is incorporated into the cannabis business application form and procedures. HdL shall also provide all necessary application forms, as well as procedures, guidelines, indemnification forms, background information releases, and other required documents. Objective 4: Fiscal Analysis, Cost Recovery Fees, Tax Ordinance and Annual Regulatory Fee Consultant shall conduct a fiscal analysis to determine proper cost recovery fees and design a cannabis tax ordinance with appropriate cannabis tax rates. Fees shall ensure all allowable City costs associated with the development of the regulatory program and with the processing and issuance of permits are borne by the applicants. Consultant shall also develop an annual regulatory fee to recover costs associated with administrative oversight of permitted cannabis facilities, including permit renewals, compliance inspections, financial audits and any other requirements deemed necessary by the City. The fiscal analysis shall include a study of the local cannabis industry to guide the City in setting cannabis tax rates for the ballot measure resolution and cannabis tax ordinance which will be prepared by the Consultant. Objective 5: Provide Subject Matter Expertise & Technical Support HdL shall provide up to 20 hours of general consulting in the form of subject matter expertise or technical assistance, to be utilized on an as -needed basis at the City's request. Such assistance may include monitoring of changes to State laws and regulations, participation in conference calls, responding to staff inquires via phone and email, reviewing staff reports to 8 Attachment 1 the City Council, assisting with responses to inquiries from the public, or other issues yet to be determined as requested by the City. Optional Cannabis Consulting Services: Application Reviews and Selection Process HdL has experience reviewing over 1,800 cannabis business applications for counties and cities across California. Our team can provide application reviews, scoring, merit -based ranking and interviews to inform the final selection for cannabis business permits. Our process begins with an initial screening of all applications for completeness based upon a checklist of required documentation. All applications deemed complete will move forward for a full review, including scoring and merit -based ranking based on the applicant's demonstrated ability to meet or exceed minimum requirements in each category. Reviews identify both strengths and weaknesses of each application as well as providing a numerical score to inform the subsequent interview and selection process. HdL can also conduct an interview panel for all applicants that receive passing scores and can prepare a report to inform the final selection of which applicants shall be granted permits. Application reviews, scoring and merit -based ranking: $2,500 per applicant Applicant interviews: $500 per applicant Background Checks HdL is qualified to provide supplemental background checks for principals and employees of cannabis businesses as part of the application process. This service is not included as a part of this proposal but can be provided at an additional cost of $300 per person for owners or managers, and $150 per person for line staff. This price includes an employee identification card designed by HdL with the City logo which will meet all the state regulation requirements. Regulatory Compliance Reviews and Financial Audits HdL's Cannabis Management Team has over 26 years combined experience conducting approximately 16,000 cannabis compliance inspections, financial audits and investigations in Colorado, California and Nevada. HdL can provide annual compliance reviews and financial audits at the following rates for each cannabis business permitted in the City. A. Conduct one (1) financial audit annually for each permit at a rate of $6,000. B. Conduct one (1) compliance review annually for each permit at a rate of $1,250. C. Conduct one (1) financial audit and one (1) compliance review annually for each permit at a rate of $7,250. D. Conduct one (1) financial audit and two (2) compliance reviews annually for each permit at a rate of $8,500. 9 Attachment 1 E. Conduct one (1) financial audit and three (3) compliance reviews annually for each permit at a rate of $9,750. F. Conduct one (1) financial audit and four (4) compliance reviews annually for each permit at a rate of $11,000. 10 Attachment 1 III. COST The proposed services are broken down into specific line items in the cost table below. Some of these services may include both fixed costs for developing and initiating each of the various components of the program and variable costs based on the number of applicants or businesses. HdL's fees are based on time, materials and travel -related expenses associated with the execution of the services. The hours and costs in the table below do not include any additional items that are not contemplated by this scope of services. All City costs' would be incorporated into either the application fees or the annual permit fees, to be payable by the applicant or permittee. Any additional services requested by the City will be billed at HdL's hourly rate. Prices are valid for 90 days from April 19, 2019. Scope of Service Objectives Estimated Cost Objective 1: Community meetings, workshops and presentations (assumes 3 site visits) $5,400 Includes travel Objective 2: Develop a draft cannabis regulatory ordinance $5,000 Objective 3: Develop a merit -based application and review process $5,000 Objective 4: Conduct fiscal analysis and develop cost recovery fees $7,500 Objective 5: Subject matter expertise and technical assistance $6,000 ESTIMATE OF TOTAL COSTS $28,900 1 Except for costs associated with setting cannabis tax rates. 11 Attachment 1 IV. EXPERIENCE AND RESOURCES Comoanv Profile Founded in 1983, HdL is a consortium of three companies established to maximize local government revenues by providing audit, compliance, economic development, consulting services and software products. Its audit and consulting services include sales, use and transaction taxes, property taxes, transient occupancy taxes, and a Cannabis Management Program. The firm also provides a variety of enterprise software processing tools for business licensing, code enforcement, animal control, building permits and tracking/billing of false alarms. HdL's systematic and coordinated approach to revenue management and economic data analysis is currently being utilized by over 500 agencies in six states. The firm currently serves 49 counties, 311 cities and 132 transactions tax districts in California. HdL's key staff has extensive experience serving local government and many have previously held positions in city management, finance, planning, economic development or revenue collection. HdL is a Corporate Partner of the League of California Cities and California State Association of Counties and works extensively with the County Auditor's Association of California, California Society of Municipal Finance Officers (CSMFO) and California Municipal Revenue and Tax Association (CMRTA) on anticipation and planning of programs to strengthen local government revenues. This close understanding of local government needs coupled with extensive databases and advanced methodology provides for the most relevant, productive and responsive revenue recovery; forecasting; and economic services available. Our team of professionals has over 46 years of direct experience establishing and implementing cannabis regulatory and taxation programs, including establishing land -use regulations, permit processes, staffing plans, and cost recovery fees; structuring cannabis business tax fees; regulatory compliance; financial audits; and law enforcement training. Our team has conducted over 16,000 cannabis compliance inspections and investigations in Colorado, California and Nevada. Key Personnel David McPherson, Cannabis Compliance Director David McPherson works with local agencies to prepare them to mitigate regulatory issues surrounding Proposition 64 and SB 94. Prior to joining HdL, David served 28 years in local government for the County of Orange and the cities of Newport Beach, San Jose and Oakland. David's experience as a law enforcement officer, compliance auditor, and tax administrator has provided him a wealth of experience that makes him uniquely qualified to manage HdL's Cannabis Management Program. While working for the City of Oakland, he became the first Tax Administrator in the country to successfully tax, regulate and audit medical marijuana businesses. David has over 8 years of experience working with cannabis regulatory programs. 12 Attachment 1 David is one of the state's most recognized experts in cannabis regulatory policies, compliance implementation and tax policies. His unique knowledge in horticulture, processing and dispensary operations while working for the City of Oakland has made him one of the pioneers in creating a Cannabis Management Program. He uses his experience to assist local and state agencies in developing cannabis policies for regulation, compliance, auditing and economic development. He worked closely with the League of Cities on the development of the Medical Cannabis Regulation and Safety Act (MCRSA) and helped shape SB 94, the Medicinal Adult -Use Cannabis Regulation and Safety Act (MAUCRSA). David provides technical support on cannabis -related matters to the League of Cities, the Police Chiefs Association, Rural County Representatives of California and the California State Association of Counties. In addition, David is working collaboratively with the Department of Consumers Affairs, Department of Food & Agriculture, Department of Health Services and the State Board of Equalization on the implementation of best practices for regulating the cannabis industry for local agencies. David received his Bachelor's Degree in History from California State University, Fullerton and his Master's Degree in Public Administration from California State University, Long Beach. While at Long Beach, he was named "Future Urban Administrator of the Year". Matt Eaton, Cannabis Compliance Manager Matt Eaton is the Cannabis Compliance Manager at HdL and plays a critical role in implementing the Cannabis Compliance Program for local agencies. Prior to joining the firm, he was a progressive law enforcement professional with 29 years' experience conducting criminal/regulatory investigations, and corporate/individual background investigations. While working as a Supervisory Investigator at the Colorado Department of Revenue in the Marijuana Enforcement Division (MED), Matt managed criminal investigators and civilian staff in the Denver Metro and Longmont field offices. During his six -year tenure at the MED, he conducted approximately 10,000 criminal investigations and compliance reviews which included regulatory and financial investigations. In addition, he is a subject matter expert on track and trace systems. He understands the complexity of reviewing data to ensure businesses are in compliance with state and local regulations. Matt was responsible for planning, developing and implementing report and field inspection protocols for the agency. He also played an instrumental role in recommending changes to current regulations and identifying essential language for new legislation in Colorado. Matt is well known for his ability to maintain working relationships with cannabis industry leaders and external stakeholders in resolving issues. Matt received his Bachelor of Science Degree from Biola University and currently maintains a Colorado Post Certificate. He has also served as an adjunct instructor teaching law enforcement principle related to criminology, correctional processes, procedural law, interviews, interrogations and criminal evidence at AIMS Community College in Greeley, Colorado. 13 Attachment 1 Tim Cromartie, Senior Cannabis Advisor Tim Cromartie is a Senior Cannabis Advisor at HdL, in which his primary role is providing policy expertise related to cannabis regulatory and tax policies at the state and local level. Prior to joining HdL, Tim served as the legislative representative covering public safety issues for the League of California Cities since 2013, with a heavy emphasis on shaping legislation governing state and local regulation of marijuana. He has been actively involved in educating cities on changes in the law resulting from the Medical Cannabis Regulation and Safety Act, as well as Proposition 64, the Adult Use of Marijuana Act. When these two Acts were merged into a single regulatory structure in 2017, Tim successfully advocated for clarification of local government's regulatory and enforcement authority in the cannabis context, and for related environmental safeguards in cultivation operations, protections against over -concentration of businesses, regulation of testing labs, and the inclusion of fire safety standards and a definition of volatile solvents in state law governing cannabis manufacturing operations. Since then he has been engaged in educating local governments on the more recent Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), as well as advocating for a reduction in the cumulative state tax rate for cannabis, improvements in the state's track -and -trace program, and the restoration of a statewide cultivation cap. Prior to the League, he held a variety of positions in the Legislature and state government, including legislative representative for CaIPERS Governmental Affairs, legislative director and public safety consultant to former state Senator Gloria Romero, and field representative for Congresswoman Barbara Lee during her term in the state Senate. Mr. Cromartie holds degrees from the University of California at Berkeley (B.A. Political Science) and UC Hastings College of the Law. Tim is an ardent aviation buff and a member of the California Aerospace Museum at the site of the former McClellan Air Force Base in Sacramento. Billie-jo Naysmith, Cannabis Compliance Manager Billie-jo Naysmth is a Cannabis Compliance Manager at HdL in which she plays a diverse role in implementing the Cannabis Compliance Program for local agencies in both California and Colorado. Prior to joining the firm, she was a progressive law enforcement professional with 23 years' experience conducting criminal/regulatory investigations, cannabis applicant background investigations and complex financial investigations. While working in the Office of the Colorado Attorney General as a Criminal Investigator she investigated Financial and Securities Fraud specializing in cannabis business activity. In addition, she worked closely with forensic accountants analyzing financial records to determine if criminal activity occurred. During her tenure as a Supervisory Investigator at the Colorado Department of Revenue in the Marijuana Enforcement Division (MED), Billie-jo managed criminal investigators and civilian staff in the Denver Metro and Longmont field offices. During her five-year stretch at the MED, she conducted approximately 5,000 criminal investigations and compliance reviews which included regulatory and financial investigations. In addition, she is a subject matter expert on track and trace systems where she has conducted data analysis in order to 14 Attachment 1 assist in complex cannabis regulatory investigations. She understands the complexity of reviewing data to ensure businesses follow state and local regulations. Billie-jo was responsible for assisting in the strategic planning for the division which included providing training for investigators. Furthermore, Billie-jo participated in collaborative rulemaking work groups and focus groups with cannabis industry leaders and external stakeholders to develop best practice regulations. She also provided critical recommendations for the agencies cannabis rules and regulations by addressing key loop holes in the Colorado legislation which was subsequently amended. In addition, Billie-jo formed essential partnerships with federal, state and local law enforcement agencies as well as local licensing authorities. Billie-jo received her Bachelor of Science Degree in Business Administration from Colorado Christian University where she graduated with the distinction of Suma Cum Laude. She also currently maintains a Colorado POST Certificate. Mark Lovelace, Cannabis Policy Advisor Mark Lovelace has 16 years of broad experience in public policy, community engagement and advocacy and is recognized as a leader in advancing the statewide discussion of medical and recreational cannabis as a policy issue in California. Mark served on the Humboldt County Board of Supervisors from 2009 through 2016 where he was instrumental in developing a comprehensive approach to regulating cannabis, including a voter -approved tax on commercial cultivation and an innovative track and trace pilot program. Mark established and co-chaired the Medical Marijuana Working Group for the California State Association of Counties (CSAC) and helped draft CSAC's legislative platform for cannabis issues. Mark pioneered the first -ever six -County regional summit on cannabis issues in 2015 which resulted in the North Coast Counties Marijuana Policy Statement. His work and input were pivotal in guiding the development of SB 643 and AB 243, two components of the Medical Cannabis Regulation and Safety Act (MCRSA). Mark has worked extensively with public agencies and statewide associations on cannabis issues, including CSAC, Rural County Representatives of California, the Association of California Water Agencies, the North Coast Resource Partnership, California Department of Fish and Wildlife, the State Water Board, the North Coast Regional Water Board, the Bureau of Cannabis Control, state legislators, the Department of Justice, members of Congress and others. He has led numerous presentations, workshops and panel discussions on cannabis issues and has been a sought-after speaker on the topic for government agencies, community organizations and cannabis industry groups. Mark received his Bachelor of Science degree in Industrial Design from California State University, San Jose. Prior to his time on the Board, he worked for many years as a respected advocate on land use, planning, development and environmental issues. Kami Miller, Cannabis Senior Auditor Kami Miller is a Cannabis Senior Auditor at HdL whose primary role is to ensure cannabis compliance and identify the risk assessment in the supply chain process of each permitted 15 Attachment 1 business. Prior to joining the firm, she served three years as a Marijuana Compliance Manager for the Department of Public Behavior and Health (DPBH) for the State of Nevada. During this time Kami played a key role in Nevada's implementation of its Medical Marijuana Program in which she was responsible for statewide monitoring of medical marijuana facilities that included cultivation, production, testing labs and retail stores. During her tenure at the DPBH, Kami managed compliance auditors and support staff in the Las Vegas office. She conducted approximately 1,000 compliance and financial inspections for which she developed the inspection protocols documentation to create comprehensive reports. In addition, her experience with various cannabis track and trace systems allowed her to develop industry supply chain practices for the Department of Taxation. Kami received her Bachelor of Business Administration in E-Commerce and Supply Chain Management from Tennessee State University. Elizabeth Eumurian, Cannabis Senior Auditor Elizabeth Eumurian is a Cannabis Senior Auditor at HdL. Her primary role is to conduct financial audits, evaluate cannabis applications and conduct background checks. As part of the audit program, she will be conducting and preparing analytical information through the CATSTM program to prepare Tax Analytical Remittance Reports (TARR) summaries to evaluate under reporting or anomalies in the remittance of tax payments to local jurisdictions. Elizabeth previously worked as a senior auditor in the entertainment industry. In this role, she executed testing procedures for targeted audit programs, analyzed findings and prepared audit and compliance reports. She also has experience working for a large financial institution analyzing data for reporting anomalies and performing internal audits. Elizabeth has recently done work for Blythe, California City, Coachella, Cotati, Desert Hot Springs, Long Beach, Mammoth Lakes, Moreno Valley, Perris, San Bernardino, and Vallejo. She earned her Bachelor of Arts degree in History from California State University, Fullerton. She has also received a certificate in CannaBusiness from Oaksterdam University. Michelle Shaw, Cannabis Compliance Inspector Michelle is a Cannabis Compliance Inspector at HdL and is tasked with conducting onsite inspections, examinations and other actions to monitor compliance with established standards for local licensed cannabis businesses. Prior to joining HdL, she was a Compliance Specialist Officer at a large, multinational bank where she managed, validated and oversaw the effectiveness and accuracy of numerous compliance issues within the consumer retail space. Throughout her eight years of experience at the bank, she performed onsite assessments of affiliate businesses to determine compliance/non-compliance of their processes and procedures pursuant to bank standards and state regulations. A graduate of Cypress College, Michelle holds a Foundations of Banking Risk certificate from the Global Association of Risk Professionals and a paralegal certificate from the Southern California College of Business and Law. 16 Attachment 1 Alfredo Marquez, Cannabis Senior Auditor Alfredo Marquez is a Cannabis Senior Auditor at HdL. His primary role is to conduct financial audits. Alfredo previously worked for Teledyne Technologies analyzing risk assessments for acquiring new businesses and various units in the organization. In this role he worked with people at various levels in the organization and successfully conducted financial, Sarbanes Oxley and compliance audits across North America, Latin America, Europe, and Asia. Alfredo has recently done work for Cotati, Cloverdale, Desert Hot Springs, Mammoth, Perris, and Vallejo. He earned his Bachelor's Degree in Accounting from the University of La Verne. 17 Attachment 1 V. REFERENCES City of Chula Vista Kelly Bacon Deputy City Manager Phone: 619.691.5144 Email: kbaconchulavistaca.qov City of La Mesa Yvonne Garrett City Manager Phone: 619.677.1311 Email: ygarrett a(�ci.la-mesa.ca.us City of Imperial Alex Chalupnik Management Analyst Phone: 760.355.4373 Email: Achalupnikcityofimperial.orq City of Oceanside Jane McPherson Finance Director Phone: 760.435.3855 Email: jmcphersonci.oceanside.ca.us City of Imperial Beach Steven Dush Assistant City Manager Phone: 619.628.1354 Email: sdush(c�imperialbeachca.gov 18 RESOLUTION NO. 2019 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE THE SECOND AMENDMENT TO THE AGREEMENT WITH HINDERLITER, DE LLAMAS AND ASSOCIATES ("HdL") TO CONDUCT A CANNABIS STUDY WHICH INCLUDES COMMUNITY OUTREACH, MODEL ORDINANCES, RETURN ON INVESTMENT (ROI), COST RECOVERY APPROACHES AND TECHNICAL ASSISTANCE WHEREAS, the City of National City and the Hinderliter, de Llamas and Associates ("HdL") entered into an Agreement on July 14, 1998, (the "Agreement") wherein the HdL agreed to provide the combination of data entry, report preparation, and data analysis necessary to effectively manage the municipal sales tax and recover revenues erroneously allocated to other jurisdictions and allocation pools; and WHEREAS, the parties desire to enter into a Second Amendment to the Agreement to increase the scope of work to include for Cannabis Management Services for the not -to -exceed amount of $28,900; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute a Second Amendment to the Agreement with Hinderliter, de Llamas and Associates to increase the scope of work to include Cannabis study and related services for the not -to -exceed amount of $28,900. PASSED and ADOPTED this 18th day of June, 2019. Alejandra Sotelo-Solis, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Angil P. Morris -Jones City Attorney hry�l'MAI 1I nV',' CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk HdL Companies Sales Tax Audit and Information Services Amendment #2 Megan Gamwell (City Manager's Office) forwarded a duplicate original Agreement to HdL Companies.