1 REQUEST FOR PROPOSALS
RFP 23-09
CANNABIS TAX AUDITING SERVICES
FOR THE CITIES OF LA MESA AND CHULA VISTA AND THE
COUNTY OF IMPERIAL
October 3, 2022
City of La Mesa
Finance Department
8130 Allison Ave
La Mesa, CA 91942
2 SECTION 1
REQUEST FOR PROPOSALS
A. INVITATION
The City is soliciting qualification packets from companies experienced and qualified to perform cannabis tax audit services for the City of La Mesa, City of Chula Vista and County of Imperial (hereinafter referred to as “Agencies”). Interested and qualified companies who have demonstrated their ability at providing comparable services are invited to submit proposals. This award will be for one year with four one-year options to renew.
Qualified companies are invited to submit an online proposal to the City no later than 5:00 p.m. on November 1, 2022.
B. BACKGROUND OF THE CITY OF LA MESA
The City of La Mesa was incorporated in 1912, as a General Law, Council -Manager municipality. The City’s approximate population size is 73,000. La Mesa is a full -service city.
On November 6, 2018, La Mesa voters approved a cannabis business tax (Measure V) by
73.4 percent, which authorized the establishment and implementation of a cannabis business tax on all cannabis businesses operating in the City of La Mesa. This is a general tax and is used to fund general expenses such as police, fire, roads and recreation.
Rates – Medicinal
1. Cultivation: $7 annually per SQFT of canopy space (indoor) or $1 annually per SQFT of canopy space for any nursery
2. Testing laboratory: 1% of gross receipts
3. Retail sales: 0% of gross receipts
4. Distribution: 2% of gross receipts
5. Manufacturing, processing or microbusinesses: 2% of gross receipts
Rates – Adult-Use
1. Cultivation: $7 annually per SQFT of canopy space (indoor) or $1 annually per SQFT of canopy space for any nursery
2. Testing laboratory: 1% of gross receipts
3. Retail sales: 4% of gross receipts
4. Distribution: 2% of gross receipts
5. Manufacturing, processing or microbusinesses: 2.5% of gross receipts
The above rates are set per La Mesa Municipal Code Section 6.10. 3 C. BACKGROUND OF THE CITY OF CHULA VISTA
The City of Chula Vista was incorporated in 1911. It is the second -largest City in San Diego County with a population over 277,000 residents.
Chula Vista boasts more than 52 square miles of coastal landscape, canyons, rolling hills, mountains, quality parks, and miles of trails. Chula Vista is a leader in conservation and renewable energy, has outstanding public schools, and has been named one of the top safest cities in the country.
Chula Vista voters approved Measure Q on November 6, 2018, by 64.32%. Me asure Q imposes a cannabis business tax of $25 per square foot of canopy on cannabis cultivators and 7% of gross receipts on all other cannabis businesses including Storefront Retailers, Non-Storefront Retailers, Manufacturers, Distributors, and Testing Laboratories. This tax is to fund general City services, including enforcement efforts against cannabis businesses that are operating illegally.
Chula Vista Municipal Code chapter 5.19 and the City’s Cannabis Regulations contain the local licensing and regulatory provisions governing commercial cannabis businesses in the City of Chula Vista.
D. BACKGROUND OF THE COUNTY OF IMPERIAL
Imperial County is home to approximately 180,000 residents which live and work within its seven cities (Brawley, Calexico, Calipat ria, El Centro, Holtville, Imperial and Westmorland) and eight unincorporated communities (Bombay Beach, Heber, Niland, Ocotillo, Palo Verde, Salton City, Seeley and Winterhaven). The county was the last to be established in California in 1907; however, it is the ninth largest California County encompassing 4,284 square miles.
We have a rich agricultural heritage, which includes the production of half of our nation’s winter vegetables, an extensive amount of renewable resources, including geothermal, wind, and solar, a wide-range of cultural and outdoor recreational activities with hundreds of points of interest such as the Imperial Sand Dunes Recreation Area, a magnet for off - road enthusiasts, and the Sonny Bono Salton Sea National Wildlife Refuge, a renowned birding site, and a lively population with frequent family-oriented community events.
4 SECTION 2
SCOPE OF WORK
A. SCOPE OF REQUIRED SERVICES
Services desired may include, but are not limited to the following item related to business tax audits. The list of services may vary between the Agencies based on need.
Business Tax Audits
1) Provide technical and policy expertise to the Agencies related to the operations and understanding of the Cannabis Industry to ensure compliance with state and local law. 2) Facilitate at least three stakeholder meetings (informational kick -off, workshop for input, and final draft or process review).
3) Recommend Agencies’ policies and procedures for tax collection and tax audits including the development of recommended internal control standards and record keeping/audit related administrative policies and procedures to ensure optimal cannabis operator compliance with state and local laws. 4) Provide assistance with Track and Trace System Evaluation. 5) Monitor business tax reporting to ensure compliance with applicable laws. 6) Conduct audits annually or as recommended per industry standards or practice. a) Represent the Agencies for purposes of examining records related to cannabis tax to identify and confirm any errors/omissions leading to the deficit of payments to the Agencies.
b) For each error/omission identified and confirmed, prepare the appropriate documentation to facilitate recovery of revenue due to the Agency including any applicable penalties and interest.
c) Prepare and provide to the appropriate parties requests for corrective action and revenue recovery.
d) Meet with designated Agency staff as necessary to review findings and recommendations.
e) Provide any additional assistance as necessary to support the Agency in recovering and preventing tax delinquencies.
f) Perform tax audits to industry best practice standards of quality and detail for cash basis businesses.
5 B. CITY OF CHULA VISTA ONLY – INVENTORY AUDIT SCOPE OF SERVICES
The City of Chula Vista seeks qualified firms with experience assisting municipal governments with consulting services related to audit initialization, and inventory and compliance audit services, which include, but not limited to:
1. Provide assistance in cannabis on-site inventory audit, reporting and analysis.
2. Provide assistance in the development of inventory audit policies and procedures.
C. CONTRACT MODIFICATION
From time to time minor modifications may be required to the Scope of Work. Permanent modifications to the Scope of Work will be provided to the contractor in writing. In the event such modifications, in the opinion of the Contractor, make compliance with contract conditions impractical, Contractor shall submit a written request for modification to the requirements in the Scope of Work. This request shall set forth in detail the reasons why the specified changes make the Scope of Work impractical and include Contractor’s proposal or recommendation to relieve the impracticality.
6 SECTION 3
QUALIFICATIONS AND REQUIREMENTS
A. QUALIFICATIONS
The qualifications of a vendor will be determined based on the following factors:
1) Understanding of the Agencies’ request for services. 2) Experience as subject matter and technical experts to implement and support the Agencies’ cannabis tax collection process.
3) Experience in providing extensive professional services as it relates to similar activities directly related to public agencies.
4) Experience in providing services with personnel who are trained and skilled in cannabis compliance.
5) Ability to work with Agencies’ staff on all issues related to cannabis tax policies, fiscal analysis, compliance reviews, tax audits/assessments.
6) Ability to provide best practices to ensure all state and local laws are followed. 7) Understanding of the ongoing evolution of state laws. 8) Understanding of the industry standards of practice for the management of cannabis compliance and tax audits.
9) Ability to interact professionally with cannabis businesses and Agencies’ personnel; promote quality customer service and a professional image of the Agency; and respond promptly and courteously to requests.
10) Verifiable references from other clients.
7 SECTION 4
SUBMITTAL INSTRUCTIONS
A. SUBMISSIONS DUE
Please submit proposals online in the form of scanned documents through PlanetBids. Only submissions made through the online system will be accepted.
All proposals are due no later than by 5:00 p.m. on Tuesday, November 1, 2022. Proposals received after the deadline will not be considered.
B. REQUIRED COMPONENTS
Your proposal must be complete for consideration and must consist of two files, your response to the request for qualifications and your cost proposal. Your response to the request for qualifications should include the following documents:
▪ Information Statement including contact details.
▪ Statement of Interest (250 words or less) describing why your company has an interest in this project and why it would be the Agencies best choice. ▪ Statement of company background and philosophy (250 words or less). ▪ Description of approach to Scope of Work listed.
▪ Statement of qualifications matching those required.
▪ List of other similar contract experience and contact names to be used as references (please list at least three (3) to be used as references). ▪ Cost schedule breakdown including each required service.
A Proposal Packet (Section 6) has been included for your use. If you choose to provide your own forms you must include all information listed. 8 SECTION 5
EVALUATION CRITERIA AND KEY CONSIDERATIONS
A. QUALIFICATION EVALUATION PROCESS
Proposals will be evaluated by a panel of Agency staff. The Agencies will use the following criteria for evaluation:
20% Description of approach to Scope of Work
20% Statement of qualifications
20% References
20% Cost schedule
20% Interview
B. TENTATIVE SCHEDULE FOR THE RFP
RFP distributed 10/03/2022
Q&A deadline 10/25/2022
Responses to RFP due 11/01/2022
Committee review complete 11/14/2022
Interviews (remote) 11/21/2022 (week of)
Selection of company 12/13/2022
Agreement execution date 01/01/2023
C. QUESTIONS AND ANSWERS
Questions related to this RFP must be submitted through the PlanetBids system and will only be accepted through 1:00 p.m. on Monday, October 25, 2022.
D. REVISIONS TO THE RFP
The Agencies reserve the right to revise the RFP prior to the date that proposals are due.
Revisions to the RFP shall be communicated via PlanetBids vendor and bid management system to all prospective businesses. The Agencies reserve the right to extend the date by which the submittals are due.
E. DISCRETION AND LIABILITY WAIVER
The Agencies reserve the right to exercise discretion and apply its judgment with respect to any qualifications submitted.
The Agencies reserve the right to reject any or all submittals, either in part or in their entirety, or to request and obtain, from one or more of the businesses submitting, 9 supplementary information as may be necessary for Agencies staff to analyze the qualifications pursuant to the contractor selection criteria contained herein.
The Agencies may require contractors to participate in additional rounds of discussions, negotiations, or more refined submittals before the ultimate selection of a contractor is made. These rounds could encompass revisions of the submittal criteria in response to the nature and scope of the initial qualifications.
The contractor, by submitting a response to this RFP, waives all right to protest or seek any legal remedies whatsoever regarding any aspect of this RFP.
This RFP does not commit the Agencies to award a contract, to defray any costs incurred in the preparation of a submission pursuant to this RFP, or to procure or contract for work.
The company shall be responsible for all costs associated with preparation of their submission to the City.
All qualifications submitted in response to this RFP become the property of the City and public records and, as such, may be subject to public review.
The Agencies reserve the right to cancel or modify in part or in its entirety this RFP including, but not limited to: selection procedures, submittal date, and submittal requirements. If the City cancels or revises the RFP, all companies will be notified via PlanetBids.
F. CITY’S STANDARD GENERAL SERVICES AGREEMENT
The successful company is expected to execute each Agencies standard general services agreement (cop ies provided) as is with minor modifications as required to customize the agreement to the specific services. Successful companies shall comply with all insurance and licensing requirements as set forth in the standard agreement.
G. OTHER PUBLIC AGENCIES
Other public agencies may piggyback on this RFP or the executed agreement from this RFP award in order to enter into contracts with the successful company for any and all services specified within.
10 SECTION 6
PROPOSAL PACKET, RFP 23-09
CANNABIS TAX AUDITING SERVICES
INFORMATION STATEMENT
Legal Name of Organization:
Date Established:
Legal Status, i.e., corporation, partnership, sole proprietorship Officers/Owners of Organization:
Name: Title:
Name: Title:
Name: Title:
Name: Title:
Number of Employees: Permanent – Full Time: _____ Part Time: _____
Business Address:
Contact Information:
Organization Bank Name:
Branch:
Address:
Contact Name:
The Agencies reserve the right to perform a credit check on your organization to obtain information regarding your organization’s financial stability.
Are you or your organization currently engaged or involved in any litigation over the proprietary rights or patent rights for the software or services to be used for the City of La Mesa? _____________________ If yes, please attach explanation.
11 STATEMENT OF INTEREST
(250 words or less describing why your company has an interest in this project and why it would be the City of La Mesa’s best choice)
12 STATEMENT OF COMPANY BACKGROUND AND PHILOSOPHY
(250 words or less)
13 DESCRIPTION OF APPROACH TO SCOPE OF WORK
(To match those required)
14 STATEMENT OF QUALIFICATIONS
(To match those required)
15 CONTRACT EXPERIENCE – REFERENCES
(List most recent experience first and specifically include any government agency experience – List any additional on separate sheet)
Company Name
Address
City
State
Zip
Phone
Fax
Email
Principal
Contact Name
Contact Phone
Company Name
Address
City
State
Zip
Phone
Fax
Email
Principal
Contact Name
Contact Phone
Company Name
Address
City
State
Zip
Phone
Fax
Email
Principal
Contact Name
Contact Phone
16 COST SCHEDULE
(Costs should be provided per agency and/or per activity for each item within the scope of work)
1) Provide technical and policy expertise to the Agencies related to the operations and understanding of the Cannabis Industry to ensure compliance with state and local law. $
2) Facilitate at least three stakeholder meetings (informational kick -off, workshop for input, and final draft or process review).
$
3) Recommend Agencies’ policies and procedures for tax collection and tax audits including the development of recommended internal control standards and record keeping/audit related administrative policies and procedures to ensure optimal cannabis operator compliance with state and local laws. $
4) Provide assistance with Track and Trace System Evaluation. $
5) Monitor business tax reporting to ensure compliance with applicable laws. $
6) Conduct audits annually or as recommended per industry standards or practice. $
CITY OF CHULA VISTA ONLY – INVENTORY AUDIT
7) Provide assistance in cannabis on-site inventory audit, reporting and analysis. $
8) Provide assistance in the development of inventory audit policies and procedures. $