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AGREEMENT FOR CONSULTANT SERVICES
This Agreement for Consultant Services (the "Agreement") is made and entered into this _____________ day of _______________, ___, by and between THE CITY OF PACIFICA, a municipal corporation (hereinafter referred to as "CITY") and _ Hinderliter de Llamas & Associates a California Corporation (hereinafter referred to as "CONSULTANT"). CITY and CONSULTANT may be referred to individually as “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, CITY requires tax collection and compliance services in connection with the business license and transient occupancy taxes, including administration of the short-term rental program;
WHEREAS, CONSULTANT is qualified to perform such services; and WHEREAS, CONSULTANT has agreed to provide CITY with such services on the terms and conditions set forth herein.
NOW, THEREFORE, for the considerations hereinafter set forth, CONSULTANT and CITY agree as follows:
ARTICLE 1 - SCOPE OF SERVICES
1.1. Scope of Work. CONSULTANT agrees to furnish the services set forth in Exhibit A, Scope of Work, Schedules 1-3, which are attached hereto and incorporated herein (the "Services").
1.2. Compliance with Law. The Services shall be performed in accordance with all applicable federal, state and local laws, ordinances, rules, regulations and orders.
1.3. Time is of the Essence. CONSULTANT agrees to diligently prosecute the Services. In the performance of this Agreement, time is of the essence.
1.4. Professional Competence. CONSULTANT represents that it has the professional skills necessary to perform the Services and that it will perform the Services in a skillful and professional manner. CONSULTANT represents that it has all the necessary licenses to perform the Services and shall maintain them throughout the term of this Agreement.
CONSULTANT agrees that the Services shall be performed in the manner and according to the standards observed by a competent practitioner of the profession in which CONSULTANT is engaged, in the same or similar geographical area in which CONSULTANT practices its profession and will prepare all work products required by this Agreement in accordance with such standards.
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CITY and CONSULTANT agree that CONSULTANT is in responsible charge of the Services. Acceptance by CITY of the Services does not operate as a release of CONSULTANT from professional responsibility for the Services performed.
1.5. Independent Contractor. CONSULTANT is an independent contractor and not an employee of CITY. CONSULTANT expressly warrants that it will not represent that it is an employee of CITY.
1.6. Confidentiality. CONSULTANT agrees to maintain in confidence and not disclose to any person, firm, governmental entity, or corporation, without CITY's prior written consent, any trade secret or confidential information, knowledge or data relating to the products, process, or operation of CITY. CONSULTANT further agrees to maintain in confidence and not to disclose to any person, firm, governmental entity, or corporation any data, information, technology, or material developed or obtained by CONSULTANT during the performance of the Services. The covenants contained in this Section 1.6 shall survive the termination of this Agreement for whatever cause.
1.7. Ownership of Material. Any reports and other material prepared by or on behalf of CONSULTANT under this Agreement (collectively, the "Documents") shall be and remain the property of CITY. All Documents not already provided to CITY shall be delivered to CITY on the date of termination of this Agreement for any reason. The Documents may be used by CITY and its agents, employees, representatives, and assigns, in whole or in part, or in modified form, for all purposes CITY may deem appropriate without further employment of or payment of any compensation to CONSULTANT. This does not include any software, programs, methodologies or systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by CONSULTANT in the course of performing the Services that were not otherwise provided to City in either hardcopy or electronic form, all of which may be protected by CONSULTANT or others’ copyrights or other intellectual property.
1.8. Documentation. CONSULTANT shall keep and maintain full and complete documentation and accounting records, employee time sheets, and correspondence pertaining to the performance of the Services, and CONSULTANT shall make such documents available for review and/or audit by CITY and CITY's representatives at all reasonable times for at least four years after the termination of this Agreement or completion of the Services.
1.9. Testimony. CONSULTANT agrees to testify at CITY's request if litigation is brought against CITY in connection with the Services. Unless the action is brought by CONSULTANT or is based upon CONSULTANT's negligence, CITY will compensate CONSULTANT for the preparation and the testimony at CONSULTANT's standard hourly rates.
ARTICLE 2 - COMPENSATION
2.1. Compensation. Compensation for the Services shall be in accordance with Exhibit A, Schedules 1-3, Compensation, attached hereto and incorporated herein. It is agreed that - 3 -
the compensation for the Services shall not exceed $250,000.00 ("Cost Ceiling"). The contingency fees will be billed separately based on revenue recovered according to usage in accordance with Exhibit A
2.2. Invoices. CONSULTANT shall submit monthly invoices in a form satisfactory to CITY on or before the tenth day of each month for Services provided during the preceding month. CONSULTANT shall submit time and cost records as necessary to substantiate performance of the Services. Within 35 days after receipt of each such invoice, CITY shall verify the accuracy of the invoice, correct the charges where appropriate and as discussed and mutually agreed with CONSULTANT, and make payment to CONSULTANT in an amount equal to the amount of such invoice, as verified or corrected by CITY. No payment hereunder shall be construed as evidence of acceptance of any of CONSULTANT's work. CITY reserves the right to withhold payment from CONSULTANT on account of Services not performed satisfactorily, delays in CONSULTANT's performance of Services, or other defaults hereunder. CONSULTANT shall not stop or delay performance of the Services under this Agreement on account of payment disputes with CITY.
2.3. Status Reports. Together with each monthly invoice, CONSULTANT shall submit a status report detailing the amount expended on the Services to that date and the remaining amount to be expended before the Cost Ceiling is reached. CONSULTANT shall notify CITY in writing when payments have reached 90 percent of the Cost Ceiling.
2.4. Withholding. In lieu of holding retention, CITY shall withhold CONSULTANT's final payment until the Services are complete and CITY has received all Documents.
CONSULTANT shall diligently continue and complete performance of the Services if the Services are not complete at the time CONSULTANT has performed services up to the Cost Ceiling.
ARTICLE 3 - TIME OF PERFORMANCE
3.1. Effective Date. This Agreement shall become effective upon execution of the second signature and shall remain in full force and effect until termination two (2) years from the date of the second signature (the "Term"). Upon mutual agreement, City shall have the option to extend the agreement for an additional one (1) year, and then another one (1) year thereafter.
3.2. Termination. This Agreement may be terminated at any time by CITY upon written notice to CONSULTANT.
3.3. Final Payment. CONSULTANT shall be entitled to compensation for Services performed up to the time of such termination, it being understood that any payments are full compensation for the Services rendered under this Agreement.
3.4. Other Remedies. Nothing in this Article 3 shall be deemed to limit the respective rights of the parties to terminate this Agreement for cause or otherwise to exercise any rights or pursue any remedies which may accrue to them.
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ARTICLE 4 - DESIGNATED CONTACTS
4.1. CITY Contact. CITY designates ________________, its ________________, as its contact who shall be responsible for administering and interpreting the terms and conditions of this Agreement, for matters relating to CONSULTANT's performance under this Agreement, and for liaison and coordination between CITY and CONSULTANT. In the event CITY wishes to make a change in CITY 's representative, CITY will notify CONSULTANT of the change in writing.
4.2. CONSULTANT Contact. CONSULTANT designates _____________ as its contact, who shall have immediate responsibility for the performance of the Services and for all matters relating to performance under this Agreement. Any change in CONSULTANT's designated contact shall be subject to written approval by CITY.
ARTICLE 5 - INDEMNIFICATION AND INSURANCE
5.1. Indemnification. CONSULTANT shall, to the fullest extent allowed by law, with respect to claims, liability, loss, damage, costs, or expenses, including reasonable attorney's and expert witness fees, awards, fines, penalties, or judgments, arising out of or relating to the Services (collectively "Claims"), defend, indemnify, and hold harmless CITY, its Officials, officers, employees and agents (the "CITY Parties"), except to the extent the Claims are attributable to CITY Parties' gross negligence or willful misconduct. CONSULTANT shall defend the CITY Parties as required by California Civil Code Section 2778, and with counsel reasonably acceptable to those parties.
CONSULTANT shall have no right to seek reimbursement from the CITY Parties for the costs of defense. The obligations contained in this Section 5.1 shall survive the termination of this Agreement for whatever cause for the full period of time allowed by law and shall not in any way be limited by the insurance requirements of this Agreement.
Notwithstanding anything to the contrary, in no event will CONSULTANT be (a) liable for claims, liabilities or damages (i) that could not reasonably have been foreseen upon entry into this Agreement; (ii) arising from any action or inaction by CONSULTANT in response to specific direction from CITY; (iii) in connection with any CITY monies not collected by CONSULTANT; nor (iv) in connection with the issuance, non-issuance or revocation of any registration, license, permit, or exemption;
5.2. Health and Safety. CONSULTANT may perform part of the Services at sites which contain unknown working conditions and contaminated materials. CONSULTANT shall be solely responsible for the health and safety of CONSULTANT's employees during the performance of the Services.
5.3. Insurance. CONSULTANT and all of CONSULTANTS employees, subcontractors, consultants and other agency shall procure, provide and maintain at all times during the performance of this Agreement, and for such additional periods as described herein, the insurance listed below with insurers licensed to do business in the State of California and with a Best's rating of no less than A:VII.
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A. Commercial Automobile Liability Insurance. Commercial Automobile Liability Insurance providing bodily injury liability and property damage, to protect against all liability arising out of the use of any owned, leased, passenger or commercial automobile at a minimum amount of $1,000,000 combined single limit and $2,000,000 aggregate. Coverage shall apply to hired and non-owned autos.
B. Commercial General Liability Insurance. Commercial General Liability Insurance, with limits providing a minimum amount of $1,000,000 combined single limit coverage for each occurrence, $2,000,000 general aggregate and $2,000,000 products/completed operations aggregate. The insurance shall cover all operations including but not limited to the following: (1) premises, operations and mobile equipment liability; (2) completed operations and products liability; (3) contractual liability insuring the obligations assumed by CONSULTANT in this Agreement; (4) broad form property damage liability; (5) personal injury liability endorsement, including death; and (6) automobile bodily injury and property damage insurance, including all owned, hired and non-owned equipment.
C. Professional Liability Insurance. Professional Liability Insurance protecting against liabilities arising out of or in connection with negligent acts, errors, or omissions of CONSULTANT and all of CONSULTANTS employees, subcontractors, consultants and other agency in connection with this Agreement, at a minimum amount of $1,000,000 combined single limit coverage and $1,000,000 aggregate, on a "claims made basis" with a continuation of coverage extension for liabilities for two years from the date the Services are substantially complete. Such professional liability policies shall include coverage for liability assumed by the CONSULTANT under this Agreement.
D. Workers Compensation Insurance. Workers Compensation insurance, occupational disease insurance and employer’s liability insurance shall be required with minimum limits as required by law, covering all workplaces involved in this Agreement.
E. Policy Terms. Concurrently with execution of this Agreement, CONSULTANT shall provide CITY with Certificates of Insurance evidencing that CONSULTANT has obtained or maintains the insurance required by this Section
5.3. The Certificates shall be on forms acceptable to CITY. CONSULTANT shall also furnish CITY with original endorsements with the following documentation:
• Precluding cancellation or reduction in coverage before the expiration of thirty (30) days after CITY shall have received written notification thereof from CONSULTANT by United States mail;
• Providing that CONSULTANT's insurance shall apply separately to each insured against whom claim is made or suit is brought, and include a “separation of insureds” or “severability” clause which treats each insured separately, except with respect to the limits of the insurer's liability (cross-liability endorsement);
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• Excepting CONSULTANT’S professional liability insurance, naming CITY, its City Council, boards, commissions, committees, officers, employees and agents as additional insureds (“Additional Insureds”); and • Providing that for any claims relating to CONSULTANT's services hereunder, CONSULTANT's insurance coverage shall be primary insurance with respect to CITY, its City Council, boards, commissions, committees, officers, employees and agents, and that any insurance or self-insurance maintained by CITY for itself, its City Council, boards, commissions, committees, officers, employees and agents shall be in excess of CONSULTANT's insurance and shall not be contributory with it.
• It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverages requirements and/or limits shall be available to the Additional Insured, including but not limited to any umbrella or excess insurance.
Furthermore, the requirements for coverage and limits shall be the greater of:
(a) the minimum coverage and limits specified in this Agreement; or (b) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured.
F. Material Breach. If CONSULTANT fails to maintain insurance coverage or provided insurance documentation which is required pursuant to this Agreement, it shall be deemed a material breach of this Agreement. CITY, at its sole option, may terminate this Agreement and obtain damages from CONSULTANT resulting from said breach. Alternatively, CITY may purchase the required insurance coverage, and without further notice to CONSULTANT, may deduct from sums due to CONSULTANT any premium costs advanced by CITY for such insurance. These remedies shall be in addition to any other remedies available to CITY.
ARTICLE 6 - NOTICES
All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by facsimile or reputable overnight courier and shall be deemed received upon the earlier of: (1) if personally delivered, the date of delivery to the address of the person to receive such notice; (2) if delivered by Federal Express or other overnight courier for next business day delivery, the next business day; (3) if sent by facsimile, with the original sent on the same day by overnight courier, the date on which the facsimile is received, provided it is before 5:00 P.M. Pacific Time; or (4) if sent electronically, the date of delivery on the confirmed read receipt. Notice of change of address shall be given by written notice in the manner described in this Article 6. Rejection or other refusal to accept or the inability to deliver because of a change in address of which no notice was given shall be deemed to constitute receipt of the notice or communication sent. Unless changed in accordance herewith, the addresses for notices given pursuant to this Agreement shall be as follows:
If to CITY: Yulia Carter
Assistant City Manager
170 Santa Maria Avenue
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Pacifica, CA 94404
Phone: (650) 738-7409
Facsimile: (650) 359-6038
Email: [email protected]
If to CONSULTANT: HdL Contracts
120 S State College Blvd. #200
Brea, CA 92821
Phone: 714-879-5000
Email: [email protected]
ARTICLE 7 - MISCELLANEOUS
7.1. Entire Agreement. This Agreement represents the entire understanding of CITY and CONSULTANT as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This Agreement may only be modified by an amendment in writing signed by each party.
7.2. No Assignment. The Services are deemed unique and neither party shall assign, transfer, subcontract or otherwise substitute its interest in this Agreement or any of its obligations hereunder without the prior written consent of the other party. As limited by this Section
7.2, this Agreement is to be binding on the successors and assigns of the parties hereto.
7.3. Severability. If any part of this Agreement is determined to be unconstitutional, invalid or beyond the authority of either party, such decision shall not affect the validity of the remainder of this Agreement, which shall continue in full force and effect, provided that the remainder of this Agreement can be interpreted to give effect to the intentions of the parties.
7.4. Counterparts. This Agreement may be signed in counterparts and, when fully signed, such counterparts shall have the same effect as if signed in one document.
7.5. Choice of Law. This Agreement and all matters relating to it shall be governed by the laws of the State of California without reference to its choice of laws principles and venue shall be in the appropriate court in San Mateo County, California.
7.6. Waiver. No failure on the part of either Party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder. A waiver by either CITY or CONSULTANT of any breach of this Agreement shall not be binding upon the waiving party unless such waiver is in writing. In the event of a written waiver, such a waiver shall not affect the waiving party's rights with respect to any other further breach.
7.7. Mediation. In the event the parties are unable to resolve a dispute arising under this Agreement through good faith negotiations, the parties agree to submit the matter to - 8 -
mediation with a mutually agreeable mediator. Prior to the mediation, the parties shall exchange any documents reasonably necessary to resolve the matter to be mediated.
7.8. Attorney’s Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled.
7.9. Interpretation. In the event this Agreement is ever construed in any dispute between the parties, it and each of its provisions shall be construed without regard to the party or parties responsible for its preparation and shall be deemed to have been prepared jointly by the parties. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement.
7.10. Authority. Each individual executing this Agreement on behalf of one of the parties represents that he or she is duly authorized to sign and deliver the Agreement on behalf of such party and that this Agreement is binding on such party in accordance with its terms.
7.11. Third Parties. Nothing contained in this Agreement shall create a contractual relationship with, or cause of action in favor of, a third party against either the CITY or CONSULTANT. CONSULTANT’s Services hereunder are being performed solely for the benefit of CITY.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
CITY OF PACIFICA
By: Date
__________, City Manager
Approved As To Form
By:
Michelle Marchetta Kenyon, City Attorney
CONSULTANT
_______________________________
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By: Date
By: Date
EXHIBIT A
SCOPE OF WORK
SCHEDULE 1 – This Schedule 1 provides the scope of Services and Fees for tax and fee administration related to transient occupancy tax pursuant to the Agreement for Consultant Services dated __________ (“Agreement”). The Agreement includes the main body of the Agreement, the Exhibits, this Schedule, and all other Schedules to the Agreement. Terms not otherwise defined herein have the definitions given to them within the main body of the Agreement.
SCOPE OF SERVICES
Consultant will provide the following Services relative to City’s transient occupancy tax administration, excluding short-term rental (STR) properties, for which said services are outlined in Schedule 3.
1. Operations Management Services
1.1. Establish and maintain database of City lodging providers.
1.2. Receive and process registrations, tax returns and payments in a timely fashion.
1.3. Provide lodging providers multiple options for submitting registrations, tax returns, payments, or support requests (including via website, email, mail, phone, and fax. Consultant tax specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).
1.4. Remit revenue to City no less than monthly.
1.5. Provide City staff access to website portal offering lodging provider registry inquiry and reporting capabilities.
1.6. Endeavor to ensure accurate filings of returns by consistently monitoring returns, providing compliance audits, and educating lodging providers as mutually agreed to by City and Consultant.
1.7. Provide analysis reports monthly and annually provide revenue trends and key insights on City lodging providers as mutually agreed upon.
2. Online Payment Processing – Consultant’s services include PCI compliant payment processing services which supports both credit card and eCheck transactions.
2.1. City Responsibilities
2.1.1.As a condition to its receipt of the Service, City shall execute and deliver any and all applications, agreements, certifications or other documents required by Consultant’s payment processor, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by Consultant’s payment processor. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.
2.1.2.City hereby grants Consultant the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. City represents and warrants that it has the full right and authority to grant these rights.
FEES
3. Operations Management Services
3.1. Fees for performing operations management Services shall be $868.57 per year for each filing property.
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3.2. Fees will be increased as of January 1st of each calendar year with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change.
For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.
3.3. Fees for any reasonable travel and lodging expenses will be billed at cost and applied to all meetings (including implementation, training, operations and support).
3.4. Fees will be invoiced monthly to City for Services performed during the prior month.. City will submit payment for any balance due to Consultant within 30 days of receiving the invoice.
4. Payment Processing – Consultant will configure payment processing services to utilize either a taxpayer funded model (convenience fee) or City funded model, as directed by City. City may switch between these models upon written request to Consultant. Fees for each of these payment processing models are detailed here.
4.1. Taxpayer funded model – City authorizes Consultant to collect each convenience fee from the taxpayer at time of payment.
4.1.1.Credit and debit card processing – 2.9% of transaction amount, minimum of $2.00
4.1.2.ACH/eCheck processing - $2.50 per transaction
4.2. City funded
4.2.1.Credit and debit card processing – 2.9% of transaction amount
4.2.2.ACH/eCheck processing - $0.75 per transaction
4.3. Returned payments/NSF fee – Each occurrence of a card chargeback, returned payment or insufficient funds will incur a fee of $25.00, to be applied to the taxpayers account.
4.4. Consultant reserves the right to review and adjust pricing related to payment processing services on an annual basis. Consultant will communicate any such adjustment to City in writing, with 60 days advance notice. Items that will be considered in the review of fees may include, but are not limited to: regulatory changes, card association rate adjustments, card association category changes, bank/processor dues and assessments, average consumer payment amounts, card type utilization, and costs of service. - 3 -
SCHEDULE 2 – This Schedule 2 provides the scope of Services and Fees for tax and fee administration related to business license tax and fees pursuant to the Agreement for Consultant Services dated __________ (“Agreement”).
The Agreement includes the main body of the Agreement, Exhibits and this Schedule, and all other Schedules to the Agreement. Terms not otherwise defined herein have the definitions given to them within the main body of the Agreement.
SCOPE OF SERVICES
Consultant will provide the following Services relative to City’s business license tax administration.
5. Operations Management Services
5.1. Establish and maintain database of City businesses.
5.2. Receive and process applications, renewals and payments in a timely fashion.
5.3. Send renewal notices to active businesses within 30 days of the renewal period end date or at another interval specified by City.
5.4. Provide businesses multiple options for submitting applications, renewals, payments, or support requests (including via website, email, mail, phone, and fax. Consultant license specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).
5.5. Remit revenue to City no less than monthly.
5.6. Provide City staff access to website portal offering business registry inquiry, reporting, and electronic department approval capabilities.
6. Compliance Services: 1) Identify and register businesses which are subject to licensure or taxation, 2) collect known debt as pertains to business license or tax, and 3) identify under-reported tax liability.
6.1. Discovery Services
6.1.1.Develop a list of businesses subject to City licensure or taxation.
6.1.2.Notify non-compliant businesses of their options to comply or dispute their non-compliant status. Notification and support to businesses will be facilitated through the website, mail, email, phone and fax.
6.1.3.Review information and forms submitted by the business for completion and accuracy, inclusive of any additional required documentation (i.e. home occupation permit). All submissions are filed and stored electronically and made available to City upon request.
6.1.4.Provide businesses with detailed invoicing and options to pay via website, mail, and phone.
6.1.5.Remit revenue to City no less than monthly, along with all business applications and any additional documentation.
6.2. Collection Services
6.2.1.Identify businesses subject to City licensure or taxation which have known debt to City and have failed to pay within an appropriate time frame.
6.2.2.Notify businesses of their options to comply or dispute their non-compliant status.
6.2.3.Provide businesses with detailed invoicing and options to pay via website, mail and phone.
6.2.4.Remit revenue to City no less than monthly.
6.3. Audit Services
6.3.1. Identify potential under-reporting and/or misclassified businesses.
6.3.2.Audit businesses mutually agreed to by City and Consultant that are identified as potential under-reporting businesses.
6.3.3.Submit audit summaries to City and discuss further actions.
6.3.4.Educate businesses on proper reporting practices. - 4 -
6.3.5.Invoice and collect identified deficiencies.
7. Online Payment Processing – Consultant’s services include PCI compliant payment processing services which supports both credit card and eCheck transactions.
7.1. City Responsibilities
7.1.1.As a condition to its receipt of the Service, City shall execute and deliver any and all applications, agreements, certifications or other documents required by Consultant’s payment processor, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by Consultant’s payment processor. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.
7.1.2.City hereby grants Consultant the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. City represents and warrants that it has the full right and authority to grant these rights.
FEES
8. Operations Management Services
8.1. Fees for performing operations management Services shall be $17.37 for each processed account, which is any account for which an application or renewal/return was processed, or active account which was sent a renewal notice.
8.2. Fees will be increased as of January 1st of each calendar year with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change.
For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.
8.3. Fees related to reasonable travel and lodging expenses are billed at cost and apply to all meetings (including implementation, training, operations and support). Travel expenses only apply to out of scope travel and must therefore be pre-approved by City.
8.4. Fees will be invoiced monthly to City for Services performed during the prior month. City will submit payment for any balance due to Consultant within 30 days of receiving the invoice.
9. Compliance Services
9.1. Fees for performing compliance Services apply to all monies received for the current tax/license period and any other prior period collected (including monies received for taxes, penalties, interest, and fees).
9.1.1.Fees for performing discovery Services shall be a contingency Fee of 35% of the revenues received as a result of the Services.
9.1.2.In the event that City discovers a non-compliant business and reports the business to Consultant (including a calculation of all taxes/fees due), Consultant will categorize the business as a collection service effort and thus apply the lower collection Services contingency Fee rate.
9.1.3.Fees for performing collection Services shall be a contingency Fee of 25% of the revenues received as a result of the Services.
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9.1.4.Fees for performing audit Services shall be a contingency Fee of 35% of the revenues received as a result of the Services.
9.2. Consultant recognizes City’s authority to waive or reduce the tax/fee debt of a business.
Should City decide to do so for a business whose deficiency was identified by Consultant, Consultant shall be entitled to compensation in the amount of one half (1/2) of the Fees Consultant would have otherwise earned. Deficiencies which are uncollectable due to insolvency or dissolution of the business, or for deficiencies which are otherwise incapable of collection (i.e. statute of limitation or other legal defense) shall not be considered a City voluntary election to waive, and thus, Consultant would not be entitled to compensation related thereto under this provision.
9.3. The fee shall be paid notwithstanding any related City assistance, work in parallel, and/or incurrence of attorneys’ fees or other costs or expenses in connection, with the relevant Services.
9.4. Fees related to reasonable travel and lodging expenses are billed at cost and applied to all meetings (including implementation, training, operations, and support). Travel expenses only apply to out of scope travel and must therefore be pre-approved by City.
9.5. Fees will be invoiced monthly to City for Services performed during the prior month. Fees will be netted out of City’s monthly revenue disbursement. City will submit payment for any balance due to Consultant within 30 days of receiving the invoice.
10. Payment Processing – Consultant will configure payment processing services to utilize either a taxpayer funded model (convenience fee) or City funded model, as directed by City. City may switch between these models upon written request to Consultant. Fees for each of these payment processing models are detailed here.
10.1. Taxpayer funded model – City authorizes Consultant to collect each convenience fee from the taxpayer at time of payment.
10.1.1. Credit and debit card processing – 2.9% of transaction amount, minimum of $2.00
10.1.2. ACH/eCheck processing - $2.50 per transaction
10.2. City funded
10.2.1. Credit and debit card processing – 2.9% of transaction amount
10.2.2. ACH/eCheck processing - $0.75 per transaction
10.3. Returned payments/NSF fee – Each occurrence of a card chargeback, returned payment or insufficient funds will incur a fee of $25.00, to be applied to the taxpayers account.
10.4. Consultant reserves the right to review and adjust pricing related to payment processing services on an annual basis. Consultant will communicate any such adjustment to City in writing, with 60 days advance notice. Items that will be considered in the review of fees may include, but are not limited to: regulatory changes, card association rate adjustments, card association category changes, bank/processor dues and assessments, average consumer payment amounts, card type utilization, and costs of service. - 6 -
SCHEDULE 3 – This Schedule 3 provides the scope of Services and Fees for short-term rentals transient occupancy tax administration pursuant to the Agreement for Consultant Services dated __________ (“Agreement”).
The Agreement includes the main body of the Agreement, Exhibits and this Schedule, and all other Schedules to the Agreement. Terms not otherwise defined herein have the definitions given to them within the main body of the Agreement.
Consultant will provide the following Services relative to City’s short-term rentals (“STR”) transient occupancy tax administration.
11. Identification and Monitoring
11.1. Monitor short-term rental sites to identify new listings and closures.
11.2. Match listings to specific parcels using GIS and property tax assessor data.
11.3. Identify properties which are already registered and paying taxes.
11.4. Provide a visual map of listing locations in City’s jurisdiction as requested, but not to exceed a quarterly basis.
11.5. Record listing details (including start date, sites linked to, and other information necessary for documenting evidence of short-term rental activity).
12. Education, Registration, and Compliance
12.1. Provide short-term rentals website with links to FAQs, education packets, and support for tax registration, filing returns, and making payments.
12.2. Work with City to identify additional requirements and collection of data necessary to enforcement procedures.
12.3. Notify non-compliant lodging providers of their status and any actions necessary to become compliant via an initial notice (STR Letter 1).
12.4. Follow up with non-compliant accounts to obtain registration via a secondary notice (STR Letter 2).
12.5. Transfer accounts who have failed to comply following STR Letter 2, to the City for further action, which may include the formal Notice of Violation (NOV) Process.
12.6. The following notification schedule will be followed by HdL:
12.6.1. STR Letter 1: Send the first amnesty letter requesting compliance. Letters are sent within 90 days of going live initially, and then Quarterly, as new properties are identified.
12.6.2. STR Letter 2: Send the final amnesty letter demanding compliance within 30 days after the mailing of STR Letter 1.
12.6.3. Transfer non-responsive accounts with supporting details to the City for further action within 45 days of STR Letter 2, which may include the Notice of Violation (NOV) process.
13. Optional Add-on Services for Education, Registration, and Compliance Notice of Violation (NOV) Letter Generation, which can be implemented within 60 days. If the City elects to revert to cease, they must do so in writing 30 days prior to the notification cycle.
13.1.1.1. HdL will create two Crystal Report templates in HdL's Prime Cloud System.
Specifications will match templates as agreed upon and previously provided by City.
13.1.1.2. HdL will regenerate facsimiles of the current STR Letter 1 and STR Letter 2 templates based on original notification dates as 'attachments' to the NOV. - 7 -
13.1.1.3. HdL will escalate non-compliant accounts to the City per the currently established process.
13.1.1.4. The City will promptly approve and request the generation of NOVs to HdL.
13.1.1.5. HdL will generate and provide the NOVs for approved accounts to the City within 5 business days of the City’s request.
13.1.1.6. The City will be responsible for printing and mailing the NOV Letters and packets.
14. Permitting
14.1. Establish and maintain database of City’s permitted short-term rental lodging providers.
14.2. Receive and process permit applications, renewals and payments in a timely fashion.
14.3. Provide short-term rentals website with links to FAQs, education packets, and support for permitting and making payments.
14.4. Work with City to identify additional requirements and collection of data necessary for permitting procedures, as agreed upon, and to include:
14.4.1. Hosted or non-hosted categorization
14.4.2. Operator primary residence information
14.4.3. Operator acknowledgment of City’s permitting regulations and requirements, such as occupant limitations, parking spaces, minimum or maximum stays, prohibited property types, prohibited activities, etc.
14.5. Remit revenue to City no less than monthly.
14.6. Provide City staff access to website portal offering lodging provider registry inquiry and reporting capabilities.
15. Operations Management Services
15.1. Establish and maintain database of City’s short-term rental lodging providers.
15.2. Receive and process tax registrations, tax returns and payments in a timely fashion.
15.3. Provide lodging providers multiple options for submitting registrations, tax returns, payments, or support requests (including via website, email, mail, phone, and fax. Consultant tax specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).
15.4. Remit revenue to City no less than monthly.
15.5. Provide City staff access to website portal offering lodging provider registry inquiry and reporting capabilities.
15.6. Endeavor to ensure accurate filings of returns by consistently monitoring returns and educating lodging providers.
15.7. Provide analysis reports monthly and annually to provide revenue trends and key insights on City lodging providers as mutually agreed upon.
16. Audit Services
16.1. In collaboration with City, on an annual basis, HdL will establish recommended audit metrics, and review and determine lodging providers who merit additional investigation or examination through a rental history audit to determine their compliance with the City’s Transient Occupancy Tax Ordinance consistent with the City’s.
16.2. Lodging providers identified and approved by City for a rental history audit are scheduled for audit. City may elect to conduct a simultaneous code compliance audit of selected providers.
16.3. Consultant will notify selected lodging providers of intent to Audit, including any requirements, records requests, and timeline.
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16.4. Consultant will perform a review of rental history records for the designated audit period for determination of tax compliance.
16.5. Following the review, Consultant will generate an audit compliance report and relevant notifications and provide to City for review and approval.
16.6. Upon City approval, Consultant will notify deficient lodging providers of any findings as well as instructions for payment and appeal processes.
16.7. Consultant will send compliant lodging providers a letter of commendation, thanking them for their cooperation and compliance.
16.8. Nonresponsive lodging providers will be escalated to City following Consultants standard collection process for further enforcement actions.
17. Online Payment Processing – Consultant’s services include PCI compliant payment processing services which supports both credit card and eCheck transactions.
17.1. City Responsibilities
17.1.1. As a condition to its receipt of the Service, City shall execute and deliver any and all applications, agreements, certifications or other documents required by Consultant’s payment processor, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by Consultant’s payment processor. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.
17.1.2. City hereby grants Consultant the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. City represents and warrants that it has the full right and authority to grant these rights.
FEES
18. Operations Management Services
18.1. Fees for performing Identification & Monitoring services with Education, Registration, and Compliance shall be $24,700 per year for standard service.
18.1.1. Optional Add-on Service - Notice of Violation (NOV) Generation shall be a one-time development fee of $3,750 plus a monthly fee of $200.00 for which the services are active.
Modifications to the report templates may result in additional development fees.
18.2. Fees for performing Operations Management Services shall be $17.37 for each processed account, which is any account for which an application or renewal was processed, or active account which was sent a renewal notice.
18.3. Fees for performing Permitting Services shall be $17.37 per processed account, which includes any account for which an application or renewal was processed, or active account which was sent a renewal notice
18.4. Fees for performing Audit Services shall be $450.00 per Audit per Account.
18.5. Fees will be increased as of January 1st of each calendar year with reference to the 12- month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change. For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, - 9 -
if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.
18.6. Fees for any reasonable travel and lodging expenses will be billed at cost and applied to all meetings (including implementation, training, operations and support).
18.7. Fees will be invoiced monthly to City for Services performed during the prior month. City will submit payment for any balance due to Consultant within 30 days of receiving the invoice.
19. Payment Processing – Consultant will configure payment processing services to utilize either a taxpayer funded model (convenience fee) or City funded model, as directed by City. City may switch between these models upon written request to Consultant. Fees for each of these payment processing models are detailed here.
19.1. Taxpayer funded model – City authorizes Consultant to collect each convenience fee from the taxpayer at time of payment.
19.1.1. Credit and debit card processing – 2.9% of transaction amount, minimum of $2.00
19.1.2. ACH/eCheck processing - $2.50 per transaction
19.2. City funded
19.2.1. Credit and debit card processing – 2.9% of transaction amount
19.2.2. ACH/eCheck processing - $0.75 per transaction
19.3. Returned payments/NSF fee – Each occurrence of a card chargeback, returned payment or insufficient funds will incur a fee of $25.00, to be applied to the taxpayers account.
19.4. Consultant reserves the right to review and adjust pricing related to payment processing services on an annual basis. Consultant will communicate any such adjustment to City in writing, with 60 days advance notice. Items that will be considered in the review of fees may include, but are not limited to: regulatory changes, card association rate adjustments, card association category changes, bank/processor dues and assessments, average consumer payment amounts, card type utilization, and costs of service.