Loading...
Host Compliancewww.hostcompliance.com 1037 NE 65th Street #81158 Tel: (415) 715-9280 Seattle, WA 98115 Regarding: City of La Quinta RFP ‐ Short Term Vacation Rental Program  August 19, 2019  Dear Tommi,  Thanks in advance for allowing us the opportunity to present this proposal. Based on the background information  provided in the bid materials and our extensive experience delivering these exact types of services and software  to hundreds of cities and counties across North America, we believe we are in a unique position to help the City  of La Quinta achieve its short‐term vacation rental (“STVR”) compliance goals.  Since our founding in 2015, we have grown substantially, today serving more than 300 local governments, of  which almost 100 are in California, including the cities of Desert Hot Springs, Palm Desert, Rancho Mirage,  Indian Wells, Indio, and Temecula.  This year, we acquired STR Helper, a company also focused on short‐term  rental compliance that was founded by a former mayor and former city manager with deep expertise in municipal  government, and combined today, we have a workforce in offices all over North America. With strong first‐hand  municipal experience, deep expertise  in geospatial data science and information management, and industry‐ leading experts in the STR space, Host Compliance has developed a deep understanding of what works and what  doesn't when it comes to enforcing short‐term rental ordinances. This deep expertise, experience and our data‐ driven approach allows Host Compliance to help the City of La Quinta quickly augment its existing processes with  an integrated proven and cost‐effective short‐term rental compliance monitoring and enforcement solution.   Our analysis for your 2017 RFP revealed 3,127 active short‐ term rental listings in La Quinta as of June 3, 2017; 3,599  listings  as  of  February  1,  2019;  and  4947  listings  as  of  August 15, 2019 (and ~18% YOY growth in the number of  rental units in La Quinta).  This net increase does not take  into  account  the  number  of  listings  that  have  been  deactivated (1320), reposted (91), or created (1320) since  the same time last year.  Understanding these nuances is  incredibly important as it 1) gives a much clearer picture of  the number of listings that the City would have needed to  identify last year (5267), and 2) highlights the importance  of  frequently  monitoring  the jurisdiction’s  short‐term  rental market for new listings and pro‐actively reaching out  for compliance. We believe this is important as it highlights  the large size and very dynamic nature of the City’s STVR  market, and we believe very few firms have the scale,  technology and experience to provide La Quinta with the  quality of service it expects and deserves.  In fact, we have  won 90% of the RFPs in which we have participated over  the  last  3  years,  including  Seattle,  Boston,  Austin,  and  Santa Fe.  Map of La Quinta STR listings                                                                                                    www.hostcompliance.com 1037 NE 65th Street #81158 Tel: (415) 715-9280 Seattle, WA 98115 Regarding the provided Agreement for Contract Services, we note that our services are provided via a “software  as a service” license, rather than a more traditional “professional  services”  arrangement.    Therefore,  the  Agreement does not contain provisions we would typically request: (i) intellectual property protection for our  software (we are comfortable with Sections 7.3 and 7.5 of the A greement for any “work product” reports created  for the City), (ii) subscription fees versus the billing requirements in Section 2.2 for itemization of time, materials  and staff members, and (iii) limitation of our liability to 12 months of fees by the City as would typically be seen  in software licenses, rather than the currently unlimited liability. Furthermore, while we are comfortable with  typical prohibitions against subcontracting or assignment, Section 4.3 of the Agreement for Contract Services as  currently drafted would make it difficult for us to access external financing or offer equity to employees and  advisors, as is common with technology companies of our size.    We also should qualify our proposal with respect to the following RFP requests (Section C of the Work Proposal  contains a more in‐depth discussion), while we have achieved similar levels of compliance with some of our  customers, we cannot guarantee 90‐95% compliance for La Quinta.  That said, we are known for sharing best  practices gleaned from working with over 300 North American local governments, providing extensive support  via our customer success team (12 FTE) and engineering/development team (13 FTE), and closely coordinating  our activities with our clients, whether large or small, resulting in a 98% renewal rate. Furthermore, our  customers rate us a 4.8 out of 5 in customer satisfaction, with 98% reporting that they would recommend us to  a friend or colleague.    Regarding sub‐Vendors and their responsibilities, we note that we have partnered with leading vendors to ensure  a high level of quality across our customers (e.g., not subcontractors per se, but more akin to suppliers).   For  data center and related services, we are using Amazon, which is the industry’s leading provider of such services  and well‐known for its scalability and security.  For payment processing, we have partnered with Stripe Inc., a  vendor certified to PCI Service Provider Level 1 (the most stringent level of certification available in the payments  industry) that processes payments for more than 100,000 other companies and organizations including Amazon,  Target, and UNICEF.  For the hotline, we would partner with Answer Connect Teleservices, Inc. out of Portland,  Oregon, a partner we selected after a rigorous review process that has provided similar services on our behalf  for other customers.    Once again thanks for the opportunity to present this proposal. Feel free to reach out to me at (857) 928‐0955  or binzer@hostcompliance.com if you have any questions.    Sincerely,   Ulrik Binzer, President & CEO  City of La Quinta RFP – Professional Services for Short-Term Vacation Rental Program WORK PROPOSAL Submitted by Host Compliance LLC Ulrik Binzer, CEO, - 857-928-0955 - binzer@hostcompliance.com 1037 NE 65th Street #81158, Seattle, WA 98115 Submission Authorized by: Ulrik Binzer, President & CEO © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 1 City of La Quinta – Short Term Vacation Rental Program Contents CONTENTS ............................................................................................................................................ 1 A. EXECUTIVE SUMMARY ..................................................................................................................... 2 B. STATEMENT OF QUALIFICATIONS .................................................................................................... 3 Company and Team Overview ................................................................................................................... 3 Qualifications, Experience & References ................................................................................................. 6 C. UNDERSTANDING AND APPROACH OF SERVICES .............................................................................. 7 D. SCOPE OF WORK PROGRAM ........................................................................................................... 17 E. PROJECT SCHEDULE ........................................................................................................................ 19 APPENDIX ATTACHMENT 1 - NON-COLLUSION AFFIDAVIT .................................................................. 22 APPENDIX ATTACHMENT 2- CONSIDERATIONS AND EXCEPTIONS TO THE STANDARD AGREEMENT FOR CONTRACT SERVICES .......................................................................................................................... 23 APPENDIX ATTACHMENT 3- SCREENSHOTS ......................................................................................... 24 APPENDIX ATTACHMENT 4 - INSURANCE ACKNOWLEDGEMENT AND SAMPLE CERTIFICATE ............... 36 APPENDIX ATTACHMENT 5- RESUMES ................................................................................................ 37 © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 2 City of La Quinta – Short Term Vacation Rental Program A. Executive Summary Serving more than 300 local governments (of which almost 100 are in California) with short-term vacation rental (“STVR”) compliance monitoring and enforcement solutions, Host Compliance has developed a deep understanding of what works and what doesn't when it comes to enforcing STVR regulation. Host Compliance is widely regarded as the thought leader in STVR compliance monitoring and enforcement industry. As a provider of scalable yet customizable software-as-a-service offerings, the way we plan to meet the requirements outlined in the RFP is through deployment of our integrated cloud-based software-as-a- services solution. Our solution should be seen as a set of integrated and automated data sources and tools to improve the capabilities, efficiency and effectiveness of the city’s experienced and qualified employees, and the combination of our Address Identification, Compliance Monitoring, Rental Activity Monitoring, Mobile Permitting and Tax Collection and Hotline modules should enable the City to accomplish its goals around enforcement, preserving the quality of life in the City, and TOT collection. Services Requested Host Compliance Solution • Identifying STVR properties Our Address Identification solution scans 50+ STVR platforms for listings, and leverages machine learning and a team of 200+ analysts to identify the addresses of listings. • Providing educational services and customer support services related to the STVR Program Our Compliance Monitoring (focused on zoning and permit compliance) and Rental Activity Monitoring (focused on TOT under- and non-payment) solutions can be used to assess compliance and conduct educational outreach to STVRs. Customer support is also included. • 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 STVR Program related fees • STVR Program online presence to provide registration, reporting, and payment options • TOT transmittal and submission of TOT transmittal receipts to City in a timely manner Our Mobile Permitting and Tax Collection module is best in class, and can: • Allow for online business license and STVR permit registration • Accept online business license, STVR permit, TOT, and renewal payments with the ability to calculate total amount owing, late fees, interest, and penalties • Send out automatic renewal notices The platform is available 24/7, with mobile adaptive design and SSL encryption, the ability to validate inputs whenever possible as to minimize data-entry errors, electronic signature capabilities, the ability to collect supporting documents (if required), and electronic credit and debit card payment capabilities through our payment processing partner, Stripe © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 3 City of La Quinta – Short Term Vacation Rental Program • Effective communication with the City regarding concerns or issues related to the STVR Program Our Customer Success team is dedicated to ensuring the effective use of our platform, through kick-off, requirements gathering, launch, “refresher” training and proactive outreach. Their efforts have earned the team customer satisfaction scores of 4.8 out of 5, with 98% of our customers reporting they would recommend us to a friend or colleague • Availability to conduct compliance audits of STVR properties Rental Activity Monitoring can be coupled with functionality to streamline audits of most egregious violators, with customer reports and analysis to support TOT audits and online submission of platform activity reports • Monthly reporting to the City of key analytical information “On-demand” dashboards and monthly emailed reports are included with Host Compliance solutions • Assistance with dispute resolution We are known for providing extensive support for dispute resolution, starting with responses to initial letters, and all the way through signed legal declarations, sworn affidavits and expert testimony We have also provided more detail on some of the more distinctive elements of our tools and services as appropriate under Section D. Scope of Work Program. B. Statement of Qualifications Company and Team Overview Host Compliance LLC is a privately held company that was born in the heart of Silicon Valley. Founded in 2015, the company has quickly become the leading provider of STVR compliance monitoring and enforcement solutions to local governments over the last 4 years. We recently closed our acquisition of STR Helper, a company focused also on STVR compliance that was founded by a former city mayor and former city manager with deep expertise in municipal government, and combined today, we have a workforce in offices all over North America, serving over 300 local government customers. Among our customers are almost 100 communities in California, including the cities of Desert Hot Springs, Palm Desert, Rancho Mirage, Indian Wells, Indio, Yucca Valley, and Temecula. Furthermore, we have a deep understanding of cities with extreme “seasonality” in their STVR population through our work with mountain ski resorts like Truckee, CA, Park City, UT and Breckenridge, CO; towns in wine country like Napa, CA and Sonoma, CA; or cities highly impacted by event-driven volume like Pasadena, CA (Rose Bowl) or Austin, TX (SXSW). While Host Compliance’s proposed solution is primarily delivered in the form of a software-as- a-service offering, the on-going project management and relationship management work will be led by some of North America’s leading experts on STVR regulation, compliance monitoring and enforcement: © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 4 City of La Quinta – Short Term Vacation Rental Program Ulrik Binzer – Overall Project Management and Leadership Ulrik is the Founder and CEO of Host Compliance, the industry leader in STVR monitoring and compliance solutions for local governments. A pioneer in the STVR enforcement solution space, Ulrik developed the first STVR compliance monitoring tools and now uses his expertise and insights to help local governments across North America implement, monitor and enforce STVR regulation. Ulrik frequently speaks on the topic of STVRs and has been featured at a number of conferences including the American Planning Association’s National Planning Conference, The University of Minnesota’s Symposium on the Sharing Economy and at numerous events organized by the American Planning Association and the California Association of Code Enforcement Officers. Prior to founding Host Compliance, Ulrik served as Chief Operating Officer of Work4 Labs – an 80-person Venture Capital backed technology company with offices in Silicon Valley and Europe, and Soligent Distribution LLC - the largest distributor of solar equipment to local governments and businesses in the Americas. Before assuming executive management roles in technology companies, Ulrik served as Vice President of the private equity firm Golden Gate Capital, as a strategy consultant at McKinsey & Company and as an Officer in the Danish Army where he commanded a 42-person Platoon and graduated first in his class from the Danish Army’s Lieutenant School. Ulrik received his M.B.A. from Harvard Business School where he was as a Baker Scholar (top 5% of his class) and earned his Bachelor of Science degree in International Business from Copenhagen Business School and New York University. David Marcus – Data management and analytics David is Host Compliance's technical Co-founder, CTO and Chief Data Scientist, and a Caltech Applied and Computational Math graduate specialized in geospatial data science and information management. He has more than 13 years of experience building well-architected, scalable GIS applications. Prior to Host Compliance, David founded PointsOnAMap.com, a database of travel attractions from around the world based on the analysis of hundreds of millions of photos, and Routefriend.com, a web- based application for planning trips on buses and trains, serving 1.5 million monthly users. David's most recent experience was at DwellAware where he served as the Lead Data Scientist, developing models of risks and costs in the residential real estate sector. Prior to DwellAware, David served in various technical roles at a number of software companies including aboutLife, Urban Mapping, American Towns, Nielsen Analytic Consulting and Hewitt Associates. David earned his Bachelor's Degree in Applied & Computational Mathematics at the California Institute of Technology and his Master's Degree in Anthropology from the University of Kent. Lucas Culbertson – Software Engineering Lucas leads Host Compliance’s engineering team and ensures that Host Compliance always delivers a modern, high-quality software product. After starting his career in a traditional desktop GIS world, Lucas' skills have rapidly evolved to meet the ever-changing demand for geospatial experts with a focus on software engineering principles. His 9+ years of hands-on experience lies in both the agile, nimble, tech start-up world to the realm of DoD contract work where security and integration are paramount. Prior to Host Compliance, Lucas served in various technical leadership roles at Sirius XM, Automatic, and Urban Mapping. Lucas started his career as a GIS specialist for Bowhead Science and Technology, working with federal customers, and a GIS analyst for Spatial Data Research, specializing in municipal and country data. Lucas earned his Bachelor of Science in Geographical Information & Analysis from the University of Kansas. © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 5 City of La Quinta – Short Term Vacation Rental Program Robert Peterson – Account Management Bob heads up Account Management and strategic implementations for Host Compliance. As the former COO of STR Helper (the company that Host Compliance acquired) as well as a former City Manager for Garden City in Utah, which transforms from a sleepy town of 700 full time residents in May to over 20,000 by July, he has deep first-hand experience with the difficulties that municipal governments experience with STVRs. Prior to working in the space of STVR compliance, Bob has worked in the software industry for over 25 years, including serving as an Infrastructure and Engineering Senior Vice President for Bank of America, managing development and QA teams for SunGard, and working in technical services for Corel and Novell. Bob earned his Bachelor’s Degree and Master of Public Administration from Brigham Young University. Teresa Ou – Legal and Compliance Given the interest in enforcement and court-defensible evidence, we have included the profile for our General Counsel, Teresa Ou. Teresa honed her legal acumen at several major national law firms in New York, Boston, and Atlanta, followed by heading up the legal, compliance, and other functions for a high- profile start-up company named Lyra Health, Inc, where she started as the first employee and helped drive growth to almost 70 employees. In addition to her legal acumen, Teresa has almost 10 years of business consulting experience with McKinsey & Company where she focused on highly regulated industries. She is now well-versed in the various aspects of local statutory/ ordinance/regulations related to STVRs, including advising municipalities on privacy laws (which will be particularly important for La Quinta with the impending effectiveness of the California Consumer Privacy Act of 2018), taxation/licensing powers, and the regulation of STVRs. Most recently, she spoke on “Legal Issues with Short Term Rentals” at the 2019 National Planning Conference for the American Planning Association. Teresa earned her undergraduate degree magna cum laude from Harvard College and her law degree from Harvard Law School. Stacy Pobatschnig – Customer success Stacy leads Host Compliance’s customer success team and our customers praise her responsiveness and ability to explain, instruct, and train. She is passionate about communication strategy, project management, and making positive impact for the thousands of permanent residents who are finding themselves priced out of the communities they work in and love. In fact, Stacy first learned about Host Compliance as she was looking for long term rental housing in the Lake Tahoe region (where she resides) and quickly realized that there was none available, partly due to the conversion of workforce housing into full-time STVRs. Prior to joining Host Compliance, Stacy ran her own consulting firm and served in various leadership roles at Recreational Equipment, Inc. (REI) and Orvis where she managed various marketing analytics and software implementation teams. Stacy earned her MBA from the University of New Hampshire and her undergraduate degree from Simmons College in Boston. Johannah Richards – Project management Johannah brings a wealth of local government experience in STVR management to Host Compliance, including running the short-term rental compliance program, among other responsibilities, in Vail, Colorado. As Tax and Licensing Manager for Vail, she was responsible for the regulation and collection of © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 6 City of La Quinta – Short Term Vacation Rental Program $24M in yearly sales tax revenue and the licensing and regulation of the 2400 short-term rentals located within the town, and in 2017, she was instrumental in the creation of public outreach and feedback processes, regulation strategies, and policy development for managing short-term rental impacts on the community. She also served as the Operations Manager for Community Development in Aspen, Colorado, with a focus on business process analysis and improvements to evaluate the efficiency and effectiveness of the current business systems that were in place for land use permitting and development. In addition, she has a deep background managing large scale project implementations across a number of our clients, including policy development initiatives in multiple communities. In combination, Host Compliance’s management team provides a unique and differentiated skillset and set of experiences that can greatly improve La Quinta’s ability to execute a successful STVR compliance monitoring and enforcement program. Qualifications, Experience & References In a short time, Host Compliance has become the global leader in STVR regulation, compliance monitoring and enforcement and currently contracts with more than 300+ cities and counties for such services. In addition, the company is adding several customers each week and building a large body of compliance monitoring and enforcement best practice as we go. Host Compliance is currently contracted with almost 100 California cities and counties to do similar work to the support desired by La Quinta. While we would be happy to introduce you to any of these (or any other) clients, here is the contact information for some of the local government entities that have been using Host Compliance services for significant periods of time and have similar needs to La Quinta. City of Napa, CA (Address Identification since May of 2016) Marie Gallo, Code Enforcement Officer PH: (707) 257-9361 Email: mgallo@cityofnapa.org Town of Truckee, CA (Address Identification, Compliance Monitoring, Rental Activity Monitoring, and Tax Collection since July of 2016) Kim Szczurek, Planning Director PH: 530-363-0076 Email: KSzczurek@townoftruckee.com City of Pasadena, CA (Address Identification, Rental Activity Monitoring, Mobile Permitting, Tax Collection, and Hotline since January of 2018) Guille Nunez, Planning PH: 626-744-7634 Email: gnunez@cityofpasadena.net © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 7 City of La Quinta – Short Term Vacation Rental Program Town of Yucca Valley, CA (Address Identification, Compliance Monitoring, Rental Activity Monitoring, and Hotline since January of 2018) Sharon Cisneros, Finance PH: (760) 369-7207, ext. 229 Email: scisneros@yucca-valley.org Town of Indian Wells, CA (Address Identification, Compliance Monitoring, Rental Activity Monitoring, and Tax Collection since February of 2019) Craig DeGroot, Building and Code Enforcement PH: (760) 776-0230 Email: cdegroot@indianwells.com C. Understanding and Approach of Services Host Compliance has worked with hundreds of other local governments on projects identical or very similar to the one described in this RFP and as such we fully understand the requirements. As a provider of scalable yet customizable software-as-a-service offerings, the way we plan to meet the requirements outlined in the RFP is through deployment of our integrated cloud-based software-as-a-services solution. Said differently, our solution should be seen as a set of integrated and automated data sources and tools to improve the capabilities, efficiency and effectiveness of the city’s experienced and qualified employees. Having these tools and data sources, will allow staff to reallocate thousands of hours of low value added “desk detective” and administrative work to activities that deliver much higher value to the city’s residents. It has been our experience that this software-as-a-service centric service delivery approach is very effective and leads to an optimal division of labor and a strong sense of partnership between Host Compliance and its clients. Host Compliance’s solutions are built in-house and all data pertinent to our services are delivered through an integrated web interface. That said, we have partnered with leading vendors to assure a high level of quality. For data center and related services, we are using Amazon, which is the industry’s leading provider of such services and well-known for its scalability and security. For payment processing, we have partnered with Stripe Inc., a vendor certified to PCI Service Provider Level 1 (the most stringent level of certification available in the payments industry) that processes payments for more than 100,000 other companies and organizations including Amazon, Target, and UNICEF. For call center services, we are working with AnswerConnect Teleservices, Inc. out of Portland, Oregon, a partner we selected after a rigorous review process. Using our customizable software-as-a-service centric approach will allow us to meet the vast majority of the requirements listed in the RFP. That said, we should qualify our proposal with respect to the RFP request for 90 to 95% compliance. While we have achieved 90-95% compliance with a number of our customers, we cannot guarantee 90-95% permitting, business license or TOT compliance for a number of reasons. Some STVRS may choose to stop advertising rather than register with the City. Some owners of properties identified as unregistered properties may not have a valid mailing address © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 8 City of La Quinta – Short Term Vacation Rental Program registered with the City. Or the City’s penalties may not be sufficient motivation for applying for a permit, business license or paying TOT (or paying the correct amount). While we have the industry leading solution for compliance monitoring and rental activity monitoring, we will not be able to guarantee that our estimates will be 90-95% correct (nor would we be able to verify such a percentage without auditing every STVR’s records). 1. IDENTIFYING NEW UNREGISTERED STVR PROPERTIES - Detailed description of the methodology of the vendor’s STVR monitoring services. A description of the tools used to discover new unregistered STVR properties should be included. Over the last 4 years, we have invested over $1 million to develop our industry-leading STVR Address Identification technology and artificial intelligence that enables us to create a more accurate inventory and match more short-term rental listings to short-term rental units than any of our competitors. In fact, since our inceptions we have successfully identified the exact addresses of more than a million short- term rental listings! Our Address Identification data is made available to City staff via Host Compliance’s cloud-based software platform, a combined CRM and big-data analytics platform utilizing some of the most cutting- edge artificial intelligence technologies to create tangible results for our clients, while delivering a "consumer-grade" user experience to city staff. We scan all the applicable short-term rental websites operating in the City (54 at the time of writing) every 3 days, de-duplicate the listings, and then identify the addresses of the properties listed for short-term rental. Our comprehensive cloud-based database includes an inventory of listing information (e.g., property type, room type, maximum advertised occupancy, number of rooms, rental rate, and minimum/maximum stay), high resolution images and screen captures of each active listing (including reviews) and for identified properties, parcel number, address, contact information and address for property owners. The listings are continuously monitored and given the importance of hard irrefutable evidence, Host Compliance automatically captures full- screen, high-definition screenshots of all active listings every 3 days (on average) and attaches these screenshots to each property’s “file” in the database. The screenshots are captured on a random time and day during the week to eliminate the risk of non-compliant short-term rental operators “gaming the system” by making their listings temporarily inactive on certain days and times. Our screenshots are time-stamped and include everything related to the listings including the pictures, maps, reviews and descriptive information. To our knowledge, no other provider of short-term rental monitoring software captures full screen, time-stamped weekly screenshots; instead, they only take screenshots upon address identification or on an ad-hoc basis. This is problematic as it leaves City staff with much less actionable evidence than what is provided by Host Compliance’s solution. Once Host Compliance has identified and recorded screenshots of all active STVR listings within La Quinta’s jurisdiction, the next step is to identify the exact parcel number, situs address, owner name, owner address and other pertinent information in our secure cloud-based database. The identification of parcel numbers is critically important at this stage, as it makes it easy to match the identified addresses with the city’s permit and business license databases and database of self-reported TOT. The address, parcel number and owner identification are done by utilizing a combination of proprietary data sources, geospatial algorithms and our more than 200 trained address identification analysts, each of © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 9 City of La Quinta – Short Term Vacation Rental Program whom have passed rigorous quality control testing (and whose backgrounds include software engineers, business and law school graduates, accountants and even a title researcher!). This process is very quick and precise as compared to doing the same work manually (or exclusively algorithmically). 2. MONITORING EXISTING STVR PROPERTIES - Detailed description of how the vendor can effectively monitor existing STVRP properties for monthly TOT remittance, expired City Business Licenses and/or City Short Term Rental Permits. Vendor will need to provide a description of the tools or methodology that will be used to attain 90 % to 95% compliance With our Compliance Monitoring service, we couple our ability to monitor STVRs for ordinance and permit compliance with systematic and automated outreach initiatives to non-compliant STVR property owners. Our Compliance Monitoring module automatically categorizes and labels all advertised short- term rental units based on their compliance level, i.e., • Fully compliant properties, i.e., properties that meet all regulatory requirements • Partially-compliant properties, i.e., satisfy some, but not all regulatory requirements. • Non-compliant properties, i.e., do not satisfy any of the City’s regulatory requirements • Properties for which the compliance status is still to be determined due to lack of data Having this data available in real-time makes it easy for City personnel to prioritize their efforts and time, while ensuring maximum compliance across the City. In addition, Host Compliance’s data can filtered, segmented and analyzed by a number of parameters including:  Listing website  Listing URL  Coordinates  Location (as defined by a boundary box or polygon i.e. neighborhood)  Zoning classification  Business license numbers or STVR permit numbers (requires regularly updated files from the City)  Type of property (single family home, condo, apartment etc.)  Rental type (whole home, room rental, shared space etc.)  # of Bedrooms and Bathrooms  Maximum Occupancy (e.g. Sleeps 6)  Minimum # of nights available for rent  Host Name/ID  Listings of Other Rentals Offered by the Host  # of Reviews  First Review dates  Last review date  Date the property was first active  Nightly rental rate  Weekly rental rate © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 10 City of La Quinta – Short Term Vacation Rental Program  …and many other parameters The list is continuously updated as we match short-term rental units with the advertised listings (and as the listings themselves are updated) and monitor compliance. Once the properties are categorized and prioritized, our Compliance Monitoring module includes systematic and automated outreach initiatives to noncompliant STVR property owners through La Quinta’s form letters (described in more detail in 3 below). Host Compliance’s proprietary Rental Activity Monitoring algorithms and services can be a big help in identifying and pro-actively reaching out to hosts that fail to report (or under-report) TOT. We will readily admit that estimating rental activity and corresponding revenue for tax collection based on reviews, calendar information, and nightly rates is challenging using traditional computation methods. Luckily with the use of advanced artificial intelligence, we have developed far more robust models that surpass anybody else in the industry. While beyond the scope of this document, Host Compliance’s rental frequency and activity algorithms were developed by deploying advanced statistical models and deep-learning artificial intelligence (AI) across our vast historical dataset and have been rigorously back- tested. As a result, Host Compliance’s rental frequency data is much more accurate than our competitors’ data. At the most basic level the service works as follows: 1. Host Compliance generates an occupancy and rental revenue estimate for each of City of La Quinta’s STVR properties 2. The estimated rental revenue is converted into an estimate of the property’s tax liability (factoring in that certain hosting platforms such as Airbnb may already have collected the appropriate taxes on behalf of City of La Quinta) 3. The estimated tax liability is compared to the self-reported and remitted taxes for each property in order to identify tax under-reporting/fraud 4. Host Compliance initiates a series of direct outreach initiatives (using City of La Quinta’s form letters) to the owners of properties suspected of tax under-reporting To facilitate this process and provide comprehensive and accurate data to City of La Quinta’s tax collection staff, Host Compliance provides: • Weekly monitoring of La Quinta’s STVR properties for signs of rental activity: o Automatic monitoring of calendar and review activity across 21/50+ STVR websites o Weekly screenshots of reviews and calendars for each active listing • Quarterly pro-active, systematic and data-informed outreach to STVR operators suspected of tax- under-reporting • Up-to-date list of STVR landlords suspected of under-reporting taxes • Documentation of information that serves as the foundation for the suspicion of tax under-reporting • Quarterly staff report on jurisdiction's STVR tax compliance: • Custom reports and analysis to support tax audits and other STVR related investigations Our experience has shown that the critical next step targeted and thoughtful communication and outreach to the noncompliant STVR operators, as described in the next section. © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 11 City of La Quinta – Short Term Vacation Rental Program 3. OUTREACH TO NON- COMPLIANT STVR OPERATORS - Detailed description of the vendor’s compliance program, this program should include: two Formal Notices, initial contact and follow-up; non-compliant process and how the vendor will work with City Staff, including the Code Compliance Division, to bring all non-compliant properties into compliance with STVRP requirements and City Ordinances. Over the course of working with 300+ customers, we believe that we have earned the right to be more prescriptive on best practices for outreach. Our experience is that letters are the most effective and official manner of contacting and communicating with noncompliant STVR property owners about matters such as (i) eliciting registration and compliance with City business licensing or STVR permitting requirements, (ii) inviting them to register and participate in the online system for registration, reporting and payment, and (iii) providing continued and ongoing contact and communication with registered STVRs to monitor and evaluate self-reported occupancy or other City priorities. Written communication about these matters enables the optimal use of the evidence collected through our platform, effective education about the requirements for compliance, and continued collection of evidence of attempted enforcement actions. The exact specifics of outreach plan can be adopted to accommodate the City’s exact needs and communication preferences, but as a rule, we have found the following types and sequence of highly targeted activities to be most effective: • When new non-registered short-term rental properties are first identified, we will first mail the owner an “initial warning” letter to remind them of the city’s registration requirements, tax payment requirements and provide instruction on how to get into compliance. Depending on how much community awareness there is of the STVR Program requirements, this initial letter may be more focused on education. In many cases, an educational first letter can be highly effective, as we have found that many STVR operators are not aware that there may be STVR regulation. • In the event, the STVR operator does not comply with the rules within 30 days of receiving the “initial warning” letter, we will follow-up with a more sternly worded “Notice of Violation” letter. Setting the timeframe for follow up in the 1st letter and ensuring consistency in sending out the second letter is critical for higher compliance rates. • If an owner does not comply with the rules after receiving the 2nd letter we typically will refer the case to the City for follow-up. The City’s follow-up will be greatly aided by our data, screenshots etc. which are available to City’s personnel through the previously described online data portal. Our Compliance Monitoring module also provides sophisticated functionality to precisely define mailing criteria to segment and target different types of letter recipients using an unlimited number of fully customized mailing criteria and form letters i.e.: • Ability to use sophisticated and highly customized mailing criteria e.g. o Newly listed non-compliant short-term rentals o Re-listings of illegal properties o Short-term rentals that are still listed despite being mailed X number of notice letters in the past Y days © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 12 City of La Quinta – Short Term Vacation Rental Program o …. any other combination of mailing criteria • Quickly deploy new letter templates and certificates by taking advantage of Host Compliance’s vast library of best-practice letter templates. All Host Compliance letter templates: o are thoroughly tested for clarity and impact to maximize response rates and minimize follow-up calls o provide the ability to continuously optimize response rates and impact by A/B testing new versions of existing and/or new form letters Please note that all form letters used by Host Compliance will be developed in close cooperation with City of La Quinta and that the final versions will be subject to the City of La Quinta’s final approval. Letters can be fully customized to include high-resolution color screenshots, registration forms, tax registration forms and other advanced features including the ability to send First Class, Certified and/or Registered letters (Certified and Registered letters will be charged an extra fee to cover the incremental cost charged by the Unites States Postal Service). As with everything else we do, Host Compliance is committed to full transparency and accountability and as a result we save every letter we send on our client’s behalf (in PDF format in full resolution and time stamped) in our database. 4. COORDINATION WITH CITY STAFF AND ENFORCEMENT - Describe how the vendor will coordinate with City Staff to follow up on Code Compliance related cases and provide additional data that may be needed to support Code Compliance cases. Our online portal offers dashboards and reporting “on demand”, as the listings are continuously monitored. The database would contain sortable records and time stamped screenshots of all currently and previously active short-term rental listings in the City’s jurisdiction, including both properties that have already been contacted by us, and properties that have yet to be contacted. Our data is updated every day, with the ability for City staff to search, enter information, correct, append with additional information, as well as use the data for outreach, monitoring and compliance purposes. To streamline the City’s workflows and reporting process, Host Compliance has many standard reports and in case additional custom reports are needed, we can create those at no additional cost, and City staff can access and run them through our platform. Should cases escalate to a more formal setting, we are known for providing extensive support for cases, through signed legal declarations, sworn affidavits and expert testimony. We have successfully provided expert testimony a number of times, in Nashville, TN; Monterey, CA; Hermosa Beach, CA; and Imperial Beach, CA, and our data and methods have always stood up to the test. To exemplify this, below is a quote from Zak Kelley from the Office of the Director of Finance at Metro Nashville & Davidson County, TN, highlighting our support: "Host Compliance has not only met, but far exceeded our expectations. They are responsive to every inquiry and always available, whether for a simple process question over email or to come in town to testify before a Senate Committee on the larger policy issues. Host Compliance has saved us a tremendous amount of time researching properties in violation. Their period rechecks, which saves the advertisement, on © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 13 City of La Quinta – Short Term Vacation Rental Program properties has been helpful in catching people who continue to operate after being told to stop. From an ordinance enforcement standpoint, Host Compliance's services are indispensable!" In addition to providing the addresses of all identifiable STVRs in the City, Host Compliance will also provide the City with the rationale for why any given listing is matched to the identified address, as well as multiple time-stamped screenshots, recordings of complaints, copies of letters sent, and other evidence. Having the rationale for the address match is critical if there is ever a dispute with a homeowner over whether his/her property was listed as a STVR at a given time. Having the historical record of outreach will also be critical for making the case that the City had tried to resolve the case outside the hearing or court environment. 5. TOOLS AVAILABLE TO RESIDENTS TO REPORT STVRP RELATED ISSUES – Detailed description of what tools would be made available to residents to report STVRP related issues. For local governments looking for ways to improve their ability to resolve STVR related neighbor concerns in real time, our 24/7 Hotline (a staffed telephone and on-line reporting portal) is a cost- effective solution that enables the City to quickly set-up and operate a cost-effective code enforcement hotline and online complaint reporting system at a fraction of the cost of doing so using traditional means. With this service, we set up a telephone and on-line hotline for neighbors to report non- emergency problems related to STVR properties to, while at the same time getting our local government partners the data they need to root out non-neighborly STVR hosts: • Incidents can be reported by phone or via our online portal • Full documentation of all reported incidents, with digital recordings and written transcripts of all calls • Ability for neighbors to include photos, video footage and sound recordings to document complaints • Real-time outreach to owners of problem properties • Weekly staff reports containing: the # and types of reported incidents, list of reported properties, and custom reports and analysis of hotline related activities The core of Host Compliance’s hotline solution is a sophisticated call center and online reporting platform that allows neighbors to easily report noise, parking, trash and other vacation rental related issues 24/7/365. The call flow can be customized to the City’s exact needs, but our recommended call flow is shown below in an appendix, including several innovative features described in more detail below the flow diagram. Note that the call flow is partially automated to provide 100% consistency, make the service cost-effective, and ensure the following. 1. Automatic Evidence Collection: Host Compliance’s systems allows the City to automatically request evidence of the alleged code violation directly from the complainant via text message or email. This evidence can take the form of images, videos, audio recordings or any other electronic evidence than can help substantiate the complaint. The evidence is requested either via text © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 14 City of La Quinta – Short Term Vacation Rental Program message or email, and the provided evidence is uploaded straight into our online system in real time. Requesting this evidence directly from the complainant immediately after they submit their complaint has many benefits: • It greatly improves City’s ability to prove ordinance violations • It makes is easier to differentiate between real and frivolous complaints • It can eliminate the need to dispatch zoning enforcement officers and thereby dramatically reduce the cost of obtaining the evidence 2. Automatic Outbound Calls to the Owners/Managers of Problem Properties: Host Compliance’s system automatically cross references complaints with the City’s database of registered short- term rentals to: • Automatically call the owner or designated contact person for the short-term rental property that is causing problems within minutes of receiving the complaint • Easily identify serial offenders’ noise/parking/traffic and other ordinances and use this data to initiate further actions against these “bad actors” 3. Automatic Collection of Data on Complaint Outcomes: Host Compliance’s system incorporated the ability to automatically call back complainants after a designated amount of time to: • Collect data on the outcome of the complaint and the property’s owner’s responsiveness • Allow the complainant to easily escalate the complaint to zoning enforcement or the police department in the event the issue has not been resolved within the designated time-frame • Requesting this data automatically and directly from the complainant within a certain time frame of him or her submitting the initial complaint has many benefits: • It greatly improves the City’s ability to prioritize complaints and only devote costly on- the-ground personnel where appropriate and necessary • It makes it easier to document serious code violations and differentiate these from less severe problems • It makes it easy to identify responsive and non-responsive property owners and managers and initiate further actions against those that do not respond to complaints and issues in a timely manner • It can eliminate the need to dispatch zoning enforcement officers and thereby dramatically reduce the cost of obtaining the evidence 4. Automatic Call Recordings: Host Compliance’s system records all calls and saves the recordings in the cloud for instant playback and future retrieval. Having real-time access to all call recordings makes it easy for zoning enforcement staff to quickly get up to speed on the situation and if necessary, initiate immediate on-the ground follow-up actions 5. 24/7 Real-time Dashboard: All calls to the hotline are automatically logged in our online dashboard which is available 24/7/365 from both desktop and mobile devices. The dashboard includes all pertinent information including: © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 15 City of La Quinta – Short Term Vacation Rental Program • Time and date of the call • Complaint type • Address of the property that the complaint pertains to • Whether the particular address is associated with a registered short-term rental property • Complainant’s contact information (if given) • Any evidence submitted by the complainant • A link to a recording of the call 6. Real-time Email and Text Message Notifications: If desired, our system can provide immediate email notifications to the City’s designated personnel whenever a new complaint is received. In addition to the many features outlined above, the Host Compliance solution also provides the ability to easily run custom reports to shed light on complaint patterns, geographical hotspots and other relevant data points that can help optimize the City’s enforcement efforts. The data will be updated in close to real-time and information can be easily downloaded into csv/Excel format. Finally , we include an online “tips” form as part of our Address Identification customers, which is a simple on-line form that makes it easy for constituents to report suspected illegal STVRs to Host Compliance and the City for further investigation. In all cases, however, the marketing of these tools will be critical to ensuring effective usage. 6. CUSTOMER SERVICE ISSUES – Discuss customer service views and include a summary of how the vendor has previously handled STVRP related customer service issues. The Host Compliance subscription includes customer service at no additional cost, and we see every customer issue as an opportunity to obtain user feedback (while ensuring that we are staying within the legal and City guidelines for how to handle constituent interactions). In the latter situation, this may require that the City get involved, although many times, our Customer Success team is able to manage the issues independently. This is due in part to the depth and breadth of experience our employees have with respect to municipal government. We aggressively recruit outstanding talent which includes a former mayor, former city manager, former code enforcement officer, former sales tax administrator and former community development director. We have employees who have come from across the property management spectrum and who have conducted academic research on STRs. We couple this experience with world class engineering, management consulting, and data science experience. This level of support and expertise is critical, as STVR Permitting and Tax Collection systems can be complex, and post‐ implementation, there continue to be a range of issues that will arise. First, the very nature of STVR’s is that they are dynamic. New listings will appear, existing listings will come down, assessor records require updating, cities will find that they want new report formats, new personnel need training, and requirements and regulations change. Our dedicated Customer Success team is in place to ensure ongoing success and serve as the primary liaison to the City, accessible via telephone or email to customer.success@hostcompliance.com. © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 16 City of La Quinta – Short Term Vacation Rental Program Constituent interactions are more nuanced. We generally segment constituent interactions into 3 primary buckets, with a corresponding different workflow: • “How to” and minor technical issues/bugs (e.g., why is my payment not being accepted?): Handled by our Customer Success team as independently as possible • Complaints about the Host Compliance: More concerning issues will be escalated by the Customer Success team to the Host Compliance senior team, which will then result in a call and/or email to the City to both (1) provide the background and context, and (2) if appropriate, align on our proposed approach • Public records requests, regulatory policy questions and concerns, and decisions made by the City: Referred to our primary contact at the City to handle We strive to for same-day responsiveness to constituents and customers, and to make this possible, members of the Customers Success team schedule days with no trainings or calls so that s/he can be primarily responsible for the initial triage and coverage on all incoming telephone calls and “customer.success@hostcompliance.com” e-mails. 7. SAMPLE LETTERS – Include sample letters with the language that would be used for correspondence or compliance related issues. Please see Appendix Attachment 3 for examples. 8. DESCRIPTION OF BUSINESS LICENSE, PERMIT, TOT, AND RENEWAL SOFTWARE AND CAPABILITIES –Description of software and capabilities to: • Allow for online business license and STVR permit registration • Accept online business license, STVR permit, TOT, and renewal payments with the ability to calculate total amount owing, late fees, interest, and penalties • Send out automatic renewal notices – provide examples of notices. • Reports – provide examples of all reports available in the system • Ability for software to be hosted on a virtualized server and the hardware requirements for the client and server Our Mobile Permitting and Tax Collection module is best in class. Our solution makes it easy for STVR hosts to register, renew permits and licenses, and calculate and remit taxes to City of La Quinta. We have applied the best of user-centered design principles to our on-line Mobile Permitting and Tax Collection module which may seem to be a “nice-to-have”, but actually leads to increased completion rates and constituent satisfaction, while also reducing errors and decreasing the amount of time spent by the staff in supporting applicants through the process. Moreover, we work closely with our clients to ensure that all appropriate permit requirements and TOT remittance calculations are captured in the system, as well as decide upon the right balance of review and validation between our team and City © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 17 City of La Quinta – Short Term Vacation Rental Program staff. For your convenience we have provided links to live version of a permitting and TOT collection system below 1 as well as a demo video for our registration system 2. We highly recommend that you take the opportunity to compare and contrast this user experience with the user experience offered by our competitors to judge for yourself who offers the best solution to this problem. Host Compliance’s focus on ease of use, error-proofing, and legal compliance results in a clearly superior experience and better data. We believe that accessibility and inclusiveness are critical to an open government, and so we strive to adhere to the principles of Web Content Accessibility Guidelines 2.0, and we are already making investments to become compliant with the California Consumer Privacy Act of 2018 (effective January 1, 2020). Please also note the: • Mobile optimization, e.g., responsive design, resized text • Clear and easy-to-read instructions and navigation • Error-proofing via input validation • Integrated credit/debit card payment functionality • Ability to collect electronic signatures. All payments are processed through a 3rd party payment processor called Stripe. Stripe has been audited by a PCI-certified auditor and is certified to PCI Service Provider Level 1. This is the most stringent level of certification available in the payments industry. To accomplish this, Stripe makes use of best-in-class security tools and practices to maintain a high level of security. Examples of reports, letters, and renewal notices have been provided in the Appendix Attachment 3. Finally, we have leveraged best-practice principles from our roots in Silicon Valley in building Host Compliance’s software, technology infrastructure, and data science architecture. Host Compliance’s core solutions are built in-house (given the lack of existing robust solutions incorporating geo-spatial data and the ability to run complex algorithms) and all data pertinent to our services are delivered through an integrated web interface that incorporates multiple modules (e.g., address identification, compliance monitoring, on-line permitting, tax collection, rental activity and tax compliance monitoring, hotline, reports and dashboards) updated in real-time. As the Host Compliance solution is a cloud-based solution on a virtualized server, it will be accessible to the relevant City of La Quinta personnel through a secure password protected web application. Data and reports can be pulled by City staff for Code compliance “on demand” through our platform, without the need for advanced hardware – only a secure and consistent connection to a modern Internet browser (e.g., Explorer 11+, Edge, Chrome, Firefox and Safari) to access online software at a designated URL. D. Scope of Work Program Below is a description of the tasks, sub-tasks and deliverables that will be provided that can be easily attached to the Agreement for Contract Services. 1 https://secure.hostcompliance.com/pasadena-ca/permit-registration 2 https://hostcompliance-1.wistia.com/medias/rzuep6u9pu © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 18 City of La Quinta – Short Term Vacation Rental Program Address Identification Monthly email-delivered report and live web-delivered dashboard with complete address information and screenshots of all identifiable STVRs in La Quinta’s jurisdiction: • Up-to-date list of jurisdiction's active STVR listings • High resolution screenshots of all active listings (captured weekly) • Full address and contact information for all identifiable STVRs in jurisdiction • All available listing and contact information for non-identifiable STVRs in jurisdiction Compliance Monitoring Ongoing monitoring of the short-term rentals operating in La Quinta’s jurisdiction for zoning and permit compliance coupled with systematic outreach to non-compliant short-term rental property owners (using La Quinta’s form letters) ● Ongoing monitoring of STVRs for zoning and permit compliance ● Pro-active and systematic outreach to unpermitted and/or illegal short-term rental operators (using jurisdiction's form letters) ● Monthly staff report on jurisdiction's zoning and permit compliance: ● Up-to-date list of STVRs operating illegally or without the proper permits ● Full case history for non-compliant listings Rental Activity Monitoring and Tax Audit Support Ongoing monitoring of jurisdiction's short-term rental properties for signs of rental activity: • Automatic monitoring of review activity across 50+ STVR websites • Weekly screenshots of reviews and calendars for each active listing • Quarterly staff report on jurisdiction's STVR tax compliance • Up-to-date list of short-term rental landlords suspected of under-reporting taxes • Documentation of information that serves as the foundation for the suspicion of tax under- reporting • Custom reports and analysis to support tax audits and other STVR related investigations • Quarterly pro-active, systematic and data-informed outreach (physical letters) to short-term rental operators regarding their tax remittance obligations (using jurisdiction's form letters) o Up to 4 letters each property per year (full color) o Letters are 2 pages each (2nd page is dedicated to full length screenshot of listing) to improve results for effective compliance • Functionality to streamline audits of most egregious violators • Online submission of platform activity reports Mobile Enabled Web Based Registration and Tax Assessment Collection Forms The development and hosting of an electronic web-based short-term rental registration and assessment collection forms 3. The capabilities of the forms include: 3 When a payment is collected, the variable customary card and ACH processing fees charged by Stripe, Inc. are passed onto paying constituents as a convenience fee in our standard configuration, nor does the system process payments of < $0.50. Please note that when ACH transactions fail, the constituent will be charged a $4 fee, and when refunding a payment, the associated fees are not returned. © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 19 City of La Quinta – Short Term Vacation Rental Program • 24/7 availability • Mobile adaptive design • The ability to validate inputs whenever possible as to minimize data-entry errors • Electronic signature capabilities • Electronic credit and debit card payment capabilities through our payment processing partner Stripe, Inc. • Ability to collect supporting documents (if required) • SSL encryption • Data available through app.hostcompliance.com • Data downloadable into csv format via app.hostcompliance.com 24/7 Short-term Rental Hotline 24/7 staffed telephone hotline and online portal for neighbors to report non-emergency problems related to STVR properties: ● Incidents can be reported by phone or via the on-line portal ● Full documentation of all reported incidents ● Digital recordings and written transcripts of all calls ● Ability for neighbors to include photos, video footage and sound recordings to document complaints ● Real-time outreach to owners of problem properties (whenever owner’s contact info is known) ● Weekly staff reports containing: ○ The # and types of reported incidents ○ List of properties for which incidents have been reported ● Custom reports and analysis of hotline related activities E. Project Schedule Based on our experience with hundreds of implementations, we understand the timelines and resources required for successful implementations of our products. Our proposed project schedule and implementation timeline would be as follows, assuming a contract effective date of September 17, 2019 and “average” complexity of any permitting and TOT collection flow, the City’s ability to acquire the necessary datasets, and the degree of alignment around requirements: Milestone Timeline Description Kick-off Meeting 9/17-9/24/19 Customer’s project sponsor and Host Compliance’s team lead meets to review the implementation process, timeline, answer any questions and • Discuss the best path to obtaining data from the City, e.g., parcel data, any registrations received to date, etc. • Agree upon set of parameters for Compliance Monitoring • Align on any applicable scripts or form letters for contacting non-compliant STVRs © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 20 City of La Quinta – Short Term Vacation Rental Program • Discuss the appropriate flow and requirements for Mobile Registration and Tax Collection and path forward to finalizing requirements the form requirements, setup and launch milestones. • Confirm 24/7 hotline call flow meets requirements, whether calls should continue to go to (760) 777-7157, and define timeline for hotline roll-out Implementation Guide Sent Within 1-2 business days of Kick-off Host Compliance’s team lead to send Customer’s project sponsor written implementation plan and data request Letter Templating Begins Post-kick-off Customer’s project sponsor (or designated team member) to begin work on letter templates Data Acquisition Post-kick-off Host Compliance to work with Customer’s project sponsor (or designated team member) to get data necessary for Address Identification, Compliance Monitoring and Rental Activity Monitoring Permitting and Tax Collection Requirements Gathering Post-kick-off Host Compliance to work with Customer’s project sponsor (or designated team member) to align on requirements for Permitting and Tax Collection product Initial Address Identification Work Starts Date initial data required is acquired Host Compliance's data team analyses short term rental sites, tracking down addresses and populating website dashboards and pages. Complete Letter Templates Desired Live Date for Compliance Monitoring (and Address Identification) - 5 business days Customer’s project sponsor (or designated team member) to provide final letter templates to Host Compliance Launch Meeting and Dashboard Login Credentials sent Desired Live Date for Address Identification and Compliance Monitoring Customer’s project team and Host Compliance’s team lead meets for to review results of the initial address identification work, discuss next steps, walk through the dashboard, coordinate the initial outreach and PR initiatives, and answer any questions Test Mailing Desired Live Date + 5 days Host Compliance’s team lead to initiate test mailing of initial letters Provide Feedback on Results of Test Mailing Desired Live Date + 20 days Customer to provide feedback on the results of test mailing and provide tweaks to letter template(s) and/or process © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 21 City of La Quinta – Short Term Vacation Rental Program Full Scale Mailing Campaign Desired Live Date + 25 days Host Compliance to incorporate feedback from test mailing and kick-off the initial full-scale mailing campaign Rental Activity Monitoring Implementation Kick- off Meeting Desired Live Date + 25 days Customer’s project team and Host Compliance’s team lead meets for ~1 hour to review the results of the initial mailing campaign, discuss next steps for the campaign, discuss the timeline and process for implementing the Rental Activity Monitoring module, and answer any questions there may be Review initial “build” of Permitting and Tax Collection Forms Date of alignment on requirements + 6 -8 weeks Host Compliance building forms, with time required varying based on complexity of the Permitting and Tax Collection processes and calculations, Customer responsiveness, development team capacity QA and launch of Permitting and Tax Collection Forms Date feedback received on initial “build” + 1-14 days Host Compliance refining forms, with time required varying based on level of fixes and refinements requested, as well as any desired launch dates © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 22 City of La Quinta – Short Term Vacation Rental Program APPENDIX ATTACHMENT 1 - Non-Collusion Affidavit © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 23 City of La Quinta – Short Term Vacation Rental Program APPENDIX ATTACHMENT 2- Considerations and exceptions to the Standard Agreement for Contract Services With regard to the provided form Agreement for Contract Services, we note that our services are provided via a “software as a service” license, rather than a more traditional “professional services” arrangement. Therefore, the agreement does not contain provisions we would typically see such as: (i) intellectual property protection for our software (we are comfortable with Sections 7.3 and 7.5 of the Agreement for Contract Services for any “work product” reports created by our software for the City), (ii) a “subscription” style exception to the billing requirements in Section 2.2 and Exhibit B of the Agreement for Contract Services, which include itemization of time, materials and staff members, (iii) limitation of our liability to 12 months of fees paid to Host Compliance by the City as would typically be seen in software licenses, rather than the currently unlimited liability provided in the agreement (again, more typical of professional services agreements); and (iv) a more limited indemnity than what is reflected in Exhibit F. Again, as Software as a Service company, our contracts are more similar to Microsoft Office licenses rather than traditional professional services contracts. Our form Software as a Service agreement, for example, indemnifies for “any claim by a third party against Customer to the extent based on an allegations that Host Compliance’ technology used to provide the Services to the Customer infringes or misappropriates any copyright, trade secret, patent or trademark right of the third party. In no event will Host Compliance have any obligations or liability under this section arising from: (i) use of any Services in a modified form or in combination with materials not furnished by Host Compliance and (ii) any content, information, or data provided by Customers, End Users, or other third parties.” Furthermore, while we would be comfortable with the typical prohibitions against subcontracting or assignment, Section 4.3 of the Agreement for Contract Services as currently drafted would make it difficult for us to access external financing for growth or offer equity to employees and advisors, as is common with technology companies of our size. We would also note that Section 6 provides for Liquidated Damages. What we have found is that delays in implementation for our platform are more often typically due to client needs, and so we should only be penalized for any delays primarily due to our failure to act. Moreover, the contract referenced an “emergency call out requirement” that we would want to see defined before agreeing to liquidated damages for a failure to comply. Finally, as described in detail in the Understanding and Approach of Services section, we cannot guarantee a 90-95% compliance rate. © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 24 City of La Quinta – Short Term Vacation Rental Program APPENDIX ATTACHMENT 3- Screenshots Full Size Screenshot Examples (example to the right enlarged to show details) © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 25 City of La Quinta – Short Term Vacation Rental Program Host Compliance Address Identification Dashboard Example Host Compliance Address Identification Report Example © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 26 City of La Quinta – Short Term Vacation Rental Program Address Identification Dashboard Example Host Compliance Address Report Example © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 27 City of La Quinta – Short Term Vacation Rental Program Host Compliance Address Verification Page Example Host Compliance Guided Edit User Interface Example © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 28 City of La Quinta – Short Term Vacation Rental Program Host Compliance Solution Screenshots Example Host Compliance Edit Record Example © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 29 City of La Quinta – Short Term Vacation Rental Program Host Compliance Solution letter example A. Host Compliance Solution letter example B. Example of the Host Compliance Letter Dashboard © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 30 City of La Quinta – Short Term Vacation Rental Program Host Compliance Solution letter example (page 1 of 3). Host Compliance Solution letter example – (page 2 of 3). Host Compliance Solution letter example (page 3 of 3). © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 31 City of La Quinta – Short Term Vacation Rental Program Host Compliance Solution renewal email and letter examples © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 32 City of La Quinta – Short Term Vacation Rental Program Mobile Optimized Introductory Screen Screen 2 with Buil-in compliance and clear instructions © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 33 City of La Quinta – Short Term Vacation Rental Program © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 34 City of La Quinta – Short Term Vacation Rental Program © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 35 City of La Quinta – Short Term Vacation Rental Program Example Hotline Email Notification to City Staff © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 36 City of La Quinta – Short Term Vacation Rental Program APPENDIX ATTACHMENT 4 - Insurance Acknowledgement and Sample Certificate We have reviewed the Insurance Requirements and will be able to meet them except that Sentinel, our Commercial General Liability provider, was recently downgraded in its AM Best rating of A to B++ due to its acquisition by a company with more limited experience in its current business lines. Host Compliance’s more important Technology, Cyber, Data Risk, and Media Insurance coverage is with Lloyd’s, London which currently has an AM Best rating of A. Please see below the attached sample insurance certificate (redacted) just recently provided to another client. © Host Compliance LLC | 1037 NE 65th Street #81158, Seattle, WA 98115 | www.hostcompliance.com 37 City of La Quinta – Short Term Vacation Rental Program APPENDIX ATTACHMENT 5- Resumes © Host Compliance LLC | 1037 NE 65th St #81158 Seattle, WA 98115 | https://hostcompliance.com Ulrik Binzer Work location: Camas, WA Ph: 857 – 928 - 0955 Email: binzer@hostcompliance.com EDUCATION Harvard Business School Master of Business Administration – 2009 (Baker Scholar – top % of graduating class) Copenhagen Business School Bachelor of Science in International Business – 2003 New York University (Leonard N. Stern School of Business) Exchange student on full academic scholarship - 2002 EXPERIENCE Host Compliance Founder and CEO, 2015 - present With ~150 local government clients, Host Compliance is the world’s leading provider of short-term rental compliance monitoring and enforcement solutions to local governments. At Host Compliance, Ulrik is responsible for strategy and execution and oversees the company’s executive management team. Work4 Labs Chief Operating Officer and Interim CEO (2012 – 2014) Work4 is the global leader in social and mobile recruiting. With operations in Silicon Valley and Paris, the 80 person startup company helps thousands of clients amplify their employer brands and quickly fill their open positions by placing and optimizing target ed job content on social networks. Golden Gate Capital Vice President (2005 – 2012) Golden Gate Capital is a top tier middle-market private equity firm with $12B under management and a proven track-record of significantly enhancing value. McKinsey & Company Analyst – Corporate Finance & Strategy Practice (2003 – 2005) Developed customized solutions to finance- and strategy related problems facing senior level client executives across multiple industries. The first Scandinavian pre-MBA consultant hired by McKinsey & Company worldwide. SHORT-TERM RENTAL RELATED PROJECTS Select Short-term Rental Data, Enforcement and Regulatory Consulting Projects City of Hermosa Beach, CA – 2016 to today City of Newport Beach, CA – 2016 to today City of West Hollywood, CA – 2016 to today City of Alhambra, CA – 2016 to today City of Oceanside, CA – 2016 to today City of Carlsbad, CA – 2017 to today City of Arlington, TX – 2017 to present City of Vancouver, BC - STR Data Analysis – 2016 to present Shasta County (CA) Vacation Rental Ordinance – 2017 to present City of Pasadena, CA - STR Policy Analysis – 2016 City of West Hollywood, CA - STR Policy Analysis – 2016 City of Oakland, CA - STR Policy Analysis – 2016 © Host Compliance LLC | 1037 NE 65th St #81158 Seattle, WA 98115 | https://hostcompliance.com David Marcus Work location: San Francisco, CA Ph: 203 – 233 – 9940 Email: dmarcus@hostcompliance.com EDUCATION California Institute of Technology (Cal Tech) Bachelor of Science in Applied and Computational Math – 2003 University of Kent Masters of Art in Anthropology – 2005 EXPERIENCE Host Compliance, LLC Co-Founder, Chief Technology Officer and Chief Data Scientist (2016 – present) With ~150 local government clients, Host Compliance is the world’s leading provider of short-term rental compliance monitoring and enforcement solutions to local governments. At Host Compliance David is applying his deep software engineering, geospatial data science and information management experience to build the company’s well-architected, scalable software. Routefriend, LLC Founder, Chief Technology Officer and Chief Data Scientist (2008 – present) Routefriend is a web-based application for planning trips on buses and trains, serving 1.5 million monthly users. The app is specifically designed to showcase the fastest way to get from point a to point b using public inter-city transportation (buses, trains, ferries etc.) and was the first of its kind when it launched in 2008. DwellAware, Inc. Lead Data Scientist (2015) DwellAware helps home buyers and renters uncover hidden facts about any home in the United States, including: socially sourced neighborhood data and reviews, crime and walkability data, hard to find data about noise from traffic, aircraft and train sources, traffic volume for every block of every street in the United States, and hidden home costs, including commute costs, utility bills, insurance costs, maintenance costs and HOA fees. UrbanMapping, Inc. Director of Engineering (2012 – 2013) Urban Mapping provides mapping functionality and on-demand data services to simplify the development and deployment of sophisticated online mapping applications. Nielsen Analytic Consulting and Hewitt Associates Before moving to San Francisco to found and work at technology startups, David served in various Project Management and Business Analyst roles at two of the world’s largest technical consulting firms . SELECT SHORT-TERM RENTAL RELATED PROJECTS Select Short-term Rental Data and Enforcement Software Projects City of San Antonio, TX – 2018 to today Los Angeles County, CA – 2018 to today City of Newport Beach, CA – 2016 to today City of West Hollywood, CA – 2016 to today City of Alhambra, CA – 2016 to today © Host Compliance LLC | 1037 NE 65th St #81158 Seattle, WA 98115 | https://hostcompliance.com Lucas Culbertson Work Location: San Francisco, CA Phone: 251 - 716 - 2581 Email: lucas.culbertson@hostcompliance.com EDUCATION University of Kansas B.S. Geographical Info & Analysis – 2005-2009 Graduated with Highest Distinction; Top 10% of Class EXPERIENCE Host Compliance Head of Engineering, 2018 Short-term rental regulation and enforcement consulting and best practices research • Manage team of 9 engineers and contractors • Automatic Labs, Acquired by SiriusXM in 2017 Director of Platform Engineering, 2014-2018 Data-driven platform provider of connected vehicle services for safer and smarter driving • Managed team of 5 in-house engineers & group of contractors • Built high throughput internal geocoding service Urban Mapping Inc. Full Stack Engineer, 2013 - 2014 Geographic technology providing mapping functionality and on-demand data services for online mapping apps • Built neighborhood-boundary database, developing new features and resolving client issues on a quarterly release cycle • Led engineering efforts developing and maintaining a database of public transit information around the world Bowhead Science & Technology LLC GIS Specialist, 2010 – 2013 Consulting focused on providing technical and business services for government contracting • Assisted federal customers (primarily US Army Corps of Engineers) to provide technical insight and workflows that fit within the existing Department of Defense IT ecosystem • Successfully implemented applications by leveraging in-depth knowledge of ESRI products to bridge the gap between software developers and GIS Analysts Spatial Data Research, Inc. GIS Analyst, 2008-2009 ESRI platform-based web mapping tools for interacting with locally created and maintained GIS data, used to reach a variety of end users government offices, schools, businesses, etc. • Focused on QA of municipal and county GIS data • Developed automated work flows in order to improve the accuracy and turn-around time of GIS products delivered to e9-1-1 customers © Host Compliance LLC | 1037 NE 65th St #81158 Seattle, WA 98115 | https://hostcompliance.com Teresa Ou Work Location: Camas, WA Phone: 617 – 256 - 6627 Email: teresa.ou@hostcompliance.com EDUCATION Harvard Law School J.D. – 1999, Journal of Law & Technology Harvard University A.B. in Psychology & Women’s Studies, magna cum laude with highest honors -1999 EXPERIENCE Host Compliance LLC General Counsel, 2018 Short-term rental regulation and enforcement consulting and best practices research Lyra Health, Inc. Various roles and responsibilities including Head of Legal, Risk, Compliance, Provider Operations, Business Operations, 2015-2018 Provider of technology and services for behavioral health for employees of customers Corinthian Consulting Independent Consultant, 2013 - 2015 Independent consultancy focused on strategy and operations consulting in highly regulated industries such as healthcare and financial services McKinsey & Company Associate, Engagement Manager, Fellow, 2004 – 2013 Consulting focused on strategy and operations consulting across industries including financial services, consumer goods and healthcare, and across functions including strategy, operations, corporate finance, marketing and sales Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP Associate, 2000-2004 Bi-coastal law firm focused on emerging companies and their investors, providing clients with strategic and legal services relating to the sale, acquisition, and recapitalization of both privately- and publicly-held technology companies Sutherland, Asbill & Brennan, LLP Associate, 1998-2000 Atlanta-based law firm focused on corporate, tax, financial services, litigation, and energy and environmental law © Host Compliance LLC | 1037 NE 65th St #81158 Seattle, WA 98115 | https://hostcompliance.com Bob Peterson Work Location: Garden City, Utah Phone: 714-875-9955 Email: bob.peterson@hostcompliance.com EDUCATION Brigham Young University, Marriott School of Management Master of Public Administration - 1998 Brigham Young University B.A. in Economics -1993 EXPERIENCE Host Compliance LLC (via acquisition of Bear Cloud Software LLC DBA STR Helper) Account Management for Host Compliance, 2019 COO for Bear Cloud Software, 2015 - 2018 Responsible for Customer Success, Project Management and Advertisement Identification analysts; implement and enforces software and project management best practices Town of Garden City City Administrator, Garden City, UT, 2014 - 2017 Managed various road, beach and short-term rental projects; reported to town council. Bank of America Infrastructure and Engineering Senior Vice President, 2006 – 2009 Managed six non-technical Collateralized Debt Obligation (CDO) offshore teams (25 FTE located in Warsaw, Poland, 40 FTE in Gurgaon, India); verified offshore teams remained in compliance with Bank of America’s Operational Risk Processes. SunGard Data Systems Development and Quality Assurance Manager, 1998 - 2006 Managed Development and QA teams in Irvine, California, Montreal, Canada and Pune, India; created project plans for new client implementations, maintenance releases, product enhancements, QA regression cycles, and QA performance testing; created weekly status reports to track the code stability, defects and regression failures. Corel Inc. Technical Support Installation Manager, 1996 - 1997 Designed and developed software test plans and analyze test results; managed a team of installation support technicians Novell Inc. Technical Service (NTS) Technician, 1993 - 1996 Assisted customers with technical inquiries © Host Compliance LLC | 1037 NE 65th St #81158 Seattle, WA 98115 | https://hostcompliance.com Stacy Pobatschnig Work location: Reno, NV Ph: 603–356–4988 Email: stacy.pobatschnig@hostcompliance.com EDUCATION University of New Hampshire Master of Business Administration – 2010 Simmons College Bachelor of Arts: Nonprofit Management, Marketing – 2006 EXPERIENCE Host Compliance Customer Success, summer 2017 - present Host Compliance is the world’s leading provider of short-term rental compliance monitoring and enforcement solutions to local governments. At Host Compliance, Stacy manages relationships with ~150 local government clients and oversee all implementation and trainings. Global Market Plans Owner (2015 – present) Manage client relationships, as well as marketing, analytics, and growth strategy for ecommerce retailers. Recreational Equipment, Inc (REI) Manager, Digital Analytics (2013 – 2015) Managed marketing analytics for all digital efforts. REI is the leading outdoor retailer in the country, generating over $2B in revenue annually, including $500M+ of digital revenue. Orvis Company Analyst, Marketing Manager (2010 – 2015) Multi channel marketing manager for Adventures, Men’s Clothing, and Hunting, and then managed all project management analytics, a/b testing, and usability optimization efforts. Orvis is the leading manufacturer of fly-fishing gear in the US and UK. Orvis is a $400M company with retail stores globally. Additional experience includes marketing and educational roles at Simmons School of Management, the Boston Symphony Orchestra, The Boston Museum of Fine Arts, National Health Scotland, the Association of British Orchestras, and more. Stacy is a dual citizen of the US and EU (Austria) with experience living and working in the US, London, Edinburgh, and Canberra, Australia. She follows the short-term rental discussion closely, and on a global scale. SHORT-TERM RENTAL RELATED PROJECTS Recent Short-term Rental Data and Enforcement Software Implementations City of Nashville, TN City of Las Vegas, NV City of San Diego, CA City of Orlando, FL City of Virginia Beach, VA City of Fort Lauderdale, FL City or Arlington, TX City of New Braunfels, TX Monterey County, CA