HomeMy WebLinkAboutE-13 Staff Report Agreement with MuniServicesCONSENT ITEM
E-13
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: LOUIE F. LACASELLA, MANAGEMENT ANALYST
DATE: APRIL 3, 2017
SUBJECT: REQUEST TO APPROVE PROFESSIONAL SERVICES AGREEMENT WITH
MUNISERVICES FOR REVENUE AUDIT AND CONSULTING SERVICES
SUMMARY:
The City’s Municipal Code authorizes the levy and collection of a Business License Tax from
businesses and a Transient Occupancy Tax (TOT) from lodging establishments operating in the City. It
is considered a best practice to periodically conduct compliance audits of businesses and lodging
establishments that collect TOT to ensure the correct tax rates are applied, and the remittance/collection
of such revenues is accurate. The City has not conducted an audit of businesses or lodging
establishments in recent memory. In order to verify that the City is receiving the correct amount of
revenue, Staff solicited and received proposals from second (2) firms. Upon evaluation of the proposals,
Staff has identified that MuniServices has the best qualifications required to perform the desired
services. Staff is requesting authorization to enter into a Professional Services Agreement with
MuniServices for auditing and consulting services on both the Business License Tax which is levied on
businesses operating in the City and TOT which is collected from lodging establishments within the
City. The proposed action approves a Professional Services Agreement with MuniServices for Revenue
Audit and Consulting Services.
RECOMMENDATION:
Staff recommends that the City Council take the following actions:
1) Approve a Professional Services Agreement with MuniServices for Revenue Audit and
Consulting Services; and
2) Authorize the City Manager to execute the agreement, in a form acceptable to the City Attorney,
on behalf of the City.
DISCUSSION:
The City’s Municipal Code authorizes the levy and collection of a Business License Tax on business
operating in the City and a separate Transient Occupancy Tax (TOT) on occupants staying in rooms of a
hotel, motel, inn, and other lodging facility when the stay is 30 days or less. Audit and compliance
services ensure that the City is applying local law equitably and accurately for all individuals and
entities subject to local taxation in the City.
APPROVED
CITY COUNCIL
Date: 4/3/2017
Approve Professional Services Agreement with MuniServices
April 3, 2017
Page 2
The City's primary interest is to ensure complete and accurate remittance/collection of revenues. To
assist in this process, a Request for Proposal (RFP) for Revenue Audit and Consulting Services was
distributed to a number of consultants and published on the City’s website. Proposals were due on
February 8, 2017 and two (2) firms responded. The firms and their proposed cost to perform the
requested services are as follows:
Firm Proposed Cost
Business License Transient Occupancy
MuniServices 35%
of New Revenue Collected
$2,000
or
25%
of New Revenue Collected
(whichever is higher)
HdL Companies 35%
of New Revenue Collected
$2,000
per lodging provider
An evaluation committee comprised of the Director of Finance, Director of Economic and Community
Development and Community Improvement Manager was convened to evaluate the two (2) proposals.
The evaluation criteria used was based on seven (7) categories: Demonstrated Success; Understanding
of the City’s Goals; Staff; Familiarity with Locality; Specific Management Approach; Reputation; and
Cost.
The committee unanimously selected MuniServices. The committee ranked MuniServices higher in the
areas of demonstrated success and staff qualifications.
MuniServices has performed work for over 100 jurisdictions across the state and country. MuniServices
has performed business license audits, collections, consulting, and discovery work generating over $70
million in new revenue for their clients. In the past five years, MuniServices has reviewed more than
9,000 lodging providers and has identified more than $20 million in unreported, underreported and
otherwise delinquent tax revenue for their clients.
The City's main objective in selecting a MuniServices is to ensure complete and accurate remittance of
Business License and TOT by:
• Assisting in locating businesses operating within the City limits and ensuring enrollment in the
City’s Business License Tax program;
• Conducting an audit of selected businesses to determine accuracy of business tax remittances;
• Conducting a TOT audit of all lodging establishments;
• Providing as-needed consultation services on TOT and Business License tax-related issues, as
needed, including timely updates of trends and legislation affecting these revenue sources, and
assistance in analyzing and projecting revenues.
MuniServices had originally proposed a minimum fixed fee of $2,000 plus a 25% contingency fee of
additional new TOT revenue due to the City and out-of-pocket expenses of up to $2,500 for travel. The
City Manager’s Office was able to negotiate with MuniServices to lower the cost to either $2,000 or
25%, whichever is greater, with no out-of-pocket expenses for travel. This represents a decrease in funds
owned to MuniServices by the City. Business License would be a 35% contingency fee of additional
new revenue due to the City.
Approve Professional Services Agreement with MuniServices
April 3, 2017
Page 3
A contingency fee is a percentage of the new revenue generated from the audit’s findings. New revenue
is defined as the difference between the bi-monthly income received on an account(s) subsequent to and
prior to corrective action being taken by City. Therefore, the consultant services are to be performed on
a contingency fee basis; as such, there are no up-front costs to the City.
FISCAL IMPACT:
The proposed actions will ensure businesses and hotels/motels are in compliance with City tax
regulations and validate the City is collecting the applicate tax revenues as defin ed by City ordinances.
Revenues may improve as a result of the proposed action, and if the increase of revenues is material,
Staff will update the City Council at a later time.
The consultant services are to be performed on a contingency fee basis; as such, there are no up-front
costs to the City.
Prepared by: Reviewed and Approved:
Louie F. Lacasella Troy L. Butzlaff, ICMA-CM
Management Analyst City Manager
Attachment:
1) Professional Services Agreement with MuniServices
CITY OF AZUSA
PROFESSIONAL SERVICES AGREEMENT
1. PARTIES AND DATE.
This Agreement is made and entered into this ____ day of ________________, 2017 by
and between the City of Azusa, a municipal corporation organized under the laws of the State of
California with its principal place of business at 213 East Foothill Boulevard, Azusa, California
91702 (“City”) and MuniServices, LLC, a Delaware limited liability company with its principal
place of business at 7625 N. Palm Ave., Ste. 108, Fresno, CA 93711 (“Consultant”). City and
Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.”
2. RECITALS.
2.1 Consultant.
Consultant desires to perform and assume responsibility for the provision of certain
professional services required by the City on the terms and conditions set forth in this
Agreement. Consultant represents that it is experienced in providing Business License
Discovery and Audit, Transient Occupancy Tax Discovery, Audit and Compliance services to
public clients, is licensed in the State of California, and is familiar with the plans of City.
2.2 Project.
City desires to engage Consultant to render such services for the Business License
Discovery and Audit, Transient Occupancy Tax Discovery, Audit and Compliance project
(“Project”) as set forth in this Agreement.
3. TERMS.
3.1 Scope of Services and Term.
3.1.1 General Scope of Services. Consultant promises and agrees to furnish to
the City all labor, materials, tools, equipment, services, and incidental and customary work
necessary to fully and adequately supply the professional consulting services necessary for the
Project (“Services”). The Services are more particularly described in Exhibit “A” attached
hereto and incorporated herein by reference. All Services shall be subject to, and performed in
accordance with, this Agreement, the exhibits attached hereto and incorporated herein by
reference, and all applicable local, state and federal laws, rules and regulations.
3.1.2 Term. The term of this Agreement shall be from April 2017 to April
2018, unless earlier terminated as provided herein. Consultant shall complete the Services
within the term of this Agreement, and shall meet any other established schedules and deadlines.
The Parties may, by mutual written consent, extend the term of this Agreement if necessary to
complete the Services.
MuniServices, LLC
Page 2 of 18
3.2 Responsibilities of Consultant.
3.2.1 Control and Payment of Subordinates; Independent Contractor. The
Services shall be performed by Consultant or under its supervision. Consultant will determine
the means, methods and details of performing the Services subject to the requirements of this
Agreement. City retains Consultant on an independent contractor basis and not as an employee.
Consultant retains the right to perform similar or different services for others during the term of
this Agreement. Any additional personnel performing the Services under this Agreement on
behalf of Consultant shall also not be employees of City and shall at all times be under
Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other
amounts due such personnel in connection with their performance of Services under this
Agreement and as required by law. Consultant shall be responsible for all reports and
obligations respecting such additional personnel, including, but not limited to: social security
taxes, income tax withholding, unemployment insurance, disability insurance, and workers’
compensation insurance.
3.2.2 Schedule of Services. Consultant shall perform the Services
expeditiously, within the term of this Agreement, and in accordance with the Schedule of
Services set forth in Exhibit “B” attached hereto and incorporated herein by reference.
Consultant represents that it has the professional and technical personnel required to perform the
Services in conformance with such conditions. In order to facilitate Consultant’s conformance
with the Schedule, City shall respond to Consultant’s submittals in a timely manner. Upon
request of City, Consultant shall provide a more detailed schedule of anticipated performance to
meet the Schedule of Services.
3.2.3 Conformance to Applicable Requirements. All work prepared by
Consultant shall be subject to the approval of City.
3.2.4 Substitution of Key Personnel. Consultant has represented to City that
certain key personnel will perform and coordinate the Services under this Agreement. Should
one or more of such personnel become unavailable, Consultant may substitute other personnel of
at least equal competence upon written approval of City. In the event that City and Consultant
cannot agree as to the substitution of key personnel, City shall be entitled to terminate this
Agreement for cause. As discussed below, any personnel who fail or refuse to perform the
Services in a manner acceptable to the City, or who are determined by the City to be
uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a
threat to the safety of persons or property, shall be promptly removed from the Project by the
Consultant at the request of the City. The key personnel for performance of this Agreement are
as follows: Louie F. Lacasella, MPA, CLRM
3.2.5 City’s Representative. The City hereby designates Troy Butzlaff, ICMA-
CM City Manager, or his or her designee, to act as its representative for the performance of this
Agreement (“City’s Representative”). City’s Representative shall have the power to act on
behalf of the City for all purposes under this Contract. Consultant shall not accept direction or
orders from any person other than the City’s Representative or his or her designee.
MuniServices, LLC
Page 3 of 18
3.2.6 Consultant’s Representative. Consultant hereby designates Client
Services Manager Julia Erdkamp, or his/her designee, to act as its representative for the
performance of this Agreement (“Consultant’s Representative”). Consultant’s Representative
shall have full authority to represent and act on behalf of the Consultant for all purposes under
this Agreement. The Consultant’s Representative shall supervise and direct the Services,
using his/her best skill and attention, and shall be responsible for all means, methods, techniques,
sequences and procedures and for the satisfactory coordination of all portions of the Services
under this Agreement.
3.2.7 Coordination of Services. Consultant agrees to work closely with City
staff in the performance of Services and shall be available to City’s staff, consultants and other
staff at all reasonable times.
3.2.8 Standard of Care; Performance of Employees. Consultant shall perform
all Services under this Agreement in a skillful and competent manner, consistent with the
standards generally recognized as being employed by professionals in the same discipline in the
State of California. Consultant represents and maintains that it is skilled in the professional
calling necessary to perform the Services. Consultant warrants that all employees and
subcontractors shall have sufficient skill and experience to perform the Services assigned to
them. Finally, Consultant represents that it, its employees and subcontractors have all licenses,
permits, qualifications and approvals of whatever nature that are legally required to perform the
Services, including a City Business License, and that such licenses and approvals shall be
maintained throughout the term of this Agreement. As provided for in the indemnification
provisions of this Agreement, Consultant shall perform, at its own cost and expense and without
reimbursement from the City, any services necessary to correct errors or omissions which are
caused by the Consultant’s failure to comply with the standard of care provided for herein. Any
employee of the Consultant or its sub-consultants who is determined by the City to be
uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat
to the safety of persons or property, or any employee who fails or refuses to perform the Services
in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant
and shall not be re-employed to perform any of the Services or to work on the Project.
3.2.9 Period of Performance. Consultant shall perform and complete all Services
under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”).
Consultant shall also perform the Services in strict accordance with any completion schedule or
Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately
agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant
agrees that if the Services are not completed within the aforementioned Performance Time
and/or pursuant to any such Project Milestones developed pursuant to provisions of this
Agreement, it is understood, acknowledged and agreed that the City will suffer damage.
3.2.10 Laws and Regulations; Employee/Labor Certifications. Consultant shall
keep itself fully informed of and in compliance with all local, state and federal laws, rules and
regulations in any manner affecting the performance of the Project or the Services, including all
MuniServices, LLC
Page 4 of 18
Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable
for all violations of such laws and regulations in connection with Services. If the Consultant
performs any work knowing it to be contrary to such laws, rules and regulations and without
giving written notice to the City, Consultant shall be solely responsible for all costs arising
therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers,
employees and agents free and harmless, pursuant to the indemnification provisions of this
Agreement, from any claim or liability arising out of any failure or alleged failure to comply
with such laws, rules or regulations.
3.2.10.1 Employment Eligibility; Consultant. By executing this
Agreement, Consultant verifies that it fully complies with all requirements and restrictions of
state and federal law respecting the employment of undocumented aliens, including, but not
limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to
time. Such requirements and restrictions include, but are not limited to, examination and
retention of documentation confirming the identity and immigration status of each employee of
the Consultant. Consultant also verifies that it has not committed a violation of any such law
within the five (5) years immediately preceding the date of execution of this Agreement, and
shall not violate any such law at any time during the term of the Agreement. Consultant shall
avoid any violation of any such law during the term of this Agreement by participating in an
electronic verification of work authorization program operated by the United States Department
of Homeland Security, by participating in an equivalent federal work authorization program
operated by the United States Department of Homeland Security to verify information of newly
hired employees, or by some other legally acceptable method. Consultant shall maintain records
of each such verification, and shall make them available to the City or its representatives for
inspection and copy at any time during normal business hours. The City shall not be responsible
for any costs or expenses related to Consultant’s compliance with the requirements provided for
in Section 3.2.10 or any of its sub-sections.
3.2.10.2 Employment Eligibility; Subcontractors, Consultants, Sub-
subcontractors and Subconsultants. To the same extent and under the same conditions as
Consultant, Consultant shall require all of its subcontractors, consultants, sub-subcontractors and
subconsultants performing any work relating to the Project or this Agreement to make the same
verifications and comply with all requirements and restrictions provided for in Section 3.2.10.1.
3.2.10.3 Employment Eligibility; Failure to Comply. Each person
executing this Agreement on behalf of Consultant verifies that they are a duly authorized officer
of Consultant, and understands that any of the following shall be grounds for the City to
terminate the Agreement for cause: (1) failure of Consultant or its subcontractors, consultants,
sub-subcontractors or subconsultants to meet any of the requirements provided for in Sections
3.2.10.1 or 3.2.10.2; (2) any misrepresentation or material omission concerning compliance with
such requirements (including in those verifications provided to the Consultant under Section
3.2.10.2); or (3) failure to immediately remove from the Project any person found not to be in
compliance with such requirements.
MuniServices, LLC
Page 5 of 18
3.2.10.4 Labor Certification. By its signature hereunder, Consultant
certifies that it is aware of the provisions of Section 3700 of the California Labor Code which
require every employer to be insured against liability for Workers’ Compensation or to undertake
self-insurance in accordance with the provisions of that Code, and agrees to comply with such
provisions before commencing the performance of the Services.
3.2.10.5 Equal Opportunity Employment. Consultant represents
that it is an equal opportunity employer and it shall not discriminate against any subconsultant,
employee or applicant for employment because of race, religion, color, national origin, handicap,
ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities
related to initial employment, upgrading, demotion, transfer, recruitment or recruitment
advertising, layoff or termination. Consultant shall also comply with all relevant provisions of
City’s Minority Business Enterprise program, Affirmative Action Plan or other related programs
or guidelines currently in effect or hereinafter enacted.
3.2.10.6 Air Quality. To the extent applicable, Consultant must
fully comply with all applicable laws, rules and regulations in furnishing or using equipment
and/or providing services, including, but not limited to, emissions limits and permitting
requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or
California Air Resources Board (CARB). Although the SCAQMD and CARB limits and
requirements are more broad, Consultant shall specifically be aware of their application to
"portable equipment", which definition is considered by SCAQMD and CARB to include any
item of equipment with a fuel-powered engine. Consultant shall indemnify City against any
fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory
agency for violations of applicable laws, rules and/or regulations by Consultant, its
subconsultants, or others for whom Consultant is responsible under its indemnity obligations
provided for in this Agreement.
3.2.10.7 Water Quality.
(A) Management and Compliance. To the extent applicable,
Consultant’s Services must account for, and fully comply with, all local, state and federal laws,
rules and regulations that may impact water quality compliance, including, without limitation, all
applicable provisions of the Federal Water Pollution Control Act (33 U.S.C. §§ 1300); the
California Porter-Cologne Water Quality Control Act (Cal Water Code §§ 13000-14950); laws,
rules and regulations of the Environmental Protection Agency, the State Water Resources
Control Board and the Santa Ana Regional Water Quality Control Board; the City’s ordinances
regulating discharges of storm water; and any and all regulations, policies, or permits issued
pursuant to any such authority regulating the discharge of pollutants, as that term is used in the
Porter-Cologne Water Quality Control Act, to any ground or surface water in the State.
(B) Liability for Non-compliance. Failure to comply with the
laws, regulations and policies described in this Section is a violation of law that may subject
Consultant or City to penalties, fines, or additional regulatory requirements. Consultant shall
defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and
MuniServices, LLC
Page 6 of 18
agents free and harmless, pursuant to the indemnification provisions of this Agreement, from and
against any and all fines, penalties, claims or other regulatory requirements imposed as a result
of Consultant’s non-compliance with the laws, regulations and policies described in this Section,
unless such non-compliance is the result of the sole established negligence, willful misconduct or
active negligence of the City, its officials, officers, agents, employees or authorized volunteers.
(C) Training. In addition to any other standard of care
requirements set forth in this Agreement, Consultant warrants that all employees and
subcontractors shall have sufficient skill and experience to perform the Services assigned to them
without impacting water quality in violation of the laws, regulations and policies described in
this Section. Consultant further warrants that it, its employees and subcontractors will receive
adequate training, as determined by City, regarding the requirements of the laws, regulations and
policies described in this Section as they may relate to the Services provided under this
Agreement. Upon request, City will provide Consultant with a list of training programs that
meet the requirements of this paragraph.
3.2.11 Insurance.
3.2.11.1 Time for Compliance. Consultant shall not commence
Services under this Agreement until it has provided evidence satisfactory to the City that it has
secured all insurance required under this section. In addition, Consultant shall not allow any
subcontractor to commence work on any subcontract until it has provided evidence satisfactory
to the City that the subcontractor has secured all insurance required under this section.
3.2.11.2 Minimum Requirements. Consultant shall, at its expense,
procure and maintain for the duration of the Agreement insurance against claims for injuries to
persons or damages to property which may arise from or in connection with the performance of
the Agreement by the Consultant, its agents, representatives, employees or subcontractors.
Consultant shall also require all of its subcontractors to procure and maintain the same insurance
for the duration of the Agreement. Such insurance shall meet at least the following minimum
levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be at least as
broad as the latest version of the following: (1) General Liability: Insurance Services Office
Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability:
Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto);
and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as
required by the State of California and Employer’s Liability Insurance. The policy shall not
contain any exclusion contrary to the Agreement, including but not limited to endorsements or
provisions limiting coverage for (1) contractual liability (including but not limited to ISO CG 24
26 or 21 29); or (2) cross liability for claims or suits by one insured against another.
(B) Minimum Limits of Insurance. Consultant shall maintain
limits no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal
injury and property damage. If Commercial General Liability Insurance or other form with
MuniServices, LLC
Page 7 of 18
general aggregate limit is used including, but not limited to, form CG 2503, either the general
aggregate limit shall apply separately to this Agreement/location or the general aggregate limit
shall be twice the required occurrence limit; (2) Automobile Liability:$1,000,000 per accident
for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s
Liability: Workers’ Compensation limits as required by the Labor Code of the State of
California. Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease.
Defense costs shall be paid in addition to the limits.
(C) Notices; Cancellation or Reduction of Coverage. At least
fifteen (15) days prior to the expiration of any such policy, evidence showing that such insurance
coverage has been renewed or extended shall be filed with the City. If such coverage is
cancelled or materially reduced, Consultant shall, within ten (10) days after receipt of written
notice of such cancellation or reduction of coverage, file with the City evidence of insurance
showing that the required insurance has been reinstated or has been provided through another
insurance company or companies. In the event any policy of insurance required under this
Agreement does not comply with these specifications or is canceled and not replaced, the City
has the right but not the duty to obtain the insurance it deems necessary and any premium paid
by the City will be promptly reimbursed by Consultant or the City may withhold amounts
sufficient to pay premium from Consultant payments. In the alternative, the City may suspend or
terminate this Agreement.
3.2.11.3 Professional Liability. Consultant shall procure and
maintain, and require its sub-consultants to procure and maintain, for a period of three (3) years
following completion of the Project, errors and omissions liability insurance appropriate to their
profession. Such insurance shall be in an amount not less than $1,000,000 per claim, and shall
be endorsed to include contractual liability. Defense costs shall be paid in addition to limits.
3.2.11.4 Insurance Endorsements. The insurance policies shall
contain the following provisions, or Consultant shall provide endorsements on forms supplied or
approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall include
or be endorsed (amended) to state that: (1) using ISO CG forms 20 10 and 20 37, or
endorsements providing the exact same coverage, the City of Azusa, its directors, officials,
officers, employees, agents and volunteers shall be covered as additional insured with respect to
the Services or ongoing and complete operations performed by or on behalf of the Consultant,
including materials, parts or equipment furnished in connection with such work; and (2) using
ISO form 20 01, or endorsements providing the exact same coverage, the insurance coverage
shall be primary insurance as respects the City, its directors, officials, officers, employees, agents
and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the
Consultant’s scheduled underlying coverage. Any excess insurance shall contain a provision that
such coverage shall also apply on a primary and noncontributory basis for the benefit of the City,
before the City’s own primary insurance or self-insurance shall be called upon to protect it as a
named insured. Any insurance or self-insurance maintained by the City, its directors, officials,
officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall
MuniServices, LLC
Page 8 of 18
not be called upon to contribute with it in any way. Notwithstanding the minimum limits set
forth in Section 3.2.11.2(B), any available insurance proceeds in excess of the specified
minimum limits of coverage shall be available to the parties required to be named as additional
insureds pursuant to this Section 3.2.11.4(A).
(B) Automobile Liability. The automobile liability policy shall
include or be endorsed (amended) to state that: (1) the City, its directors, officials, officers,
employees, agents and volunteers shall be covered as additional insureds with respect to the
ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or
borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance
coverage shall be primary insurance as respects the City, its directors, officials, officers,
employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage
excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance
maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be
excess of the Consultant’s insurance and shall not be called upon to contribute with it in any
way. Notwithstanding the minimum limits set forth in Section 3.2.11.2(B), any available
insurance proceeds in excess of the specified minimum limits of coverage shall be available to
the parties required to be named as additional insureds pursuant to this Section 3.2.11.4(B).
(C) Workers’ Compensation and Employers’ Liability
Coverage. The insurer shall agree to waive all rights of subrogation against the City, its directors,
officials, officers, employees, agents and volunteers for losses paid under the terms of the
insurance policy which arise from work performed by the Consultant.
(D) All Coverages. Each insurance policy required by this
Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced
or canceled except after thirty (30) days (10 days for nonpayment of premium) prior written
notice by certified mail, return receipt requested, has been given to the City; and (B) any failure
to comply with reporting or other provisions of the policies, including breaches of warranties,
shall not affect coverage provided to the City, its directors, officials, officers, employees, agents
and volunteers. Any failure to comply with reporting or other provisions of the policies
including breaches of warranties shall not affect coverage provided to the City, its officials,
officers, employees, agents and volunteers, or any other additional insureds.
3.2.11.5 Separation of Insureds; No Special Limitations; Waiver of
Subrogation. All insurance required by this Section shall contain standard separation of insureds
provisions. In addition, such insurance shall not contain any special limitations on the scope of
protection afforded to the City, its directors, officials, officers, employees, agents and volunteers.
All policies shall waive any right of subrogation of the insurer against the City, its officials,
officers, employees, agents, and volunteers, or any other additional insureds, or shall specifically
allow Consultant or others providing insurance evidence in compliance with these specifications
to waive their right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, its officials, officers, employees, agents, and volunteers, or any other
additional insureds, and shall require similar written express waivers and insurance clauses from
each of its subconsultants.
MuniServices, LLC
Page 9 of 18
3.2.11.6 Deductibles and Self-Insurance Retentions. Any
deductibles or self-insured retentions must be declared to and approved by the City. Consultant
shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate
such deductibles or self-insured retentions as respects the City, its directors, officials, officers,
employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing
payment of losses and related investigation costs, claims and administrative and defense
expenses.
3.2.11.7 Subconsultant Insurance Requirements. Consultant shall
not allow any subconsultants to commence work on any subcontract relating to the work under
the Agreement until they have provided evidence satisfactory to the City that they have secured
all insurance required under this Section. If requested by Consultant, the City may approve
different scopes or minimum limits of insurance for particular subconsultants. The Consultant
and the City shall be named as additional insureds on all subconsultants’ policies of Commercial
General Liability using ISO form 20 38, or coverage at least as broad.
3.2.11.8 Acceptability of Insurers. Insurance is to be placed with
insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in
California, and satisfactory to the City.
3.2.11.9 Verification of Coverage. Consultant shall furnish City
with original certificates of insurance and endorsements effecting coverage required by this
Agreement on forms satisfactory to the City. The certificates and endorsements for each
insurance policy shall be signed by a person authorized by that insurer to bind coverage on its
behalf, and shall be on forms provided by the City if requested. All certificates and
endorsements must be received and approved by the City before work commences. The City
reserves the right to require complete, certified copies of all required insurance policies, at any
time.
3.2.11.9 Reporting of Claims. Consultant shall report to the City, in
addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in
connection with the Services under this Agreement.
3.2.12 Safety. Consultant shall execute and maintain its work so as to avoid
injury or damage to any person or property. In carrying out its Services, the Consultant shall at
all times be in compliance with all applicable local, state and federal laws, rules and regulations,
and shall exercise all necessary precautions for the safety of employees appropriate to the nature
of the work and the conditions under which the work is to be performed. Safety precautions as
applicable shall include, but shall not be limited to: (A) adequate life protection and life saving
equipment and procedures; (B) instructions in accident prevention for all employees and
subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks,
confined space procedures, trenching and shoring, equipment and other safety devices,
equipment and wearing apparel as are necessary or lawfully required to prevent accidents or
injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety
measures.
MuniServices, LLC
Page 10 of 18
3.2.13 Accounting Records. Consultant shall maintain complete and accurate
records with respect to all costs and expenses incurred under this Agreement. All such records
shall be clearly identifiable. Consultant shall allow a representative of City during normal
business hours to examine, audit, and make transcripts or copies of such records and any other
documents created pursuant to this Agreement. Consultant shall allow inspection of all work,
data, documents, proceedings, and activities related to the Agreement for a period of three (3)
years from the date of final payment under this Agreement.
3.3 Fees and Payments.
3.3.1 Compensation. Consultant shall receive compensation, for all Services
rendered under this Agreement at the rates set forth in Exhibit “C” attached hereto and
incorporated herein by reference. Extra Work may be authorized, as described below, and if
authorized, will be compensated at the rates and manner set forth in this Agreement.
3.3.2 Payment of Compensation. Consultant shall submit to City a monthly
itemized statement which indicates work completed and hours of Services rendered by
Consultant. The statement shall describe the amount of Services and supplies provided since the
initial commencement date, or since the start of the subsequent billing periods, as appropriate,
through the date of the statement. City shall, within 45 days of receiving such statement, review
the statement and pay all approved charges thereon.
3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any
expenses unless authorized in writing by City.
3.3.4 Extra Work. At any time during the term of this Agreement, City may
request that Consultant perform Extra Work. As used herein, “Extra Work” means any work
which is determined by City to be necessary for the proper completion of the Project, but which
the parties did not reasonably anticipate would be necessary at the execution of this Agreement.
Consultant shall not perform, nor be compensated for, Extra Work without written authorization
from City’s Representative.
3.3.5 Prevailing Wages. Consultant is aware of the requirements of California
Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations,
Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), which require the payment of
prevailing wage rates and the performance of other requirements on “public works” and
“maintenance” projects. If the Services are being performed as part of an applicable “public
works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total
compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage
Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in
effect at the commencement of this Agreement. Consultant shall make copies of the prevailing
rates of per diem wages for each craft, classification or type of worker needed to execute the
Services available to interested parties upon request, and shall post copies at the Consultant’s
principal place of business and at the project site. Consultant shall defend, indemnify and hold
the City, its elected officials, officers, employees and agents free and harmless from any claim or
liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.
MuniServices, LLC
Page 11 of 18
3.4 Termination of Agreement.
3.4.1 Grounds for Termination. City may, by written notice to Consultant,
terminate the whole or any part of this Agreement at any time and without cause by giving
written notice to Consultant of such termination, and specifying the effective date thereof, at
least seven (7) days before the effective date of such termination. Upon termination, Consultant
shall be compensated only for those services which have been adequately rendered to City, and
Consultant shall be entitled to no further compensation. Consultant may not terminate this
Agreement except for cause.
3.4.2 Effect of Termination. If this Agreement is terminated as provided herein,
City may require Consultant to provide all finished or unfinished Documents and Data and other
information of any kind prepared by Consultant in connection with the performance of Services
under this Agreement. Consultant shall be required to provide such document and other
information within fifteen (15) days of the request.
3.4.3 Additional Services. In the event this Agreement is terminated in whole
or in part as provided herein, City may procure, upon such terms and in such manner as it may
determine appropriate, services similar to those terminated.
3.5 Ownership of Materials and Confidentiality.
3.5.1 Documents & Data; Licensing of Intellectual Property. This Agreement
creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense
any and all copyrights, designs, and other intellectual property embodied in plans, specifications,
studies, drawings, estimates, and other documents or works of authorship fixed in any tangible
medium of expression, including but not limited to, physical drawings or data magnetically or
otherwise recorded on computer diskettes, which are prepared or caused to be prepared by
Consultant under this Agreement (“Documents & Data”). All Documents & Data shall be and
remain the property of City, and shall not be used in whole or in substantial part by Consultant
on other projects without the City's express written permission. Within thirty (30) days
following the completion, suspension, abandonment or termination of this Agreement,
Consultant shall provide to City reproducible copies of all Documents & Data, in a form and
amount required by City. City reserves the right to select the method of document reproduction
and to establish where the reproduction will be accomplished. The reproduction expense shall be
borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of
compensation to which the Consultant is entitled under the termination provisions of this
Agreement, Consultant shall provide all Documents & Data to City upon payment of the
undisputed amount. Consultant shall have no right to retain or fail to provide to City any such
documents pending resolution of the dispute. In addition, Consultant shall retain copies of all
Documents & Data on file for a minimum of five ( 5) years following completion of the Project,
and shall make copies available to City upon the payment of actual reasonable duplication costs.
Before destroying the Documents & Data following this retention period, Consultant shall make
a reasonable effort to notify City and provide City with the opportunity to obtain the documents.
MuniServices, LLC
Page 12 of 18
3.5.2 Subcontractors. Consultant shall require all subcontractors to agree in
writing that City is granted a non-exclusive and perpetual license for any Documents & Data the
subcontractor prepares under this Agreement. Consultant represents and warrants that
Consultant has the legal right to license any and all Documents & Data. Consultant makes no
such representation and warranty in regard to Documents & Data which were prepared by design
professionals other than Consultant or its subcontractors, or those provided to Consultant by the
City.
3.5.3 Right to Use. City shall not be limited in any way in its use or reuse of the
Documents and Data or any part of them at any time for purposes of this Project or another
project, provided that any such use not within the purposes intended by this Agreement or on a
project other than this Project without employing the services of Consultant shall be at City’s
sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it
shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless
Consultant and its officers, directors, agents and employees from claims arising out of the
negligent use or re-use of the Documents & Data on such other project. Consultant shall be
responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only
with respect to the condition of the Documents & Data at the time they are provided to the City
upon completion, suspension, abandonment or termination. Consultant shall not be responsible
or liable for any revisions to the Documents & Data made by any party other than Consultant, a
party for whom the Consultant is legally responsible or liable, or anyone approved by the
Consultant.
3.5.4 Indemnification. Consultant shall defend, indemnify and hold the City, its
directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the
indemnification provisions of this Agreement, for any alleged infringement of any patent,
copyright, trade secret, trade name, trademark, or any other proprietary right of any person or
entity in consequence of the use on the Project by City of the Documents & Data, including any
method, process, product, or concept specified or depicted.
3.5.5 Confidentiality. All Documents & Data either created by or provided to
Consultant in connection with the performance of this Agreement shall be held confidential by
Consultant. All Documents & Data shall not, without the prior written consent of City, be used
or reproduced by Consultant for any purposes other than the performance of the Services.
Consultant shall not disclose, cause or facilitate the disclosure of the Documents & Data to any
person or entity not connected with the performance of the Services or the Project. Nothing
furnished to Consultant which is otherwise known to Consultant or is generally known, or has
become known, to the related industry shall be deemed confidential. Consultant shall not use
City’s name or insignia, photographs of the Project, or any publicity pertaining to the Services or
the Project in any magazine, trade paper, newspaper, television or radio production or other
similar medium without the prior written consent of City.
MuniServices, LLC
Page 13 of 18
3.6 General Provisions.
3.6.1 Delivery of Notices. All notices permitted or required under this
Agreement shall be given to the respective parties at the following address, or at such other
address as the respective parties may provide in writing for this purpose:
Consultant:
MuniServices, LLC
7625 N. Palm Ave., Ste. 108
Fresno, CA 93711
Attn: Contracts Department
City:
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Attn: Louie F. Lacasella, MPA, CLRM
Such notice shall be deemed made when personally delivered or when mailed,
forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to
the party at its applicable address. Actual notice shall be deemed adequate notice on the date
actual notice occurred, regardless of the method of service.
3.6.2 Indemnification.
3.6.2.1 Scope of Indemnity. To the fullest extent permitted by law,
Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees,
volunteers and agents free and harmless from any and all claims, demands, causes of action,
costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or
persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any
alleged acts, errors or omissions of Consultant, its officials, officers, employees, subcontractors,
consultants or agents in connection with the performance of the Consultant’s Services, the
Project or this Agreement, including without limitation the payment of all consequential
damages, expert witness fees and attorneys fees and other related costs and expenses.
Notwithstanding the foregoing, to the extent Consultant's Services are subject to Civil Code
Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code
Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or
willful misconduct of the Consultant.
3.6.2.2 Additional Indemnity Obligations. Consultant shall defend, with
legal counsel chosen by City, at Consultant’s own cost, expense and risk, any and all claims,
actions or other proceedings of every kind covered by Section 3.6.2.1 that may be brought or
instituted against City or its directors, officials, officers, employees, volunteers and agents.
Consultant shall pay and satisfy any judgment, award or decree that may be rendered against
MuniServices, LLC
Page 14 of 18
City or its directors, officials, officers, employees, volunteers and agents as party of any such
claim, suit, action or other proceeding. Consultant shall also reimburse City for the cost of any
settlement paid by City or its directors, officials, officers, employees, agents, or volunteers as
part of any such claim, suit, action or other proceeding. Such reimbursement shall include
payment for City’s attorneys’ fees and costs, including expert witness fees. Consultant shall
reimburse City and its directors, officials, officers, employees, agents, and/or volunteers, for any
and all legal expenses and costs incurred by each of them in connection therewith or in enforcing
the indemnity herein provided. Consultant’s obligation to indemnify shall survive expiration or
termination of this Agreement and shall not be restricted to insurance proceeds, if any, received
by the City, its directors, officials officers, employees, agents, or volunteers.
3.6.3 Governing Law; Government Code Claim Compliance. This Agreement
shall be governed by the laws of the State of California. Venue shall be in Los Angeles County.
In addition to any and all contract requirements pertaining to notices of and requests for
compensation or payment for extra work, disputed work, claims and/or changed conditions,
Consultant must comply with the claim procedures set forth in Government Code sections 900 et
seq. prior to filing any lawsuit against the City. Such Government Code claims and any
subsequent lawsuit based upon the Government Code claims shall be limited to those matters
that remain unresolved after all procedures pertaining to extra work, disputed work, claims,
and/or changed conditions have been followed by Consultant. If no such Government Code
claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as
specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit
against the City.
3.6.4 Time of Essence. Time is of the essence for each and every provision of
this Agreement.
3.6.5 City’s Right to Employ Other Consultants. City reserves right to employ
other consultants in connection with this Project.
3.6.6 Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the parties.
3.6.7 Assignment or Transfer. Consultant shall not assign, hypothecate, or
transfer, either directly or by operation of law, this Agreement or any interest herein without the
prior written consent of the City. Any attempt to do so shall be null and void, and any assignees,
hypothecates or transferees shall acquire no right or interest by reason of such attempted
assignment, hypothecation or transfer.
3.6.8 Construction; References; Captions. Since the Parties or their agents have
participated fully in the preparation of this Agreement, the language of this Agreement shall be
construed simply, according to its fair meaning, and not strictly for or against any Party. Any
term referencing time, days or period for performance shall be deemed calendar days and not
work days. All references to Consultant include all personnel, employees, agents, and
subcontractors of Consultant, except as otherwise specified in this Agreement. All references to
MuniServices, LLC
Page 15 of 18
City include its elected officials, officers, employees, agents, and volunteers except as otherwise
specified in this Agreement. The captions of the various articles and paragraphs are for
convenience and ease of reference only, and do not define, limit, augment, or describe the scope,
content, or intent of this Agreement.
3.6.9 Amendment; Modification. No supplement, modification, or amendment
of this Agreement shall be binding unless executed in writing and signed by both Parties.
3.6.10 Waiver. No waiver of any default shall constitute a waiver of any other
default or breach, whether of the same or other covenant or condition. No waiver, benefit,
privilege, or service voluntarily given or performed by a Party shall give the other Party any
contractual rights by custom, estoppel, or otherwise.
3.6.11 No Third Party Beneficiaries. Except to the extent expressly provided for
in Section 3.6.7, there are no intended third party beneficiaries of any right or obligation assumed
by the Parties.
3.6.12 Invalidity; Severability. If any portion of this Agreement is declared
invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions shall continue in full force and effect.
3.6.13 Prohibited Interests. Consultant maintains and warrants that it has not
employed nor retained any company or person, other than a bona fide employee working solely
for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not
paid nor has it agreed to pay any company or person, other than a bona fide employee working
solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration
contingent upon or resulting from the award or making of this Agreement. Consultant further
agrees to file, or shall cause its employees or subconsultants to file, a Statement of Economic
Interest with the City’s Filing Officer as required under state law in the performance of the
Services. For breach or violation of this warranty, City shall have the right to rescind this
Agreement without liability. For the term of this Agreement, no member, officer or employee of
City, during the term of his or her service with City, shall have any direct interest in this
Agreement, or obtain any present or anticipated material benefit arising therefrom.
3.6.14 Cooperation; Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be necessary,
appropriate or convenient to attain the purposes of this Agreement.
3.6.15 Attorney’s Fees. If either party commences an action against the other
party, either legal, administrative or otherwise, arising out of or in connection with this
Agreement, the prevailing party in such litigation shall be entitled to have and recover from the
losing party reasonable attorney’s fees and all other costs of such action.
3.6.16 Authority to Enter Agreement. Consultant has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party
MuniServices, LLC
Page 16 of 18
warrants that the individuals who have signed this Agreement have the legal power, right, and
authority to make this Agreement and bind each respective Party.
3.6.17 Counterparts. This Agreement may be signed in counterparts, each of
which shall constitute an original.
3.6.18 Entire Agreement. This Agreement contains the entire Agreement of the
parties with respect to the subject matter hereof, and supersedes all prior negotiations,
understandings or agreements. This Agreement may only be modified by a writing signed by
both parties.
3.6.19 Federal Provisions. When funding for the Services is provided, in whole
or in part, by an agency of the federal government, Consultant shall also fully and adequately
comply with the provisions included in Exhibit “D” (Federal Requirements) attached hereto and
incorporated herein by reference (“Federal Requirements”). With respect to any conflict
between such Federal Requirements and the terms of this Agreement and/or the provisions of
state law, the more stringent requirement shall control.
MuniServices, LLC
Page 17 of 18
CITY OF AZUSA MuniServices, LLC
By: By:
Troy Butzlaff, ICMA-CM Doug Jensen
City Manager SVP Client Services
Attest:
Jeffrey Lawrence Cornejo, Jr. City Clerk
Approved as to Form:
Best Best & Krieger LLP
City Attorney
A-1
EXHIBIT “A”
SCOPE OF SERVICES
BUSINESS LICENSE DISCOVERY AND AUDIT SERVICE
Program Objectives and Methods
Our LTC service is designed to assist the City in locating tax revenue that the City may not be receiving
from its local tax registry. MuniServices provides detection, documentation and correction of errors and
omissions causing deficiencies, thereby producing new revenue that would not otherwise have been
realized by the City. Moreover, our team works in full and collaborative partnership with City revenue
staff to supplement the operations and procedures currently in place.
The LTC service also aims to reduce future errors by informing businesses about the proper methods of
compliance. Reducing the number of future errors reduces the costs of future enforcement efforts and
increases ongoing revenue.
The beginning of the process focuses on communication between the City and MuniServices. Here are the
initial steps:
Initial Meeting. MuniServices meets with the City staff to review the procedures and objectives of the
LTC service, business entity relations and logistical matters, including establishing an appropriate
liaison with City management and staff and logical checkpoints for measuring progress (the “Initial
Meeting”). Typically this meeting will occur within 5-10 days of the fully executed Agreement.
Work plan. Based on the Initial Meeting, MuniServices develops a work plan that incorporates the
logistical matters agreed to in the Initial Meeting and describes in detail how the objectives of the
LTC service shall be met.
Commencement of Services. After the Work plan is developed, MuniServices shall begin providing
the Discovery and Audit services described below. MuniServices’ obligation to provide services is
contingent on the City providing the necessary information and cooperation.
Phase 1: Preparation Phase
The Preparation Phase will allow MuniServices to make certain that all necessary steps are accomplished
to lay the foundation for a successful project. These steps include meeting with the City to obtain a
thorough understanding of the client’s processes and requirements, obtaining data from both the client
and external sources, standardizing this data for use in MuniServices proprietary database integration
software, generating correspondence and forms, and modifications to our Compliance Administration
System to calculate delinquent taxes.
The standard timing of this phase is approximately 30 to 60 days. This timeframe is dependent on items
such as timely receipt of data and client requirements. Because of this, the timeframe may be shortened or
lengthened as necessary.
Initial Project Meeting/Draft Work Plan Review. The first draft version of the work plan will be
completed and submitted to the City for their review on this date. Revisions to the work plan will be
implemented in conjunction with the City after the initial meeting and throughout the duration of the
project.
A-2
City Dependencies. Prior to execution of the discovery program, MuniServices needs certain items from
the City in order to ensure the highest level of performance.
1. Registration Database – MuniServices will need a copy of the business license tax registry in
electronic format along with the payment history of all registered businesses in the City. A
Business Tax File Layout form will be included with the project plan for additional information
on the data transfer process.
2. Supporting City Data Files – MuniServices would also like to receive additional City database
files to include in the master business inventory build for the City. Examples include a copy of
the commercial utility billing records and a copy of City preferred vendors.
3. Registration Forms – MuniServices will need a copy of the business tax application currently
used by the City (in Microsoft Word if available).
4. Accompanying Documents to the Business Registration Forms – MuniServices will also need any
other documentation required as a prerequisite to the issuing of a certificate.
Business Inventory Build. The tax registration file(s) provided by the City will be integrated the with
multiple public and private database files. The end result will be an inventory of the compliant and non-
compliant entities operating in the City. At this stage our staff of tax specialists can review the potential
non-compliant accounts or “leads” for accuracy.
Phase 2: Testing Phase
During this phase we will begin to test the processes and procedures developed during the preparation
phase. Prior to bulk mailing, a smaller test batch of notifications will be mailed to ensure that the
processes outlined are functioning correctly. During this phase any modifications to process can be
initiated in a timely manner. The standard timing of this phase is 60 days.
1st Test Mailing. MuniServices will prepare a mailing designed to assess the procedures outlined in
the work plan. The test batch usually consists of 100 – 150 notices and will be tracked closely to
determine impact on MuniServices as well as City staff. During the testing phase, MuniServices and
the City can make immediate modifications to the processes to ensure the highest level of
effectiveness prior to bulk notifications starting.
Invoice & Tax Calculation Approval. Once the first round of respondents has been processed,
MuniServices will submit sample account statements for the City’s review. This allows the City to
validate tax calculations and classifications prior to invoicing of the non-compliant entities.
Payment Process Test. This procedure will validate MuniServices payment posting and application
processing procedures. MuniServices and the City will ensure funds are transmitted timely and that
documentation for each payment batch meets the City’s guidelines.
Application & Batch Forwarding. MuniServices will submit to the City the first batch of applications
where payment has been received by the taxpayer.
Phase 3: Active Phase
Stated simply, this phase will be the execution of the work plan developed by MuniServices for the
notification and registration of non-compliant entities. During the testing phase, MuniServices will work
with the City to refine the processes and ensure accuracy prior to the volumes associated with the active
phase. MuniServices will continue to modify the timing related to new milestones of the active phase as
the project continues.
A-3
Testing Validation. Upon completion of the testing phase, MuniServices will review the processes
with the City and review any additions or modifications to the procedures outlined in the work plan.
MuniServices will then prepare a final operation version of the work plan and submit to the City for
approval.
Bulk Mailing/Active Phase. The active phase begins with MuniServices first bulk mailing. Each
mailing will continue the processes refined during the testing phase and continue on a weekly basis
throughout the duration of the project.
Audit
Following the initial steps, we move to the rest of the steps in and components of the service.
Comprehensive Inventory. MuniServices will establish a comprehensive inventory of the entities subject
to taxation by the City and the database elements needed to facilitate a comprehensive comparative
analysis with the City’s records of those entities current and prior year’s tax remittance to ensure proper
registration. We will compare the City’s records with MuniServices’ database of business records to
identify potential non-reporting and non-registered entities subject to taxation.
Communication with City staff. MuniServices will work directly with designated City staff to review and
discuss potential audit candidates subject to review. Only entities mutually agreed by MuniServices and
the City to be reviewed shall be subject to MuniServices’ audit services. For potential under-reporting
entities identified, MuniServices will obtain authorization from the City to conduct a review of the
entities’ records and determine the amount of tax due for current and prior periods (plus applicable
interest and penalties, where appropriate). Additionally we will submit audit summaries (also referred to
as “Deficiency Notice”) to the City to permit the City to determine the amount of a deficiency owed, if
any.
Communication with Business Community. We will work with personnel at each target business to
determine whether a business license fee is due, when necessary and appropriate. This is accomplished
with the highest regard to discretion and professional conduct. We deploy a non-controversial,
constructive public relations approach that emphasizes the importance of each business to the City and the
mutual benefits of correcting non-reporting errors.
Taxpayer Assistance. For each unregistered or non-reporting entities identified and confirmed,
MuniServices will assist the entities, as necessary, to complete the City’s applicable registration form(s)
and determine the amount of tax due for current and prior periods (plus applicable interest and penalties,
where appropriate) and ensure that registration forms are complete and correct. Additionally we will
educate entities regarding the City’s reporting requirements to prevent recurring deficiencies in future
years.
Call Center Assistance. Our call center is open during normal business hours to assist entities with
questions concerning application of the City’s taxes, and reporting and remittance requirements.
Invoicing. After the applications have been completed, on behalf of the City we invoice entities for the
amount of identified deficiencies together with supporting documentation, and remit payment received to
the City. Entities can remit payments to MuniServices by mail, over the phone, or online.
Collection and Remittance. When all completed registration forms and associated payments are
completed MuniServices will forward them to the City in batches at the frequency directed by the City.
A-4
(MuniServices will follow the City’s business rules in collecting partial payments or the tax in full at the
City’s direction.) Applications will be forwarded with copies of the payments and payments deposited
into an account designated by the City.
Payment Deposit Services. If the City elects to have MuniServices conduct payment deposit services,
applications will be forwarded with copies of the payments and the payments will be deposited into an
account designated by the City.
Reporting. On a monthly basis we provide the City with reports addressing each taxpayer not reporting,
including the business name, address, and telephone number to the City and we monitor and analyze the
business license registration files of the City each quarter in order to determine non-reporting businesses.
Timing and Deliverables
MuniServices will provide the City with audit progress reports to include the following:
1. Status of work in progress – to include copies of reports provided to taxpayers/ intermediaries
addressing each reporting error/omission individually, including where applicable the business
name, address, telephone number, account identification number, individuals contacted, date(s) of
contact, nature of business, reason(s) for error/omission and recommended corrective procedure;
2. Actual revenue produced for the City – on a monthly and cumulative basis;
3. Projected revenue forthcoming to the City – as a result of MuniServices’ audit service, specified
according to source, timing, and one-time versus ongoing; and
4. Alphabetical listing of all errors/omissions detected – for the City by MuniServices, including the
account number, correction status, payment amount received by the City, period to which
payment is related and payment type (e.g., reallocation, deficiency assessment) for each one.
City Assistance
To begin the work and throughout the project MuniServices will ask the City for assistance as follows:
1. Provide an electronic copy of the City’s License Registration File and License Payment History
file to MuniServices, together with any other information necessary for MuniServices to compute
MuniServices’ billing for services, in electronic format, to MuniServices on no less than a
quarterly basis during the term of the Agreement and thereafter for so long as MuniServices’ right
to invoice for services rendered continues;
2. Use reasonable and diligent efforts to collect, or to assist MuniServices in the collection of,
deficiencies identified by MuniServices pursuant to the Agreement; and
3. Notify MuniServices within 10 days following receipt by the City of payments, if there is any,
resulting from deficiencies identified by MuniServices.
A-5
TRANSIENT OCCUPANCY TAX AUDIT and COMPLIANCE SERVICES
MuniServices will provide its Compliance Program as a single service consisting of the following two-
phase process.
• Audit and Discovery - Phase 1. During this phase, MuniServices will:
a. Establish a comprehensive inventory of all lodging properties subject to taxation by the City
and the database elements (public and private databases) needed to facilitate further audit to
identify and locate lodging providers not properly registered with the City and not appearing
on the City rolls as TOT remitters;
b. Perform discovery services designed to identify and locate lodging providers not properly
registered with the City and not appearing on the City rolls as TOT remitters;
c. Analyze lodging provider return information from the most recent 48 months or the period
covered by the applicable statute of limitation, whichever is shorter, in order to identify
unusual or suspicious reporting and/or activities that warrant further review;
d. Conduct unobtrusive collection of information on each property, including number of rooms,
occupancy rate, property’s condition, business dynamics;
e. Provide a detailed audit report to the City identifying lodging providers who might require
additional investigation or review to determine their compliance with the City’s TOT
ordinance;
f. Coordinate with designated City official(s) as necessary to review the audit report;
g. Develop with the designated City staff a list of lodging providers to be subject to a
compliance review of lodging and tax records; and
h. During the term of this Agreement, provide up to ten (10) hours of additional consulting time
to assist the City in evaluating or implementing any of the proposed actions suggested by the
above report.
• Compliance Review - Phase 2. Based on our previous experiences, on average only about 30% of the
properties will be recommended for Phase 2.
MuniServices uses a non-invasive approach to TOT auditing and will only be contacting the hotel
properties during the compliance phase. Typically only 30% of the properties will be contacted.
During this phase, MuniServices will conduct a compliance review consisting of some or all of the
following procedures:
a. Provide City staff with a detailed list of all records required to be made available by lodging
providers for the reviews, together with a draft engagement announcement letter to be sent to
each lodging provider;
b. Examine records pertaining to TOT for each lodging provider selected for a compliance
review.
c. Verify accuracy of filed TOT returns with daily and monthly activity summaries;
d. Review a random sample of the daily and monthly summaries to determine if the daily
summaries reconcile to the monthly summaries;
e. If MuniServices believes such a review is necessary, review secondary and tertiary
documentation such as bank statements to verify that deposits reconcile with the reported
revenue on the TOT returns or other tax filings;
f. Review exempted revenue for proper supporting documentation;
g. Submit to designated City staff a compliance review report that includes:
• MuniServices review findings;
A-6
• For each error/omission identified and confirmed, accompanying documentation that
MuniServices believes is necessary to facilitate recovery of revenue due from lodging
providers for prior periods;
• Draft notices of deficiency determination, commendation and warning letters as
applicable; and recommendations;
h. Coordinate with designated City official(s) as necessary to review compliance review report;
i. Provide assistance to City in reviewing any matters submitted in extenuation and mitigation
by lodging providers in contesting a deficiency determination; and
j. Prepare and document any changes to the compliance review findings and provide revised
tax, interest or penalty amounts due the City.
Please note that legislative analysis, economic impact reporting on measures, consulting and policy
update (deliverables) are provided timely, regularly and year-round, and are included in the Compliance
services for no extra fee.
TOT Consultation
In addition to the Audit & Discovery and Compliance Review, MuniServices will provide consultation
services to the City that will include the following which are described in detail above:
• Provide as-needed consultation services aimed at maintaining and enhancing the City's TOT
revenue base, covering such topics as: revenue forecasting assistance, revenue tracking software,
statewide trends, specific opportunities and threats to the City;
• Provide timely information regarding existing and proposed legislation that could affect TOT
revenues, specifically indicating how the City might be impacted;
• Review City's TOT ordinance and provide feedback and suggestions as needed;
• Review City's TOT remittance materials and make suggestions for improvement;
• Train City staff on optimum remittance processing techniques to maximize accurate compliance.
Legislative Support, Analysis and Updates
MuniServices will monitor proposed state and federal legislation to identify issues affecting the City's
Transient Occupancy Taxes (TOT) revenues, and, if justified, make recommendations to the
City. MuniServices has long-reported and advocated on proposals that seek to treat all hotel sales the
same in regards to payment of local taxes, regardless of method of purchase to ensure consistency and
fairness. Our Government Relations team works in collaboration with stakeholders including the hotel
and motel associations and online travel company representatives. The Internet has created inconsistent
treatment of hotel-related taxes for local government entities. We have been active and involved with
monitoring and providing expertise to address the emergence of the shared economy when it comes to
short-term vacation rentals. The proliferation of this lodging option has created some difficulties for local
governments to equitably enforce its TOT ordinance and collect taxes from short term rentals.
MuniServices maintains an in-depth and invaluable “Government Relations Services” resource center on
its website that provides historical collection of presentations, policy updates and the issues reported and
advocated on clients’ behalf can be accessed on MuniServices website
at http://www.muniservices.com/services/government-relations. We have included in this proposal an
example of MuniServices’ communication to clients on short-term rental considerations, as well as a
MuniServices-prepared letter opposing SB 1102 (McGuire) from 2016 that sought to potentially impact
local TOT revenues.
A-7
Reporting
The Compliance Program – Audit - Phase 1. MuniServices will provide the City a detailed Audit report
identifying lodging providers who might require additional investigation or review to determine their
compliance with the City’s TOT ordinance.
The Compliance Program - Compliance Review - Phase 2. MuniServices will provide City staff with a
detailed list of all records required to be made available by lodging providers for the reviews, together
with a draft engagement announcement letter to be sent to each lodging provider. This Phase will
include:
• MuniServices review findings;
• For each error/omission identified and confirmed, accompanying documentation that
MuniServices believes is necessary to facilitate recovery of revenue due from lodging providers
for prior periods;
• Draft notices of deficiency determination, commendation and warning letters as applicable; and
recommendations;
Compliance Review (Final Audit) Report. After conducting all the phases MuniServices will submit a
written compliance review report to the designated City staff member(s) that include our findings; the
documentation necessary to facilitate recovery of revenue due for prior periods for each error/omission
identified and confirmed; and draft notices of deficiency determination, commendation and warning
letters as applicable, and recommendations. A report will be provided for each lodging provider reviewed.
City to Provide
In order for MuniServices to conduct the Audit & Discovery, we will request assistance from the City in
the following areas:
• Prior to the start of the work to be performed, provide MuniServices with (1) the most recent
registration to collect the tax and (2) returns for the time period requested as needed to compile a
historical database for the period of the statute of limitations. If the City has the full return data
digitized, submitting such in electronic format would be preferable;
• Inform MuniServices of any circumstances concerning current existing payees;
• Inform MuniServices of the development of new lodging properties no later than the Certificate
of Occupancy being granted;
• Cooperate in the transition by reviewing proposed processing and materials, offering comments
and suggestions and providing timely approvals;
D-1
EXHIBIT “B”
SCHEDULE OF SERVICES
BUSINESS LICENSE DISCOVERY AND AUDIT SERVICE
Work Plan
Based on the Initial Meeting, MuniServices develops a work plan that incorporates the logistical matters
agreed to in the Initial Meeting and describes in detail how the objectives of the LTC service shall be met.
The Work Plan components are described in the project approach below.
Implementation Process and Timelines
MuniServices will commence project work within 10 working days following authorization. As shown
below, we implement new projects in three phases, which ensures the highest quality of service to both
our client and their constituents. Here is the general timeline for each phase. Upcoming sections describe
the phases in detail.
Phase & Description Timeline Key Activities
Phase 1: Preparation Phase 30-60 Days Data preparation & communication
Phase 2: Testing Phase 60 Days Small test batches
Phase 3: Active Phase Perpetual Full batches
Audit Perpetual Specific business audits
Please note the Active Phase and the Audit phase are perpetual to match the dynamic nature of your
business community. The need for the active phase and the audit phase continue as long as business
continue to come and go in the City.
D-2
TRANSIENT OCCUPANCY TAX AUDIT and COMPLIANCE SERVICES
Project Phases/Workplan
Typically within 90 days of MuniServices receipt of the lodging provider return information from the
City for the most recent forty-eight (48) months, or the period covered by the applicable statute of
limitation, whichever is shorter, Work Plan for TOT Services
I. Start-up of TOT Audit Process (Within first 30-60 days):
• Procedural meeting with the City
• Request Documentation from City:
1. 48 Months of Returns for all properties (or properties City selected)
2. Current TOT Ordinance
II. Property Review and Hotels Selected for Audits (Within 90 days):
1. When we receive the returns, we enter the data into our worksheets to develop trends, property
comparison, exempt rent to gross rent variation, etc. We research the statistics on the City and
properties. Based on this data, we select specific properties for audit (if the City hasn’t requested
specific properties). The City will receive an Audit Report identifying the properties and why
they were selected.
2. Once the City approves the hotels selected for audits, we will forward the City Announcement
Letters that need to be mailed to the properties on City letterhead. Once the City sends out the
letters to the properties, we request they send us a copy of the signed letters.
III. Start-up of TOT Audits (30 days later):
1. Auditors will contact the City for a brief conference call to discuss the audit timeline. Once the
timeline has been approved, MuniServices sends out Appointment Letter with a list of required
information. The date for the on-site review needs to allow the property a minimum of 30 days of
preparation time.
IV. Desk Audits and Field Audits (8 weeks later):
1. Google search on specifics of hotel to determine/confirm number of rooms, any special
requirement and any other charges to which guests may be charged.
2. One week after the Scheduling Letters are mailed, contact hotel operator to confirm date and time
of audit and explain procedures and request data for sample months selected; for example
Property Management System. Month End Reports, Profit & Loss Statements, Exemption
Reports, etc.
3. Conduct on-site review.
V. Provide Final Audit Report to the City (12 weeks later):
1. Auditors will submit (via email) all the Commendation/Deficiency Letters that need to be
submitted to the hoteliers, by the City.
2. City will receive an electronic copy of the Final Audit Report.
D-3
EXHIBIT “C”
COMPENSATION
BUSINESS LICENSE DISCOVERY AND AUDIT SERVICE
Discovery Services
MuniServices’ compensation for providing Discovery Services shall be a contingency fee of 35% of the
additional revenue received by the City from the services. The contingency fee shall apply to the current
tax year, all eligible prior period revenues, and any applicable penalties, interest, and late charges. The
contingency fee only applies to revenue actually received by the City. The term “current tax year” shall
mean the most recent tax year for which local taxes are due and payable to the City, and in which
MuniServices has identified deficiencies.
Audit Services
MuniServices’ compensation for the Audit Service shall be a contingency fee of 35%. The contingency
fee shall apply to revenue received by the City as a result of deficiencies identified in the review and shall
include any eligible prior period revenues together with all applicable penalties, interest and late charges.
The City agrees to use reasonable and diligent efforts to collect deficiencies identified by MuniServices.
TRANSIENT OCCUPANCY TAX AUDIT and COMPLIANCE SERVICES
MuniServices will provide the TOT service for a minimum fixed fee of $2,000 or a 25% contingency fee
of the additional revenue due to the City, whichever is greater. The 25% contingency fee applies to the
current tax year, all eligible prior period revenues, and any applicable penalties, interest and late charges.
The contingency fee applies to revenue due to the City whether the City collects the fees or not from the
lodging providers. The term “current tax year” will mean the most recent tax year for which local taxes
are due and payable to the City, and in which MuniServices as identified deficiencies.
Additional Consulting Services
City may request that MuniServices provide additional consulting services at any time during term of the
Agreement. If MuniServices and the City agree on the scope of the additional consulting services
requested, then MuniServices shall provide the additional consulting services on a Time and Materials
basis. Depending on the personnel assigned to perform the work, MuniServices’ standard hourly rates
range from $75 per hour to $200 per hour.
Depending on the personnel assigned to perform the work, MuniServices’ standard hourly rates will
apply. The following are sample hourly rates based on the job classification:
• Principal: $200 per hour
• Project Manager: $175 per hour
• Client Services: $150 per hour
• Information Technology (IT) support: $175 per hour
• Operational Support:
o Director or Manager: $175 per hour
o Senior Analyst: $125 per hour
o Analyst: $100 per hour
o Administrative: $75 per hour
These additional consulting services will be invoiced at least monthly based on actual time and expenses
incurred.