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HdL Companies1Proposal for Sales and Use Tax Services City of La Quinta PROPOSAL FOR Short Term Vacation Rental Program August 19, 2019 SUBMITTED BY HdL Companies 120 S. State College Blvd., Ste 200 Brea, CA 92821 hdlcompanies.com CONTACT George Bonnin T: 714.879.5000 E: gbonnin@hdlcompanies.com Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 1 TABLE OF CONTENTS A. COVER LETTER ....................................................................................................... 2 B. STATEMENT OF QUALIFICATIONS ........................................................................ 3 C. UNDERSTANDING AND APPROACH OF SERVICES ............................................. 7 D. SCOPE OF WORK PROGRAM................................................................................. 8 E. PROJECT SCHEDULE ........................................................................................... 11 F. APPENDICES ......................................................................................................... 12 Non-Collusion Affidavit Form Insurance Acknowledgement Staff resumes and contract exceptions Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 3 B. STATEMENT OF QUALIF ICATIONS EXPERIENCE A tradition of service to local government. Founded in 1983, HdL was established to maximize local government revenues through a variety of audits, analytical services and software systems. HdL d eveloped California’s first computerized sales tax management program and was responsible for securing legislation (AB 1611) that allowed independent verification of state allocations. Since that time, HdL has remained dedicated exclusively to creating innovative revenue solutions for local government. HdL’s systematic and coordinated services for revenue management and economic data analysis is currently being utilized by over 500 agencies in six states. Team expertise and customer service – we’ve walked in your shoes. HdL’s key staff has extensive local government experience, having previously held positions in city management, finance, planning, economic development or revenue collection. The HdL team includes several experienced revenue supervisors, certified revenue officers (CROs), and prior CMRTA board members. 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 Societ y of Municipal Finance Officers (CSMFO) and California Municipal Revenue and Tax Association (CMRTA) on anticipation and planning of programs to strengthen local government revenues. HdL’s intimate understanding of local government needs coupled with our extensive databases and advanced methodology provides for the most relevant, productive, and responsive revenue solutions, software systems, and customer service. Proven dedication to California local governments HdL’s Professional Services solutions are built on a solid foundation of financial expertise and a deep understanding of the needs of California local governments. Since its foundation over 35 years ago, HdL has collaborated with the leaders of over 200 California municipalities on solutions for locally administered revenue programs; providing full-service revenue solutions including software systems, fee studies, code reviews, process consulting, compliance and audit services, serving on staffing oral boards, and more. This wealth of experience is fully utilized in all aspects of our Software and Professional Services by combining the latest technological advancements with best practices gleaned from years of serving in and providing services to California local government s. Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 4 PERSONNEL / STAFFING HdL’s key staff has extensive local government experience, having previously held positions in city management, finance, planning, economic development or revenue collection. HdL’s intimate understanding of local government needs coupled with our extensive databases and advanced methodology provides for the most relevant, productive, and responsive revenue solutions, software systems, and customer service. All work as it relates to this RFP response shall be performed from our Fresno, CA office. The HdL team for this project will be composed of the following individuals : ➢ Project Administrator – Robert Gray, President ➢ Lead Project Manager – Joshua Davis, Director of Professional Services ➢ Client Services Director – Darlene Demeduk These individuals will be supported by their respective teams and other HdL staff as required. Robert Gray – President Mr. Gray serves as President of HdL Software LLC and has been with the firm since 1996. He has extensive experience in the design, development, implementation and support of software systems for local government. He has played a key role in the design of 8 municipal software systems and approximately 200 successful implementations of those systems. He introduced HdL’s local tax services, which provide tax administration and consulting services to an ever - growing number of municipalities. While leading HdL Software through a period of significant growth, he has ensured that HdL maintains its commitment to providing excellent customer Robert Gray President Josh Davis Professional Services Team Darlyne Demeduk Client Services Team George Bonnin Sales Roi Kim Software Development Team Dennis Lewis Systems Team Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 5 service. He also oversees software development and IT for Hinderliter de Llamas. He earned a Bachelor of Science degree in Computer Science and a Master's degree in Business Administration from Azusa Pacific University. Joshua Davis – Vice President, Director of Professional Services Mr. Davis has over 20 years of experience with local tax administration, discovery, and audit, and oversees a skilled team which provides the most sophisticated local tax administration services available to California municipalities. Trained in revenue audit and discovery techniques, he is skilled in navigating the complex scenarios and needs ofte n encountered during such services. He also possesses strong technical and business process capabilities which he employs to aid HdL clients in meeting their strategic objectives. Prior to joining HdL, he was employed as a compliance service manager at a government services firm. His reputation amongst municipalities is that of a very capable local taxation expert who will help the municipality achieve their objectives while providing excellent customer service throughout the engagement. Notable projects he has managed include a long term and broad engagement supporting the City of Beverly Hills business tax team and administering business tax for the City of Roseville. All services provided through Mr. Davis’s team enable municipalities to administer their tax programs more effectively, through both efficient operations and increased discovery and collection of tax due. Darlyne Demeduk – Clients Services Manager Ms. Demeduk has over 23 years of experience in Finance and Business Licensing. She previously served as Business Program Specialist for the City of Pleasanton for over 20 years. While at the City, Darlyne assisted HdL in developing the Business License Software system by serving as one of the original Beta Testers. She has been an active member of the California Municipal Revenue and Tax Association since 1989, serving the association on both the State and Local Boards. She has held the offices of Secretary, 2nd VP, 1st VP, President, Past President and Associate Member Chair. She is the recipient of the Bruno Marchetti Award for extraordinary leadership and service to the organization in 2004. She has also earned the Certification of Certified Revenue Officer from both the CMRTA and NBBLO (National Bureau of Business Licensing Officials). After a distinguished career in local government business licensing, Ms. Demeduk joined HdL Software in 2011. She serves as Client Services Manager, overseeing all aspects of Client Relations, and Project Management, providing guidance during implementation of new systems and services while ensuring Client support and satisfaction. Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 6 REFERENCE Agency Name: City of Chico Address: 411 Main St, Chico, CA 95927 Contact Person: Scott Dowell, Administration Services Contact Information: scott.dowell@chicoca.gov, 530-879-7301 Project Background: Short-term rentals administration, TOT administration, Business license compliance Agency Name: City of Half Moon Bay Address: 501 Main Street, Half Moon Bay, CA 94019 Contact Person: Hossein Golestan, Financial Services Consultant Contact Information: hgolestan@hmbcity.com, 650-726-8283 Project Background: Short-term rentals administration, TOT administration, Business license administration Agency Name: City of Pacific Grove Address: 300 Forest Ave, Pacific Grove, CA 93950 Contact Person: Lori Frati, Finance Management Analyst Contact Information: lfrati@cityofpacificgrove.org, 831-648-3133 Project Background: Short-term rentals administration, TOT administration, Business license administration Agency Name: City of San Mateo Address: 330 W. 20th Avenue, San Mateo, CA 94403 Contact Person: Lisa Wesley, Program Manager Contact Information: wesley@cityofsanmateo.org, 650-522-7110 Project Background: Short-term rentals administration, TOT administration, Business license compliance Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 7 C. UNDERSTANDING AND APPROACH OF SERVICES HdL fully understands the services requested by the City of La Quinta as stated on page 1 and 2 of the City’s Request for Proposals and as listed below . The City of La Quinta requests the vendor’s assistance in the following areas: • Providing online services for permit applications, payments, renewals and TOT remittance. • Pursuing compliance from the remaining active unregistered vacation rentals and any additional properties identified in the future. • Lead compliance efforts including identification, monitoring, evidence gathering, and initial contact, while working collectively with identified STVRP related contacts. The newly selected vendor may provide a 24/7 hotline service for residents to report any issues. Monitoring includes but is not limited to: • Identifying short-term vacation rental (STVR) properties. • Providing educational services and customer support services related to the STVRP. • Registration services of STVR properties in accordance with the City of La Quinta’s Municipal Code. • Business license compliance related to STVR properties. • Invoicing of all STVRP related fees. • STVRP online presence to provide registration, reporting, and payment options. • TOT transmittal and submission of TOT transmitta l receipts to City in a timely manner. • Effective communication with the City regarding concerns or issues related to the STVRP. • Availability to conduct compliance audits of STVR properties. • Monthly reporting to the City of key analytical information. • Assistance with dispute resolution. HdL’s services are capable of fully meeting the requested scope of service. Our services are custom crafted to meet the City’s strategic objectives and will improve revenues and efficiencies while maintaining the high level of customer service taxpayers expect from the City. The modular approach of our programs is designed to further enhance the City’s capabilities regard ing the administration and collection of short-term rental/transient occupancy taxes. Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 8 D. SCOPE OF WORK PROGRAM Short-Term Rental Administration The Short-Term Rental (STR) Administration Program offered by HdL is a comprehensive approach which ensures compliance and education of short-term rental hosts (STR Hosts) in transient occupancy tax regulations and filing procedures, regulatory permits and licensing, and other City specific goals and objectives. HdL’s program involves a modular, customer service centric approach, that reduces City administrative costs and provides the City with assurances of future compliance and reporting practices from the City’s short -term rental lodging industry. HdL’s modular approach begins with ongoing detailed analysis of STRs on a variety of listing services, including Airbnb, Home Away, VRBO, etc. This process creates a full inventory of short-term rentals within the City’s proscribed geographic boundary, including the full name of the owner and the physical address of the unit. Eac h STR is tracked and frequently updated with valuable data which can include items such as number of nights rented, average occupancy rates, room rates, as well as trend and usage reporting. Following identification, HdL conducts a targeted education and compliance campaign designed to inform STR Hosts of their obligations to file and remit taxes , obtain a business license and STR permit, and other requisite licenses and permits as may be needed. Each lodging provider is provided a full overview of the requirements and how to best comply both in the present and the future. During the permitting and registration process, HdL offers a variety of support options to the community including online filing, file -by-phone, email, and registration via standard mail. HdL tax and license specialists are available, from 8:00 a.m. to 5:00 p.m. Pacific Standard Time Monday through Friday, to provide support to the STR community and to assist in the registration process. Tax specialists balance a straight-forward approach to education and compliance with white - glove customer service, aimed at providing swift response, empathy, and kindness. Customer service issues receive top priority and are handled swiftly by bringing all necessary resources to bear, whether they be manager, system, or City support. Once permitted and registered, accounts move into a standard administration process. HdL manages the filing of tax returns, including mailing of tax returns, processing of payments, customer support, delinquency follow up , and the development and management of an online portal for registration, filing, payments, and other support related needs. STR Identification & Monitoring HdL compiles a list of all actively posted short term rentals available from a wide a rray of sources. Lists are compiled and aggregated to accommodate duplicate listings from various sites. During the identification and monitoring process, HdL will: • Scan over 40 different rental sites, including global aggregators like HomeAway/VRBO, Airbnb, Turnkey.com, and Booking.com, national aggregators like Vacasa and Turnkey and small, local property management firms.; • Match Listings to specific parcels using GIS and property tax assessor data; • Create comparison reports to determine which properties may already be compliant or registered and paying taxes Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 9 • Record listing details such as start date, various sites linked to, other information necessary for documenting evidence of STR activity; and • Continually monitor activity to identify and record new listings and closures to ensure accurate real-time identification and monitoring. Education, Permitting, Registration, and Compliance Using the list of active STR listings, HdL conducts a series of City approved education-based programs ranging from mailers to direct phone contacts to achieve over 95% compliance. Each packet contains all the information necessary to obtain registration and comply with local requirements. HdL assists STR hosts throughout the prog ram with information and support with all aspects of becoming compliant. During this program, HdL will: • Validate listing to ensure proper identification and filter out records that may lead to erroneous contacts. • Establish optional implementation items such as amnesty programs, back tax and penalty provisions, and other pre-registration programs. • Notify non-compliant entities with a series of education -based letters designed to garner compliance—four (4) letters of non-compliance are sent, including an assessment. • Provide call-center support for assistance with general questions, support, and assistance with, business license, permitting, registration, and filing and paying returns. • Employ systems to provide for easy applying, permitting, and renewal. Permits applications are sent to the City through HdL’s Approval Central online interface system for approval. • Conduct desk audits to ensure accurate filing from the start. • Provide online portal with links to FAQs, education packets, and support for registering , obtaining a business license, filing returns, and making payments online. • Follow up with non-compliant accounts to obtain registration and work closely with Code Compliance Division to establish effective actions and compliance procedures. • Work with City to identify additional requirements and ensure collection of data necessary to enforcement procedures. Such data may include rental history information from the property, screen shots of advertisements with guest review information. Software and Online System HdL’s software and online systems facilitate all aspects of the STR compliance, permitting, registration, and ongoing administration. These systems: • Allow STR Hosts the flexibility to file and pay TOT returns online, by mail, or over the phone. • Allow STR Hosts to conveniently apply for STR permits, business licenses, and register as a TOT property. • Provide for STR permit application approvals to be conveniently processed between tax specialists and the City using HdL’s Approval Central system. • Apply penalties and interest are automatically applied, based on filing periods. Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 10 • Populate bulk Email and mail notices sent monthly as a reminder of filing dates, or sent on demand to swiftly educate and announce changes. • Provide reports and data to facilitate analysis of TOT trends and remittances. Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 11 E. PROJECT SCHEDULE GENERAL PROJECT TIMELINE Day 1: Kick-Off Meeting to discuss project and request Information Day 7: Information received from City; two -month system configuration timeline begins Day 42: STR discovery research for first non-compliant group completed Day 56: STR discovery account QA complete Day 60: Go Live; STR compliance letter #1 mailed Proposal for Professional Services – Short Term Vacation Rental Program City of La Quinta, CA August 19, 2019 12 F. APPENDICES 1. Signed Non-Collusion Affidavit Form – See attached 2. Insurance Acknowledgement: • HdL hereby acknowledges the insurance requirements of the City of La Quinta. 3. Staff Bios: Please see page 4 and 5 4. Contract Exceptions: • Contract Exceptions: HdL requests the addition of text regarding “proprietary information” to be added to the City’s Agreement template near Section 7.3 Ownership of Documents. Please see below: Proprietary Information of Consultant. As used in this Section, the term “proprietary information” means any information that relates to Consultant’s computer or data processing programs; data processing applications, routines, subroutines, techniques or systems; or business processes. City shall hold in confidence and shall not disclose to any other party any of Consultant’s proprietary information in connection with this Agreement, or otherwise learned or obtained by City in connection with this Agreement, unless disclosure is required under federal or state law, including without limitation the Freedom of Information Act or the Public Records Request Act. Consultant shall retain ownership and rights to all proprietary information. The obligations imposed by this Section shall survive any expiration or termination of this Agreement.