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HomeMy WebLinkAbout10. Approve PSA w-Muniservices LLC for UUT Compliance Audit, Revenue Protection Recovery & Consulting SvcsÐ CityofDowney AGENDAMEMO TO Item No. APPROVED BYMAYoR VASQUEZ AND MEMBERS oF rHE ctry cou*",t clTy nnaruacER OFFICE OF THE CITY MANAGER BY: ANIL GANDHY, DIRECTOR OF FINANCE & INFORMATION TECHNOLOGY AUGUST 14,201s h'*lv 1"''lt1 FROM: DATE: SUBJECT: APPROVE A PROFESSIONAL SERVICES AGREEMENT WITH MUNISERVIGES LLC FOR USERS' TAX COMPLIANCE, REVENUE PROTECTION AND AUDIT SERVICES RECOMMENDATION It is recommended that the City Council approve a professional services agreement with MuniServices, LLC for Utility Users Tax (UUT) compliance audit and revenue protection recovery and consulting services. BACKGROUND Utility Users' Taxes are a source of revenue that the City collects for utilities sùch as gas, electric and telecommunications. The City's UUT rates was established by Ordinance in 2012 UUT revenues for FY18-19, are projected to be $7.065 million or 8o/o of General Fund Revenues. Ensuring that such tax is properly assessed and collected can be a challenge for local governments. An effective compliance program will assist the City in identifying and correcting errors/omissions causing revenue deficiencies, and thereby produce new or previously unrealized revenue for such participants. DISCUSSION To staff's knowledge, the City has not performed audits of UUT service providers with regard to the proper application and collection of the City's UUT. UUT compliance audits cannot be performed in.house due to the complexity of the audit. UUT compliance are a specialized area of auditing, limited to a few companies with the experience and capacity to perform this task successfully. MuniServices has over 38 years of experience in providing tax revenue enhpncement services to over 1,000 local government partners nationwide. Muniservices UUT Compliance Review Services Proposal (Attachment A) includes a broad range of compliance, administrative and protective services that will allow the City to preserve, protect and enhance its UUT revenues focusing on these additional areas: Compliance Revenue Protection and Enhancement Ordinance Review, Administrative Rulings and Tax lnquiries Professional Services Agreement - Muniservices, LLC August 14,2018 Page 2 Muniservices has developed its own extensive database management resources that facilitate finding new revenue sources and identify non-compliant businesses and payment anomalies for detection and correction. Muniservices contract with legal experts who specialize in UUT legislation. Muniservices also offers a dedicated Government Relations team to provide policy, regulatory and legislative consulting support. Ïhe proposal attached will engage Muniservices to a one (1) year contract with an option for extension of two (2) years. Staff recommends that the City Council authorize the agreement with Muniservices, subject to approval as to form by the City Attorney. CITY GOUNGIL PRIORITY Fiscal Responsibility FISGAL IMPACT The City's total annual fixed fee for participating in the program will be the greater of 0.6% of the total actual UUT taxes received for the most recent fiscal year by the City, or a minimum fee of $15,000 per calendar year. ATTACHMENTS Attachment A: Proposal to Provide Telecommunications Utility Users'Tax Compliance Audit Services Attachment B: Professional Services Agreement 2 MuniServices. an Avenu Insights and Analytics company UUT Compliance, Administrative, and Revenue Protection Program Obiectives MuniServices UUT Program, as described below, will provide a broad range of compliance, administrative and protective services that will allow the City and other participating California public agencies to preserve, protect and enhance their UUT revenues focusing on these areas: o Compliance o Administrative o Revenue Protection and Enhancement o Ordinance Review, Administrative Rulings, and Tax Inquiries The following utilities shall be covered under the Program: gas, electricity, telecommunications, and video (including CATV), UUT Program Description A. Compliance 1. UUT Tax Application Review: MuniServices will conduct a "focused" compliance review of the major service providers on behalf of one or more cities to assure that the provider's "tax application" matrix reflecting all of the provider's current products and service, is being taxed properly, for the benefit of City and other client cities. 2. UUT Payment Review: Identification of possible gaps in payments, irregularities, calculation mistakes (e.9., wrong tax rate), and other payment errors to the City, provided that the City provides MuniServices with regular UUT payment history. MuniServices will assist the City with the appropriate compliance correspondence and enforcement actions. 3. Comparative Anal]¡sis of UUT Pa]¡ments: MuniServices will periodically perform a comparative analysis of a service provider's UUT payments to the City with other neighboring or comparable client cities, after adjusting for rate, population, and median household income. MuniServices will also perform a comparative analysis of the franchise and UUT payments for gas and electricity. 4. Detection: a. MuniServices will annually update its proprietary database of "new telecom service providers" and send out a PUC 799 notice letter to such new providers on City's behalf. The current list exceeds 1,500 providers. b. MuniServices will annually update its proprietary database of new "video service providers" and send out a notice letter to such new providers on City's behalf. c. MuniServices will annually review the SB 278 lists of the major gas and electric companies to identify new non-core gas and direct access electric customers, as well as new third party providers, and take appropriate steps to assure that the UUT is being applied to "commodity" purchases. ATTACHMENT A 5. Exemption Review: MuniServices will periodically review the exemption lists of the major service providers regarding non-residential customers. 6. Optional City Specific Compliance Reviews: At City's option, MuniServices will offer "city specific" reviews on a performance fee or other negotiated basis, if the above activities or other factors (e.g., non-response by utility provider) would suggest that there is a reasonable need to do so. B. Administrative 1. UUT Paj¡ment History: MuniServices will provide City, on a monthly or otherwise mutually agreed upon basis, with a spreadsheet reflecting the City's UUT payments by provider and utility category [based on remittance data provided by City to MuniServices]. 2. Prepaid Wireless [481717) Monitoring and Analysis: For direct sellers, MuniServices will monitor the monthly prepaid wireless payments and perform a comparative analysis with similar cities to determine accuracy and identiflz any potential discrepancies. For major direct sellers, MuniServices will perform a tax application review under 4.1 above. MuniServices will identiff online prepaid wireless sellers and send an annual notice letter to ensure compliance wi th AB1717 . MuniServices will engage and follow-up with the Board of Equalization IBOEJ on any issues, problems and discrepancies affecting your City's prepaid wireless revenue collections by retail sellers, including online sellers, to the extent that MuniServices has access to BOE documents through a City resolution authorizing MuniServices to have such access. 3. UUT Website: Prepare and maintain an accurate copy of the City's UUT ordinance and its administrative rules and interpretations on the uutinfo.org website, including a link to the City's web page (if desired). Model forms for exemptions and remittances, administrative rulings, and other tax compliance documents will be maintained on the wrn¡w.uutinfo.ors website. 4' Revenue Forecasts and Management Reports: MuniServices will provide an annual repoft that outlines the year's activities in review, revenue forecasts, YTD Comparison charts and revenue generated from compliance activities. This report contains an analysis ofUUT revenues and a five-year revenue forecast on each ofthe utilitybusiness segments [electric, gas, CATV, wired telecom, wireless telecom, etc.J. 5. Tax Application and Geocode Inquiries: MuniServices will provide technical assistance to City staff, and provide timely analysis and draft respo4ses to tax application inquiries from utility companies, and will assist in responding to citizens regarding their utility bills and the computation of the UUT. MuniServices will assist City and the utility service providers in correcting geocoding errors in response to taxpayer complaints. C. Revenue Protection and Enhancement l. Legislative Review Services: MuniServices will monitor proposed state and federal legislation to identifli issues affecting the City's UUT or utility franchise revenues, and, make recommendations to client cities, their lobbyists, and other potential stakeholders or municipal advocates and otherwise assist in developing effective consensus positions and coordinated advocacy. 2. Technolog,v and Marketing Anall¡sis. MuniServices will identisz, monitor and anticipate changes in technology, services, or marketing of services, which mayhave an impact on future UUT revenues. D. UUT Ordinance Implementation l. MuniServices will provide the following: a. Assist the City in satisf,ring the requirements of AB 17L7 [prepaid wireless), including required BOE documentation. b. Analysis and recommendation (including drafting amendment language) on proposed state and federal legislation (in coordination with C.1.). c. Assistance with tax application issues, including taxation of new technologies or services; including preparation of Administrative Rulings. d. Assistance on issues involving "bundling rule" and tax allocation/apportionment. e. Assistance on nexus issues (re: tax application and collection).f. Review of city's tax info/forms on uutinfo.org.g. Assistance on Voluntary Disclosure Agreements [offers to compromise owed taxes). h. On reques! review of exemption status of individual utility user. i. Participation on monthly conference call with client cities. E. MuniServices to Acquire its own Legal Services L. In the course of providing the services to City described herein, MuniServices may require and obtain legal services from in house or outside legal counsel, which it will obtain at its own costs. MuniServices, however, shall not provide legal advice to the City; nor will it provide legal analysis or advice to citizens or service suppliers involving an interpretation or application of the City's UUT ordinance. Notwithstanding the foregoing MuniServices will provide its technical assistance and expertise, upon request to the City Attorney, regarding an interpretation or application of the City's UUT ordinance. Compensation: UUT Program The City's total annual fixed fee for participating in the Program will be the greater of six-tenths of one percent (0.60/o) of the total actual UUT taxes received for the most recent fiscal year by the City, or a minimum fee of fifteen thousand dollars [$15,000) per calendar year. Pavment of Fee The annual fee will be paid in four equal quarterly payments with due dates of; March 31, fune 30, September 30, and December 31.Invoices for services rendered shall be in arrears finvoiced for the immediately preceding quarter). If the effective date of the Agreement is other than on an invoice date, the City will be invoiced for the first quarterly payment on the immediately following invoice date as set forth herein. The City will be invoiced and responsible for a prorated portion of the preceding quarter based on the effective date of the Agreement. Term The term shall be from fuly l,20IB through fune 30,2019, unless earlier terminated as provided therein. Consultant shall complete the Services within the term of this Agreemen! and shall meet any other established schedules and deadlines. The term of this Agreement may be extended by two (2) additional years by a written amendment to this Agreement signed by the City Manager and Consultant. CITY OF DOWNEY PROFESSIONAL SERVIGES AGREEMENT WITH MUNISERVICES, LLC FOR UTILITY USERS TAX COMPLIANCE REVIEW SERVICES 1. PnRlesANDDnre. This Agreement is made and entered into this 14ÏH day of August, 2018 by and between the Gity of Downey, a California municipal corporation and charter city wíth its principal place of business at 11111 Brookshire Avenue, Downey California 90241 ("City") and MuniServices, LLC, a Delaware Limited Liability Company, with its principal place of business at7625 N. Palm Avenue, Ste. #108, Fresno, California 93711("Consultant"). City and Consultant are sometimes individually referred to as "Party" and collectively as "Parties." 2. Recrrlrs. 2.1 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional Utility Users' Tax Compliance and Revenue Protection Services required by City on the terms and conditions set forth in this Agreement. Consultant represents that it has demonstrated competence and experience in providing Utility Users'Tax Compliance and Revenue Protection Services to public clients, is lícensed in the State of California, and is familiar with the plans of City. 2.2 Project. City desires to engage Consultant to render such services for Utility Users'Tax Gompliance and Revenue Protection Services ("Project") as set forth in this Agreement 3.Tenms. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Consultant promises and agrees to furnish to City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional Utility Users' Tax Compliance and Revenue Protection Services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "4" attached hereto and incorporated hereín by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 1 ATTACHMENT B 3.1.2 Term. The term of this Agreement shall be from July I ,2018 to June 30, 2019, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. City shall have the option to extend this Agreement for an additional two year term. Said extension shall be by written notice to consultant from the City Manager, with prior approval by the City Council, provided at least 30 days prior to the expiration of the initial term of this Agreement. 3.2 Responsibilities of Gonsultant. 3.2.1 Control and Pavment of Subordinates; lndependent Contractor. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay allwages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "A" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel, required to perform the Services in conformance with such conditions. ln order to facilitate Consultant's conformance with the Schedule, City shall respond to Consultant's submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. The parties acknowledge that the Schedule of Services may be amended by mutual agreement due to changes in circumstances, including changes in the performance schedules of other third parties performing work for the City on the Project, which affect the timing of Consultant's performance of the Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City. 3.2.4 Substitution of Kev Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City, which approval shall not be unreasonably withheld. ln the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As 2 discussed below, any personnelwho fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the City. 3.2.5 City's Representative. The City hereby designates the City Manager, or his or her designee, to act as its representative for the performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for all purposes under this Contract. Consultant shall not accept direction or orders from any person other than the City's Representative or his or her designee. 3.2.6 Consultant's Representative. Consultant hereby designates Karo Aydindzhyand/or Steve Quon, or his or her designee(s), to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his or her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times. 3.2.8 Standard of Care: Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner consistent with the standard of care set forth herein, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project. 3 3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all applicable local, state and federal laws, rules and regulations in force at the time the Services are performed by Consultant and in any manner affecting the performance of the Project or the Services, including all applicable Ca|/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. lf the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. Consultant's violation of such laws, rules and regulations shall also constitute a material breach of this Agreement. 3.2.10 lnsurance. 3.2.10.1 Time for Compliance. Consultant shall not commence the Services under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. ln addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this section. 3.2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subcontractors. Consultant shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of lnsurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: lnsurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: lnsurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation and Employer's Liability: Workers'Compensation insurance as required by the State of California and Employer's Liability lnsurance. (B) Minimum Limits of lnsurance. Consultant shall maintain limits no less than: (1) General Liability:$1,000,000 per occurrence for bodily injury, personal injury and property damage. lf Commercial General Liability lnsurance or other form with general aggregate limit is used, either the generaf aggregate limit shall apply separately to this AgreemenUlocation or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability:$1,000,000 per accident for bodily injury and property damage; and (3) Workers'Compensation and Employer's Liability:Workers'Compensation limits as 4 requ¡red by the Labor Code of the State of California. Employer's Liability limits of $2,000,000 per accident for bodily injury or disease. 3.2.10.3 Professional Liabilitv. Consultant shall procure and maintain, and require its sub-consultants to procure and maintain, for a period of three (3) years following completion of the Project, errors and omissions liability insurance appropriate to its profession. Such insurance shall be in an amount not less than $2,000,000 per claim, and shall be endorsed to include contractual liability. 3.2.10.4 lnsurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsementS on forms supplied or approved by the City to add the following provisions to the insurance policies: (A) General Liabilitv. The general liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the Services or operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers LiabilityCoveraæ The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. (D) All Coveraqes. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees, agents and volunteers. 5 3.2.10.5 Separation of lnsureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. ln addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents and volunteers. 3.2.10.6 Deductibles and Self-lnsurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses 3.2.10.7 Acceptability of lnsurers. lnsurance is to be placed with insurers with a current A.M. Best's rating no less than A:Vll, licensed to do business in California, and satisfactory to the City. 3.2.10.8 Verification of Coveraqe. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. 3.2.11Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life-saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. 3.3 Fees and Payments. 3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "A" attached hereto and incorporated herein by reference. The total annual fixed fee for participating in the Program will be the greater of six-tenths of one percent 6 (0.6%) of the total actual UUT taxes received for the most recent fiscal year by the City (excluding UUT revenues derived from sewer, water and trash), or a minimum fee of fifteen thousand dollars ($15,000) per fiscal year. 3.3.2 Payment of Compensation. Consultant shall submit to City a quarterly invoice which indicates work rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. City shall, within thirty (30) days of receiving such statement, review the statement and pay all approved charges thereon. 3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City's Representative. 3.4 Accounting Records. 3.4.1 Maintenance and lnspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 3.5 General Provisions. 3.5.1 Termination of Aqreement 3.5.1,1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time either for cause or for the City's convenience and without cause by giving written notice to Consultant of such termination, and specifuing the effective date thereof, at least thirty (30) calendar days before the effective date of such termination. Consultant may only terminate this Agreement for cause upon giving the City not less than thirty (30) calendar days'written notice. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. The City shall within fifteen (15) calendar days following termination pay the Consultant for all services adequately rendered and all reimbursable costs incurred by 7 Consultant up to the date of termination, in accordance with the payment provisions of this Agreement. The following reasons shall constitute "cause" for which either party may terminate this Agreement as provided herein: Substantial failure by the other party to perform in accordance with the terms of this Agreement and through no fault of the terminating party; Assignment of this Agreement or transfer of the Project by either party to any other entity without the prior written consent of the other party; Suspension of the Project or the Consultant's Services by the City for more than ninety (90) calendar days, consecutive or in the aggregate, without good cause; Material changes in the conditions under which this Agreement was entered into, the Scope of Services or the nature of the Project, and the failure of the parties to reach agreement on the compensation and schedule adjustments necessitated by such changes. 3.5.1.2 Effect of Termination. lf this Agreement is terminated as provided herein, City may require Consultant to provide allfinished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such Documents and Data and other information within fifteen (15) days of the City's request. 3.5.1.3 Additional Services. ln the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Consultant: Contracts Department MuniServices, LLC 7625 N. Palm Avenue, Ste. 108 Fresno, CA 93711 Phone: (559) 271-6852 contracts@ m u n ise rvices. com City of Downey 1 1 1 1 1 Brookshire Avenue Downey, California 90241 a o a B Gity: Phone: (562) 904-7286 Fax: (562) 923-6388 Attn: City Manager With a courtesy copy to: City of Downey City Attorney's Office 1 1 1 1 1 Brookshire Avenue Downey, California 90241 Such notice shall be deemed made when personally delivered or when mailed, forty- eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.3 Ownership of Materials and Confidentiality. 3.5.3.1 Documents & Data: Licensinq of lntellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or othenruise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data") specifically prepared for City. Consultant shall require all subcontrçctors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement, specifically for City. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 3.5.3.2 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity I pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 3.5.4 Cooperation: Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.5 Attorney's Fees. ln the event of any litigation, whether in a court of law, administrative hearing, arbitration, or otherwise, arising from or related to this Agreement of the services provided under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred, including staff time, court costs, attorneys'fees and all other related expenses in such litigation. 3.5.6 lndemnification. Consultant shall defend (with counsel acceptable to City), indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged negligent acts, errors, omissions or willful misconduct of Consultant, its officials, officers, employees, agents, consultants and contractors arising out of or in connection with the performance of the Services, the Project or this Agreement, including without limitation the payment of all consequential damages and attorneys'fees and other related costs and expenses. Consultant shall defend, at Consultant's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against City, its directors, officials, officers, employees, agents or volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, agents or voluntèers, in any such suit, action or other legal proceeding. Consultant shall reimburse City and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, and agents or volunteers. Consultant shall not be obligated to defend, indemnify or hold the City harmless in any manner whatsoever for any claims or liability arising solely out of the City's own negligent acts, errors or omissions or willful misconduct. 3.5.7 Entire Aqreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understand ings or agreements. 3.5.8 Governinq Law. This Agreement shall be governed by the laws of the State of California. Venue shall be the courts in Los Angeles County. 3.5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 10 3.5.10 City's Riqht to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project. 3.5.11 Successors and Assisns. This Agreement shall be binding on the successors and assigns of the parties. 3.5.12Assignment or Transfer. Neither party shall assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the other party, which consent shall not be unreasonably withheld Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. 3.5.13 Construction: References: Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otheruvise specified in this Agreement. All references to City include its elected officials, officers, employees, agents and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.5.14 Amendment: Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or othenruise. 3.5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.17 lnvalidity: Severability. lf any portion of this Agreement is declared invalid, illegal, or othenryise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.18 Prohibited lnterests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than á bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this 11 Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.5.19 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of any City Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.5.20 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self- insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 3.5.21Authoritv to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.5.22 Counterparts. This Agreement may be executed in counterparts, each of which shall constitute one and the same instrument. 3.5.23 Effect of Conflict. ln the event of any conflict, inconsistency, or incongruity between any provision of this Agreement, any of its exhibits, attachments, purchase order, or notice to proceed, the provisions of this Agreement will govern and control. 3.6 Subcontracting. 3.6.1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. 12 By: CITY OF DOWNEY, a Galifornia municipal corporation and charter city Sean Ashton, Mayor Attest: City Clerk Approved as fo Form: CONSULTANT MuniServices, LLC By Doug Jensen, SVP Client Services h,,üùt US $r nttorneV 1 23859 13 ExHtBlr "A" Scope op SeRvrces MuniServices, an Avenu Insights and Anall.tics cornpany UUT Compliance, Administrative, and Revenue Protection Program Obiectives MuniServices UUT Program, as described below, will provide a broad range of compliance, administrative and protective services that will allow the City and other participating California public agencies to preserye, protect and enhance their UUT revenues focusing on these areas: . Compliance o Administrative r Revenue Protection and Enhancementr Ordinance Review, Administrative Rulings, and Tax Inquiries The following utilities shall be covered under the Program: gas, electricity, telecommunications, and video [including CATVJ. UUT Program D escription A. Comnliance 1. UUT Tax Application Review: Muniservices will conduct a "focused" compliance review of the major service providers on behalf of one or more cities to assure that the provider's "tax application" matrix reflecting all of the provider's current products and service, is being taxed properly, for the benefit of City and other client cities. 2' UUT Pa]¡ment Review: Identification of possible gaps in pajments, irregularities, calculation mistakes (e.g., wrong tax rateJ, and other payment errors to the City, provided that the City provides MuniServices with regular UUT paSrment history. MuniServices will assist the City with the appropriate compliance correspondence and enforcement actions. 3' Comnarative Anal]¡sis of UUT Payments: MuniServices will periodically perform a comparative analysis of a service provider's UUT payments to the City with other neighboring or comparable client cities, after adjusting for rate, population, and median household income. Muniservíces will also perform a comparative analysis of the franchise and UUT payments for gas and electricity. 4. Detection; a. MuniServices wili annually update its proprietary database of "new telecom service providers" and send out a PUC 799 notice letter to such new providers on City's behalf. The current list exceeds 1,500 providers. b. MuniServices will annually update its proprietary database of new "video service providers" and send out a notice letter to such new providers on City's behalf. c. MuniServices will annually review the SB 278 lists of the major gas and electric companies to identifu new non-core gas and direct access electric customers, as well as new third party providers, and take approptiate steps to assure that the UUT is being applied to "commodity" purchases. 5. Exemntion Review: MuniServices will periodically review the exemption lists of the major service providers regarding non-residential customers. 6. Optional Cit]¡ Specific Compliance Reviews: At City's option, MuniServices will offer "city specific" reviews on a performance fee or other negotiated basis, if the above activities or other factors (e.g., non-response by utility provider) would suggest that there is a reasonable need to do so. B. Administrative L. UUT Pavment Historv: MuniServices will nrovide Citv. on a monthlv or otherwise mutually agreed upon basis, with a spreadsheet reflecting the City's UUT payments by provider and utility category þased on remittance data provided by City to MuniServicesJ. 2. Prepaid Wireless [4B17].71 Monitoring and Analvsis: For direct sellers, MuniServices will monitor the monthly prepaid wireless payments and perform a comparative analysis with similar cities to determine accuracy and identi$r any potential discrepancies. For major direct sellers, MuniServices will perform a tax application review under A.1 above. MuniServices will identiff online prepaid wireless sellers and send an annual notice letter to ensure compliance with A87717. MuniServices will engage and follow-up with the Board of Equalization [BOE) on any issues, problems and discrepancies affecting your City's prepaid wireless revenue collections by retail sellers, including online sellers, to the extent that MuniSeryices has access to BOE documents through a City resolution authorizing MuniServices to have such access. 3. UUT Website: Prepare and maintain an accurate copy of the City's UUT ordinance and its administrative rules and interpretations on the uutinfo.org website, including a link to the City s web page (if desired). Model forms for exemptions and remittances, administrative rulings, and other tax compliance documents will be maintained on the www.uutinfo.org website. 4. Revenue Forecasts and Management Reports: MuniServices will provide an annual report that outlines the year's actiyities in review, revenue forecasts, YTD Cornparison charts and revenue generated from compliance activities. This report contains an analysis ofUUT revenues and a five-year revenue forecast on each ofthe utilitybusiness segments [electric, gas, CATV, wired telecom, wireless telecom, etc.). 5. Tax Application and Geocode Inquiries: MuniServices will provide technical assistance to City staff and provide timely analysis and draft respo4ses to tax application inquiries from utility companies, and will assist in responding to citizens regarding their utility bills and the computation of the UUT. MuniServices will assist City and the utility service providers in correcting geocoding errors in response to taxpayer complaints. C. Revenue Protection and Enhancement 1. Legislative Review Services: MuniServices will monitor proposed state and federal legislation to identify issues affecting the City's UUT or utility franchise revenues, and, make recommendations to client cities, their lobbyists, and other potential stakeholders or municipal advocates and otherwise assist in developing effective consensus positions and coordinated advocacy. 2. Technolog,v and Marketing Anal]¡sis. MuniServices will identiff, monitor and anticipate changes in technology, services, or marketing of services, which mayhave an impact on future UUT revenues. D. UUT Ordinance Implementation 1. MuniServices will provide the following: a. Assist the City in satisffing the requirements of AB 1777 [prepaid wireless), including required BOE documentation. b. Analysis and recommendation (including drafting amendment language) on proposed state and federal legislation (in coordination with C.L.). c. Assistance with tax application issues, including taxation of new technologies or services; including preparation of Administrative Rulings. d. Assistance on issues involving "bundling rule" and tax allo cati on/app ortionment. e. Assistance on nexus issues fre: tax application and collection). f. Review of city's tax info/forms on uutinfo.org. g. Assistance on Voluntary Disclosure Agreements foffers to compromise owed taxes). h. On request, review of exemption status of individual utility user. i. Participation on monthly conference call with client cities. E. MuniServices to Acquire its own Legal Services l. In the course of providing the services to City described herein, MuniServices may require and obtain legal services from in house or outside legal counsel, which itwill obtain at its own costs. MuniServices, however, shall not provide legal advice to the City; nor will it provide legal analysis or advice to citizens or service suppliers involving an interpretation or application of the City's UUT ordinance. Notwithstanding the foregoing MuniServices will provide its technical assistance and expertise, upon request to the City Attorney, regarding an interpretation or application of the City's UUT ordinance. Compensation: UUT Program The City's total annual fixed fee for participating in the Program will be the greater of six-tenths of one percent (0.60/o) of the total actual UUT taxes received for the most recent fiscal year by the City, or a minimum fee of fifteen thousand dollars ($15,000) per calendar year. Pavment of Fee The annual fee will be paid in four equal quarterly payments with due dates of: March 31", june 30, September 30, and December 31. Invoices for services rendered shall be in arrears [invoiced for the immediately preceding quarter). If the effective date of the Agreement is other than on an invoice date, the City will be invoiced for the first quarterly payment on the immediately following invoice date as set forth herein. The City will be invoiced and responsible for a prorated portion of the preceding quarter based on the effective date of the Agreement. Term The term shall be from July !,z}l}through June 30, 2019, unless earlier terminated as provided therein. Consultant shall complete the Services within the term of this Agreemenf and shall meet any other established schedules and deadlines. The term of this Agreement may be extended by two [2) additional years by a written amendment to this Agreement signed by the City Manager and Consultant.