HomeMy WebLinkAbout14 C41450 - HdL - Outsource City Business LicenseCONTRACT NO. C41450
STAFF REPORT
CITY OF PALM DESERT
DEVELOPMENT SERVICES DEPARTMENT
MEETING DATE: May 13, 2021
PREPARED BY: Eric Ceja, Interim Director of Development Services
REQUEST: Ratify the City Manager’s Emergency Declaration to enter into
a Professional Services Agreement (PSA) with Hinderliter De
Llamas and Associates (HdL) to outsource the City’s
Business License functions
Recommendation
By Minute Motion: Ratify the City Managers use of an
emergency declaration to enter into a PSA with HdL for City
business licensing functions.
Strategic Plan
•Economic Development – “Expand and raise awareness of business-
friendly services in order to retain and attract businesses.”
Background
On March 20, 2020, the City Council proclaimed a local emergency in the City in response
to the COVID-19 pandemic and authorized the City Manager to act as Emergency Corps
Commander. One of the authorities granted to the City Manager as Emergency Corps
Commander is to activate pre-established local emergency provisions such as special
purchasing and contracting.
Due to the pandemic and technology challenges the City’s current business licensing
division is 2-3 months behind in processing new and renewal business licensing. This
backlog has created tremendous pressure on the local business community in trying to
obtain PPE loans, health permits, and other licensing. The City Manager executed
a contract for professional services with HdL for business license operations
and management.
HDL will take over all business licensing functions including new applications, renewals,
and will pursue delinquent accounts. The term of this agreement is from May 2021 to May
2022, and is eligible for three (3) one-year term extensions.
The business license platform provided by HdL will include on-line applications,
online renewals and payment processing. The online system will provide a portal
linked within
May 13 , 2021 -Staff Report
HDL Contract Ratification
Page 2 of 2
CONTRACT NO . C41450
the City 's web -site to maintain a seamless customer expe r ience . The Hdl system is
also fulling integrated into the California State Licensing Board and requi red regulatory
State agencies related to the type of business or regulated indust ry .
There are currently two full -time employees entering business licenses . These two
employees will be reallocated within Development Services to the Housing Department
and Code Compliance Division . The Code Compl iance Division in turn will assist with
walk -in customers that need a business license . There will also be a self-serve Kiosk in
the Development Serv ices lobby to assist anyone that comes in and wishes to set up their
account online . Staff recommends ratifying the City Managers use of an
emergency declaration to enter into a PSA with Hdl for the services desc ri bed above .
Fiscal Analysis
The initial cost is estimated to be between $120 ,000 and $135 ,000 which includes the
initial set up and the first year management cost. The actual initial cost w ill be based on
the number of licenses transferred and the annual cost of the services will al s o vary based
on the number of active licenses during that year . The reallocation of staff results in
savings of the cost of one full time employee position as the employee 's reallocation is
filling an existing vacancy paid by the Housing Fund . The other reallocated position will
assist with walk -in traffic and fill in a clerical gap in Code Compliance .
In addition , Hdl offers a suite of other services that are noted in their proposal that
may be of interest to the City and will be considered after the licensing system is
up and running . They include STR admin istration and tax collection and cannabis
compliance and tax collection audit services .
LEGAL REVIEW DEPT. REVIEW FINANCIAL AS SI STANT CITY
REVI EW MANAGER
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Janet M. Moore And y F irest ine
Robert W . Hargreaves E ric Ceja , Deputy Director of Director of Fina nc e A ssis tant City
City Attorney Dev el opmen t Se rvice s Man ag er
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ATTACHMENT : Profess ional Serv ices Agreement with Hdl
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Original on File with City derk's Office
CITY OF PALM DESERT
PROFESSIONAL SERVICES AGREEMENT
Contract No. C41450
1.PARTIES AND DATE.
This Agreement is made and entered into this _30th__ day of __April_, 20_21, by and
between the City of Palm Desert, a municipal corporation organized under the laws of the State
of California with its principal place of business at 73-510 Fred Waring Drive, Palm Desert,
California 92260-2578, County of Riverside, State of California (“City”) Hinderliter De Llamas and
Associates (also known as HdL Companies), with its principal place of business at 120 S. State
College Blvd., Suite 200, Brea, CA 92821 ("Consultant"). City and Consultant are sometimes
individually referred to herein as "Party" and collectively as "Parties."
2.RECITALS.
2.1 Project.
The City is a public agency of the State of California and is in need of professional services
for the following project:
BUSINESS LICENSE ADMINISTRATION
(hereinafter referred to as “the Project”).
2.2 Consultant.
Consultant desires to perform and assume responsibility for the provision of certain
professional services required by the City on the terms and conditions set forth in this Agreement.
Consultant is duly licensed and has the necessary qualifications to provide such services.
3.TERMS.
3.1 Scope of Services and Term.
3.1.1 General Scope of Services. Consultant promises and agrees to furnish to
the City all labor, materials, tools, equipment, services, and incidental and customary work
necessary to fully and adequately supply the services necessary for the Project ("Services"). The
Services are more particularly described in Exhibit "A" attached hereto and incorporated herein
by reference. All Services shall be subject to, and performed in accordance with, this Agreement,
the exhibits attached hereto and incorporated herein by reference, and all applicable local, state
and federal laws, rules and regulations.
3.1.2 Term. The term of this Agreement shall be from April 30, 2021 to April 30,
2022, unless earlier terminated as provided herein. The City shall have the unilateral option, at
its sole discretion, to renew this Agreement automatically for no more than three (3) additional
one-year terms. Consultant shall complete the Services within the term of this Agreement, and
shall meet any other established schedules and deadlines.
3.2 Responsibilities of Consultant.
3.2.1 Independent Contractor; Control and Payment of Subordinates. The
Services shall be performed by Consultant or under its supervision. Consultant will determine the
means, methods and details of performing the Services subject to the requirements of this
Agreement. City retains Consultant on an independent contractor basis and not as an employee.
Any personnel performing the Services shall not be employees of City and shall at all times be
under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and
other amounts due such personnel in connection with their performance of Services under this
CONTRACT NO. C41450
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Agreement and as required by law. Consultant shall be responsible for all reports and obligations
respecting such additional personnel, including, but not limited to: social security taxes, income
tax withholding, unemployment insurance, disability insurance, and workers' compensation
insurance.
3.2.2 Schedule of Services. Consultant shall perform the Services in a prompt
and timely manner in accordance with the Schedule of Services set forth in Exhibit "B" attached
hereto and incorporated herein by reference. Consultant represents that it has the professional
and technical personnel required to perform the Services expeditiously. Upon request of City,
Consultant shall provide a more detailed schedule of anticipated performance to meet the
Schedule of Services.
3.2.3 Conformance to Applicable Requirements. All work prepared by
Consultant shall be subject to the approval of City.
3.2.4 Substitution of Key Personnel. Consultant has represented to City that
certain key personnel will perform and coordinate the Services. Should one or more of such
personnel become unavailable, Consultant may substitute other personnel of at least equal
competence upon written approval of City. In the event that City and Consultant cannot agree as
to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause.
The key personnel for performance of this Agreement are as follows: Connor Duckworth, Client
Advisor.
3.2.5 City's Representative. The City hereby designates Janet Moore, Director
of Finance, or his/her designee, to act as its representative in all matters pertaining to the
administration and performance of this Agreement ("City's Representative"). City's
Representative shall have the power to act on behalf of the City for review and approval of all
products submitted by Consultant but not the authority to enlarge the scope of Services or change
the total compensation due to Consultant under this Agreement. The City Manager shall be
authorized to act on City's behalf and to execute all necessary documents which enlarge the
scope of services or change the Consultant's total compensation subject to the provisions
contained in Section 3.3 of this Agreement. Consultant shall not accept direction or orders from
any person other than the City Manager, City's Representative or his/her designee.
3.2.6 Consultant's Representative. Consultant hereby designates Connor
Duckworth, Client Advisor, or his/her designee, to act as its representative for the performance of
this Agreement ("Consultant's Representative"). Consultant's Representative shall have full
authority to represent and act on behalf of the Consultant for all purposes under this Agreement.
The Consultant's Representative shall supervise and direct the Services, using his/her best skill
and attention, and shall be responsible for all means, methods, techniques, sequences, and
procedures and for the satisfactory coordination of all portions of the Services under this
Agreement.
3.2.7 Coordination of Services. Consultant agrees to work closely with City staff
in the performance of Services and shall be available to City's staff, consultants and other staff at
all reasonable times.
3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all
Services under this Agreement in a skillful and competent manner, consistent with the standards
generally recognized as being employed by professionals in the same discipline in the State of
California. Consultant represents and maintains that it is skilled in the professional calling
necessary to perform the Services. Consultant warrants that all employees and subconsultants
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shall have sufficient skill and experience to perform the Services assigned to them. Consultant
represents that it, its employees and subconsultants have all licenses, permits, qualifications and
approvals of whatever nature that are legally required to perform the Services, and that such
licenses and approvals shall be maintained throughout the term of this Agreement. Consultant
shall perform, at its own cost and expense and without reimbursement from the City, any services
necessary to correct errors or omissions which are caused by the Consultant's failure to comply
with the standard of care provided herein. Any employee of the Consultant or its sub-consultants
who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely
completion of the Project, a threat to the safety of persons or property, or any employee who fails
or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed
from the Project by the Consultant and shall not be re-employed to perform any of the Services
or to work on the Project.
3.2.9 Period of Performance. Consultant shall perform and complete all Services
under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”).
Consultant shall also perform the Services in strict accordance with any completion schedule or
Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately
agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees
that if the Services are not completed within the aforementioned Performance Time and/or
pursuant to any such Performance Milestones developed pursuant to provisions of this
Agreement, it is understood, acknowledged and agreed that the City will suffer damage.
3.2.10 Laws and Regulations; Employee/Labor Certification. Consultant shall
keep itself fully informed of and in compliance with all local, state and federal laws, rules and
regulations in any manner affecting the performance of the Project or the Services, and shall give
all notices required by law. Consultant shall be liable for all violations of such laws and regulations
in connection with the Services and this Agreement. All violations of such laws and regulations
shall be grounds for the City to terminate the Agreement for cause.
3.2.10.1 Employment Eligibility; Consultant. Consultant certifies that
it fully complies with all requirements and restrictions of state and federal law respecting the
employment of undocumented aliens, including, but not limited to, the Immigration Reform and
Control Act of 1986, as may be amended from time to time and shall require all subconsultants
and sub-subconsultants to comply with the same. Consultant certifies that it has not committed
a violation of any such law within the five (5) years immediately preceding the date of execution
of this Agreement, and shall not violate any such law at any time during the term of the Agreement.
3.2.10.2 Equal Opportunity Employment. Consultant represents that
it is an equal opportunity employer and it shall not discriminate against any subconsultant,
employee or applicant for employment because of race, religion, color, national origin, handicap,
ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities
related to initial employment, upgrading, demotion, transfer, recruitment or recruitment
advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's
Minority Business Enterprise program, Affirmative Action Plan or other related programs or
guidelines currently in effect or hereinafter enacted.
3.2.10.3 Safety. Consultant shall execute and maintain its work so
as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant
shall at all times be in compliance with all applicable local, state and federal laws, rules and
regulations, and shall exercise all necessary precautions for the safety of employees appropriate
to the nature of the work and the conditions under which the work is to be performed.
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3.2.11 Insurance.
3.2.11.1 Minimum Requirements. Without limiting Consultant’s
indemnification of City, and prior to commencement of the Services, Consultant shall obtain,
provide and maintain at its own expense during the term of this Agreement, policies of insurance
of the type and amounts described below and in a form that is satisfactory to City.
(A) General Liability Insurance. Consultant shall maintain
commercial general liability insurance with coverage at least as broad as Insurance Services
Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general
aggregate, for bodily injury, personal injury, and property damage. The policy must include
contractual liability that has not been amended. Any endorsement restricting standard ISO
“insured contract” language will not be accepted.
(B) Automobile Liability Insurance. Consultant shall maintain
automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering
bodily injury and property damage for all activities of the Consultant arising out of or in connection
with Work to be performed under this Agreement, including coverage for any owned, hired, non-
owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each
accident. The City’s Risk Manger may modify this requirement if it is determined that Consultant
will not be utilizing a vehicle in the performance of his/her duties under this Agreement.
(C) Professional Liability (Errors & Omissions) Insurance.
Consultant shall maintain professional liability insurance that covers the Services to be performed
in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the
aggregate. Any policy inception date, continuity date, or retroactive date must be before the
effective date of this Agreement and Consultant agrees to maintain continuous coverage through
a period no less than three years after completion of the Services required by this Agreement.
(D) Workers’ Compensation Insurance. Consultant shall
maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance
(with limits of at least $1,000,000). Consultant shall submit to City, along with the certificate of
insurance, a Waiver of Subrogation endorsement in favor of the City, its officers, agents,
employees, volunteers and representatives.
(E) Umbrella or Excess Liability Insurance. Consultant may opt
to utilize umbrella or excess liability insurance in meeting insurance requirements. In such
circumstances, Consultant shall obtain and maintain an umbrella or excess liability insurance
policy with limits that will provide bodily injury, personal injury and property damage liability
coverage at least as broad as the primary coverages set forth above, including commercial
general liability and employer’s liability. Such policy or policies shall include the following terms
and conditions:
(1) A drop down feature requiring the policy to respond if
any primary insurance that would otherwise have
applied proves to be uncollectible in whole or in part for
any reason;
(2) Pay on behalf of wording as opposed to reimbursement;
(3) Concurrency of effective dates with primary policies; and
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(4) Policies shall “follow form” to the underlying primary
policies.
(5) Insureds under primary policies shall also be insureds
under the umbrella or excess policies.
(G) Cyber Liability Insurance. Consultant shall procure and
maintain Cyber Liability insurance with limits of $1,000,000 per occurrence/loss, which shall
include the following coverage:
(1) Liability arising from the theft, dissemination and/or use
of confidential or personally identifiable information;
including credit monitoring and regulatory f ines arising
from such theft, dissemination or use of the confidential
information.
(2) Network security liability arising from the unauthorized
use of , access to, or tampering with computer systems.
(3) Liability arising from the failure of technology products
(software) required under the contract f or Consultant to
properly perform the services intended.
(4) Electronic Media Liability arising from personal injury,
plagiarism or misappropriation of ideas, domain name
infringement or improper deep-linking or framing, and
inf ringement or violation of intellectual property rig hts.
(5) Liability arising from the failure to render professional
services
If coverage is maintained on a claims-made basis, Consultant shall maintain such coverage for
an additional period of three (3) years following termination of the Agreement.
3.2.11.2 Other Provisions or Requirements.
(A) Proof of Insurance. Consultant shall provide certificates of
insurance to City as evidence of the insurance coverage required herein, along with a waiver of
subrogation endorsement for workers’ compensation. Insurance certificates and endorsements
must be approved by City’s Risk Manager prior to commencement of performance. Current
certification of insurance shall be kept on file with City at all times during the term of this
Agreement. City reserves the right to require complete, certified copies of all required insurance
policies, at any time.
(B) Duration of Coverage. Consultant shall procure and
maintain for the duration of the Agreement insurance against claims for injuries to persons or
damages to property, which may arise from or in connection with the performance of the Services
hereunder by Consultant, his/her agents, representatives, employees or subconsultants.
(C) Primary/Non-Contributing. Coverage provided by
Consultant shall be primary and any insurance or self-insurance procured or maintained by City
shall not be required to contribute with it. The limits of insurance required herein may be satisfied
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by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance
shall contain or be endorsed to contain a provision that such coverage shall also apply on a
primary and non-contributory basis for the benefit of City before the City’s own insurance or self-
insurance shall be called upon to protect it as a named insured.
(D) City’s Rights of Enforcement. In the event any policy of
insurance required under this Agreement does not comply with these specifications, or is
canceled and not replaced, City has the right, but not the duty, to obtain the insurance it deems
necessary and any premium paid by City will be promptly reimbursed by Consultant, or City will
withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City
may terminate this Agreement.
(E) Acceptable Insurers. All insurance policies shall be issued
by an insurance company currently authorized by the Insurance Commissioner to transact
business of insurance or is on the List of Approved Surplus Line Insurers in the State of California,
with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise
approved by the City’s Risk Manager.
(F) Waiver of Subrogation. All insurance coverage maintained
or procured pursuant to this agreement shall be endorsed to waive subrogation against the City,
its elected or appointed officers, agents, officials, employees, volunteers, and representatives or
shall specifically allow Consultant or others providing insurance evidence in compliance with
these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its
own right of recovery against the City, its elected or appointed officers, agents, officials,
employees, volunteers and representatives and shall require similar written express waivers and
insurance clauses from each of its subconsultants.
(G) Enforcement of Contract Provisions (non estoppel).
Consultant acknowledges and agrees that any actual or alleged failure on the part of the City to
inform Consultant of non-compliance with any requirement imposes no additional obligations on
the City nor does it waive any rights hereunder.
(H) Requirements Not Limiting. Requirements of specific
coverage features or limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided by any insurance.
Specific reference to a given coverage feature is for purposes of clarification only as it pertains to
a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher limits than the
minimums shown above, the City requires and shall be entitled to coverage for the higher limits
maintained by the Consultant. Any available insurance proceeds in excess of the specified
minimum limits of insurance and coverage shall be available to the City.
(I) Notice of Cancellation. Consultant agrees to oblige its
insurance agent or broker and insurers to provide City with a thirty (30) day notice of cancellation
(except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for
each required coverage.
(J) Additional Insured Status. General liability, automobile
liability, and if applicable, pollution liability and cyber liability, policies shall provide or be endorsed
to provide that the City and its officers, officials, employees, agents, volunteers and
representatives shall be additional insureds with regard to liability and defense of suits or claims
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arising out of the performance of the Agreement, under such policies. This provision shall also
apply to any excess/umbrella liability policies.
(K)Prohibition of Undisclosed Coverage Limitations. None of
the coverages required herein will be in compliance with these requirements if they include any
limiting endorsement of any kind that has not been first submitted to City and approved of in
writing.
(L)Separation of Insureds. A severability of interests provision
must apply for all additional insureds ensuring that Consultant’s insurance shall apply separately
to each insured against whom claim is made or suit is brought, except with respect to the insurer’s
limits of liability. The policy(ies) shall not contain any cross-liability exclusions.
(M)Pass Through Clause. Consultant agrees to ensure that its
subconsultants, subcontractors, and any other party involved with the Project who is brought onto
or involved in the Project by Consultant, provide the same minimum insurance coverage and
endorsements required of Consultant. Consultant agrees to monitor and review all such coverage
and assumes all responsibility for ensuring that such coverage is provided in conformity with the
requirements of this section. Consultant agrees that upon request, all agreements with
subconsultants, subcontractors, and others engaged in the Project will be submitted to City for
review.
(N)City’s Right to Revise Specifications. The City and the City’s
Risk Manager reserve the right at any time during the term of the Agreement to change the
amounts and types of insurance required by giving the Consultant ninety (90) days advance
written notice of such change. If such change results in additional cost to the Consultant, the City
and Consultant may renegotiate Consultant’s compensation. If the City reduces the insurance
requirements, the change shall go into effect immediately and require no advanced written notice.
(O)Self-Insured Retentions. Any self-insured retentions must
be declared to and approved by City. City reserves the right to require that self-insured retentions
be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to
comply with these specifications unless approved by City.
(P)Timely Notice of Claims. Consultant shall give City prompt
and timely notice of claims made or suits instituted that arise out of or result from Consultant’s
performance under this Agreement, and that involve or may involve coverage under any of the
required liability policies.
(Q)Additional Insurance. Consultant shall also procure and
maintain, at its own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the Services.
3.3 Fees and Payments.
3.3.1 Compensation. Consultant shall receive compensation, including
authorized reimbursements, for all Services rendered under this Agreement at the rates set forth
in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall
not exceed proposed amount included in consultant proposal (Exhibit B) without written approval
of the City Council or City Manager, as applicable.
3.3.2 Payment of Compensation. Consultant shall submit to City monthly
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invoices which provide a detailed description of the Services and hours rendered by Consultant.
City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed
and approved charges. If the City disputes any of Consultant's fees, the City shall give written
notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth
therein. Consultant shall submit its final invoice to City within thirty (30) days from the last date
of provided Services or termination of this Agreement and failure by the Consultant to submit a
timely invoice may constitute a waiver of its right to final payment. Payment shall not constitute
acceptance of any Services completed by Consultant. The making of final payment shall not
constitute a waiver of any claims by the City for any reason whatsoever.
3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any
expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement.
3.3.4 Extra Work. At any time during the term of this Agreement, City may
request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which
is determined by City to be necessary for the proper completion of the Project, but which the
Parties did not reasonably anticipate would be necessary at the execution of this Agreement.
Consultant shall not perform, nor be compensated for, Extra Work without written authorization
from the City.
3.4 Labor Code Requirements.
3.4.1 Prevailing Wages. Consultant is aware of the requirements of California
Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations,
Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing
wage rates and the performance of other requirements on "public works" and "maintenance"
projects. If the Services are being performed as part of an applicable "public works" or
"maintenance" project, as defined by the Prevailing Wage Laws, Consultant agrees to fully comply
with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates
of per diem wages in effect at the commencement of this Agreement. Consultant shall make
copies of the prevailing rates of per diem wages for each craft, classification or type of worker
needed to execute the Services available to interested parties upon request, and shall post copies
at the Consultant's principal place of business and at the project site. It is the intent of the parties
to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the
Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code
sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the
City, its officials, officers, employees, agents, volunteers and representatives, free and harmless
from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing
Wage Laws.
3.4.3 Labor Certification. By its signature hereunder, Consultant certifies that it
is aware of the provisions of Section 3700 of the California Labor Code which require every
employer to be insured against liability for Worker's Compensation or to undertake self-insurance
in accordance with the provisions of that Code, and agrees to comply with such provisions before
commencing the performance of the Services.
3.5 Accounting Records.
3.5.1 Maintenance and Inspection. Consultant shall maintain complete and
accurate records with respect to all costs and expenses incurred under this Agreement. All such
records shall be clearly identifiable. Consultant shall allow a representative of City during normal
business hours to examine, audit, and make transcripts or copies of such records and any other
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documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data,
documents, proceedings, and activities related to the Agreement for a period of three (3) years
from the date of final payment under this Agreement.
3.6 General Provisions.
3.6.1 Termination of Agreement.
3.6.1.1 Grounds for Termination. City may, by written notice to
Consultant, terminate the whole or any part of this Agreement at any time and without cause by
giving written notice to Consultant of such termination, and specifying the effective date thereof,
at least sixty (60) days before the effective date of such termination. Consultant may, by written
notice to City, terminate the whole or any part of this Agreement at any time and without cause
by giving written notice to City of such termination, and specifying the effective date thereof, at
least ninety (90) days before the effective date of such termination. Upon termination, Consultant
shall be compensated only for those Services which have been adequately rendered to City, and
Consultant shall be entitled to no further compensation.
3.6.1.2 Effect of Termination. If this Agreement is terminated as
provided herein, City may require Consultant to provide all finished or unfinished Documents and
Data and other information of any kind prepared by Consultant in connection with the performance
of Services under this Agreement. Consultant shall be required to provide such document and
other information within fifteen (15) days of the request.
3.6.1.3 Additional Services. In the event this Agreement is
terminated in whole or in part as provided herein, City may procure, upon such terms and in such
manner as it may determine appropriate, services similar to those terminated.
3.6.2 Delivery of Notices. All notices permitted or required under this Agreement
shall be given to the respective parties at the following address, or at such other address as the
respective parties may provide in writing for this purpose:
Consultant: HdL Companies
120 S. State College Blvd., Suite 200
Brea, CA 92821
ATTN: George Bonnin, Sales and Marketing
gbonnin@hdlcompanies.com
City: City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
ATTN: Janet Moore, Director of Finance
jmoore@cityofpalmdesert.org
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48)
hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its
applicable address. Actual notice shall be deemed adequate notice on the date actual notice
occurred, regardless of the method of service.
3.6.3 Ownership of Materials and Confidentiality.
Contract No. ____________
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3.6.3.1 Documents & Data; Licensing of Intellectual Property. This
Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or
sublicense any and all copyrights, designs, and other intellectual property embodied in plans,
specifications, studies, drawings, estimates, and other documents or works of authorship fixed in
any tangible medium of expression, including but not limited to, physical drawings or data
magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be
prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall
be and remain the property of City, and shall not be used in whole or in substantial part by
Consultant on other projects without the City’s express written permission. Within thirty (30) days
following the completion, suspension, abandonment or termination of this Agreement, Consultant
shall provide to City reproducible copies of all Documents & Data, in a form and amount required
by City. City reserves the right to select the method of document reproduction and to establish
where the reproduction will be accomplished. The reproduction expense shall be borne by City
at the actual cost of duplication. In the event of a dispute regarding the amount of compensation
to which the Consultant is entitled under the termination provisions of this Agreement, Consultant
shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant
shall have no right to retain or fail to provide to City any such documents pending resolution of
the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a
minimum of fifteen (15) years following completion of the Project, and shall make copies available
to City upon the payment of actual reasonable duplication costs. Before destroying the
Documents & Data following this retention period, Consultant shall make a reasonable effort to
notify City and provide City with the opportunity to obtain the documents.
3.6.3.2 Proprietary Information of Consultant. As used in this
Section, the term “proprietary information” means any information that relates to Consultant’s
computer or data processing programs; data processing applications, routines, subroutines,
techniques or systems; or business processes. City shall hold in confidence and shall not disclose
to any other party any of Consultant’s proprietary information in connection with this Agreement,
or otherwise learned or obtained by City in connection with this Agreement, unless disclosure is
required under federal or state law, including without limitation the Freedom of Information Act or
the Public Records Request Act. Consultant shall retain ownership and rights to all proprietary
information. The obligations imposed by this Section shall survive any expiration or termination
of this Agreement.
3.6.3.3 Subconsultants. Consultant shall require all subconsultants
to agree in writing that City is granted a non-exclusive and perpetual license for any Documents
& Data the subconsultant prepares under this Agreement. Consultant represents and warrants
that Consultant has the legal right to license any and all Documents & Data. Consultant makes
no such representation and warranty in regard to Documents & Data which were prepared by
professionals other than Consultant or its subconsultants, or those provided to Consultant by the
City.
3.6.3.4 Right to Use. City shall not be limited in any way in its use
or reuse of the Documents and Data or any part of them at any time for purposes of this Project
or another project, provided that any such use not within the purposes intended by this Agreement
or on a project other than this Project without employing the services of Consultant shall be at
City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project,
it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless
Consultant and its officers, directors, agents and employees from claims arising out of the
negligent use or re-use of the Documents & Data on such other project. Consultant shall be
responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only
with respect to the condition of the Documents & Data at the time they are provided to the City
Contract No. ____________
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upon completion, suspension, abandonment or termination. Consultant shall not be responsible
or liable for any revisions to the Documents & Data made by any party other than Consultant, a
party for whom the Consultant is legally responsible or liable, or anyone approved by the
Consultant.
3.6.3.5 Indemnification – Documents and Data. Consultant shall
defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers, agents
and representatives free and harmless, pursuant to the indemnification provisions of this
Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name,
trademark, or any other proprietary right of any person or entity in consequence of the use on the
Project by City of the Documents & Data, including any method, process, product, or concept
specified or depicted.
3.6.3.6 Confidentiality. All ideas, memoranda, specifications, plans,
procedures, drawings, descriptions, computer program data, input record data, written
information, and other Documents & Data either created by or provided to Consultant in
connection with the performance of this Agreement shall be held confidential by Consultant. Such
materials shall not, without the prior written consent of City, be used by Consultant for any
purposes other than the performance of the Services. Nor shall such materials be disclosed to
any person or entity not connected with the performance of the Services or the Project. Nothing
furnished to Consultant which is otherwise known to Consultant or is generally known, or has
become known, to the related industry shall be deemed confidential. Consultant shall not use
City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or
the Project in any magazine, trade paper, newspaper, television or radio production or other
similar medium without the prior written consent of City.
3.6.3.7 Confidential Information. The City shall refrain from
releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal
counsel determines that the release of the Proprietary Information is required by the California
Public Records Act or other applicable state or federal law, or order of a court of competent
jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary
Information. Consultant shall have five (5) working days after receipt of the release notice to give
City written notice of Consultant's objection to the City's release of Proprietary Information.
Consultant shall indemnify, defend and hold harmless the City, and its officers, directors,
employees, agents, volunteers and representatives from and against all liability, loss, cost or
expense (including attorney’s fees) arising out of a legal action brought to compel the release of
Proprietary Information. City shall not release the Proprietary Information after receipt of an
objection notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of
legal counsel), and hold City harmless from any legal action brought to compel such release;
and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City
release such information.
3.6.4 Cooperation; Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be necessary,
appropriate or convenient to attain the purposes of this Agreement.
3.6.5 Cooperative Purchasing. City acknowledges and agrees that any other
public agency within the State (e.g., city, county, district, public authority, public agency,
municipality or other political subdivision) may procure services that are substantially similar to
any of the Services set forth in this Agreement, provided that such public agency executes a
separate agreement with Consultant wherein the fees payable for the services rendered to such
public agency are the responsibility of such public agency and not City.
Contract No. ____________
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3.6.6 Indemnification.
3.6.6.1 To the fullest extent permitted by law, Consultant shall
defend (with counsel approved by the City), indemnify and hold the City, its officials, officers,
employees, volunteers, agents, and representatives free and harmless from any and all claims,
demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or
equity, to property or persons, including wrongful death, in any manner arising out of, pertaining
to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials,
officers, employees, subconsultants or agents in connection with the performance of the
Consultant’s Services, the Project or this Agreement, including without limitation the payment of
all expert witness fees, attorney’s fees and other related costs and expenses except such loss or
damage caused by the sole negligence or willful misconduct of the City. Consultant's obligation
to indemnify shall survive expiration or termination of this Agreement and shall not be restricted
to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees,
agents, volunteers or representatives.
3.6.6.2 If Consultant’s obligation to defend, indemnify, and/or hold
harmless arises out of Consultant’s performance as a “design professional” (as that term is
defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code
section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be
limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful
misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of
competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not
exceed the Consultant’s proportionate percentage of fault.
3.6.7 Entire Agreement. This Agreement contains the entire agreement of the
Parties with respect to the subject matter hereof, and supersedes all prior negotiations,
understandings or agreements.
3.6.8 Governing Law. This Agreement shall be governed by the laws of the State
of California. Venue shall be in Riverside County.
3.6.9 Time of Essence. Time is of the essence for each and every provision of
this Agreement.
3.6.10 City's Right to Employ Other Consultants. City reserves right to employ
other consultants in connection with this Project.
3.6.11 Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the Parties.
3.6.12 Assignment; Subcontracting. Consultant shall not assign, sublet, or
transfer this Agreement or any rights under or interest in this Agreement without the written
consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer
without such consent shall be void and without legal effect and shall constitute grounds for
termination. Consultant shall not subcontract any portion of the Services required by this
Agreement, except as expressly stated herein, without prior written approval of City.
Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in
this Agreement.
3.6.13 Construction; References; Captions. Since the Parties or their agents have
participated fully in the preparation of this Agreement, the language of this Agreement shall be
Contract No. ____________
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construed simply, according to its fair meaning, and not strictly for or against any Party. Any term
referencing time, days or period for performance shall be deemed calendar days and not work
days. All references to Consultant include all personnel, employees, agents, and subconsultants
of Consultant, except as otherwise specified in this Agreement. All references to City include its
elected officials, officers, employees, agents, volunteers and representatives except as otherwise
specified in this Agreement. The captions of the various articles and paragraphs are for
convenience and ease of reference only, and do not define, limit, augment, or describe the scope,
content, or intent of this Agreement.
3.6.14 Amendment; Modification. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing and signed by both Parties.
3.6.15 Waiver. No waiver of any default shall constitute a waiver of any other
default or breach, whether of the same or other covenant or condition. No waiver, benefit,
privilege, or service voluntarily given or performed by a Party shall give the other Party any
contractual rights by custom, estoppel, or otherwise.
3.6.16 No Third-Party Beneficiaries. There are no intended third party
beneficiaries of any right or obligation assumed by the Parties.
3.6.17 Invalidity; Severability. If any portion of this Agreement is declared invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue in full force and effect.
3.6.18 Prohibited Interests. Consultant maintains and warrants that it has not
employed nor retained any company or person, other than a bona fide employee working solely
for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not
paid nor has it agreed to pay any company or person, other than a bona fide employee working
solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration
contingent upon or resulting from the award or making of this Agreement. For breach or violation
of this warranty, City shall have the right to rescind this Agreement without liability. For the term
of this Agreement, no member, officer or employee of City, during the term of his or her service
with City, shall have any direct interest in this Agreement, or obtain any present or anticipated
material benefit arising therefrom.
3.6.19 Authority to Enter Agreement. Consultant has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party
warrants that the individuals who have signed this Agreement have the legal power, right, and
authority to make this Agreement and bind each respective Party.
3.6.20 Counterparts. This Agreement may be signed in counterparts, each of
which shall constitute an original.
3.6.21 Survival. All rights and obligations hereunder that by their nature are to
continue after any expiration or termination of this Agreement, including, but not limited to, the
indemnification obligations, shall survive any such expiration or termination.
[SIGNATURES ON NEXT PAGE]
Contract No. ____________
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SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT
BY AND BETWEEN THE CITY OF PALM DESERT
AND HDL COMPANIES
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on the day and year first above written.
CITY OF PALM DESERT
By:
L. TODD HILEMAN
CITY MANAGER
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Best Best & Krieger LLP
City Attorney
REVIEWED BY:
____________________________________
JANET M. MOORE
Director of Finance
HDL COMPANIES
By:
Its:
Printed
Name:
Contract No. ____________
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Notary Acknowledgment
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy,
or validity of that document.
STATE OF CALIFORNIA
COUNTY OF ______________
On , 20___, before me, _______________________________, Notary Public,
personally appeared , who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
I certify under PENALTY OF PERJURY under the laws of
the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature of Notary Public
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the
document and could prevent fraudulent removal and reattachment of this form to another document.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
Individual
Corporate Officer
Title(s) Title or Type of Document
Partner(s) Limited
General Number of Pages
Attorney-In-Fact
Trustee(s)
Guardian/Conservator Date of Document
Other:
Signer is representing:
Name Of Person(s) Or Entity(ies)
Signer(s) Other Than Named Above
CONTRACT NO. C41450
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Agreement 5.1.21 Rev 4.30.21 w comments.docx Exhibit “A”
EXHIBIT "A"
SCOPE OF SERVICES
HDL COMPANIES PROPOSAL
City of Palm
Desert, CA
TAX & FEE ADMINISTRATION SERVICES
April 27, 2021
SUBMITTED BY
HdL Companies
120 S. State College Blvd., Suite 200
Brea, CA 92821
hdlcompanies.com
CONTACT
Connor Duckworth
T: 714-879-5000
E: cduckworth@hdlcompanies.com
Exhibit "A"
Scope of Service
BACKGROUND: HdL Companies was founded in 1983 and since then has helped cities, counties, and
special districts maximize revenues through allocation audits, financial and economic analysis. As local
tax experts, the firm also assists municipalities with Business License Administration Services, Business
License Compliance and Audit Management, TOT Management, Short Term Rentals Discovery and
Administration, Operations Support, Fee and Ordinance Analysis and other analytical services that allow
cities and counties to expand the effectiveness of related internal operations. Most of HdL's key staff
members have extensive local gover nment experience, having previously held positions in city
management, finance, planning, economic development, or revenue collection.
As proposed, HdL will work with the City business license staff to assist with the administration of the
City's business license program utilizing HdL's state of the art cloud -based business license software.
HdL's proposal for business license administration and management includes:
Business License Tax Operations Management
HdL will transfer the City’s existing databases as they relate to business license tax into HdL’s internal
administration tools. HdL will maintain the data and provide access to or copies of data or reports at the City’s
request. While access to online systems will be available for the City to use at their discretion, the City will
not be required to use or maintain any software in house for managing the business license registry. HdL will
work in conjunction with the City during the implementation, and on an ongoing basis, to establish clear primary
roles for the City and HdL to jointly facilitate the program prior to implementation. The City and HdL will
mutually agree on procedures for administering the business tax on an ongoing basis.
Renewal Processing – Send active business license accounts a renewal notice within 45 days of the renewal
period ending. Accounts will receive all applicable forms necessary to complete the renewal process.
New Account Processing – HdL will process any new business license applications and complete the new
account registration process in a timely fashion. HdL will also facilitate intra-city departmental approvals such
as zoning, code compliance, fire inspection, and other regulatory related functions.
Delinquent Account Processing – HdL will endeavor to collect delinquent accounts through a series of City
approved processing methods. This will include at minimum two follow up delinquent notices and up to two
additional contacts via letter, email, or telephone. Delinquent accounts will be collected with full penalties as
allowed by the Municipal code or through current City practices. Accounts that remain delinquent will be
processed through the City approved processes established in HdL’s collections component of the
Compliance Management Program.
On-Line Filing & Payment Processing – HdL registers a City approved domain name which will serve as
the starting point for all web-based activities. This City specific site is designed to look and feel like the City’s
own web pages and ensures a level of continuity between the business community, the City, and HdL.
With HdL Flex File, businesses can choose to file their new business registration as well as renew their license
and make payments via our on-line filing portal. In addition to filing and paying for taxes, businesses can
obtain copies of applications, general support and FAQs, schedule appointments and request copies of their
tax registration all with the click of a button. Our on-line services underscore HdL’s commitment to excellence
in customer service and education by continually improving the registration and payment experience for the
business community.
Payment Posting/Processing – HdL will process mail, online and phone payments in an expedited manner.
The City will process payments received in person at the counter. License accounts will be updated daily with
payment information and revenues received by HdL will be disbursed to the City net HdL’s service fees at an
interval to be determined with the City during project implemen tation. HdL’s payment acceptance process
accepts the following payment types:
✓Check / Money Order / Cashier’s Check
✓E-Check
✓Debit Cards
✓Credit Cards (Visa, Mastercard, Discover, & American Express)
✓Check by Phone
Business Support Center – HdL will provide businesses with multiple support options for registering,
renewing, making payments and for general inquiries. A toll -free number will be provided to businesses in
order to access one of our license specialists Monday-Friday 8:00am to 5:00pm Pacific. Businesses will also
have access to support via, e-mail, fax, and via the Business Support Center On-Line. HdL constantly monitors
quality control points to ensure courteous customer service, minimal hold times under 2 minutes, and the
return of voice messages the same business day.
Business License Tax - Revenue Discovery
Enriched Data Portfolio / Lead Identification – Utilizing data provided by the City, as well as the HdL
Enriched Data Portfolio (EDP), HdL’s team builds an enhanced listing of entities subjected to licensure or
taxation including, but not limited to, those businesses physically located in the City, itinerant businesses, and
entities participating in the sharing economy such as short-term rentals (STRs), drive sharing services and
others. These entities are electronically matched to the existing files of the City using advanced data matching
algorithms, allowing HdL staff to identify which entities are compliant and which entities require follow up.
Field Surveys – Experienced field crews, equipped with the most advanced tools available (mobile
mapping/GPS systems, tablet computers pre-loaded with various City and state-wide databases, etc.) may
canvass commercial areas of the City to develop and enhance the leads identified in the EDP. Field Surveys
provide additional inventories of active businesses as well as to provide on -site verifications of data culled
from other sources.
Exception Resolution – Records are reviewed by our skilled team members, filtering out records that may
lead to erroneous contacts. This extra step allows staff to find additional revenues not otherwise identifiable
through electronic means and assists in reducing potential complaints levied at City staff and management
from pursuit of false positives.
Compliance Communication and Outreach – Upon exception resolution, HdL staff initiates contact with the
identified entities through a series of City approved communication methods. HdL makes every effort to
simplify the process for taxpayers and utilizes a variety of mediums for communication including mail,
telephone, email, and web-site access. Potential non-compliant entities are notified of their options to comply
or dispute their non-compliant status. Initial notification packets include everything a business needs to
become compliant and multiple methods of resolving their accounts.
Business Support Center – HdL operates a business support and service center where the business
community can access expert staff during normal business hours. Businesses calling our toll-free line can
expect minimal hold times along with access to a variety of options which include filing support, payment
options, resolution of specific tax issues and other services designed to reduce the burden of registering and
filing taxes. Our team of experts, including our resident Certified Revenue Officers (CRO), implements a
business friendly and education centric approach to supporting the business community in all aspects of the
management and compliance process.
Business Support Center ~Online – Businesses are encouraged to take advantage of the range of services
available on-line, 24 hours a day, seven days a week. With HdL Flex File, businesses can choose to file their
new business registration as well as make payments via our on-line filing portal. In addition to filing and paying
for taxes, businesses can obtain copies of applications, general support and FAQs, schedule appointments
and request copies of their tax registration all with the click of a button. Our on-line services underscore HdL’s
commitment to excellence in customer service and education by continually improving the registration and
payment experience for the business community.
Document Submission / Processing – Whether the taxpayer chooses to respond by mail, email or our online
filing website, each application submission is reviewed for completion and accuracy prior to processing. Any
additional documentation needed to complete the approval of a submission, such as a home occupation
permit, can also be requested or forwarded to other City departments either as a pre-requisite or as a courtesy
to the business. All submissions are filed and stored electronically and made available to the City via standard
reporting processes or upon request.
Invoicing – Once an application is approved, invoices are forwarded to the taxpayer indicating detailed tax
calculations and balances owed. Taxpayers are provided the opportunity to pay their balances via mail, online,
or over the phone services. Taxpayers will also have continued access to our Business Support Center for
any questions or disputes arising from the invoice process.
Registry Update – Upon collection of all requirements which may include the payment, application and/or
other documentation, HdL will prepare a Registry Update package to include payment as well as copies of all
taxpayer correspondence and other relevant information. Data in the City registry file stored in the HdL Prime
Software Suite is updated daily with packages from the Compliance Management Services. Once completed,
the business will be processed through the standard processes approved through the HdL Operations
Management Component.
Business License Tax – Audits Only
Analysis & Selection – Audit candidates are selected using a variety of selection methodologies developed
by our audit team using decades of business license tax audit experience. Preliminary analysis reports on
each business selected are shared with the City prior to moving through the audit phases.
Audit Notification & Scheduling – Businesses selected by HdL and approved by the City are sent a letter
notifying them of a scheduled Compliance Analysis Audit. Every effort is made to promote a positive
experience for the taxpayer. A detailed description of the requirements and relevant documentation required
for the audit is provided to the business 2 weeks in advance of the proposed audit date. If the business is
unable meet the audit date selected by the City all efforts to reschedule the audit to a more accommodating
date will be made. Businesses are also afforded the opportunity to schedule flexible appointment times by
contacting the Business Support Center or visiting our online support center.
Compliance Analysis & Audit – The HdL audit team will audit the financial records of the business to
determine compliance with business tax regulations. HdL validates taxing variables such as gross receipts
and other relevant information for determining compliance. In addition to identifying underreporting issues, the
HdL Audit Program will also focus on other compliance related issues such as assuring correct classifications,
multiple location allocation, apportionment issues, and identifying business to business relationships that may
create tax liability for 3rd parties.
Audit & Compliance Report – Upon completion of the audit and analysis, and prior to additional actions, a
compliance report will be generated and reviewed with the City. The report will indicate specific results of the
review and recommended future actions. Documentation that substantiates the findings in the report will be
included with the report to assist the City and HdL in determining next step of the process.
Deficiency and Commendation Notification – Upon final review of the audit and analysis report businesses
that are found to have deficiencies will be notified of the findings as well as the payment and appeal processes.
HdL will also work with businesses found to be deficient to explain the current findings and educate taxpayers
on proper future filing procedures so as to prevent future errors and deficiencies. Businesses found to be in
compliance, will be sent a commendation letter thanking them for their compliance.
Invoicing & Collections – Business found to be underreporting are invoiced through the standard City
approved collections process. Balances are collected and remitted along with supporting documentation to
the City through the approved remittance processes.
Transient Occupancy Tax – Operations Management Services
HdL’s transient occupancy tax administration service goes beyond scheduled cyclical audits, providing
compliance monitoring of each return as it is filed while unburdening the City from the day-to-day
administration of the TOT revenue program. Continual monitoring of returns is the optimal way to increase
compliance while maintaining positive relations with the City’s lodging providers. The program is education
focused, ensuring that lodging providers are clear on reporting requirements and methodology. HdL’s tax
administration professionals are available as needed to support both the City’s team and the City’s lodging
providers. The City is kept up to date, with 24x7 online access to HdL’s client portal containing real time access
to registration and filing data, and management reporting. HdL’s TOT administration service incorporates all
of the following:
Tax Registration Database Management – HdL will transfer the City’s existing databases as they relate to
TOT into HdL’s internal administration tools. HdL will maintain the data, software, online filing portal for lodging
providers, and online client portal for the City.
Return Processing – HdL will process TOT filings within 5 days of submission. Accounts will receive all
applicable forms necessary to complete the renewal process.
New Account Processing – HdL will process any new TOT registrations for Lodging Establishments that
change hand or newly offered properties.
Payment Posting / Processing – HdL will process all payments made for new and existing lodging providers.
Accounts will be updated with payment information and revenues will be remitted to the City net HdL’s fees
on no less than a monthly basis.
On-Line Filing & Payment Processing – With input from the City, HdL crafts a customized website and
domain for the City’s taxpayers to submit online forms, returns, and payments along with other customer
support related items.
Compliance Monitoring & Lodging Provider Audits – HdL will ensure accurate filings of TOT returns by
consistently monitoring returns and educating lodging providers on filing requirements. HdL will also provide
cyclical compliance audits as mutually agreed to by the City and HdL, ensuring all providers are audited at
least once every three years.
Reports – HdL’s TOT administration service includes a variety of standard reports demonstrating account
activity and filing trends. During service implementation HdL will work with the City to identify reporting
requirements and frequency/method of delivery and will supplement our standard service with custom reports
as needed to meet the City’s requirements.
Progress Payments – HdL’s TOT administration service is billed monthly based on activity completed during
the prior month. If standalone audits are conducted, they are billed only upon completion of the audit.
Customer Support Center – HdL will provide lodging providers with multiple support options for registering,
filing returns, making payments and for general inquiries. A toll-free number will be provided to businesses in
order to access one of our tax specialists. Lodging providers will also have access to support via e-mail, fax,
and the online Business Support Center.
Annual Audit Plan – During implementation, HdL gathers all the historical data available from the City and
leverages internal data sources and expertise to provide an analysis of all lodging providers, along with a
recommended audit schedule. This allows HdL to work cooperatively with the City to identify the entities that
require attention first. HdL works directly with the City to ensure consensus on the audit schedule for the
program.
Transient Occupancy Tax - Audit Only Service
HdL’s Transient Occupancy Tax Audit Service employs a business-friendly approach which educates hoteliers
in transient occupancy tax regulations and filing procedures, ensures compliance, and maximizes agency
revenues. The process incorporates the following:
Ordinance and Filing Procedure Review – Analysis of Transient Occupancy Tax ordinances and agency
procedures are conducted to identify possible deficiencies or other administration related issues.
Recommendations are made by the audit team for items such as to best practices, form design, and potential
ordinance modifications to insure the most effective policies and controls.
Analysis Report – HdL’s audit team will obtain and conduct a review of the most recent 36 months of transient
occupancy tax filings. In order to verify and augment the data, the audit team will compile a variety of
supplemental information on each property, including number of rooms, occupancy rate, physical condition,
and business dynamics. Data is then further scrutinized in order to identify unusual or suspicious reporting
and/or other variables that indicate cause for further review. Information and findings are documented in the
analysis report for review with the Agency.
Analysis Review – Upon completion of the analysis report, meetings are scheduled with the agency to review
the results as well as identify and recommend lodging providers who require additional investigation or
examination to determine their compliance with the Agency’s ordinance.
Audit Notification & Scheduling – Lodging providers selected by HdL and approved by the Agency for an
audit are sent a letter and scheduled for a Compliance Analysis Audit. Every effort is made to promote a
positive experience for the taxpayer. Lodging providers will be reminded of the documents required for the
audit that were discussed in webinars and previous communications. Lodging providers are afforded the
opportunity to schedule flexible appointment times by contacting the Business Support Center or visiting our
online support center.
Compliance Analysis & Audit – The HdL audit team reviews the books and records of the lodging provider
to determine compliance with transient occupancy tax regulations. HdL validates taxable gross rents,
exemptions, bank statements, daily/monthly summaries, and other relevant information for determining
compliance. Supporting documentation for relevant items such as exemptions will also be documented for
accuracy.
Audit & Compliance Report – Upon completion of the audit and analysis, and prior to additional actions, a
compliance report is generated and reviewed with the Agency. The report indicates specific results of the
reviews and recommended actions. Documentation will be included with the report to assist the Agency and
HdL in determining next steps.
Deficiency and Commendation Notification – Upon final review with the Agency, lodging providers that are
found to have deficiencies are notified of the findings as well as payment and appeal processes. Appointments
are also scheduled to review the findings and educate taxpayers on proper filing procedures designed to
prevent future errors and deficiencies. Lodging providers found to be compliant are sent a commendation
letter thanking them for their cooperation and compliance.
Invoicing & Collections – Lodging providers found to be underreporting are invoiced through the standard
Agency approved collections process identical to the procedures approved for other Programs. Balances are
collected and remitted along with supporting documentation to the Agency through approved remittance
processes.
Short Term Rental - Operations Management Services
The Short-Term Rental (STR) Program provided by HdL takes a unique approach in ensuring compliance
and educating lodging providers, including short term rental hosts (STR Hosts), in transient occupancy tax
regulations and filing procedures, regulatory permits and licensing, and other City specific goals and
objectives. HdL’s program involves a modular, customer service centric approach, that reduces City
administrative costs and provides the City with assurances of future compliance and reporting practices from
the City’s short-term rental lodging industry.
HdL’s modular approach starts with a detailed analysis of STR listing on a variety of published methods,
including Airbnb, Home Away, VRBO, etc. This process creates a full inventory of short-term rentals within
the City’s proscribed geographic boundary, including the full name of the owner and the physical address of
the unit. Each STR is tracked and updated nightly with valuable data that can include items such as number
of nights rented, average occupancy rates, room rates, as well as trend and usage reporting.
Following identification, HdL conducts a targeted education and compliance campaign designed to inform
STR Hosts of their obligations to file and remit taxes and other requisite licenses and permits as may be
needed. Each lodging provider is provided a full overview of the requirements and how to best comply both
in the present and the future. During the registration process, HdL offers a variety of support options to the
community including online filing, file-by-phone, email, and registration via standard mail. HdL tax and license
specialists are available throughout the process to provide support to the STR community and to assist in the
registration process.
Once registered, accounts move into a standard administration process. HdL manages the filing of tax returns
and other prerequisites on a quarterly or monthly basis, depending on City requirements. This includes mailing
of tax returns, processing of payments, customer support, delinquency follow up, and the development and
management of an online portal for registration, filing, payments, and other support related needs.
STR Identification & Monitoring
HdL compiles a list of all actively posted short term rentals available from a wide array of sources. Lists are
compiled and aggregated to accommodate duplicate listings from various sites. During the identification and
monitoring process, HdL will:
•Scan over 20 different rental sites, including global aggregators like HomeAway/VRBO Airbnb,
Turnkey.com, and Booking.com, national aggregators like Vacasa and Turnkey and small, local
property management firms.;
•Match Listings to specific parcels using GIS and property tax assessor data.
•Create comparison reports to determine which properties may already be compliant or
registered and paying taxes.
•Provide visual map of all listings within the City.
•Record listing details such as start date, various sites linked to, other information.
necessary for documenting evidence of STR activity; and
•Continually monitor activity to identify and record new listings and closures to ensure accurate
real-time identification and monitoring.
Education, Registration, and Compliance
Using the list of active STR listings, HdL conducts a series of City approved education -based programs
ranging from mailers to direct phone contacts. Each packet contains all the information necessary to obtain
registration and comply with local requirements. HdL assists STR hosts throughout the program with
information and support with all aspects of becoming compliant. During this program, HdL will:
•Validate listing to ensure proper identification and filter out records that may lead to erroneous
contacts.
•Notify non-compliant entities with a series of education-based packets designed to garner
compliance.
•Provide a support center for assistance with general questions, support, and assistance with filing
and paying returns.
•Provide online portal with links to FAQs, education packets, and support for registering, filing
returns, and making payments online.
•Follow up with non-compliant accounts to obtain registration.
•Work with City to identify additional requirements and ensure collection of data necessary to
enforcement procedures.
•Establish optional implementation items such as amnesty programs, back tax and penalty
provisions, and other pre-registration programs.
G:\rda\Veronica Tapia\Finance\Business License Services\HdL Agreement 5.1.21 Rev 4.30.21 w comments.docx
EXHIBIT "B"
COMPENSATION
Business License Tax & Fee
Administration Services
Business License Operations Management $15.00\processed account + CPI
Hybrid software implementation, hosting, use
and support
$15,000 1st year, $8,000 + CPI per year
thereafter
Business Tax Compliance (Discovery/Audits) 35% of all collected revenue
Business Tax Collections 25% of all collected revenue
Payment processing fees Agency funded - 2.9% credit cards, $0.50
eCheck Convenience fee - 2.9%, minimum $2.00
POTENTIAL FUTURE ADDITIONAL SERVICES
Short Term Rental Operations Management $15.00\monthly filing + CPI
Short Term Rental Permitting $20\permit application +CPI
Short Term Rental Compliance Services 35% of all revenue collected
*Multi-service Discount Opportunity
Eligible if bundled with HdL Sales Tax
Services at time of agreement
1st year hybrid access cost is reduced to
$8,000 (a $7,000 savings)
In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above
may be increased or reduced each year at the time of renewal, but any increase shall not exceed
the Consumer Price Index, All Urban Consumers, Los Angeles-Riverside-Orange Counties.]
CONTRACT NO. C41450