HomeMy WebLinkAbout55B - RESO - AGMT - UUTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
OCTOBER 4, 2016
TITLE:
AGREEMENTS FOR SALES AND USE TAX &
UTILITY USERS' TAX COMPLIANCE,
AUDITING AND CONSULTING SERVICES
(STRATEGIC PLAN NO. 4,2A)
1
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
_--:• ID,
❑ As Recommended
❑ As Amended
❑ Ordinance on 15' Reading
❑ Ordinance on 2ntl Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
1) Authorize the City Manager and Clerk of the Council to execute an agreement with
MuniServices, LLC for Sales and Use Tax Revenue Auditing services for an initial one -
year term beginning January 1, 2017 through December 31, 2017, for an amount not to
exceed $10,000, plus 15% of recovered revenues over the life of the initial agreement with
a provision for one six -month extension exercisable by the City Manager and the City
Attorney, in an amount not to exceed 15% of recovered revenues subject to non -
substantive changes approved by the City Manager and the City Attorney.
2) Adopt a Resolution authorizing the release of information to MuniServices from the State
Board of Equalization in connection with the auditing of Sales and Use Tax making certain
determinations relating thereto and authorizing certain actions in connection therewith.
3) Authorize the City Manager and Clerk of the Council to execute an agreement with
MuniServices, LLC for Utility Users' Tax and Mobil Telephony Services Auditing services
for an initial two -year term beginning January 1, 2017 through December 31, 2018, for an
amount not to exceed 0.6% of the total UUT taxes received for the most recent fiscal year
by the City or a minimum fee of $15,000 over the life of the initial agreement with a
provision for one one -year extension exercisable by the City Manager and the City
Attorney, subject to non - substantive changes approved by the City Manager and the City
Attorney.
4) Adopt a Resolution authorizing the release of information to MuniServices from the State
Board of Equalization in connection with the auditing of Utility Users' Tax and Mobil
Telephony Services making certain determinations relating thereto and authorizing certain
actions in connection therewith.
55B -1
Agreements with MuniServices For Sales And Use Tax & Utility Users' Tax
Compliance, Auditing And Consulting
October 4, 2016
Page 2
BACKGROUND
Staff has developed a phased approach in selecting and presenting for City Council'
consideration the auditing services for the City's top General Fund revenue sources. On
September 20, 2016, the City Council approved Macias Gini & O'Connell, LLP (MGO's)
agreement for Medical Marijuana Auditing Services. Staff is presenting today for Council
consideration the awarding of auditing services in connection with the Sales and Use Tax along
with the Utility Users' Tax (UUT), which has been a service the City has maintained. The final
consideration is for a new service, which will enhance the City's ability to forecast and ensure
compliance with Property Tax and Hotel Visitors' Tax regulations. Staff will present for Council
consideration the awarding of auditing services for the Secured and Unsecured Property Tax and
the Hotel Visitors' Tax on October 18, 2016.
DISCUSSION
The Sales and Use Tax and UUT represent approximately 32% of the City's total General Fund
revenue. Sales Tax is levied upon the retailers who sell tangible property in the State of
California. The Tax is measured by gross receipts from retail sales at an 8% rate. The distribution
of the statewide tax is as follows: 7% to other governmental agencies including the State, County
and others and 1 % is allocated to the City of Santa Ana. A Use Tax complements the Sales Tax
and is imposed on the storage, use, or other consumption of tangible personal property
purchased from any out -of -state retailer. The Use tax is measured by the sales price of the
property and the rate is the same for both, the Sales Tax and the Use Tax.
The UUT is imposed on every individual and corporation using a utility within the City. Utilities
subject to the tax include electric, gas, water, telephone, cellular and international calls. The
current tax rate is 5.5 %. On January 2014, the City Council unanimously voted to modernize and
reduce the UUT's rate from 6.0% to 5.5% and was subsequently approved by the voters in
November of 2014.
Currently, MuniServices provides the City with Sales & Use Tax and UUT compliance, auditing,
consulting services and the Sales Tax Analysis Reporting System (STARS) software application;
however, the current agreement will lapse at the end of this calendar year.
As such, on February 11, 2016 a Request for Proposals (RFP No. 16 -022) for Revenue Auditing,
Recovery, Reporting, Analysis, and Legislative /State Agency Liaison and Implementation
Monitoring services for Sales and Use Tax and UUT was released and posted on the City's
online bid management and publication system. Two proposals for the Sales and Use Tax
component were received. They were subsequently reviewed by a three - member committee
comprised of staff from Finance & Management Services Agency and the Community
Development Agency. For the UUT component, only one proposal was received.
55B -2
Agreements with MuniServices For Sales And Use Tax & Utility Users' Tax
Compliance, Auditing And Consulting Services
October 4, 2016
Page 3
As a result, each of the responding consultants were interviewed and evaluated based on the
following criteria:1) qualifications; 2) experience; 3) proposed scope of services and time of
performance; 4) client references, and; 5) cost of providing services. The proposals were ranked
accordingly, as follows:
Sales and Use Tax
Rank
Firm
Average Score out of 100)
1
MuniServices, LLC
95
2
Hinderliter, de Llamas & Associates
90
The proposals submitted by MuniServices for the Sales & Use Tax component were found to be
most responsive to the City's needs, offers the best value, and is appropriate for the services
requested. MuniServices strong qualifications, experience and client references as well as an
appropriate proposed scope of services and time of performance will provide a flexible and cost -
effective auditing program. MuniServices staff has extensive experience in implementing Sales
and Use Tax audit programs and in providing consulting services for comparable cities, including
the California cities of San Jose, Sacramento, Los Angeles, San Diego, and Anaheim, among
others.
MuniServices' proposal was the only proposal submitted for the UUT component of the RFP.
Therefore, MuniServices was selected to provide the compliance, auditing and consulting
services for the UUT.
As part of the submitted Sales and Use Tax proposal and agreed terms for the auditing services,
MuniServices will provide the following services:
1. Audit and recovery services of unreported, underreported and misallocation of Sales
and Use Tax as well as correction of reporting errors and corrections through the
appeals process.
2. Comprehensive reporting and analytics including economic dashboards, ad hoc
reporting and increased data mining and integration.
3. Monitor and analyze the State Board of Equalization's quarterly distribution reports.
4. Legislative services and analysis regarding pertinent Sales and Use Tax legislation and
regulations and state agency liaison and implementation monitoring.
5. Sales and Use Tax and UUT web -based software application, which will enable staff to
access the City's Sales and Use Tax and UUT data and be able to extract, analyze,
and utilize the available data.
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Agreements with MuniServices For Sales And Use Tax & Utility Users' Tax
Compliance, Auditing And Consulting
October 4, 2016
Page 4
6. Assist in the development of a multi -year Sales and Use Tax revenue forecast model.
7. Ongoing consultation on all aspects of the auditing, compliance and consulting
services.
As part of the submitted UUT proposal and agreed terms for the auditing services, MuniServices
will provide the following services:
1. UUT application review, as well as payment review and comparative analyses of UUT
payments.
2. Detection of new telecom and video service providers along with identification of new
non -core gas and direct access electric customers, as well as third party providers, and
take appropriate steps to assure that the UUT is being applied to commodity
purchases.
3. UUT payment history detailing the City's UUT payments by provider and utility
category.
4. Annual UUT report outlining the year's activities in review, year -to -date comparison
charts and revenue generated from compliance activities.
5. Assist in the development of a multi -year UUT revenue forecast model.
6. Legislative services and analysis regarding pertinent UUT (including Prepaid Mobile
Telephony UUT) legislation and regulations and state agency liaison and
implementation monitoring.
7. Ongoing consultation on all aspects of the auditing, compliance and consulting
services.
The reports, analysis and information derived from both audit programs can be used for budget
planning, revenue forecasting, trend analysis, economic development analysis and other projects
requiring Sales and Use Tax/UUT revenue statistics to assist in analyzing the City's economic
base.
Additionally, the services that MuniServices will render ensures compliance with tax regulations,
provides early indications of trends in the economy, as well as ensures that the revenues
generated within city boundaries are properly allocated, assigned and remitted to the City of
Santa Ana.
55B -4
Agreements with MuniServices For Sales And
Compliance, Auditing And Consulting Services
October 4, 2016
Page 5
STRATEGIC PLAN ALIGNMENT
Use Tax & Utility Users' Tax
Approval of this item allows the City to meet Goal #4 -
(provide a reliable five -year financial forecast that ensure s
the strategic plan), Strategy A (adopt a budget that is in
forecast and strategic plan).
FISCAL IMPACT
Sales and Use Tax
City Financial Stability, Objective #2
financial stability in accordance with
alignment with the five -year financial
The fees for the services that MuniServices will render are available in the General Fund Sales
Tax account (01102002- 50020).The fees will not exceed $10,000 annually for the STARS
application, plus 15% of recovered revenues. As a note, the new auditing fees were reduced from
20% of recovered revenues to 15% of recovered revenues and the STARS application cost was
reduced from $12,000 to $10,000. Payments made to MuniServices will be recognized when the
fees related to MuniServices auditing and reporting activities are incurred.
Utility Users' Tax
The fees for the services that MuniServices will render are available in the General Fund UUT
accounts (01102002 -50031 through 01102002 - 50035). The fees will not exceed 0.6% of the total
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 $15,000. For the first year of the agreement,
the City will provide the actual UUT payments received for fiscal year ending June 30. This will
be the basis for the first year UUT Program fees. In subsequent years, MuniServices will
calculate the fee based on the actual remittance notices received for the most recent fiscal year.
APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
Finance and Management Services Agency
EXHIBITS: 1. Sales & Use Tax Agreement
2. Sales & Use Tax Resolution
U114AUTIM
3. Utility Users' Tax Agreement
4. Utility Users' Tax Resolution
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55B -6
EXHIBIT 1
Consultant Services Agreement
This Consultant Services Agreement (the "Agreement') is made as of the 4th day of October, 2016 by and
between MunServices, LLC, a Delaware limited liability company ( "CONSULTANT ") and the City of Santa
Ana, a charter city and municipal corporation of the State of California ( "CITY'). In consideration of the mutual
promises herein contained and other good and valuable consideration, the adequacy and receipt of which is
hereby acknowledged, the parties agree as follows:
RECITALS
A. The CITY desires to retain a consultant having special skill and knowledge in the field of professional
services for Sales and Use Tax Recovery, Reporting, Analysis, and Legislative /State Agency Liaison and
Implementation Monitoring Services as specified herein.
B. In undertaking the performance of this Agreement, CONSULTANT represents that it possesses the
necessary knowledge, qualifications, skills and personnel to provide such services. CONSULTANT warrants
that any services performed by CONSULTANT under this Agreement will be performed in compliance with
such standards as may reasonably be expected from a professional consulting firm in the field.
NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms
and conditions hereinafter set forth, the parties agree as follows:
CITY hereby retains CONSULTANT, and CONSULTANT hereby agrees to provide such services as
are set forth hereinbelow, in accordance with the terms and conditions of this Agreement, and represents and
warrants to CITY that CONSULTANT accepts such assignment to perform those services, subJect to those
terms and conditions.
1. Scope of Services
a. CONSULTANT will provide CITY with the services described in EXHIBITS A and C which are attached
hereto and incorporated by reference. CONSULTANT shall provide said services at the time, place,
and in the manner specified in EXHIBITS A and C.
b. CONSULTANT shall furnish at its own expense all labor, materials, equipment and other items
necessary to carry out the terms of this Agreement.
2. Compensation
Upon execution of this Agreement, CITY will pay CONSULTANT as outlined in EXHIBITS B and D,
incorporated and included herein. Payment by CITY shall be made within forty -five (45) days following
receipt of proper invoice evidencing work performed, subject to City accounting procedures and proof of
insurance as set forth in section 3 -9. Payment need not be made for work which fails to meet the
standards of performance set forth in the Recitals which may reasonably be expected by CITY.
3. General Provisions
3.1. Term of the Agreement: The initial term for the provision of services for this Agreement shall be
for a period of one (1) year beginning January 1, 2017, with one six -month option exercisable in the
sole discretion of the CITY, in a writing executed by the City Manager and the City Attorney, if neither
party has terminated said Agreement in accordance with section 3 -2.
I
55B -7
3 -2. Termination. Either party shall have the right to terminate this Agreement in the event of a
material breach by the other party. Any such termination may be made only by providing sixty (60)
days written notice to the other party, specifically identifying the breach or breaches on which
termination is based. Following receipt of such notice, the party in breach shall have thirty (30) days to
cure such breach or breaches. in the event that such cure is not made, this Agreement shall terminate
in accordance with the initial sixty (60) days' notice. Notwithstanding the foregoing, either party may
terminate the Agreement at any time and for any reason by providing thirty -days (30) written notice to
the other party pursuant to Section 2 of this Agreement; provided however, that if CONSULTANT has
not breached the Agreement and has commenced services identified in EXHIBIT A prior to the date of
termination, CONSULTANT shall be entitled to payment as described in EXHIBIT B; provided,
however, that payment need not be made for work which fails to meet the standard of performance
specified in the Recitals of this Agreement.
3 -3. Effect of Termination: Notwithstanding non - renewal or termination of this Agreement, CITY
shall be obligated to pay CONSULTANT for services performed through the effective date of
termination for which CONSULTANT has not been previously paid, provided CONSULTANT has not
breached the Agreement. In addition, because the services performed by CONSULTANT prior to
termination or non - renewal of this Agreement may result in the CITY's receipt of revenue after
termination which are subject to CONSULTANT' fee, the CITY shall remain obligated after termination
or non - renewal to provide to CONSULTANT such information as is necessary for CONSULTANT to
calculate compensation due as a result of the receipt of revenue by the CITY.
3 -4. Independent Contractor: It is understood that CONSULTANT and its subcontractors, if any, in
the performance of the work and services agreed to be performed, shall act as and be an independent
contractor and shall not act as an agent or employee of the CITY. CITY understands that
CONSULTANT may perform similar services for others during the term of this Agreement and agrees
that CONSULTANT representation of other government sector clients is not a conflict of interest.
CONSULTANT shall obtain no rights to retirement benefits or other benefits which accrue to CITY's
employees, and CONSULTANT hereby expressly waives any claim it may have to any such rights.
3.5. Subcontractors: CONSULTANT shall have the right to hire subcontractors to provide the
services described herein. CONSULTANT, in rendering performance under this Agreement shall be
deemed an independent contractor and nothing contained herein shall constitute this arrangement to
be employment, a joint venture, or a partnership. CONSULTANT shall be solely responsible for and
shall hold CITY harmless from any and all claims for any employee related fees and costs including
without limitation employee insurance, employment taxes, workman's compensation, withholding taxes
or income taxes,
3 -6. Notice: Any notice required to be given under this Agreement shall be in writing and either
served personally, sent prepaid first class mail, or by express mail courier (i.e. FedEx, UPS, etc.). Any
such notice shall be addressed to the other party at the address set forth below. All notices, including
notices of address changes, provided under this Agreement are deemed received on the third day after
mailing if sent by regular mail, or the next day if sent overnight delivery.
IF TO CITY:
City of Santa Ana
Finance & Management Services
Attn: Francisco Gutierrez
Director of Finance
20 Civic Center Plaza (M -17)
Santa Ana, CA 92701
Phone: (714) 647 -6960
Facsimile: (714) (714) 647 -5414
55B -8
IF TO CONSULTANT:
MuniServices, LLC
Attn: Contract Department
7625 N. Palm Ave., Ste. 108
Fresno, CA 93711
Phone: (559) 271 -6852
Facsimile: (559) 312 -2852
Email: IegalPQ mun1seryices Cam
Representative or designees: CONSULTANT Primary Representative /Project Manager shall be:
Julia Erdkamp, Client Services Manager
7625 N. Palm Ave., Ste. 108, Fresno, CA 93711
Phone: (559) 276 -2901 / Email: Julia.Erdkamp(a MuniServices,com
For the convenience of the CITY, a short list of helpful contacts is attached and incorporated herein as
EXHIBIT E.
Representative or designees: City of Santa Ana's Primary Representative /Project Manager shall be:
Willard Holt, Treasury and Customer Services Manager
20 Civic Center Plaza, Room 1105, Santa Ana, CA 92701
Phone: (714) 647 -5456 / Email: wholt(a Santa- ana.orq
3.7. Indemnity: CONSULTANT shall indemnify, defend, and hold harmless the CITY, its officers,
agents, and employees, from and against any and all claims, liabilities, and losses whatsoever
(including damages to property and injuries to or death of persons, court costs, and reasonable
attorneys' fees) to extent occurring or resulting from CONSULTANT'S negligent or unlawful
performance of its obligations under or breach of the terms of this Agreement, unless such claims,
liabilities, or losses arise out of, or are caused at least in part by the sole negligence or willful
misconduct of the CITY. "CONSULTANT'S performance" includes CONSULTANT'S action or inaction
and the action or inaction of CONSULTANT'S officers, employees, agents and subcontractors.
3 -8. Limitation of Liability: In no event shall CONSULTANT, its employees, contractors, directors,
affiliates and /or agents be liable for any special, incidental, or consequential damages, such as, but not
limited to, delay, lost data, disruption, and loss of anticipated profits or revenue arising from or related
to the services, whether liability is asserted in contract or tort, and whether or not CONSULTANT has
been advised of the possibility of any such loss or damage. In addition, CONSULTANT'S total liability
hereunder, including reasonable attorneys' fees and costs, shall in no event exceed an amount equal to
the fees described in EXHIBIT B, except as otherwise provided for in Section 7 of this Agreement. The
foregoing sets forth the CITY'S exclusive remedy for claims arising from or out of this Agreement. The
provisions of this section allocate the risks between CONSULTANT and the CITY and CONSULTANT'S
pricing reflects the allocation of risk and limitation of liability specified herein,
3 -9. Insurance: CONSULTANT shall keep in full force and effect insurance coverage during the
term of this Agreement, including without limitation statutory workers' compensation insurance;
employer's liability and commercial general liability insurance (CGL); comprehensive automobile liability
insurance; professional liability and fidelity insurance. The insurance certificate shall name the City, its
agents, officers, servants and employees as additional insureds under the CGL policy with respect to
the operations and work performed by the named insured as required by written contract. The General
Liability policy is Primary & Non - Contributory. Waiver of Subrogation applies under the General Liability
and Workers' Compensation policies. The CGL insurance minimum coverage shall be at least
$1,000,000 per incident, claim or occurrence and $2,000,000 aggregate. The Automobile Liability
insurance minimum coverage shall be at least $1,000,000 covering all owned, non - owned, and hired
vehicles. The certificate shall provide that there will be no cancellation, termination, or non - renewal of
the insurance coverage without a minimum 30 -day written notice to the CITY, except in the case of
cancellation for non - payment of premium which shall be at least 10 -days written notice. CONSULTANT
shall supply CITY with a fully executed additional insured endorsement in substantially the form
attached hereto as Exhibit F upon execution of this Agreement and shall be approved in form by the
CITY Attorney.
3
55B -9
3 -10. E,gual, Opportunity to Daft: The parties have participated and had an equal opportunity to
participate in the drafting of this Agreement. No ambiguity shall be construed against any party upon a
claim that that party drafted the ambiguous language,
3 -11. Assignment: This Agreement shall be binding upon and inure to the benefit of the parties, their
successors, representatives and assigns, CONSULTANT shall not assign this Agreement, or delegate
its duties or obligations under this Agreement, without the prior written consent of CITY, which consent
shall not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing,
CONSULTANT may assign this Agreement, in whole or in part, without the consent of CITY to any
corporation or entity into which or with which CONSULTANT has merged or consolidated; any parent,
subsidiary, successor or affiliated corporation of CONSULTANT; or any corporation or entity which
acquires all or substantially all of the assets of CONSULTANT. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties and their successors or assigns.
3 -12. Ownership of Documents: Except for CONSULTANT preexisting proprietary information and
processes, any and all documents, including draft documents where completed documents are
unavailable, or materials prepared or caused to be prepared by CONSULTANT pursuant to this
agreement shall be the property of the CITY at the moment of their completed preparation,
3 -13. Intellectual Property Rights: The entire right, title and interest in and to CONSULTANT'S
database and all copyrights, patents, trade secrets, trademarks, trade names, and all other intellectual
property rights associated with any and all ideas, concepts, techniques, inventions, processes, or works
of authorship including, but not limited to, all materials in written or other tangible form developed or
created in the course of this Agreement (collectively, the "Work Product ") shall vest exclusively in
CONSULTANT or its subcontractors. The foregoing notwithstanding, in no event shall any CITY -owned
data provided to CONSULTANT be deemed included within the Work Product.
3.14. Discrimination: CONSULTANT shall not discriminate because of race, color, creed, religion,
sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and
prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or
other employment related activities. CONSULTANT affirms that it is an equal opportunity employer and
shall comply with all applicable federal, state and local laws and regulations.
3 -15. Jurisdiction — Venue: This Agreement has been executed and delivered in the State of
California and the validity, interpretation, performance, and enforcement of any of the clauses of this
Agreement shall be determined and governed by the laws of the State of California. Both parties
further agree that Orange County, California, shall be the venue for any action or proceeding that may
be brought or arise out of, in connection with or by reason of this Agreement,
3.16. Professional Licenses: CONSULTANT shall, throughout the term of this Agreement, maintain
all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the
services hereunder and required by the laws and regulations of the United States, the State of
California, the CITY of Santa Ana and all other governmental agencies, CONSULTANT shall notify the
CITY immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals,
waivers, and exemptions. Said inability shall be cause for termination of this Agreement.
3 -17. Public Release and Statements: Neither party or its representatives or agents shall disseminate
any oral or written advertisement, endorsement or other marketing material relating to each other's
activities under this Agreement without the prior written approval of the other party. Neither party shall
make any public release or statement concerning the subject matter of this Agreement without the
express written consent and approval of the other party. No party or its agent will use the name, mark
or logo of the other party in any advertisement or printed solicitation without first having prior written
approval of the other party, The parties shall take reasonable efforts to ensure that its subcontractors
shall not disseminate any oral or written advertisement, endorsement or other marketing materials
55B -10
referencing or relating to the other party without that party's prior written approval. In addition, the
parties agree that their contracts with all subcontractors will include appropriate provisions to ensure
compliance with the restrictions of this Section.
3 -18. CONFIDENTIALITY. If Consultant receives from the City information which due to the nature of
such information is reasonably understood to be confidential and /or proprietary, Consultant agrees that
it shall not use or disclose such information except in the performance of this Agreement, and further
agrees to exercise the same degree of care it uses to protect its own information of like importance, but
in no event less than reasonable care. "Confidential Information" shall include all nonpublic information.
Confidential information includes not only written information, but also information transferred orally,
visually, electronically, or by other means. Confidential information disclosed to either party by any
subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of
non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly
available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c)
is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be
disclosed by operation of law; or (e) is independently developed by the Consultant without reference to
information disclosed by the City.
3 -19. Force Majeure: CONSULTANT shall not be in default of its obligations hereunder to the extent
that its performance is delayed or prevented by causes beyond its control, including but not limited to
acts of God, government, weather, fire, power or telecommunications failures, inability to obtain
supplies, breakdown of equipment or interruption in vendor services or communications.
3 -20. Litigation Fees. If litigation arises out of this Agreement for the performance thereof, then the
court shall award costs and expenses, including reasonable attorney's fees, to the prevailing party. In
awarding attorney's fees, the court shall not be bound by any court fee schedule but shall award the full
amount of costs, expenses and attorney's fees paid or incurred in good faith.
3 -21. Entire Agreement: This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior understandings or written or oral agreements between the parties respecting
the subject matter contained herein. Said Agreement shall not be amended, altered, or changed,
except by a written amendment signed by both parties.
3 -22. Change Order Contingency: From time -to -time, at CITY's option, CITY may request optional
services of CONSULTANT at mutually agreed upon scope and fees.
3 -23. Invalidity: If any one or more of the provisions contained in this Agreement shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision thereof, and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision had never been contained herein.
3.24. Implementation: Implementation of services should begin as soon as possible from the effective
date for the performance of services under the terms of this Agreement.
3 -25. Counterpart Signature and Delivery: This Agreement may be signed in separate counterparts
including facsimile copies. Each counterpart (including facsimile copies) is deemed an original and all
counterparts are deemed on and the same instrument and legally binding on the parties.
3 -26. Miscellaneous Provisions:
a. CONSULTANT shall perform all services with the necessary knowledge and skills required
to perform the tasks. CONSULTANT or personnel of CONSULTANT engaged in the
performance of such services shall not represent themselves to be, nor shall they be
deemed to be, employees of CITY for any purpose whatsoever.
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b. CITY agrees that its employees will cooperate with and assist representatives of
CONSULTANT in every reasonable way to enable CONSULTANT to secure all information
and data required to perform the services herein provided for. CONSULTANT shall have no
liability for defects in the services attributable to CONSULTANT's reliance upon or use of
data, design criteria, drawings, specifications, or other information furnished by CITY or third
parties retained by CITY.
c. Each undersigned represents and warrants that its signature hereinbelow has the power,
authority and right to bind their respective parties to each of the terms of this Agreement,
and shall indemnify CITY fully, including reasonable costs and attorney's fees, for any
injuries or damages to CITY in the event that such authority or power is not, in fact, held by
the signatory or is withdrawn.
d. CONSULTANT agrees any alterations, variations, modifications, or waivers of the provisions
of the Agreement, shall be valid only when reduced to writing, executed and attached to the
original Agreement and approved by the required persons,
e. If any legal action is instituted to enforce any party's rights hereunder, each party shall bear
its own costs and attorneys' fees, regardless of who is the prevailing party.
f. All exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in
the body of this Agreement.
g. In the event of any conflict between the provisions of this Agreement and those set forth in
any Exhibit referenced and incorporated herein, the provisions of the Consultant Services
Agreement shall prevail.
(Signatures on following page)
55B -12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first
above written.
ATTEST:
MARIA D. HUIZAR
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
CITY Attorney
By: &t�!'
Lisa Storck
Assistant City Attorney
RECOMMENDED FOR APPROVAL:
Francisco Gutierrez, Executive Director
Finance & Management Services Agency
CITY OF SANTA ANA
DAVID CAVAZOS
City Manager
CONSULTANT
Doug Jensen
SVP Client Services
MuniServices, LLC
Tax ID#
55B -13
EXHIBIT A
SCOPE OF WORK
Sales, Transactions And Use Tax Audit Services (SUTA) Services
In performing the sales, transactions and use tax audit program MuniServices shall:
1. Identify and correct the sales /transactions /use tax reporting errors of businesses that, based on the
nexus of their activities, are not properly registered with the City.
Z Identify and correct the reporting of businesses that are improperly reporting tax to state and county
pools (i.e, classifying sales tax as use tax) and thereby depriving the City of sales tax revenue.
3. Detect, document and correct sales /transactions /use tax reporting errors /omissions and thereby
generate new, previously unrealized revenue for the City.
4. Ensure through comprehensive audit measures that the revenue information used for ongoing
economic analysis includes all sales /transactions /use tax generators.
5. Assist the City with strategies to preserve and even enhance sales and use tax revenue generated by
existing businesses within the City.
MuniServices' proposed sales /transactions /use tax allocation audit services for the City includes five distinct
types of audits:
• Taxable Nexus Field audits
• Permitization audits
• Deficiency assessment audits
• Accounts payable audits
• Quarterly Distribution Report audits
Taxable Nexus Field Audits
MuniServices' initial and periodic taxable nexus field audits include a physical canvassing and evaluation of
sales /transactions /use tax generating businesses located in the City. In the absence of this undertaking,
significant misallocations will remain undetected. MuniServices' field audits focus on those businesses located
in the City from which the City has not been receiving sales /transactions /use tax revenue.
Permitization Audits
Wholesalers, contractors, processors, manufacturers and other non- retail businesses will frequently not have a
sales tax permit properly registered to the City in which they are located because their business operations do
not include a point -of -sale qualifying activity. However, these companies will often generate local
sales /transactions /use tax from the State Board of Equalization (BOE) audit deficiency assessments,
occasional sales (i.e., mergers and acquisitions), and self - accrual of use tax on purchases. MuniServices' field
audits facilitate the identification and correction of improperly registered permits for companies having point -of-
sale operations in the City.
Deficiency Assessment Audits
When the California BOE audits taxpayers for sales /transactions /use tax compliance, it is not uncommon for
the taxpayer to receive a substantial deficiency assessment due to underpayments and /or under - collections.
In many cases, the local allocation portion of the deficiency assessment is distributed in error to the State pool,
county pools, or other jurisdictions. Accordingly, MuniServices has developed proprietary criteria and
techniques to detect and correct BOE deficiency assessment misallocations and thus expand the benefits
produced by MuniServices' allocation audit service.
55B -14
Accounts Payable Audits
When California taxpayers purchase tangible personal property for which title passes out -of- state, the
transactions are subject to use tax (rather than sales tax) which is collected by the vendor who in turn remits it
to the BOE, with the local allocation typically distributed statewide or countywide through the pools.
Under certain conditions, the seller may allocate the local tax by situs or the City may elect to self- accrue the
use tax and remit it directly to the BOE, in which case the local portion will come back to the City in the same
manner as sales tax.
MuniServices' accounts payable audit will include a review of the City's purchases to identify opportunities for
the City to capture the 1% local allocation on purchases subject to use tax and the local district tax where
applicable. In this regard, MuniServices will prepare the documentation to facilitate the election, including
assistance in preparing and filing the tax returns.
Quarterly Distribution Report Audits
Every three months, the City and MuniServices receive a Quarterly Distribution Report (QDR) from the BOE
with the local allocation amount reflected by permit number,
MuniServices' QDR audits detect and correct taxpayer - reporting errors and thereby generate new, previously
unrealized sales /transactions /use tax revenue for the City. MuniServices' QDR audits focus on those accounts
where MuniServices observes a substantial decline in the sales/ transactions /use tax revenue allocation for a
particular business entity in a given quarter. In most cases, accounts showing zero balances have either
relocated or simply reported late, in which case the payments will not be reflected until the next quarter's QDR.
Therefore, six months must lapse before the QDRs indicate whether a zero balance account can be attributed
to a late payment or a misallocation.
Cities and counties may only recover misallocated Bradley -Burns sales tax revenue for three quarters prior to
the BOE being notified of the reporting error and misallocated District tax revenues for between three quarters
and three years. Therefore QDR audits must be conducted in a timely manner in order to preserve the
opportunity for the City to recover misallocated revenue. MuniServices shall conduct the QDR audit each and
every quarter to minimize the potential of lost revenue to the City.
Confidentiality Provisions
MuniServices is authorized by this Agreement to examine transaction tax, sales tax, and use tax records of the
BOE provided to City pursuant to contract under the Bradley - Burns Uniform Sales and Use Tax Law and
California Revenue & Taxation Code applicable to transactions and use taxes. If the City adopts a new
transaction tax or taxes after the effective date of this Agreement the parties intend for the work under this
agreement to include that tax or taxes.
MuniServices is required to disclose information contained in, or derived from, those sales, transaction, and
use tax records only to an officer or employee of the City who is authorized by resolution to examine the
information.
MuniServices is prohibited from performing consulting services for a retailer during the term of this Agreement.
MuniServices is prohibited from retaining the information contained in, or derived from, those sales,
transaction, and use tax records, after this Agreement has expired.
This Agreement, and MuniServices' and City's obligations with respect to confidentiality of taxpayer data
pursuant to the Bradley Burns Revenue and Taxation Code, shall continue until final payment for all services
rendered hereunder.
55B -15
Deliverables
SUTA Detection and Documentation
MuniServices shall represent the City for purposes of examining BOE records pertaining to sales and use tax
to identify errors and omissions. MuniServices' procedures for detecting and documenting misallocations are
as follows:
1. Review applicable provisions of the City's municipal code and ordinance adopted by the City to
determine applicability.
2. Procure a computer tape of sales /transactions /use tax permit records from the BOE.
3. Analyze sales tax distribution reports provided by the BOE for five or more of the most recent
consecutive quarters.
4. Clean -up, standardize and computerize data from City's quarterly sales tax distribution reports provided
by BOE for previous quarters, current quarter and each future quarter service is provided.
5. Prepare an aggregated list of business entities on electronic media; this list is derived from multiple
private and public sources (hard copy and electronic), including specialized business listings and
directories, the City's sales and use tax payment files, and an electronic copy of the City's Business
License Tax registry, updated no less than twice per year,
6. Clean, standardize and integrate, in address - order, each entity's business name, address and payment
file information, to eliminate redundancies, using MuniServices' proprietary software.
7. Physically canvas commercial /industrial area within the City's borders.
8. Develop a target list of potential point of sale /use reporting errors /omissions based on:
a. An electronic comparison of MuniServices' comprehensive inventory against the BOE's quarterly
distributions for the City, and
b. An analysis of each potentially misallocated account based on proprietary guidelines established
by MuniServices.
9. Meet with designated City official(s) to review service objectives and scope, MuniServices workplan
schedule, public relations and logistical matters.
10. Contact personnel in sales, operations and /or tax accounting at each target business to determine
whether a point -of- sale /use reporting error exists. (Note: this is accomplished with the highest regard to
discretion and professional conduct. MuniServices' allocation audits are predicated on a non-
controversial, constructive public relations approach which emphasizes the importance of each
business to the City and the mutual benefits of correcting reporting errors.)
11. Provide to the City and BOE reports addressing each taxpayer reporting error individually, including the
business name, address, telephone number, California sales tax permit number, individuals contacted,
date(s) of contact, nature of business, reason(s) for error, recommended corrective procedure and, if
available, estimated sales /transactions /use tax revenue which should be forthcoming to the City.
12. MuniServices may also provide suggested language for letters to be sent to the taxpayers and /or BOE
from the City (or from MuniServices on behalf of the City) urging cooperation in promptly correcting the
distribution error.
13. Respond to negative findings by BOE with timely reconfirmation documentation in order to preserve the
City's original dates of knowledge.
14, Receive and process registration control record information monthly.
15. Receive and process sales tax distribution reports quarterly.
16. Coordinate with the taxpayer and BOE to make the necessary corrections and collect eligible back
quarter's amounts.
17, Monitor and analyze the quarterly distribution reports with an audit focus on the following:
a. Accounts with previously reported point -of -sale /use distribution errors to ensure that the
corrections are made for current quarters and all eligible back quarters.
b. Major accounts comprising 90% or more of the City's total sales tax revenue to identify any
irregularities or unusual deviations from the normal pattern (e.g. negative fund transfers,
significant decreases, unusual increases, etc.) and ensure that the City is not receiving less
revenue than it is entitled to.
to
55B -16
c. Those accounts receiving deficiency assessments to ensure that the City receives its local
allocation
18. Identify opportunities for the City to recover local allocation on purchase transactions subject to use tax.
Prepare the necessary documentation to facilitate recovery, including assistance in preparing and filing
the returns.
SUTA Detection Timino Considerations
For each misallocated account detected, MuniServices will coordinate with the business and BOE to make the
necessary corrections plus retroactive adjustments for eligible amounts of sales /transactions /use tax
improperly distributed in prior quarters. MuniServices coordinates and communicates between typically four
parties; sales /operations personnel at the taxpayer's local operation, tax personnel at the company's corporate
headquarters, and BOE personnel and the in- state /out -of -state district offices. Correction of the account is
considered to have been made once the payments on identified taxpayer accounts are being properly
allocated by the taxpayer to the City in the period in which the payment was made.
As needed, MuniServices will represent the City before state officials, boards, commissions and committees for
the purpose of correcting sales tax distribution errors that have deprived the City of revenue to which it is
entitled.
11
55B -17
4211 =?
COMPENSATION
Sales, Transactions and Use Tax Audit Services (SUTA) Services
What the City will pay MuniServices
During the term of this Agreement and any optional extension thereof or any amendment thereto MuniServices'
compensation for the Sales and Use Tax Audit Service shall be a 15% contingency fee. This fee applies to
revenue received for six quarters beginning with the quarter in which the Date of Correction falls and all eligible
prior quarters back to and including the three quarters prior to the Date of Knowledge quarter for Bradley -Burns
sales tax revenues and all eligible prior quarters back to and including all corrected quarters prior to the Date of
Knowledge quarter for district tax revenues. As used herein, the Date of Knowledge is the quarter during which
MuniServices notifies the BOE of the existence of a misallocation. As used herein, the Date of Correction
refers to the quarter in which the taxpayer has correctly reported the local tax and the BOE distributes the local
tax properly to City based on the taxpayer's reporting. For ODR Misallocations detected and corrected,
MuniServices' compensation shall only include the quarters for which the misallocation actually occurred.
For clarification and to encourage communication and collaboration between MuniServices and the City,
MuniServices shall be entitled to full payment of all compensation as provided herein even if any one or more
of City, its personnel, agents, or representatives, or any third party or parties provides) information to
MuniServices that assists or is used by MuniServices in the identification, detection, and correction of point -of-
sale distribution errors or the reporting and /or misallocation of revenue.
In the event that the City identifies, documents, and notifies the BOE of a point -of -sale distribution error,
reporting error or misallocation as those terms are used herein, the City will notify MuniServices of the City's
discovery no later than ten days after the Date of Knowledge as defined in Title 18 of the California Code of
Regulations, Regulation 1807 ( "Date of Knowledge "). The City also agrees to notify MuniServices promptly if it
is working on a local tax misallocation issue independently of MuniServices and to maintain and promptly make
available to MuniServices on request contemporaneous documentation of such work and its timing so we do
not duplicate work.
Invoicing /Billing
MuniServices will invoice City quarterly based on past and /or prospective compliance secured on behalf of
City. Invoices are due and payable within forty -five (45) days upon receipt.
All expenses incurred by MuniServices in providing the Sales Tax service are the sole and exclusive
responsibility of MuniServices, except those expenses that receive prior written approval by City.
Additional Consulting
City may request that MuniServices provide additional consulting services at any time during the term of the
Agreement. If MuniServices and City agree on the scope of the additional consulting services requested, then
MuniServices shall provide the additional consulting on a Time and Materials basis. Depending on the
personnel assigned to perform the work, MuniServices' standard hourly rates range from $75 per hour to $200
per hour.
The following are sample hourly rates based on the job classification
• Principal: $200 per hour
• Client Services: $175 per hour
• Information Technology (IT) support: $150 per hour
• Operational Support:
o Director or Manager: $175 per hour
o Senior Analyst: $125 per hour
12
55B -18
o Analyst: $100 per hour
o Administrative: $75 per hour
These additional consulting services will be invoiced at least monthly based on actual time and expenses
incurred. All reimbursable expenses shall receive prior approval from the City and shall be reimbursed at cost
to MuniServices.
Completion of Services
Notwithstanding any other provision of this Agreement, because Consultant's services performed hereunder
result in corrections of misallocations and other revenue after cessation of services by Consultant for City, City
agrees that with regards to misallocations identified to the BOE whose Date of Knowledge occurred during
Consultant's performance of services for City or for other revenue resulting from Consultant's actions taken
during the term of this Agreement, that City's obligation to pay Consultant in accordance with the
compensation language of this Agreement shall survive expiration or termination of this Agreement for any
reason. Additionally, notwithstanding any other provision of this Agreement, if this Agreement is terminated or
expires, Consultant shall continue to pursue corrections of accounts identified during the term of this
Agreement that have not been corrected by the BOE as of the effective date of termination or expiration. The
period after termination during which Consultant is pursuing correction of accounts identified before termination
is referred to as the "completion period." City shall compensate Consultant in accordance with the
compensation language of this Agreement for corrected misallocations that result from Consultant's efforts
during the completion period. City will also take all necessary steps to allow Consultant to continue to receive
the required information from the BOE during this completion period.
13
55B -19
EXHIBIT C
SCOPE OF WORK
SALES /USE TAX ANALYSIS & REPORTING SERVICE (STARS)
Stars Reports. Within thirty (30) days of receipt of monthly and /or quarterly sales tax data from the
applicable governmental authorities, Consultant shall provide City with electronic access to updated
STARS Reports,
1.1 General Reporting Contents. The STARS Reports are dependent on availability of data received
from applicable governmental authorities. The online STARS Reports allow City's staff to interact
with sales tax data from the permit level to citywide level; on a cash or economic basis; by quarter
or year; and by classification grouping include economic category and segment. The STARS
Reports provide City with access to sales and use tax data online and via mobile devices. In
addition, reports can be exported to Microsoft Excel or Adobe PDF formats. The reports available
may include:
A Cash Dashboard,
An Economic Dashboard.
An Economic Change Report.
• A business look -up report.
• A Taxpayer Ranking Report.
• Geo- Areas.
1.2 Sales Tax Forecast. Consultant also provides a Sales Tax Forecast that identifies historical sales
tax and projected sales tax for pessimistic, most likely and optimistic scenarios.
1.3 GRIA Application. Consultant will include the Geographic Revenue Information Application
(GRIA), as part of the STARS and forecasting service and at the same cost. The GRIA will provide
and separately present combined geographically based (GEO /GIS) revenue information to include:
• Sales and Use Tax
• Secured and Unsecured Property Tax
• Hotel Visitors' Tax
• Documentary Stamp Tax (Property Transfer Tax)
• Business License Tax (including Business Improvement District Assessments /Charges); and
• Medical Marijuana Tax
Consultant and City agree that the GRIA data will not be available until January 1, 2017 and is
subject to MuniServices receiving certain City data matching:
a. City Hotel Visitors' Tax data to City Business License Tax aacounts; and
b. City Business License Tax account data to State Board of Equalization Sales and Use Tax
Permits.
To be included in the GRIA, City data must be received in a mutually agreeable format at least thirty
(30) calendar days prior. MuniServices and City shall update (GEO /GIS) revenue information data
on a quarterly basis (or more often as may be mutually agreeable).
1.4 Accuracy. The STARS Reports rely on information provided by applicable governmental authorities
and third - parties. Consultant will endeavor to verify, remove redundancies, or otherwise clean or
standardize the information provided by governmental authorities or any third parties.
1.5 Timing. Consultant's obligation to provide the STARS Reports is conditioned on City's delivery of
required, signed documentation to Consultant to access the proper data from the applicable
governmental authorities.
14
55B -20
1.6 Paper reports, Some of the reports may be delivered in paper -based or excel formats white our
online report platform continues to be expanded. For example, Geo Area reports are currently still
being provided in paper format. As we expand the online portal, additional reports will become
available on your home page.
City Assistance
1. Confidentiality. The information provided to the City in the STARS Reports is confidential. It is not open to
public inspection. A City may use the information only for lawfully permitted purposes. City shall not
distribute the STARS Reports to any person unless that person is legally entitled to access the information
in the STARS Reports, or except as may otherwise be required by law or court order.
Consultant is authorized by this Agreement to examine transaction tax, sales tax, and use tax records of
the State Board of Equalization (BOE), including, but not limited to, any transaction and use tax that may
become effective and be collected for City. Consultant is required to disclose information contained in, or
derived from, those transaction, sales, and use tax records only to an officer or employee of the City who is
authorized by resolution to examine the information. Consultant is prohibited from performing consulting
services for a retailer during the term of this Agreement. Consultant is prohibited from retaining the
information contained in, or derived from, those transaction, sales, and use tax records, after this
Agreement has expired.
2. Data. In order for Consultant to provide the STARS Reports, the City will need to deliver to Consultant the
signed documents /authorizations required to access the proper data from the applicable governmental
authorities as may be required by law.
3. Additional Terms.
a. License, Consultant grants to City a license for each of City's designated users to access the New
STARS reports service for so long as this Agreement is in effect. Each of City's designated users must
be submitted in writing to Consultant. Consultant will provide the user with the necessary log -in
information. Any passwords issued for this service may only be used by the person to whom the
password is issued; sharing of passwords is STRICTLY PROHIBITED. City has the obligation to
protect those passwords.
b. Limitations of Liability. Consultant is not responsible for any breach of data resulting from City's
failure to protect passwords or systems used to access the Service. Consultant does not warrant that
the service is error free. CONSULTANT DISCLAIMS ALL OTHER WARRANTIES WITH RESPECT TO
THE SOFTWARE, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON -
INFRINGEMENT OF THIRD PARTY RIGHTS. Some jurisdictions do not allow the exclusion of implied
warranties or limitations of how long an implied warranty may last, or the exclusion of limitation of
incidental damages, so the above limitations or exclusions may not apply to City. In no event shall
Consultant or its licensors, suppliers, or licensees be liable to City for any consequential, special,
incidental, or indirect damages of any kind arising out of the performance or use of the service, even if
Consultant has been advised of the possibility of such damages.
c. Non - disclosure. City's use of the New STARS services is conditioned on City's agreement not to
make the service or any of output of the system available to Consultant's competitors. Nothing in this
provision prohibits the City from exporting data and formatting it for its own use or from making
documents marked as 'public' known to the public.
55B -21
EXHIBIT D
COMPENSATION
Sales /Use Tax Analysis & Reporting Service (STARS)
1. Base Package Annual fee. During the term of this Agreement and any optional extension thereof or any
amendment thereto City shall pay Consultant an annual fee of $10,000 ( "annual fee ") payable in four equal
quarterly payments as shown below, proratable on a quarterly basis for any contractual period less than
twelve months. This includes a mutually agreeable number of Geo Areas. Consultant will invoice the City
on a quarterly basis. Invoices are due and payable within forty -five (45) days of receipt. If this Agreement
is terminated ahead of its agreed to term for any reason, the City remains obligated to pay Consultant the
quarterly payments of the annual fee for the quarters before the effective date of termination.
2. Adjustments. The Annual Fee shall be adjusted at the beginning of each calendar year by the percentage
change in the Consumer Price Index — Los Angeles- Riverside- Orange County (GPI -U) as reported by the
Bureau of Labor Statistics. The initial Consumer Price Index used for the first CPI adjustment will be the
Consumer Price Index — Los Angeles- Riverside - Orange County for the month in which the agreement is
fully signed with the first adjustment to occur at the beginning of the Calendar year following the first full
calendar year of service. For instance, if the agreement is signed in April, year 1, the adjustment would not
occur until January of year 3. The adjustments thereafter will be based on the CPI -WU from December of
the prior calendar year. Each Annual Fee adjustment shall not be less than two percent (2 %) or greater
than four percent (4 %).
3. Additional Paper Copies. Consultant shall provide City additional paper, bound copies of the STARS
Reports upon City's request at the rate of $200 annually per additional copy, payable by City in quarterly
installments of $50 per additional copy,
4, Additional Consulting. City may request that Consultant provide additional consulting services at any
time during the term of the Agreement. If Consultant and City agree on the scope of the additional
consulting services requested, then Consultant shall provide the additional consulting on a Time and
Materials basis. Depending on the personnel assigned to perform the work, Consultant' standard hourly
rates range from $75 per hour to $200 per hour.
The following are sample hourly rates based on the job classification:
• Principal: $200 per hour
• Client Services: $175 per hour
• Information Technology (IT) support: $150 per hour
• Operational Support:
• Director or Manager: $175 per hour
• Senior Analyst: $125 per hour
• Analyst: $100 per hour
• Administrative: $75 per hour
These additional consulting services will be invoiced at least monthly based on actual time and expenses
incurred.
55B -22
EXHIBIT E
MuniServices Helpful Contacts
Contact
Project Role
Phone
Email
Julia Brdkam , MPA
Client Services Manager
559.246.2901
julla.erd1kal-ngamuniservices.com
Doug Jensen
SVP Client Services
_
559.288.8943
dou .'ensen muniserVices.com
Janis Varne
VP Misallocation - SUTA
559.271.3011
anis.varne muniservices.com
Steve Quon
Audit Manager
800,800.8181 x76517
steve. uon muniservices.com
Bret Harmon, MPA
AVP Client Innovation
559.271.6876
bret.harmon munlservices.Corn
Irene Reynolds
Client Relations Manager
559.271.6867
irene.re nolds. muniservices.com
Billin Department
757.3211517
billingeportfollorecoveU.com
Francesco Mancia, MBA
VP Government Relations
559.288.7296
fran.m ncia muniservices.com
Brenda Nara an
Dir. Government Relations
916.261.5147
brenda,nara ar muniservices.com
Patricia A. Dunn, MSHR
Contracts Manager
559,271.6852
patriclajuno muniservices.com
55B -23
EXHIBIT F
ADDITIONAL INSURED ENDORSEMENT
FOR COMMERCIAL GENERAL LIABILITY POLICY
Insurance Company
This endorsement modifies such insurance as is afforded by the provisions of Policy #
relating to the following:
1. The CITY of Santa Ana, 20 Civic Center Plaza, Santa Ana, California 92701; its officers,
employees, agents, volunteers and representatives are named as additional insureds ( "additional insureds ")
with regard to liability and defense of suits arising from the operations and uses performed by or on behalf of
the named insured.
2. With respect to claims arising out of the operations and uses performed by or on behalf
of the named insured, such insurance as is afforded by this policy is primary and is not additional to or
contributing with any other insurance carried by or for the benefit of the additional insureds.
3. This insurance applies separately to each insured against whom claim is made or suit is
brought except with respect to the company's limits of liability. The inclusion of any person or organization as
an insured shall not affect any right which such person or organization would have as a claimant if not so
included.
4. With respect to the additional insureds, this insurance shall not be cancelled, or
materially reduced in coverage or limits except after thirty (30) days written notice has been given to the CITY
of Santa Ana, 20 Civic Center Plaza, Santa Ana, California 92701.
(Completion of the following, including countersignature, is required to make this endorsement effective.)
Effective
Policy #
Issued to
Insured
Countersigned by
Authorized Representative
this endorsement form as a part of
55B -24
0400 -0 �a
RESOLUTION NO, 2016-
A RESOLUTION OF THE CITY OF SANTA ANA AUTHORIZING THE
EXAMINATION OF SALES AND USE TAX RECORDS
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS:
WHEREAS, pursuant to Ordinance No. NS -1187, the City of Santa Ana ( "City ") entered into a
contract with the State Board of Equalization to perform all functions incident to the
administration and collection of the Sales and Use Tax Ordinance and the local sales and
use taxes; and
WHEREAS, City deems it necessary for authorized representatives of City to examine
confidential sales and transactions and use tax records of the Board pertaining to
sales and use taxes collected by the Board for City; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain
requirements and conditions for the disclosure of Board records and establishes criminal
penalties for the unlawful disclosure of information contained in, or derived from sales and use
tax records of the Board; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code requires that any
person designated by City shall have an existing contract to examine City's sales and use tax
records.
NOW, THEREFORE IT IS RESOLVED AND ORDERED BY THE CITY COUNCIL OF THE
CITY OF SANTA ANA AS FOLLOWS:
Section 1. That the Executive Director of Finance and Management Services, Assistant
Director of Finance, Treasury and Customer Services Manager, or other officer or employee of
City designated in writing by the City Manager to the State Board of Equalization (hereafter
referred to as Board) is hereby appointed to represent City with authority to examine all of the
sales and use tax records of the Board pertaining to sales and use taxes collected for City by the
Board of Equalization pursuant to the contract between City and the Board. The information
obtained by examination of Board records shall be used for purposes related to the collection of
City's sales and use taxes by the Board pursuant to the contract.
Section 2. That the Executive Director of Finance and Management Services, Assistant
Director of Finance, Treasury and Customer Services Manager, or other officer or employee of
City designated in writing by the City Manager to the Board, is also hereby appointed to
represent City with the authority to examine those sales and use tax records of the Board for
purposes related to the following governmental functions of City:
Resolution No. 2016 -XXX
Page 1 of 3
55B -25
a) tracking and economic development
b) forecasting and budget related functions
c) detection of misallocations and deficiencies
The information obtained by examination of Board records shall be used only for those
governmental functions of the Local Jurisdiction listed above.
Section 3. That MuniServices, LLC is hereby designated and authorized to examine all of
the sales and use tax records of the Board pertaining to all sales and use taxes collected for
City.
The person or entity designated by this section meets all of the following conditions:
a) has an existing contract with City to examine sales and use tax records;
b) is required by that contract to disclose information contained in, or derived from those
sales and use tax records only to an officer or employee authorized under Section 1
(or Section 2) of this resolution to examine the information;
c) is prohibited by that contract from performing consulting services for a retailer during
the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived
from those sales and use tax records after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of Board records
shall be used only for purposes related to the collection of City's sales and use taxes by the
Board pursuant to the contracts between City and the Board of Equalization and for purposes
relating to the governmental functions of City listed in Section 2 of this resolution.
Section 4. This resolution supersedes all prior sales and use tax resolutions of City adopted
pursuant to subdivision (b) of Revenue and Taxation Code Section 7056.
Section 5. This Resolution shall take effect immediately upon its adoption by the City Council,
and the Clerk of the Council shall attest to and certify the vote adopting this Resolution.
Resolution No, 2016 -XXX
Page 2 of 3
55B -26
ADOPTED this ______day of 2016.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia Carvalho, City Attorney
By: 2�Y
Lin Storck
Assistant City Attorney
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of Council, do hereby attest to and certify the attached Resolution
No. to be the original resolution adopted by the City Council of the City of Santa
Ana on
Clerk of Council
City of Santa Ana
55B -27
Resolution No, 2616 -XXX
Page 3 of 3
55B -28
EXHIBIT 3
Consultant Services Agreement
This Consultant Services Agreement (the "Agreement ") is made as of the 4th day of October, 2016 by and
between MuniServices, LLC, a Delaware limited liability company ( "CONSULTANT ") and the City of Santa
Ana, a charter city and municipal corporation of the State of California ( "CITY"). In consideration of the mutual
promises herein contained and other good and valuable consideration, the adequacy and receipt of which is
hereby acknowledged, the parties agree as follows:
RECITALS
A. The CITY desires to retain a consultant having special skill and knowledge in the field of professional
services for Utility Users' Tax (including Prepaid Mobile Services Telephony Service Taxes) Revenue Auditing,
Recovery, Reporting, Analysis, and Legislative /State Agency Liaison and Implementation Monitoring Services
as specified herein.
B. In undertaking the performance of this Agreement, CONSULTANT represents that it possesses the
necessary knowledge, qualifications, skills and personnel to provide such services. CONSULTANT warrants
that any services performed by CONSULTANT under this Agreement will be performed in compliance with
such standards as may reasonably be expected from a professional consulting firm in the field.
NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms
and conditions hereinafter set forth, the parties agree as follows:
CITY hereby retains CONSULTANT, and CONSULTANT hereby agrees to provide such services as
are set forth hereinbelow, in accordance with the terms and conditions of this Agreement, and represents and
warrants to CITY that CONSULTANT accepts such assignment to perform those services, subject to those
terms and conditions.
1. Scope of Services
a. CONSULTANT will provide CITY with the services described in EXHIBIT A which is attached hereto
and incorporated by reference. CONSULTANT shall provide said services at the time, place, and in the
manner specified in EXHIBIT A.
b. CONSULTANT shall furnish at its own expense all labor, materials, equipment and other items
necessary to carry out the terms of this Agreement.
2. Compensation
Upon execution of this Agreement, CITY will pay CONSULTANT as outlined in EXHIBIT B,
incorporated and included herein. Payment by City shall be made within forty -five (45) days following
receipt of proper invoice evidencing work performed, subject to CITY accounting procedures and proof
of insurance as set forth in section 3 -9. Payment need not be made for work which fails to meet the
standards of performance set forth in the Recitals which may reasonably be expected by CITY.
3. General Provisions
3 -1. Term of the Agreement: The initial term for the provision of services as set forth in section 1 of
this Agreement shall be for a period of two (2) years commencing January 1, 2017, with one (1) one -
year option exercisable in the sole discretion of the City, by a writing executed by the City Manager and
the City Attorney, if neither party has terminated said Agreement in accordance with section 3 -2.
55B -29
3 -2. Termination: Either party shall have the right to terminate this Agreement in the event of a
material breach by the other party. Any such termination may be made only by providing sixty (60)
days written notice to the other party, specifically identifying the breach or breaches on which
termination is based. Following receipt of such notice, the party in breach shall have thirty (30) days to
cure such breach or breaches. In the event that such cure is not made, this Agreement shall terminate
in accordance with the initial sixty (60) days' notice. Notwithstanding the foregoing, either party may
terminate the Agreement at any time and for any reason by providing thirty -days (30) written notice to
the other party; provided however, that if CONSULTANT has not breached the Agreement and has
commenced services identified in EXHIBIT A prior to the date of termination, CONSULTANT shall be
entitled to payment as described in EXHIBIT B; provided, however, that payment need not be made for
work which fails to meet the standard of performance specified in the Recitals of this Agreement.
3 -3. Effect of Termination: Notwithstanding non - renewal or termination of this Agreement, CITY
shall be obligated to pay CONSULTANT for services performed through the effective date of
termination for which CONSULTANT has not been previously paid. In addition, because the services
performed by CONSULTANT prior to termination or non - renewal of this Agreement may result in the
CITY's receipt of revenue after termination which are subject to CONSULTANTS` fee, the CITY shall
remain obligated after termination or non - renewal to provide to CONSULTANT such information as is
necessary for CONSULTANT to calculate compensation due as a result of the receipt of revenue by the
CITY.
3.4. Independent Contractor: It is understood that CONSULTANT and its subcontractors, if any, in
the performance of the work and services agreed to be performed, shall act as and be an independent
contractor and shall not act as an agent or employee of the CITY. CITY understands that
CONSULTANT may perform similar services for others during the term of this Agreement and agrees
that CONSULTANT representation of other government sector clients is not a conflict of interest.
CONSULTANT shall obtain no rights to retirement benefits or other benefits which accrue to CITY's
employees, and CONSULTANT hereby expressly waives any claim it may have to any such rights.
3 -5. Subcontractors: CONSULTANT shall have the right to hire subcontractors to provide the
services described herein. CONSULTANT, in rendering performance under this Agreement shall be
deemed an independent contractor and nothing contained herein shall constitute this arrangement to
be employment, a joint venture, or a partnership. CONSULTANT shall be solely responsible for and
shall hold CITY harmless from any and all claims for any employee related fees and costs including
without limitation employee insurance, employment taxes, workman's compensation, withholding taxes
or income taxes.
3 -6. Notice: Any notice required to be given under this Agreement shall be in writing and either
served personally, sent prepaid first class mail, or by express mail courier (i,e. Fed Ex, UPS, etc.). Any
such notice shall be addressed to the other party at the address set forth below. All notices, including
notices of address changes, provided under this Agreement are deemed received on the third day after
mailing if sent by regular mail, or the next day if sent overnight delivery.
If to City:
City of Santa Ana
Executive Director, Finance and
Management Services Agency
City of Santa Ana
20 Civic Center Plaza (M -17)
Santa Ana, CA 92702
Phone: (714) 647 -6960
Facsimile; (714) 647 -5414
55B -30
If to MuniServices:
MuniServices, LLC
Attn: Contract Department
7625 N. Palm Ave., Ste, 108
Fresno, CA 93711
Phone: (559) 271 -6852
Facsimile: (559) 312 -2852
Email: leaa16c mun!services.com
Representative or designees: CONSULTANT Primary Representative /Project Manager shall be:
Julia Erdkamp, Client Services Manager
7625 N. Palen Ave., Ste, 108, Fresno, CA 93711
Phone: (559) 246 -2901 / Email: Julia. Erdkamr)OMuniServices.cgm
For the convenience of the CITY, a short list of helpful contacts is attached and incorporated herein as
EXHIBIT C.
Representative or designees: City of Santa Ana's Primary Representative /Project Manager shall be:
Willard Holt, Treasury and Customer Services Manager
20 Civic Center Plaza, Room 1105, Santa Ana, CA 92701
Phone: (714) 647 -5456 / Email: wholt esanta- ana.orq
3.7, Indemnity: CONSULTANT shall indemnify, defend, and hold harmless the CITY, its officers,
agents, and employees, from and against any and all claims, liabilities, and losses whatsoever
(including damages to property and injuries to or death of persons, court costs, and reasonable
attorneys' fees) to extent occurring or resulting from CONSULTANT'S negligent or unlawful
performance of its obligations under or breach of the terms of this Agreement, unless such claims,
liabilities, or losses arise out of, or are caused at least in part by the sole negligence or willful
misconduct of the CITY. "CONSULTANT'S performance" includes CONSULTANT'S action or inaction
and the action or inaction of CONSULTANT'S officers, employees, agents and subcontractors.
3.8. Limitation of Liability: In no event shall CONSULTANT, its employees, contractors, directors,
affiliates and /or agents be liable for any special, incidental, or consequential damages, such as, but not
limited to, delay, lost data, disruption, and loss of anticipated profits or revenue arising from or related
to the services, whether liability is asserted in contract or tort, and whether or not CONSULTANT has
been advised of the possibility of any such loss or damage. In addition, CONSULTANT'S total liability
hereunder, including reasonable attorneys' fees and costs, shall in no event exceed an amount equal to
the fees described in EXHIBIT B. The foregoing sets forth the CITY'S exclusive remedy for claims
arising from or out of this Agreement. The provisions of this section allocate the risks between
CONSULTANT and the CITY and CONSULTANT'S pricing reflects the allocation of risk and limitation
of liability specified herein.
3.9. Insurance: CONSULTANT shall keep in full force and effect insurance coverage during the
term of this Agreement, including without limitation statutory workers' compensation insurance;
employer's liability and commercial general liability insurance (CGL); comprehensive automobile liability
insurance; professional liability and fidelity insurance. The insurance certificate shall name the City, its
agents, officers, representative and employees as additional insureds under the CGL policy with
respect to the operations and work performed by the named insured as required by written contract.
The CGL policy is Primary& Non - Contributory. Waiver of Subrogation applies under the CGL and
Workers' Compensation policies. The CGL insurance minimum coverage shall be at least $1,000,000
per incident, claim or occurrence and $2,000,000 aggregate. The Automobile Liability insurance
minimum coverage shall be at least $1,000,000 covering all owned, non - owned, and hired vehicles.
The certificate shall provide that there will be no cancellation, termination, or non - renewal of the
insurance coverage without a minimum 30 -day written notice to the CITY, except in the case of
cancellation for non- payment of premium which shall be at least 10 -days written notice. CONSULTANT
shall supply CITY with a fully executed additional insured endorsement in substantially the form
attached hereto as Exhibit D upon execution of this Agreement and shall be approved in form by the
CITY Attorney.
55B -31
3.10. Equal Opportunity to Draft: The parties have participated and had an equal opportunity to
participate in the drafting of this Agreement. No ambiguity shall be construed against any party upon a
claim that that party drafted the ambiguous language.
3 -11. Assignment: This Agreement shall be binding upon and inure to the benefit of the parties, their
successors, representatives and assigns. CONSULTANT shall not assign this Agreement, or delegate
its duties or obligations under this Agreement, without the prior written consent of CITY, which consent
shall not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing,
CONSULTANT may assign this Agreement, in whole or in part, without the consent of CITY to any
corporation or entity into which or with which CONSULTANT has merged or consolidated; any parent,
subsidiary, successor or affiliated corporation of CONSULTANT; or any corporation or entity which
acquires all or substantially all of the assets of CONSULTANT. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties and their successors or assigns.
3 -12. Ownership of Documents: Except for CONSULTANT's preexisting proprietary information and
processes, any and all documents, including draft documents where completed documents are
unavailable, or materials prepared or caused to be prepared by CONSULTANT pursuant to this
agreement shall be the property of the CITY at the moment of their completed preparation.
3 -13. Intellectual Property Rights: The entire right, title and interest in and to CONSULTANT's
database and all copyrights, patents, trade secrets, trademarks, trade names, and all other intellectual
property rights associated with any and all ideas, concepts, techniques, inventions, processes, or works
of authorship including, but not limited to, all materials in written or other tangible form developed or
created in the course of this Agreement (collectively, the "Work Product ") shall vest exclusively in
CONSULTANT or its subcontractors. The foregoing notwithstanding, in no event shall any CITY -owned
data provided to CONSULTANT be deemed included within the Work Product.
3.14. Discrimination: CONSULTANT shall not discriminate because of race, color, creed, religion,
sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and
prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or
other employment related activities. CONSULTANT affirms that it is an equal opportunity employer and
shall comply with all applicable federal, state and local laws and regulations.
3 -15. Jurisdiction — Venue: This Agreement has been executed and delivered in the State of
California and the validity, interpretation, performance, and enforcement of any of the clauses of this
Agreement shall be determined and governed by the laws of the State of California. Both parties
further agree that Orange County, California, shall be the venue for any action or proceeding that may
be brought or arise out of, in connection with or by reason of this Agreement.
3 -16. Professional Licenses: CONSULTANT shall, throughout the term of this Agreement, maintain
all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the
services hereunder and required by the laws and regulations of the United States, the State of
California, the CITY of Santa Ana and all other governmental agencies. CONSULTANT shall notify the
CITY immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals,
waivers, and exemptions, Said inability shall be cause for termination of this Agreement.
3 -17. Public Release and Statements: Neither party or its representatives or agents shall disseminate
any oral or written advertisement, endorsement or other marketing material relating to each other's
activities under this Agreement without the prior written approval of the other party. Neither party shall
make any public release or statement concerning the subject matter of this Agreement without the
express written consent and approval of the other party. No party or its agent will use the name, mark
or logo of the other party in any advertisement or printed solicitation without first having prior written
approval of the other party. The parties shall take reasonable efforts to ensure that its subcontractors
shall not disseminate any oral or written advertisement, endorsement or other marketing materials
55B -32
referencing or relating to the other party without that party's prior written approval. In addition, the
parties agree that their contracts with all subcontractors will include appropriate provisions to ensure
compliance with the restrictions of this Section.
3.18. CONFIDENTIALITY. If Consultant receives from the City information which due to the nature of
such information is reasonably understood to be confidential and /or proprietary, Consultant agrees that
it shall not use or disclose such information except in the performance of this Agreement, and further
agrees to exercise the same degree of care it uses to protect its own information of like importance, but
in no event less than reasonable care. "Confidential Information" shall include all nonpublic information.
Confidential information includes not only written information, but also information transferred orally,
visually, electronically, or by other means. Confidential information disclosed to either party by any
subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of
non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly
available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c)
is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be
disclosed by operation of law; or (e) is independently developed by the Consultant without reference to
information disclosed by the City.
3.19. Force Maieure: CONSULTANT shall not be in default of its obligations hereunder to the extent
that its performance is delayed or prevented by causes beyond its control, including but not limited to
acts of God, government, weather, fire, power or telecommunications failures, inability to obtain
supplies, breakdown of equipment or interruption in vendor services or communications.
3 -20. Litigation Fees. If litigation arises out of this Agreement for the performance thereof, then the
court shall award costs and expenses, including reasonable attorney's fees, to the prevailing party. In
awarding attorney's fees, the court shall not be bound by any court fee schedule but shall award the full
amount of costs, expenses and attorney's fees paid or incurred in good faith.
3 -21. Entire Agreement: This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior understandings or written or oral agreements between the parties respecting
the subject matter contained herein. Said Agreement shall not be amended, altered, or changed,
except by a written amendment signed by both parties unless a Change Order Contingency is mutually
agreed to by the parties.
3 -22. Change Order Contingency: From time -to -time, at CITY's option, CITY may request optional
services of CONSULTANT at mutually agreed upon scope and fees.
3.23. Invalidit : If any one or more of the provisions contained in this Agreement shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision thereof, and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision had never been contained herein.
3 -24. Implementation: Implementation of services should begin as soon as possible from the
Effective Date for the performance of services under the terms of this Agreement.
3 -25. Counterpart Signature and Delivery: This Agreement may be signed in separate counterparts
including facsimile copies. Each counterpart (including facsimile copies) is deemed an original and all
counterparts are deemed on and the same instrument and legally binding on the parties.
3 -26. Miscellaneous Provisions:
a. CONSULTANT shall perform all services with the necessary knowledge and skills required
to perform the tasks. CONSULTANT or personnel of CONSULTANT engaged in the
performance of such services shall not represent themselves to be, nor shall they be
deemed to be, employees of CITY for any purpose whatsoever.
55B -33
b. CITY agrees that its employees will cooperate with and assist representatives of
CONSULTANT in every reasonable way to enable CONSULTANT to secure all information
and data required to perform the services herein provided for. CONSULTANT shall have no
liability for defects in the services attributable to CONSULTANT's reliance upon or use of
data, design criteria, drawings, specifications, or other information furnished by CITY or third
parties retained by CITY.
c. Each undersigned represents and warrants that its signature hereinbelow has the power,
authority and right to bind their respective parties to each of the terms of this Agreement,
and shall indemnify CITY fully, including reasonable costs and attorney's fees, for any
injuries or damages to CITY in the event that such authority or power is not, in fact, held by
the signatory or is withdrawn.
d. CONSULTANT agrees any alterations, variations, modifications, or waivers of the provisions
of the Agreement, shall be valid only when reduced to writing, executed and attached to the
original Agreement and approved by the required signatories.
If any legal action is instituted to enforce any party's rights hereunder, each party
shall bear its own costs and attorneys' fees, regardless of who is the prevailing
party.
f. All exhibits referenced herein and attached hereto shall be incorporated as if fully set
forth in the body of this Agreement.
g. In the event of any conflict between the provisions of this Agreement and those set
forth in any Exhibit referenced and incorporated herein, the provisions of the
Consultant Services Agreement shall prevail.
/Signatures on following page}
55B -34
|N WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first
above written.
ATTEST:
MARIA D. H U IZAR
Clerk of the Council
APPROVED ASTOFORM:
SONIAR, C8RV8LHO
CITY Attorney
Lisa Storck
Assistant City Attorney
RECOMMENDED FOR APPROVAL:
Francisco Gutierrez. Executive Director
Finance & Management Services Agency
CITY OF SANTA ANA
DAVDC46wZOG
City Manager
CONSULTANT
Doug Jensen
uvr Client Services
MVAi8ervioeG,LLC
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EXHIBIT A
SCOPE OF WORK
Utility Users Tax Compliance, Administrative and Revenue Protection Program
MuniServices, LLC ( "MuniServices ") agrees to provide the City with certain professional services in furtherance
of a comprehensive utility users tax /franchise compliance and revenue protection program ( "Program "), with
broad participation by California public agencies, that is designed to preserve, protect, and enhance the City's
utility users tax ( "UUT ") revenues.
Article 1- Objectives and Methods
MuniServices UUT Program, described below, will provide a broad range of compliance, administrative and
protective services [including the legal services of the City's outside counsel, Donald H. Maynor, A Professional
Law Corporation ( "Law Firm")), that will allow the City to preserve, protect and enhance their UUT revenues
focusing on three areas:
• Compliance
• Administrative
• Revenue Protection and Enhancement
Article 2 -UUT Program Scope of Work
A. Compliance
UUT Tax Application Review: MuniServices will conduct a "focused compliance review of the major
service utility providers on behalf of one or more cities to assure that the providers "tax application"
decisions are correct on a system -wide basis, to the benefit of all client cities.
2. UUT Payment Review: Identification of possible gaps in payments, irregularities, calculation mistakes (e.g.,
wrong tax rate), and other payment errors, if City provides MuniServices with regular UUT payment history.
MuniServices will assist the City with the appropriate compliance correspondence and enforcement
actions.
3. Comparative Analysis of UUT Payment: MuniServices will assure that the UUT payments are correct by
performing a comparative analysis of a service provider's UUT payments with your City and other
neighboring client cities, as well as using industry market share data. MuniServices will also perform a
comparative analysis of the franchise 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 the 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.
5. Exemption Review: MuniServices will periodically review the exemption lists of the major service
providers regarding non- residential customers.
55B -36
6. Optional City-Specific Compliance Reviews: At City's option MuniServices will offer "city- specific" reviews
on a performance fee or other negotiated basis, only if the above activities or other factors would
suggest that there is a reasonable need to do so. See Appendix A.
B. Administrative
1. UUT Payment History: MuniServices will provide the 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 the City to MuniServices).
2. Geocode Corrections: MuniServices will assist City and the utility service providers in correcting
geocoding errors in response to taxpayer complaints.
3. UUT Website: Prepare and maintain an accurate copy of the City's UUT ordinance and its administrative
rules and interpretations on the uutlnfo.org Website including a link to the City's web page (if desired),
FAO's, and model forms for exemptions, registration, remittances and other tax compliance documents will
be maintained on the www.uutinfo.oM website.
4. Revenue Forecasts and Management Report(s): MuniServices will provide an annual report that outlines
the year's activities in review, revenue forecasts, YTD Comparison charts and revenue generated from
compliance activities. This report contains an analysis of UUT revenues and a five -year revenue forecast
on each of the utility business segments (electric, gas, CATV, wired telecom, wireless telecom, etc.).
5. Tax Application Inquiries: MuniServices will provide technical assistance to City staff, and provide timely
analysis and draft responses to tax application inquiries from utility companies, and will assist in
responding to citizens regarding their utility bills and the computation of the UUT.
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. Compliance with AB 1717 (Prepaid wireless): Law Firm and MuniServices will assist the City in meeting
the requirements of the new state law on the collection of the UUT, including establishing statutory
eligibility and satisfying the requirements of the California State Board of Equalization ( "BOE ") per AB
1717,
AB 1717 (Ch. 885, Stat. 2014), the Prepaid Mobile Services Telephony Service Surcharge Collection Act
( "AB 1717 ") was enacted with an effective date of January 1, 2015, and a collection date commencing
January 1, 2016, and establishes a statewide method of collecting the City's UUT on prepaid wireless
services;
AB 1717 imposes certain restrictions on third party consultants of the City who are designated and
authorized by the City to examine certain BOE documents relating to the collection of the City's utility users
tax on prepaid wireless services, as covered by AB 1717;
In order to satisfy the requirements of AB 1717, the parties agree:
a) MuniServices is authorized to examine the BOE's records pertaining to the prepaid local charge
(i.e., prepaid wireless UUT (collectively, the "Records ") and to use such information only for
purposes related to such collection;
b) MuniServices shall disclose information contained in or derived from, the Records only to an
officer or employee of the City authorized by resolution to examine the information;
55B -37
C) MuniServices shall not perform any consulting services for a "seller" (as defined in AB 1717)
during the term of the Contract;
d) MuniServices shall not retain information contained in, or derived from, the Records after the
Contract has expired;
e) MuniServices shall, to the same extent as the BOE, be subject to Revenue and Tax Code
Section 55381, relating to unlawful disclosures;
Ordinance Update and Election Assistance: Law Firm will provide to the Tax Administrator periodic
reviews and recommended updates to the UUT ordinance, administrative rulings to address new issues
that may arise because of deregulation, litigation, changes in laws or regulations, the unbundling of
traditional utility services, or the introduction of new technologies to provide utility services. Such
recommendations will typically clarify or add procedural protections to the existing ordinance, and should
not require a Proposition 218 election approval. If a major modernization of the ordinance is deemed
necessary, with voter approval, MuniServices and Law Firm will at the request of the City assist with
ordinance language, staff reports, revenue forecasts, draft ballot language, and Law Firm will attend one
City meeting at no additional cost.
4. Administrative Rulings: Under an updated UUT ordinance, the Tax Administrator has the authority to
periodically issue administrative rulings as new tax application issues arise. MuniServices and Law
Firm will assist City by timely identifying those issues, facilitating a thorough discussion among the
client cities on an appropriate ruling, and then drafting a recommended ruling for your City's
consideration.
5. Technology Reviews: MuniServices will continually research utility market information to Identify potential
taxable services delivered by new technologies and new providers.
Article 3 — Information to Be Provided by City
The City agrees to provide MuniServices with the following information:
i. A copy of the City's UUT Ordinance and any amendments thereto.
2. Letters requesting the exemption lists from the utility companies to be placed on City letterhead.
3. A Letter of Authorization for MuniServices to act on City's behalf. Place on City letterhead.
4. A sample remittance form to be provided to the utility companies.
5. Two SB278 letters requesting from utility companies to provide transportation list on City letterhead.
The City will provide MuniServices, on a timely basis, with information necessary to conduct its compliance review
activities including but not limited to: monthly UUT payment histories, exemption lists, and SB 278 gas and electric
lists (including names of customers refusing to pay surcharges), administrative rulings, and of any subsequent
amendments to the UUT ordinance.
Article 4 -- Termination and Completion of Services
A. Either the City or MuniServices may terminate this Agreement, by thirty (30) days prior written notice as
provided in this Section.
B. If the City terminates this Agreement at any time within twelve (12) months following the effective date of
this Agreement, and Law Firm has prepared an ordinance update for the City (whether or not the City
adopts the recommended update), the City shall nevertheless pay MuniServices four (4) quarterly
payments from the commencement of the Agreement to compensate MuniServices for services rendered.
MuniServices shall also be entitled to additional compensation as described in Section C below.
to
55B -38
C. Upon termination by either party of the Agreement as provided herein, MuniServices shall be entitled to
retain any fees it may have received from the City as outlined is this Agreement. In addition, MuniServices
shall be entitled to payment according to the terms of Exhibit B for all additional revenues, including interest
and penalties, resulting from MuniServices compliance review activities. Within thirty (30) days following
termination, MuniServices shall provide the City with a list of detections of non - compliance resulting from
the compliance review activities of MuniServices. The City shall, in good faith, diligently seek to: i) correct
such detections of non - compliance made by MuniServices prior to the date of termination; and, ii) collect
the additional revenues that are due the City and MuniServices for past periods and for the twelve quarters
going forward following the correction, even though the date of actual correction may occur after the
termination date. MuniServices shall assist the City in this correction /collection effort, if so requested by the
City. MuniServices right to compensation for city - specific compliance review activities under Appendix A
Section B shall survive termination of this Agreement for any reason.
11
55B -39
Appendix A
Optional City - Specific Compliance Services
In the course of performing the various UUT compliance activities, MuniServices may discover discrepancies
or other evidence of possible significant non - compliance. MuniServices may thereupon advise the City that it
may be prudent to conduct a city - specific compliance review of a particular service provider or taxpayer, or
specific issue relating to such service provider or taxpayer. The City may authorize such city- specific
compliance actions as provided in this Appendix A ( "Optional City - Specific Compliance Actions') for utility
user's tax purposes or in connection with a gas, electric, CATV, water, garbage franchise, as follows:
City - Specific Audits Scope of Work
At any time during the term of this Agreement, with the prior mutual consent of the City and MuniServices,
MuniServices may perform an audit of a specific utility provider related to UUT payments and /or utility franchise
fees if applicable. The audit's intention is to focus on the compliance of the particular selected utility provider(s)
with the City's UUT ordinance and /or franchise fee agreement. This service includes an actual request for, and
review of the utility provider's books and records. Typically, the audit process, in general, will consist of the
following:
1. Submit an Audit Notification along with the Letter of Authorization and a Request for Information (RFI)
outlining the information needed to complete the audit to the Provider(s).
Z Attempt to obtain a waiver on the Statute of Limitations, as applicable, for the audit.
3. Review the work papers and supporting documentation used in the computation of the UUT and /or
franchise fee payments.
4. Review and analyze the provider's general ledger and financial statements. Compare and analyze the
data for reasonableness, completeness, and accuracy as related to the UUT and /or franchise fee.
5. Review and analyze all the provider's revenue accounts in detail to:
a) Determine revenues that are to be included or excluded from the UUT and /or franchise fee
computations;
b) Review the revenues excluded from the computations, if any, and;
c) Determine if exclusions are permitted by the City's ordinance and /or franchise agreement.
6. Determine if a utility provider or any of its subsidiaries receives any revenues from customers or third -
parties for the use of utility provider's facilities located on City's right -of -way authorized by the franchise
agreement that are not included in the franchise fee calculation used to determine the payment to the
City.
7. Analyze the number of customers reported in the City by rate classification and obtain and review the
utility provider's procedures to code new customers to the proper jurisdictions and the procedures used
to address annexations.
8. Obtain and review the list of any exempted customers, if any, from the UUT and /or franchise fee
computation, For Cable TV Provider's PEG fees, if there are any, request the supporting documentation
on provider's payments to the City. The schedules should include a composition of the number of
subscribers such as basic, non - standard and free subscribers, by month, for each of the calendar years
included in the review period.
9. Sample test the geo- coding system by selecting certain customer accounts within the City boundaries
and in the immediate vicinity to review if those accounts are properly coded as assessed. MuniServices
will concentrate the sampling in problematic geographical areas, such as those that might overlap with
a neighboring city or where multiple zip codes exist. MuniServices will also sample test heavily in the
area of annexations to ensure that proper procedures are in place to identify and properly code these
areas within the Franchisee's system. MuniServices will request that the utility provide the customer
account information in an electronic format for all customers located in the City and surrounding areas.
12
55B -40
10. Compare the provider's payments, exclusions, and other computations as related to the UUT and /or
franchise agreement. Compare the actual payments made to the City for timeliness and accuracy.
11. Conduct an Exit Interview with the utility provider to review findings and obtain the provider's position
on the issues identified. Seek to obtain agreement and /or payment of any amounts due to the City (to
be sent directly to the City) within 30 days.
12, Prepare a written report with findings that describe and explain the results of MuniServices review,
potential additional monies due to the City, the Provider's position on the issues and any applicable
penalties and interest, MuniServices will schedule a final presentation of these findings with the City.
13. Provide any and all necessary schedules and supporting documents to assist the City in collecting
underpaid UUT and /or franchise fees.
Utility Customer's Jurisdictional Coding Verification Service (Optional)
As an optional service under the UUT Premium Services, MuniServices will perform a 100% test of a providers'
customer base, verifying that all customers are correctly coded to the proper jurisdiction, and provide the
providers with any accounts that are identified as being incorrectly coded. This service requires the providers
to provide non - confidential customer account information in an electronic format for all customers located in the
City and surrounding areas.
Deliverables
MuniServices shall deliver to the City the studies, plans, specifications, or other documents as are identified in the
Scope of Services; and shall, upon completion of all work, submit to the City all information developed in the
course of providing the services. MuniServices shall, in such time and in such form as the City may require,
furnish reports concerning the status of services required under this Agreement. MuniServices shall, upon
request by the City and upon completion or termination of this Agreement, deliver to the City all material furnished
to MuniServices by the City.
City Assistance
City agrees to:
1. Provide administrative subpoenas as needed for access to the books and records of the utility.
2. Provide a specific Letter of Authorization for MuniServices addressed to the specific utility for the
specific audit,
3. Invoice the responsible party for tax deficiencies (plus interest and penalties if applicable) identified and
confirmed by MuniServices within thirty (30) days following receipt of MuniServices detection report or
correspondence.
4. Provide MuniServices with a copy of any settlement agreement with a taxpayer /tax collector within ten
(10) days of entering into such agreement,
5. City agrees to view MuniServices as a revenue enhancement partner and allow MuniServices to assist
the City in increasing compliance and increasing revenues.
Notification
Notify MuniServices within ten (10) days following receipt by the City of payments that are a direct result of
MuniServices compliance and /or audit services (cash, installment, or other compensation directly benefitting
the City) of such tax deficiencies, whether invoiced or not. Upon receipt of such notice, MuniServices will
promptly invoice the City (if applicable).
City's Determination Final
Whenever the City Council or a City Officer is empowered under State or local ordinance to make a determination
as to whether or not a tax assessed against a taxpayer is due, for purposes of this Agreement that determination
shall be final and binding on the parties hereto. However, a City Officer's determination to waive a tax assessment
shall not relieve the City of its obligation to pay MuniServices therefore.
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55B -41
Termination and Completion of Services
1. Either the City or MuniServices may terminate this Agreement, by thirty (30) days prior written notice as
provided in this Section.
If the City terminates this Agreement at any time within twelve (12) months following the effective date of
this Agreement, and Law Firm has prepared an ordinance update for the City (whether or not the City
adopts the recommended update), the City shall nevertheless pay MuniServices four (4) quarterly
payments from the commencement of the Agreement to compensate MuniServices for services rendered,
MuniServices shall also be entitled to additional compensation as described in Exhibit B.
2. Upon termination by either party of the Agreement as provided herein, MuniServices shall be entitled to
retain any fees it may have received from the City as outlined is this Agreement. In addition, MuniServices
shall be entitled to payment according to the terms of Exhibit B for all additional revenues, including interest
and penalties, resulting from MuniServices compliance review activities. Within thirty (30) days following
termination, MuniServices shall provide the City with a list of detections of non - compliance resulting from
the compliance review activities of MuniServices. The City shall, in good faith, diligently seek to: i) correct
such detections of non - compliance made by MuniServices prior to the date of termination; and, ii) collect
the additional revenues that are due the City and MuniServices for past periods and for the twelve quarters
going forward following the correction, even though the date of actual correction may occur after the
termination date. MuniServices shall assist the City in this correction /collection effort, if so requested by the
City. MuniServices right to compensation for city- specific compliance review activities under Article 4
Section B shall survive termination of this Agreement for any reason.
Confidentiality
MuniServices agrees that it shall keep all information it receives concerning City taxpayers confidential and shall
use it solely for tax compliance purposes. Services performed by MuniServices prior to termination may result in
the City's receipt of revenue after termination. This receipt of revenue entitles MuniServices to payment from
the City even after expiration of contract or termination. The City agrees to provide to MuniServices after
expiration or termination of this Agreement such confidential payment information as is necessary to enable
MuniServices to calculate the compensation due to MuniServices as a result of said receipt of revenue and
MuniServices shall maintain the confidentiality of this information. Therefore, MuniServices shall be deemed a
contractor under Revenue and Taxation Code Section 7284.6 - .7 after expiration of contract or receipt of
notice of termination from the City for the sole and limited purpose of enabling MuniServices to have access to
said information to calculate compensation.
City agrees to view MuniServices as a revenue enhancement partner and allow MuniServices to assist the City
in increasing compliance and increasing revenues.
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55B -42
43ARIMI 7
COMPENSATION
Compensation for UUT Compliance, Administration and Revenue Protection Program
A. Annual Fixed Fee
Total Annual Fixed Fee: The City's total annual fixed fee for participating in the Program (including Law
Firm) shall be the greater of six - tenths of one percent (0.6 %) of the total 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 $15,000. For the first year of the agreement, the City will provide the actual UUT
payments received for fiscal year ending June 30, This will be the basis for the first year UUT Program
fees. In subsequent years, MuniServices will calculate the fee based on the actual remittance notices
received for the most recent fiscal year.
2. Disclosure of Allocation of Annual Fee between MuniServices and Law Firm. The total annual fee
payment shall be allocated as follows:
City will pay MuniServices its fee payments as specified in A.9 above on the scheduled
dates as specified on A.3 below. MuniServices agrees to pay Law Firm on behalf of the City
the greater of 35% of the total annual fixed fee or $7,500, provided that if, at the request of
the City, Law Firm provides legal services relating to a UUT ballot measure [see Art.2(C) (3)
above], MuniServices agrees to pay Law Firm for the first year only the greater of 50% of the
total annual fixed fee or $90,000. At any time, Law Firm and MuniServices may, by mutual
agreement, adjust their proportional share of said total annual fee, provided that such
parties shall receive prior approval of such adjustment from the City.
3. Quarterly Payments of Fixed Fee: The annual fixed fee shall 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 this
Agreement is other than on an invoice date, the City shall be invoiced for the first quarterly payment on
the immediately following invoice date as set forth herein. City shall be invoiced and responsible for a
prorated portion of the preceding quarter based on the effective date of this Agreement. Payment will
be made to MuniServices within forty -five (45) days of receipt of MuniServices invoice therefore. Any
amounts which remain unpaid after forty -five (45) days shall accrue interest at a rate of one and one -
half percent (1.5 %) per month, or the maximum amount permitted by law. These quarterly payments
are nonrefundable, and such payments by City to MuniServices shall be deemed full payment to Law
Firm.
B. Specific to AB 1717
The work performed specific to AB1717 shall not be construed as permitting a contingent fee arrangement
as payment for services rendered pertaining to prepaid local charges and any fees paid by the City to
MuniServices for city - specific auditing of a "seller" of prepaid wireless UUT remitting to the BOE, shall only
be performed on a fixed fee basis or on an hourly time and material basis and shall not involve any
contingent fee arrangement.
MuniServices fees for services performed on an hourly rate schedule shall depend on the personnel
assigned to perform the work, and shall be based on the job classification as follows:
Principal: $200 per hour
Project Manager: $175 per hour
15
55B -43
Client Services: $150 per hour
Information Technology (IT) support: $175 per hour
Operational Support:
o Director or Manager: $175 per hour
o Senior Analyst: $125 per hour
o Analyst: $100 per hour
o Administrative: $75 per hour
These additional consulting services will be invoiced at least monthly based on actual time and expenses
incurred.
Compensation for Optional City - Specific Audits Compliance Review Services
With the exception noted in subsection (2) below, with respect to a city - specific compliance review referred
to under the city- specific scope of work above, MuniServices shall be entitled to contingent fee
compensation where MuniServices' compliance review activities result in the City receiving additional
revenues from such city - specific compliance review activity. Accordingly, the City shall pay MuniServices
twenty -five percent (25 %) of the additional revenues, including interest and penalties, that has resulted
from its city - specific compliance review activities. MuniServices will seek to recover, or assist the City in
recovering all revenue due the City from prior periods, if any, and MuniServices will receive 25% of any
retroactive recovery with a minimum compensation recovery period of twelve (12) calendar quarters. In
cases where there are less than twelve calendar quarters in the retroactive recovery period, recovery in
prospective quarters will be included to satisfy the twelve calendar quarter minimum recovery period. If the
City determines that a correction should be applied prospectively from the date of the determination only,
then MuniServices' Compensation shall apply to the additional revenues resulting from the correction for
the twelve calendar quarters following the commencement of the prospective correction. In calculating
additional revenues, if actual revenue amounts are not available or easily obtained, MuniServices may,
with the approval of the City, use the best available information to estimate the additional revenues (e.g.,
averaging known underpayments or use of industry averages). As used in this subsection, the term
"additional revenues" includes the value of any other services, credits, property of every kind or nature, or
other consideration received by the City in lieu of monetary payment.
2. Specifically for Solid Waste compliance reviews, MuniServices shall be entitled to additional fixed fee
compensation. The amount of the fixed fee compensation and the detailed of scope of work shall be
determined prior to the start of the work and shall be mutually agreed to in writing between both parties.
3. Notwithstanding subsections (1 and 2) above, nothing herein shall prohibit the parties from entering into a
written agreement on compensation for city - specific compliance review services on a fixed fee or any other
separately negotiated basis,
4. MuniServices compensation is due and payable within forty -five (45) days of the City's receipt of
MuniServices invoice. Any undisputed amounts which remain unpaid after forty -five (45) days shall accrue
interest at a rate of one and one -half percent (1.5 %) per month, or the maximum amount permitted by law.
Utility Customer's Jurisdictional Coding Verification Service (Optional)
Should MuniServices provide the Optional Jurisdictional Coding Verification Service to the City, the City shall
pay MuniServices a fixed fee of twenty- thousand dollars ($20,000) per each Provider coded. The fixed fee will
be billed to the City 50% upon election of the service and the remaining 50% upon completion.
MuniServices Expenses
MuniServices shall absorb all expenses incurred by MuniServices in providing its services as described herein.
These expenses include items such as employee salaries and benefits, insurance, airfare, auto rentals, meals,
16
55B -44
lodging, express mail, mail, telephone, copying, directories, on -line resources, and other overhead and
miscellaneous expenses.
Additional Consulting
The City may request that MuniServices provide additional consulting services at any time during the term of
the Agreement. If MuniServices and the City agree on the scope of the additional consulting services
requested, then MuniServices shall provide the additional consulting on a Time and Materials basis.
Depending on the personnel assigned to perform the work, MuniServices standard hourly rates range from $75
per hour to $200 per hour.
These additional consulting services will be invoiced at least monthly based on actual time and expenses
incurred. All reimbursabfe expenses shall receive prior approval from the City and shall be reimbursed at cost
to MuniServices.
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55B -45
4119-11W
MuniServices Helpful Contacts
Contact
Project Role
Phone
Email
Julia Erdkamp, MPA
Client Services Mana qLr
559,246.2901
jVLlaerclkarn (cDmuniservices.com
Dom _Jensen
SVP Client Services
559.288.8943
Jonathan Gerth
VP Audit Services
205.423.4177
v girth revds.com
Steve Quon
UUT Supervisor
800.800.8181 x 76517
Tim Hunter
Franchise Fee Manager
205.423.4170
L revds com
Billing Department
757.321.2517
bllkno�portfollorecovery.corn
Francesco Mancia,
MBA
VP Government Relations
559.288.7296
fran.mandaBmuniservices.corn
Brenda Narayan
Dir. Government Relations
916.261.5147
bronda.nara ,an aMuniservices.com
Patricia A. Dunn,
MSHR
Contracts Manager
559,271.6852
_I
18
55B-46
I *Alw I:3i17i7
ADDITIONAL INSURED ENDORSEMENT
FOR COMMERCIAL GENERAL LIABILITY POLICY
Insurance Company
This endorsement modifies such insurance as is afforded by the provisions of Policy #
relating to the following:
1. The CITY of Santa Ana, 20 Civic Center Plaza, Santa Ana, California 92701; its officers,
employees, agents, volunteers and representatives are named as additional insureds ( "additional insureds ")
with regard to liability and defense of suits arising from the operations and uses performed by or on behalf of
the named insured.
2. With respect to claims arising out of the operations and uses performed by or on behalf
of the named insured, such insurance as is afforded by this policy is primary and is not additional to or
contributing with any other insurance carried by or for the benefit of the additional insureds.
3. This insurance applies separately to each insured against whom claim is made or suit is
brought except with respect to the company's limits of liability. The inclusion of any person or organization as
an insured shall not affect any right which such person or organization would have as a claimant if not so
included.
4. With respect to the additional insureds, this insurance shall not be cancelled, or
materially reduced in coverage or limits except after thirty (30) days written notice has been given to the CITY
of Santa Ana, 20 Civic Center Plaza, Santa Ana, California 92701.
(Completion of the following, including countersignature, is required to make this endorsement effective.)
Effective
Policy #
Issued to
Named Insured
Countersigned by
Authorized Representative
this endorsement form as a part of
19
55B -47
55B -48
EXHIBIT 4
RESOLUTION NO. 2016-
A RESOLUTION OF THE CITY OF SANTA ANA AUTHORIZING THE
EXAMINATION OF PREPAID MOBILE TELEPHONY SERVICES
SURCHARGE AND LOCAL CHARGE RECORDS
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS:
WHEREAS, pursuant to Ordinance No. NS -2860 of the City of Santa Ana and the Local Prepaid
Mobile Telephony Services Collection Act, the City of Santa Ana, hereinafter called Local
Jurisdiction, entered into a contract with the State Board of Equalization, hereafter referred to as
the Board, to perform all functions incident to the administration and collection of the prepaid
mobile telephony services surcharge and local charges (Rev. & Tax. Code, § 42101.5); and
WHEREAS, the Local Jurisdiction deems it desirable and necessary for authorized
representatives of the Local Jurisdiction to examine confidential prepaid mobile telephony
services surcharge and local charge records pertaining to the prepaid mobile telephony
services surcharge and local charges collected by the Board for the Local Jurisdiction pursuant
to that contract;
WHEREAS, the Board will make available to the Local Jurisdiction any information that is
reasonably available to the Board regarding the proper collection and remittance of a local
charge of the Local Jurisdiction by a seller, including a direct seller, subject to the
confidentiality requirements of Sections 7284.6, 7284.7 and 19542 of the Revenue and Taxation
Code; and
WHEREAS, Sections 42110 and 42103 of the Revenue and Taxation Code sets forth certain
requirements and conditions for the disclosure of Board of Equalization records and establishes
criminal penalties for the unlawful disclosure of information contained in or derived from the
prepaid mobile telephony services surcharge and local charge records of the Board;
NOW, THEREFORE IT IS RESOLVED AND ORDERED BY THE CITY COUNCIL OF THE
CITY OF SANTA ANA AS FOLLOWS:
Section 1. That the Executive Director of Finance and Management Services, Assistant
Finance Director, Treasury and Customer Services Manager, or other officer or employee of the
Local Jurisdiction designated in writing by City Manager to the Board is hereby appointed to
represent the Local Jurisdiction with authority to examine prepaid mobile telephony services
surcharge and local charge records of the Board pertaining to prepaid mobile telephony
services surcharge and local charges collected for the Local Jurisdiction by the Board
pursuant to the contract between the Local Jurisdiction and the Board. The information
obtained by examination of Board records shall be used only for purposes related to the
collection of the Local Jurisdiction's prepaid mobile telephony services surcharge and local
charges by the Board pursuant to the contract.
Resolution No. 2016 -XXX
Page 1 of 3
55B -49
Section 2. That the Executive Director of Finance and Management Services, Assistant
Finance Director, Treasury and Customer Services Manager or other officer or employee of the
Local Jurisdiction designated in writing by the City Manager to the Board is hereby appointed to
represent the Local Jurisdiction with authority to examine those prepaid mobile telephony
services surcharge and local charge records of the Board for purposes related to the following
governmental functions of the Local Jurisdiction:
a) compliance and enforcement of the utility users tax (local charge)
b) administrative functions set out in City's utility users tax ordinance
c) legal interpretation and enforcement of utility users tax ordinance
The information obtained by examination of Board records shall be used only for those
governmental functions of the Loral Jurisdiction listed above.
Section 3. That MuniServices, LLC is hereby designated to examine the prepaid mobile
telephony services surcharge and local charges records of the Board of Equalization pertaining
to prepaid mobile telephony services surcharge and local charges collected for the Local
Jurisdiction by the Board. The person or entity designated by this section meets all of the
following conditions (Rev. & Tax. Code, § 42110, subd. (b)(2)):
a) has an existing contract with the Local Jurisdiction that authorizes the person to
examine the prepaid mobile telephony services surcharge and local charge records;
b) is required by that contract with the Local Jurisdiction to disclose information
contained in or derived from, those records only to an officer or employee of the
Local Jurisdiction authorized by the resolution to examine the information;
c) is prohibited by that contract from performing consulting services for a seller during the
term of that contract;
d) is prohibited by that contract from retaining information contained in, or derived
from, those prepaid mobile telephony services surcharge and local charge records,
after that contract has expired.
The contract between the Local Jurisdiction and MuniServices, LLC designated by the Local
Jurisdiction to request information from the Board shall be subject to the following limitations
(Rev. & Tax. Code, § 42103, subd. (g)):
a) MuniServices, LLC shall, to the same extent as the Board, be subject to Section 55381,
relating to unlawful disclosures.
b) the contract between the Local Jurisdiction and MuniServices, LLC shall not provide, in
whole or in part, in any manner a contingent fee arrangement as payment for services
rendered.
Resolution No. 2016 -XXX
Page 2 of 3
55B -50
BE IT FURTHER RESOLVED THAT the information obtained by examination of the
Board records shall only be used for purposes related to the collection of the Local
Jurisdiction's prepaid mobile telephony services surcharge and local charges by the Board
pursuant to the contract between the Local Jurisdiction and Board, or for purposes related to
other governmental functions of the Local Jurisdiction, as identified above in section 2.
Section 4. This Resolution shall take effect immediately upon its adoption by the City Council,
and the Clerk of the Council shall attest to and certify the vote adopting this Resolution.
ADOPTED this day of 2016.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia Carvalho, City Attorney
Lisa Storck
Assistant City Attorney
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of Council, do hereby attest to and certify the attached Resolution
No. to be the original resolution adopted by the City Council of the City of Santa
Ana on
IRM0
Clerk of Council
City of Santa Ana
55B -51
Resolution No. 2016 -XXX
Page 3 of 3
55B -52