Agenda packet — Finance Committee, September 23, 2024 (part 2 of 3)

South Trunk - this area will rehabilitate approximately 1,680 feet of 24 to 33-inch unlined reinforced concrete pipe with 8 associated manholes.

Santa Rosa Ph 2 Trunk - this area will rehabilitate approximately 5,622 feet of 24 to 33-inch unlined reinforced concrete pipe with 22 associated manholes.

DISCUSSION:

Due to the complexity of this project, and to increase efficiencies, staff has requested the use of a consultant to provide engineering services for the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project.

On June 13, 2023, by Resolution No. 2023-278, Council approved a Prequalified List of Consultants to Provide Water, Wastewater and Storm Drain Engineering Services for Various Capital Projects.

In accordance with Administrative Directive 3.1, Selection Procedures for Professional Consultants Who Provide Architectural and Engineering Services for Capital Projects, a Request for Proposal (RFP) was sent to the four (4) prequalified consultants.

On July 9, 2024, staff received and distributed two (2) proposals to a selection committee consisting of Utilities Engineering and Operations staff. The selection committee evaluated the proposals and determined Woodard and Curran, of Sacramento, CA to be the most qualified and responsive. Woodard and Curran’s sealed proposal costs were opened after the selection ranking had been finalized; the proposal cost and scope were reviewed and negotiated to provide design and bid period services.

The scope of services to be provided under this agreement include:
 Project Management
 Field Investigations
 Permitting Assistance
 Public Outreach Assistance
 Development of Construction Documents
 Bid Phase Services
 Engineering Support During Construction
In accordance with Modesto Municipal Code 8-3.204(a) “Exceptions to Formal Bidding Requirements,” Agreements for Professional Services are exempt from the bidding requirements of Modesto Municipal Code 8-3.203 if competitive quotations or proposals have been sought informally from at least three (3) qualified entities.

However, staff proceeded with the RFP process pursuant to Administrative Directive 3.1 and two (2) proposals were received as part of this solicitation. Staff recommends approval of an Engineering Services Agreements with Woodard and Curran for the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project. #5..
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Finance Committee, September 23, 2024
Engineering Services Agreements with Woodard and Curran for the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project

Page 3 of 3 ends

FISCAL IMPACT:

Expenses associated with this Project will be housed in the following non-Capital Project:
101591 – River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project
ANTICIPATED PROJECT EXPENDITURES:

Construction $7,000,000
Construction Contingency $700,000
Construction Administration – City Staff $500,000
Engineering Services Agreement – Woodard and Curran $737,860 10% Additional Services, if Needed $73,786
Engineering/Design/Administration $100,000
Total $9,111,646
A budget adjustment in the amount of $9,090,315 from Wastewater Fund Reserves will be necessary to establish the expense budgets for the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project.

CEQA/NEPA REQUIREMENTS:

Staff will be utilizing the program level CEQA Environmental Planning and Compliance documents provided for projects listed within the 2016 WWMP. These program level CEQA documents cover the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project.

STAFF RECOMMENDATION:

Motion recommending an Engineering Services Agreement with Woodard and Curran, of Sacramento, CA, for the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project in the amount of $737,860, plus $73,786 in additional services, if needed, for a total amount not to exceed $811,646; and forwarding to Council for approval.

Motion recommending an amendment to the Fiscal Year 2024-25 Multi-Year Program Budget in the amount of $9,090,315 from Wastewater Reserves to fund the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project and forwarding to Council for approval.

Approved by:

William Wong, Director of Utilities
Joseph P. Lopez, City Manager
Attachments:

1. Woodard and Curran – Agreement

2. Woodard and Curran – Exhibits to Agreement
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ENGINEERING SERVICES AGREEMENTS WITH WOODARD ANDCURRAN RIVER

TRUNK, SOUTH TRUNK, AND SANTA ROSA PHASE II SEWER TRUNK

REHABILITATION PROJECT
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and WOODARD & CURRAN, INC., a Maine corporation, hereinafter referred to as "Consultant".

This Agreement is made with regard to the following recitals:

A. The City has determined that Engineering Services are necessary for the River Trunk, South Trunk, and Santa Rosa Phase II Sewer Trunk Rehabilitation Project.

B. Consultant represents that it is qualified, willing, and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Consultant shall undertake and complete the preparation of the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" or "project". The Consultant shall perform the services as described in Exhibit "A" in a manner compatible with the standards of its profession and shall produce a fully complete project that is acceptable to City.
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2. TERM OF AGREEMENT.

This Agreement is effective as of the date first written above and will continue in effect until City's acceptance of and payment for all services authorized by City and performed by Consultant, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

Consultant shall undertake and complete the preparation of the scope of work as set forth and described in the documents commonly referred to as “project” attached hereto as Exhibit "A" and made a part hereof. City hereby gives Consultant notice to proceed with the preparation of the project in the manner described in Exhibit "A", as of the Effective Date of this agreement. Consultant shall diligently proceed with the preparation of the project and agrees to complete said preparation within the time period set forth in Exhibit "A".

3. COMPENSATION.

Consultant agrees to accept a sum not to exceed SEVEN HUNDRED THIRTY-SEVEN THOUSAND EIGHT HUNDRED SIXTY AND 00/100 DOLLARS ($737,860) (maximum compensation) as full remuneration for performing all services and furnishing all staffing and materials for Modesto in accordance with Exhibit "A" attached hereto and for performance by Consultant of all of its duties and obligations under this Agreement, except that additional services may be compensated as described below.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant on a time and materials basis for Consultant’s actual costs for all work called for in Exhibit “A” to this Agreement. All work to be performed under this Agreement shall be billed at the hourly rates set forth in Exhibit “B” attached hereto, #5..
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Consultant shall submit monthly invoices to City which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any out-of-pocket costs paid by Consultant in connection with work performed on this project.

Additional services may be authorized by the City Manager in an amount up to, but not to exceed ten percent (10%) of the agreed maximum compensation, or SEVENTY- THREE THOUSAND SEVEN HUNDRED EIGHTY-SIX AND 00/100 DOLLARS ($73,786). In the event that additional services are deemed necessary, the Consultant shall provide a written request to the City Manager indicating the reason for additional work, scope and cost of such work. The City Manager shall provide a written response to the request, either approving or denying the additional expenditure. If additional services are requested and approved, they will be billed at the hourly rates set forth in Exhibit “B” and may not exceed the amount requested and approved in writing by the City Manager. In that event, the new total compensation shall not exceed EIGHT HUNDRED ELEVEN THOUSAND SIX HUNDRED FORTY-SIXAND 00/100 DOLLARS ($811,646). If additional services in excess of this amount are deemed necessary by City Staff, an amendment to this Agreement will be required and must be approved by the City Council prior to commencing the work, as provided in Paragraph 9 of this agreement.

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business.

Consultant warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further warrants that it will follow #5..
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the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

Consultant is not responsible for damage or delay in performance caused by events beyond the reasonable control of Consultant. In the event Consultant’s services are suspended, delayed or interrupted for the convenience of the City or delays occur beyond the reasonable control of Consultant, an equitable adjustment in Consultant’s time of performance and cost of Consultant’s personnel and subcontractors may be made.

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that Glenn Hermanson , will be the person primarily responsible for the performance of the services referred to in this Agreement.

City has entered into this Agreement in reliance on that representation by Consultant. Consultant therefore agrees that ten percent (10%) or more of the time to be devoted to the project that is the subject of this Agreement will be that of the above-named person.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

Title to Data
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If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract.

All materials, documents, data or information obtained from the City data files or any City medium furnished to Consultant in the performance of this Agreement will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Consultant after termination of this Agreement without written consent of the City.

7. NEWS AND INFORMATION RELEASE.

Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from City through the City Manager.

8. INTEREST OF CONTRACTOR.

Consultant warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest. Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so required at the option of City.

9. AMENDMENTS.
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Both parties to this Agreement understand that it may become desirable or necessary during the execution of this Agreement, for City or Consultant to modify the scope of services provided for under this Agreement. Any material extension or change in the scope of work shall be discussed with City and the change and cost shall be memorialized in a written amendment to the original contract prior to the performance of the additional work.

Until a change order is so executed, City will not be responsible to pay any charges Consultant may incur in performing such additional services, and Consultant shall not be required to perform any such additional services.

10. INDEPENDENT CONTRACTOR.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Consultant, by virtue of this Agreement, has no authority to bind or incur any obligation on behalf of City.

Consultant has no authority or responsibility to exercise any rights or power vested in the City.

No agent, officer, or employee of the City is to be considered an employee of Consultant. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture.

Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

Consultant shall determine the method, details and means of performing the work and services to be provided by Consultant under this Agreement. Consultant shall be responsible to City only for the requirements and results specified in this Agreement, and, except #5..
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as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant has control over the manner and means of performing the services under this Agreement.

Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement.

If in the performance of this Agreement any third persons are employed by Consultant, such persons shall be entirely and exclusively under the direction, supervision, and control of Consultant. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the Consultant.

11. INDEPENDENT CONTRACTOR.

It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever.

It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

As an independent contractor, Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement. #5..
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12. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned without the express prior written consent of the City in each and every instance.

13. PATENT/COPYRIGHT MATERIALS.

Unless otherwise expressly provided in the contract, Consultant shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this Agreement. Consultant shall furnish a warranty of such right to use to City at the request of City.

14. NOTICES.

Notice required by this Agreement shall be given in writing and shall be deemed given and effective upon receipt provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery (including delivery by an overnight courier service which obtains confirmation of receipt); or (b) by facsimile, provided that such transmission is followed by delivery by an overnight courier service which obtains confirmation of receipt; or (c) postage prepaid, return receipt requested, certified mail; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:
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FOR CONSULTANT: Name: Woodard & Curran, Inc.

Address: 801 T Street
Sacramento, CA 95811
Attention: Glenn Hermanson
Phone: (916) 999-8700
Email: [email protected]
FOR CITY: Name: City of Modesto
Address: 1010 10th Street
Suite 4600
Modesto, CA 95354
Attention: Cristian Ciotau
Phone: (209) 577-5260
Email: [email protected]

15. INSURANCE REQUIREMENTS.

The Consultant shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the City as may be required by the Risk Manager of the City. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or reduction in the policy, notices of same shall be given to the Risk Manager of the City by certified mail, return receipt requested, for all of the following stated insurance policies.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the Consultant shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days notice of the cancellation on the policies of insurance required hereunder (10 days notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified #5..
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herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice. The Consultant shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled.
(a) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (b) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations as applicable.
(c) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(d) Professional Liability insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claims made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Consultant shall promptly obtain a new policy, submit the same to the Risk Manager for #5..
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approval and submit a certificate thereof as hereinabove provided. Upon failure of the Consultant to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated.

Failure of the Consultant to obtain and/or maintain any required insurance shall not relieve the Consultant from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Consultant concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by Consultant for the City. The Consultant's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager. The Consultant must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed.

CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

For any claims related to this project, the CONSULTANT’S insurance coverage shall be primary insurance as respects the Entity, its officers, officials, employees, and #5..
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volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the CONSULTANT’S insurance and shall not contribute with it.

16. TERMINATION OF AGREEMENT.

Termination by City for Default of Consultant
Should Consultant default in the performance of this Agreement or materially breach any of its provisions, at its option, City may terminate this Agreement by giving written notification to Consultant. The termination date shall be the effective date of the notice. For the purposes of this section, material breach of this Agreement shall include, but not be limited to, any of the following: failure to perform required services or duties, willful destruction of City's property by Consultant, dishonesty or theft.

Termination by City for Convenience
The City may also terminate the Consultant's performance under the Agreement, either in whole or in part, at its own discretion, or when conditions encountered during the Work make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the Agreement by act of God, by law, or by official action of a public authority, or upon a determination by the City that such termination is in the best interest and convenience of the City, or whenever the City is prohibited from completing the Work for any reason. The City shall provide no less than ten (10) calendar days written notice of its intent to terminate the Agreement for convenience, and shall endeavor to provide the Consultant with consultation with the City prior to termination.
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Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subcontractors except as necessary to complete any portion of the Work that is not terminated; c. If directed in writing by the City to do so, assign all right, title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the City all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the Consultant in performing the Work whether completed or in process; e. Settle outstanding liabilities and claims, subject to the approval of City;
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terminated;
g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Work and/or property related to the Work;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project. i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain
unacceptable and/or not useful to City as of the termination date.

City will pay Consultant an amount based on the percentage of satisfactory work completed in accordance with the notice of termination. The final payment to the Consultant after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as subconsultant agreements or contracts for materials;
b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums #5..
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previously paid to the Consultant.

Authorization to Terminate Agreement
Termination of the Agreement may be invoked by the City Manager, or his/her designee, subject to the right of the Consultant to appeal the City Manager, or his/her designee’s, decision to the City Council. The Consultant shall appeal by notifying the City Clerk in writing within ten (10) calendar days of receipt of written notification from City of termination of the Agreement. In the event that termination of this Agreement is upheld by the City Council, any cessation of payment of delay claims, extended claims, Eichleay claims, or any other claims for delay shall be retroactive to the date of termination selected by the City Manager, or his/her designee.

17. CERTIFIED PAYROLL REQUIREMENT.

For consultants performing field work on public works contracts on which prevailing wages are required: The Consultant shall comply with the provisions of Section 1776 of the California Labor Code, regarding payroll records, and shall require its subconsultants and subcontractors to comply with that section as may be required by law.

18. INDEMNITY.

The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of Consultant, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement. #5..
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Consultant's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

19. DISPUTE RESOLUTION.

All claims, controversies, or disputes arising out of, or relating to the formation of this Agreement, or the breach, termination execution, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this contract provision shall be determined by binding arbitration in Modesto, California by one arbitrator, except as otherwise specified in this Agreement. The American Arbitration Association shall administer the arbitration under its Arbitration Rules then in effect, subject to the modifications of those rules contained in this paragraph. This agreement to arbitrate shall be specifically enforceable under the prevailing law of any court having jurisdiction, and the award rendered by the arbitrator may be entered in any court having jurisdiction. The appropriate venue for any arbitration or court proceeding relating to or arising out of this provision shall be in Stanislaus County, California.

This paragraph is not intended to and does not waive the claim filing requirements found in California Government Code section 900 et seq. In the event that a timely and legally sufficient, arbitrable claim is filed by Consultant with City, and the claim is rejected in whole or in part by City, this paragraph shall result in the conclusive, final, and binding resolution of all the issues presented in the claim by Consultant so long as any issues presented by the claim are arbitrable. Claims rejected by City or by operation of law, shall be submitted by Consultant to arbitration pursuant to the Arbitration Rules of the American Arbitration #5..
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Association within ninety (90) days after mailing of the written rejection by City to Consultant.

Otherwise, the claim or claims shall be deemed waived in their entirety.

The “fast track’ rules of the American Arbitration Association shall apply to any claim or counterclaim less than ONE HUNDRED FIFTY THOUSAND AND 00/100 ($150,000.00) DOLLARS. In arbitration not proceeding under the “fast track” rules, the arbitrator shall have the power to order that depositions be taken and other discovery be made.

Both City and Consultant shall have the right, upon written notice, to take no more than three (3) depositions of the other as a matter of right in an arbitration proceeding under the “fast track” rules.

Whether or not City and Consultant may be engaged in interstate commerce, any controversy or dispute mentioned above shall be determined by, and the parties shall be bound by, the substantive law of the State of California, and not the Federal Arbitration Act at 9 USC Section 1 et seq.

The arbitrator may grant any remedy or relief deemed by the arbitrator just and equitable under the circumstances, whether or not such relief could be awarded in a court of law. The arbitrator shall be empowered to award monetary sanctions against a party for failure of cooperation in the arbitration. The arbitrator shall, in written award, allocate all the costs of the arbitration, including the fees of the arbitrator and the reasonable attorney fees of the prevailing party, against the party who did not prevail. The prevailing party shall be the party in whose favor the majority of the central issues in the case are resolved.

Notwithstanding anything in this provision to the contrary, the arbitrator shall have no power to award punitive damages or other damages not measured by the party’s actual damages (excluding litigation costs and fees) against any party. This limitation of the #5..
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arbitrator’s powers under this Agreement shall not operate as an exclusion of the issue of punitive damages from this Agreement to Arbitrate sufficient to vest jurisdiction in a court with respect to that issue.

Consultant shall include in all subcontracts a specification whereby the subcontractor consents to being joined in an arbitration between City and Consultant involving the work of the subcontractor to be joined. Consultant’s failure to do so shall be a breach of this Agreement.

The parties hereby waive any rights provided by Title 9.2 of the California Code of Civil Procedure, Section 1296. The arbitrator’s award shall be deemed final, conclusive and binding to the fullest extent allowed by California law.

20. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. Additional or new terms contained in this Agreement which vary from Consultant's proposal are controlling and are deemed accepted by Consultant by shipment of any article or other commencement of performance hereunder. All previous proposals, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver of or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

21. PARTIAL INVALIDITY.

If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way. #5..
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22. WAIVER.

The waiver by any party to this Agreement of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

23. AUDIT.

The City's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Consultant's charges to City under this Agreement.

Consultant agrees to retain reports, records, documents, and files related to charges under this Agreement for a period of four (4) years following the date of final payment for Consultant services. City's representative shall have the right to reproduce any of the aforesaid documents.

24. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

25. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

26. COMPLIANCE WITH LAWS.

Consultant shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.
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27. CITY BUSINESS LICENSE.

Consultant will have a City of Modesto business license.

28. THIRD PARTIES.

The services to be performed by Consultant are intended solely for the benefit of the City. No person or entity not a signatory to this Agreement shall be entitled to rely on Consultant’s performance of its services hereunder, and no right to assert a claim against Consultant by assignment or indemnity rights or otherwise shall accrue to a third party as a result of this Agreement or the performance of Consultant’s services hereunder.

IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attestation by its City Clerk under authority of Resolution No. 2024- _______, adopted by the Council of the City of Modesto on the _______ day of ____________, 2024, and WOODARD & CURRAN, INC. has caused this agreement to be duly executed in duplicate as of the Effective Date. #5..
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SCOPE OF SERVICES
TASK 1 – PROJECT MANAGEMENT
Task 1.1 – Project Management and Coordination
Woodard & Curran will provide regular project coordination, communication and updates to the City in order to obtain input and provide project updates. Woodard & Curran will track the project scope, budget, and schedule and communicate with the City regarding important changes or concerns. The project progress and budget status will be included in monthly progress reports that will be attached to billing invoices. Key work activities completed in the invoice period and meeting minutes from formal project status meetings will also be included in the monthly progress reports. This subtask also includes Woodard & Curran’s internal technical kickoff meeting with senior advisors and coordination with subconsultants.

Task 1.2 – Project Kickoff and Status Meetings
To coordinate project tasks among the City, subconsultants, and other agencies, we will hold a project kick-off meeting and bi-weekly status meetings during the design phase. For formal project status meetings, Woodard & Curran will prepare meeting agendas and minutes. Formal project meetings are the kickoff meeting, 10% BODR meeting, 70% design review meeting, and 90% design review meeting. It is assumed up to two Woodard & Curran’s staff will attend each meeting and each status meeting will be 1 hour long. The hours for the formal status meetings are accounted for in the following design tasks. The bi-weekly status meetings will be virtual.

Task 1.03 – Quality Control
Woodard & Curran will perform internal QA/QC Reviews of the BODR, 70%, 90%, and 100% design documents as well as follow existing internal control procedures and hold project team review meetings designed to support project execution and deliverable quality. The hours for this subtask are shown with each item being reviewed.

Task 1 Deliverables
 Monthly billing and status reports (total of 24).
 Project kickoff meeting, formal project status meeting agendas and minutes.

TASK 2 – 10% BASIS OF DESIGN REPORT
Task 2.1 – Review Existing Information
Woodard & Curran will review existing information, record drawings, condition assessment reports, and closed-circuit television (CCTV) inspection videos for the trunks being rehabilitated. Furthermore, we will review surrounding sewer lines for bypass pumping opportunities.

Task 2.2 – Select Rehabilitation and Bypass Pumping Alternatives In this task we will apply our knowledge and experience with trenchless rehabilitation construction to evaluate CIPP, spiral wound lining, segmental sliplining, and continuous sliplining to determine the best rehab alternative. We will work closely with the City on developing evaluation criteria that will be used to decide on the most efficient and costeffective alternative, considering constructability and impacts on the surrounding community.

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This task also includes planning for bypass pumping and construction sequencing.

Task 2.3 – Review Hydraulic Modeling Results by City Consultant The City of Modesto has Carollo as an on-call consultant to manage the City’s sewer hydraulic model. Under this task, Woodard & Curran will provide the City with the inside diameters of the rehabilitated sewer segments, so that Carollo can conduct a hydraulic analysis for the identified rehabilitation alternatives and return the results to Woodard & Curran for evaluation. This evaluation will confirm that the alternatives either meet the required hydraulic capacity or need to be improved for future required capacity.

In addition to the new sewer inside diameters, Woodard & Curran will also develop sewer bypass configurations for Carollo to model. For example, they will assess the feasibility of redirecting flow from Spokane Street to Imperial Avenue for bypassing purposes. Carollo will be responsible for performing the hydraulic modeling, while Woodard & Curran will analyze the resulting model output.

Task 2.4 – Prepare 10% Design Drawings
Under this task we will develop 10% design drawings to illustrate the intent of the project design. The plans will include plan view drawings and bypass pumping drawings. The drawings will also show the 38 manholes that are being rehabilitated. We will assume two bypass pumping design alternatives per trunk line. The sewers and manholes to be rehabilitated are shown in Attachment 1.

Task 2 Deliverables
 10% Design Drawings (3 hard copies and a PDF copy)
TASK 3 – FIELD INVESTIGATIONS
Task 3.1 – Utility Research
Woodard & Curran will develop utility coordination letters and provide them to all known utility owners in the project area. Woodard & Curran will prepare a utility tracking database and re-contact utility owners who did not respond to the first request. The utility information will be shown on the drawings in accordance with the American Society of Civil Engineers (ASCE) 38-02 - Level “C” standard guidelines (no potholing).

Task 3.2 – Topographic Survey
This task encompasses several field and topographic survey activities, which will be carried out by our local subconsultant, O’Dell Engineering. These activities include:

Sewer pipe invert elevations and diameter entering and exiting the manholes.

Existing utility locations (visible items such as valve covers, pull boxes, poles, etc.) Rim and invert of the manholes within the 3 project areas including manholes that will likely be locations for bypass pumps.

Point elevations for ground surface.

Planimetrics (curb, gutter, sidewalk, trees, building edges).

Street right-of-way lines (approximate, not “property boundary quality”.

The topographic mapping will incorporate all features identified during the field survey in an AutoCAD dwg file.

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Task 3.3 – Acquire Additional Title Reports (Optional)
Downstream of the south end of the Santa Rosa Trunk the alignment enters the Gallo facility.

The bypass pumping pipes may need to be laid across various private parcels to a manhole where the flow can be discharged. Understanding the location and widths of the existing sewer easement may be helpful when configuring the bypass piping.

Task 3 Deliverables:
 Topographic map.
 Optional Title Reports
TASK 4 – PERMITTING
Task 4.1 – Prepare Permit Applications
Construction projects of this size typically require a number of permits. The following is a quick discussion on anticipated permits for this project.

CDFW Streambed Alteration Agreement (SAA). This project rehabilitates the existing sewer under the Tuolumne River. As long as the work being performed stays outside the top of the riverbank and there is no chance of pollutants (for example drilling fluid from HDD) getting into the river, then a SAA is not required. Therefore, it is assumed that as long as we select a bypass piping alignment that isn’t in the river a SAA will not be required. It is assumed that putting the bypass pipes on the Carpenter Road bridge will not require a SAA.

Hours to prepare an SAA are not included in the fee estimate.

Modesto Irrigation District (MID) encroachment. One of the alternatives for the River Trunk (Spokane Street) bypass piping is to cross the MID ROW. The fee estimate assumes that this alignment will be used and therefore the hours necessary to apply for a MID encroachment permit are included in the fee estimate.

Caltrans encroachment. Yosemite Boulevard is a Caltrans highway. Work will need to be performed inside Caltrans ROW. Woodard & Curran will prepare a permit application to obtain a Caltrans encroachment permit.

Since no excavation (other than shallow burial of bypass pipes) will be required, a Regional Water Quality Control Board (RWQCB) permit will not be needed for this project.

Woodard & Curran will assist the City in obtaining a draft permit for work within the City right-of-way. Woodard & Curran will develop the permit application package. The Contractor will be responsible for obtaining the final permit and paying fees. Application fees for the draft permit, if any, will be paid by the City.

Task 4 Deliverables:
 Permit coordination and applications for the following:
o MID encroachment
o Caltrans encroachment
o City of Modesto encroachment
TASK 5 – ENVIRONMENTAL AND PUBLIC OUTREACH ASSISTANCE
(Optional)

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Task 5.1 – Environmental Clearance Assistance (Optional) The City is responsible for all aspects of environmental clearance except for writing the project description.. If the City requires environmental assistance, this subtask will be used to provide the assistance. The level of effort is limited to what is shown on the fee estimate.

This work cannot be performed without authorization by the City.

Task 5.2 – Public Outreach Assistance (Optional)
The majority of this project is located in residential neighborhoods. We are assuming that cured-in-place pipe (CIPP) lining will likely be the preferred rehabilitation alternative. At this diameter, CIPP does not require excavation, but the project will be disruptive since bypass piping will be needed along many streets to dewater the sewer. The Santa Rosa Trunk runs directly through the La Loma Neighborhood (LLN), a very active community with movie nights in the park and pollinator festivals. The City has other projects in the area and LLN might be experiencing “project fatigue”. An extra level of outreach may be necessary. Katie Evans with Woodard & Curran is an outreach specialist who loves engaging with neighborhoods, explaining the benefits of projects, listening to community concerns, and working with design engineers to develop acceptable solutions. If the City requires public outreach assistance, this subtask will be used to provide the assistance. The level of effort is limited to what is shown on the fee estimate. This work cannot be performed without authorization by the City.

Task 5 Deliverables:
 To be determined.

TASK 6 –CONSTRUCTION DOCUMENTS
This task involves developing 70%, 90% and final construction drawings, technical specifications, and engineer’s estimate (PS&E).

Task 6.1 – Prepare 70% PS&E Submittal Package
Woodard & Curran will provide plans, technical specifications, and engineer’s estimate of construction cost at a 70% design level. Three copies of the plans (half-size), specifications, and engineer’s estimate will be delivered to the City for review.

Task 6.2 – Conduct 70% PS&E Review Meeting
Woodard & Curran will conduct a review meeting to discuss the 70% PS&E submittal and any questions that the City may have after the review period. The review meeting will take place at the City’s offices.

The review meeting will focus on key items such as bypass pumping for the project.

Woodard & Curran will hold a 70% review meeting to discuss the 70% PS&E submittal to address any questions the City may have following the initial review period. We anticipate holding this meeting in person at the City’s office.

Task 6.3 – Prepare 90% PS&E Submittal Package
Woodard & Curran will address the City’s 70% review comments and provide a comment response log.

Additionally, we will provide plans, technical specifications, marked-up front-end specifications (as provided by the City), and an engineer’s estimate of construction costs at the 90% design level. Three copies of the plans (half-size), specifications, and engineer’s estimate will be delivered to the City for review.

Task 6.4 – Conduct 90% PS&E Review Meeting

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Woodard & Curran will hold a 90% review meeting to discuss the 90% PS&E submittal and address any questions the City may have following the review period. We anticipate holding this meeting in person at the City’s office.

Task 6.5 – Prepare Final PS&E Submittal Package
Woodard & Curran will respond to the City’s 90% review comments and provide a comment response log, plans, plans (half-size), specifications, and estimate to the City. This submittal will be for final bidready documents.

Woodard & Curran will address the City’s 90% review comments and provide a comment response log.

Additionally, we will provide bid ready final construction documents including plans, technical specifications, and an engineer’s estimate.

Task 6.6 – Prepare Grit Trap Design
Woodard & Curran will develop PS&E documents for grit trap(s) for this project. This task covers 70%, 90%, and 100% submittals.

Anticipated Drawing List
Sheet
Count Sheets Titles
1 G-1 Cover Sheet & Map
1 G-2 General Notes
1 G-3 Abbreviations and Symbols
1 G-4 Key Plan 1
1 G-5 Key Plan 2
5 TOTAL GENERAL SHEETS
1 ST-1 South Trunk Lining
3 ST-2 to 5 South Trunk Bypass Plans and Details*
2 R-1 to 2 River Trunk Lining
2 R-3 to 4 River Trunk Bypass Plans and Details*
6 SR-1 to 6 Santa Rosa Trunk Lining
5 SR-7 to 11 Santa Rosa Trunk Bypass Plans and Details* 1 GC-1 General Civil Details
20 TOTAL PIPELINE SHEETS
25 TOTAL SHEETS
*Since bypass pumps and pipes are temporary, the bypass plans may be shown on figures using GIS aerial mapping in the appendix to the specifications instead of CAD drawings.

Task 6 Deliverables:
 70 percent PS&E submittal package (3 hard copies and one PDF file).  70 percent review meeting agenda and minutes.
 70 percent review comment response log.
 90 percent PS&E submittal package (3 hard copies and one PDF file).  90 percent review meeting agenda and minutes
 90 percent review comment response log.

EXHIBIT A
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 Final PS&E submittal package with 25 total sheets (3 hard copies and one PDF file).

TASK 7 – BID PHASE SERVICES
Task 7.1 – Attend Pre-Bid Meeting
If required, Woodard & Curran will attend a City’s pre-bid meeting to answer any questions the prospective bidders may have and explain the design intent.

Task 7.2 – Answer Bidder Questions/Provide Addenda
This task includes providing assistance to the City during the bidding period. Woodard & Curran will assist the City during the bidding period by responding to bidders’ questions and issuing up to one addendum. This scope assumes that Woodard & Curran will answer up to twenty (20) contractor questions at an average of 1.5 hours per question.

Task 7 Deliverables:
 One Addendum in electronic format.

TASK 8 – ENGINEERING SERVICES DURING CONSTRUCTION (ESDC) Task 8.1 – Coordination with Construction Manager
During the construction phase, Woodard & Curran will coordinate all work with the construction manager, answering questions, etc.

Task 8.2 – Attend Pre-Construction Meeting
Woodard & Curran will support the City’s Construction manager (CM) by attending the preconstruction meeting to clarify any questions the contractor may have.

Task 8.3 – Review Submittals
Woodard & Curran will review up to 75 contractor’s submittals (assuming 60 ‘first time’ submittals plus 15 resubmittals) and will provide comments and clarifications back to the City’s CM.

Task 8.4 – Respond to Requests for Information (RFIs)
Woodard & Curran will review up to 40 technical requests for information (RFIs) to respond to questions during construction to clarify the contract documents and design intent, at an average of 2 hours per RFI plus 24 hours of CAD time (total).

Task 8.5 – Attend Site Visits and Construction Meetings Woodard & Curran anticipates conducting four full day site visits in support of the project to be available for construction manager and contractors, and to monitor the progress of the construction.

Additionally, Woodard & Curran will attend bi-weekly remote construction meetings to support the project (assuming 25 meetings at one hour each).

Task 8.6 –Provide Input on Change Orders
Woodard & Curran will be available to review requested change orders by the City’s contractor. We will review supporting information, support the City Construction Manager in discussions with the contractor, and assist the CM with the preparation of change orders. We assume 5 change orders at 16 hours each.

Task 8.7 – Final Project Acceptance

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Woodard & Curran’s design staff will be available to provide input on the final project acceptance by providing a final check list of items to be completed. We will be available to support the CM on a final job walk.

Task 8.8 – Prepare Record Drawings
After final completion, Woodard & Curran will review the contractor’s as-built drawings and prepare a set of record drawings in AutoCAD Civil 3D.

Task 8 Deliverables:
 Responses to up to 75 submittals
 Responses to 40 RFIs.
 Up to 5 Change order responses at 16hrs each
 One set of record drawings in AutoCAD and 24x36 plan sheet size on bond paper and digital files.

Scope Assumptions:

City will provide existing documents, CCTV tapes, and record drawings to be reviewed.

City will provide updated GIS files that show property lines.

Geotechnical information will not be necessary for this project as the assumed rehabilitation method is CIPP. No launch pit excavation is necessary for a 33” liner as it can be inserted through the existing access way with the cone removed.

Up to two members of the Woodard & Curran design team will attend the field site visit. The visit plus travel time will take one day.

City can provide access / right-of-entry to each manhole along the alignment.

The City will provide existing City utility information (water, sewer, storm, etc.).

To create an anticipated drawing list, it was assumed that CIPP lining is the construction method for the pipeline rehabilitation (to be confirmed by the hydraulic evaluation).

Manhole condition assessment will not be performed. The manholes to be rehabilitated have been identified in an existing condition assessment report.

No traffic control plans or specifications will be developed as limited traffic control will be needed during construction.

Preparation of lot line adjustments, legal descriptions, parcel maps or other similar mapping documents are not within this scope of services.

The City will provide a consolidated list of review comments prior to any Design Review Meeting (70%, 90%).

Applicable County and City CAD standards will be provided by the City. The drawing size is 22”x34” full-size (11”x17” half-size).

Technical specifications will be provided by Woodard & Curran. Front-end specifications (Div 00 and 01) will be provided by the City.

Cost estimates will be developed to AACE Class 3 level.

All permit fees to be paid directly by the City or Contractor.

City will reproduce contract documents and distribute contract documents to potential bidders.

City will coordinate with property owners as needed.

EXHIBIT A
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Client: City of Modesto Fee Estimate
Project: Final Design of the River Trunk, South Trunk, and Santa Rosa Phase 2 Sewer Trunk Rehabilitation Project 27-Aug-24 Tasks Total
Jim Graydon
Glenn
Hermanson Jen Glynn James Kohne
Madison
Veggian
Katie Evans
Engineering/
Project
Support
Kim Clyma
Chris van
Lienden
Drafter Admin. O'Dell
Engineering
PIC PM QA/QC PE TM2 STM E2 PM2 STM CAD PAC Surveying
$365 $360 $360 $315 $330 $350 $235 $330 $350 $155 $155
Task 1: Project Management1.1 Project Management and Coordination 1 40 2 28 1 2 1 24 99 $29,155 $0 $0 $29,1551.2 Project Kickoff and Bi-weekly Status Meetings 4 40 4 72 120 $39,980 $0 $300 $330 $40,310Subtotal Task 1: 5 80 6 100 1 0 2 1 0 0 24 219 $69,135 $0 $0 $300 $330 $69,465Task 2: 10% Basis of Design Report2.1 Review Existing Information / Record Documents 2 4 2 8 $2,450 $0 $0 $2,4502.2 Select Rehabilitation and Bypass Pumping Alternatives 6 2 12 10 30 $9,960 $0 $0 $9,9602.3 Review Hydraulic Modeling Results by City Consultant 6 6 $1,890 $0 $0 $1,8902.4 Prepare 10% Design Drawings 22 4 50 16 70 100 262 $62,340 $0 $100 $110 $62,450Subtotal Task 2: 0 30 6 72 26 0 72 0 0 100 0 306 $76,640 $0 $0 $100 $110 $76,750Task 3: Field Investigations3.1 Utility Research 4 40 44 $10,660 $0 $0 $10,6603.2 Topographic Survey 4 12 16 $4,080 $115,400 $126,940 $0 $131,0203.3 Acquire Additional Title Reports (Optional) 0 $0 $6,000 $6,600 $0 $6,600Subtotal Task 3 w/out Optional Tasks: 0 0 0 8 0 0 52 0 0 0 0 60 $14,740 $115,400 $126,940 $0 $0 $141,680Subtotal Task 3 Using Optional Tasks: 0 0 0 8 0 0 52 0 0 0 0 60 $14,740 $121,400 $133,540 $0 $0 $148,280Task 4: Permitting4.1 Prepare Permit Applications 2 40 40 82 $23,320 $0 $0 $23,320Subtotal Task 4: 0 0 2 0 0 0 40 40 0 0 0 82 $23,320 $0 $0 $0 $0 $23,320Task 5: Environmental and Public Outreach Assistance (Optional)5.1 Environmental Clearance Assistance (Optional) 40 40 $14,000 $0 $0 $14,0005.2 Public Outreach Assistance (Optional) 80 80 $28,000 $0 $900 $990 $28,990Subtotal Task 5 Using Optional Tasks: 0 0 0 0 0 120 0 0 0 0 0 120 $42,000 $0 $0 $900 $990 $42,990Task 6: Construction Documents6.1 Prepare 70% PS&E Submittal Package 30 8 40 60 60 184 382 $88,700 $0 $200 $220 $88,9206.2 Conduct 70% PS&E Review Meeting 8 16 24 $7,920 $0 $300 $330 $8,250

6.3 Prepare 90% PS&E Submittal Package 20 6 40 60 100 226 $51,560 $0 $200 $220 $51,780

6.4 Conduct 90% PS&E Review Meeting 8 16 24 $7,920 $0 $300 $330 $8,2506.5 Prepare Final PS&E Submittal Package 20 4 30 20 40 114 $28,990 $0 $200 $220 $29,2106.6 Prepare Grit Trap Design 8 20 16 44 $10,060 $0 $0 $10,060Subtotal Task 6: 0 94 18 142 60 0 160 0 0 340 0 814 $195,150 $0 $0 $1,200 $1,320 $196,470Task 11: ESDC7.1 Attend Pre-Bid Meeting 8 8 16 $5,400 $0 $200 $220 $5,620Answer Bidder Questions / Provide AddendaSubtotal Task 7: 0 29 0 29 0 0 0 0 0 12 0 70 $21,435 $0 $0 $200 $220 $21,655Task 8: Engineering Services During Construction (ESDC)8.1 Coordination with Construction Manager 40 40 $27,000 $0 $0 $27,0008.2 Attend Pre-Construction Meeting 6 6 $2,160 $0 $200 $220 $2,3808.3 Review Submittals 15 15 45 150 225 $60,225 $0 $0 $60,2258.4 Respond to Requests for Information (RFIs) 4 4 32 40 20 100 $25,460 $0 $0 $25,4608.5 Attend Site Visits and Construction Meetings 57 57 $17,955 $0 $400 $440 $18,3958.6 Provide Input on Change Orders 12 4 24 40 $13,320 $0 $0 $13,3208.7 Final Project Acceptance 8 8 16 $5,400 $0 $100 $110 $5,5108.8 Prepare Record Drawings 2 12 20 34 $6,640 $0 $0 $6,640Subtotal Task 8: 0 87 23 206 0 0 202 0 0 40 0 558 $158,160 $0 $0 $700 $770 $158,930TOTAL w/out Optional Tasks 5 320 55 557 87 0 528 41 0 492 24 2109 $558,580 $115,400 $126,940 $2,500 $2,750 $688,270TOTAL Using Optional Tasks 5 320 55 557 87 120 528 41 0 492 24 2229 $600,580 $121,400 $133,540 $3,400 $3,740 $737,860 2. Subconsultants will be billed at actual cost plus 10%. 5. Additional Woodard & Curran staff may perform work on the project, based on our standard billing rate schedule currently in effect.

3. Other direct costs (ODCs) such as reproduction, delivery, mileage (rates will be those allowed by current IRS guidelines), and travel expenses, will be billed at actual cost plus 10%.

4. W&C reserves the right to adjust its hourly rate structure and ODC markup at the beginning of the calendar year for all ongoing contracts.

Total
Fee

1. The individual hourly rates include salary, overhead and profit.

Labor Outside Services ODCs
Description
Total Hours
Total Labor
Costs (1)
Sub Consultant
Total Cost (2)
ODCs
Total ODCs
(3)
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

September 23, 2024
Date: July 8, 2024
TO: Finance Committee
Nick Bavaro, Chair
Rosa Escutia-Braaton, Vice Chair
David Wright, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: Tax Audits, Analysis and Reporting Services Agreement CONTACT: Dianne Love, Purchasing Manager, [email protected], 209-571-5164
DESCRIPTION:

Consider the Agreement for Tax Audits, Analysis and Reporting Services to Hinderliter, De Llamas and Associates (HDL) Companies, Brea, CA for a total amount not to exceed $1,200,000 over five years and forwarding to Council for approval. (Funding Source: General Fund and Measure H)
STRATEGIC PLAN ELEMENT:

This item advances the City of Modesto 2020-2025 Strategic Plan Area: Governance and Service Delivery: “build community trust in City government through responsive, transparent and efficient service delivery”; Goal J: “build a high-performance organization”.

BACKGROUND:

Tax audits, analysis and reporting services have been critical in providing the City with vital information related to sales and use tax, Measure H tax, utility users tax (UUT), business license tax, franchise fees and transient occupancy tax (TOT). Information received from these services has provided audit reports and tax analysis which have assisted in revenue recovery as well as revenue projections for five of the City’s major General Fund revenue sources. In addition, part of these services ensure businesses are in compliance with the rules and regulations defined on how these taxes should be calculated for accuracy.

On January 14, 2020, under Resolution 2020-008, Council approved an Agreement with Avenu Insights and Analytics, LLC dba MuniServices for tax audits, analysis, and reporting services for a two-year agreement with three one-year extension options, for an annual estimated cost not to exceed $120,000, and a total amount not to exceed $600,000 over five years. The current agreement with Avenu Insights and Analytics is scheduled to expire on January 13, 2025. #6..
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Tax Audits, Analysis and Reporting Services Agreement

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On November 15, 2021, the City Manager approved Amendment 1 to authorize MuniServices access to confidential sales and use tax records for Modesto businesses to facilitate the audits and ensure these records remain confidential.

On January 5, 2022, the City Manager approved Amendment 2 to add Utility User Tax and Franchise Fee Compliance Audits. As part of this added service, MuniServices would be compensated 30% of the taxes recovered by these audits.

On January 27, 2023, the City Manager approved Amendment 3 to extend the one-year extension and add Measure H as part of their sales tax audit and reporting services at no additional cost. This Amendment included authorizing MuniServices access to the sales tax records to perform the Measure H sales tax audits and price increases for Business License services.

On December 22, 2024, the City Manager approved Amendment 4 to extend the final one-year extension with a term expiration date of January 13, 2025. There are no fiscal impacts with this Amendment.

City staff recommends Amendment 5 to increase the Agreement amount by $250,000 to a new total amount of $850,000 due to the increase in tax recovery services due to Measure H, Utility User Tax and Franchise Fee Compliance audits. This Amendment is scheduled for Council approval in October 2024.

DISCUSSION:

On October 27, 2023, the City Manager authorized the Purchasing Manager to solicit the procurement for Tax Audits, Analysis and Reporting Services. On March 19, 2024, the Purchasing Division issued Request for Proposals (RFP) #2324-46 for the Tax Audits, Analysis and Reporting Services on the City’s PlanetBids public bidding website under various commodity codes1. Prospective bidders were notified online and via email of the bid opportunity.

Thirteen (13) companies downloaded the RFP document from PlanetBids.

On April 16, 2024, proposals were formally opened in the City Clerk’s office and broadcast via Microsoft Teams Livestream. Two (2) chose to respond and there were no local proposals received. An evaluation committee comprised of six (6) City staff members which included the Director of Finance, Revenue Collection and Compliance Manager, Accounting Manager, Budget Manger, Economic Development Manager and Financial Analyst evaluated the proposals and Councilmember Wright was chosen to observe the RFP process. The evaluation was based on the following criteria which was captured in the City’s RFP document:

1. Quality of reporting and audit report samples

2. Quality of demonstrated methods associated with analytics and audits including legislative updates related to taxes

3. History of complying with deadlines and proactive notices of legislative tax updates

4. References
1 91800-Consulting Services, 91804-Accounting/Auditing/Budget Consulting, 91812-Analytical Studies and Surveys (Consulting), 91849-Finance/Economics Consulting, 94600-Financial Services, 94620-Auditing, 96100-Miscellaneous Services, No.1 (Not otherwise Classified), 96200-Miscellaneous Services, No. 2 (Not otherwise Classified), 20911-Accounting/Financial: Bookkeeping, Billing and Invoicing, Budgeting, Payroll, Taxes, etc.
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Tax Audits, Analysis and Reporting Services Agreement

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5. Cost
Based on being ranked highest in total evaluation criteria, the evaluation committee recommends the award of proposal for the Tax Audits, Analysis and Reporting Services to HDL Companies. HDL Companies received excellent references on services and outlined the best methodology for their analytics and audit review for this service. They demonstrated strong best practices for managing legislative updates specifically related to taxes.

Modesto Municipal Section 8-3.203 requires all purchases which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. Based on the highest score proposer offering the Tax Audits, Analysis and Reporting Services conforms to the Modesto Municipal Code, 8-3.203, City staff recommends the award of proposal to HDL Companies, Brea, CA.

The California Department of Tax and Fee Administration (CDTFA) is the state agency responsible for overseeing the collection and reporting of all sales taxes throughout the state. In its role as administrator, CDTFA collects sales taxes which includes local district taxes (Measure H) from retailers throughout the state and remits these revenues to cities, counties, and special districts, as applicable. With the change in the consulting firm for the Sales Tax Audit services, it is necessary for the City to complete several administrative steps, which includes a Resolution authorizing HDL Companies access the Modesto business tax records to perform these audits on the City’s behalf.

FISCAL IMPACT:

Sufficient funds are budgeted in Fiscal Year (FY) 2024-25 to support the cost for this agreement and future Fiscal Years will capture this cost. The funding source for these agreements are all funded through the General Fund and Measure H.

Below is a summary of the last five-year spending with the current vendor, Avenu Insights and Analytics:

Agreement Period Amount
Year 1 $ 89,491
Year 2 $ 116,431
Year 3 $ 146,708
Year 4 $ 98,057
Year 5 (through July 2024) $ 96,125
Total $ 546,812
RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending the Award of Proposal and Agreement for Tax Audits, Analysis and Reporting Services to HDL Companies, Brea, CA for a two-year Agreement with three (3) oneyear extension options, for an annual estimated amount of $240,000 and a total amount not to exceed $1,200,000 over five years; and forwarding to Council for approval. #6..
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Tax Audits, Analysis and Reporting Services Agreement

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Approved by: _____
DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. HDL Companies – Agreement

2. RFP 2324-46 Tax Audits Analysis and Reporting Services

3. Modesto_HdL Companies Response__Final

4. Scoring Abstract
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ANNUAL AGREEMENT #278577

FOR TAX AUDITS, ANALYSIS AND REPORTING SERVICES

WITH HINDERLITER, DE LLAMAS AND ASSOCIATES
THIS AGREEMENT made and entered into in the City of Modesto, State of California, this _____ day of , 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "CITY", and Hinderliter, de Llamas and Associates a California corporation, hereinafter referred to as "CONSULTANT".

This AGREEMENT is made with regard to the following recitals:

A. The CITY has determined that Tax Audits, Analysis and Reporting Services should be prepared to maximize the City’s tax revenues and ensure ongoing funding for critical.

B. CONSULTANT represents that it is qualified, willing and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this AGREEMENT, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

CONSULTANT shall undertake and complete the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" or "Project".

2. TERM OF AGREEMENT.

The term of the AGREEMENT shall be for a period of two (2) years, with three (3) oneyear extension options at the sole discretion of the CITY, for a total of up to five (5) years.

Year 1: November 14, 2024 through November 13, 2025
Year 2: November 14, 2025 through November 13, 2026
Year 3: November 14, 2026 through November 13, 2027
Year 4: November 14, 2027 through November 13, 2028
Year 5: November 14, 2028 through November 13, 2029
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Price increases for subsequent AGREEMENT years, three (3), four (4) and, five (5) shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one (1) AGREEMENT year and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONSULTANT in writing, ninety (90) days prior to the annual anniversary date of the AGREEMENT to be effective for the subsequent year.

CONSULTANT shall diligently proceed with the completion of the Project within the time period set forth in Exhibit "A".

3. COMPENSATION.

CONSULTANT agrees to an estimated annual amount of $240,000 and a total amount not to exceed $1,200,000 as full remuneration for performing all services and furnishing all staffing and materials for CITY in accordance with Exhibit "A". CITY shall be responsible for monitoring and enforcement of the “not-to-exceed” amount. Should the compensation owed to CONSULTANT meet or exceed the “not-toexceed” amount, the CITY may instruct CONSULTANT to cease providing services. If the CITY does not give Consultant such an instruction, then, notwithstanding the “not-to-exceed” amount, CITY hereby authorizes CONSULTANT to continue to provide services under the Agreement and agrees to compensate CONSULTANT for those services. Nothing in this agreement shall be construed to require CONSULTANT to provide services for which no fee would be paid.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

CITY shall pay CONSULTANT on a time and materials basis for CONSULTANT’s actual costs for all work called for in Exhibit “A” to this AGREEMENT. All work to be performed under this AGREEMENT shall be billed at the hourly rates set forth in Exhibit “B” attached hereto. CONSULTANT shall submit monthly invoices to CITY which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any reimbursable expenses paid by CONSULTANT and identified in Exhibit “B” or approved by the CITY in writing.

CITY shall pay CONSULTANT Net 45 Days via manual check. #6..
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4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this AGREEMENT, CONSULTANT shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. CONSULTANT warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the CITY with the services contemplated by this AGREEMENT. CONSULTANT further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

5. PERFORMANCE BY KEY EMPLOYEE.

CONSULTANT has represented to CITY that Andrew Nickerson will be the person primarily responsible for the performance of the services referred to in this AGREEMENT.

CITY has entered into this AGREEMENT in reliance on that representation by CONSULTANT.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the CITY, and may be used by CITY as it may require without any additional cost to CITY. No reports shall be used by the CONSULTANT for purposes other than this contract without the express prior written consent of CITY.

All materials, documents, data or information obtained from the CITY data files or any CITY medium furnished to CONSULTANT in the performance of this AGREEMENT will at all times remain the property of the CITY. Such data or information may not be used or copied for direct or indirect use by CONSULTANT after termination of this AGREEMENT without written consent of the CITY.

7. NEWS AND INFORMATION RELEASE.

CONSULTANT agrees that it will not issue any news releases in connection with either the award of this AGREEMENT, or any subsequent amendment of or efforts under this AGREEMENT, without first obtaining review and approval of said news releases from the City Manager.

8. CONFLICT OF INTEREST.

CONSULTANT warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would create a “conflict of interest”, as that term is defined in the Political Reform Act (Gov. Code § 81000 et seq), for the CONSULTANT in the performance of this AGREEMENT. CONSULTANT warrants that, in performance of this AGREEMENT, CONSULTANT shall not employ any person having any such interest. CONSULTANT understands that, if this AGREEMENT is made in violation of Government Code § 1090 et seq., the entire AGREEMENT is void and CONSULTANT will not be entitled to any compensation for services performed. CONSULTANT agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so, required at the option of CITY.

9. AMENDMENTS.

This AGREEMENT, including the Exhibits attached hereto, may be amended only by a writing signed by both Parties. CITY will not be responsible to pay any charges CONSULTANT may incur in performing services not identified in Exhibit ‘A’ unless first authorized by the CITY in writing. #6..
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10. INDEPENDENT CONTRACTOR.

All acts of CONSULTANT, its agents, officers, and employees and all others acting on behalf of CONSULTANT relating to the performance of this AGREEMENT, shall be performed as independent contractors and not as agents, officers, or employees of CITY. Except as CITY may specify in writing, CONSULTANT has no authority to bind or incur any obligation on behalf of CITY. CONSULTANT has no authority or responsibility to exercise any rights or power vested in the CITY. It is understood by both CONSULTANT and CITY that this AGREEMENT shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture. CONSULTANT, its agents, officers and employees are and, at all times during the terms of this AGREEMENT, shall represent and conduct themselves as independent contractors and not as employees of CITY.

CONSULTANT shall determine and control the method, details and means of performing the work and services to be provided by CONSULTANT under this AGREEMENT. CONSULTANT shall be responsible to CITY only for the requirements and results specified in this AGREEMENT, and, except as expressly provided in this AGREEMENT, shall not be subjected to CITY's control with respect to the physical action or activities of the CONSULTANT in fulfillment of this AGREEMENT. CONSULTANT is permitted to provide services to others during the same period service is provided to CITY under this AGREEMENT. If necessary, CONSULTANT has the responsibility for employing other persons or firms to assist CONSULTANT in fulfilling the terms and obligations under this AGREEMENT.

If in the performance of this AGREEMENT any third persons are employed by CONSULTANT, such persons shall be entirely and exclusively under the direction, supervision, and control of CONSULTANT. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the CONSULTANT.

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CITY employee, right to act on behalf of the CITY in any capacity whatsoever as an agent, or to bind the CITY to any obligation whatsoever. It is further understood and agreed that CONSULTANT must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of CONSULTANT's personnel.

11. ASSIGNMENT.

Neither this AGREEMENT nor any portion thereof shall be subcontracted or assigned, other than noted in Exhibit ‘A’, without the express prior written consent of the CITY in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

Unless otherwise expressly provided in the contract, CONSULTANT shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this AGREEMENT. CONSULTANT shall furnish a warranty of such right to use to CITY at the request of CITY.

13. NOTICES.

Notice required by this AGREEMENT shall be given in writing and shall be deemed given and effective upon delivery provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery; (b) overnight courier service which obtains confirmation of delivery; or (c) certified pail, return receipt requested, if delivery is confirmed by a return receipt; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:

FOR CONSULTANT: Name: Hinderliter, de Llamas & Associates Address: 120 S. State College Blvd., Suite 200
Brea, CA 92821
Attention: HDL Contracts
Phone: (714) 879-5000
Email: [email protected]
FOR CITY: Name: City of Modesto
Address: P.O. Box 642
Modesto, CA 95353
Attention: Dianne Love, Purchasing Manager
Phone: (209) 571-5164
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Email: [email protected]

14. INSURANCE REQUIREMENTS.

The CONSULTANT shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the CITY as may be required by the Risk Manager of the CITY. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the CITY via PINS Advantage Insurance Program, for all of the following stated insurance policies.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the CONSULTANT shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days’ notice of the cancellation on the policies of insurance required hereunder (10 days’ notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notice of cancellation of said insurance policies within 5 business days of receipt of such notice. The CONSULTANT shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled.
(a) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent CONSULTANTs and subcontractors; products and completed operations as applicable.
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(b) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(c) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (d) Professional Liability insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claim made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the CITY, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the CITY, the CONSULTANT shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the CONSULTANT to furnish, deliver or maintain such insurance and certificates as above provided, this AGREEMENT, at the election of the CITY, may be forthwith declared suspended or terminated. Failure of the CONSULTANT to obtain and/or maintain any required insurance shall not relieve the CONSULTANT from any liability under this AGREEMENT, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the CONSULTANT concerning indemnification. The CITY, its agents, officers, employees, and volunteers shall be named as an additional insurer on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the CITY, its agents, officers, employees, and volunteers for losses arising from work performed by CONSULTANT for the CITY. The CONSULTANT's insurance policy(ies) shall include a provision that the coverage is primary as respects the CITY; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager. The CONSULTANT must deliver certificates evidencing existence of the insurance listed above to the CITY prior to the time the contract is signed.
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CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

For any claims related to this project, the CONSULTANT’S insurance coverage shall be primary insurance as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the CONSULTANT’S insurance and shall not contribute to it.

15. TERMINATION OF AGREEMENT.

Termination for Default
In the event either party fails to perform under this AGREEMENT or breaches any condition contained herein, the other party shall notify in writing the breaching party of the non-performance.

Within 10 days after receipt of notification, the breaching party shall correct any non-performance to the reasonable satisfaction of the non-breaching party, or such other time as may be identified in the notice. Failure to correct any non-performance shall allow the non-breaching party to terminate this AGREEMENT for cause.

Termination by CITY for Convenience
CITY may cancel this AGREEMENT at any time, with or without cause, upon written notification to CONSULTANT.

Post-Termination Procedure
Upon receipt of a written notice of termination, the CONSULTANT shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, sub-CONSULTANTs and agents are notified of such termination and act as specified in the notice of termination; b. Terminate all orders and Subcontractors except as necessary to complete any #6..
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portion of the Work that is not terminated;
c. If directed in writing by the CITY to do so, assign all right, title and interest in subcontracts and materials in progress to CITY, in which case the CITY will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such sub-CONULTANTs, but in no event shall recovery by any CONSULTANT or sub-CONSULTANT include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the CONSULTANT in performing the Work whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of CITY; f. Complete performance of such part of the Project as has not been terminated; g. Take such other actions as may be necessary, or as may be directed by the CITY for the protection and preservation of the Project and/or property related to the Project;
h. If CITY so requests, and at CITY's cost, CONSULTANT shall provide sufficient oral or written status reports to make CITY reasonably aware of the status of CONSULTANT's work on the project.
i. The CONSULTANT understands and agrees that CITY may, in CITY's sole discretion, refuse to pay CONSULTANT for that portion of CONSULTANT's services which were performed by CONSULTANT on the project prior to the termination date and which remain unacceptable and/or not useful to CITY as of the termination date.
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CITY will pay CONSULTANT for work actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the CONSULTANT after termination for convenience shall be limited to amounts due and owing under the AGREEMENT at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as sub-CONSULTANT AGREEMENTs or contracts for materials; b. The AGREEMENT price allocable to the portion of the Work properly performed or goods supplied to the work site by the CONSULTANT as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the CONSULTANT.

16. INDEMNITY.

The CONSULTANT shall hold the CITY, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONSULTANT, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this AGREEMENT.

CONSULTANT's obligation to defend, indemnify, and hold the CITY, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this AGREEMENT for CONSULTANT to procure and maintain a policy of insurance.

In the event that CONSULTANT or any employee, agent, or subcontractor of CONSULTANT providing services under this AGREEMENT is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of CITY, CONSULTANT shall indemnify, defend, and hold harmless CITY for the payment of any employee and/or #6..
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employer contributions for PERS benefits on behalf of CONSULTANT or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of CITY.

Notwithstanding anything to the contrary, in no event will CONSULTANT be liable for claims, liabilities or damages (i) in connection with any CITY monies not collected by CONSULTANT; nor (ii) in connection with the issuance, non-issuance or revocation of any registration, license, permit, or exemption.

17. DISPUTE RESOLUTION.

Venue for all claims, controversies, or disputes arising out of, or relating to the formation of this AGREEMENT, or the breach, termination execution, enforcement, interpretation, or validity of this AGREEMENT, including the determination of the scope or applicability of this contract provision shall be in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California.

18. ATTORNEYS’ FEES.

If a party to this AGREEMENT brings any action, including an action for declaratory relief, to enforce or interpret the provision of this AGREEMENT, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

19. ENTIRE AGREEMENT.

This AGREEMENT and its exhibits contain the entire understanding between CONSULTANT and CITY. All previous proposals, offers and communications relative to this AGREEMENT, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this AGREEMENT.

20. PARTIAL INVALIDITY.

If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
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21. WAIVER.

The waiver by any party to this AGREEMENT of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

22. AUDIT.

The CITY's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify CONSULTANT's charges to CITY under this AGREEMENT.

CONSULTANT agrees to retain reports, records, documents, and files related to charges under this AGREEMENT for a period of four (4) years following the date of final payment for CONSULTANT services. CITY's representative shall have the right to reproduce any of the aforesaid documents.

23. GOVERNING LAW.

This AGREEMENT shall be governed according to the laws of the State of California.

24. HEADINGS NOT CONTROLLING.

Headings used in the AGREEMENT are for reference purposes only and shall not be considered in construing this AGREEMENT.

25. COMPLIANCE WITH LAWS.

CONSULTANT shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws.

CONSULTANT shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

26. CITY BUSINESS LICENSE.

CONSULTANT will have a City of Modesto business license. #6..
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IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this AGREEMENT by its City Manager and attestation by its City Clerk under authority of Resolution No. 2024- , adopted by the Council of the City of Modesto on the day of __________ , 2024 and Hinderliter, de Llamas and Associates has caused this AGREEMENT to be duly executed as of the Effective Date.
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REQUEST FOR PROPOSALS # 2324-46

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SERVICES
1 REQUEST FOR PROPOSALS (“RFP”) NO. 2324-46
FOR

TAX AUDITS, ANALYSIS AND REPORTING SERVICES
PROPOSAL OPENING: April 16, 2024 at 11:00 A.M.

CITY OF MODESTO CONTACT: Carol Wattle, Senior Buyer
E-MAIL ADDRESS: [email protected]
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2 Table of Contents
NOTICE TO PROPOSERS ........................................................................................................................ 3 CALENDAR OF EVENTS ........................................................................................................................ 5 CITY CONTACT ....................................................................................................................................... 5 PRECEDENCE ........................................................................................................................................... 5 VIRTUAL BID OPENING......................................................................................................................... 6 GENERAL PROPOSAL REQUIREMENTS............................................................................................. 7 PROPOSAL SUBMITTAL CHECKLIST ............................................................................................... 15 PROPOSAL FORM A - RFP ACKNOWLEDGEMENT .................................................................... 16 PROPOSAL FORM B – PROPOSER COMPANY INFORMATION ................................................ 19 PROPOSAL FORM C - PRICING SCHEDULE ................................................................................. 21 PROPOSAL FORM D – PROPOSER EXCEPTIONS, CLARIFICATIONS, AMENDMENTS ....... 23 PROPOSAL FORM E – PROPOSER CUSTOMER REFERENCES ................................................. 24 PROPOSAL FORM F - FINANCIAL INTEREST DISCLOSURE .................................................... 26 PROPOSAL FORM G - PROPOSER COMPANY HISTORY STATEMENT .................................. 28 PROPOSAL FORM H - PROPOSER FINANCIAL STATEMENTS ................................................. 29 PROPOSAL FORM I - ADDENDA ACKNOWLEDGEMENT ......................................................... 31 PROPOSAL FORM J – PROPOSER EXPERIENCE ......................................................................... 32 TECHNICAL SPECIFICATIONS AND REQUIREMENTS ................................................................. 33

1.0 SCOPE OF WORK: ........................................................................................................................ 33

1.1 REQUIRED LICENSES:................................................................................................................ 36 STANDARD AGREEMENT FOR CONSULTANT SERVICES ...................................................... 37 #6..
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3 NOTICE TO PROPOSERS
NOTICE IS HEREBY GIVEN that the City of Modesto, County of Stanislaus, State of California (“City”), will receive at the City Clerk’s office, 1010 Tenth Street, Suite 6600, Modesto, CA 95354 sealed proposals (each, a “Proposal”) from qualified Proposers (each, a “Proposer”) for the furnishing of tax audits, analysis and reporting services (the “Services”) for the City of Modesto, Finance Department.

Any equipment, materials, and supplies shall be furnished F.O.B. City of Modesto (delivery charges borne by Proposer, included in the Services pricing herein, and not separately charged to the City).

Proposers are highly recommended to download all RFP documents from the City’s Purchasing Division website at http://www.modestogov.com/257/Contracting-Bid-Opportunities; RFP documents shall include all specifications necessary for Proposers to submit a responsive Proposal.

Each Proposal shall be sealed and filed with the City Clerk’s office, 1010 Tenth Street, Suite 6600, Modesto, CA 95354 prior to Tuesday, April 16, 2024 at 11:00 A.M., at which time Proposals will be opened and recorded. All Proposals shall be available for review following City Council award approval at the Purchasing Division, 1010 Tenth Street, 5th Floor, Suite 5300, Modesto, CA 95354.

Proposals will be received only at the address shown above, and prior to the time indicated. Any Proposal received at or after said time and/or date, or at a place other than the stated address cannot be considered and will be returned to the Proposer unopened.

All Proposals, whether delivered by an employee of the Proposer, U.S. Postal Service, courier or package delivery service must be received and time stamped at the stated address prior to the time designated. The City Clerk’s time stamp shall be considered the official timepiece for the purpose of establishing the actual receipt of Proposals. The City of Modesto assumes no responsibility for delay in the delivery of the Proposal. Proposals will not be accepted by email or facsimile. #6..
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4 On the outside of the Proposal envelope and courier envelope, if any, the Proposer shall indicate the following:
“NAME AND ADDRESS OF PROPOSER
PROPOSAL IN RESPONSE TO REQUEST FOR PROPOSALS # 2324-46 PROPOSAL OPENING DATE: TUESDAY, APRIL 16, 2024 AT 11:00 A.M.” Proposer must deliver your Proposal by a preferred method to the appropriate location below:

MAIL TO: CITY CLERK

CITY OF MODESTO
P.O. BOX 642
MODESTO, CA 95354
DELIVER/ COURIER TO: CITY CLERK

CITY OF MODESTO
1010 10TH STREET, SUITE 6600
MODESTO, CA 95353
The City reserves the right to reject any or all Proposals or to waive any informalities or minor irregularities in a Proposal.

No Proposer may withdraw its Proposal for a period of ninety (90) days after the date set for the opening thereof.
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REQUEST FOR PROPOSALS # 2324-46

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5 CALENDAR OF EVENTS
Event Date
RFP Issued March 19, 2024
Written Questions Due via Email March 26, 2024
Addendum Issued (if required) April 2, 2024 (approximate date) Proposal Due Date & Time PRIOR 11:00 A.M. on Tuesday, April 16, 2024 AGREEMENT Award Approximately September 2024

CITY CONTACT
All questions regarding these specifications, terms, and conditions shall be submitted in writing via email to the City’s Purchasing Division contact named on the cover page of this RFP (“City Contact”) by the date listed in the CALENDER OF EVENTS above. The City will respond to pertinent questions through issuance of an Addendum to be available to all Proposers. All contact between Proposer and the City regarding the Proposal process shall be through the City Contact. Attempts by the Proposer to contact other City personnel regarding this RFP and associated process may result in disqualification of the Proposer. Notwithstanding the foregoing, information intentionally or un-intentionally provided by any person other than the City Contact may not be correct and will not be binding upon the City.

PROPOSER FAMILIARITY WITH SERVICE CONDITIONS
It is the responsibility of each Proposer to become familiar with all of the specifications, terms and conditions and the site condition (if applicable). The Proposer agrees to and acknowledges all RFP specifications, terms, and conditions and indicates the ability to perform by submission of a Proposal.

By the submission of a Proposal, the Proposer certifies that if awarded a contract it will make no claim against the City based upon ignorance of conditions or misunderstanding of the specifications.

PRECEDENCE
Proposer agrees that any AGREEMENT resulting from City’s acceptance of its Proposal, together with the terms in any City AGREEMENT and associated specifications provided by the City to Proposer therewith, shall comprise the entire AGREEMENT between City and Proposer. Moreover, Proposer agrees that any additional or contrary terms contained in Proposer’s acknowledgement of, shall be null and void.
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6 VIRTUAL BID OPENING
The City of Modesto will be broadcasting Proposal openings live electronically via Microsoft Teams at 11:00 a.m. (Pacific Time) on Tuesday, April 16, 2024. The City Clerk Record of Proposal document should be available on Planet Proposals by the end of the same day.

The public Proposal opening for this Invitation for Proposals will be available using the URL link containing the Number and Title of the Proposal on the cover page, provided below. By submitting your Proposal for the above-stated RFP you acknowledge, understand, and agree to this modified Proposal opening procedure.

URL -https://teams.microsoft.com/l/meetupjoin/19%3ameeting_NTI0YzBiMDMtNDQ0Yi00YjNlLWIwZjYtYzg4ZDVjMDdkM2Mz%40thread.v2 /0?context=%7b%22Tid%22%3a%22125ccacf-fc61-463c-9976-
189f876ff90b%22%2c%22Oid%22%3a%229715c333-c997-4dd7-8984-12cd4deaa705%22%7d • Click here to join the meeting
• +1 469-998-7409
• Conference ID: 961 656 049#
Should you have any questions regarding this, please do not hesitate to contact the Purchasing Department Contact listed on the Cover Page.
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7 GENERAL PROPOSAL REQUIREMENTS
A. PROPOSAL SUBMITTAL: Proposers should submit two (2) “inked” (preferably blue ink) signed original Proposal documents, plus one (1) copy of the signed original Proposal document, and one (1) electronic copy submitted via USB. The original Proposal document shall be clearly marked. Photocopies do not constitute an original Proposal. FAILURE TO FURNISH AT LEAST TWO (2) “INKED” SIGNED ORIGINAL PROPOSAL DOCUMENT MAY RESULT IN DISQUALIFICATION.

B. CONFIDENTIAL PROPOSER INFORMATION: It is the responsibility of the Proposers to identify information in their Proposal submission that they may consider to be confidential under the California Public Records Act. To the extent that the City agrees with that designation, such information will be held in confidence whenever possible. All other information will be considered public.

C. PROPOSER COSTS INCURRED IN RESPONDING TO RFP: All costs associated with the preparation and submission of a Proposal shall be borne by the Proposer.

D. PROPOSER EXCEPTIONS: All exceptions taken to this RFP and associated specifications shall be specifically and clearly identified on Exceptions, Clarifications and Amendments form.

Failure to comply with this provision may deem the Proposal as non-responsive. Please review the Sample AGREEMENT and make note on the Exceptions, Clarifications, and Amendments form for any changes. Exceptions taken shall not affect the overall performance and quality of equipment, materials and/or services required by the City. The Purchasing Manager or designated agent shall make the final decision regarding the acceptability of equipment, materials and/or services with exceptions.

E. CITY ACCEPTANCE/REJECTION OF IRREGULAR PROPOSALS: An AGREEMENT shall be awarded to the Proposer whose Proposal most closely satisfies the needs of the City and is deemed the most advantageous to the City. The City reserves the right to reject any or all Proposals or to waive any informalities or minor irregularities in a Proposal.

F. COMPLETE PROPOSAL DOCUMENT: The following forms constitute the makeup of a complete Proposal document and shall signed wherever indicated and be submitted to the City in the order listed:
• Proposal Form A – RFP Acknowledgement
• Proposal Form B – Proposer Company Information
• Proposal Form C - Pricing Schedule
• Proposal Form D - Proposer Exceptions, Clarifications, Amendments #6..
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8 • Proposal Form E - Proposer Customer References
• Proposal Form F - Financial Interest Disclosure
• Proposal Form G - Proposer Company History Statement
• Proposal Form H – Proposer Financial Statements
• Proposal Form I – Addenda Acknowledgement
• Proposal Form J – Proposer Experience
Failure to furnish any of these documents may result in disqualification.

G. COMPLIANCE/NON-COMPLIANCE: If Proposer cannot comply with a specification requirement in this RFP, note on the Exception, Clarifications, Amendments form of the specification paragraph, your exception, and your recommendation. The Purchasing Manager will evaluate your recommendation. If after evaluation it is determined that the Proposer is not in compliance with the specification, the Proposal may be rejected.

H. PROPOSED PRICING FORMAT:
• The cost of labor, equipment, fuel, licenses, bonds, permits, and insurance necessary to perform the required services shall be included in Proposal pricing, along with Proposer’s profit margin and any other cost factors.
• Unless otherwise stated, the Proposer agrees that, in the event of a price decline, the benefit of such lower pricing shall be extended to the City. • The City of Modesto shall not pay mileage charges or travel time from the Contractor’s place of business to the job site, or from site to site, or for the Contractor’s travel time to pick up materials.
• Proposer shall use the pricing schedule provided in this RFP to present Proposal pricing.

No other form or format shall be accepted. Proposal must be submitted on the Pricing Schedule provided. No alterations may be made to the pricing schedule. Any exceptions, amendments or adjustments should be noted on the Exception, Clarification, Amendments Form.

I. AWARD OF AGREEMENT:
• The City may award one or more AGREEMENTs to one or more Proposer in order to provide for backup, or in case the “primary” contractor is unable to meet the City’s needs.

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9 • The City reserves the right to decline to award any AGREEMENT if it is determined that the proposed pricing is not competitively priced based on similar AGREEMENTs with public agencies within the State of California or if the bids received fail to meet the City’s requirements.
• The City reserves the right to select that Proposal, which best suits the City’s needs. Price is only one factor that will be considered by the City when awarding an AGREEMENT.

Regardless of City staff’s recommendation, the City Council reserves the right to award an AGREEMENT to the Proposer that best suits the City’s needs as determined by the City Council whether or not said award is consistent with City staff’s recommendation for award.
• The City will appoint a selection committee to evaluate each Proposer’s submitted Proposal. The City will evaluate Proposals on a 100-point scale based upon the following weighted scoring:

Evaluation Elements Scoring Method
Quality of reporting and audit
report samples and narrative
descriptions, capability and
experience
Numerical Score
Quality of demonstrated methods
associated with analytics and audits
and legislative updates associated
with taxes
Numerical Score
History of complying with
deadlines and proactive notices of
legislative tax updates
Numerical Score
References Numerical Score
Cost Numerical Score
Total Maximum Points
J. INDEMNITY: Proposer, if awarded an AGREEMENT, will be required to hold the city, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgements or damages from every cause, including #6..
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10 but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of Proposer, its agents, officers, employees, and volunteers relating to or during the performance of its obligations under this Proposal.

Contractor’s obligation to defend, indemnify, and hold the city, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Proposal for Proposer to procure and maintain a policy of insurance. With reference to the foregoing, the parties agree that all risk of loss, including but not limited to damages, property losses and defense of third-party suits, arising out of or relation to the operation of city-owned vehicles by Contractor’s employees is apportioned to Contractor in accordance with the provisions contained in indemnity.

K. PROPOSER REPRESENTATION: Proposer represents that:
• Proposer has had an opportunity to examine and has examined any and all of the documents, including specifications, any resultant contract and supporting data, and that it has, from the information contained in such documents, specifications, and data, fully acquainted itself with all conditions relevant to the work. • Proposer has made all reasonable investigations essential to a full understanding of the difficulties, which may be encountered in performing the work. • Proposer will complete the proposed services for the compensation stated in any resultant AGREEMENT.
• Proposer assumes full and complete responsibility for all conditions relevant to the proposed services and all risks in connection therewith. • Proposer represents that it is fully qualified to perform the proposed services in accordance with the terms of any resultant AGREEMENT within the time specified therein.

L. PROPOSAL PROTEST AND APPEAL PROCEDURES: Proposers wishing to protest or appeal a contract award decision by the City of Modesto must follow the procedures provided in this section. Protests or appeals which are not submitted in accordance with these procedures will not be reviewed.

Definitions
For the purposes of these procedures: "Days" means working days in which City Hall is open for business, excluding holidays and weekends.
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11 "Proposal" includes the term "offer" or "proposal" as used in the context of formal, informal, or negotiated procurements.
"Announced Decision" includes the term “Notice of Intent to Award Letter”. Once the City has issued an Announced Decision, the date noted will begin the time that an Interested Party may lodge a protest.

Protest Procedures
• Only a Proposer who has actually submitted a Proposal is eligible to submit a protest against the City’s Announced Decision.
• Subcontractors are not eligible to submit bid protests. • A Proposer may not rely on the bid protest submitted by another bidder but must timely pursue its own protest.
• A written protest to an Announced Decision must be made to the City of Modesto's Director of Finance no later than ten days after the date of the Announced Decision. • The protest shall be delivered or sent by registered mail and received by the deadline, or protest will be automatically rejected. Protestors who choose to be represented by legal counsel are responsible for the associated expenses. • The protest shall be accompanied by a certified or cashier's check in the amount of $300.00, (except for protests of Federally Funded AGREEMENTs) made payable to the Clerk of the City of Modesto. Protests filed without the requisite fee will be rejected without any additional review.
• The protest filed with the Director of Finance shall:
a. Include the name, address, email address and business telephone number of the protestor;
b. Identify the under protest by name, Request for Proposal (RFP) or Request for Proposal (RFP) number, and Proposal/RFP date;
c. The bid protest must contain a complete statement of the basis for the protest and all supporting documentation. The protest must refer to the specific portion or portions of the Contract Documents upon which the protest is based; #6..
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12 d. Include all supporting documentation, if any. Documentation submitted after filing deadline will not be reviewed.
• Proposal Protests: A Proposer shall follow, in order, the following steps:
a. Protest to Director of Finance: Upon receipt of a complete and timely protest, the Director of Finance shall review all the submitted materials and shall create and retain a written record of the review. The Director of Finance shall respond at least generally to each material issue raised in the protest not later than ten (days after receipt of the protest. Notice of the Director of Finance's decision may be given by letter mailed through U.S. Postal Service.

All protests to the Director of Finance shall either be delivered to:

City Clerk’s Office
Attn: Director of Finance
1010 Tenth St. Suite 6600
Modesto CA 95354
Or mailed to:

City Clerk’s Office
Attn: Director of Finance
PO Box 642
Modesto CA 95353
b. Appeal to Deputy City Manager: At the protestor’s discretion, the further decision of the Director of Finance decision may be appealed in writing to the City of Modesto's Deputy City Manager(s) no later than ten days after the date of the Director of Finance’s Decision. The scope of the appeal shall be limited by the issues raised in the initial protest to the Director of Finance. The Deputy City Manager shall not be permitted to review any newly raised issues. The Deputy City Manager shall review the appeal, accompanying supporting documents, if any and the written records of the protest review by the Director of Finance. A written record of the Deputy City Manager's review shall be created and maintained. The Deputy City Manager shall give notice of their decision to the protestor within ten days after receipt of appeal.

Further protest appeals shall either be delivered to:
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13 City Clerk’s Office
Attn: Deputy City Manager
1010 Tenth St. Suite 6600
Modesto CA 95354
Or mailed to:

City Clerk’s Office
Attn: Deputy City Manager
PO Box 642
Modesto CA 95353
d. Appeal to City Council: Any protestor seeking to appeal to the decision of the Deputy City Manager may appeal in writing to the City Council by filing with the City Clerk a written notice of such appeal not later than fifteen days after the date of the Deputy City Manager's decision. The City Clerk will calendar the protest for Council hearing and give notice of the time and place of the hearing as provided in Modesto Municipal Code Sections 1-4.01 through 1-4.05. The City Council’s decision on the appeal shall be final.

All protest appeals to the City Council shall either be delivered to:

City Clerk’s Office
Attn: City Council
1010 Tenth St. Suite 6600
Modesto CA 95354
Or mailed to:

City Clerk’s Office
Attn: City Council
PO Box 642
Modesto CA 95353
e. Optional Alternative Process for Protests of Procurement Actions Exceeding $250,000: A Bidder protesting procurements exceeding $250,000 shall comply with the procedures contained herein, except that in lieu of appeal to the Deputy City Manager a protestor may request that the protest be heard and decided at an administrative hearing.
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14 A written request for administrative hearing shall be accompanied by a certified or cashier's check in the amount of $1,500, (except for protests of Federally Funded projects); The request for hearing shall include the specific grounds of the appeal.

The City of Modesto shall select and engage an impartial and qualified person to act as hearing officer in the pending protest. The protestor shall have the right to twice reject the selected hearing officer, provided that the City is notified of such rejection within three days of notice to protestor of the name of the hearing officer.

The protest shall be heard not later than twenty days after receipt of protestor's request for hearing and the selection of a hearing officer. Protests not made in a timely manner shall be deemed withdrawn unless the City and the protestor mutually agree otherwise in writing. The protestor’s failure to accept a hearing officer after the third attempt by City staff to identify an impartial hearing officer shall be deemed a withdrawal of the protest.

The costs of the hearing officer and expenses of the protest shall be borne by the protestor. The sums deposited with the request for hearing shall be credited to the costs of the hearing officer and other hearing expenses. f. Mandatory Alternative Process for Protests of Procurements Obtained with Federal Funds: If the protested procurement involves federal funds, the Deputy City Manager, City Council, or hearing officer shall give notice, accompanying their respective decisions, to the protestor that he or she has the right to appeal to the appropriate federal agency, for which an agency name, contact (where available) and address shall be provided by City staff. Such an appeal shall be filed with the appropriate agency within seven business days of the dispatch or rejection notices to the protestor. Federal agencies may entertain protests alleging that the City has failed to adopt written protest procedures or has failed to follow such procedures. The City Council is the highest authority of the City of Modesto, and its decisions are final. A disappointed Bidder for a contract involving expenditures of Federal funds shall have the right to appeal the City Council decision directly to the federal agency as described herein. #6..
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15 PROPOSAL SUBMITTAL CHECKLIST

PROPOSAL SUBMITTAL CHECKLIST
The Proposer shall provide a complete Proposal in a sealed envelope by the required deadline on the Proposal Opening Date. Failure to provide all the required documents may cause the Proposal to be considered non-responsive.

Proposer’s Proposal must contain the following applicable elements completed and signed wherever indicated and submitted as described more-fully herein. The following checklist is provided solely for Proposer’s use in reviewing the completeness of your submission:

COMPLETE PROPOSAL ELEMENTS √
Proposal Form A - RFP Acknowledgement
Proposal Form B – Proposer Company Information
Proposal Form C - Pricing Schedule
Proposal Form D – Proposer Exceptions, Clarifications, Amendments Proposal Form E – Proposer Customer References
Proposal Form F - Financial Interest Disclosure
Proposal Form G – Proposer Company History Statement
Proposal Form H – Proposer Financial Statements
Proposal Form I - Addenda Acknowledgement
Proposal Form J – Proposer Experience

Proposer’s submission should include all City of Modesto forms. If any form is not applicable, Proposer should write or type “Not Applicable” on it but still include the form in your submission.

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16 PROPOSAL FORM A - RFP ACKNOWLEDGEMENT
The City is soliciting Proposals from qualified firms (each a “Proposer” to fulfill the City’s requirements per the specifications, terms and conditions contained in this Request for Proposals (“RFP”). This Proposal Acknowledgement must be completed, signed by an authorized responsible officer or employee, dated, and submitted with the Proposal response. Obligations assumed by such signature will include the following:

1. Preparation of Proposals: (a) All prices and notations must be printed in ink or typewritten. No erasures permitted. Errors may be crossed out and corrections printed in ink or typewritten adjacent and must be initialed in ink by person signing the Proposal. (b) Quote price as specified in Proposal. No alterations or changes of any kind shall be permitted to the Proposal Form. Responses that do not comply shall be subject to rejection in total.

2. Failure to Submit Proposal: If you are not submitting a Proposal but want to remain on the mailing list and receive future Proposals, complete, sign and return this Proposal Acknowledgement and state the reason you are not pricing.

3. Taxes and Freight Charges: (a) Unless otherwise required and specified in the RFP, the prices quoted herein do not include Sales, Use or other taxes. (b) No charge for delivery, drayage, express, parcel post packing, cartage, insurance, license fees, permits, costs of bonds, or for any other purpose, except taxes legally payable by City, will be paid by the City unless expressly included and itemized in the Proposal. (c) Amount paid for transportation of property to the City is exempt from Federal Transportation Tax. An exemption certificate is not required where the shipping paper shows the consignee as the City; as such papers may be accepted by the carrier as proof of the exempt character of the shipment. (d) Articles sold to the City are exempt from certain Federal excise taxes. The City will furnish an exemption certificate.

4. Award: (a) Unless otherwise specified by the Proposer or the RFP gives notice of an all-or-none award, the City may accept any item or group of items of any Proposal. (b) Proposals are subject to acceptance by the City at any time within 90 days of opening, unless otherwise specified in the RFP.

A Proposer shall not change its Proposal within such time frame (c) A valid contract based on the sample AGREEMENT attached to the RFP and the Proposal shall be mailed, or otherwise furnished, to the successful Proposer within the time for acceptance specified, and such contract shall be a binding contract without further action by either party. The contract shall be interpreted, construed, and given effect in all respects according to the laws of the State of California.

5. Patent Indemnity: Proposers who do business with the City shall hold the City, its officers, agents, and employees, harmless from liability of any nature or kind, including cost and expenses, for infringement or use of any patent, copyright or other proprietary right, secret process, patented or unpatented invention, article or appliance furnished or used in connection with the contract or purchase order.
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17 6. Samples: Samples of items, when required, shall be furnished free of expense to the City and if not destroyed by test may upon request (made when the sample is furnished), be returned at the Proposer’s expense.

7. Rights and Remedies of City’s for Default: (a) In the event any item furnished by the Proposer in the performance of the contract or purchase order should fail to conform to the specifications therefore or to the sample submitted by the Proposer with its Proposal, the City may reject the same, and it shall thereupon become the duty of the Proposer to reclaim and remove the same forthwith, without expense to the City, and immediately to replace all such rejected items with others conforming to such specifications or samples; provided that should the Proposer fail, neglect or refuse so to do the City shall thereupon have the right to purchase in the open market, in lieu thereof, a corresponding quantity of any such items and to deduct from any moneys due or that may there after come due to Proposer, or send an invoice to the Proposer which shall be paid within thirty (30) days, the difference between the prices named in the contract or purchase order and the actual cost thereof to the City. In the event that the Proposer fails to make prompt delivery as specified for any item, the same conditions as to the rights of the City to purchase in the open market and to reimbursement set forth above shall apply, except when delivery is delayed by fire, strike, freight embargo, or Act of God or the government. (b) Cost of inspection or deliveries or offers for delivery, which do not meet specifications, will be borne by the Proposer. (c) The rights and remedies of the City provided above shall not be exclusive and are in addition to any other rights and remedies provided by law or under the contract.

8. Payment Terms and Methods: Proposer will be able to choose from either of the following payment methods and associated timings:
(a) Option A (Preferred): City of Modesto ePay Payment: This secure payment methodology is preferred by an increasing number of the City’s suppliers. On Net 30-day timing, you will receive a single-use Master Card number with a detailed remittance for each payment. You will process the payment though your POS/Card terminal. The payment remittance will be sent from [email protected] via email and will contain the following information:
• 16-digit credit card number
• Expiration date
• Security code
• Total dollar amount of invoices to be paid
• Invoices reference numbers and corresponding amounts

ePay results in small percentage rebate of 1.0% to the City through the card issuer. That rebate amount will be considered by the City in its evaluation of Proposer’s pricing proposal #6..
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18 hereunder. Information about enrolling in MasterCard ePay program can be obtained from the City’s contact listed on the Cover Page of this RFP.
(b) Option B – Manual Check: On Net 45 Day timing, the City will mail a hardcopy check to Bidder. The payment will be deemed to have been made when the check envelope is mailed via US Postal Service First Class Mail. The timing of the mailing will be at the end of the Net 45 Day period. Additional time should be estimated by the Bidder for the check to be in transit, and to await deposit and clearance by Bidder staff.

9. California Government Code Section 4552: In submitting a Proposal to a public purchasing body, the Proposer offers and agrees that if the Proposal is accepted, it will assign to the purchasing body all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2, commencing with Section 16700, of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the Proposer for sale to the purchasing body pursuant to the Proposal. Such assignment shall be made and become effective at the time the purchasing body tender’s final payment to the Proposer.

10. No Guarantee or Warranty: The City makes no guarantee or warranty as to the condition, completeness or safety of any material or equipment that may be traded in under a contract or purchase order resulting from this Proposal.

11. Two “Inked” Signed Original Proposal Documents Required: Failure to furnish two (2) “inked” signed original Proposal documents may result in disqualification. These should be accompanied by one (1) copy of the documents and one (1) electronic copy on a USB drive.

12. Minor Irregularities. The City reserves the right, in its sole discretion, to waive any informalities or minor irregularities in a Proposal.

THE undersigned acknowledges receipt of the referenced RFP and/or Addenda and offers and agrees to furnish the articles and/or services specified on behalf of the Proposer indicated in Proposer’s Proposal Forms A through J, attached hereto and made a part hereof, for the pricing proposed on the Pricing Schedule.

Proposer Company Name:

Proposer Headquarters Address:

City/State/Zip:

Signature/Title/Date:
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19 PROPOSAL FORM B – PROPOSER COMPANY INFORMATION
A. Proposer Company Full
Legal Name
B. Proposer Company
Marketplace (or DBA)
Name
C. Type of Legal Entity: ___ Corporation, registered in ____________________ (State) ___ Limited Liability Company, registered in _________________(State) ___ Partnership, registered in ________________(State)
___ Sole Proprietorship, registered in ____________(State) ___ Other ___________________________________________(Describe) D. Headquarters Address
(Street Address, City,
State, Country, Postal
Code):

E. Website Address: www.___________
F. Contact Person Details: Name:

Title:

Phone (Office):

Phone (Mobile):

Mailing Address (Street Address, City, State, Postal Code):

Fax Number:

Email:

G. Federal Taxpayer
Identification Number
(TIN):

H. Dun & Bradstreet
(DUNS) Number:

I. Names and Titles of
Top Three Proposer
Officers:

J. Years in Business:

K. Proposer Office
Address Closest to City
of Modesto (Street
Address, City, State,
Country, Postal Code):

L. City of Modesto
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20 Business License
Number (note –
provide only if
available now - - but
not required until any
contract begins):
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21 PROPOSAL FORM C - PRICING SCHEDULE
All labor, materials, equipment, tools, fuel, licenses, bonds, insurance, and other expenses necessary for Proposer to perform the required services shall be included in Proposal pricing. Proposal must be submitted on the below Pricing Schedule provided. No alterations should be made to the pricing schedule. Any exceptions, amendments or adjustments should be noted on Proposal Form D – Exceptions, Clarifications, Amendments.

Item
No.

Description Unit Unit Price Extended Price
A1 Sales/Use Tax Audit, Analysis & Reporting EA $ $
A2 Utility Users Tax Audit, Analysis & Reporting EA $ $ A3 Transient Occupancy Tax (TOT) Audit, Analysis & Reporting EA $ $ A4 Business License Tax Audit, Analysis & Reporting EA $ $ A5 Franchise Fee Audit, Analysis & Reporting EA $ $
ePay 1% Rebate (See Bid Form A for this option) $
Total Items: $ __________
Other Associated Costs: (Be specific) $ _____________________________ #6..
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22 Payment Terms:

Check which of the following payment terms/methodology Proposer accepts (a description of each can be found in Proposal Form A – RFP Acknowledgement):

Choose One:
• Option A (Preferred): City of Modesto ePay Payment on Net 30 Day Timing: ___ Choose by checking (√) here. If selected, for bid comparison purposes, Proposer’s pricing will be reduced by the City of Modesto’s average ePay card program rebate percentage; or ePay Email Address: ______________________________
• Manual Check Payment Mailed by US Postal Service First Class Mail Only on Net 45 Day Timing:
___ Choose by checking (√) here.

THE undersigned acknowledges receipt of the referenced RFP and any associated Addenda and offers to furnish the articles and/or services specified, in accordance with the specifications, terms and conditions of this RFP and these Proposal documents, for the pricing indicated on the Pricing Schedule.

Proposer Company Name:

Name of Proposer Signatory:

Signature of Proposer Representative:
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23 PROPOSAL FORM D – PROPOSER EXCEPTIONS, CLARIFICATIONS, AMENDMENTS Exceptions to the City of Modesto’s RFP package, sample AGREEMENT, and associate specifications are not encouraged and may cause Proposer to be considered responsible and/or its Proposal to be considered not responsive.

Therefore, if no exceptions, clarifications, or amendments are proposed by Proposer, it is preferred that Proposer so indicate by typing or writing “Not Applicable” in the Description field in the first item row below. Less preferred, Proposer may indicate no exceptions, clarifications or amendments are proposed by leaving this form out of its’ Proposal submission.

Nonetheless, Proposer may request Proposal clarifications and exceptions below, if any, sign and submit with your Proposal response. Any requested exception, clarification or amendment may not be accepted and may deem the Proposer as non-responsive.

Item # Reference To: Description
Page # Section or
Paragraph #
Proposer Company Name:

Name of Proposer Signatory:

Signature of Proposer Representative:
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24 PROPOSAL FORM E – PROPOSER CUSTOMER REFERENCES
Proposer shall provide a list of five current or former customers able to discuss prior experience with similar type of services requested by the City in the above-referenced RFP. Proposer’s references shall have similar volume and requirements to the City of Modesto’s as described in the above-referenced RFP. Proposers failing to provide references may be deemed as non-responsive.

The City may contact some or all of the references provided in order to determine the Proposer’s performance record on services similar to that described in the above-referenced RFP. The City reserves the right to contact references other than those provided in Proposer’s submission and to use the information gained from them in the award process.

Company Name:

Address:

City, State, Zip Code:

Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Service:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code:

Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
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25 Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
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26 PROPOSAL FORM F - FINANCIAL INTEREST DISCLOSURE
Any contract award to result from this RFP process and Proposer’s submission of a Proposal therewith will require approval by a majority vote of the City of Modesto’s City Council. In order to have full transparency in any City of Modesto commercial actions, the City Council may not approve an AGREEMENT between the City and the Proposer until all persons with a direct or indirect financial interest of greater than $2,000 in the Proposer are identified by name.

Proposer must therefore complete this Proposal Form F – Financial Interest Disclosure, listing by name all parties that have a material financial interest in the AGREEMENT, contract, or development right.

PLEASE NOTE, any Council action that requires a Financial Interest Disclosure cannot be considered by the City Council until the required reporting is made. That means that City Council agenda items without the disclosure will be removed from the Council agenda.

Financial Interest Disclosure to City of Modesto
Proposer shall identify any person with a financial interest in the Proposer by name, below.

For the purposes of this disclosure, a “Financial Interest” shall have the meaning contained in Modesto Municipal Code section 2-10.02.

Persons having an aggregate economic interest in the Proposer less than two thousand dollars ($2,000.00) at all times prior to final Council action of the proposed contract are not required to be listed on the Financial Interest Disclosure.

Notwithstanding the foregoing, a Financial Interest Disclosure is not required for a Proposer meeting the financial criteria for listing on the New York or the Pacific Stock exchanges unless it is reasonably foreseeable that a City Council decision will increase or decrease that entity's gross revenues or expenses by one million dollars ($1,000,000) or more and the requirements of Modesto Municipal Code Section 2-

10.03(h) are satisfied.

It is the legal obligation of all applicants for approval of an AGREEMENT or of an application for development rights to verify in writing, under penalty of perjury, that the identity of each person having a material financial interest in the Proposer is true, correct and complete. By signing below, the applicant understands that this information is provided under penalty of perjury, and that intentionally supplying misinformation or deception may result in either invalidation of the AGREEMENT or application, or criminal prosecution for misdemeanor violation of the Modesto Municipal Code, or both. Negligent provision of misinformation shall be grounds for invalidation. In accordance with the Modesto Municipal Code, each applicant has a continuing obligation to maintain the truth, accuracy and completeness of the financial interest disclosure information provided below until after final consideration by the City Council of any matter arising out of or relating to the AGREEMENT or application.

Print Names of Persons Having a Financial Interest in Proposer Receiving this AGREEMENT:
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27 First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
By signing this document, I agree to the information contained within.

Proposer Company Name:

Name of Proposer Signatory:

Signature of Proposer Representative:
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28 PROPOSAL FORM G - PROPOSER COMPANY HISTORY STATEMENT Company History Statement - Proposer shall have been in business for a minimum of three continuous years (immediately prior to the time of the City’s solicitation) providing the services described in this Invitation for Proposals (RFP).

The Proposer’s company history overview statement shall be approximately one to three pages in length and inserted below:

Proposer Company Legal Name: Insert Proposer Logo Here (if existent):

Insert Proposer Company History Overview Statement Beginning Here:
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29 PROPOSAL FORM H - PROPOSER FINANCIAL STATEMENTS
Minimum Qualifications are mandatory for proposal consideration, and at a minimum shall include the following:

Financial Stability:

City staff will request financial statements from the proposer whose proposal is determined to best meet the City’s needs, as determined by the selection committee. Within two (2) business days of City request, proposer shall provide a copy of their company’s most recent professionally prepared Financial Statements (Income Statement and Balance Sheet). These statements, if un-audited, shall be accompanied by a cover letter that states the name and title of the preparer, the basis of the financial statement presentation (cash or accrual) and whether these statements have been prepared in accordance with Generally Accepted Accounting Principles for the most recent fiscal year end of the proposer. Audited financial statements shall be submitted in their entirety, including the auditor’s opinion and notes to the financial statements.

A separate document shall be provided and signed under penalty of perjury by the proposer’s financial officer or owner that explains the proposer’s inability to provide statements for a fiscal period that ended at least eight (8) months before the required date of submittal if such inability exists.

One complete set of Financial Statements shall be submitted within two (2) business days of City request.

Financial Statements, whether delivered via email, by an employee of the proposer, U.S. Postal Service, courier, or package delivery service must be received by the City of Modesto, Purchasing Division within two (2) business days of request. Financial statements delivered via email should be sent to [email protected]. If sent via email, proposer is encouraged to follow-up with a phone call to Carol Wattle at (209)577-5406, to confirm receipt. Failure of proposer to provide requested documents within two (2) business days, may disqualify proposer from further consideration. The City of Modesto assumes no responsibility for delay in the delivery of the Financial Statements to the City.

CITY OF MODESTO, PURCHASING DIVISION
1010 10TH STREET, SUITE 5300
ATTN: CAROL WATTLE
TAX AUDITS, ANALYSIS AND REPORTING SERVICES (RFP 2324-46) MODESTO, CA 95354
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30 By signing this document, I confirm that I understand the financial statement requirements as set forth above.

Proposer Company Name:

Name of Proposer Signatory:

Signature of Proposer Representative: __________________________________________________ #6..
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31 PROPOSAL FORM I - ADDENDA ACKNOWLEDGEMENT
In order to obtain any addenda information, throughout the RFP period, Proposer is responsible for regularly checking the City of Modesto’s Planet Proposal website at https://pbsystem.planetbids.com/portal/14999/bo/bosearch for the RFP number listed on the Cover Page and in the header of each subsequent page of this RFP, and in any event, no later than the day prior to Proposal opening.. The changes identified in any addenda issued will modify this RFP and specifications. The addenda now become a part of this RFP and Proposer’s resultant Proposal. Signing the Proposal on the signature portion thereof, the Proposer is acknowledging that the Proposer has confirmed that it has received all addenda issued for RFP and has included costs for such in the Proposal submitted. Failure to list and acknowledge all addenda numbers may cause Proposer’s Proposal to be considered nonresponsive.

Do not attach any of the addenda to this sheet nor include them with the Proposal.

If no addenda have been issued against this RFP solicitation, Proposer may write “Not Applicable” and return this Proposal Form as part of its submission. Alternatively, Proposer may leave this Proposal Form out of its submission.

But if any addenda have been issued by the City of Modesto this document is required to be completed and returned.

The Proposal is submitted with respect to the changes to the RFP included in addenda numbers:

List All Addenda Numbers, Separated by Commas
(“,”):

Proposer Company Name:
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32 PROPOSAL FORM J – PROPOSER EXPERIENCE
Proposer shall provide below a summary covering the following:

A. Experience: The Contractor and its employees directly involved in providing inspections, services and repairs shall have a minimum of three years’ experience providing the types of services requested in this RFP:
i. Identify key personnel and their position within your organization. ii. Provide a biographical summary or resume detailing the experience, level of expertise and qualifications of the key individuals providing the types of services requested herein.

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33 TECHNICAL SPECIFICATIONS AND REQUIREMENTS

1.0 SCOPE OF WORK:

A. Project Description
The City of Modesto collected approximately $98 million in General Fund sales and use tax, utility users tax, transient occupancy tax, and business license tax in fiscal year 2022-23. In addition, the Modesto voters approved the Measure H sales tax measure in November 2022 which increased the City’s local sales tax by 1%, adding an additional sales tax revenue in the amount of $42 million. The City is requesting proposals from qualified firms to provide professional services for Sales and Use Tax Audits, Utility Users Tax and Franchise Fee Audits, Transient Occupancy Tax Audits, and Business License Tax audits.

B. Project Objective
The City’s objective is to contract with a firm that will provide audit and information services. This will include identifying and ensuring City receipt of misallocated or underreported tax revenues. Revenue reporting services will include written and/or electronic access reports and regularly scheduled briefings concerning revenue performance, trend analysis, gains and declines, revenue projections, enhanced recovery options, and, if appropriate, an analysis of present and future issues related to revenue recovery.

C. Project Requirements
At a minimum, the selected CONSULTANT will be required to perform the following work:
1) Verify the California Department of Tax and Fee Administration (CDTFA) quarterly sales and use tax allocations including Measure H to the City, including the Bradley Burns allocation and any and all District taxes.
2) Track and report on misallocations that have been corrected as a result of the proposer’s efforts and remitted to the City by the CDTFA.
3) Provide sales and use tax reporting services including Measure H that include detail and summary information for:
a) Quarterly sales and use tax analysis reports that are benchmarked to previous years. Analysis should include information on the top revenue producers, indication of revenue changes by business and economic category, identification of the major businesses that influenced change in the City’s tax revenue, analysis of key businesses that grew or declined during the reporting period, identification of the top revenue generators in the City, and an analysis of their potential to grow or decline. b) Reports by geographical area (for example, shopping centers, business districts, commercial districts, redevelopment area, governmental, residential, etc.)
c) Revenue forecasting reports.
i) Reports should be broken down by monthly sales and use tax receipts forecasts if possible. d) Other sales and use tax summary reports.
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34 e) Provide at least four quarters of historical data. f) Provide the City with a cash basis fiscal year-end sales tax report encompassing a specific data range of addresses to coincide with a tax sharing AGREEMENT. Report must be available by Oct 1st and support provided to reconcile any discrepancies.
g) Provide an electronic database of the City’s sales and use tax data to the City, including but not limited to:
i) Sales tax producers in the City, including business name, address, CDTFA #, current and historical sales tax allocations.
ii) Quarterly updates
iii) Ability to create and maintain subsets of information by geographic areas/features iv) Ability to define, print, and/or export data to spreadsheet. 4) Provide support with Utility User Tax (UUT) application, including:
a) Perform compliance reviews of major utility providers, with a focus on common client issues, to assure that the UUT is being properly applied to taxable services. b) Perform compliance reviews of major utility providers and utilize other detection tools to identify possible gaps in payments, calculation mistakes, and other errors. c) Upon City’s request, provide a report reflecting the City’s UUT payments and assistance in identifying discrepancies with City records.
5) Provide compliance/discovery services to ensure businesses subject to taxation are properly licensed and taxed utilizing software technology available and perform database mining of the active business licenses and identify non-compliant business.
6) Provide the City with a list of taxpayers thus identified, including details to the discrepancy, with the approval of the City, send these taxpayers a letter explaining the City of Modesto’s license requirements, and requesting that the taxpayer either obtain a business license, or request an exemption. 7) Determine how long the business may have been in operation in the City of Modesto without a license and assess any applicable license fees for prior years including penalties and interest, in accordance with the City’s ordinances and fee schedules.
8) On an ongoing basis, the CONSULTANT must track licensee payments from one year to the next to identify any accounts with substantial variations in payments. These must be reported to the City for review of possible under reporting and follow up with licensees. 9) Transient Occupancy and Utility User Tax audits that result in a finding should be verified with Business License account to verify if additional tax revenue may be due and subject for collection. 10) With City direction and approval audit Transient Occupancy Tax to ensure the hotels, short term rentals, and over the air fees within the City have/are correctly reporting revenues in a timely and accurate manner. Reconcile discrepancies in the cities records with what has or has not been reported by the hotels and permitted short-term rentals. Identify lost or uncollected revenue that can be collected by the City. #6..
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35 11) Verify the mathematical accuracy and timeliness of transient occupancy reports filed with the City. 12) Reconcile the gross revenues reported on the Transient Occupancy Tax Returns prepared by the Hotel(s) to gross revenue recorded in the Hotel’s accounting records and verify that they were in accordance with the City’s ordinance.
13) Select a sample of rental transactions during the review period and for each transaction selected, verify tax computations, and reconcile the amounts of rental revenues and transient occupancy tax collected to the books and records of the hotel.
14) Review the internal control procedures of the Hotel to determine the following; a) How “gross rents” and “uncollected rents” were accounted for and reported to the City. b) What procedures were in place to identify transient and non-transient guest. i) Verify operator has supporting documentation for long term guest (more than 27 consecutive days) and correct deductions from gross rent was calculated.
c) How exemptions, including complimentary rooms, were documented, and reported to the City. 15) Review the supporting documentation, on a sample basis, for exemptions and deductions claimed on the transient occupancy tax returns.
16) If requested by City, contractor will review, provide recommendations, and assist with updates to Business License, Transient Occupancy and Utility User Tax Ordinance and fee or tax analysis. 17) Construct under reporting of tax returns and consult with City for approval and direction. 18) Perform additional procedures that the City considers necessary to verify the reasonableness of reported revenues of the Hotel operator.
19) Tailor reports to the City’s reporting needs in a mutually agreed format. 20) Attend meetings to discuss analytical reports for sales and use tax quarterly. Provide charts and graphs as supporting documentation. Assign staff such that the City has a consistent point of contact in these discussions.
21) Meet with City staff as necessary to support the City in recovering and preventing tax deficiencies. 22) Define methodology for revenue recovery for sales and use tax. 23) Providing ongoing communication to the City on revenue recovery work in progress. This requirement will include: 1) providing a quarterly report of all inquiries filed on behalf of the City and the status of outstanding past inquiries filed with the CDTFA; 2) notifying the City; and 3) providing the Finance #6..
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36 Director with a copy of all written communication (e.g. correspondence and email) with the CDTFA regarding the City.
24) Prepare documentation to facilitate the recovery of revenue due to the City from prior reporting periods (plus applicable interest and penalties, if appropriate). 25) Provide a detailed listing of all errors/omissions detected by the firm. Information shall include the company name, account number, value of the detection, correction status, payment amount received by the City, payment amount due, reporting period for which the payment is related, and any additional information deemed necessary by the firm.
26) Assist the City with strategies to preserve and enhance sales and use tax generated by existing businesses with the City and new point-of-sale attraction.
27) Follow up and provide legislative updates related to taxes and communicate concerns especially if they impact revenues.

1.1 REQUIRED LICENSES:

Prior to beginning any service that shall be furnished under this specification, the Proposer shall secure the appropriate Business/Delivery license from the City of Modesto. Business/Delivery license information may be obtained by calling (209) 577-5389 or emailing [email protected]. The successful Proposer shall maintain a City of Modesto business license for the duration of the AGREEMENT.

1.2 TERM OF AGREEMENT:

The term of the AGREEMENT shall be for a period of two-years with three (3) one-year extension options at the sole discretion of City, for a total of up to five (5) years.

A. Pricing shall remain firm for the first two years of any AGREEMENT, which may be awarded pursuant to this RFP.

B. Price increases for subsequent AGREEMENT years three (3), four (4), and five (5), shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one AGREEMENT year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONSULTANT(s) in writing, sixty (60) days prior to the annual anniversary date of the AGREEMENT to be effective for the subsequent ye
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37 STANDARD AGREEMENT

FOR CONSULTANT SERVICES
THIS AGREEMENT made and entered into in the City of Modesto, State of California, this day of , 2024, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "CITY", and (CONSULTANT), a California corporation, hereinafter referred to as "CONSULTANT".

This AGREEMENT is made with regard to the following recitals:

A. The CITY has determined that an should be prepared for the CITY to .

B. CONSULTANT represents that it is qualified, willing and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this AGREEMENT, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

CONSULTANT shall undertake and complete the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" or "Project".

2. TERM OF AGREEMENT.

The term of the AGREEMENT shall be for a period of two (2) years, with three (3) oneyear extension options at the sole discretion of CITY, for a total of up to five (5) years.

Year 1: XXXX through XXXXX
Year 2: XXXX through XXXXX
Year 3: XXXX through XXXXX
Year 4: XXXX through XXXXX
Year 5: XXXX through XXXXX
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38 Price increases for subsequent AGREEMENT years, three (3), four (4) and, five (5) shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one (1) AGREEMENT year and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONSULTANT in writing, sixty (60) days prior to the annual anniversary date of the AGREEMENT to be effective for the subsequent year.

CONSULTANT shall diligently proceed with the completion of the Project within the time period set forth in Exhibit "A".

3. COMPENSATION.

CONSULTANT agrees to accept a sum not to exceed $__________ (maximum compensation) as full remuneration for performing all services and furnishing all staffing and materials for Modesto in accordance with Exhibit "A".

The Compensation shall be paid pursuant in the manner and at the times set forth below:

CITY shall pay CONSULTANT [TO BE DETERMINED BY RFQ RESPONSE IN FINAL AGREEMENT, EITHER “Net 30 terms via CITY’s ePay Program” or “Net 45 Days via manual check”.]

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this AGREEMENT, CONSULTANT shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. CONSULTANT warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, #6..
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39 facilities and other resources necessary to provide the CITY with the services contemplated by this AGREEMENT. CONSULTANT further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

5. PERFORMANCE BY KEY EMPLOYEE.

CONSULTANT has represented to CITY that will be the
person primarily responsible for the performance of the services referred to in this AGREEMENT. CITY has entered into this AGREEMENT in reliance on that representation by CONSULTANT. CONSULTANT therefore agrees that percent ( %) or more of the time to be devoted to the project that is the subject of this AGREEMENT will be that of the above-named person.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the CITY, and may be used by CITY as it may require without any additional cost to CITY. No reports shall be used by the CONSULTANT for purposes other than this contract without the express prior written consent of CITY.

Title to Data
If, as a part of the AGREEMENT, CONSULTANT is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this AGREEMENT will be delivered to CITY upon the completion or termination of services under the contract. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this AGREEMENT are prepared specifically for the CITY and are not necessarily suitable for any future or other use.
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40 All materials, documents, data or information obtained from the CITY data files or any CITY medium furnished to CONSULTANT in the performance of this AGREEMENT will at all times remain the property of the CITY. Such data or information may not be used or copied for direct or indirect use by CONSULTANT after termination of this AGREEMENT without written consent of the CITY.

7. NEWS AND INFORMATION RELEASE.

8. CONFLICT OF INTEREST.

9. AMENDMENTS.

10. INDEPENDENT CONTRACTOR.

All acts of CONSULTANT, its agents, officers, and employees and all others acting on behalf of CONSULTANT relating to the performance of this AGREEMENT, shall be performed as independent contractors and not as agents, officers, or employees of CITY. Except as CITY may specify in #6..
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41 writing, CONSULTANT has no authority to bind or incur any obligation on behalf of CITY. CONSULTANT has no authority or responsibility to exercise any rights or power vested in the CITY. It is understood by both CONSULTANT and CITY that this AGREEMENT shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture. CONSULTANT, its agents, officers and employees are and, at all times during the terms of this AGREEMENT, shall represent and conduct themselves as independent contractors and not as employees of CITY.

It is understood and agreed that as an independent contractor and not an employee of CITY neither the CONSULTANT or CONSULTANT's assigned personnel shall have any entitlement as a CITY employee, right to act on behalf of the CITY in any capacity whatsoever as an agent, or to bind the CITY to any obligation whatsoever. It is further understood and agreed that CONSULTANT must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of CONSULTANT's personnel.

11. ASSIGNMENT.
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42 Neither this AGREEMENT nor any portion thereof shall be subcontracted or assigned, other than noted in Exhibit ‘A’, without the express prior written consent of the CITY in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

13. NOTICES.

FOR CONSULTANT: Name:

Address:

Attention:

Phone: ( )
Facsimile: ( )
FOR CITY: Name: City of Modesto
Address: P.O. Box 642
Modesto, CA 95353
Attention:

Phone: (209)
Facsimile: (209)
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43 14. INSURANCE REQUIREMENTS.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the CONSULTANT shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days’ notice of the cancellation on the policies of insurance required hereunder (10 days’ notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice. The CONSULTANT shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled.
(a) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent CONSULTANTs and subcontractors; products and completed operations as applicable.
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44 (b) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(c) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (d) Professional Liability insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claim made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the CITY, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the CITY, the CONSULTANT shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the CONSULTANT to furnish, deliver or maintain such insurance and certificates as above provided, this AGREEMENT, at the election of the CITY, may be forthwith declared suspended or terminated. Failure of the CONSULTANT to obtain and/or maintain any required insurance shall not relieve the CONSULTANT from any liability under this AGREEMENT, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the CONSULTANT concerning indemnification. The CITY, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the CITY, its agents, officers, employees, and volunteers for losses arising from work performed by CONSULTANT for the CITY. The CONSULTANT's insurance policy(ies) shall include a provision that the coverage is primary as respects the CITY; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager. The CONSULTANT must deliver certificates evidencing existence of the insurance listed above to the CITY prior to the time the contract is signed.
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45 CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

15. TERMINATION OF AGREEMENT.

Termination by CITY for Convenience
CITY may cancel this AGREEMENT at any time, with or without cause, upon written notification to CONSULTANT.

Post-Termination Procedure
Upon receipt of a written notice of termination, the CONSULTANT shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, sub-CONSULTANTs and agents are notified of such termination and act as specified in the notice of termination; b. Terminate all orders and Subcontractors except as necessary to complete any #6..
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46 portion of the Work that is not terminated;
c. If directed in writing by the CITY to do so, assign all right, title and interest in subcontracts and materials in progress to CITY, in which case the CITY will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such sub-CONSULTANTs, but in no event shall recovery by any CONSULTANT or sub-CONSULTANT include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the CONSULTANT in performing the Work whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of CITY; f. Complete performance of such part of the Project as has not been terminated; g. Take such other actions as may be necessary, or as may be directed by the CITY for the protection and preservation of the Project and/or property related to the Project;
h. If CITY so requests, and at CITY's cost, CONSULTANT shall provide sufficient oral or written status reports to make CITY reasonably aware of the status of CONSULTANT's work on the project.
i. The CONSULTANT understands and agrees that CITY may, in CITY's sole discretion, refuse to pay CONSULTANT for that portion of CONSULTANT's services which were performed by CONSULTANT on the project prior to the termination date and which remain unacceptable and/or not useful to CITY as of the termination date.
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47 CITY will pay CONSULTANT for work actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the CONSULTANT after termination for convenience shall be limited to amounts due and owing under the AGREEMENT at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as sub-CONSULTANT AGREEMENTs or contracts for materials; b. The AGREEMENT price allocable to the portion of the Work properly performed or goods supplied to the work site by the CONSULTANT as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the CONSULTANT.

16. INDEMNITY.

In the event that CONSULTANT or any employee, agent, or subcontractor of CONSULTANT providing services under this AGREEMENT is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of CITY, CONSULTANT shall indemnify, defend, and hold harmless CITY for the payment of any employee and/or employer contributions for PERS benefits on behalf of CONSULTANT or its employees, agents, or subcontractors, #6..
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48 as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of CITY.

17. DISPUTE RESOLUTION.

18. ATTORNEYS’ FEES.

19. ENTIRE AGREEMENT.

20. PARTIAL INVALIDITY.

21. WAIVER.

23. GOVERNING LAW.

This AGREEMENT shall be governed according to the laws of the State of California.

24. HEADINGS NOT CONTROLLING.

Headings used in the AGREEMENT are for reference purposes only and shall not be considered in construing this AGREEMENT.

25. COMPLIANCE WITH LAWS.

CONSULTANT shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws.

CONSULTANT shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

26. CITY BUSINESS LICENSE.

CONSULTANT will have a City of Modesto business license. #6..
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50 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this AGREEMENT by its City Manager and attestation by its City Clerk under authority of Resolution No. 2024- , adopted by the Council of the City of Modesto on the day of , 2024 and (CONSULTANT) has caused this AGREEMENT to be duly executed as of the Effective Date.

CITY OF MODESTO, (CONSULTANT),
a municipal corporation a California corporation*
By ___________________________ By ________________________________ JOSEPH P. LOPEZ, City Manager Name Title
By ________________________________
Name Title
ATTEST: (Seal)
By ___________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
CONSULTANT’s Federal ID
#______________
APPROVED AS TO FORM:

By ________________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

By ________________________________
CHRISTINA ALGER, Director of Human Resources
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Proposal for the City of Modesto RFP No. 2324-46
Proposal for Sales and Use Tax Services 1
City of
Modesto
Proposal for Tax Audits, Analysis and Reporting Services 2O023-RFP-011 April 16, 2024

SUBMITTED BY
HdLCompanies
120 S. State College Blvd., Ste 200
Brea, CA 92821
hdlcompanies.com

CONTACT
Andy Nickerson
T: 714.879.5000
E: [email protected]
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Proposal for the City of Modesto RFP No. 2324-46

TRANSMITTAL LETTER

COMPLETED PROPOSAL DOCUMENTS
PROPOSAL FORM A – RFP ACKNOWLEDGEMENT
PROPOSAL FORM B – PROPOSER COMPANY INFORMATION
PROPOSAL FORM C – PRICING SCHEDULE
PROPOSAL FORM D – EXCEPTIONS, CLARIFICATIONS AMENDMENTS PROPOSAL FORM E – CUSTOMER REFERENCES
PROPOSAL FORM F – FINANCIAL INTEREST DISCLOSURE
PROPOSAL FORM G – COMPANY HISTORY
PROPOSAL FORM H – FINANCIAL STATEMENTS
PROPOSAL FORM I – ADDENDA ACKNOWLEDGEMENT
PROPOSAL FORM J – PROPOSAL EXPERIENCE

APPENDICES

SCOPE OF WORK

SALES AND USE TAX

UTILITY USERS/FRANCHISE FEES TAX

TRANSIENT OCCUPANCY TAX

BUSINESS LICENSE TAX

COST PROPOSAL DETAILS

SAMPLE SALES TAX REPORTS

TABLE OF CONTENTS
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8 10
12 13
15 17
20 22
23 29
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Proposal for the City of Modesto RFP No. 2324-46
April 16, 2024
City of Modesto
1010 10th Street, Suite 6600
Modesto, CA 95353
HdL Companies are pleased to submit our proposal for Tax Audits, Analysis and Reporting Services for the City of Modesto. It would be an honor and privilege to provide these additional services to you.

As you consider taking this journey with us, rest assured you will receive the same refreshing customer experience, unmatched service delivery, and unparalleled revenue recovery that our 700+ city, county, and special district clients from across the nation enjoy every day. You will join the growing wave of 60+ local governments that have recently switched to HdL from other providers while we have maintained a 99.6% client retention rate. You can rely on us to understand your needs, deliver on our promises, and thoughtfully serve your business community. We are headquartered in Brea, CA.

Welcome to Day One of your journey! You can look forward with anticipation to our:
• Relevant, timely, and ongoing staff support by a team with decades of direct experience in municipal finance and budgeting, economic development, and maximization of revenues. • Technology-driven resources for data analysis and reporting capabilities, providing immediate and convenient access to the most up-to-date tax and fee information. • Expertise, analysis, recaptured revenues, and precise budgetforecasts to maximize your revenue streams. • Reliable continuity of service by an employee-owned firm staffed with experienced, happy professionals.

HdL currently provides business license software to the City. Adding the proposed service options allows the City a single environment to track all services, enabling Transient Occupancy Tax and Utility Users Tax to interact with each other, providing cohesive reporting and collaboration for up-to-date data at the City’s fingertips. HdL’s Prime Software has a specific sales tax import in which sales tax clients can upload their quarterly data to the software. This interaction can highlight discrepancies between sales tax and business license databases and trigger the City to reach out to those reporting sales tax but not holding a business license within the City.

Our contact information is:

HdL Companies
120 S. State College Blvd., Suite 200, Brea, CA 92821 Phone: 714.879.5000 Website: hdlcompanies.com Please call if you have any questions or need additional information. I can be reached at 714.879.5000 or by email at [email protected]. I am authorized to legally bind agreements for HdL. I acknowledge receipt of the Questions & Answers released for this RFP. This proposal is valid for 90 days after the submission date of April 16, 2024.

Sincerely,
Andrew Nickerson, President/CEO
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Proposal for the City of Modesto RFP No. 2324-46
Please find the completed proposal documents following this page.  PROPOSAL FORM A – RFP ACKNOWLEDGEMENT
 PROPOSAL FORM B – PROPOSER COMPANY INFORMATION
 PROPOSAL FORM C – PRICING SCHEDULE
 PROPOSAL FORM D – EXCEPTIONS, CLARIFICATIONS AMENDMENTS  PROPOSAL FORM E – CUSTOMER REFERENCES
 PROPOSAL FORM F – FINANCIAL INTEREST DISCLOSURE
 PROPOSAL FORM G – COMPANY HISTORY
 PROPOSAL FORM H – FINANCIAL STATEMENTS
 PROPOSAL FORM I – ADDENDA ACKNOWLEDGEMENT
 PROPOSAL FORM J – PROPOSAL EXPERIENCE

COMPLETED PROPOSAL DOCUMENTS
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REQUEST FOR PROPOSALS # 2324-46

TAX AUDITS, ANALYSIS AND REPORTING

SERVICES
19 PROPOSAL FORM B – PROPOSER COMPANY INFORMATION
A. Proposer Company Full
Legal Name
B. Proposer Company
Marketplace (or DBA)
Name
C. Type of Legal Entity: _X__ Corporation, registered in _California___________________ (State) ___ Limited Liability Company, registered in _________________(State) ___ Partnership, registered in ________________(State)
___ Sole Proprietorship, registered in ____________(State) ___ Other ___________________________________________(Describe) D. Headquarters Address
(Street Address, City,
State, Country, Postal
Code):

E. Website Address: www._hdlcompanies.com__________
F. Contact Person Details: Name: Gary Lott
Title: COO
Phone (Office): 714.879.5000
Phone (Mobile): 626.831.5600
Mailing Address (Street Address, City, State, Postal Code:( Same as above Fax Number: 909.861.7726
Email: [email protected]
G. Federal Taxpayer
Identification Number
(TIN):

H. Dun & Bradstreet
(DUNS) Number:

I. Names and Titles of
Top Three Proposer
Officers:

J. Years in Business:

K. Proposer Office
Address Closest to City
of Modesto (Street
Address, City, State,
Country, Postal Code):

L. City of Modesto
Hinderliter, de Llamas & Associates
HdL Companies
120 S. State College Blvd., Suite 200
Brea, CA 92821
33-0008507
62-750-1398
Andy Nickerson, CEO/President
Gary Lott, COO
Richard Park, CFO
40 Years
HdL Companies, 1111 E. Herndon Ave., Suite 301, Fresno. CA 93720 8 #6..
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REQUEST FOR PROPOSALS # 2324-46

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SERVICES
20 Business License
Number (note –
provide only if
available now - - but
not required until any
contract begins):
1297848
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Item
No.

Description Unit Unit Price Extended Price
A1 Sales/Use Tax Audit, Analysis & Reporting EA Audit: See Cost Proposal A2 Utility Users Tax Audit, Analysis & Reporting EA
$5,000/mo or
$60,000/yr
See Cost
Proposal Details
A3 Transient Occupancy Tax (TOT) Audit, Analysis & Reporting EA $900/hotel/year See Cost
Proposal Details
A4 Business License Tax Audit, Analysis & Reporting EA Discovery, audit: 40% Collections: 25%
See Cost
Proposal Details
A5 Franchise Fee Audit, Analysis & Reporting EA Pricing included with UUT
See Cost
Proposal Details
ePay 1% Rebate (See Bid Form A for this option) N/A
Total Items: See Cost
Proposal Details
Other Associated Costs: (Be specific) $ _See Cost Proposal Details______________ See Cost
Proposal Details
Reporting: $850/month
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Company Name:

Address:

City, State, Zip Code:

Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Service:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code:

Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
The City of Fresno
2600 Fresno Street, Room 2031
Fresno, CA 93721-3602
Henry Fierro
[email protected]
City Government
559.621.2489
300,000
The City of Palo Alto
Christine Paras
250 Hamilton Avenue, 4th Floor
Palo Alto, CA 94301
[email protected]
650.329.2392
City Government
782,595
February 2024 - January 2027
October 2023 - May 2028
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SERVICES
25 Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business or
Governmental
Agency:

Date Range of
Services:

Annual Contract Value $
The City of Culver City
9770 Culver Boulevard
Culver City, CA 90232
Lisa Soghor
[email protected]
City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
Kenn Lee
[email protected]
408.615.2340
City Government
May 2023 - May 2028
250,000
City Government
Client since 2019
City of Tracy
333 Civic Center Plaza
Tracy, CA 95376
282,000
Karin Schnaider
[email protected]
209.831.6120
City Government
Client since 2016
125,400
310.253.5851
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Financial Interest Disclosure to City of Modesto
Proposer shall identify any person with a financial interest in the Proposer by name, below.

For the purposes of this disclosure, a “Financial Interest” shall have the meaning contained in Modesto Municipal Code section 2-10.02.

10.03(h) are satisfied.

Print Names of Persons Having a Financial Interest in Proposer Receiving this AGREEMENT:
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The Proposer’s company history overview statement shall be approximately one to three pages in length and inserted below:

Proposer Company Legal Name: Insert Proposer Logo Here (if existent):

Insert Proposer Company History Overview Statement Beginning Here:

Hinderliter, de Llamas & Associates
Please see attached Company History following this page. 17 #6..
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Firm Description
HdL was established in 1983 to maximize local government revenues by providing allocation audits, analytical services, and software solutions to local governments. The firm provides municipal revenue solutions for business license tax, lodging tax, sales, use and transaction tax, cannabis tax and various other locally administered taxes. HdL developed California’s first computerized sales tax management program and was responsible for securing legislation (AB 1611) that allowed independent verification of state allocations.

HdL maintains the largest privately held sales, property, and business tax databases in California. This proprietary database serves as the base for identifying emerging economic trends and developing budget projections that take those trends into account. HdL’s systematic and coordinated approach to revenue management, tax administration and economic data analysis is currently being utilized by over 700 agencies nationwide.

Honoring the Past. HdL grew out of local government. Its founders, a legendary city manager and distinguished finance director, founded HdL to protect cities against revenue losses and decisions based on limited data. In a convincing demonstration of their enduring commitment to the profession they love, they converted HdL to an employee-owned company when they retired from HdL. Not only does their foresight insulate our client-first, resident-focused culture from market whims that so easily steer other companies toward market expectations and away from client needs, but also creates a culture of personal responsibility and caring. This simple-yet-powerful protection inspires our staff to remember our roots as they operate and innovate on your behalf.

Thriving in the Present. HdL has carefully assembled a distinguished team of elite professionals from the highest ranks of local government and the private sector to recapture leaking revenue, expand access to data, and optimize local tax structures and revenue.

Seizing the Moment. For the last 40 years, HdL has been in a continuous cycle of pioneering and then evolving the art and industry of local tax discovery, compliance, and administration services. As a result, HdL’s 700+ local government clients are better funded, more informed, and better prepared for and more confident about the future. There is no better time to take advantage of unparalleled expertise and experience at the best cost-value ratio.

Protecting Your Future. Most of HdL’s revenue management service clients realize new revenues exceeding the cost of the program, which means you would optimize your tax revenue while receiving additional services effectively at no cost.

FIRM HISTORY
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HdL is a Corporate Partner of the League of California Cities and California State Association of Counties and works extensively with the State Association of County Auditors, California Society of Municipal Finance Officers (CSMFO) and California Municipal Revenue and Tax Association (CMRTA) on anticipation and planning of programs to strengthen local government revenues and monitoring of legislative actions which impact local governments.

This close understanding of local government needs coupled with extensive databases and advanced methodology provides for the most relevant, productive and responsive, revenue recovery, forecasting and economic services available.
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SERVICES
29 PROPOSAL FORM H - PROPOSER FINANCIAL STATEMENTS
Minimum Qualifications are mandatory for proposal consideration, and at a minimum shall include the following:

Financial Stability:

One complete set of Financial Statements shall be submitted within two (2) business days of City request.

CITY OF MODESTO, PURCHASING DIVISION
1010 10TH STREET, SUITE 5300
ATTN: CAROL WATTLE
TAX AUDITS, ANALYSIS AND REPORTING SERVICES (RFP 2324-46) MODESTO, CA 95354
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Do not attach any of the addenda to this sheet nor include them with the Proposal.

But if any addenda have been issued by the City of Modesto this document is required to be completed and returned.

The Proposal is submitted with respect to the changes to the RFP included in addenda numbers:

List All Addenda Numbers, Separated by Commas
(“,”):

Proposer Company Name: Hinderliter, de Llamas & Associates Addendum 1- Released April 2, 2024
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SERVICES
32 PROPOSAL FORM J – PROPOSER EXPERIENCE
Proposer shall provide below a summary covering the following:

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HdL’s Team of Experts
HdL has carefully assembled a distinguished team of elite professionals from the highest ranks of local government and the private sector to recapture leaking revenue, expand access to data, and optimize local tax structures and revenue.

Andrew Nickerson – President/CEO
Years of experience in delivering revenue management services to local governments | 31 Mr. Nickerson possesses over 30 years of experience working with cities, counties and special districts on programs to enhance tax revenues, ensure regulatory compliance and provide accurate revenue forecasting and financial planning. Throughout his career, he has been instrumental in guiding market expansion and new product development for the HdL Companies. In his tenure as President/CEO, Mr. Nickerson has led this employee-owned company from an established regional firm to a multi- state, multi-service corporation admired for its commitment to quality and client service. With a broad range of experience in leadership, finance, public policy, and taxation, he is a trusted adviser to local government leaders andis known for possessing high standards for responsiveness, accuracy and integrity. Throughout his career, he has been involved in various municipal organizations including The League of California Cities, California Society of Municipal Finance Officers, State Association of County Auditors, California State Association of Counties, Texas Municipal League and Government Finance Officers Association.Mr.Nickerson earned a Bachelor of Science degree (Finance & Real Estate Law) from California State Polytechnic University, Pomona.

SALES, USE AND TRANSACTIONS TAX ANALYSIS TEAM
Client Services
LedbyourDirectorofClientServices,threeprincipalsand a managementanalystwillprovidetheCitywith sales tax, budget and revenue management services. The team will advise the City on economic development opportunities, including analyzing the City’s sales tax data for presentations and preparing sales, use and transactions tax revenue estimates of various terms up to five years. A Principal will also meet with City staff each quarter to present the City’squarterly reports and address any issues or concerns. Providing these services to the City are:

Bobby Young – Director of Client Services
Years of local government experience | 25
Years of experience delivering revenue management services to local government experience | 10 Mr. Young has over 25 years of local government experience. As Director of Client Services, he leads the team in developing reporting advancements and efficiencies for clients, as well as providing meaningful presentations regarding both Sales Tax and Transaction Tax Districts.

Prior to joining HdL, he served the City of Costa Mesa for 13 years, the last 5 as Finance Director. During much of his tenure, he led the City’s strategic financial planning and decision making while fulfilling the duties of City Treasurer. Mr. Young has also spent time as an external auditor of government and non-profit entities specializing in assessment and documentation of internal controls, annual reviews, and preparation of clients’ Comprehensive Annual Financial Report (CAFR). He’s been an

PROJECT TEAM
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active member in municipal affairs with both the Government Finance Officers Association (GFOA) and California Society of Municipal Finance Officers (CSMFO). Mr. Young holds a bachelor’s degree from California State University, Fullerton in Accounting.

Joan Michaels Aguilar, MPA – Principal
Years of local government experience | 41
Years of experience delivering revenue management services to local government experience | 4 Ms. Aguilar has over 41 years of public sector experience, most recently as the Deputy City Manager – Administrative Services for the City of Dixon. In this role, she managed annual budget operations, debt administration, mentored staff, and technology aspects, including website management and social media. Ms. Aguilar began her career at the City of Burbank working in a variety of departments during her 23 years with the city. She has also worked in King City, Azusa, and Covina, and consulted for the cities of Colton and Stockton. Ms. Aguilar has been an active member of CSMFO since 1981, serving as CSMFO President in 2019, and remains on multiple committees including Membership, Commercial Partner, Communications, and past Host Committees that help planCSMFO’s annual conferences. She has participated for the pasttwo years in the mentorship program, paired with a mentee to expand leadership skills and give back to the profession. She holds a Master of Public Administration from California State University, Northridge and a Bachelor of Arts in Management from the University of Phoenix.

Wayne Padilla, CPA – Principal
Years of local government experience | 31
Years of experience delivering revenue management services to local government experience | 6 Mr. Wayne Padilla has over 31 years of public sector experience having served in management positions in the cities of Madera, Chowchilla, Modesto, and San Luis Obispo. He possesses a wealth of knowledge covering municipal finance, city governance, and budgeting. Mr. Padilla is continually sought after to advise local governments on issues related to public administration. Mr. Padilla holds a bachelor’s degree in accounting from California State University, Fresno and has been active in municipal affairs at regional and state levels. He began his career working in the government audit section of KPMG Peat Marwick and became a Certified Public Accountant in 1989.

David McPherson, MPA – Principal
Years of local government experience | 28
Years of experience delivering revenue management services to local government experience | 7 Mr. McPherson has over 28 years of local government experience and several years of private sector experience. As Revenue and Tax Administrator for the City of Oakland and Deputy Finance Director for the City of San Jose he pioneered innovative solutions to capture, regulate, audit, and automate sales tax; and implemented software to monitor misallocations, trend analysis, audit leads, and track county pool use tax revenues. While working for the Cities of San Jose and Newport Beach, Mr. McPherson partnered with the League of Cities to influence policy changes for protecting local sales tax revenue. In the private sector, Mr. McPherson served as HdL’s Director of Compliance assisting local and state agencies with policy development for regulation, compliance, auditing, and economic development. He earned his Master of Public Administration from California State University, Long Beach.
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Audit Services
Our Director of Audit Services and Associate Director of Audit Services have over 45 years combined experience auditing local tax, place of sale and CDTFA administrative issues. The firm has continually adapted to legislative changes, CDTFA regulation changes, and technological advances and will utilize these tools for the City. HdL has an audit team of 14 staff members in place that is very well trained and familiar with the state regulations and guidelines concerning tax reporting for the City.

Matt Hinderliter – Director of Audit Services
Years of experience in delivering audit services to local governments | 33 As Director of HdL’s Audit Service team, Mr. Hinderliter is responsible for ensuring that the company’s clients suffer no missed opportunities for revenue recovery or enhancement. Mr.

Hinderliter joined the firm in 1990 after receiving his Bachelor of Arts degree in Business Administration from California State University, Fullerton. During his over 30-year tenure Mr. Hinderliter has been instrumental in the development of HdL’s multi-dimensional audit program, which includes extensive in-house data mining and web- based analysis combined with thorough field surveys. He is the author of a comprehensive audit training manual, including in-depth information concerning complex point of sale issues and regular updates regarding proposed changes in legislation and regulations. As Director Mr. Hinderliter maintains a personal and team commitment to accurate audit findings, business friendly taxpayer outreach, and to ensuring that HdL’s audit programs remain at the industry’s leading edge through continuous innovation and improvement.

Quang Dang – Associate Director of Audit Services
Years of experience in delivering audit services to local governments | 15 Mr. Dang is the lead analyst for the audit services team. He works closely with the Director of Audit Services on operational and management aspects of the team, supervises and trains audit team members and is a principal liaison with CDTFA Allocation Group staff. Mr. Dang holds a Bachelor of Science degree from California State University, Fullerton.

Production Services Team
Our Production Team ensures that the data from the CDTFA is processed in an accurate and timely manner and is available to the City on our sales tax web application. The team is responsible for running the reports that are delivered at the quarterly meetings with the City staff, as well as processing any special report requests. In addition to the Manager of Production, we have 5 members in this department to assist the City with these tasks.

Mary Hubbell – Manager of Production Services
Years of experience in delivering revenue management services to local governments | 8 Ms. Hubbell supervises the conversion of the California Department of Tax and Fee Administration sales tax data to HdL’s proprietary software and its subsequent translation into various client reports. She assists with client technical support and is responsible for the production of client newsletters and reports. Ms. Hubbell received a Bachelor of Science degree in Administration and Marketing from the University of Arizona. 26 #6..
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TAX AND FEE ADMINISTRATION
The Tax and Fee Administration team includes experienced business license tax department supervisors, certified revenue officers (CROs), and prior CMRTA board members. Our Tax and Fee Administration team is made up of over 100 team members.

Robert Gray, MBA – Chief Information Officer & Director of Tax and Fee Administration Solutions Years of experience in delivering software and administration services to local governments | 27 Mr. Gray serves as Director of Tax and Fee Administration and has been with the firm since 1996. He has extensive experience in the design, development, implementation, and support of software solutions for local government, having overseen the design of eight municipal software systems and over 400 successful implementations of those systems. He introduced HdL’s local tax services, which provide tax and fee administration and consulting services to an ever-growing number of municipalities. He is particularly passionate about maintaining HdL’s commitment to providing excellent customer service along with unmatched government revenue expertise. As HdL’s Chief Information Officer, he also oversees HdL’s software development and information technology teams. Mr. Gray earned a Bachelor of Science degree in Computer Science and a Master of Business Administration from Azusa Pacific University.

Joshua Davis – Practice Development Leader
Years of experience in delivering business tax services to local governments | 27 Mr. Davis has over 27 years of experience with local tax administration, discovery, and auditing. He oversees a skilled team which provides the most sophisticated local tax administration services available to California municipalities. Trained in revenue audit and discovery techniques, he is proficient in navigating the complex scenarios often encountered during such services. He also possesses strong technical and business process capabilities which he employs to aid HdL clients in meeting their strategic objectives. Prior to joining HdL, he was employed as a compliance service manager at a government services firm. He has a reputation as an effective local taxation expert who takes pride in helping municipalities achieve their goals while providing excellent customer service throughout the engagement. Notable projects he has managed include a long term and broad engagement supporting the City of Beverly Hills business tax team and acting as tax administrator tax for multiple government agencies. All services provided through Josh’s team enable municipalities to administer their tax programs more effectively, through both efficient operations and increased discovery and collection of taxes due.

Bret Harmon, MPA – Director of Client Experience
Years of local government experience | 6
Years of experience delivering consultant services to local government | 15 Mr. Harmon is a distinguished professional with a wealth of experience in public administration and private sector leadership. As the Director of Client Experience for HdL’s Tax and Fee Administration division, Bret brings 25 years of expertise to lead and influence positive impacts throughout the tax and fee administration process. As a former Finance Director and City Manager, Mr. Harmon understands the pressures, demands, and opportunities facing local government leaders. He and the rest of the Client Experience team are dedicated to the success of each client. Mr. Harmon earned a Master of Public Administration degree from Brigham Young University.
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Michelle Godfrey – Senior Operations Manager
Years of experience in delivering services to local government | 18 Ms. Godfrey has 18 years of experience designing, implementing, and managing tax and licensing programs for local governments in various regions throughout the United States.

Ms. Godfrey oversees our Tax and Fee Operations providing administration, compliance, and auditing services for over 150 jurisdictions. She serves as our in-house expert for third-party taxes and manages program design, customization, and implementation of our administration and audit services for each agency. Ms. Godfrey has extensive knowledge and experience in working with and managing state, local, and third-party taxpayer databases and systems. She also directs taxpayer education and initiatives that enhance knowledge and compliance with state and local tax and licensing requirements. She holds a Bachelor of Science Degree in Business Administration and Economics from Weber State University.

Vikki Beatley, MBA – Principal, Utility Users Tax
Years of local government experience | 23
Years of experience delivering consultant services to local government | 3 Ms. Beatley has over 23 years of local government experience, and more than 30 years of experience in finance and treasury/cash management. She was most recently the Director of Finance/City Treasurer for the City of Seal Beach where she had responsibility for all accounting operations, treasury management, financial analysis, and financial statement preparation, utility user’s tax, and parking permit program. Additionally, she was responsible for cashiering, meter reading, and utility billing for the City’s Water and Sewer. She was also responsible for the financial oversight of the Successor Agency. Prior to that, she was the CFO for Mesa Water District and the Investment/Revenue Officer for the City of Orange. Ms. Beatley was also an Adjunct Lecturer in the Master of Public Administration program at California State University Long Beach where she taught Government Budgeting and Finance. She holds a Bachelor of Arts in Finance from California State University Fullerton, and an Executive MBA from the University of Phoenix.

Connor Duckworth, CRO – Client Advisor
Years of local government experience | 6
Years of experience delivering consultant services to local government | 13 Mr. Duckworth has nearly two decades of experience working for both State and local municipalities and providing his expertise in tax and fee administration along with political consulting to candidates and municipalities on several races and referendums. As a Client Advisor, he is responsible for the sales development and implementation of business license, occupancy tax, and other revenue related products and services. He has served as a lecturer and mentor to municipalities nationwide and served as Vice President on both Division and State Boards for local government organizations. He won the CMRTA Lighthouse Award of Excellence for creating the top business license and revenue program in the State. Additionally, Mr. Duckworth was elected to a countywide office for eight years which served the needs of over 200,000 residents. 28 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Service Proposed by HdL
HdL Companies acknowledge the City’s request and will be responding to the following services:
 Sales and Use Audit, Analysis and Reporting
 Utility Users and Franchise Fee Audit, Analysis and Reporting  Transient Occupancy Audit, Analysis and Reporting
 Business License Audit, Analysis and Reporting
Sales and Use Tax Services

1. Objectives and Methodology for Auditing Services
HdL will deploy a series of proprietary techniques, developed and refined by 40 years of performing local allocation audits, to detect, correct and recover misallocated revenue for the City of Modesto. The audit team’s goal is No Missed Opportunity for revenue recovery or enhancement. When errors are found HdL staff will promptly file claims for their corrections following the procedures and guidelines codified in CDTFA Section 35056. Thereafter, HdL will work diligently with CDTFA staff to ensure prompt recovery of all escaped revenue.

Using confidential taxpayer records as authorized by Revenue and Taxation Code Section 7056, HdL will identify and correct errors that result in underpayments of tax to the City. The firm will employ a series of analyses, comparisons with other data sources and physical field canvassing to find, document and submit for correction all taxpayer errors that result in lost City revenue or could result in lost revenue in the future. When errors are identified, HdL staff will promptly file claims for their correction following CDTFA procedures. Thereafter, HdL will work with CDTFA to ensure the prompt recovery of all escaped revenues. Documentation of errors will be regularly provided to the City.

In conducting these activities on behalf of the City, HdL will provide reports that accurately depict the City’s sales tax base, use tax collections and revenues. All reports, graphs, tables and revenue forecasts are designed to enhance the City’s capacity to plan for, expand, and manage its sales and use tax revenues. Reports identifying and comparing the retail composition of various sub-geographic areas of the City will also be provided.

To achieve the highest audit and recovery results, HdL employs the following audit techniques and programs.

Identification of Errors and Revenue Maximization Opportunities Field Surveys: Field inventories of the City’s business and industrial areas are conducted to identify businesses located within the City that appear to be under-reporting revenues or are not on the CDTFA allocation rolls.

Specially trained field auditors, using the latest in mapping, GPS and digital recording technology, document not only the existence of sales tax producing businesses but also any relevant factors such as size, presence of a large stock of goods, will-call windows and any specific references to sales activity. This process identifies a wide range of registration errors including erroneous consolidation of multiple outlets, misreporting of point of sale from an erroneous location and delays in reporting new outlets.

SCOPE OF WORK
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Proposal for the City of Modesto RFP No. 2324-46
Tax Area Code (TAC) Review: HdL reviews every active account on the CDTFA’s allocation rolls reporting $50 or more in local tax to ensure proper TAC assignment. Government and private sector property tax mapping and GIS databases are used extensively in this process. These programs are important because physical canvassing will not reveal businesses with missing or incomplete signage, or those that are home-based. A complete TAC review is performed at least once every 3-6 months.

Deviation Assessment: Each quarter, HdL applies proprietary queries and analyses to its statewide allocation database to identify all accounts for which there has been a substantial change in allocation pattern. HdL’s database, unmatched in size, comprises over 99.8% of all sales and use tax transactions in California and allows for the most comprehensive audits in the state. The review is applied to direct allocations and to the county pools and allows for a much broader view and understanding of what has happened in any given quarter. Well-founded leads are quickly extracted from this process, often without the need for time-consuming manual reviews of taxpayer files. This allows for faster processing and less time used for preparing submittals. This in turn lowers recovery fees by reducing the amount of prior quarter revenue requiring redistribution.

Use Tax Errors and Opportunities: HdL analyzes the use tax allocation pools of the 58 counties and the state each quarter to identify instances where a taxpayer may have misidentified a transaction as use tax rather than sales tax. Further specialized reviews and techniques are employed to identify direct allocation opportunities of local use tax. CDTFA Regulation 1802(d) allows for direct allocation of local use tax on qualifying individual sales or purchases over $500,000. Out-of-state and foreign-based companies often have large transactions that meet the criteria for direct allocation under this section. Under Regulation 1699.6, businesses and organizations (including local government agencies) with aggregate purchases subject to use tax of least $500,000 per year can apply for a Use Tax Direct Payment Permit, allowing for direct allocation of the corresponding local share. Finally, under a resolution adopted in December 1994, a construction contractor who enters into a contract equal to or greater than $5,000,000 may elect to obtain a sub-permit for the jobsite resulting in a direct allocation of local use tax to the jurisdiction where the jobsite is located.

Regulation 1699 Evaluations: CDTFA Regulation 1699 controls when and where a permit should be issued to a given business location. Wholesalers, contractors, processors, manufacturers, and other non-retail businesses that do not normally sell merchandise often conduct occasional sales, self-accrue use tax or are levied deficiency assessments by the state. HdL uses proprietary methods for finding companies that should be taking out permits so that those revenues are allocated to the City.

Monitoring and Recovery of Misallocated Revenue
Development of Correction Data: Preliminary lead lists developed through the audit programs are further refined using a variety of programs and databases to reduce the need for taxpayer contact. Companies remaining in the audit database are then contacted by a specialized audit team whose members are specifically selected and trained to interview tax preparers and marketing, warehouse and management staff. Taxpayer interviews are always conducted in a business friendly, non-intrusive manner that emphasizes cooperation and protection of confidentiality.

Documentation: Telephone contacts are often accompanied by a written follow-up questionnaire concerning business activities, a specific one-time transaction or a written confirmation of our findings. This documentation is always filed with the petition to minimize CDTFA processing time. Solid documentation and follow-up lower client fees by reducing the number of quarters requiring retroactive adjustment and ensures faster recovery of misallocated revenues.

City Review: HdL will provide the City with a quarterly report of all revenue recovery work in progress. This report will include an electronic Work Authorization which, once approved, will include active links to copies of all inquiries filed with the CDTFA on the City’s behalf. This information is archived and is accessible to authorized users at any time through the HdL client portal. HdL will also keep the City apprised of any additional oral or written communication with the CDTFA on any matter directly impacting the City. These reports, along with a detailed quarterly invoice listing all relevant information about the taxpayer and the amount of revenue recovered, will keep the City well informed of all ongoing audit activity. 30 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Preparation and Submittal of Corrections: Petitions are prepared (CDTFA Form 549-S or 549-L) that notify the CDTFA the existence and nature of the misallocation. All relevant and available supporting documentation is attached, including any information from taxpayer file reviews or any other sources that provide evidence of an earlier date of knowledge regarding the error. This documentation facilitates the maximum recovery of revenue due the City from prior periods. Copies of all transmittal forms and correspondence with the CDTFA and taxpayers are sent to City staff.

Continuous Follow-up: HdL employs a full-time case manager whose responsibility is to monitor and follow-up on case inventory. An aging report is updated and reviewed monthly, and appropriate follow-up is initiated on cases that are taking an inordinate amount of time to correct. This follow-up emphasizes partnership and cooperation with CDTFA Allocation Group staff. HdL’s continuous efforts to check on the status of submittals are made to ensure that corrections are being pursued. Timely follow-up on cases reduces the time it takes for the City to recover its revenue.

Appeals: HdL cases are thoroughly researched, vetted
and documented prior to submittal. This ensures the
fastest possible processing times and reduces the
number of cases that are initially disclaimed and must be further researched and defended through a very
lengthy CDTFA appeals process. Nearly all HdL cases
are resolved favorably at either the first or second levels of the CDTFA petition process described in Regulation
35056.

Track Record: HdL is effective in recovering
misallocated revenue for client agencies in 97% of all
cases submitted to the CDTFA. The small number of cases that do require an appeal is evidence of HdL’s thorough research and the quality of the well-documented information included to support claims.

2. Sales and Use Tax Management Services
HdL Sales, Use and Transactions Tax Web-Based Application and Reports HdL will provide City staff with unlimited access to its quarterly updated web-based sales tax system to facilitate “in-house” analysis and printing of reports. The system allows City staff to search, print and export sales tax data for a variety of financial, management and planning functions. The system provides the ability to search all sales tax producers by business name, address, CDTFA account number and current and historical sales tax allocations.

The web application also provides access to archived quarterly sales tax reports. Data is easily queried and exported to either comma delimited or native Excel formats, allowing for convenient use with applications in the Microsoft Office suite. The web application is accessible from all major operating systems, internet browser platforms, and device types (laptop, tablet, PC, mobile). 31 #6..
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Proposal for the City of Modesto RFP No. 2324-46
HdL’s geo-area feature supports use of address ranges, which ensures the inclusion of all CDTFA registrations and allows City staff to create and modify geo-areas without a separate GIS system. HdL also supports interfacing with the City’s GIS by including accurately geocoded latitude and longitude for each business. The database includes historical allocation information and can be quickly exported by City staff on demand. Additionally, City created shape files can be used to define Geo-areas. Training in the use of the software and ongoing upgrades is provided at no additional charge.

HdL will provide City staff with unlimited access to its quarterly updated web-based sales tax system to facilitate “in-house” analysis and printing of reports. The system allows City staff to search, print and export sales tax data for a variety of financial, management and planning functions. The system provides the ability to search all sales tax producers by business name, address, CDTFA account number and current and historical sales tax allocations. HdL will also provide the City with a historical history of new revenue discovered vs. fees charged to the City. HdL’s reports include all the specifications listed in the City’s RFP.

Quarterly sales tax reports are provided on both a cash and adjusted basis. Cash reports reconcile to CDTFA payments and are necessary for any revenue sharing agreements that the City might have in place. Adjusted reports shift payment aberrations (double-up payments, CDTFA audit adjustments, etc.) into the quarter where the sales occurred to accurately show the City’s true economic trends.

The quarterly sales tax data will be presented in reports for major sales tax producers by both rank and category, analysis of sales tax activity by category, business or areas specified by the City. HdL’s quarterly sales tax reports include a listing of top sales tax producers and comparisons with both regional and statewide trends. Retailer information is provided in grouped form or in business-by-business detail.

Since our database can be accessed remotely, City staff have access from their home office, on their schedule.

The database is user-friendly and allows staff to easily query data needed through a variety of reports and can be exported to Microsoft Suite applications.

HdL’s services are superior to other vendors because the firm provides analysis done in context with regional market areas, countywide and statewide trends to better monitor and compare the City’s economic performance by business category. A non-confidential newsletter is included to support management’s efforts to inform and engage the public. Please find a listing of sample reports at the end of this section. 32 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Budget Projections and Monitoring
HdL has developed a comprehensive, detail-oriented method for projecting and monitoring client sales and use tax revenues that has proved to result in estimates that fall within 2% of actual receipts two-thirds of the time. Initial and mid-year projections are made by factoring out payment aberrations that skew the base revenue and factoring in known changes such as new or closed businesses.

HdL also incorporates information from over 90 economic sources as well as information gathered from client meetings to develop economic factors to apply to individual retail business segments; the results are combined into a single estimate of anticipated revenue. HdL further enhances its projections by contacting builders of large-scale development projects to better time and estimate the value of potential use tax payments into its estimates. Annual, three and five-year forecasts are also provided.

Economic Benefits to the City
When properly refined and organized, sales tax data analysis is an important tool for strengthening and expanding local economies. The data shows companies that are growing and may need expansion space and should be contacted as part of an agency’s business retention program.

When broken out geographically, the data produces patterns of industries that potentially share common customers, suppliers, technology and labor and therefore offer opportunities for attracting new businesses. The data further exposes retail areas that may be over saturated in some retail segments while also identifying voids and opportunities for additional retail development.

Although numerous companies and agencies use the CDTFA’s published data as a basis for analysis, the results are usually inaccurate and misleading due to address and business categorization errors in the data. To correct those deficiencies, HdL performs data validation and scrubbing techniques on an ongoing basis, fixing business addresses and re-categorizing merchants to differentiate brick and mortar retailers from “business to business” suppliers and on-line retailers.

The company further creates and groups businesses into additional categories and classifications, not provided by the CDTFA, to better track new and emerging economic trends. Samples include the breaking out of biotech/medical suppliers, online fulfillment centers, alternate energy and utility providers, wineries and marijuana dispensaries. This focused approach to data management allows agencies to compare the impact of trends more accurately in their jurisdiction with state and regional trends.

On a regional basis, it also allows for the identification of true economic voids and opportunities to expand the City’s tax base. Accurate addressing allows for improved performance monitoring and comparison of specific economic areas such as shopping centers, downtown districts and auto malls with similar projects throughout California.

In addition to using our large database, HdL’s principals leverage their experience analyzing client data throughout California to identify new trends and developments that might help other clients. The service includes analyses to identify retail voids and opportunities and an annual publication of retailers seeking expansion in the region and state.
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Proposal for the City of Modesto RFP No. 2324-46
Use Tax Maximization
Major construction projects and even ongoing business operations often generate significant use tax revenues from purchases of machinery, equipment and other fixed assets. HdL has worked with numerous clients to ensure that use tax from manufacturing and assembly plants, food processing, cold storage facilities, power/energy projects, medical, research and technical facilities, oil fields/refineries and extraction/mining industries are properly allocated to the host jurisdiction.

HdL’s sales tax team includes a staff of specialists who review new business startups that might present potential self-assessed use tax opportunities, meets with contractors to advise on sub-permits and reporting procedures and provides materials and advice on purchasing companies and direct payment permits. The firm monitors major construction projects to make sure that any use tax generated is properly allocated to the job site’s host jurisdiction. When brought into a project early, HdL assists clients with inserting provisions in conditional use permits and development agreements to guarantee that use tax maximization procedures are followed and monitors projects and subcontractors to make certain that sales tax is properly allocated back to the client jurisdiction. Direct payment permits and purchasing corporations can sometimes be utilized where conditions offer mutual opportunities for the client agency to capture additional sales tax revenues and the participating company can increase control of sales and use tax liabilities.

Consultation
Quarterly, a principal of the firm analyzes the City’s data in detail and meets with appropriate City officials to review trends, discuss and make recommendations regarding the budget implications of the year’s data. HdL also serves as “on-call” staff to provide sales tax estimates for proposed projects, assist with budget projections and answer sales and use tax questions related to economic development, budgeting and related revenue collection.

When requested by the City, principals also meet with committees of the City Council, advisory committees and other groups to explain sales tax regulations, economic trends and legislative proposals that will impact the City’s tax base. HdL will, when requested by the City, conduct technical seminars for City personnel on California sales and use tax processes. To support in-house efforts to maximize use tax, the seminars will cover the fundamentals of direct payment permits, purchasing corporations and maximizing “use tax” from construction projects.

HdL maintains close and positive relationships with CDTFA executives and staff to quickly resolve policy issues unique to individual clients. The firm also advocates regulation and legislative changes when they are of benefit to clients. Examples are the Company’s work in the change of allocation of “use tax” for major construction projects, securing an Executive Order from the Governor to allow publishing of top taxpayers in public documents and the introduction of the problem of “point of sale” for warehouses to the CDTFA.

Legislative Updates
HdL prepares Legislative Updates for clients to keep them informed of all proposals that may impact local revenues. The firm also provides Issue Updates which are similar in nature but deal with specific issues such as Sales Tax Participation Agreements, legal decisions or regulation changes. Each issue is presented in detail so that City staff are equipped to respond to questions on topics important to their community leaders.

The firm also retains Rebecca Marcus as a lobbyist to represent client interests in matters before the CDTFA and the state legislature. With over 20 years of experience in state and national politics, Rebecca has developed the necessary institutional knowledge and established relationships to effectively advance clients’ interests in Sacramento. As a Chief of Staff for 13 years in the California State Assembly for several distinguished Members including Assembly members Mark Stone, Mike Feuer, and Johan Klehs, Rebecca successfully advanced legislation across a diverse array of policy areas. As a result, over 100 of these Members’ bills became law ranging from landmark green chemistry legislative to a transformative transportation tax. Please find a copy of HdL’s latest Legislative Update in our Sample Report package. 34 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Project Timeline
HdL’s services will be on a quarterly schedule and completed within ninety (90) days of receipt of quarterly data from CDTFA. Audit activities will be promptly conducted on each new quarter’s data to identify those accounts requiring further research. Potential allocation errors and supporting documentation will be filed with CDTFA in time to meet the state’s statutory time limits to ensure that the City does not lose any revenue to which it is entitled. HdL has sufficient computer processing, storage, and back-up capacity (off site) that the firm has never missed timely delivery to any client due to computer or other failures. HdL’s on-going investment in maintenance and updated equipment plus a skilled IT staff mitigate the potential for interruptions in the future as well.

A typical project schedule is below:

Event HdL Client
Contract signed and received by HdL ✓ ✓
STAGE 1 (0-30 Days)
Conference Call – Kick Off Meeting held with Client Services and City Staff. ✓ ✓ Access to Web Application is provided to designated City Staff. Reports are posted. ✓ ✓ Initial Field Canvas is completed. Audits are performed and documents. Petitions for CDTFA are prepared. ✓
STAGE 2 (31 – 60 Days)
Follow up Field Report and submittal of all confirmed misallocations are sent to CDTFA. ✓
Work Authorizations are sent to the City for approval. ✓ ✓ STAGE 3 (61 – 120 Days)
Invoices are submitted quarterly (February, May, August and November) ✓ Quarterly Meetings are scheduled within 3-6 weeks of receipt of quarterly data from CDTFA. ✓ ✓
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Proposal for the City of Modesto RFP No. 2324-46
Utility Users and Franchise Fee Tax
Utility Users Tax (UUT) and Franchise Fee (FF) Tax
Administration Services
Tax Registration Database Management: HdL will transfer the City’s existing databases as they relate to UUT and FF into HdL’s internal administration tools. HdL will maintain the data and provide reports to the City.

Return Processing: HdL will process UUT filings within 5 days of submission. Accounts will receive all applicable forms necessary to complete the filing process.

New Account Processing: HdL will process registrations for all new utility providers.

Payment Posting / Processing: HdL will process all payments made for new and existing utility providers.

Accounts will be updated with payment information and revenues will be remitted to the City net HdL’s fees on no less than a monthly basis.

Customer Support Center: HdL will offer utility providers multiple support options for registering, filing returns, making payments and for general inquiries. A toll-free number will provide access to one of our tax specialists Monday-Friday 8:00am to 5:00pm Pacific. Providers will also have access to support via, e-mail, fax, and via the Support Center On-Line.

On-Line Filing and Payment Processing: With input from the City, HdL creates a custom web site and domain for taxpayers to submit online forms, returns, and payments along with other customer support related items.

Reporting: HdL offers a variety of hardcopy, electronic, and online reports which provide information regarding operations, returns, and revenue trends. HdL’s reporting contains a wealth of knowledge compiled from interactions with taxpayers, City information, and HdL proprietary databases. HdL will work with the City during implementation to identify the standard and custom reports required by the City as well as establish the frequency of the delivery.

Annual Reporting: In addition to standard monthly reports, HdL will provide the City with analysis reports designed to provide key insights on the utility provider community and the reporting details of each provider, including utility trends, provider trends, revenue trends, and a revenue forecast.

Industry and Legislative Updates: HdL will actively monitor federal and state industry and legislative events which may impact UUT or utility franchise revenues, keeping the City and business community informed, and making recommendations regarding advocacy of other response as appropriate.

UUT and FF Compliance Monitoring and Audits
HdL will also provide UUT and FF compliance audits for significant reporters as mutually agreed to by the City and HdL, which includes the following:

Audit Notification and Scheduling: Utility providers selected by HdL and approved by the City are sent a letter and scheduled for a Compliance Analysis Audit. Every effort is made to promote a positive utility provider experience. Utility providers are afforded the opportunity to schedule flexible appointment times by contacting the Business Support Center or visiting our online support center. 36 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Compliance Analysis and Audit: The HdL audit team coordinates with the utility provider regarding data and information required for the audit process. Key components of this process include:
• UUT audit
• Review utility’s address coding to identify any mis-coded addresses; • Audit gross revenue calculations to ensure proper taxes from local users are calculated and remitted accurately; and
• Calculate tax, penalty and interest as appropriate on any reporting deficiencies.

Audit and Compliance Report: Upon completion of the audit and analysis, and prior to additional actions, a compliance report is generated and reviewed with the City. The report indicates specific results of the reviews and recommended actions. Documentation will be included with the report to assist the City and HdL in determining next steps.

Deficiency and Commendation Notification: Upon final review with the City, utility providers which are found to have deficiencies are notified of the findings as well as payment and appeal processes. Appointments are also scheduled to review the findings and educate utility providers on proper filing procedures designed to prevent future errors and deficiencies. Utility providers found to be compliant are sent a commendation letter thanking them for their cooperation and compliance.

Invoicing and Collections: Utility providers found to be underreporting are invoiced through the standard City approved collections process. Utility providers will have access to all of the services provided including the Business Support Center and online support systems. Balances are collected and remitted along with supporting documentation to the City through approved remittance processes.

Accuracy
HdL will review the City’s Municipal Code to determine appropriate tax/fee calculations, and any penalties and interest to be applied to audit findings or late payments. HdL’s proprietary systems will be utilized to ensure accurate calculations.

Communication
HdL’s team of professionals have extensive experience with both written and verbal communications to noncompliant business entities and utility providers. HdL utilizes a variety of communication approaches depending on the circumstances and the City’s objectives. HdL will collaborate with the City regarding any written communications, to ensure the content and tone matches the City’s desired approach.

Provide Comparative Analysis with Other Cities
HdL provides comparative analysis reports to agencies throughout the U.S. HdL is currently working with several municipalities on similar projects and can share reporting examples with the City upon request.

Project Timeline
Day 1: Review municipal code, contract, and set up kick-off call.

Day 7: Kick-off call. Establish deliverables for banking docs, payment limits, etc.

Day 14: Banking docs and payment limits received.

Day 28:Configure system, reports, emails. Receive approval of introductory letter and other key communications.

Day 28: Review historical information and open tickets for account creation.

Day 42: Test system and proof all docs.

Day 57: Banking Set Up
Day 60: Go live.
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Proposal for the City of Modesto RFP No. 2324-46
Transient Occupancy Tax
Transient Occupancy Tax Administration
HdL’s Transient Occupancy Tax (TOT) Administration Service goes beyond scheduled cyclical audits, providing compliance monitoring of each return as it is filed while unburdening the City from the day-to-day administration of the TOT revenue program. Continual monitoring of returns is the optimal way to increase compliance while maintaining positive relations with the City’s lodging providers.

The program is education focused, ensuring that lodging providers are clear on reporting requirements and methodology.

HdL’s tax administration professionals are available as needed to support both the City’s team and the City’s lodging providers. The City is kept up to date, with 24/7 online access to HdL’s client portal containing real time access to registration and filing data, and management reporting. HdL’s TOT administration service incorporates all of the following:

Tax Registration Database Management: HdL will transfer the City’s existing databases as they relate to TOT into HdL’s internal administration tools. HdL will maintain the data and provide reports to the City.

Return Processing: HdL will process TOT filings within 5 days of submission. Accounts will receive all applicable forms necessary to complete the filing process.

New Account Processing: HdL will process any new registrations for lodging establishments which are new or have changed ownership.

Payment Posting/Processing: HdL will process all payments made for new and existing lodging providers.

Accounts will be updated with payment information and revenues will be remitted to the City net HdL’s fees on no less than a monthly basis.

Customer Support Center: HdL will provide lodging providers with multiple support options for registering, filing returns, making payments and for general inquiries. A toll-free number will be provided to businesses in order to access one of our tax specialists Monday-Friday 8:00 am to 5:00 pm Pacific. Providers will also have access to support via, e-mail, fax, and via the Support Center Online.

Online Filing and Payment Processing: With input from the City, HdL creates a custom web site and domain for taxpayers to submit online forms, returns, and payments along with other customer support related items.

Annual Reporting: In addition to standard monthly reports, HdL will continue to provide the City with annual analysis reports designed to provide key insights on the lodging provider community and the reporting details of each provider.

Reporting: HdL Offers a variety of hardcopy, electronic, and online reports designed to facilitate the City’s administration of TOT as well as provide valuable information for budget forecasting. HdL’s reporting contains a wealth of knowledge compiled from interactions with taxpayers, City information, HdL proprietary databases, as well as industry leading providers such of travel related data such as Smith Travel and PKF-HR.

HdL will work with the City during implementation to identify the standard and custom reports required by the City as well as establish the frequency of the delivery.

Compliance Monitoring and Lodging Provider Audits: HdL will ensure accurate filings of TOT returns by consistently monitoring returns and comparing them with data obtained from the identification phase. This can include listing calendar data, average occupancy, and average room rates. HdL will also provide compliance audits as mutually agreed to by the City and HdL, ensuring all providers are audited at least once every three years i.e. 60 audits total will be done at 20 per year for agreements lasting 5 or more years. 38 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Transient Occupancy Tax Audits
The HdL Transient Occupancy Tax Audit Program involves a business-friendly approach that reduces City administrative costs and provides the City with assurances of future compliance and reporting practices from the City’s lodging industry. Our approach includes an ordinance and procedural review, lodging provider analysis and selection, thorough audit completion, findings and comprehensive reporting. The Program will include:

Ordinance and Filing Procedure Review: Analysis of Transient Occupancy Tax ordinances and City procedures are conducted to identify possible deficiencies or other administration related issues.

The HdL audit team will meet with the City. The HdL audit team will meet with the City to discuss findings and provide recommendations for items such as best practices, form design, administrative procedures, and potential ordinance modifications or loopholes to insure the most effective policies and controls.

Lodging Provider Analysis and Selection:HdL’s audit team will obtain and conduct a review of the most recent 3+ current year period of transient occupancy tax filings as a baseline for the audits. The audit team will analyze lodging provider return information to identify reporting anomalies and potential audit selection or priority.

Upon completion of the analysis report, meetings are scheduled with the City to review theresults as well as identify lodging providers who require additional investigation.

Audit Notification and Scheduling: Lodging providers selected by HdL and approved by the City are sent a letter and scheduled for a Compliance Analysis Audit. Every effort is made to promote a positive taxpayer experience.Businesses will be reminded of the documents required for the audit through letter, email, and phone communications. Lodging providers are afforded the opportunity to schedule flexible appointmenttimes by contacting the Audit Coordinator. Auditors meet with hotels virtually to perform the audit, unless circumstances require onsite auditing.

Compliance Analysis and Audit: The HdL audit team reviews the books and records of the lodging provider to determine compliance with Transient Occupancy Tax regulations. HdL validates taxable gross rents, exemptions, bank statements, daily/monthly summaries, federal income tax returns, and other relevant information for determining compliance. Supporting documentation for relevantitems such as exemptions will also be documented for accuracy.

Findings and Comprehensive Reporting: Upon completion of the audit and analysis, and prior to additional actions, a compliance report is generated and reviewed with the City. The report indicates specific results of the reviews, taxability rationale, and recommended actions. Business-specific documentation will be included with the reportto assisttheCity andHdL indetermining next steps.

Deficiency and Commendation Notification:Uponfinal reviewwiththeCity, businesses that are foundto have deficiencies are notified of the findings as well as payment and dispute processes. Businesses who dispute are scheduled to review the findings with the auditor. The Findings Letter educates taxpayers on proper filing procedures designed to prevent futureerrors and deficiencies. Lodging Providers found to be compliant are sent a Commendation Letter thanking them for their cooperation and compliance.

Invoicing and Collections: Lodging providers found to be underreporting are invoiced by the City through the standard City approved collections process.
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Proposal for the City of Modesto RFP No. 2324-46
Project Timeline
A typical project timeline once a signed contract is received for the project is below.

Day 1: Kick off meeting and request for filing information from the City.

Day 7: Filing information received, communication letters approved.

Day 14: Audit communication letters sent.

Day 28: Audit confirmations received from properties.

Day 42: Documents received from audit properties.

Day 50: Audit meeting for Q&A; additional info requested.

Day 80: All information received and analyzed.

Day 100: Audit report written, and first draft sent to Client.

Day 110: Audit meeting between City and HdL to discuss findings and next steps.

Day 115: Findings letters sent by HdL to collect amounts due.

Day 125: Responses received from properties. Dispute Meetings Scheduled.

Day 130: Dispute meetings held.

Day 140: Dispute results finalized. HdL begins final collections.

Day 150: Final clearance letters sent.
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Proposal for the City of Modesto RFP No. 2324-46
Business License Tax
Our robust Business License Tax Services, which include Discovery, Audit, and Collections generate needed general fund revenues quickly and efficiently. You and your business community will love working with our teams (i.e., implementation, operations, client support, and taxpayer support) throughout your journey. Like our other clients have, you will find our approach to communicating tactfully, sensitively, and proactively leaves a favorable impression in the minds of your business community members while giving you the revenues you need to manage the City’s service demands.

DISCOVERY
Defining the Business Population. Starting with an integration of your data into our Enriched Data Portfolio (EDP), we build an enhanced listing of business subject to licensure or taxation, such as those physically located in the City, itinerant businesses, and entities participating in the sharing economy like short-term rentals (STRs), drive sharing services, and others. We
electronically match these businesses to your existing
files using advanced data matching algorithms, allowing us to identify which businesses are compliant and which require specific support and attention.

Augmenting Data. When the results of the EDP
integration process need additional data, our
experienced field crews, equipped with the most
advanced tools loaded with various City and state-wide
databases, may canvass your commercial areas to refine
the business population data. Field surveys not only
provide additional inventories of active businesses, but also provide on-site verification of data culled from
other sources.

Resolving Exceptions. When data exceptions arise, our skilled team members review those records to avoid erroneous contacts. This extra step allows staff to find additional revenues not otherwise identifiable through electronic means and assist in reducing potential complaints caused by false positives.

Reaching the Community. Upon exception resolution, HdL staff initiates contact with the identified entities through a series of City approved communication methods. HdL makes every effort to simplify the process for taxpayers and utilizes a variety of mediums for communication including mail, telephone, email, and web-site access. Potential non-compliant entities are notified of their options to comply or dispute their non-compliant status. Initial notification packets include everything a business needs to become compliant and multiple methods of resolving their accounts.

Making it Easy. We operate a business support and service center where your business community can access expert staff during normal business hours. Businesses calling our toll-free phone line can expect minimal hold times along with access to a variety of burden-reducing filing support, payment, resolution of specific tax issues, and other service options. Your business community will find our business-friendly and education-centric approach to be welcoming and refreshing in all aspects of the management and compliance process.

Then Making it Even Easier. Businesses can access a wide range of services through the online filing portal.

With HdL Flex File, businesses can choose to file their new business registration as well as make payments. In addition to filing and paying for taxes, businesses can obtain copies of applications, general support, access FAQs, schedule appointments, and request copies of their tax registration. 41 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Our online services underscore HdL’s commitment to excellence in customer service and education by continually improving the registration and payment experience for the business community.

Managing Paperwork. Whether the taxpayer chooses to respond by mail, email, or our online filing website, we review each application submission for completion prior to processing it. We will forward documentation, such as a home occupation permit, to City departments as a courtesy to the businesses or as a pre-requisite for other City actions. We electronically file and store all submissions.

Invoicing Businesses. After approving an application, we forward an easy-to-read invoice showing how we calculated the tax due along with the current balance and past-due balances to the taxpayer. They can pay the balances via mail, online, or over-the-phone services. Taxpayers access our Business Support Center for questions or disputes related to the invoice process.

Curating Compliance. We curate, manage, and update each discovered business’s application, documents, invoices, payments, and correspondence in the Registry. Our Compliance Management Services will make daily updates to your Registry file and store it in the HdL Prime Software Suite. Then our Operations Management team processes the business through our standard process along with other compliant businesses. This ensures ongoing compliance and impeccable records management.

COMPLIANCE AND AUDIT
Selecting Candidates. Your relationship with your business community matters. To protect your relationships and reputation, we use proven selection methodologies to identify audit candidates and to limit the impact on your business community. Before starting an audit campaign, we share the list of candidates and preliminary audit reports for each with you. This not only gives you a chance to collaborate on the list, but also keeps you informed of where we are headed in case questions arise.

Scheduling Engagements. Businesses we select and you approve for an audit will go through a respectful, professional audit experience. We begin by sending a City-approved letter to the business telling them about their selection for audit and setting the date and time of their Compliance Analysis audit. Then two weeks before the audit, we send the business a detailed description of the requirements and relevant documentation we will review during the audit. If the business is unable to meet the audit date, then we work with the business to reschedule. As an added benefit, the business can schedule flexible appointment times by contacting the Business Support Center or visiting our online support center.

Determining Compliance. We evaluate compliance by auditing financial and other records, analyzing the application of business tax regulations, assuring correct classifications, reviewing multiple location allocations, testing apportionment issues, and identifying business-to-business relationships that may create tax liability for third parties.

Reporting Results. After finishing the audit and analysis, and prior to additional actions, we will prepare a compliance report package containing our findings, supporting documentation, and recommended future actions for your review and direction.

Sharing Next Steps. In staying true to our business-friendly approach and values, we make it easy for businesses to understand the results of their audits. Compliant businesses receive a commendation letter thanking them for their compliance. Non-compliant businesses receive a final audit and analysis report explaining the current findings and how to avoid deficiencies in the future along with details about what is due, how to pay, and how to appeal.

Collecting Deficiencies. Underreporting businesses receive an invoice and remit payment according to the City-approved collections process. We remit collected balances along with supporting documentation through the City-approved remittance process.
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Proposal for the City of Modesto RFP No. 2324-46

BUSINESS LICENSE TAX ADMINISTRATION
The Business License Tax Administration Service solves your time, staffing, and resource allocation problems surrounding business licensing. Our team of experts will manage all, or parts you choose, of your business tax operations, which frees valuable resources for reallocation to other pressing needs. Before going live as your tax administrator, we complete an implementation process to tailor our service to your needs. This implementation process involves key conversations about how we combine municipal code requirements, City practices, requisite documentation, and other best practices into the service. It is during these meetings when we mutually agree on which documents are necessary, including commercial zoning or home occupation forms.

Another example of a key discussion topic is whether you desire our help in coordinating your regulatory processes (e.g., planning approvals).

APPLICATION
Starting Off. Businesses begin with the application process. Businesses that do not want to submit their application online through the online taxpayer portal or over the phone can submit applications via mail or email.

Collecting Documentation. During the application process, we will collect the documents we identified during the implementation process. If you need other additional documents, then we will work together to agree upon any service changes to accommodate the need. Your staff would reach out to businesses for documentation or clarification related to the regulatory approval process. [Please note that we do not replace your expert judgement related to your regulatory processes. As a courtesy, we will perform a cursory review of regulatory documentation to confirm we have received it and that it appears complete before routing it through the regulatory approvals process. Your expert staff will determine if it is accurate.] Calculating Taxes. The application requires businesses to self-report pertinent information (e.g., gross receipts). Once the application is completed, we will invoice the taxpayer using their self-reported information.

We do not audit this information as part of this service but can perform audits under our Compliance services, if authorized.

Handling Incompletes. Occasionally businesses submit incomplete applications because they start it in error, have changed their minds about going into business, or for other reasons. This is an opportunity for our customer service to shine as we balance resources against the reasons for incomplete applications.

Representing You.We register a City-approved domain name, which will serve as the starting point for all webbased activities. This City-specific site is designed to look and feel like the City’s own web pages and ensures a level of continuity between the business community, you, and us. Your dedicated website will be unique to you and your service. We will showcase an example during the RFP interview stage.

Providing Options. With HdL Flex File, businesses can choose to file their new business registration as well as renew their license, make payments via our online filing portal, and much more. Our online services underscore our commitment to excellence in customer service and education by continually improving the registration and payment experience for your business community.

Delivering Excellence. Businesses can expect us to process items they submit through the online taxpayer portal within two business days. They can expect us to process items they mail within 10 business days to allow for the proper handling, sorting, and recording of information prior to the actual processing of the account. If you wish to designate contractors as an expedited class, then we can accommodate same-day service for them.

This would eliminate delays at your Planning/Building department.

RENEWAL
As you review the renewal process steps, you may find the following definitions to be useful to you.

Online Renewal Notice: An email or post-mail letter that provides web renewal instructions to taxpayers. It includes their Account Number, Web Pin, Expire Date, Due Date, and Business Support Center contact information.
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Proposal for the City of Modesto RFP No. 2324-46
Renewal Notice: A mailed notice that includes instructions for fee calculations for businesses that would like to process their renewal via post-mail. This notice provides instructions for calculating the business license tax due for the current period.

Insert Management: A no-cost insert sent via email. Additional mailed inserts will be billed to the city at 25 cents per page.

Being Proactive. Businesses appreciate early reminders about renewal season. We will send out a series of renewal reminders by post mail and email to all annual active accounts before their expiration date according to the schedule below. We look forward to sharing more details about our proactive process during the interview phase of this RFP. Here is a summary of the key events and timing in our process. 75-100 Days prior to the Expiration date | CPI Updates
45-50 Days prior to the Expiration date | Online Renewal Notice #1 35-40 Days prior to the Expiration date | Online Renewal Notice #2 25-30 Days prior to the Expiration date | Post-Mail Renewal Notice 10-15 Days prior to the Expiration date | Online Renewal Notice #3 10-15 Days after Expiration date | Online Renewal Notice #4 (If Applicable) 10 Days after the Penalty Accrual date | Delinquency Notice #1 90 Days after the Expiration date | Compliance

PAYMENT
Managing Payments. Customers may pay over the phone, via mail or online. We accept Visa, Mastercard, and E-check over the phone and online. If a customer must submit a physical check, they may do so via mail. We do not accept cash payments.

Paying You.We will process payments and remit the cash to you on or before the 20th of each month (or another mutually selected date) via Check or ACH. Our service charges, transaction fees, and the State’s CASp (AB)1379/ (SB)1186 fees are automatically paid each cycle via deduction from disbursement to you.

Hearing You. If you have a question about remittance, then please submit your inquiries to [email protected] within one business day. We respond as swiftly as possible with variations in turnaround time based on the complexity of the issue.

Going Beyond. You will find the following key resources are available on a daily, weekly, monthly, quarterly, and yearly basis.

FINANCIAL RESOURCES | DAILY
• We review, reconcile, and post cash receipts information to your ledger accounts.

FINANCIAL RESOURCES | MONTHLY
• We process refund requests each month.
• If we are collecting BID funds or other special district funds along with business license taxes, we can remit those funds to those special districts at your request. • Each month we provide the following standard reports along with the remittance of your funds. o Cash Receipts summary and detail of revenue activity. o Invoice for our services, including an itemized list of charges. o Transaction detail summary and itemization of transaction related expenses. o Disbursement Summary document for reconciliation of deposit received.

FINANCIAL RESOURCES | QUARTERLY
• Each quarter we will disburse collected CASp (AB)1379 fees to the California Department of State Architect (DSA) on your behalf along with the required Form 786.

FINANCIAL RESOURCES | ANNUAL
• We will notify you 30 days in advance of any CPI adjustments to the pricing in our contract. • We will submit the Form 787 report to the California DSA.

Elevating Service. We can collect other fees in addition to business tax according to certain criteria, noted below, at no extra charge to you. With mutually agreed-to design and pricing, we can collect other fees that do not match the criteria below.
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Proposal for the City of Modesto RFP No. 2324-46
ADDITIONAL OTHER FEES | CRITERIA
• Are a single fee assigned to one Rate Type.
• Are charged on the same renewal cycle as the business license. • Are stable, i.e., they do not change from year to year unless the input value is changed by the taxpayer.

Recapturing Surcharges. As with our many other clients, you have the option to use a surcharge to offset the service charge for credit card payments. We set up the surcharge as part of the implementation process.

Importing Data. As another part of the implementation process, we will determine the best way to share data with your financial system. We have found the variety of financial systems requires varied approaches to the data import process.

ISSUANCE
Issuing Tax Certificates. Once the business has paid the tax it owes, we send their business tax certificate. We will email a copy of the certificate within three business days after we receive their full payment and process that payment. If they do not have an email address on file, we will mail them a copy of their certificate on the first week of the month following the completion of their application and full payment of their tax.

DELINQUENT ACCOUNT PROCESSING
Processing Delinquent Accounts. Some businesses will end up as delinquent accounts. After collaborating with you to establish the process, we endeavor to collect delinquent accounts through a series of jointly approved steps. This will include at minimum two follow-up delinquent notices and up to two additional contacts via letter, email, or telephone. Delinquent accounts will pay the full penalties as allowed by your municipal code or according to current City practices. After exhausting the delinquency collection process options, we transfer the delinquent accounts to the Compliance Management Program.

Project Timeline
Event HdL Client
Contract signed and received by HdL ✓ ✓
DISCOVERY - STAGE 1 (1-2 weeks)
Conference Call - HdL Sales, PM, IT, Client Stakeholders - Review contract, special conditions/programming ✓ ✓
Client to provide forms, ordinances, fee resolutions, business rules, logo(s), users authority, and payment gateway. Provide contact info for client stakeholder and walk-through business license process.
✓ ✓
Send sample letters to Client. Provide a list of all information required by HdL.

Provide contact info for HdL stakeholders. ✓
Provide client IT with FTP account information, instructions for sending data ✓ Upload client data to FTP server. (SQL or Access) Send screenshots (all screens for variety of account types) ✓
PROJECT KICK OFF AND SET UP - STAGE 2 (3-4 weeks)
Project kick off conference call ✓ ✓
Begin data conversion ✓
Project Manager build tables, fee, messages, etc. ✓
Reports, forms, and letters requested/development/review/edit/approval ✓ 45 #6..
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Proposal for the City of Modesto RFP No. 2324-46
Project Manager test approval with forms ✓
HdL Tech and Project Manager review and test 1st conversion ✓ Send the preview version of Prime (screenshots) ✓
Client to confirm user permissions ✓
Client to confirm Approvals process ✓
GO LIVE - STAGE 3 (1-2 weeks)
Sign-off on conversion fee calculation ✓
Run script in client’s live database for new renewal cycles ✓ 46 #6..
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Proposal for the City of Modesto RFP No. 2324-46
The HdL Advantage
Exceptional Personnel: The HdL team is invested in your success.We are 100% employee owned and view your success as our success. Many of our key employees have previously served local government agencies in positions of management, and have extensive experience in economic development, finance and revenue collection. We use a team approach so thatthere is always someone available to take your questions during our normal business hours of 8:00 am – 5:00 pm.

Comprehensive Audits: HdL has the largest database outside of the CDTFA which allows for a “fresh” look at revenue collections. This advantage coupled with the HdL’s advanced technology and processes consistently finds allocation errors and revenue opportunities often missed by other firms.

Accurate Forecasting: HdL has developed a comprehensive, detail-oriented method for projecting and monitoringclient sales and use tax revenues that has proved to result in estimates that fall within 2% of actual receipts two-thirds ofthe time.

InsightfulReports andTimelyServices:HdL’s analysis is doneincontextwith the surrounding market region to better identify retail trends, voids and opportunities. The service includes a custom non-confidential newsletter that can be shared with the Council and community. The firm’s sophisticated economic support program provides special reports and data to assist the City in monitoring and leveraging existing economic development programs, identifying new revenue opportunities and maximizing use tax revenues.

Easy-to-Use Software: Our web-based sales tax application is user-friendly and offers clients immediate access to current and historical sales tax data. The application allows for easy printing of reports and data export to other systems or programs. Quarterly reports are available on the website within 5 days of receiving the Quarterly Data Reportfrom the CDTFA.

Seamless Transition: As recent converts will attest, switching sales tax services to HdL is seamless without any loss of historical data or interruption in audit, reporting and support activity. 47 #6..
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Sales and Use Tax
Sales and Use Tax Services | Audit and Management Services HdL proposes two pricing options:

1. $850/month, plus 15% contingency for retroactive fund transfers, and 8 prospective quarters *

2. $850/month, plus 30% contingency on retroactive fund transfers only (no prospective billing) * *CPIincrease applied annually.

HdL’s fees quoted are for the complete bundle of services detailed below. Option 2 above provides the City with ease of contract administration and streamlined invoicing and billing verification. • Audit: The fees proposed above apply to all new sales and use tax revenue received by the City as a result of audit and recovery workperformedbythefirm.Thisauditfeeapplies tomonies receivedinthe first eight consecutive reporting quarters beginning with the receipt of the audit revenue in addition to any retroactive back quarter adjustments obtained by HdL.

Auditfees are billed only after completion ofthe audit, submittal of corrections to theCDTFAand receipt of revenues by the client. 100% of all newrevenue generated byHdL flows to the City after the completion of the eight quarters. The fee constitutes the full reimbursement to HdL and covers all direct and indirect costs incurred by the firm under this contract. This includes all salaries of our employees, travel expenses and service contracting costs as well as the software to be delivered to the City under this proposal.

Invoices are submitted only for recoveries previously approved by the City. HdL does not bill for audit revenues untilthe client has received said monies. Further, if during the billing cycle, a taxpayer receives a refund for overpaymentof taxes generated during that cycle, HdL credits back any proportionate share of the fee that may have been levied.Invoices are submitted quarterly after the City has received the revenue from the audit correction. The invoice includes thename,address, andsales tax registrationnumberofeach company, and the specific amount of revenueallocated by the CDTFAto the City for those businesses.

If a misallocation correction involves additional revenue from a company that had already been partially allocatingrevenues to the City, the City and HdL will agree in a Work Authorization, prior to billing, the methodology for identifying the incremental revenue attributable to HdL’swork. • Management Services: This includes access to the City’s sales tax database through our web-based software and quarterly meetings withone of our principals. In preparation for each meeting, a principal of the firm analyzes the City’s data in detail and meets with appropriate City officials to review trends, point out businesses that should be contacted as part of the City’s business retention program and discuss and make recommendations regarding the economic and budget implications of the quarter’s data. Also included is a non-confidential newsletter that can be shared with your council and the public.

COST PROPOSAL DETAILS
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Utility User Tax and Franchise Fee Audit and Compliance Utility Users Tax and Franchise Fees | Administration
• Industry Monitoring and Management Support and Tax Administration is $5,000 per month or $60,000 per year. *
*CPIincrease applied annually.

Utility Users Tax and Franchise Fees | Audit Services
• HdL proposes to perform a review the franchise fees, PEG fees and utility users’ taxes (UUT) paid by the cable, electric, gas, and telecommunications providers (the Companies) to the City of Modesto, California for the most recent 3-year review period (review period) for the not-to-exceed budgets listed in the table below.

Three-Year Review of Franchise Fees, PEG Fees and
Utility Users’ Taxes
Proposed
Budgets for
Each Review
[A]
Review of Utility Users’ Taxes and Telecommunications Taxes [B]
Up to
$25,000
[A] –may be adjusted for any unforeseen circumstances.
[B] – budgets depending on company and type of review, possible to have multiple reviews with separate budgets of the same company, i.e., Verizon/Frontier for wireline services and cellular service, Spectrum for franchise and PEG fees and telecom service (VOIP or cellular or both).

HdL will issue a separate report for each review of each Company that will discuss our findings, plus any applicable interest and penalties due to the City. Please note that actual costs may be less than the proposed budgets, and HdL will endeavor to pass on any savings to the City.

We have based the proposed budgets on anticipated cooperation from the City and the staff of each of the Companies and the assumption that we will not encounter any unexpected circumstances during the project. If significant additional time is necessary, we will discuss it with the City and arrive at a new fee estimate before we incur any additional costs.

HdL’s hourly billing rate for these services is $225.00 per hour.

If the City takes legal action to collect underpayments identified by HdL, any additional services, e.g. expert testimony requested of HdL will be provided at an agreed hourly rate of $225 per hour. 49 #6..
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Transient Occupancy Tax
Transient Occupancy Tax Administration with Short-Term Rental Services | Services andAdditional Information • The fee for lodging tax services is $900 per property per year. The service includes tax administration, management support and forecasting, and audits of properties every three years. * • Alternative option: The City may choose to select which properties to review in a standalone audit at a rate of $2,500 per audit plus reasonable travel, minimum 3 simultaneous audits. • $13,750 Annually for Compliance Monitoring and Identification • $25 per Application or Renewal - Permitting
• $16 per filing – STR management/TOT Administration
* Annual CPI increase applies to all pricing.

Business License Tax
Business License Tax Services | Discovery,Compliance, andAudit Services • The fee for discovery and audit services is 40% of the revenues the City receives as a result of the discovery and audit services. *
• The fee for compliance services is 25% of collections the City receives as a result of the compliance service.

Business License Tax Services | Administration
• The fee for this service is $17 per processed account, which is any account for which an application or renewal/return was processed, or active account which was sent a renewal notice. • Travel and lodging expenses are billed at cost and apply to all meetings, including process, preinstallation, installation, training, and support. HdL is dedicated to conserving public funds ensuring that any travel costs are indeed required and reasonable.
*Annual CPI increase applies to all pricing.

Hourly Rates
Hourly Rate for Additional Services | HourlyRates for Other Optional ServicesNotIncluded in thisRFP • Director: $325
• Programmer: $295
• SeniorAnalyst: $245
• Analyst: $195
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Proposal for the City of Modesto RFP No. 2324-46
Sample Report Package
Trends by Major Groups
Major Industry Groups
Quarterly Line Graph
Annual Line Graph
Major business type changes, including comparisons with state and county averages.

Allocations byBusinessType Including Pools
Adjusted for ReportingAberrations
Top sales tax generators listed in descending order. Used bymanagementto track trends andidentify companies who should be contacted as part of a business retention program.

Top 100 SalesTax Generators
Quarterly DeviationAnalysis
Reports forRevenue Projections.

SalesTaxAllocation SummaryCash Reconciliation Report
Budget Projections
Five Year Forecast
ConsensusForecast
Quarterly customized newsletter summarizing sales tax highlights presented in a manner toprotect confidentiality and that can be shared with the public.

City of Fresno
City of Culver City
Special reports as needed for economic development and other purposes.

Regional Updates
MarketCompetition Comparisons
Surplus/Gap Comparison
RetailAnalytics Brochure
Sample of Legislative and Issue Updates.

Legislative Update
Issue Update
HeadLinesMonthly E-Newsletter–TrendsAffectingCalifornia’s Economy

SAMPLE SALES TAX REPORTS
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CITY OF PROSPERITY

MAJOR INDUSTRY GROUPS ADJUSTED FOR

ECONOMIC DATA
Major Industry Group Count 4Q22 4Q21 $ Change % Change
Autos and Transportation 141 1,534,864 1,200,240 334,624 27.9% General Consumer Goods 724 1,057,968 916,449 141,518 15.4% Restaurants and Hotels 280 618,280 418,175 200,105 47.9% Building and Construction 41 204,832 212,421 (7,590) -3.6% Fuel and Service Stations 12 201,474 125,232 76,242 60.9% Food and Drugs 96 131,428 125,744 5,684 4.5%
Business and Industry 558 60,187 47,916 12,271 25.6%
Transfers & Unidentified 45 2,661 495 2,166 437.3%
State and County Pools - 0 0 0 -N/ATotal 1,897 3,811,694 3,046,673 765,021 25.1% $0K
$200K
$400K
$600K
$800K
$1,000K
$1,200K
$1,400K
$1,600K
Autos
and
Transportation
General
Consumer
Goods
Restaurants
and
Hotels
Building
and
Construction
Fuel and
Service
Stations
Food
and
Drugs
Business
and
Industry
State and
County
Pools
4Q21 Compared To 4Q22
4Q21 4Q22
4Q22 Percent of Total
40%
Autos
and
Transportation
28%
General
Consumer
Goods
16%
Restaurants
and
Hotels
5%
Building
and
Construction
5%
Fuel and
Service
Stations
3%
Food
and
Drugs
2%
Business
and
Industry

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CITY OF PROSPERITY
MAJOR INDUSTRY GROUPS - 13 QUARTER HISTORY ADJUSTED FOR

ECONOMIC DATA
Sales Tax by Major Industry Group
($200)K
$0K
$200K
$400K
$600K
$800K
$1,000K
$1,200K
$1,400K
$1,600K
4Q
19 1Q
20 2Q
20 3Q
20 4Q
20 1Q
21 2Q
21 3Q
21 4Q
21 1Q
22 2Q
22 3Q
22 4Q
22 Count: 141
Autos And Transportation
Count: 724
General Consumer Goods
Count: 280
Restaurants And Hotels
Count: 41
Building And Construction
Count: 12
Fuel And Service Stations
Count: 96
Food And Drugs
Count: 558
Business And Industry
Count: 45
Transfers & Unidentified
Agency Trend
$2,400K
$2,800K
$3,200K
$3,600K
$4,000K
$4,400K
$4,800K
4Q
19 1Q
20 2Q
20 3Q
20 4Q
20 1Q
21 2Q
21 3Q
21 4Q
21 1Q
22 2Q
22 3Q
22 4Q
22 Prosperity
13 Quarter Trend: +11.0%
Periods shown reflect the period in which the sales occurred - Point of Sale HdL • 909.861.4335 • www.hdlcompanies.com

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CITY OF PROSPERITY
MAJOR INDUSTRY GROUPS - 13 YEAR HISTORY ADJUSTED FOR

ECONOMIC DATA
Sales Tax by Major Industry Group
($1,000)K
$0K
$1,000K
$2,000K
$3,000K
$4,000K
$5,000K
$6,000K
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22
Count: 141
Autos And Transportation
Count: 724
General Consumer Goods
Count: 280
Restaurants And Hotels
Count: 41
Building And Construction
Count: 12
Fuel And Service Stations
Count: 96
Food And Drugs
Count: 558
Business And Industry
Count: 45
Transfers & Unidentified
Agency Trend
$10,000K
$11,000K
$12,000K
$13,000K
$14,000K
$15,000K
$16,000K
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Prosperity
13 Year Trend: +34.9%
Periods shown reflect the period in which the sales occurred - Point of Sale HdL • 909.861.4335 • www.hdlcompanies.com

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CITY OF PROSPERITY
TOP 25 BUSINESS TYPES LISTED BY ALLOCATION
4Q 2022 COMPARED TO 4Q 2021
HdL STATE
Code Business Type Description (Count)
AGENCY
4Q 2022 4Q 2021 Change 4Q 2022 4Q 2021 Change
60 New Motor Vehicle Dealers (16) 1,221,560 874,350 39.7% 227,131,187 190,022,380 19.5% 08 Discount Dept Stores (3) 725,842 597,817 21.4% 106,386,126 97,348,487 9.3% 35 Casual Dining (128) 362,071 208,598 73.6% 113,366,904 72,430,349 56.5% 24 Quick-Service Restaurants (113) 224,696 192,132 16.9% 82,623,589 72,696,248 13.7% 62 Service Stations (12) 205,429 106,287 93.3% 169,302,730 116,040,151 45.9% 65 Auto Lease (16) 192,005 266,868 -28.1% 21,244,486 23,444,882 -9.4% 50 Building Materials (6) 152,903 167,237 -8.6% 98,800,436 91,224,603 8.3% 19 Specialty Stores (195) 72,046 57,916 24.4% 32,173,532 28,148,999 14.3% 34 Grocery Stores (20) 63,024 58,475 7.8% 45,250,655 43,473,047 4.1% 12 Sporting Goods/Bike Stores (19) 61,266 55,882 9.6% 13,735,032 14,191,395 -3.2% 05 Variety Stores (19) 54,388 34,167 59.2% 10,413,615 9,019,209 15.5% 03 Family Apparel (73) 54,249 61,900 -12.4% 42,301,476 38,952,632 8.6% 31 Electronics/Appliance Stores (42) 49,320 58,956 -16.3% 31,408,946 27,801,995 13.0% 71 Auto Repair Shops (42) 42,271 26,334 60.5% 19,200,772 14,450,110 32.9% 37 Fast-Casual Restaurants (11) 38,019 34,142 11.4% 20,904,661 18,400,459 13.6% 27 Drug Stores (27) 37,985 37,766 0.6% 14,363,349 13,433,651 6.9% 22 Convenience Stores/Liquor (26) 31,864 22,875 39.3% 25,641,447 21,583,067 18.8% 52 Plumbing/Electrical Supplies (8) 31,855 6,717 374.3% 30,107,944 21,664,707 39.0% 61 Automotive Supply Stores (28) 24,374 23,427 4.0% 22,877,574 21,608,293 5.9% 85 Transportation/Rentals (20) 24,223 16,419 47.5% 14,942,297 11,791,273 26.7% 07 Department Stores (8) 23,968 25,494 -6.0% 17,328,803 14,603,060 18.7% 76 Leisure/Entertainment (23) 19,598 864 2167.1% 11,395,730 3,931,722 189.8% 64 Used Automotive Dealers (15) 18,609 9,857 88.8% 36,878,189 29,344,947 25.7% 66 Boats/Motorcycles (3) 15,806 14,255 10.9% 8,098,577 7,544,270 7.3% 82 Contractors (25) 12,806 16,552 -22.6% 48,870,018 40,970,837 19.3% All Others (999) 116,705 94,905 23.0% 531,325,103 456,489,898 16.4% TOTAL ALL TYPES (1897) 3,876,884 3,070,194 26.3% 1,796,073,178 1,500,610,671 19.7% Major Industry Groups
Autos And Transportation (141) 1,539,256 1,231,805 25.0% 362,398,910 17.8% Building And Construction (41) 204,026 199,454 182,263,696 Business And Industry (558) 63,834 46,423 341,267,073
Food And Drugs (96) 134,264 120,181 101,106,134
Fuel And Service Stations (12) 205,429 106,287 199,790,680 General Consumer Goods (724) 1,083,409 929,257 346,865,605 Restaurants And Hotels (280) 644,592 435,994 257,357,952 Transfers & Unidentified (45) 2,076 793 5,023,128
TOTAL ALL GROUPS (1897) 3,876,884 3,070,194 26.3% 1,796,073,178 19.7%

2.3% 15.4%

37.5% 9.9%

11.7% 8.4%

93.3% 47.2%

16.6% 11.4%

47.8% 41.8%
161.9% 87.0%
1,500,610,671
307,658,635
157,937,336
310,454,770
93,271,649
135,760,595
311,285,522
181,556,492
2,685,672

19.7%
4,773,841 3,823,959 24.8%

18.5%
364.8%
891,703 752,634
5,255 1,131
3,876,884 3,070,194 26.3% 1,796,073,178

GROSS RECEIPTS

ALLOCATIONS FROM STATE POOL

ALLOCATIONS FROM COUNTY POOL
TOTAL ALL BUSINESSES (1897) 1,500,610,671

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ADJUSTED FOR

ECONOMIC DATA

CITY OF PROSPERITY
TOP 25 BUSINESS TYPES LISTED BY ALLOCATION
4Q 2022 COMPARED TO 4Q 2021
HdL STATE
Code Business Type Description (Count)
AGENCY
4Q 2022 4Q 2021 Change 4Q 2022 4Q 2021 Change
60 New Motor Vehicle Dealers (16) 1,221,560 874,350 39.7% 224,066,837 188,783,520 18.7% 08 Discount Dept Stores (3) 725,842 595,903 21.8% 106,322,023 96,940,251 9.7% 35 Casual Dining (128) 343,569 186,474 84.2% 107,602,355 69,088,199 55.7% 24 Quick-Service Restaurants (113) 219,803 195,444 12.5% 79,092,826 73,353,908 7.8% 62 Service Stations (12) 201,474 125,232 60.9% 160,755,276 112,148,520 43.3% 65 Auto Lease (16) 192,023 235,833 -18.6% 21,634,481 23,391,864 -7.5% 50 Building Materials (6) 153,238 167,315 -8.4% 98,525,554 91,374,770 7.8% 19 Specialty Stores (195) 71,485 53,181 34.4% 30,679,416 27,668,116 10.9% 34 Grocery Stores (20) 62,939 58,651 7.3% 44,825,142 43,414,115 3.3% 12 Sporting Goods/Bike Stores (19) 60,851 55,710 9.2% 13,491,928 14,215,040 -5.1% 03 Family Apparel (73) 54,207 61,916 -12.4% 42,195,296 38,578,330 9.4% 31 Electronics/Appliance Stores (42) 49,448 55,401 -10.7% 31,174,427 27,719,192 12.5% 27 Drug Stores (27) 37,985 37,142 2.3% 14,364,087 13,180,350 9.0% 71 Auto Repair Shops (42) 37,890 25,616 47.9% 17,705,268 14,510,592 22.0% 37 Fast-Casual Restaurants (11) 37,801 35,107 7.7% 20,348,925 18,262,260 11.4% 05 Variety Stores (19) 32,793 33,455 -2.0% 8,808,573 8,875,315 -0.8% 52 Plumbing/Electrical Supplies (8) 31,855 19,843 60.5% 30,171,402 21,510,358 40.3% 22 Convenience Stores/Liquor (26) 29,163 28,932 0.8% 23,509,119 23,097,206 1.8% 85 Transportation/Rentals (20) 24,174 16,395 47.5% 14,777,261 10,580,801 39.7% 07 Department Stores (8) 23,968 25,494 -6.0% 17,307,845 13,814,200 25.3% 61 Automotive Supply Stores (28) 23,772 22,711 4.7% 22,161,125 21,185,677 4.6% 64 Used Automotive Dealers (15) 19,232 10,616 81.2% 34,773,336 32,206,743 8.0% 76 Leisure/Entertainment (23) 16,900 893 1791.7% 11,029,400 3,702,977 197.9% 66 Boats/Motorcycles (3) 15,806 14,425 9.6% 7,956,538 7,679,531 3.6% 82 Contractors (25) 13,278 16,316 -18.6% 48,888,510 40,735,194 20.0% All Others (999) 110,639 94,321 17.3% 515,027,828 445,632,792 15.6% TOTAL ALL TYPES (1897) 3,811,694 3,046,673 25.1% 1,747,194,778 1,481,649,816 17.9% Major Industry Groups
Autos And Transportation (141) 1,534,864 1,200,240 27.9% 354,806,640 15.1% Building And Construction (41) 204,832 212,421 182,142,985 Business And Industry (558) 60,187 47,916 336,159,212
Food And Drugs (96) 131,428 125,744 96,748,342
Fuel And Service Stations (12) 201,474 125,232 190,424,986 General Consumer Goods (724) 1,057,968 916,449 338,371,796 Restaurants And Hotels (280) 618,280 418,175 246,414,203 Transfers & Unidentified (45) 2,661 495 2,126,614
TOTAL ALL GROUPS (1897) 3,811,694 3,046,673 25.1% 1,747,194,778 17.9% -3.6% 15.3%

25.6% 9.8%

4.5% 2.8%

60.9% 47.0%

15.4% 10.5%

47.9% 38.9%
437.3% 13.9%
1,481,649,816
308,319,308
157,954,144
306,229,096
94,076,169
129,558,503
306,301,648
177,344,159
1,866,788

17.9%
3,811,694 3,046,673 25.1%
na
na
0 0
0 0
3,811,694 3,046,673 25.1% 1,747,194,778

GROSS RECEIPTS

ALLOCATIONS FROM STATE POOL

ALLOCATIONS FROM COUNTY POOL
TOTAL ALL BUSINESSES (1897) 1,481,649,816

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CITY OF PROSPERITY
TOP 100 SALES TAX PRODUCERS - 4Q 2022
Rank Firm Name Business Address 4Q 2022 4Q 2021
Business
Type
Percent
of Total
Cumulative
Prior 4 Qtrs Percent
Percent
Change
1 08 Dougco Discount Dept Stores 2207 W Butler Ave 586,185 450,955 2,300,941 29.99% 15.12% 15% 2 60 Thomco New Motor Vehicle Dealers 1200 W East St 221,467 0 134,750 n/a 5.71% 21% 3 60 Ooohlala New Motor Vehicle Dealers 2 Locations 215,466 103,368 675,576 108.45% 5.56% 26% 4 60 Djgraphic New Motor Vehicle Dealers 4 Locations 181,613 162,864 698,188 11.51% 4.68% 31% 5 50 Giftprints Building Materials 500 S East Ave 144,545 159,784 611,656 -9.54% 3.73% 35% 6 60 Archetype New Motor Vehicle Dealers 1100 W East St 141,617 146,649 550,234 -3.43% 3.65% 38% 7 08 Verdalee Discount Dept Stores 2120 W East St 139,657 146,862 623,975 -4.91% 3.60% 42% 8 60 Bonega New Motor Vehicle Dealers 1247 W East St 133,430 90,851 468,158 46.87% 3.44% 45% 9 60 Macnetworks New Motor Vehicle Dealers 2 Locations 132,207 130,008 577,562 1.69% 3.41% 49% 10 65 Kiaras Auto Lease No Address In City 81,396 99,484 381,755 -18.18% 2.10% 51% 11 60 Chameleons New Motor Vehicle Dealers 1811 W East St 72,655 56,925 254,841 27.63% 1.87% 53% 12 60 Silverstone New Motor Vehicle Dealers 400 S Ingersoll Blvd 69,980 155,583 505,895 -55.02% 1.81% 55% 13 62 Survive Service Stations 2 Locations 60,263 22,375 254,980 169.33% 1.55% 56% 14 60 Yukiko New Motor Vehicle Dealers 1700 W East St 53,126 28,101 139,892 89.06% 1.37% 58% 15 65 Eventos Auto Lease No Address In City 46,318 54,802 209,074 -15.48% 1.19% 59% 16 05 Warrior Variety Stores 2 Locations 36,776 17,183 51,201 114.03% 0.95% 60% 17 12 Primeco Sporting Goods/Bike Stores 2801 W Dunkirk Rd 36,276 38,768 158,425 -6.43% 0.94% 61% 18 19 Maxies Specialty Stores 2568 W Butler Ave 32,382 28,209 124,089 14.80% 0.84% 62% 19 03 Francesca Family Apparel 150 E East St Ste 130 29,503 34,144 169,448 -13.59% 0.76% 62% 20 62 Metropoly Service Stations 3201 W Yukon Blvd 25,844 9,132 79,372 183.02% 0.67% 63% 21 24 Awch Quick-Service Restaurants 2 Locations 24,947 24,799 100,075 0.60% 0.64% 64% 22 03 Socorros Family Apparel 201 E East St 24,400 26,538 128,663 -8.06% 0.63% 64% 23 24 Chaunceys Quick-Service Restaurants 1210 N Ingersoll Blvd 24,003 21,524 95,184 11.52% 0.62% 65% 24 52 Travelube Plumbing/Electrical Supplies 2220 W East St 23,973 0 66,508 n/a 0.62% 65% 25 07 Asd Department Stores 1201 S Townsend Ave 23,304 25,073 142,550 -7.06% 0.60% 66% 26 62 Ravenous Service Stations 300 S Ingersoll Blvd 23,198 9,751 87,859 137.91% 0.60% 67% 27 62 Capelli Service Stations 601 W Yukon Blvd 21,693 13,694 73,494 58.41% 0.56% 67% 28 34 Hotdog Grocery Stores 2400 W Butler Ave 20,243 20,093 92,055 0.74% 0.52% 68% 29 27 Kade Drug Stores 4 Locations 20,242 17,830 80,429 13.53% 0.52% 68% 30 62 Natuurlik Service Stations 525 N Ingersoll Blvd 19,592 12,708 68,833 54.16% 0.51% 69% 31 85 Samkhya Transportation/Rentals 1300 W East St 18,654 12,310 68,239 51.54% 0.48% 69% 32 62 Ingear Service Stations 2601 W East St 18,357 10,077 61,643 82.16% 0.47% 70% 33 35 Greenbrew Casual Dining 129 W East St 17,889 12,213 59,517 46.48% 0.46% 70% 34 12 Chavas Sporting Goods/Bike Stores 2801 W Dunkirk Rd 16,313 7,330 50,813 122.56% 0.42% 71% 35 31 Axion Electronics/Appliance Stores 2121 W East St Ste 300 16,070 20,122 84,537 -20.14% 0.41% 71%

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Finance CommitteeSeptember 23, 2024

Finance Committee
September 23, 2024