CONSULTANT SERVICES AGREEMENT
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ORfGfNAL
THIS AGREEMENT is made at Emeryville California, as
of ~"'UP."i I').. ) 19~ by and between the City of Emeryville a municipal corporation (hereafter referred to as "City") and Municipal Resource Consultants (hereafter referred to as "Consultant" or "MRC"), who agree as follows:
1. Services. SUbject to the terms and conditions
set forth in this Agreement, Consultant shall provide to City the services described in Exhibit "A". Consultant
shall provide said services at the time, place, and in the manner specified in Exhibit "A". The Consultant shall not be compensated for services outside the scope of Exhibit "A".
2. Payment. City shall pay Consultant for services
rendered pursuant to this Agreement at the times and in the manner set forth in Exhibit "A". The payments specified in Exhibit "A" shall be the only payments to be made to
Consultant for services rendered pursuant to this Agreement, unless the City approves additional compensation for
additional service. Consultant shall submit all billings for services rendered pursuant to this Agreement to City in the manner specified in Exhibit "A".
3. Facilities and Equipment. Consultant shall, at
its sole cost and expense, furnish all facilities and
equipment which may be required for furnishing services pursuant to this Agreement.
4. General Provisions. The general provisions set
forth in Exhibit "B" are part of this Agreement. In the event of any inconsistency between said general provisions and any other terms or conditions of this Agreement, the other term or condition shall control insofar as it is
inconsistent with the general provisions.
5. Exhibits. All Exhibits referred to herein are
attached hereto and are by this reference incorporated
herein.
EXECUTED as of the day and year first above stated.
CITY OF EMERYVILLE
A Municipal corporation
ATTEST:
By:
Title:
Date:
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
(;Ph/)J ...1 (lLt-{J'1.-~
"aohn T. Austin
ATTEST TO FORM:
CITY ATTORNEY
2 EXHIBIT "A"
Additional terms of this Agreement are as follows:
OBJECTIVES
MRC shall provide a Sales Tax Information, Audit and
Corollary Consulting service designed to achieve the
following objectives:
Sales Tax Information
Computerize the City's sales tax data utilizing MRC's
Sales Tax Analysis & Reporting System (STARS) to
readily facilitate the City's monitoring, analysis and
forecasting of its sales tax revenue.
Sales Tax Audit
Conduct an initial and ongoing sales tax audit in order to identify and correct point of sale taxpayer
reporting errors and thereby generate new sales tax
income for the City. MRC's sales tax audit shall
encompass all city businesses and not just the major
firms.
Corollary Consulting
As an outgrowth of the sales tax information and audit
services, MRC shall identify additional opportunities
for the city and/or MRC to enhance the City's revenue
base in areas such as sales tax, property tax, business license tax, utility users tax and defined economic
development goals.
SCOPE OF SERVICE
The scope of service includes, but is not limited to, MRC performing the following tasks:
Sales Tax Information
o Procure a computer tape of sales tax permit
records from the State Board of Equalization.
o Establish master file in STARS from tape data
provided in previous task.
o Input data from sales tax distribution reports
provided by state Board of Equalization for most
recent six (6) consecutive quarters.
o Receive and process sales tax distribution reports
quarterly.
o Reorganize and refine computerized sales tax data
for the city utilizing MRC's Sales Tax Analysis
and Reporting System (STARS)
o Prepare and submit STARS reports on a quarterly
basis principally focusing on the major sales tax
producers. Major sales tax producers are defined
as those businesses meeting or exceeding a
specified quarterly revenue threshold and
comprising in aggregate ninety percent (90%) or
more of the sales tax revenue generated from
businesses located in the City.
All major sales tax producers and business
categories are monitored and analyzed quarterly
based on reports to include the following:
Management Summary & Charts. Based on MRC's
analysis and evaluation of the STARS reports
and other data, each quarterly report
includes a comprehensive Management Summary.
The Summary features a general analysis
regarding statewide trends that may affect
the City's sales tax plus a specific analysis
of the city's sales tax composition, changes
and performance. Twelve color charts are
included in each report to graphically
illustrate the data and analysis presented in
the Summary. The Management Summary and
Charts do not contain confidential
information and can therefore be distributed
to key City personnel and the City Council.
Major (and Top 100) Sales Tax Producers.
Ranks in descending order according to level
of sales tax produced.
2 Business Classification. Groups and ranks
major producers by business classification
according to level of sales tax produced.
Sales Tax Trend Reports. Indicates growth
and decline comparisons by various categories
for forecasting and analysis.
Geo-Coding. Tracks sales tax performance
within specific areas of the city (e.g., key
shopping centers, redevelopment project
areas, downtown business districts, etc.)
Charts and printed reports are included for
each geo-area. (Note: Each client is
entitled to at least one geo-area at no
charge. If numerous geo-areas are desired,
there many be a nominal charge. MRC will
advise the City in advance of any such
charge, which would be at MRC's cost).
Status Report. MRC cleans up addresses on
all permits and provides a status report on
all changes to the sales tax files, that is
equally useful for business tax enforcement.
The report shows all new permits, address
changes, owner changes and closed permits and
effectively replaces the yellow registration
cards that are cumbersome to use. By
comparing the data which is in a clean
address order with the business tax files,
unlicensed business can be identified and
billed, or business tax records can be
updated for new addresses or owners, or
purged if closed.
The "cleaned up" data from the State Board of
Equalization can be transferred to the City's
computer via floppy diskette or 9-track tape if
the City desires to have the information for other
purposes.
3 Sales Tax Audit
o Develop a target list of potential point of sale
reporting errors based on a comprehensive
inventory and evaluation of all businesses in the
city of Emeryville. These businesses are to be
analyzed based on proprietory guidelines
established by MRC, formulated through expert
knowledge of corporate mergers and acquisitions,
sales vs. use tax, business marketing organization
and methods, commercial sales tax reporting
practices, and other conditions contributing to
reporting errors.
o Contact each target business to determine whether
a point of sale reporting error exists.
Note: This shall be accomplished with the highest
regard to discretion and professional conduct.
MRC sales tax audits shall be predicated on a
constructive pUblic relations approach which
emphasizes the importance of each business to the
city and the mutual benefits of correcting
reporting errors.
o Provide to the city and State Board of
Equalization reports addressing each point of sale
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 tax
income which should be forthcoming to the City of
Emeryville.
o Coordinate with the taxpayer and state Board of
Equalization to make the necessary corrections
plus retroactive adjustments for eligible amounts
improperly distributed in prior quarters.
o On a quarterly basis, monitor and analyze STARS
reports with audit focus on the following:
Those accounts with previously reported point
of sale distribution errors to ensure that
the corrections are made for current quarters
plus retroactive adjustments for eligible
amounts improperly distributed in prior
quarters.
4 Those major accounts comprising approximately
ninety percent (90%) of the City's total
sales tax revenue to identify any
irregularities (e.g., negative fund
transfers, significant increases, decreases,
etc.) and ensure that the city is not getting
less than it is entitled.
Those accounts having a use tax designation
to ascertain why the tax is being classified
as use tax rather than sales tax.
Corollary Consulting
o Make specific recommendations (for city staff
and/or MRC) to further enhance the City's revenue
base in areas such as sales tax, property tax,
business license tax, transient occupancy tax,
utility users tax and defined economic development
goals.
o Provide City employees with post audit sales tax
orientation:
Conduct technical seminar on California's
local sales tax distribution process.
Train staff in the fundamentals of sales tax
aUditing should the City desire to assume
responsibility for future maintenance of
local retail accounts internally.
o
o
o
Analyze list of City's major sales tax producers
in order to advise and assist the City in
developing a pUblic relations program to prevent
the loss of these important businesses.
Profile for Economic Development/Community
Redevelopment and Chamber of Commerce personnel
the most economically desirable/undesirable types
of developments/business users and the reasons
why.
Provide a list of businesses located in the city
that are not presently producing sales tax to the
City of Emeryville but could be through
constructive changes in marketing and/or
purchasing procedures.
Assist in defining specific geographic areas for
which the city would have an interest in knowing
the sales tax produced (e.g., within Community
Redevelopment Agency boundaries) .
5 TIMING
Service under this contract shall commence within ten (10) days following receipt of the following:
city Council contract approval and resolution
designating MRC as the authorized city contractor
to examine sales and use tax records (see Exhibit
"C"); and
state Board of Equalization quarterly distribution
reports for most recent six (6) consecutive
quarters.
Sales Tax Information
STARS reports shall be provided to city on a quarterly
basis within thirty (30) working days following receipt of the quarterly distribution reports.
Sales Tax Audit
The initial report identifying point of sale reporting
errors shall be provided within sixty (60) to ninety
(90) working days following receipt of the above.
Corollary consulting
This will occur within a reasonable time after delivery of the initial STARS reports and/or completion of the
Sales Tax Audit.
6 PERIOD COVERED AND CHARGES
The term of this Agreement shall be for a one (1) year period commencing In order to make the
proposed services self-funding for the City of Emeryville, MRC's compensation for providing the initial and ongoing sales tax audits and STARS reports is entirely predicated and contingent upon MRC's ability to produce new sales tax revenue for the City, further described as follows:
Sales Tax Audit Service
MRC's compensation for providing the audit service is 25% of new sales tax revenue realized by the City as a result of MRC identifying and correcting the related point-of-sale
distribution error. Said 25% applies to each correction for fund transfers (i.e., retroactive adjustments for eligible amounts improperly distributed in prior quarters) and the first six consecutive reporting quarters following completion of the audit by MRC and confirmation of corrections by the State Board of Equalization.
Sales tax audit invoices are submitted quarterly after the City has received the revenue from the correction and
quarterly distribution report confirming it. Each invoice is to include the business name, permit number, local allocation amount received by the City and amount due MRC. Invoices are due and payable upon receipt.
STARS Reports
MRC proposes to provide STARS Reports for $2,500 for the first year, or $625 per quarter, payable only after the city has received the quarterly STARS report(s) and sufficient funds to cover the STARS charges from the City's 75% share of new sales tax revenue produced from MRC's audit service. The following computation illustrates a hypothetical example:
New sales tax revenue produced
for City from MRC audit service
Less MRC compensation for audit
service @ 25%
City's share of new sales tax
revenue @ 75%
Less STARS charge for full year
@ $625 per quarter
Net new sales tax revenue to City
after compensating MRC for audit
service and STARS reports
7 $60,000
- 15,000
$ 45,000
-$ 2,500
$ 42,500
Should MRC's audit service fail to generate sufficient new sales tax revenue for the city to cover the STARS charges out of the City's 75% share, then MRC shall absorb the
shortfall amount.
Expenses
All expenses incurred by MRC in providing the audit service and STARS reports are absorbed by MRC. These expenses
include items such as employee salaries and benefits,
insurance, airfare, auto rentals, meals, lodging,
keypunching, computer processing, clerical, communications (e.g., personal meetings, telephone, mail, etc.)
photocopying, overhead and miscellaneous out-of-pockets for consumable supplies and research materials such as maps, directories, etc.
8 CERTIFICATION OF CONFIDENTIALITY
section 7056 of the State of California Revenue and Taxation Code specifically limits the disclosure of confidential taxpayer information contained in the records of the State Board of Equalization. This section specifies the conditions under which a City may authorize persons other than city officers and employees to examine State Sales and Use Tax records.
A. MRC is authorized by this Agreement to examine sales and use tax records of the State Board of Equalization
provided to City pursuant to contract under the BradleyBurns Uniform Sales and Use Tax Law.
B. MRC is required to disclose information contained in, or derived from, those sales and use tax records only to an officer or employee of the City who is authorized by
resolution to examine the information.
C. MRC is prohibited from performing consulting services for a retailer during the term of this Agreement.
D. MRC is prohibited from retaining the information
contained in, or derived from, those sales and use tax
records, after this Agreement has expired.
Information obtained by examination of state Board of
Equalization records shall be used only for purposes related to collection of local sales and use tax or for other
governmental functions of the City as set forth by resolution adopted pursuant to Section 7056(b) of the Revenue and
Taxation Code.
The resolution shall designate MRC as a person authorized to examine sales and use tax records and certify that this Agreement meets the requirements set forth above and in Section 7056(b) (1) of the Revenue and Taxation Code.
MRC hereby certifies that any and all information utilized in the conduct of work performed is to be utilized only for those purposes authorized by the City and by the Bradley-Burns Uniform Local Sales and Use Tax Law.
9 EXHIBIT "B"
GENERAL PROVISIONS
1. Independent Contractor. At all times during the term of this Contract, Municipal Resource Consultants (Consultant) shall be an Independent Contractor and shall not be an
employee of the City of Emeryville (City). City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement; however, City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement.
2. Liability. city shall not be called upon to assume
any liability for direct payment of any salaries, wages, or other compensation to any Consultant personnel or
subcontractor performing services hereunder for City, or any liability other than provided for in this Agreement.
City shall not be liable for compensation
Consultant employee or subcontractor for
arising out of his/her employment, or
actions of the Consultant or its employees.
or indemnity to any
injury or sickness
for any negligent
All persons employed in the performance of such services and functions shall be employees of Consultant, and as such shall not, for any purposes, be considered employees of City and therefore shall have no right to any City service, civil service, or other city status.
3. Subcontracts. Any subcontracts entered into by
Consultant for services to be rendered towards the completion of Consultant's portion of this Agreement shall be for
Consultant's benefit alone, and as such shall be its
responsibility with no liability resting on the City.
Consultant agrees to provide a list of all subcontractors to be used in connection with services to be rendered toward the completion of its portion of this Agreement to the City within ten (10) working days of execution of this Agreement.
4. Licenses, Permits, Etc. Consultant represents and
warrants to City that he has all licenses, permits,
qualifications and approvals of whatsoever nature which are legally required for Consultant to practice his profession.
Consultant represents and warrants to city that Consultant shall, at his sole cost and expense, keep in effect or obtain at all times during the term of this Agreement any licenses, permits, and approvals which are legally required for
Consultant to practice his profession.
GENERAL PROVISIONS
PAGE 2
5. Time. Consultant shall devote such time to the
performance of services pursuant to this Agreement as may be reasonably necessary for satisfactory performance of
Consultant's obligations pursuant to this Agreement. Neither party shall be considered in default of this Agreement to the extent performance is prevented or delayed by any cause, present or future, which is beyond the reasonable control of the party.
6. Insurance.
(a) Public Liability. During the term of this
Agreement, Consultant shall maintain in
full force and effect a policy of pubLi.c
liability insurance with minimum coverages
as follows: $1, 000, 000 for injury to one
person in anyone occurrence; $1,000, 000
aggregate; and, $50,000.00 for property
damage. Consultant shall cause the City,
its officials and employees to be named on
all liability policies described above as
insured as respects: (1) activities
performed for the city by or on behalf of
the named insured, (2) products and
completed operations of the Named Insured,
and (3) premises owned, leased or used by
the Named Insured.
(b) Worker's compensation. During the term of
this Agreement, Consultant shall fUlly
comply with the terms of the law of
California concerning worker's
compensation. Said compliance shall
include, but not be limited to,
maintaining in full force and effect one
or more policies of insurance insuring
against any liability Consultant may have
for worker's compensation. INSERT A
7. Consultant Not Agent. Except as City may specify
in writing, Consultant shall have no authority, express or implied to act on behalf of City of any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.
8. Assiqnment Prohibited. No party to this
Agreement may assign any right or obligation pursuant to this agreement. Any attempt of purported assignment of any right or obligation pursuant to this Agreement shall be void and of no effect.
GENERAL PROVISIONS
PAGE 3
9. Personnel. Consultant shall assign only
competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the removal of any person or persons assigned by Consultant to perform services pursuant to this Agreement, Consultant shall remove any such person immediately upon receiving notice from City of the desire of City for the removal of such person or persons.
10. Standard of Performance. Consultant shall
perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices his profession. All products of whatsoever nature which Consultant del i vers to City pursuant to this Agreement shall be prepared in a substantial, first class and
workmanlike manner and conform to the standards of quality normally observed by a person practicing in Consultant's profession.
11. City Representative. The city Manager or his
designee is the representative of the City and will administer this Agreement for the City.
12. Termination. This Agreement may terminate on
ten (10) days written notice by either party, or within such time as both parties may find necessary to conclude the work currently under way and to summarize Consultant's findings for city.
13. Indemnity and Hold Harmless. Consultant shall
assume the defense of, and indemnify and save harmless, the City, its officers, employees, and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be SUbjected or put, by reason of, or resulting from, the performance of the work, provided that such action, damage, claims, loss, or expense is attributable to bodily injury, sickness, disease or death, or to injury to, or destruction of property, whether upon or off the work, including the loss of use thereof, and is caused in whole or in part by any
negligent act or omission of the Consultant, and
subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, whether or not it is caused in part by a party indemnified hereunder.
Insert "A"
(b) Worker's Compensation: (continued).
The insurer will agree to waive all rights of subrogation against the City, its officials and employees for losses arising from work performed by the Consultant for the City. (c) Automobile Insurance. During the term of this Agreement, Consultant shall maintain in full force and effect a policy of comprehensive automobile liability insurance with minimum coverages as follows: $1,000,000 combined single limit per occurrence for bodily and personal injury, sickness, disease or death; and $100,000 for property damage. Consultant shall cause the City, it's officials and employees to be named on all liability policies described above as insured as respects:
(1) liability arising out of activities performed by or on behalf of the Named Insured, and (2) automobiles owned, leased, hired or borrowed by the Named Insured.
(d) Additional Provisions - All Coverages. Each insurance pOlicy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice has been given to the City.
Each insurance pOlicy shall be primary insurance as respects the City, it's officials and employees. Any insurance or self insurance maintained by the city, it's officials or employees shall be excess of the Consultants insurance and shall not contribute with it. Any failure by Consultant to comply with reporting provisions of the insurance policies shall not affect coverage provided to the City, it's officials or employees.