HomeMy WebLinkAboutHinderliter, de Llamas and Associates 2020-01-20COU #1920-191
AGREEMENT FOR SALES, USE AND TRANSACTIONS TAX AUDIT AND
INFORMATION SERVICES
This Agreement is made and entered into as of the 20th day of January, 2020 (the "Effective Date")
by and between the CITY OF UKIAH, a municipal corporation hereinafter called ("CITY"), and
HINDERLITER, de LLAMAS AND ASSOCIATES a California Corporation, hereinafter called
("CONTRACTOR").
RECITALS
WHEREAS, sales, use and transactions tax (sometimes collectively referred to herein as
"sales and use tax") revenues can be increased through a system of continuous monitoring,
identification and correction of allocation errors, and
WHEREAS, an effective program of sales and use tax management will improve
identification of economic opportunities; provide for more accurate sales and use tax
forecasting; and assist in related revenue collections; and
WHEREAS, CITY desires the combination of data entry, report preparation and analysis
necessary to effectively manage its sales and use tax base; the recovery of revenues
erroneously allocated to other jurisdictions and allocation pools; and to maximize its financial
and economic planning; and
WHEREAS, CON I R ACTOR has the programs, equipment and personnel required to deliver
the sales and use tax related services referenced herein;
THEREFORE, CITY and CONTRACTOR, for the consideration hereinafter described,
mutually agree as follows:
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II. SERVICES
The CONTRACTOR shall perform the following services (collectively, the "Services"):
A. SALES TAX AND ECONOMIC ANALYSIS SERVICES
1. CONTRACTOR shall establish a special database that identifies the name, address
and quarterly allocations of all sales tax producers within the CITY for the most
current and all quarters back to fiscal year 2012-2013 or earlier, if the CITY has prior
historical sales tax data available on computer readable magnetic media. This
database will be utilized to generate special reports to the CITY on: major sales tax
producers by rank and category, sales tax activity by categories, or business districts,
identification of reporting aberrations, and per capita and outlet comparisons with
regional and statewide sales.
2. CONTRACTOR shall provide updated reports following each calendar quarter
identifying changes in sales by individual businesses, business groups and categories
and by geographic area. These reports may include, without limitation, quarterly
aberrations due to State audits, fund transfers, and receivables along with late or
double payments, and quarterly reconciliation worksheets to assist with budget
forecasting. CONTRACTOR shall meet quarterly with CITY.
3. CONTRACTOR shall additionally provide following each calendar quarter a
summary analysis for the CITY to share with Council Members Chambers of
Commerce, other economic development interest groups and the public that analyze
CITY'S sales tax trends by major groups, and geographic areas without disclosing
confidential information.
4. CONTRACTOR shall make available to CITY staff CONTRACTOR' s web -based
sales tax computer software program containing sellers permit and quarterly
allocation information for all in -city business outlets registered with the Department
of Tax and Fee Administration and updated quarterly. This software shall allow
CITY staff to search businesses by street address, account number, business name,
business type and keyword, arrange data by geographic area, and print out a variety
of reports.
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B. ALLOCATION AUDIT AND RECOVERY SERVICES
1, CONTRACTOR shall conduct initial and nn -going salec, use and transactions tax
audits to identify and correct distribution and allocation errors, and to proactively
affect favorable registration, reporting or formula changes thereby generating
previously unrealized sales, use and transactions tax income for the CITY and/or
recovering misallocated tax from previously properly registered taxpayers. Common
errors that will be monitored and corrected include, but are not limited to:
transposition errors resulting in misallocations; erroneous consolidation of multiple
outlets; formula errors, misreporting of "point of sale" to the wrong location; delays
in reporting new outlets; misallocating use tax payments to the allocation pools or
wrong jurisdiction; and erroneous fund transfers and adjustments.
2. CONTRACTOR shall initiate contacts with state agencies, and sales management
and accounting officials in companies that have businesses where a probability of
error exists to verify whether current tax receipts accurately reflect the local sales
activity. Such contacts will be conducted in a professional and courteous manner.
3. CONTRACTOR shall (i) prepare and submit to the Department of Tax and Fee
Administration information for the purpose of correcting allocation errors that are
identified and (ii) follow-up with individual businesses and the California
Department of Tax and Fee Administration to promote recovery by the CITY of back
or prospective quarterly payments that may be owing.
If during the course of its audit, CONTRACTOR finds businesses located in the
CITY that are properly reporting sales and use tax but have the potential for
modifying their operation to provide an even greater share to the CITY,
CONTRACTOR may so advise CITY and work with those businesses and the CITY
to encourage such changes.
C. DEFICIENCY/ALLOCATION REVIEWS AND RECOVERY
1, CONTRACTOR shall conduct on-going reviews to identify and correct unreported
transactions and tax payments and distribution errors thereby generating previously
unrealized revenue for the CITY. Said reviews shall include:
(i)
Comparison of county -wide local tax allocations to transactions tax for brick
and mortar stores and other cash register -based businesses, where clearly all
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transactions are conducted on-site within the CITY boundaries, and therefore
subject to transactions tax.
(ii) Review of any significant one-time use tax allocations to ensure that there are
corresponding transaction tax payments for taxpayers with nexus within the
CITY boundaries.
(iii) Review of state-wide transactions tax allocations and patterns to identify any
obvious errors and omissions.
(iv) Identification and follow-up with any potentially large purchasers of supplies
and equipment (e.g. hospitals, universities, manufacturing plants, agricultural
operations, refineries) to ensure that their major vendors are properly
reporting corresponding transactions tax payments resulting from the
Measure Y 1/2 cent sales tax ("District taxes").
2. CON1RACTOR will initiate, where the probability of an error exists, contacts with
the appropriate taxpayer management and accounting officials to verify whether
current tax receipts accurately reflect the local sales activity. Such contacts will be
conducted in a professional and courteous manner so as to enhance CITY's relations
with the business community.
3. CON1RACTOR shall prepare and submit to the Department of Tax and Fee
Administration all information necessary to correct any allocation errors and
deficiencies that are identified, and shall follow-up with the individual businesses and
the California Department of Tax and Fee Administration to ensure that all back
quarter payments due the CITY are recovered.
D. DATA BASE MANAGEMENT, REPORTS AND STAFF SUPPORT
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1. CON1RACTOR shall establish a database containing all applicable Department of
Tax and Fee Administration (CDTFA) registration data for each business subject to
District taxes holding a seller's permit account. Said database shall also identify the
quarterly transactions and use tax allocations under each account for the most current
and previous quarters where available.
2. CONTRACTOR shall provide updated reports each quarter identifying changes in
allocation totals by individual businesses, business groups and by categories.
Quarterly aberrations due to State audits, fund transfers, and receivables, along with
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late or double payments, will also be identified. Quarterly reconciliation worksheets
to assist finance officer with budget forecasting will be included.
3. CONTRACTOR shall advise and work with CITY Staff on planning and economic
questions related to maximizing revenues, preparation of revenue projections and
general information on sales, transactions and use tax questions.
4. CONTRACTOR shall make available to CITY the HdL proprietary software
program and District taxes database containing all applicable registration and
quarterly allocation information for CITY business outlets registered with the
Department of Tax and Fee Administration. The database will be updated quarterly.
E. CONSULTING AND OTHER OPTIONAL SERVICES
CONTRACTOR may, from time to time in its sole discretion, upon the CITY' s request in
each instance, consult with CITY staff, including without limitation, regarding (i)
technical questions and other issues related to sales, use and transactions tax; (ii)
utilization of reports to enhance business license collection efforts; and (iii) sales tax
projections for proposed annexations, economic development projects and budget
planning. In addition to the foregoing optional consulting services, upon the CITY's
request in each instance CONTRACTOR may, from time to time in its sole discretion,
perform other optional Services, including without limitation, negotiating/review of tax
sharing agreements, establishing purchasing corporations, and meeting with taxpayers to
encourage self-assessment of use tax.
IIi. CONSIDERATION
A. CONTRACTOR shall provide the sales tax and economic analysis Services described in
Section II -A above for a fee of $350 per month, commencing with the month of the
Effective Date (hereafter referred to as "monthly fee"). The monthly fee shall be invoiced
quarterly in arrears, and shall be paid by CITY no later than 30 days after the invoice date.
The monthly fee shall increase annually following the month of the Effective Date by the
percentage increase in the "CPI" for the preceding twelve-month period. In no event shall
the monthly fee be reduced by this calculation. For purposes of this Agreement, the
"CPI" shall mean the Consumer Price Index - All Urban Consumers for the surrounding
statistical metropolitan area nearest CITY, All Items (1982-84 = 100), as published by the
U.S. Department of Labor, Bureau of Labor Statistics, or, if such index should cease to be
published, any reasonably comparable index selected by CONTRACTOR.
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B. CONTRACTOR shall be further paid 15% of all new and recovered sales, use and
transactions tax revenue received by the CITY as a result, in whole or in part, of the
allocation audit and recovery services described in Section 11-B above (lleleufter referred
to as "audit fee"), including without limitation, any reimbursement or other payment from
any state fund and any point of sale misallocations.
1. The audit fee shall be paid even if CITY assists, works in parallel with, and/or incurs
attorneys' fees or other costs or expenses in connection with any of the relevant
Services. Among other things, the audit fee applies to state fund transfers received
for back quarter reallocations and monies received in the first eight consecutive
reporting quarters following completion of the allocation audit by CONTRACTOR
and confirmation of corrections by the California Department of Tax and Fee
Administration. CITY shall pay audit fees upon CONTRACTOR'S submittal of
evidence of CON"I'RACTOR'S work in support of recovery of subject revenue,
including, without limitation, copies of CDTFA 549-S petition forms of any other
correspondence between CONTRACTOR and the Department of Tax and Fee
Administration or the taxpayer.
2. For any increase in the tax reported by businesses already properly making tax
payments to CITY, it shall be CONTRACTOR's responsibility to support in its
invoices the audit fee attributable, in whole or in part, to CONTRACTOR's Services.
C. CONTRACTOR shall be paid $100 monthly billed quarterly for the transaction district
tax reports for District taxes that we include with the quarterly sales tax analyses.
CONTRACTOR shall be paid 25% of the initial amount of new transactions or use tax
revenue received by the CITY as a result of audit and recovery work performed by
CONTRACTOR (hereafter referred to as "audit fees"). New revenue shall not include
any amounts determined and verified by CITY or CONTRACTOR to be increment
attributable to causes other than CONTRACTOR'S work pursuant to this agreement. In
the event that CONTRACTOR is responsible for an increase in the tax reported by
businesses already properly making tax payments to the CITY, it shall be
CONTRACTOR'S responsibility to separate and support the incremental amount
attributable to its efforts prior to the application of the audit fee. Said audit fees will
apply to state fund transfers received for those specific quarters identified as being
missing and/or deficient following completion of the audit by CONTRACTOR and
confirmation of corrections by the California Department of Tax and Fee Administration
but shall not apply prospectively to any future quarter. CONTRACTOR shall provide
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CITY with an itemized quarterly invoice showing all formula calculations and amounts
due for audit fees.
D. CONTRACTOR shall invoice CITY' other ' Services
for any consulting and ot�ici optional
rendered to CITY in accordance with Section lI-E above based on the following hourly
rates on a monthly or a quarterly basis, at CONTRACTOR's option. All such invoices
shall be payable by CITY no later than 30 days following the invoice date. CITY shall not
be invoiced for any consulting Services totaling less than an hour in any month. The
hourly rates in effect as of the Effective Date are as follows:
Principal $325 per hour
Programmer $295 per hour
Senior Analyst $245 per hour
Analyst $195 per hour
CONTRACTOR may change such hourly rates from time to time upon not less than 30
days' prior written notice to CITY.
E. Any invoices not paid in accordance with the Thirty (30) day payment terms, shall accrue
monthly interest at a rate equivalent to ten percent (10%) per annum until paid.
F. CONTRACTOR unilaterally retains the right to divide any recovery bills in excess of
$25,000 over a one (1) year period (Four (4) quarterly billings).
G. CONTRACTOR shall provide CITY with an itemized quarterly invoice showing all
formula calculations and amounts due for the audit fee (including, without limitation, a
detailed listing of any corrected misallocations), which shall be paid by CITY no later
than 30 days following the invoice date.
IV. CONFIDENTIALITY; OWNERSHIP/USE OF INFORMATION
A. Section 7056 of the State of California Revenue and Taxation Code specifically limits the
disclosure of confidential taxpayer information contained in the records of the California
Department of Tax and Fee Administration. Section 7056 specifies the conditions under
which a CITY may authorize persons other than CITY officers and employees to examine
State Sales and Use Tax records.
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B. The following conditions specified in Section 7056-(b), (1) of the State of California
Revenue and Taxation Code are hereby made part of this Agreement:
1. CONTRACTOR is authorized by this Agreement to examine sales, use or
transactions and use tax records of the Department of Tax and Fee Administration
provided to CITY pursuant to contract under the Bradley -Burns Uniform Sales and
Use Tax Law Revenue and Taxation Code section 7200 et.seq.
2. CON TRACTOR is required to disclose information contained in, or derived from,
those sales, use or transactions and use tax records only to an officer or employee of
the CITY who is authorized by City Council resolution to examine the information.
3. CONTRACTOR is prohibited from performing consulting services for a retailer, as
defined in California Revenue & Taxation Code Section 6015, during the term of this
Agreement.
4. CONTRACTOR is prohibited from retaining the information contained in, or
derived from those sales, use or transactions and use tax records, after this
Agreement has expired. Information obtained by examination of Department of Tax
and Fee Administration records shall be used only for purposes related to collection
of local sales and use tax or for other governmental functions of the CITY as set forth
by resolution adopted pursuant to Section 7056 (b) of the Revenue and Taxation
Code. The resolution shall designate the CONTRACTOR as a person authorized to
examine sales and use tax records and certify that this Agreement meets the
requirements set forth above and in Section 7056 (b), (1) of the Revenue and
Taxation Code.
C. Software Use. CON TRACTOR hereby provides authorization to CITY to access
CONTRACTOR'S Sales Tax website if CITY chooses to subscribe to the software and
reports option. The website shall only be used by authorized CITY staff. No access will
be granted to any third party without explicit written authorization by CONTRACTOR.
CITY shall not sublet, duplicate, modify, decompile, reverse engineer, disassemble, or
attempt to derive the source code of said software. The software use granted hereunder
shall not imply ownership by CITY of said software, or any right of CITY to sell said
software or the use of same, or any right to use said software for the benefit of others.
This software use authorization is not transferable. Upon termination or expiration of
this Agreement, the software use authorization shall expire, and all CITY staff website
logins shall be de -activated.
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D. Proprietary Information. As used herein, the term "proprietary information" means all
information or material that has or could have commercial value or other utility in
CONTRACTOR' s business, including without limitation: CONTRACTOR'S (i)
computer or data processing programs; (ii) data processing applications, routines,
subroutines, techniques or systems; desktop or web -based software; (iii) business
processes; (iv) marketing plans, analysis and strategies; and (v) materials and techniques
used; as well as the terms and conditions of this Agreement. Except as otherwise
required by law, CITY shall hold in confidence and shall not use (except as expressly
authorized by this Agreement) or disclose to any other party any proprietary information
provided, learned of or obtained by CITY in connection with this Agreement. The
obligations imposed by this Section IV -D shall survive any expiration or termination of
this Agreement or otherwise. The terms of this Section IV -D shall not apply to any
information that is public information.
V. CITY MATERIALS AND SUPPORT
CITY shall adopt a resolution in a form acceptable to the California Department of Tax and
Fee Administration and in compliance with Section 7056 of the Revenue and Taxation Code,
authorizing CONTRACTOR to examine the confidential sales tax records of CITY. CITY
further agrees to provide any information or assistance that may readily be available such as
business license records within the CITY and to provide CON TRACTOR with proper
identification for contacting businesses. CITY further agrees to continue CONTRACTOR's
authorization to examine the confidential sales tax records of the CITY by maintaining
CONTRACTOR's name on the CITY resolution or by providing copies of future allocation
reports on computer readable magnetic media until such time as all audit adjustments have
been completed by the California Department of Tax and Fee Administration and any audit
fee owing to CONTRACTOR has been paid.
VI. LICENSE, PERMITS, FEES AND ASSESSMENTS
CONTRACTOR shall obtain such licenses, permits and approvals (collectively the "Permits")
as may be required by law for the performance of the Services. CITY shall assist
CONTRACTOR in obtaining such Permits.
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VII. TERMINATION
This Agreement may be terminated for convenience by either party by giving 30 days' written
notice to the other of such termination and specifying the effective date thereof. Upon the
presentation of such notice, CONTRACTOR may continue to perform Services through the
date of termination. Following termination of this Agreement, CITY shall continue to timely
pay CONTRACTOR's invoices for Services performed and not paid for prior to termination.
Anything to the contrary herein notwithstanding (and without limitation on the foregoing
sentence), CITY shall continue to pay to CONTRACTOR the audit fee for tax payments
received by CITY after termination of this Agreement from (i) state fund transfers for back
quarter reallocations and the first eight consecutive calendar quarters following completion of
the allocation audit by CONTRACTOR and confirmation of corrections by the California
Department of Tax and Fee Administration; and (ii) businesses identified by CONTRACTOR
pursuant to Section III -B-2 above, to the extent such businesses commence or continue to
make increased tax payments during the first 24 months following termination of this
Agreement.
VIII. INDEPENDENT CONTRACTOR
CONTRACTOR shall perform the services hereunder as an independent contractor and shall
furnish such services in its own manner and method, and under no circumstances or
conditions shall any agent, servant, or employee of CONTRACTOR be considered as an
employee of CITY.
IX. COOPERATIVE AGREEMENT
It is intended any other public agency (e.g., city, county, district, public authority, public
agency, municipality, or other political subdivision of California) located in the state of
California shall have an option to procure identical services as set forth in this Agreement. The
City of Ukiah shall incur no responsibility, financial or otherwise, in connection with orders for
services issued by another public agency. The participating public agency shall accept sole
responsibility for securing services or making payments to the vendor.
X. NON -ASSIGNMENT
This Agreement is not assignable either in whole or in part by CONTRACTOR without the
written consent of CITY.
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XI. INSURANCE
Without limiting Consultant's obligations arising under Section X.H. Consultant shall
not begin work under this Agreement until it procures and maintains for the full period of time
allowed by law, surviving the termination of this Agreement insurance against claims for
injuries to persons or damages to property, which may arise from or in connection with its
performance under this Agreement.
1. Minimum Scope of Insurance
Coverage shall be at least as broad as:
a. Insurance Services Office ("ISO) Commercial General Liability Coverage
Form No. CG 20 10 10 01 and Commercial General Liability Coverage — Completed
Operations Form No. CG 20 37 10 01.
b. ISO Form No. CA 0001 (Ed. 1/87) covering Automobile Liability, Code 1 "any
auto" or Code 8, 9 if no owned autos and endorsement CA 0025.
c. Worker's Compensation Insurance as required by the Labor Code of the State
of California and Employers Liability Insurance.
d. Errors and Omissions liability insurance appropriate to the consultant's
profession. Architects' and engineers' coverage is to be endorsed to include contractual
liability.
Minimum Limits of Insurance
Consultant shall maintain limits no less than:
a. General Liability: $1,000,000 combined single limit per occurrence for bodily
injury, personal injury and property damage including operations, products and completed
operations. If Commercial General Liability Insurance or other form with a general aggregate
limit is used, the general aggregate limit shall apply separately to the work performed under
this Agreement, or the aggregate limit shall be twice the prescribed per occurrence limit.
b. Automobile _Liability: $1,000,000 combined single limit per accident for
bodily injury and property damage.
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c. Worker's Compensation and Employers Liability: Worker's compensation
limits as required by the Labor Code of the State of California and Employers Liability limits
of $1,000,000 per accident.
d. Errors and Omissions liability: $1,000,000 per occurrence.
3. Deductibles and Self -Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. At
the option of the City, either the insurer shall reduce or eliminate such deductibles or self-
insured retentions as respects to the City, its officers, officials, employees and volunteers; or
the Consultant shall procure a bond guaranteeing payment of losses and related investigations,
claim administration and defense expenses.
4. Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
a. General Liability and Automobile Liability Coverages
i. The City, it officers, officials, employees and volunteers are to be
covered as additional insureds as respects; liability arising out of activities
performed by or on behalf of the Consultant, products and completed
operations of the Consultant, premises owned, occupied or used by the
Consultant, or automobiles owned, hired or borrowed by the Consultant for the
full period of time allowed by law, surviving the termination of this
Agreement. The coverage shall contain no special limitations on the scope -of -
protection afforded to the City, its officers, officials, employees or volunteers.
ii. The Consultant's insurance coverage shall be primary insurance as
respects to the City, its officers, officials, employees and volunteers. Any
insurance or self-insurance maintained by the City, its officers, officials,
employees or volunteers shall be in excess of the Consultant's insurance and
shall not contribute with it.
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iii. Any failure to comply with reporting provisions of the policies shall not
affect coverage provided to the City, its officers, officials, employees or
volunteers.
iv. The Consultant's insurance shall apply separately to each insured
against whom claim is made or suit is brought, except with respect to the limits
of the insurer's liability.
b. Worker's Compensation and Employers Liability Coverage
The insurer shall agree to waive all rights of subrogation against the City, its
officers, officials, employees and volunteers for losses arising from
Consultant's performance of the work, pursuant to this Agreement.
c. Professional Liability Coverage
If written on a claims -made basis, the retroactivity date shall be the effective
date of this Agreement. The policy period shall extend one year from date of
final invoice.
d. All Coverages
Each Insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or in limits except after thirty (30) days prior written notice by
certified mail, return receipt requested, has been given to the City.
5. Acceptability of Insurers
Insurance is to be placed with admitted California insurers with an A.M. Best's rating of no
less than A- for financial strength, AA for long-term credit rating and AMB -1 for short-term
credit rating.
6. Verification of Coverage
Consultant shall furnish the City with Certificates of Insurance and with original
Endorsements effecting coverage required by this Agreement. The Certificates and
Endorsements for each insurance policy are to be signed by a person authorized by that insurer
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to bind coverage on its behalf. The Certificates and Endorsements are to be on forms
provided or approved by the City. All Certificates and Endorsements are to be received and
approved by the City before Consultant begins the work of this Agreement. The City reserves
thet i_ � of all l:_:__ If
right to require complete, certified copies all requiredinsurance policies, at any time. I
Consultant fails to provide the coverages required herein, the City shall have the right, but not
the obligation, to purchase any or all of them. In that event, after notice to Consultant that
City has paid the premium, the cost of insurance may be deducted from the compensation
otherwise due the contractor under the terms of this Contract.
7. Subcontractors
Consultant shall include all sub -contractors or sub -consultants as insured under its policies or
shall furnish separate certificates and endorsements for each sub -contractor or sub -consultant.
All coverage for sub -contractors or sub -consultants shall be subject to all insurance
requirements set forth in this Section XI.
XII. INDEMNIFICATION
With respect to losses, claims, liens, demands and causes of action arising out of the CITY's
use of the results of CONTRACTOR's services as provided to the City pursuant to this
Agreement, CON TRACTOR hereby agrees to protect, defend, indemnify, and hold the CITY
free and harmless from any and all losses, claims, liens, demands, and causes of action of
every kind and character including, but not limited to, the amounts of judgments , penalties,
interest, court costs, legal fees, and all other expenses incurred by the CITY arising in favor of
any party, including claims, liens, debts, personal injuries, death, or damages to property
(including employees or property of the CITY).
Notwithstanding the foregoing insurance requirements, and in addition thereto,
Consultant agrees, for the full period of time allowed by law, surviving the termination of this
Agreement, to indemnify the City for any claim, cost or liability that arises out of, or pertains
to, or relates to any negligent act or omission or the willful misconduct of Consultant and its
agents in the performance of services under this contract, but this indemnity does not apply to
liability for damages for death or bodily injury to persons, injury to property, or other loss,
arising from the sole negligence, willful misconduct or defects in design by the City, or arising
from the active negligence of the City.
"Indemnify," as used herein includes the expenses of defending against a claim and the
payment of any settlement or judgment arising out of the claim. Defense costs include all
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costs associated with defending the claim, including, but not limited to, the fees of attorneys,
investigators, consultants, experts and expert witnesses, and litigation expenses.
References in this paragraph to City or Consultant, include their officers, employees, agents,
and subcontractors.
Each party to this Agreement agrees to investigate, handle, respond to, provide defense for,
and defend at its sole expense any such claims, demand, or suit for which it has agreed to
indemnify the other party pursuant to this paragraph. Each party also agrees to bear all other
costs and expenses related to its indemnity obligation, even if the claim or claims alleged are
groundless, false, or fraudulent. This provision is not intended to create any cause of action in
favor of any third party against CONTRACTOR or the CITY or to enlarge in any way the
liability of CONTRACTOR or the CITY but is intended solely to provide for indemnification
of each party from liability for damages or injuries to third persons or property arising from
this contract or agreement on the terms set forth in this paragraph.
XIII. IRREPARABLE HARM
CON TRACTOR and CITY each understands and agrees that any breach of this Agreement by
either of them may cause the other party hereto irreparable harm, the amount of which may be
difficult to ascertain, and therefore agrees that such other party shall have the right to apply to
a court of competent jurisdiction for specific performance and/or an order restraining and
enjoining any further breach and for such other relief as such other party shall deem
appropriate. Such right is to be in addition to the remedies otherwise available to such other
party at law or in equity. The parties hereto expressly waive the defense that a remedy in
damages will be adequate and any requirement in an action for specific performance or
injunction hereunder for the posting of a bond.
XIV. DISPUTE RESOLUTION
The Parties agree to make a diligent, good faith attempt to resolve any claim, controversy or
dispute arising out of or relating to this Agreement, or concerning the breach or interpretation
thereof. If a dispute arises between the Parties that cannot be settled after engaging in good
faith negotiations, the parties agree to resolve the dispute pursuant to the following
procedures. Each Party shall designate an authorized representative to negotiate the dispute,
and said representative will attempt to resolve the dispute by any means within their
authority.
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If the issue remains unresolved after thirty (30) days, the Parties will resolve any remaining
dispute through (non-binding) arbitration. The non-binding arbitration process will provide
for the selection by both Parties of a disinterested third person arbitrator within thirty (30)
days. If the Parties cannot agree upon an arbitrator, then a single neutral arbitrator will be
appointed pursuant to Section 1281.6 of the Code of Civil Procedure. The place of the
arbitration shall be in Mendocino County, California. The arbitrator will follow the
substantive laws of the State of California, including rules of evidence, and the arbitrator's
decision will be supported by substantial evidence. The arbitrator will have no power,
authority or jurisdiction to award any punitive or exemplary damages. The award will be
made within six (6) months. If non-binding arbitration does not result in settlement of the
dispute within six (6) months, either Party may pursue other legal remedies for a
determination of the dispute.
This provision is not intended to, nor shall it be construed to, change the time periods for
filing any claim or action under Government Code Sections 900, et seq. This dispute
resolution process is a material condition to this Agreement and must be exhausted as an
administrative remedy prior to either party initiating litigation. By executing this Agreement,
you are agreeing to the dispute resolution process described in this section, and are giving up
any rights you might possess to have the dispute litigated in a court or by jury trial.
CITY (initial)
XV. GOVERNING LAW
CONSULTANT (initial)
This Agieeinenl shall be governed by and consliued in accordance with the laws of the Slate
of California (without regard to its choice of law provisions). If any legal action is necessary
to enforce or interpret this Agreement, the parties agree that such action shall be brought in
the Superior Court for the State of California, County of Mendocino, or the U.S. District
Court for the Northern District of California, Western Division. The parties hereby submit to
the exclusive jurisdiction of such courts and waive any other venue to which either party
might be entitled by domicile or otherwise.
XVI. SEVERABILITY; NO WAIVER
The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of the other provisions of this Agreement, which shall remain in full
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force and effect. If any of the provisions of this Agreement shall be deemed to be
unenforceable by reason of its extent, duration, scope or otherwise, then the parties
contemplate that the court making such determination shall enforce the remaining provisions
of this Agreement, and shall reduce such extent, duration, scope, or other provision and shall
enforce them in their reduced form for all purposes contemplated by this Agreement. No
failure or delay by either party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any right, power or privilege hereunder.
XVII. NOTICES
All notices sent by a party under this Agreement shall be in writing and shall be deemed
properly delivered to the other party as of the date of receipt, if received on a business day
prior to 3:00 PM local time, or otherwise on the next business day after receipt, provided
delivery occurs personally, by courier service, or by U.S. mail to the other party at its address
set forth below, or to such other address as either party may, by written notice, designate to the
other party. Notices to CONTRACTOR shall be sent to HINDERLITER, de LLAMAS and
ASSOCIATES, 120 S. State College Blvd., Suite 200, Brea, CA 92821; and notices to CITY
shall be sent to CITY OF UKIAH, 300 Seminary Avenue, Ukiah, CA 95482.
XVIII. ENTIRE AGREEMENT; ETC.
This Agreement expresses the full and complete understanding of the parties with respect to
the subject matter hereof and supersedes all prior or contemporaneous proposals, agreements,
representations and understandings, whether written or oral, with respect to the subject matter.
This Agreement may not be amended or modified except in writing signed by each of the
parties hereto. This Agreement shall be construed as to its fair meaning and not strictly for or
against either party. The headings hereof are descriptive only and not to be construed in
interpreting the provisions hereof.
XIX. COUNTERPARTS; AUTHORITY TO SIGN
This Agreement may be executed in any number of counterparts, each of which will constitute
an original and all of which, when taken together, will constitute one agreement. Any
signature pages of this Agreement transmitted by facsimile or sent by email in portable
document format (PDF) will have the same legal effect as an original executed signature page.
Each of the persons signing on behalf of a party hereto represents that he or she has the right
and power to execute this Agreement on such party's behalf.
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SIGNATURES ON NEXT PAGE
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date
first above written by their respective officers duly authorized in their behalf.
CITY:
CITY OF UKIAH
Sag angiac•j •, City Manager
Kristine Lawler, City Clerk
CONTRACTOR:
HINDERLITER, DE LLAMAS & ASSOCIATES
A California Corporation
By:
APPROVED AS TO FORM:
David rt, City Attorney
940431.4-6
Andrew Nickerson, President
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