1 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
CITY OF CHULA VISTA
CONSULTANT SERVICES AGREEMENT
WITH THE PUN GROUP, LLP
TO PROVIDE CANNABIS TAX AND INVENTORY AUDIT & CONSULTING SERVICES This Agreement is entered into effective as of August 8, 2023 (“Effective Date”) by and between the City of Chula Vista, a chartered municipal corporation (“ City”) and THE PUN GROUP, LLP, (“ Consultant”) collectively, the “Parties” and, individually, a “Party”) with referenceto the following facts:
RECITALS
WHEREAS, On November 6, 2018, City of Chula Vista voters approved Measure Q by 64.32%, which imposes a Cannabis Business tax of $ 25 per square foot of canopy on Cannabis Cultivators, and 7% of gross receiptsof all other CannabisBusinessesincluding Storefront Retailers, Non-Storefront Retailers, Manufacturers, Distributors, and Testing Laboratories, to fund general City services, including but not limited to enforcement efforts againstCannabisBusinessesthat are operating illegally; and WHEREAS, Chula Vista Municipal Code Chapter 5.19 and the City’s Cannabis Ordinance contain the local licensing and regulatory provisions governing Commercial Cannabis Businessesin the City of Chula Vista; and
WHEREAS, Currently, eleven licensed Cannabis Businessesare operating within the City’s boundaries, and a twelfth Cannabis Businesseswill open during fiscal year 2024; and WHEREAS, Chula Vista Municipal Code Section 5.21.150 allows the City to perform compliance audits and examine all cannabisbusinesslocations, books, and records to certify tax remittance and general operations are in accordancewith the City of Chula Vista’s rules and regulations; and WHEREAS, to enhance Cannabis Excise Tax revenue collection efforts, program oversight, and compliance with Municipal CodeChapter5.21, the FinanceDepartmentrequiresthe useof a consultantto provide cannabis excise tax and inventory audit and consulting services; and WHEREAS, In order to procure theseservices in collaboration with City of La Mesa, and the County of Imperial, and in accordancewith Chula Vista Municipal Code Section 2.56.110 for “professional services”, a Request for Proposal was published (RFP 23-09) by the City of La Mesa. Five ( 5) proposals were received, staff from all three agenciesevaluatedthe proposalsand selectedthe Consultant as the most qualified amongst those submitting; and
WHEREAS, Consultant warrants and representsthat it is experienced and staffed in a manner such that it can deliver the services required of Consultant to City in accordancewith the time frames and the terms and conditions of this Agreement.
End of Recitals. Next Page Starts Obligatory Provisions.] DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 2 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
OBLIGATORYPROVISIONS
NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Partieshereby acknowledge, City and Consultant hereby agreeas follows:
1. SERVICES
1.1 Required Services. Consultant agreesto perform the services, and deliver to City the “Deliverables” (if any) describedin the attachedExhibit A, incorporated into the Agreement by this reference, within the time frames set forth therein, time being of the essencefor this Agreement. The services and/or Deliverables describedin Exhibit A shall be referred to herein as the “Required Services.”
1.2 Reductions in Scopeof Work. City may independently, or upon requestfrom Consultant, from time to time, reduce the Required Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agreeto meet and confer in good faith for the purposeof negotiating a corresponding reduction in the compensation associatedwith the reduction.
1.3 Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and ordinancesgoverning procurement and purchasingauthority, City may requestConsultant provide additional services related to the Required Services (“Additional Services”). If so, City and Consultant agree to meet and confer in good faith for the purpose of negotiating an amendmentto Exhibit A, to add the Additio nal Services. Unless otherwise agreed, compensation for the Additional Services shall be charged and paid consistentwith the ratesandterms already provided therein. Once addedto Exhibit A, “Additional Services” shall also become “Required Services” for purposesof this Agreement.
1.4 Standard of Care. Consultant expressly warrants and agrees that any and all Required Services hereundershall be performed in accordancewith the highest standardof care exercised by members of the profession currently practicing under similar conditions and in similar locations.
1.5 No Waiver of Standardof Care. Where approval by City is required, it is understood to be conceptual approval only anddoesnot relieve the Consultantof responsibility for complying with all laws, codes, industry standards, and liability for damagescausedby negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Consultant or its subcontractors.
1.6 Security for Performance. In the event that Exhibit A Section 5 indicates the needfor Consultant to provide additional security for performance of its duties under this Agreement, Consultant shall provide such additional security prior to commencementof its Required Services in the form and on the terms prescribed on Exhibit A, or as otherwise prescribed by the City Attorney.
1.7 Compliance with Laws. In its performance of the Required Services, Consultant shall comply with any and all applicable federal, stateand local laws, including the Chula Vista Municipal Code.
1.8 BusinessLicense. Prior to commencementof work, Consultant shall obtain a businesslicense from City.
1.9 Subcontractors. Prior to commencement of any work, Consultant shall submit for City’s information and approval a list of any and all subcontractorsto be usedby Consultant in the performance of the Required Services. Consultant agrees to take appropriate measures necessary to ensure that all subcontractors and DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 3 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
personnel utilized by the Consultant to complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any responsibilities of the Consultant under this Agreement, Consultant shall ensurethat eachand every subcontractorcarries out the Consultant’s responsibilities asset forth in this Agreement.
1.10 Term. This Agreement shall commence on the earlier to occur of the Effective Date or Consultant’s commencementof the Required Services hereunder, and shall terminate, subject to Sections 6.1 and 6.2 of this Agreement, when the Parties have complied with all their obligations hereunder; provided, however, provisions which expressly survive termination shall remain in effect.
2. COMPENSATION
2.1 General. For satisfactory performanceof the RequiredServices, City agreesto compensateConsultant in the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard terms for billing and payment are set forth in this Section 2.
2.2 Detailed Invoicing. Consultant agreesto provide City with a detailed invoice for servicesperformed each month, within thirty ( 30) days of the end of the month in which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following the Effective Date of the Agreement. All chargesmust be presentedin a line item format with eachtask separately explained in reasonabledetail. Each invoice shall include the current monthly amount being billed, the amount invoiced to date, and the remaining amount available under any approved budget. Consultant must obtain prior written authorization from City for any feesor expensesthat exceedthe estimatedbudget.
2.3 Payment to Consultant. Upon receipt of a properly prepared invoice and confirmation that the Required Services detailed in the invoice have been satisfactorily performed, City shall pay Consultant for the invoice amount within thirty (30) days. Paymentshall bemadein accordancewith thetermsandconditions set forth in Exhibit A and section 2.4, below. At City’s discretion, invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced.
2.4 Retention Policy. City shall retain ten percent (10%) of the amount duefor RequiredServicesdetailed on each invoice ( the “holdback amount”). Upon City review and determination of Project Completion, the holdback amount will be issuedto Consultant.
2.5 Reimbursementof Costs. City may reimburseConsultant’sout-of-pocket costsincurred by Consultant in the performance of the Required Services if negotiated in advance and included in Exhibit A. Unless specifically provided in Exhibit A, Consultant shall beresponsiblefor any andall out-of-pocket costsincurred by Consultant in the performance of the Required Services.
2.6 Exclusions. City shall not be responsible for payment to Consultant for any fees or costs in excessof any agreedupon budget, rate or other maximum amount(s) provided for in Exhibit A. City shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or related to the errors, omissions, negligenceor actsof willful misconduct of Consultant, its agents, employees, or subcontractors.
2.7 Payment Not Final Approval. Consultant understandsand agreesthat payment to the Consultant or reimbursement for any Consultant costs related to the performance of Required Services does not constitute a City final decision regarding whether such payment or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a waiver of any violation by Consultant of the terms of DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 4 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
this Agreement. If City determines that Consultant is not entitled to receive any amount of compensation already paid, City will notify Consultant in writing and Consultant shall promptly return such amount.
3. INSURANCE
3.1 Required Insurance. Consultant must procure and maintain, during the period of performance of Required Services under this Agreement, and for twelve months after completion of Required Services, the policies of insurancedescribedon the attachedExhibit B, incorporated into the Agreement by this reference the “Required Insurance”). The Required Insurance shall also comply with all other terms of this Section.
3.2 Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions relating to the Required Insurancemust be disclosed to and approvedby City in advanceof the commencementof work.
3.3 Standardsfor Insurers. Required Insurancemust be placed with licensedinsurers admitted to transact businessin the State of California with a current A. M. Best’s rating of A V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers ( LESLI) with a current A.M. Best’s rating of no less than A X. For Workers ’ Compensation Insurance, insuranceissuedby the StateCompensationFund is also acceptable.
3.4 Subcontractors. Consultant must include all sub-consultants/sub-contractors as insureds under its policies and/or furnish separatecertificates and endorsementsdemonstrating separatecoverage for those not under its policies. Any separate coverage for sub-consultants must also comply with the terms of this Agreement.
3.5 Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as additional insuredswith respectto any policy of generalliability, automobile, or pollution insurancespecified as required in Exhibit B or as may otherwise be specified by City’s Risk Manager.. The general liability additional insured coverage must be provided in the form of an endorsementto the Consultant’s insurance using ISO CG 2010 ( 11/85) or its equivalent; such endorsement must not exclude Products/Completed Operations coverage.
3.6 General Liability Coverageto be “Primary.” Consultant’s general liability coveragemust be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurancemaintained by the City, its officers, officials, employees, or volunteers is wholly separatefrom the insurance provided by Consultant and in no way relieves Consultant from its responsibility to provide insurance.
3.7 No Cancellation. No Required Insurancepolicy may be canceledby either Party during the required insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail, return receipt requested. Prior to the effective date of any such cancellation Consultant must procure and put into effect equivalent coverage(s).
3.8 Waiver of Subrogation. Consultant’s insurer(s) will provide a Waiver of Subrogation in favor of the City for each Required Insurancepolicy under this Agreement. In addition, Consultant waives any right it may have or may obtain to subrogation for a claim against City.
3.9 Verification of Coverage. Prior to commencement of any work, Consultant shall furnish City with original certificates of insurance and any amendatory endorsementsnecessaryto demonstrateto City that Consultant has obtained the Required Insurance in compliance with the terms of this Agreement. The words DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 5 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
will endeavor” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives” or any similar languagemust be deleted from all certificates. The required certificates and endorsementsshould otherwise be on industry standardforms. The City reservesthe right to require, at any time, complete, certified copies of all required insurance policies, including endorsementsevidencing the coverage required by thesespecifications.
3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or AsbestosPollution Liability and/or Errors & Omissions coverage are required and are provided on a claims -made form, the following requirements also apply:
a. The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning of the work required by this Agreement.
b. Insurance must be maintained, and evidence of insurance must be provided, for at least five ( 5) years after completion of the work required by this Agreement. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Consultant must purchase “extended reporting” coverage for a minimum of five ( 5) yearsafter completion of the work required by this Agreement. d. A copy of the claims reporting requirements must be submitted to the City for review.
3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Consultant’s obligations under this Agreement, including Indemnity.
3.12 Additional Coverage. To the extent that insurancecoverageprovided by Consultant maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained.
4. INDEMNIFICATION
4.1. General. To the maximum extent allowed by law, Consultant shall timely and fully protect, defend, reimburse, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers ( collectively, “ Indemnified Parties”), from and against any and all claims, demands, causesof action, costs, expenses, (including reasonableattorneys’ feesandcourt costs), liability, loss, damageor injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any allegedacts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Required Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising from the sole negligence or willful misconduct of the Indemnified Parties. Also coveredis liability arising from, connectedwith, causedby or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passivenegligent acts or omissions of the Consultant, its employees, agentsor officers, or any third party.
4.2. Modified Indemnity Where Agreement Involves Design Professional Services. Notwithstanding the forgoing, if the services provided under this Agreement are design professional services, as defined by California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 6 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
obligation under Section 1, above, shall be limited to the extent required by California Civil Code section 2782.8.
4.3 Costsof DefenseandAward. Included in Consultant’s obligations underthis Section 4 is Consultant’s obligation to defend, at Consultant’s own cost, expense and risk, and with counsel approved in writing by City, any andall suits, actionsor other legal proceedingsthat may be brought or instituted againstone or more of the Indemnified Parties. Subject to the limitations in this Section 4, Consultant shall pay and satisfy any judgment, award or decreethat may be renderedagainst one or more of the Indemnified Parties for any and all related legal expensesand costs incurred by any of them.
4.4. Consultant’s Obligations Not Limited or Modified. Consultant’s obligations under this Section 4 shall not belimited to insuranceproceeds, if any, receivedby the Indemnified Parties, or by any prior or subsequent declaration by the Consultant. Furthermore, Consultant’s obligations under this Section 4 shall in no way limit, modify or excuseany of Consultant’s other obligations or duties under this Agreement.
4.5. Enforcement Costs. Consultant agrees to pay any and all costs and fees City incurs in enforcing Consultant’s obligations under this Section 4.
4.6 Survival. Consultant’sobligations under this Section 4 shall survive the termination of this Agreement.
5. FINANCIAL INTERESTS OF CONSULTANT.
5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and consultants performing work for government agenciesto publicly disclose certain of their personal assetsand income using a Statementof Economic Interests form ( Form 700).
In order to assure compliance with these requirements, Consultant shall comply with the disclosure requirements identified in the attachedExhibit C, incorporated into the Agreement by this reference.
5.2 Disclosures; Prohibited Interests. Independent of whether Consultant is required to file a Form 700, Consultant warrants and representsthat it hasdisclosedto City any economic interestsheld by Consultant, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is thesubjectof this Agreement. Consultant warrantsandrepresentsthat it hasnot employedor retained any company or person, other than a bona fide employee or approved subcontractor working solely for Consultant, to solicit or securethis Agreement. Further, Consultant warrants andrepresentsthat it hasnot paid or agreedto pay any company or person, other than a bona fide employee or approved subcontractor working solely for Consultant, any fee, commission, percentage, brokeragefee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further warrants and represents that no officer or employee of City, has any interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Consultant or Consultant’s subcontractors. Consultant further agreesto notify City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. For breach or violation of any of thesewarranties, City shall havethe right to rescind this Agreement without liability.
6. REMEDIES
6.1 Termination for Cause. If for any reasonwhatsoever Consultant shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Consultant shall violate any of the other covenants, agreementsor conditions of this Agreement (each a “Default”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 7 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
terminate this Agreement by giving five ( 5) days written notice to Consultant. Such notice shall identify the Default and the Agreement termination date. If Consultant notifies City of its intent to cure such Default prior to City’s specified termination date, and City agreesthat the specified Default is capable of being cured, City may grant Consultant up to ten (10) additional days after the designatedtermination date to effectuate such cure. In the event of a termination under this Section 6.1, Consultant shall immediately provide City any and all ”Work Product” (defined in Section 7 below) prepared by Consultant as part of the Required Services.
Such Work Product shall be City’s sole and exclusive property as provided in Section 7 hereof. Consultant may be entitled to compensationfor work satisfactorily performed prior to Consultant’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default.
6.2 Termination or Suspensionfor Convenience of City. City may suspendor terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Consultant of such termination or suspension at least fifteen ( 15) days prior to the effective date thereof. Upon receipt of such notice, Consultant shall immediately ceaseall work under the Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7 hereof. Consultant shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requestedor approved by City in advancethat would maximize City’s value under the Agreement.
6.3 Waiver of Claims. In the event City terminates the Agreement in accordancewith the terms of this Section, Consultant hereby expressly waives any and all claims for damagesor compensation as a result of such termination except asexpressly provided in this Section 6.
6.4 Administrative Claims Requirementsand Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presentedin writing and filed with City and actedupon by City in accordancewith the proceduresset forth in Chapter1.34 of the Chula Vista Municipal Code, assamemay be amended, the provisions of which, including such policies and proceduresusedby City in the implementation of same, are incorporated herein by this reference. Upon requestby City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement.
6.5 Governing Law/Venue. This Agreement shall be governed by and construedin accordancewith the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in SanDiego County, Stateof California.
6.6 Service of Process. Consultant agrees that it is subject to personal jurisdiction in California. If Consultant is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Consultant irrevocably consentsto service of processon Consultant by first class mail directed to the individual and addresslisted under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five days after mailing.
7. OWNERSHIP AND USE OF WORK PRODUCT
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 8 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
of the Required Services (collectively “ Work Product”) shall be the sole and exclusive property of City. No such Work Product shall be subject to private use, copyrights or patent rights by Consultant in the United Statesor in any other country without the express, prior written consent of City. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Consultant, except asmay be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generatedas Work Product, Consultant shall make available to City, upon reasonablewritten request by City, the necessary functional computer software and hardware for purposes of accessing, compiling, transferring and printing computer files.
8. GENERAL PROVISIONS
8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties.
8.2 Assignment. City would not have entered into this Agreement but for Consultant’s unique qualifications andtraits. Consultant shall not assignany of its rights or responsibilities underthis Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion.
8.3 Authority. The person(s) executing this Agreement for Consultant warrants and representsthat they have the authority to execute sameon behalf of Consultant and to bind Consultant to its obligations hereunder without any further action or direction from Consultant or any board, principle or officer thereof.
8.4 Counterparts. This Agreement may be executedin counterparts, each of which shall be deemedan original, but all of which shall constitute one Agreement after each Party has signed such a counterpart.
8.5 Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire Agreement betweenthe Partieswith respectto the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneousagreements, understandings, representations, warranties and statements, oral or written, are superseded.
8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services, Consultant agreesto maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the performance of the Agreement, including accounting for costs and expenses charged to City, including such records in the possession of sub- contractors/sub-consultants.
8.7 Further Assurances. The Parties agreeto perform such further acts and to execute and deliver such additional documentsand instruments asmay be reasonablyrequired in order to carry out the provisions of this Agreement and the intentions of the Parties.
8.8 Independent Contractor. Consultant is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agentsor volu nteersshall have control over the conduct of Consultant or any of Consultant’s officers, employees, or agents (“ Consultant Related Individuals”), except as set forth in this Agreement. No Consultant Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 9 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
any other payroll tax with respectto any Consultant Related Individuals; instead, Consultant shall be solely responsible for the payment of same and shall hold the City harmless with respect to same. Consultant shall not at any time or in any manner representthat it or any of its Consultant Related Individuals are employees or agents of City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner.
8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demandsand requeststo be sent to any Party shall be deemedto have been properly given or served if personally served or deposited in the United Statesmail, addressedto such Party, postageprepaid, registered or certified, with return receipt requested, at the addressesidentified in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or otherwise provided in writing.
8.10 Electronic Signatures. EachParty agreesthat the electronic signatures, whether digital or encrypted, of the Parties included in this Agreement areintended to authenticate this writing and to have the sameforce and effect as manual signatures. Electronic Signature meansany electronic sound, symbol, or processattached to or logically associatedwith a record and executedand adoptedby a Party with the intent to sign such record, including facsimile or email electronic signatures, pursuantto the California Uniform Electronic Transactions Act ( Cal. Civ. Code §§ 1633.1 to 1633.17) as amendedfrom time to time.
End of page. Next page is signature page.)
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 10 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
SIGNATURE PAGE
CONSULTANT SERVICES AGREEMENT
IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Consultant agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consentto bound by same, and that they are freely entering into this Agreement asof the Effective Date.
THE PUN GROUP, LLP CITY OF CHULA VISTA
BY:________________________________ BY: ________________________________ Kenneth H. Pun JOHN MCCANN
CPA, CGMA, EngagementPartner MAYOR
ATTEST
BY: ________________________________
Kerry K. Bigelow, MMC
City Clerk
APPROVED AS TO FORM
CITY ATTORNEY
BY: _______________________________
Jill D.S.Maland
Lounsbery FergusonAltona & Peak
Acting City Attorney
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 11 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
EXHIBIT A
SCOPE OF WORK AND PAYMENT TERMS
1. Contact People for Contract Administration and Legal Notice A. City Contract Administration:
Jimmy Vasquez
276 4thAvenue, Chula Vista, CA 91910
619) 585-5688
[email protected]
For Legal Notice Copy to:
City of Chula Vista
City Attorney
276 Fourth Avenue, Chula Vista, CA 91910
619-691-5037
CityAttorney@chulavistaca. gov
B. Consultant Contract Administration:
THE PUN GROUP, LLP
Kenneth Pun
200 E. SandpointeAve Suite 600, SantaAna, CA 92707
949) 777-8801r
[email protected]
For Legal Notice Copy to:
Kenneth Pun
200 E. SandpointeAve Suite 600, SantaAna, CA 92707
949) 777-8801
[email protected]
2. Required Services
A. General Description:
Consultant shall provide services, asdirected by City, relatedto cannabisaudit initialization, compliance audit services, cash handling audit, cannabis revenue excise tax reporting audit, fiscal analysis, inventory audit, reporting and analysis, and development of audit policies and procedures.
B. Detailed Description:
Consultant shall provide services, as directed by City, described below:
Cannabis Revenue Excise Tax Audits:
Provide technical and policy expertise to the City related to the operations and understanding of the cannabisindustry to ensurecompliance with state and local laws.
Facilitate at least three stakeholder meetings (information kick- off, workshops for input, and final draft of processreview).
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 12 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
RecommendCity policies and proceduresfor tax collection and tax audits including the development of recommended internal control standards and record keeping/audit related administrative policies and proceduresto ensureoptimal cannabisoperator compliance with stateand local laws.
Evaluate and implement track and trace system.
Evaluate excise tax reporting to ensurecompliance with applicable laws.
Implement excise tax reporting template.
Conduct audits annually or as recommended per industry standardsor practice. o Representthe City for purposesof examining recordsrelatedto cannabisexcisetax to identify and correct any errors/omissions leading to incorrect remittances to the City. o For errors/omissions in excise tax collection identified, prepare appropriate documentation to facilitate the recovery of revenue due to the City including applicable penalties and interest. o Prepareand deliver notice to entities for corrective action and revenuerecovery. o Meet with City staff as necessaryto review findings and recommendations. o Provide additional assistancenecessary to support the City in recovering and preventing tax delinquencies.
o Perform tax audits to industry practice standardsof quality and detail for cashbasisbusinesses.
Inventory Audit:
Perform cannabison-site inventory audit, reporting and analysis.
Provide technical expertiseto the City in the development of inventory audit policies and procedures.
3. Term: In accordancewith Section 1.10 of this Agreement, the term of this Agreement shall begin August 8, 2023 and end on June 30, 2024 for completion of all Required Services.
4. Compensation:
A. Form of Compensation
Time and Materials. For performance of the Required Services by Consultant as identified in Section 2.B., above, City shall pay Consultant for the productive hours of time spent by Consultant in the performance of the Required Services, at the ratesor amounts as indicated below:
The Pun Group LLP:
1. CannabisBusinessTax Audit, Reporting and Analysis: $6,000 per licenseeeachfiscal year.
Which includes:
a) Facilitate at least 3 stakeholdersmeeting (informational kick- off, workshop for input, and draft or processreview).
b) Recommendpolicies and proceduresfor tax collection and tax audits including development of recommended internal control standardsand record keeping/audit related administrative policies and proceduresto ensureoptimal cannabisoperator compliance with stateand local laws. c) Provide assistancewith track and trace system evaluation. d) Monitor businesstax reporting to ensurecompliance with applicable laws. e) Conduct audits annually or as recommended per industry standardsor practice.
2. Cannabis on-site Inventory Audit, Reporting and Analysis: $ 3,500 - $5,000
3. Development of Inventory Audit Policies and Procedures: $250/hour, not to exceed $25,000 in total price.
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 13 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
B. Reimbursement of Costs
None, the compensationincludes all costs
Notwithstanding the foregoing, the maximum amount to be paid to the Consultant for servicesperformed through June30, 2024 shall not exceed $129,000.
5. Special Provisions:
Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement for four additional one-year terms (July 1 to June 30). The City Manager or Director of Finance/Treasurer shall be authorized to exercise the extensions on behalf of the City. If the City exercises an option to extend, each extension shall be on the same terms and conditions contained herein, provided that the amounts specified in Section 4 above may be increasedby up to 2% for eachextension. The City shall give written notice to Consultant of the City’s election to exercisethe extension via the Notice of Exercise of Option to Extend document.
The maximum amount to be paid to the Consultant for servicesperformed through June30, 2028 if all four options to extend are exercised shall not exceed $303,055.
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 14 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
EXHIBIT B
INSURANCE REQUIREMENTS
Consultant shall adhere to all terms and conditions of Section 3 of the Agreement and agreesto provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x).
Type of Insurance Minimum Amount Form
General Liability:
Including products and
completed operations,
personaland
advertising injury
2,000,000 per occurrence for
bodily injury, personal injury
including death), and property
damage. If Commercial General
Liability insurance with a general
aggregate limit is used, either the
general aggregate limit must apply
separatelyto this Agreement or the
general aggregate limit must be
twice the required occurrencelimit
Additional Insured Endorsement
or Blanket AI Endorsementfor
City*
Waiver of Recovery Endorsement
Insurance Services Office Form
CG 00 01
Must be primary and must not
exclude Products/Completed
Operations
Automobile Liability $ 1,000,000 per accident for bodily injury, including death, and
property damage
Insurance Services Office Form
CA 00 01
Code 1-Any Auto
Code 8-Hired
Code 9-Non Owned
Workers’
Compensation
Employer’s Liability
1,000,000 eachaccident
1,000,000 diseasepolicy limit
1,000,000 diseaseeachemployee
Waiver of Recovery Endorsement
ProfessionalLiability
Errors & Omissions)
1,000,000 eachoccurrence
2,000,000 aggregate
Other Negotiated InsuranceTerms: NONE
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132 15 City of Chula Vista Agreement No.: 2023-133
Consultant Name: THE PUN GROUP, LLP Rev. 1/17/23
EXHIBIT C
CONSULTANT CONFLICT OF INTEREST DESIGNATION
The Political Reform Act1and the Chula Vista Conflict of Interest Code2 (“Code”) require designatedstateand local government officials, including some consultants, to make certain public disclosures using a Statement of Economic Interests form ( Form 700). Once filed, a Form 700 is a public document, accessibleto any member of the public. In addition, consultantsdesignatedto file the Form 700 are also required to comply with certain ethics training requirements.3
A. Consultant IS a corporation or limited liability company and is therefore EXCLUDED4from disclosure.
B. Consultant NOT a corporation or limited liability company and disclosure designation is asfollows:
APPLICABLE DESIGNATIONS FOR INDIVIDUAL( S) ASSIGNED TO PROVIDE SERVICES Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict- of-interest-code.) Name Email Address Applicable Designation
Enter Name of Each Individual
Who Will Be Providing Service
Under the Contract – If
individuals have different
disclosure requirements,
duplicate this row and
complete separately for each
individual
Enter email address(es) A. Full Disclosure
B. Limited Disclosure ( selectoneor moreof
thecategoriesunder which theconsultantshall file):
1. 2. 3. 4. 5. 6. 7.
Justification:
C. Excluded from Disclosure
1. Required Filers
Each individual who will be performing services for the City pursuant to the Agreement and who meetsthe definition of “Consultant,” pursuantto FPPC Regulation 18700.3, must file a Form 700.
2. Required Filing Deadlines
Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City' s online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement.
3. Filing Designation
The City Department Director will designateeachindividual who will be providing servicesto the City pursuantto the Agreement as full disclosure, limited disclosure, or excluded from disclosure, basedon an analysis of the services the Consultant will provide. Notwithstanding this designation or anything in the Agreement, the Consultant is ultimately responsible for complying with FPPC regulations and filing requirements. If you have any questions regarding filing requirements, pleasedo not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK- FPPC, or 866) 275-3772 *2.
Pursuantto theduly adoptedCity of ChulaVista Conflict of InterestCode, this documentshall serveasthe written determinationof theconsultant’s requirementto comply with thedisclosurerequirementssetforth in theCode.
Completed by: Margarita Guerra
1 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 2 Chula Vista Municipal Code §§2.02.010-2.02.040.
3 Cal. Gov. Code §§53234, et seq.
4 CA FPPC Adv. A- 15-147 (Chadwick) (2015); Davis v. Fresno Unified School District ( 2015) 237 Cal.App.4th261; FPPC Reg. 18700.3 (Consultant defined asan “individual” who participates in making a governmental decision; “individual” doesnot include corporation or limited liability company).
DocuSign Envelope ID: 7716E7E8- AACD- 4E4A- 96A4- 34FCA113B132