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HomeMy WebLinkAboutDavis Farr, LLP - 2018-08-20 AMENDMENT NO. I TO AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND DAVIS FARR, LLP FOR TRANSIENT OCCUPANCY TAX, UTILITY USER TAX AND LEASE CONCESSION AUDIT SERVICES THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "City,"and DAVIS FARR, LLP, a California limited liability partnership, hereinafter referred as "Consultant." WHEREAS, City and Consultant are parties to that certain agreement, dated August 20, 2018, entitled "Professional Services Contract Between the City of Huntington Beach and Davis Farr, LLP for Transient Occupancy Tax, Utility User Tax and Lease Concession Audit Services" which agreement shall hereinafter be referred to as the "Original Agreement;" and City and Consultant wish to amend the Original Agreement to reflect the additional work to be performed by Consultant, and to extend the term of the Original Agreement, NOW, THEREFORE, it is agreed by City and Consultant as follows: 1. TERM The term of the Agreement is extended for one additional year until August 20, 2022. 3. REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. 21-9745r256496 1 IN WITNESS WHEREOF, the parties hereto have aused this Agreement to be executed by and through their authorized officers on u.Srr of to 2021. CONSULTANT, CITY OF HUNTINGTON BEACH, DAVIS FARR, LLP a municipal corporation of the State of California By: 042 n vt" _ INITIATED AND APPROVED: OrIvIt rt �- print name O ITS: (circle one)Chamnan/Presk*mNice President Chief ia er Put"r AND APPROVED AS TO FORM: By: print name ITS: (circle rm Secretary/Chief Financial City Attorney Officer/Asst.Secretary -Treasurer REVIEWED AND APPROVED: City Manager RECEIVED AND FILED: City Clerk COUNTERPART 21-9745n56496 _ IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on -A�/ j n , 2021. CONSULTANT, CITY OF HUNTINGTON BEACH, DAVIS FARR, LLP a municipal corporation of the State of California By: INITIATED AND APPROVED: print name ITS: (circle one)Chairman/President/Vice President C ief Financia i er AND APPROVED AS TO FORM: By: print name ITS: (circle one)Secretary/Chief Financial 'City Attomey Officer/Asst. Secretary-Treasurer REVIEWED AND APPROVED: I ity Manager RECEIVW AND n� :Z City Clerk COUNTERPART 21-974sn5e4% 2 & - ®-J City of Huntington Beach File #: 18-181 MEETING DATE: 8/20/2018 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Gilbert Garcia, Chief Financial Officer Subject: Approve and authorize execution of Professional Services Contract with Davis Farr, LLP, in an amount not to exceed $121,500 for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services Statement of Issue: City Council is requested to approve a three-year professional service contract with Davis Farr, LLP, for Transient Occupancy Tax (TOT), Utility Users Tax (UUT), and Lease Concession Audit Services. Financial Impact: No additional appropriations are requested. Sufficient appropriations are budgeted in the current fiscal year in account 10035205.69365 in the Finance Department to support the FY 18/19 contract value of $44,000. Funds for future years will be budgeted accordingly. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Professional Services Contract Between the City of Huntington Beach and Davis Farr LLP, for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services" in an amount not to exceed $121 ,500. Alternative Action(s): Do not approve the recommendation and direct staff accordingly. Analysis: The City of Huntington Beach currently collects transient occupancy tax revenue from 22 hotels/inns, and utility users tax from 272 utility services providers. In addition, the City receives a percentage of the monthly gross revenues from 21 concessionaires. Below is a summary of the actual revenue the City received from TOT, UUT, and lease concession revenues over the past three fiscal years. City of Huntington Beach Page 1 of 2 Printed on 8/15/2018 54 Dcwered by LegistarTl File #: 18-181 MEETING DATE: 8/20/2018 Transient Lease Fiscal Year Occupancy Tax Utility Users Tax Concessions 2014-15 $ 9,214,736 $ 20,228,931 $ 1,529,912 2015-16 1€0,034,950 19,4£2,113 1,640,150 2016-17 11,363,957 19,302,604 1,472,372 The City posted the Requests for Proposals for Transient Occupancy Tax, Utility Users Tax, and Lease Concession Audit Services on PlanetBids, the City's bid management website. Proposals were received from the following four firms: 1 . Davis Farr, LLP 2. Vavrinek, Trine, Day & Co., LLP 3. Gruber & Associates, CPAs 4. HdL Software, LLC Staff analyzed and reviewed each proposal based on a variety of factors including, but not limited to, the following: 1) Responsiveness to the RFP; 2) Recent experience of the firm in conducting audits of similar size and scope; and, 3) The firm's references. As a result of this comprehensive review, staff is recommending the CPA firm of Davis Farr, LLP, as the most qualified firm to perform the audits of TOT, UUT, and lease concession revenues for the City. The professional services agreement will be for a total of three years, with a total maximum payment amount of$121 ,500 over the three-year period. The following is a summary of Davis Farr, LLP's, cost proposal: Year 1 Year 2 1 Year 3 j Total 44,001 39,10d 38,40d 121 50 Environmental Status: Not Applicable. Strategic Plan Goal: Strengthen economic and financial sustainability Attachment(s): 1. "Professional Services Contract between the City of Huntington Beach and Davis Farr, LLP, for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services" 2. Certificate of Insurance. 3. Rating Sheets. City of Huntington Beach Page 2 of 2 Printed on 8/15/2018 55 powered by Legistar l -20 -20/e City of Huntington Beach File #: 18-181 MEETING DATE: 8/6/2018 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Gilbert Garcia, Chief Financial Officer Subiect: Approve and authorize execution of Professional Services Contract with Davis Farr, LLP in an amount not to exceed $121,500 for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services Statement of Issue: City Council approval is requested to approve a three-year professional service contract with Davis Farr, LLP for Transient Occupancy Tax (TOT), Utility Users Tax (UUT), and Lease Concession Audit Services. Financial Impact: No additional appropriations are requested. Sufficient appropriations are budgeted in the current fiscal year in account 10035205.69365 in the Finance Department to support the FY 18/19 contract value of$44,000. Funds for future years will be budgeted accordingly. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Professional Services Contract Between the City of Huntington Beach and Davis Farr LLP for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services" in an amount not to exceed $121 ,500. Alternative Action(s): Do not approve the recommendation and direct staff accordingly. Analysis: The City of Huntington Beach currently collects transient occupancy tax revenue from 22 hotels/inns and utility users tax from 272 utility services providers. In addition, the City receives a percentage of the monthly gross revenues from 21 concessionaires. Below is a summary of the actual revenue the City received from TOT, UUT, and lease concession revenues over the past three fiscal years. City of Huntington Beach Page 1 of 2 Printed on 8/1/2018 povverebl*Legistar", File #: 18-181 MEETING DATE: 8/6/2018 Transient Lease Fiscal Year ©ccupancyTax Utility Users Tax Concessions 2014-15 $ 9,214,736 $ 20,228,931 $ 1,529,912 2015-16 10,034,950 1-9,482,113 1,640,150 2016-17 11,363,957 19,302,6(A 1,472,372 The City posted the Requests for Proposals for Transient Occupancy Tax, Utility Users Tax, and Lease Concession Audit Services on PlanetBids, the City's bid management website. Proposals were received from the following four firms: 1 . Davis Farr, LLP 2. Vavrinek, Trine, Day & Co., LLP 3. Gruber & Associates, CPAs 4. HdL Software, LLC Staff analyzed and reviewed each proposal based on a variety of factors including, but not limited to the following: 1) responsiveness to the RFP; 2) recent experience of the firm in conducting audits of similar size and scope; and, 3) the firm's references. As a result of this comprehensive review, staff is recommending the CPA firm of Davis Farr, LLP as the most qualified firm to perform the audits of TOT, UUT, and lease concession revenues for the City. The professional services agreement will be for a total of three years, with a total maximum payment amount of $121 ,500 over the three-year period. The following is a summary of Davis Farr, LLP's cost proposal: Year 1 Year 2 Year 3 Total 44,00d 39,10d $ 38,40d 5 121 50 Environmental Status: Not Applicable. Strategic Plan Goal: Strengthen economic and financial sustainability Attachment(s): 1 . "Professional Services Contract between the City of Huntington Beach and Davis Farr, LLP for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services" 2. Certificate of Insurance. 3. Rating Sheets. City of Huntington Beach Page 2 of 2 Printed on 8/1/2018 poweret3A Legistar11 ATTACHMENT # 1 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND DAVIS FARR, LLP FOR TRANSIENT OCCUPANCY TAX, UTILITY USER TAX, AND LEASE CONCESSION AUDIT SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and Davis Farr, LLP, a California Limited Liability Partnership, hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to provide Transient Occupancy Tax, Utility User Tax, and Lease Concession audit services; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Jennifer Farr who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 1 of 11 18-6483/180514/MV 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on August 20rh , 2018 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than three (3) years from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed One Hundred Twenty-One Thousand Five Hundred Dollars ($121,500). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 2of11 18-6483/180514/Mv 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars 3 of 11 18-6483/180514/MV ($1,000,000.00) per occurrence and in the aggregate. The above-mentioned insurance shall not contain a self-insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not effect Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: 4ofII 1 8-6483/1 805 1 4/MV A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall 5of11 1 8-6483/1 805 1 4/MV be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or 6of11 1 8-6483/1 805 1 4/MV other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail-return receipt requested: TO CITY: TO CONSULTANT: City of Huntington Beach Davis Farr, LLP ATTN: Sunny Han Jennifer Farr 2000 Main Street 2301 Dupont Drive, Suite 200 Huntington Beach, CA 92648 Irvine, CA 92612 17. CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining 7of11 18-6483/180514/MV covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for 8of11 18-6483/180514/MV CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this 9of11 18-6483/180514/MV Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Council. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. 10of11 18-6483/180514/MV i CONSULTANT, CITY OF HUNTINGTON BEACH, a Davis Farr, LI,P municipal corporatign of the S ate of COMPANY NAME California d' �� - -- %yor By: print name G�ty Clerk ITS: (circle one) .' INITIATED AND APPROVED: AND B} ---_ - Chief Financial Officer print name ITS: (circle one) REVIWainiager OVED: APPROVED ity Attorney c i 11 of 11 1 s-6as3/iso;larnTv PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND DAVIS FARR LLP FOR TRANSIENT OCCUPANCY TAX, UTILITY USER TAX, AND LEASE CONCESSION AUDIT SERVICES Table of Contents 1 Scope of Services.....................................................................................................1 2 City Staff Assistance................................................................................................1 3 Term; Time of Performance.....................................................................................2 4 Compensation..........................................................................................................2 5 Extra Work...............................................................................................................2 6 Method of Payment..................................................................................................2 7 Disposition of Plans, Estimates and Other Documents ...........................................3 8 Hold Harmless .........................................................................................................3 9 Professional Liability Insurance.............................................................................3 10 Certificate of Insurance............................................................................................4 11 Independent Contractor............................................................................................5 12 Termination of Agreement.......................................................................................5 13 Assignment and Delegation......................................................................................6 14 Copyrights/Patents...................................................................................................6 15 City Employees and Officials..................................................................................6 16 Notices.........................................................................................6 17 Consent....................................................................................................................7 18 Modification.............................................................................................................7 19 Section Headings .....................................................................................................7 20 Interpretation of this Agreement..............................................................................7 21 Duplicate Original....................................................................................................8 22 Immigration...............................................................................................................8 23 Legal Services Subcontracting Prohibited................................................................8 24 Attorney's Fees..........................................................................................................9 25 Survival.....................................................................................................................9 26 Governing Law.........................................................................................................9 27 Signatories.................................................................................................................9 28 Entirety......................................................................................................................9 29 Effective Date.................................................................................10 EXHIBIT "A" City of Huntington Beach PROPOSAL FOR REVENUE TAX AUDIT SERVICES Section E—Methodology TRANSIENT OCCUPANCY TAX AUDITS Our philosophy when performing compliance audits is using a strict interpretation of the City's ordinance when determining compliance and placing the burden of proof on the hotel owner. Prior to the start of audit fieldwork, we will perform the following procedures: 1. Review the City's Municipal Code for Transient Occupancy Taxes. 2. Provide the City with a form letter to notify the hotel of the upcoming audit. 3. Call hotel to schedule the audit. We typically provide a few optional dates for the audit and work with the hotels to find a mutually agreeable audit start date. 4. Send the Hotel an audit request list at least a week prior to the audit start date. 5. Review the results of prior audits for the Hotel to determine if there are areas that require follow up. 6. Discuss any specific concerns the City has with the Hotel. 7. Provide the City with a listing of scheduled audits. Our fieldwork procedures at each Hotel include the following procedures: 8. We will obtain all reports provided by the hotel owner to the City for the period under audit. 9. We will interview the appropriate individuals responsible for recording revenues reported to the City. We will document and walkthrough a typical transaction from billing to collection to recording to deposit, if any. During the process, we will gain an understanding of the specific system reports used to generate reporting to the City and determine what adjustments are made to any system reports or files. We will determine how gross rents and uncollected rents are accounted for in the system. We will evaluate the system for tracking exemptions and complementary rooms. 10. We will determine if reports were submitted to the City on time or penalties were properly calculated if TOT returns were late. 11. We will calculate the mathematically accuracy of the amount due to the City based on the applicable tax rate. 12. We will trace information from the reports provided to the City to hotel reports and accounting records supporting the amounts reported. Page 1 8 COD City of Huntington Beach PROPOSAL FOR REVENUE TAX AUDIT SERVICES 13. We will review the Hotel's reports and financial statements to identify revenues that are not included as taxable for calculation of the tax. We will evaluate the reasonableness of the exclusion. 14. We will select a sample of monthly revenues reported to the City and trace revenues to detailed reports by customer (daily reports). From these detailed reports, we will select a sample of customer folio's to verify that all amounts collected from the customers are reflected in the system reports. 15. For any exemptions noted,we will review a sample of exemptions and trace to evidence that it allowable (e.g. government employee, stay longer than 30 days, etc.). For government employees,this will include obtaining a copy of the government exemption documentation. 16. We will review the procedures that are in place to identify transient and non-transient guests and determine how exemptions and complimentary rooms were documented and reported to the City. 17. We will obtain information about complimentary rooms including whether or not tax was paid on complementary rooms. We will include information about the number of complimentary rooms and estimated value of those rooms in our report. 18. We will conduct an exit meetingwith the hotel management summarizing ourfindings to ensure we answer any questions they have about our findings. We will ask the hotel management to sign an exit meeting summary of the findings. 19. If a misapplication of City ordinances is identified,we will calculate the amount of the deficiency and report back to the City to determine if we should audit a prior year for the hotel that is not in compliance. 20. We will issue an agreed-upon-procedures report in accordance with the standards established by the American Institute of Certified Public Accountants. The report will identify the agreed upon procedures performed, results reached and recommendations. The report will include a schedule of revenue reported, taxes paid and exemptions reported to the City, audited amounts, and amounts due to the City along with penalties, if applicable. 21. We will provide the draft report to the City for review within 30 days of the end of fieldwork. We will finalize the report within 5 days of the City's review and provide a hard copy and electronic version of the final report. 22. After all audits for the year have been completed, we will prepare a bound report of all audits, a summary schedule of findings, and recommendations for improvements to the City's Municipal Code or management of the program, if applicable. I Page 9 City of Huntington Beach PROPOSAL FOR REVENUE TAX AUDIT SERVICES CONCESSIONAIRE AUDITS Prior to the start of audit fieldwork,we will perform the following procedures: 1. Review the agreement between the City and the vendor to develop an understanding of taxable revenue, revenue exempt from the tax, and other credits allowed per the agreement. 2. Provide the City with a form letter to notify the vendor of the upcoming audit. 3. Call the vendor to schedule the audit. 4. Send the vendor an audit request list at least a week prior to the audit start date. 5. Review the results of prior audit for the vendor to determine if there are areas that require follow up. Our fieldwork procedures at each vendor will include the following procedures: 6. We will obtain all reports provided by the vendor to the City for the period under audit. 7. We will interview the appropriate individuals responsible for recording revenues reported to the City. We will document and walkthrough a typical transaction from billing to collection to recording to deposit, if any. During the process, we will gain an understanding of the specific system reports used to generate reporting to the City and determine what adjustments are made to any system reports orfiles.We will determine how gross revenues and exempt revenue are accounted for in the system, 8. We will determine if reports were submitted to the City on time or penalties were properly calculated if returns were late. 9. We will calculate the mathematically accuracy of the amount due to the City based on the applicable agreement. 10. We will trace information from the reports provided to the City to vendor reports and accounting records supporting the amounts reported. 11. We will review the vendor's reports and financial statements to identify revenues that are not included as taxable for calculation of the tax. We will evaluate the reasonableness of the exclusion. 12. If the vendor has a computerized accounting system,we will vouch 100%of revenues reported to the City to the accounting system reports. From the detailed reports,we will select a sample of days and vouch the revenues reported to the individual receipts for those days tested. 13. If the vendor does not have an accounting system, we will select several months and obtain complete support for those months and mathematically vouch the revenues to the support. In some cases,this support is in the form of individual receipts. Based on the errors found in those months, we will extrapolate the results to the entire period. For example, if there is a 10% Page 1 10 City of Huntington Beach PROPOSAL FOR REVENUE TAX AUDIT SERVICES average error rate for the months tested,we will calculate taxes due assuming there was a 10% error for the entire period tested. 14. For any deductions from gross revenues allowed by the agreement, we will vouch a sample of those deductions to support for the amount and determine if the deduction is allowable perthe agreement. 15. For any credits taken by the vendor(for example, construction costs),we will vouch the credits to support and ensure the amount does not exceed the allowable amount per the agreement. 16. We will obtain an understanding of the businesses operated by the vendor and location of those businesses. We will review the vendor's website to determine if there are any online sales and determine if those sales should be subject to the tax. 17. We will conduct an exit meeting with the vendor's management summarizing our findings to ensure we answer any questions they have about our findings. We will ask the vendor to sign an exit meeting summary of the findings. 18. We will issue an agreed-upon-procedures report in accordance with the standards established by the American Institute of Certified Public Accountants. The report will identify the agreed upon procedures performed, results reached and recommendations. The report will include a schedule of revenue reported, taxes paid and exemptions reported to the City, audited amounts, and amounts due to the City along with penalties, if applicable. 19. We will provide the draft report to the City for review within 30 days of the end of fieldwork. We will finalize the report within 5 days of the City's review and provide a hard copy and electronic version of the final report. UTILITY USERS TAX COMPLIANCE Our suggested procedures to monitor and utility users tax is as follows: 1. Each year, we will work with the City's IT staff to obtain a data dump of information about the utility user tax payments. 2. We will evaluate the data using our data mining software to detect possible missed payments and possible underpayments based on the overall seasonal trends. 3. We will provide the City with the results of our data analysis for further follow up and will assist the City with those follow up efforts. 4. We will evaluate the data to identify potentially higher risk utilities (large amount of tax paid, unusual fluctuations in amounts paid, declining amounts paid, history of late payments, etc.) 5. We will search for utility providers within the City to determine if they are paying tax to the City. Page 1 11 City of Huntington Beach PROPOSAL FOR REVENUE TAX AUDIT SERVICES 6. We will review a sample of the gas, electric, and water exemption lists and telecommunication exemption certificates for non-residential customers and identify possible errors. 7. We will prepare a report summarizing our findings. Work Plan The following is our work plan, subject to City review and modification. Mile"sta � � , { 3: �K.. �.Phi , aR Ju � ►y Award of contract Audit notification letters ti4 Schedule audits Mr Planning procedures S, _ Perform audit fieldwork OMF ' Draft reports to City ' Finalize reports I Final summary report Assistance from City Staff To facilitate our audits,we request the City staff provide us with copies of all the TOT returns filed for the period under audit. We also request a listing of payments received from the accounting system for purposes of verifying the amounts paid to the City agree to the amount of the tax return and to assist in calculating penalties when payments are late.We request the City be available for specific questions when unusual situations arise regarding interpretation of the Municipal Code. Page 1 12 i EXHIBIT "B" City of Huntington Beach PROPOSAL FOR REVENUE TAX AUDIT SERVICES Section F—Cost Summary Our proposed fee structure is competitive and indicative of the value we are confident we can deliver. Our fixed fees (inclusive of all costs)for services are as follows: • •, $19,800 $16,100 $16,800 (9 hotels) (7 hotels) (7 hotels) • $19,200 $17,500 $15,600 (8 vendors) (7 vendors) (6 vendors) • •, $5,000 $5,500 $6,000 While it is unlikely that the City of Huntington Beach would request services outside the scope of the Agreed Upon Procedures,our following hourly rates would be utilized for those services: Classification Hourly Rate Partner $200 Manager $150 Senior $110 Staff $95 Page ( 13 ATTACHMENT #2 DAVIFAR-01 MA912705 r� CERTIFICATE OF LIABILITY INSURANCE DATE(MMIDOIYYW)08/07/2018 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER License#OE77964 Cc TAT Suzanne Posada Integro USA Inc.,dba:Integro Insurance Brokers 3620 Birch Street bM No,Ext):(949)419-1644 ac,No):(949)419-1674 Newport Beach,CA 92660 ADDRL S:suzanne.posada@integrogroup.com INSURERS AFFORDING COVERAGE NAIC# INSURER A:Travelers Property Casualty Company of America 25674 INSURED INSURERS:Travelers Casualty Insurance Company of America 19046 Davis Farr,LLP INSURER C:Great Divide Insurance Company 25224 2301 Dupont Drive,Suite#200 INSURER D: Irvine,CA 92612 INSURER E INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. iNSR I TYPE OF INSURANCE ADOL SUER POLICY NUMBER POLICY EFF POLICY EXP LIMITS A X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE S 1,000,000 CLAIMS MADE ❑X OCCUR X 6804J154861 05/21/2018 05/21/2019 DAMAGETO RENTED 300,008 a occu nc $ MED EXP(Any oneperson) $ 5,000 PERSONAL&AOV INJURY $ 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE S 2,000,000 X Ref LOC PRODUCTS-COMPIOP AGG $ 2,000,006 POLICY❑j OTHER: S B COMBINED SINGLE LIMIT 1,000,000 - AUTOMOBILE LIABILITY $ _ ANY AUTO BA4J155058 05121/2018 05/21/2019 BODILY INJURY Per arson $ OWNED SCHEDULED AUTOS ONLY AUTOS EQ BODILY INJURY Per accident $ X AUTOS ONLY X Al1T0.S ONLY (Parr PROacc aR'dentDAMAGE $ A X UMBRELLA LIAe X OCCUR EACH OCCURRENCE 1,000,000 EXCESS LIAB CLAIMS-MADE CUP4J155126 105/21/2018 05/2112019 AGGREGATE $ 1,000,000 DED I X I RETENTIONS 0 $ A WORKERS COMPENSATION X PERLITE OTH- Y t N UB6K048648 0612112018 05/21/2019STAT ER _ AND EMPLOYERS'LIABILITY 1,000,000 ANY PROPRIETORIPARTNERIEXECUTIVE E.L.EACH ACCIDENT $ OFFICERIMEMBER EXCLUDED? NIA 1,000,000 (Mandatory In NH) E.L.DISEASE-EA EMPLOYE $ If yes,describe under 1�QQQ�QQQ DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $ C Professional Liab.- CAB20185202 05/21/2018 0512112019 Ea Claim/Aggregate 5,000,000 C (Claims Made) CAB20185202 05121/2018 05/2112019 Ded:Ea Claim/Agg. 50,000 i DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101,Additional Remarks Schedule,may be attached If more space Is required) Professional Liability(Claims Made)Policy:Retroactive Date:05/15/2015 Certificate holder is additional insured,per the attached form#CG D1 8611 03,to the extent required by written contract,subject to policy terms and conditions.Coverage is primary and non-contributopr gbttYC dtfch� CG DO 37 04 05,to the extent required by written contract,subject to policy terms and conditions. At' t+ By: '^' ;Ci!1AEL E.GATES CERTIFICATE HOLDER CITY A NCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE CI of Huntington Beach THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN City 9 ACCORDANCE WITH THE POLICY PROVISIONS. 2000 Main Street Huntington Beach,CA 92648 AU%Ty7JyH�O/RI�Z�Ea,DyJ REPRESENTATIVE ACORD 25(2016JO3) O 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD j i INSURED: Davis Farr, LLP COMMERCIAL GENERAL LIABILITY POLICY NO.: 6804J154861 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. XTEND ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART GENERAL DESCRIPTION OF COVERAGE— This endorsement broadens coverage. The following listing is a general coverage description only. Limitations and exclusions may apply to these coverages.Read all the PRO- VISIONS of this endorsement carefully to determine rights, duties, and what Is and is not covered. A. Broadened Named Insured I. Injury to Co-Empioyees and Cc-Volunteer B. Damage To Premises Rented To You Extension Workers •Perils of fire, explosion, lightning, smoke, water J. Aircraft Chartered with-Crew • Limit increased to$300,000 K. Non-Owned Watercraft—Increased C. Blanket Waiver of Subrogation from 25 feet to 50 feet D. Blanket Additional Insured—Managers or L. Increased Supplementary Payments Lessors of Premises •Cost for bail bonds increased to$2,500 E. Blanket Additional Insured—Lessor of •Loss of earnings increased to$500 per day leased Equipment M. Knowledge and Notice of Occurrence F. Incidental Medical Malpractice or Offense G. Personal Injury—Assumed by Contract N. Unintentional Omission H. Extension of Coverage—Bodily Injury O. Reasonable Force—Bodily Injury or Property Damage PROVISIONS B. DAMAGE TO PREMISES RENTED TO YOU A. BROADENED NAMED INSURED EXTENSION 1. The Named Insured in Item 1.of the Declara- 1. The last paragraph of COVERAGE A. BOD- tions is as follows: ILY INJURY AND PROPERTY DAMAGE LI- The person or organization named in Item 1. ABILITY (Section I — Coverages) is deleted of the Declarations and any organization, and replaced by the following: other than a partnership or joint venture, over Exclusions c.through n. do not apply to dam- which you maintain ownership or majority in- age to premises while rented to you, or tem- terest on the effective date of the policy, porarify occupied by you with permission of However,coverage for any such organization the owner, caused by: will cease as of the date during the policy pe- riod that you no longer maintain ownership of, a. Fire; or majority interest in,such organization. b. Explosion; 2. WHO IS AN INSURED (Section Il) Item 4.a. c. Lightning; is deleted and replaced by the following: d. Smoke resulting from such fire,explosion, a. Coverage under this provision is afforded or lightning;or only until the 180th day after you acquire e. Water, t or form the organization or the end of the policy period,whichever is earlier, unless A separate limit of insurance applies to this reported in writing to us within 180 days. coverage as described in LIMITS OF INSUR- 3. This Provision A. doss not apply to any per- ANCE(Section 111). son or organization for which coverage is ex- 2. This Insurance does not apply to damage to eluded by endorsement. premises while rented to you, or temporarily CG D1 86 11 03 Copyright, The Travelers Indemnity Company,2003 Page 1 of 5 COMMERCIAL GENERAL LIABILITY occupied by you with permission of the COVERAGE A. BODILY INJURY AND owner,caused by: PROPERTY DAMAGE LIABILITY(Section I— a. Rupture, bursting, or operation of pros- Coverages)is excluded by endorsement, sure relief devices; C. BLANKET WAIVER OFSUBROGATION b. Rupture or bursting due to expansion or We waive any right of recovery we may have swelling of the contents of any building or against any person or organization because of structure, caused by or resulting from wa- payments we make for injury or damage arising ter; out of premises owned or occupied by or rented c. Explosion of steam boilers, steam pipes, or loaned to you; ongoing operations performed steam engines, or steam turbines. by you or on your behalf, done under a contract g with that person or organization; "your work"; or 3. Part 6. of LIMITS OF INSURANCE (Section "your products". We waive this right where you Ill)is deleted and replaced by the following: have agreed to do so as part of a written contract, Subject to 5. above, the Damage To Prem- executed by you prior to loss. ises Rented To You Limit is the most we will D. BLANKET ADDITIONAL INSURED — MANAG- pay under COVERAGE A. 'for damages be- ERS OR LESSORS OF PREMISES cause of"property damage"to any one prem- ises while rented to you, or temporarily occu- WHO IS AN INSURED(Section II)is amended to pied by you with permission of the owner, include as an insured any person or organization caused by fire, explosion, lightning, smoke (referred to below as "additional insured") with resulting from such fire, explosion, or light- whom you have agreed in a written contract, exe- ning, or water. The Damage To Premises cuted prior to loss, to name as an additional in- Rented To You Limit will apply to all damage sured, but only with respect to liability arising out proximately caused by the same "occur- of the ownership, maintenance or use of that part rence", whether such damage results from of any premises n eased to you, subject to the fol- fire, explosion,lightning, smoke resulting from g provisions- such such fire, explosion, or lightning, or water, or 1. Limits of Insurance. The limits of insurance any combination of any of these. afforded to the additional insured shall be the The Damage To Premises Rented To You limits which you agreed to provide, or the lim- Limit will be the higher of: its shown on the Declarations, whichever Is less. s a. $300,000; or 2. The insurance afforded to the additional in- b. The amount shown on the Declarations sured does not apply to: i for Damage To Premises Rented To You Limit. a. Any "occurrence" that takes place after 4. Under DEFINITIONS (Section V), Paragraph you cease to be a tenant in that premises; a. of the definition of "Insured contract" is b. Any premises for which coverage is ex- amended so that it does not include that por- cluded by endorsement; or t tion of the contract for a lease of premises c. Structural alterations, new construction or that indemnifies any person or organization demolition operations performed by or on for damage to premises while rented to you, behalf of such additional insured. 1 or temporarily occupied by you with permis- 3, The insurance afforded to the additional in- sion of the owner,caused by: sured is excess over any valid and collectible a. Fire; insurance available to such additional in- b. Explosion, sured, unless you have agreed in a written contract for this insurance to apply on a pd- c. Lightning; mary or contributory basis. d. Smoke resulting from such fire, explosion, E. BLANKET ADDITIONAL INSURED — LESSOR or lightning;or OF LEASED EQUIPMENT e. Water. WHO IS AN INSURED(Section 11) is amended to 5. This Provision B. does not apply if coverage include as an insured any person or organization for Damage To Premises Rented To You of (referred to below as "additional Insured") with Page 2 of 5 Copyright, The Travelers Indemnity Company, 2003 CG D1 86 11 03 i a { COMMERCIAL GENERAL LIABILITY whom you have agreed in a written contract, exe- for which no remuneration is demanded cuted prior to loss, to name as an additional in- or received. sured,but only with respect to their liability arising 3. Paragraph 2.a.(1)(d) of WHO iS AN IN- out of the maintenance, operation or use by you SURED (Section II) does not apply to any of equipment leased to you by such additional in- registered nurse, licensed practical nurse, sured, subject to the following provisions: emergency medical technician or paramedic 1. Limits of Insurance, The limits of insurance employed by you, but only while performing afforded to the additional insured shall be the the services described in paragraph 2. above limits which you agreed to provide, or the lim- and while acting within the scope of their em- its shown on the Declarations, whichever is pioyment by you. Any"employees"rendering less. "Good Samaritan services"will be deemed to 2. The insurance afforded to the additional in- be acting within the scope of their employ- sured does not apply to: ment by you, a. Any "occurrence" that takes place after 4, The following exclusion is added to paragraph the equipment lease expires;or 2. Exclusions of COVERAGE A. — BODILY INJURY AND PROPERTY DAMAGE LIABIL- b. "Bodily injury" or"property damage" aris- ITY(Section I—Coverages): ing out of the sole negligence of such ad- (This insurance does not apply to:) Liability ad- ditional Insured. arising out of the willful violation of a penal 3. The insurance afforded to the additional in- statute or ordinance relating to the sale of sured Is excess over any valid and collectible pharmaceuticals by or with the knowledge or insurance available to such additional in- consent of the insured. sured, unless you have agreed in a written 5, For the purposes of determining the applica- contract for this insurance to apply on a pri- ble limits of insurance, any act or omission, mary or contributory basis, together with all related acts or omissions in F, INCIDENTAL MEDICAL MALPRACTICE the furnishing of the services described in 1. The definition of "bodily injury" in DEFINi- paragraph 2. above to any one person,will be TIONS (Section V) is amended to Include"in- considered one"occurrence". cidental Medical Malpractice Injury". 6. This Provision F. does not apply If you are in 2, The following definition is added to DEFINI- the business or occupation of providing any of TIONS(Section V): the services described in paragraph 2,above, "Incidental medical malpractice injury' means 7. The insurance provided by this Provision F. bodily injury, mental anguish, sickness or dis- shall be excess over any other valid and col- ease sustained by a person, including death lectible insurance available to the insured, resulting from any of these at any time, aris- whether primary, excess, contingent or on Ing out of the rendering of, or failure to ren- any other basis, except for insurance pur- der,the following services: chased specifically by you to be excess of a. Medical,surgical,dental,laboratory,x-ray this policy. or nursing service or treatment, advice or G. PERSONAL INJURY — ASSUMED BY CON- instruction, or the related furnishing of TRACT food or beverages; 1. The Contractual Liability Exclusion in Part b, The furnishing or dispensing of drugs or 2•, Exclusions of COVERAGE B. PER- medical, dental, or surgical supplies or SONAL AND ADVERTISING INJURY LIABIL- appliances; or iTY (Section I — Coverages) Is deleted and replaced by the following: c. First aid. d. "Good Samaritan services", As used in (This Insurance does not apply to:) this Provision F., "Good Samaritan ser- vices" are those medical services ren- "Advertising injury" for which the insured has dered or provided in an emergency and assumed liability in a contract or agreement. This exclusion does not apply to liability for CG 10186 11 03 Copyright,The Travelers Indemnity Company,2003 Page 3 of 5 COMMERCIAL GENERAL LIABILITY damages that the insured would have in the 3. Subparagraphs 2.a.(1)(a), (b) and (c) and absence of the contract of agreement. 3.a. of WHO IS AN INSURED (Section II) do 2. Subparagraph f. of the definition of "insured not apply to"bodily injury"for which insurance contract" (DEFINITIONS — Section V) is de- is provided by paragraph 1.or 2.above. feted and replaced by the following: J. AIRCRAFT CHARTERED WITH CREW _ f. That part of any other contract or agree- 1. The following is added to the exceptions con- ment pertaining to your business (inciud- tained in the Aircraft, Auto Or Watercraft Ing an indemnification of a municipality in Exclusion in Part 2., Exclusions of COVER- connection with work performed for a AGE A. BODILY INJURY AND PROPERTY municipality)under which you assume the DAMAGE LIABILITY(Section I—Coverages): tort liability of another party to pay for (This exclusion does not apply to:) Aircraft "bodily injury," "property damage"or"per- chartered with crew to any insured. sonal injury" to a third party or organiza- ton. Tort liability means a liability that 2. This Provision J. does not apply If the char- would be Imposed by law in the absence tered aircraft is owned by any insured. of any contract or agreement. 3. The Insurance provided by this Provision J. 3. This Provision G. does not apply if COVER- shall be excess over any other valid and col- AGE B. PERSONAL AND ADVERTISING IN- lectible insurance available to the insured, JURY LIABILITY is excluded by endorse- whether primary, excess, contingent or on ment. any other basis, except for insurance pur- chased specifically by you to be excess of this policy. JURY K. NON-OWNED WATERCRAFT The definition of "bodily injury" (DEFINITIONS — Section V)is deleted and replaced by the follow- 1. The exception contained in Subparagraph (2) of the Aircraft, Auto Or Watercraft Exclu- Ing: "Bodily injury" means bodily injury, mental an- sion in Part 2., Exclusions of COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE gulsh, mental injury, shock, fright, disability, hu- miliation, sickness or disease sustained b per- and (Section I —Coverages) is deleted y a p and replaced by the following: son, including death resulting from any of these at anytime. (2) A watercraft you do not own that is: I. INJURY TO CO-EMPLOYEES AND CO- (a) Fifty feet long or less; and VOLUNTEER WORKERS (b) Not being used to carry persons or 1. Your "employees" are insureds with respect property for a charge; to "bodily injury" to a co-"employee" in the 2. This Provision K. applies to any person who, !% course of the co-"employee's"employment by with your expressed or implied consent, either you, or to your"volunteer workers"while per- uses or is responsible for the use of a water- forming duties related to the conduct of your craft. I business, provided that this coverage for your . 3. The insurance provided by this Provision K. "employees" does not apply to acts outside shall be excess over any other valid and col- the scope of their employment by you or while lectible insurance available to the insured, performing duties unrelated to the conduct of whether primary, excess, contingent or on n your business. any other basis, except for insurance pur- 2. Your "volunteer workers" are insureds with chased specifically by you to be excess of respect to "bodily injury" to a co-"volunteer this policy. worker"while performing duties related to the L. INCREASED SUPPLEMENTARY PAYMENTS conduct of your business, or to your"employ- ees" in the course of the "employee's" em- Parts b. and d. of SUPPLEMENTARY PAY- pioyment by you, provided that this coverage MENTS — COVERAGES A AND B (Section I - a for your "volunteer workers" does not apply Coverages)are amended as follows: while performing duties unrelated to the con- 1. In Part b.the amount we will pay for the cost duct of your business. of bail bonds is increased to$2500. j Page 4 of 5 Copyright,The Travelers Indemnity Company, 2003 CG D1 86 1103 i i1 1 3 1 COMMERCIAL GENERAL LIABILITY 2, In Part d. the amount we will pay for loss of which you are required to notify us in writing earnings is Increased to$500 a day. of the abrupt commencement of a discharge, M. KNOWLEDGE AND NOTICE OF OCCUR- release or escape of "pollutants" which RENCE OR OFFENSE causes "bodily Injury" or "property damage" which may otherwise be covered under this 1. The following is added to COMMERCIAL policy. GENERAL LIABILITY CONDITIONS(Section N. UNINTENTIONAL OMISSION IV), paragraph 2.(Duties In The Event of Oc- currence,Offense,Claim or Suit): The following Is added to COMMERCIAL GEN- Notice of an "occurrence" or of an offense ERAL LIABILITY CONDITIONS (Section IV), which may result in a claim under this insur- paragraph 6.(Representations): ance shall be given as soon as practicable af- The unintentional omission of, or unintentional ter knowledge of the "occurrence"or offense error in, any information provided by you shall not has been reported to any insured listed under prejudice your rights under this insurance. How- Paragraph 1. of Section II — Who is An In- ever,this Provision N.does not affect our right to sured or an "employee" (such as an Insur- collect additional premium or to exercise our right ance, loss control or risk manager or adminis- of cancellation or nonrenewal in accordance with trator)designated by you to give such notice, applicable state Insurance laws, codes or reguia- Knowledge by other"employee(s)"of an "oc- tions, currence"or of an offense does not imply that O. REASONABLE FORCE — BODILY INJURY OR you also have such knowledge. PROPERTY DAMAGE 2. Notice shall be deemed prompt if given in The Expected Or Intended Injury Exclusion in good faith as soon as practicable to your Part 2., Exclusions of COVERAGE A. BODILY workers' compensation Insurer. This applies INJURY AND PROPERTY DAMAGE LIABILITY only if you subsequently give notice to us as (Section I —Coverages) is deleted and replaced I soon as practicable after any insured listed by the following: under Paragraph 1.of Section 11—Who Is An (This insurance does not apply to:) Insured or an "employee" (such as an insur- ance,loss control or risk manager or adminis- Expected or Intended Injury or Damage trator) designated by you to give such notice "Bodily injury" or"property damage" expected or discovers that the "occurrence", offense or intended from the standpoint of the Insured. This claim may involve this policy, exclusion does not apply to "bodily injury" or k 3. However,this Provision M.does not apply as "property damage" resulting from the use of rea- respects the specific number of days within sonabie force to protect persons or property. �l I, t x CG D1 86 11 03 Copyright, The Travelers Indemnity Company,2003 Page 5 of 5 INSURED: Davis Farr, LLP COMMERCIAL GENERAL LIABILITY POLICY NO.: 6804J154861 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. OTHER INSURANCE - ADDITIONAL INSUREDS This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART PROVISIONS b. The"personal injury' or"advertising injury'for COMMERCIAL GENERAL LIABILITY CONDITIONS which coverage is sought arises out of an of- (Section IV), Paragraph 4. (Other Insurance), is fense committed amended as follows: subsequent to the signing and execution of that 1. The following is added to Paragraph a. Primary contract or agreement by you. Insurance: 2. The first Subparagraph (2) of Paragraph b. Ex- However,if you specifically agree in a written con- cess Insurance regarding any other primary in- tract or written agreement that the insurance pro- surance available to you is deleted. i vided to an additional insured under this 3. The following is added to Paragraph b. Excess Coverage Part must apply on a primary basis, or Insurance, as an additional subparagraph under a primary and non-contributory basis, this lnsur- Subparagraph(1): ance Is primary to other insurance that is avail- That is available to the insured when the insured able to such additional insured which covers such is added as an additional insured under any other t additional insured as a named insured, and we policy,including any umbrella or excess policy. will not share with that other insurance, provided that: a. The "bodily injury" or "property damage" for which coverage is sought occurs; and ' n n r; i F p u n j � I CG DO 37 04 05 Copyright 2005 The St. Paul Travelers Companies, Inc.All rights reserved. Page 1 of 1 9 'g I { ATTACHMENT #3 PROFESSIONAL SERVICES SERVICE: Financial Auditing Services SERVICE DESCRIPTION: Provide transient occupancy tax, utility users tax, and lease concession audit services for the City. VENDOR: Davis Farr LLP OVERALL RANKING: 1 SUBJECT MATTER EXPERTS/RATERS: 1. Public Works Senior Administrative Analyst 2. Public Works Project Manager 3. Deputy Director of Economic Development I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1,197.5 Davis Farr, LLP—Minimum Qualifications Review Total Weighted Maximum Criteria Score Score Compliance with RFP 120 150 Technical Approach 362.5 375 Qualifications 240 300 Recent experience 220 300 Cost 200 300 References 55 75 Local Vendor(bonus) 0 15 Total 1,197.5 1,500 II. DUE DILIGENCE REVIEW • Interview Ranking: 1 Davis Farr LLP—Summary of Review • Extensive local and California experience with similar audits. Performed over 120 TOT audits and several franchise tax/UUT/concessionaire audits in the last three years. • Successful in finding unreported revenues on a majority of the audits. • Very qualified:served governmental entities for over 40 years. • Methodology included in the proposal is through and clear. • Excellent relationship with City staff. Currently provide revenue audit services to the City for Hotels and Leases and financial audit services. • References from the cities of Irvine, Costa Mesa, Garden Grove, Morgan Hill, and Indio. Davis Farr LLP—Pricing • Pricing of$121,500 is competitive (second lowest of four proposals submitted 188 PROFESSIONAL SERVICES SERVICE: Financial Auditing Services SERVICE DESCRIPTION: Provide transient occupancy tax, utility users tax, and lease concession audit services for the City. VENDOR: Vendor #2 OVERALL RANKING: 2 SUBJECT MATTER EXPERTS/RATERS: 1. Public Works Senior Administrative Analyst 2. Public Works Project Manager 3. Deputy Director of Economic Development I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 965 VENDOR#2—Minimum Qualifications Review Total Weighted Maximum Criteria Score Score Compliance with RFP 95 150 Technical Approach 262.5 375 Qualifications 230 300 Recent experience 190 300 Cost 140 300 References 47.5 75 Local Vendor(bonus) 0 15 Tota I 965 1,500 II. DUE DILIGENCE REVIEW • Interview Ranking: 2 Vendor#2—Summary of Review • Extensive local and California experience with local government audits. • Very qualified: served governmental entities for over 60 years. • Little mention regarding extent of recent relevant audits. • Familiarity with City:financial statement auditors for the City for FY 13114— 15116. • References from the cities of Indian Wells, Rancho Mirage. Fairfield, and Whittier as well as OCTA. Vendor#2—Pricing • Pricing of$181,500 is very high (highest of four proposals submitted CITY OF HUNTINGTON BEACH SUPPLEMENTAL COMMUNICATION FINANCE DEPARTMENT TO: Honorable Mayor and City Council Members FROM: Gilbert Garcia, Chief Financial Officer DATE: August 6, 2018 SUBJECT: SUPPLEMENTAL COMMUNICATION FOR THE AUGUST 6,2018, REGULAR CITY COUNCIL MEETING CONSENT CALENDAR #20. Retracting item number 18-181, "Approving and authorize execution of Professional Services Contract with David Farr, LLP in an amount not to exceed $121,500 for Transient Occupancy Tax, and Lease Concession Audit Services."The Finance Department will bring this Professional Service Contract back to City Council on August 20, 2018. SUPPLEMENTAL COMMUNICATION Mee"Date:Agenda no,r�o �� (lg--a City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 • www.huntingtonbeachca.gov Ffa. —Sol A� Office of the City Clerk ' -Robin Estanislau, City Clerk August 21, 2018 Davis Farr, LLP Attn: Jennifer Farr 2301 Dupont Drive, Suite 200 Irvine, CA 92612 Dear Ms. Farr: Enclosed is a copy of the fully executed "Professional Services Contract between the City of Huntington Beach and Davis Farr, LLP for Transient Occupancy Tax, Utility User Tax, and Lease Concession Audit Services." Sincerely, Robin Estanislau, CIVIC City Clerk RE:ds Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand