Hinderliter, deLlamas & Assoc/Tax Audit & Info Srvcs for "Measure G" 17AGREEMENT FOR TRANSACTIONS TAX AUDIT & INFORMATION SERVICES
This Agreement is made and entered into as of the day of 1 2016 by and
between the CITY OF LA QUINTA, hereinafter referred to as "CITY" and HINDERLITER,
DE LLAMAS AND ASSOCIATES a California Corporation, hereinafter referred to as
"CONTRACTOR".
I. RECITALS
WHEREAS, transactions tax revenues can be increased through a system of continuous
monitoring, identification and correction of allocation errors and reporting deficiencies,
and
WHEREAS, an effective program of transactions and use tax management can provide
for more accurate budget forecasting and financial planning; and
WHEREAS, CITY desires the combination of data entry, report preparation, and data
analysis necessary to effectively manage its Measure "G" transactions and use tax base
the recovery of revenues either unreported or erroneously allocated to other
jurisdictions; and
WHEREAS, CONTRACTOR has the programs, equipment and personnel required to
deliver the transactions and use tax related services referenced herein;
THEREFORE, CITY and CONTRACTOR, for the consideration hereinafter described,
mutually agree as follows:
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II. SERVICES
The CONTRACTOR shall perform the following services:
A. DEFICIENCY/ALLOCATION REVIEWS AND RECOVERY
1. CONTRACTOR shall conduct on-going reviews to identify and correct
unreported transactions and use tax payments and distribution errors thereby
generating previously unrealized revenue for the CITY. Said reviews shall
include:
(i) Comparison of county -wide local tax allocations to transactions tax for
brick and mortar stores and other cash register -based businesses, where
clearly all transactions are conducted on-site within the Measure "G"
CITY boundaries, and therefore subject to transactions tax.
(ii) Review of any significant one-time use tax allocations to ensure that
there is corresponding transaction tax payments for taxpayers with
nexus within the CITY boundaries.
(iii) Review of state-wide transactions tax allocations and patterns to
identify any obvious errors and omissions.
(iv) Identification and follow-up with any potentially large purchasers of
supplies and equipment (e.g. hospitals, universities, manufacturing
plants, agricultural operations, refineries) to ensure that their major
vendors are properly reporting corresponding transactions tax
payments to the Measure "G" Transactions Tax District.
2. CONTRACTOR will initiate, where the probability of an error exists, contacts
with the appropriate taxpayer management and accounting officials to verify
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whether current tax receipts accurately reflect the local sales activity. Such
contacts will be conducted in a professional and courteous manner so as to
enhance CITY's relations with the business community.
3. CONTRACTOR shall prepare and submit to the Board of Equalization all
information necessary to correct any allocation errors and deficiencies that are
identified, and shall follow-up with the individual businesses and the State
Board of Equalization to ensure that all back quarter payments due the CITY
are recovered.
B. DATA BASE MANAGEMENT, REPORTS AND STAFF SUPPORT
1. CONTRACTOR shall establish a database containing all applicable Board of
Equalization (BOE) registration data for each business within the Measure "G"
District boundaries holding a seller's permit account. Said database shall also
identify the quarterly transactions and use tax allocations under each account
for the most current and previous quarters where available.
2. CONTRACTOR shall provide updated reports each quarter identifying changes
in allocation totals by individual businesses, business groups and by categories.
Quarterly aberrations due to State audits, fund transfers, and receivables, along
with late or double payments, will also be identified. Quarterly reconciliation
worksheets to assist finance officer with budget forecasting will be included.
3. CONTRACTOR shall advise and work with CITY Staff on planning and
economic questions related to maximizing revenues, preparation of revenue
projections and general information on sales, transactions and use tax questions.
4. CONTRACTOR shall make available to CITY the HdL proprietary software
program and Measure "G" database containing all applicable registration and
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quarterly allocation information for CITY business outlets registered with the
Board of Equalization. The database will be updated quarterly.
III. CONFIDENTIALITY
Section 7056 of the State of California Revenue and Taxation code specifically limits
the disclosure of confidential taxpayer information contained in the records of the State
Board of Equalization. This section specifies the conditions under which CITY may
authorize persons other than CITY officers and employees to examine State Sales, Use
and Transactions Tax records.
The following conditions specified in Section 7056 (b), (1) of the State of California
Revenue and Taxation Code are hereby made part of this agreement.
A. CONTRACTOR is authorized by this Agreement to examine sales, use or
transactions and use tax records of the Board of Equalization provided to CITY
pursuant to contract under the conditions established by the California Revenue and
Taxation law.
B. CONTRACTOR is required to disclose information contained in, or derived from,
those sales, use or transactions and use tax records only to an officer or employee
of the CITY who is authorized by resolution to examine the information.
C. CONTRACTOR is prohibited from performing consulting services for a retailer,
as defined in California Revenue & Taxation Code Section 6015, during the term
of this Agreement.
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D. CONTRACTOR is prohibited from retaining the information contained in, or
derived from those sales or transactions and use tax records, after this Agreement
has expired. Information obtained by examination of Board of Equalization records
shall be used only for purposes related to collection of local sales and use tax or for
other governmental functions of the CITY as set forth by resolution adopted
pursuant to Section 7056 (b) of the Revenue and Taxation Code. The resolution
shall designate the CONTRACTOR as a person, authorized to examine sales and
use tax records and certify that this Agreement meets the requirements set forth
above and in Section 7056 (b), (1) of the Revenue and Taxation Code.
IV. CONSIDERATION
A. CONTRACTOR shall be paid $100 monthly billed quarterly for the transaction
district tax reports that we include with the quarterly sales tax analyses.
CONTRACTOR shall be paid 25% of the initial amount of new transactions or use
tax revenue received by the CITY as a result of audit and recovery work performed
by CONTRACTOR (hereafter referred to as "audit fees"). New revenue shall not
include any amounts determined and verified by CITY or CONTRACTOR to be
increment attributable to causes other than CONTRACTOR'S work pursuant to this
agreement. In the event that CONTRACTOR is responsible for an increase in the
tax reported by businesses already properly making tax payments to the CITY, it
shall be CONTRACTOR'S responsibility to separate and support the incremental
amount attributable to its efforts prior to the application of the audit fee. Said audit
fees will apply to state fund transfers received for those specific quarters identified
as being missing and/or deficient following completion of the audit by
CONTRACTOR and confirmation of corrections by the State Board of
Equalization but shall not apply prospectively to any future quarter.
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CONTRACTOR shall provide CITY with an itemized quarterly invoice showing
all formula calculations and amounts due for audit fees.
CONTRACTOR shall obtain prior approval from CITY for each specific business
for which payment of audit fees will be expected. Said approval shall be deemed
given when the City Manager or his/her designated representative, signs a Work
Authorization form, a copy of which is attached as "Exhibit A." CITY shall pay
audit fees upon CONTRACTOR'S submittal of evidence of State fund transfers and
payments to CITY from businesses identified in the audit and approved by the
CITY.
B. Above sum shall constitute full reimbursement to CONTRACTOR for all direct
and indirect expenses incurred by CONTRACTOR in performing audits including
the salaries of CONTRACTOR'S employees, and travel expenses connected with
contacting local and out-of-state businesses and the Board of Equalization Staff.
C. Extra work beyond the Scope of Services set forth in this agreement shall not be
performed by CONTRACTOR or reimbursed or paid for by CITY unless such extra
work is specifically authorized in writing by City Manager or his/her designated
representative. CONTRACTOR shall be compensated for any additional services
in the amounts and in the manner as agreed to by the CITY and CONTRACTOR
at the time the CITY's written authorization is given to CONTRACTOR for the
performance of said services.
VI. CITY MATERIALS AND SUPPORT
CITY shall adopt a resolution in a form acceptable to the State Board of Equalization
and in compliance with Section 7056 of the Revenue and Taxation Code, authorizing
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CONTRACTOR to examine the confidential sales, use, and transactions tax records of
CITY. CITY further agrees to continue CONTRACTOR'S authorization to examine
the confidential records of the CITY by maintaining CITY's name on the CITY
Resolution until such time as all audit adjustments have been completed by the State
Board of Equalization and audit fees due the CONTRACTOR have been paid.
VII. LICENSE, PERMITS, FEES AND ASSESSENTS
CONTRACTOR shall obtain such licenses, permits and approvals (collectively the
"Permits") as may be required by law for the performance of the services required by
this Agreement. CITY shall assist CONTRACTOR in obtaining such Permits, and
CITY shall absorb all fees, assessments and taxes which are necessary for any Permits
required to be issued by CITY.
VIII. TERMINATION
This Agreement may be terminated for convenience by either party by giving 30 days
written notice to the other of such termination and specifying the effective date thereof.
Upon the presentation of such notice, CONTRACTOR shall continue to work through
the date of termination. Upon termination as provided herein, CONTRACTOR shall be
paid the value of all tax analysis and reporting work performed less payments previously
made by CITY. In ascertaining the value of the work performed up to the date of
termination, consideration shall be given to amounts due for any unpaid invoices, and
to businesses identified by CONTRACTOR which make tax payments after termination
of this Agreement as a result of CONTRACTOR'S work. After CITY receives said tax
payments for such businesses, CONTRACTOR shall be paid the audit fees resulting
from tax payments made by the business for back quarter reallocations. Compensation
for any audit work previously authorized and satisfactorily performed shall be made at
the times provided in the preceding section entitled "Consideration."
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All documents, data, surveys and reports prepared by CONTRACTOR pursuant to this
Agreement shall be considered the property of the CITY and upon payment for services
performed by CONTRACTOR, such documents and other identified materials shall be
delivered to CITY by CONTRACTOR.
IX. INDEPENDENT CONTRACTOR
CONTRACTOR shall perform the services hereunder as an independent contractor and
shall furnish such services in his own manner and method, and under no circumstances
or conditions shall any agent, servant, or employee of CONTRACTOR be considered
as an employee of CITY.
X. NON -ASSIGNMENT
This Agreement is not assignable either in whole or in part by CONTRACTOR without
the written consent of CITY.
XI. ATTORNEY'S FEES
In the event a legal action is commenced to enforce any of the provisions of this
Agreement, the prevailing party shall be entitled to recover its costs and reasonable
attorney's fees.
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XII. GOVERNING LAW
The laws of the State of California shall govern the rights, obligations, duties and
liabilities of the parties to this Agreement and shall also govern the interpretation of this
Agreement.
XIII. INDEMNIFICATION
CONTRACTOR hereby agrees to, and shall hold CITY, its elective and appointive
boards, officers, agents and employees, harmless from any liability for damage or claims
for damage for personal injury, including death, as well as from claims for breach of
confidentiality or property damage which may arise from CONTRACTOR'S willful or
negligent acts, errors or omissions or those of its employees or agents. CONTRACTOR
agrees to and shall defend CITY and its elective and appointive boards, officers, agents
and employees from any suits or actions at law or in equity for damages caused, or
alleged to have been caused, by reason of any of the aforesaid willful or negligent acts,
errors or omissions.
CITY hereby agrees to, and shall hold CONTRACTOR, its officers, agents and
employees, harmless from any liability for damage or claims for damage for personal
injury, including death, as well as from claims for breach of confidentiality or property
damage which may arise from CITY'S negligent acts, errors or omissions including
misuse or improper disclosure of confidential information contained in reports
submitted by contractor under this Agreement. CITY agrees to and shall defend
CONTRACTOR and its officers, agents and employees from any suits or actions at law
or in equity for damage caused, or alleged to have been caused, by reason of any of the
aforesaid negligent acts, errors or omissions and/or misuse or improper disclosure of
confidential information.
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XIV, NOTICE
All notices required by this Agreement shall be given to CITY and CONTRACTOR in
writing, by personal delivery or first class mail postage prepaid, addressed as follows:
CITY: CITY OF LA QUINTA
78-495 Calle Tampico
La Quinta, CA 92253
CONTRACTOR HINDERLITER, DE LLAMAS, & ASSOCIATES
1340 Valley Vista Drive, Suite 200
Diamond Bar, CA 91765
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on
the date first above written by their respective officers duly authorized in that behalf.
CITY: CITY OF LA QUINTA
J. SPEVACEK, CITY MANAGER
CONTRACTOR:
HINDERLITER, DE LLAMAS & ASSOCIATES
A California Corporation
Chief naic al 6fricer
APPROVED AS TO FORM:
CITY COUNSEL:
Y
WILLIAM H.IHRKE, CITY ATTORNEY
ATTEST TO CITY MANAGER'S SIGNATURE AND AUTHORITY:
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SUSAN MAYSELS, CI. CLERK
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SAMPLE
EXHIBIT A
Transactions Tax Audit
Work Authorization No.
SAMPLE
The following business or businesses, located in the City of La Quinta, have been identified as
having the potential for generating additional tax revenues to the City of La Quinta. Contractor
is hereby authorized to contact the given business(s) and the State Board of Equalization to
verify the accuracy of the current reporting methodology and obtain the necessary
documentation for the Board of Equalization, to bill for uncollected transactions and use tax
payments or modify misallocated payments and to return revenues that may be due to the
District.
Contractor's compensation shall be 25% of the new transactions tax revenue received by the
District as a result of audit and recovery work performed by Contractor, as set forth in the
Agreement between Contractor and City.
CITY: CITY OF LA QUINTA
By:
Date:
HINDERLITER, DE LLAMAS AND ASSOCIATES
Un
Date