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2000 - HDL Software, LLC - Business License Software and ServicesAgreement for HdL Services City of Rosemead, CA June 3, 2015 AMENDMENT TO AGREEMENT FOR BUSINESS LICENSE SOFTWARE AND SERVICES This Amendment to Agreement for Business License Software and Services is made and entered into as of the 3rd day of June, 2015 ( "Agreement Date "), by and between the City of Rosemead, CA, a municipal corporation, hereinafter referred to as City, and HdL Software, LLC, a California company, hereinafter referred to as HdL. WHEREAS, HdL and City entered into that certain Agreement for Business License Software and Services dated April 8, 1997 ( "Original Agreement "), whereby HdL agreed to provide HdL's Business License Software System and related services; and WHEREAS, HdL and City now desire to amend the Agreementto include HdL's new Prime Business License Software System with Web Module and related services, and provide for the compensation of the new system on the terms and conditions set forth herein; THEREFORE, it is agreed by City and HdL as follows: 1. SCOPE OF SERVICES Specific services to be performed by HdL are as described in Exhibit A. Includes scope, schedule, support, and system requirements. 2. COMPENSATION City agrees to compensate HdL for services under this Agreement as described in Exhibit B. 3. TERM OF AGREEMENT The term of this Agreement shall commence on the above written date (the "Agreement Date ") and shall continue each year thereafter until termination is requested. The process for termination can be found in Exhibit C. 4. GENERAL TERMS AND CONDITIONS The General Terms and Conditions for this Agreement are as described in Exhibit C. S. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class mail postage prepaid, addressed as follows: City City of Rosemead 8838 E. Valley Boulevard Rosemead, CA 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 HdL Software, LLC 1 Agreement for HdL Services City of Rosemead, CA June 3, 2015 6. FULL FORCE AND EFFECT Except as modified pursuant to this amendment, all other terms and conditions of the Original Agreement shall remain in full force and effect. 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 that behalf. CITY OF ROSEME By: Name:le#All d Title: City Manager HdL SOFTWARE, LLC By: /X / "V) Robert Gray President, HdL Software LLC APPROVED A TO FOR City Attorney HdL Software, LLC 2 Agreement for HdL Services City of Rosemead, CA June 2, 2015 EXHIBIT A SCOPE OF SERVICES 1. HdL Prime Business License System 1.1. Data Migration HdL will convert the City's existing data. The City agrees to provide its current data in ASCII delimited file format (or another format agreed upon between HdI- and the City), along with a file layout detailing the content of the file. This data will be required a minimum of two times during the conversion process. The City understands that the second (and any subsequent) data set must be provided in the same format and layout as the first data set. 1.2. Implementation 1.2.1. HdL's responsibilities Project manager - HdL will provide a project manager (PM) to guide the software implementation process. The primary responsibility for the HdL PM is to ensure successful and timely completion of each step of the software implementation schedule. The HdL PM will work closely with the City's designated project manager to define the software implementation schedule, identify City needs and configure the software accordingly, validate the data conversion, provide user training, and generally shepherd the City through the software implementation process. IT support - HdI- will provide a dedicated IT staff member to provide IT support during the software implementation process. This individual will provide the necessary instruction and assistance in order to install the software in the City's computing environment, and will provide any needed technical support. Training- HdL will provide software training as defined in the agreed upon software implementation schedule. For HdL Prime migration, this generally consists of one (1) six hour training session for up to 6 individuals. User manual - HdI- will provide a digital copy of the software user manual. The City may print copies of the manual or distribute digital copies for internal use by City staff. The user manual contains proprietary and confidential information, and as such is bound by the confidentiality portion of this agreement. The user manual may not in any circumstances be distributed to any 3r party or any individual that is not a current City staff member responsible for using or maintaining the software. 1.2.2. City's responsibilities Project manager - The City will designate a staff member to serve as the City's project manager (PM). This individual must be intimately involved in the daily business processes which the software will automate, and be empowered to make, or quickly secure from management, decisions required for the implementation of the software. The primary responsibility for the City PM is to ensure that all City responsibilities during the software implementation are met according to the agreed upon software implementation schedule. The City PM will be instrumental in the successful implementation of the software; working closely with the HdL PM to verify data conversion, review and approve reports, establish business rules, and configure all aspects of the software. IT support - The City wi I I designate an IT staff member to work with Hd L staff throughout the software implementation process. This individual must be knowledgeable about the City's computing environment and be authorized to manage the SQL Server database and install and configure software on the network server and workstations. The primary responsibility of the City's IT designee is to provide data to HdL for conversion (if required), install the SQL Server database, and install the software in the City's computing environment. HdL Software, LLC Agreement for HdL Services City of Rosemead, CA June 2, 2015 EXHIBIT B — COMPENSATION Note: *Data Conversion: Includes up to 30 hrs. of data conversion time. Any work above 30hrs will be charged at $210.00 per hour. * *Link for Payment Processor: HdL has selected Authorize.net and FIS Global as the preferred providers for payment gateway and merchant account services. The Authorize.net and FIS Global solution has proven to be reliable, full featured and cost effective for our clients. If the City wishes to select a different payment gateway, there will be a development cost of approximately $3,500 to establish the link. If requested by the City, HdL will assess the gateway solution and provide an estimate of the development costs. 1. Software License Fee -The license fee includes the use of the software by the specified number of named users, software user manual in digital format, and all standard forms and reports. 2. Software Use Fee - The software use fee for the HcIL Web Module shall begin on the "Go Live" date. The software use fee shall be adjusted at the beginning of each anniversary year following the first year of service. Each software use fee adjustment shall not be less than two percent (2%) or greater than ten percent (10 %) and will include any amounts paid for any City required license or permits. HdL Software, LLC Agreement for HdL Services City of Rosemead, CA June 2, 2015 3. Implementation - The implementation fee covers all efforts involved for installation and configuration of the software. This includes one session of pre - installation and process evaluation, one session of "go live" training, installation support, design and programming of standard forms and reports, and configuration of the software. 4. Travel Expenses - Travel and lodging expenses are billed at cost and apply to all meetings; including process, pre - installation, installation, training, and support. HdL is dedicated to conserving public funds, and ensures any travel costs are indeed required and reasonable. S. Parcel Data - HdL Prime includes comprehensive land maintenance functionality. There arefourwaysto acquire the parcel data. a. If the City is a client for HdL property tax services, the parcel data will be provided at no cost. b. If the City is not a client for HdL property tax services, the parcel data may be purchased from HdL. c. If the City wishes to use any other source of parcel data, HdL can work with the City to create a re- useable import utility. The development of this utility will be billed on a time and material basis. Once the source data has been reviewed, a statement of work will be provided including a cost estimate. 6. Customizing Services The software is a table- driven system and has been developed to meet almost all of the needs of a City. However, should the need occur, HdL is available to provide custom enhancements to the software on a pre- determined time and material basis. No work shall be performed without prior written approval of the City. 7. Payment Schedule —Compensation for the contract amount shall be as follows: a. 1st year costs: • $11,000.00 due at Agreement Execution. • $3,600.00 Annual use fee for the HdL Web Module due on Prime (Go Live). • $202.00 (Approximately) due at next Prime annual use fee renewal b. Years 2, 3 and 4: $436.54 per month until complete payback C. Traveling Expenses. Travel and lodging expenses are billed at cost as they are incurred. Travel expenses shall be due and payable within 30 days of the billing date. d. Annual Software Use Fee. The software use fee will be invoiced each year on the anniversary of the effective date of the Agreement, and shall be due and payable within 30 days of the invoice date. 1. Pricing Adjustments - All pricing listed in this contract will be honored throughout implementation of the project. Any additional /optional services needed after the "go -live" date will be provided using the pricing currently established at the time the service is requested. HdL Software, LLC 5 Agreement for HdL Services City of Rosemead, CA June 2 2015 EXHIBIT C GENERAL TERMS AND COND ITIONS A. OWNERSHIP OF MATERIALS, CONFIDENTIALITY. 1. Software License. HdL hereby provides a license to the City to use HdL's Software. The software shall only be used by the City. The City shall not sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of said software. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. City shall not create any derivative work or product based on or derived from the Software or documentation, or modify the Software or documentation without the prior written consent of HdL. In the event of a breach of this provision (And without limiting HdUs remedies), said modification, derivative work or product based on the Software or documentation is hereby deemed assigned to HdL. Upon termination, the software license shall expire, all copies of the software shall be removed from the City's computers and network and all digital copies deleted or ....otherwise destroyed. 2. City Data. HdL acknowledges that the agency data provided by the City during the course of this Agreement is the property of the City. City authorizes HdL to access, import, process and generate reports from the Agency Data with its various proprietary systems. No confidential or otherwise sensitive information will be released. At the termination of this Agreement the City data will be made available to the City in a format acceptable to both the City and HdL. 3. Proprietary Information As used herein, the term "proprietary information' means any information which relates to HdUs 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 HdL proprietary information in connection with this Agreement, or otherwise learned or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information that is public information. B. LICENSE, PERMITS, FEES AND ASSESSMENTS. HdL shall obtain such licenses, permits and approvals (collectively the "Permits ") as may be required by law for the performance of the services required by this Agreement. City shall assist HdL in obtaining such Permits, and City shall absorb all fees, assessments and taxes which are necessary for any Permits required to be issued by City. If City requires payment for such Permits, the associated costs will be included with the next invoice. C. INSURANCE REQUIREMENTS. HdL shall maintain the policies set out below, and in amounts of coverage not less than those indicated herein. Additionally, where required by City, HdL shall name the City as an additional insured and provide a Certificate of Insurance. 1. Worker's Compensation and Employer's Liability In accordance with applicable law. 2. Comprehensive General Liability- Bodilyinjury liabilityinthe amountof$1, 000,000 for each person in anyone accident, and $1,000,000 for injuries sustained by two or more persons in any one accident. Property damage liability in the amount of $1,000,000 for each accident, and $2,000,000 aggregate for each year of the policy period. 3. Comprehensive Automobile Liability Bodily injury liability coverage of $1,000,000 for each accident. 4. Errors and Omissions -In addition to any other insurance required by this Agreement, HdL shall provide and maintain, during the term of this Agreement, professional liability insurance in the amount of $1,000,000 as evidenced by a Certificate of Insurance. D. TERMINATION. This Agreement may be terminated as follows: 1. Software — Software services may be terminated by either party upon written notice 90 days prior to the end of the established annual billing cycle. Upon termination, the software license shall expire and (a) City will immediately remove the software from the City's computers and network and destroy or erase all copies of the software and any Proprietary Information and confirm destruction of same by signing and returning to HdL an "Affidavit of Destruction" acceptable to HdL and (b) upon City's request, HdL will assist in extracting the City data in a format acceptable to both the City and HdL. 2. Compliance Services - City may activate or discontinue Compliance Services without the need to terminate the agreement by sending a letter of intent to HdL. E. INDEPENDENT CONTRACTOR. HdL shall perform the services hereunder as an independent contractor. No agent, representative or employee of HdL shall be considered an employee of the City. F. NON - ASSIGNMENT. This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. G. GOVERNING LAW. The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. H. INDEMNIFICATION. HdL shall indemnify and hold harmless City and its officers, officials and employees from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage, including attorney fees, which may arise out of the performance of the work described herein, caused in whole or in part byany negligent actor omission of HdL, its officers, agentsand employees under this Agreement. Cityshall indemnify and hold harmless HdL, its officers, agents and employees, from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from City's negligent acts, errors or omissions under this Agreement. HdL Software, LLC A�c..i CERTIFICATE OF LIABILITY INSURANCE DATE(MMIDDNYYY) 5/25/2023 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this Certificate does not confer rights to the Certificate holder in lieu of such endorsement(s). PRODUCER Sawyer 2 Park Plaza, Suite 500 Irvine CA 92614 CONTACT NAME: WS CertificatesWoodruff PHONE Fp/c No: 844-872 -6329 DADOAD �Lss: oerlificates woodruffsa er.cem INSURERS AFFORDING COVERAGE NAIC# INSURER A: Berldey National Insurance Company 38911 5/26/2024 INSURED HOLCOMP41 Hinderliter de Llamas & Associates INSURER B: Hudson Excess Insurance Company 14484 HdL Software, LLC. INSURERC: INSURERD: MED EXP (Any one Person) $15,000 120 S. State College Blvd, Suite 200 Brea, CA 92821 INSURER E: INSURER F : COVERAGES CERTIFICATE NUMBER: 364571731 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR ACCORDANCE WITH THE POLICY PROVISIONS. ADOLTYPEOFINSURANCE M in POUCYNUMBER MWDDYIYEFF Y POLICY EXP LIMIT A X COMMERCMLGENER UABILRY TCP702275410 5/26/2023 5/26/2024 EACH OCCURRENCE $1,000,000 CLAIMS -MADE J OCCUR PDAMAREMISES Ea ocwE TO nence $1,000,000 MED EXP (Any one Person) $15,000 PERSONAL& ADV INJURY $1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERA -AGGREGATE $2,000,000 X POLICY JECOT F—] LOC PRODUCTS - COMP/OP AGG $2,000,000 $ OTHER: A AUTOMOBILE UkEdi TCP702275410 5/26/2023 5/26/2024 COMBINED SINGLE LIMIT $1,000,000 Ea accident BODILY INJURY (Per person) $ X ANY AUTO OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per eccitlem) $ PROPERTYDAMAGEAGE $ Per acrAdimttlent HIRED NON -OWNED AUTOS ONLY AUTOSS ONLYLY A X UMBRELLA UABX OCCUR TCP702275410 5/26/2023 5/26/2024 EACH OCCURRENCE $5,000,000 AGGREGATE $5,000,000 EXCESS LIAS CLAIMS -MADE DEC) I X I RETENTIONS $ WORKERS COMPENSATION AND EMPLOYERS' LMBILITY YIN STATUTE ER ANYPROPRIETORIPARTNERIEXECUTNE EL EACH ACCIDENT $ OFFICERIMEMBEREXCLUDED? ❑ NIA (MarMatory In NH) E.L. DISEASE - EA EMPLOYEE $ If yes, describe ender DESCRIPTION OF OPERATIONS below EL.DISEASE - POLICY LIMIT $ B Professional Liability EET 14167 01 5/26/2023 5/26/2024 Prot Liab Agg $2,000,000 B B Cyber UabiNy Tech E&O EET 1416701 EET 14167 01 5/26/2023 5/26/2023 5/26/2024 5/26/2024 Cyber Limit $2,000,000 Tech E&O Limit $2,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may M attached U more space is required) Retroactive Date for Professional Liability- 2/15/2013. Line Of Coverage: Crime Policy # 82556901 Effective Dale 5/25/2023 - 5/26/2024 Carrier: Federal Insurance Company NAIC # 20281 Crime Limit: $1,000,000 See Attached... CERTIFICATE HOLDER CANCELLATION m 1988.2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Rosemead 8838 E. Valley Blvd Rosemead CA 91770 AUTHORIEDREPRESENTATIVE � ,>•1 , m 1988.2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD AGENCY CUSTOMER ID: HDLCOMP-01 LOC #: A� & ADDITIONAL REMARKS SCHEDULE Page 1 of 1 AGENCY NAMED INSURED Woodruff Sawyer Hindediter de Llamas & Associates HdL Software, I.I.C. 120 S. State College Blvd, Suite 200 POLICY NUMBER Brea, CA 92621 CARRIER NAIC CODE EFFECTIVE DATE: THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: 25 FORM TITLE: CERTIFICATE OF LIABILITY INSURANCE of Cancellation applies with respects General Liability to the extent provided in the attached form. ACORD 101 The ACORD name and logo are registered marks of ACORD CORPORATION. All rights reserved. POLICY NUMBER: TCP702275410 COMMERCIAL GENERAL LIABILITY CG 02 2410 93 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EARLIER NOTICE OF CANCELLATION PROVIDED BY US This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART SCHEDULE Number of Days' Notice 30 (If no entry appears above, information required to complete this Schedule will be shown in the Declarations as applicable to this endorsement.) For any statutorily permitted reason other than nonpayment of premium, the number of days required for notice of cancellation, as provided in paragraph 2. of either the CANCELLATION Common Policy Condition or as amended by an applicable state cancellation endorsement, is increased to the number of days shown in the Schedule above. City of Rosemead 8838 E. Valley Blvd Rosemead CA 91770 CG 02 2410 93 Copyright, Insurance Services Office, Inc., 1992 Page 1 of 1 0 i-arai HDLCO-1 OP ID: DF 1.coizo CERTIFICATE OF LIABILITY INSURANCE 2-03 I DAT11/13DIYY°YI ��- 11/13/14 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policylies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER 626-966-1791 COMA CT _.. Partee Insurance Assoc.,Inc. 626-331-8132 PXONE FAX NoT License #0786033 (NC NQ.EXtL - 584 S.Grand Avenue E-MAIL ADDRESS: Covina, CA 91724-3409 RECEIVED WayneM.ParteeCIC,CWCA CITY OF ROSEMEAD INSURER(S)AFFORDING COVERAGE NAICI INSURER A:Sentinel Insurance Company INSURED HDL Coren B Cone INSURER El:Technology Insurance Company 1340 Valley Vista Dr#200 NOV 132014 INSURER C,Twin City Fire Insurance CO. Diamond Bar, CA91765 CITY CLERK'S OFFICE INSURER D- INSURER E: BY: INSURER F COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ADDL SUER POLICY EFF POLICY EXP ITN TYPE OF INSURANCE ,wc POLICY NUMBER IMMIDMIYYYI (MMIDD/YYYTI LIMITS GENERAL LIABILITY EACH OCCURRENCE s 2,000,000 ]25BAZB3291 11/15/14 11/15/15 DAMAGE (2Ew ED $ 1,000,00C A X COMMERCIAL GENERAL LIABILITY DAMAGE IORENcwrenm CLAIMS-MADE X OCCUR MED EXP(Any one person) $ 10,000 PERSONAL&ADV INJURY s 2,000,000 GENERAL AGGREGATE S 4,000,00C GEN'L AGGREGATE LIMIT APPLIES PEP. PRODUCTS-COMP/OP AGG S 4,000,00C X POLICY ErOT I LOC S PR - COMBINED SINGLE LIMIT 2,000,000 AUTOMOBILE LIABILITY (Ea acaEent) S A ANY AUTO 72513AZB3291 11/15/14 11/15/15 BODILY INJURY(Per person) S ALL OWNED SCHEDULED BODILY INJURY(Per accident) S AUTOS NON.OWNED PROPERTY DAMAGE $ X HIRED AUTOS AUTOS Per accident) - $ X UMBRELLA LIAB X rrrUR EACH OCCURRENCE Y 1,000,000 A EXCESS LIAB CLAIMS-MADE 725BAZB3291 11/15/14 11/15/15 AGGREGATE S 1,000,000 DED X RETENTIONS 10,000 s WORKERS COMPENSATION WC YT TU. 0TH ER AND EMPLOYERS'LIABILITY B ANY PROPRIErORPARTNERIEXECUTIVE YI NIA TWC3438249 11/15114 11/15/15 EL EACH ACCIDENT S 1,000,000 OFFICER/MEMBER EXCLUDED' I (Mandatory in NH) E L DISEASE-EA EMPLOYEES 1,000,000 e JpwIPO rib c OF OPERATIONS below L DISEASE-POLICY LIMIT S 1,000,000 I V y_6l. C ,Professional Liab 72PG0260349 11/16/14 11/15/15 Limit 1,000,000 Claim Made Form RETRO:2/15/03 Ded 25,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEH ICLESAttach ACORD 101.Additional Remars Schedule,I more space is required) a30 day notice of cancellation applies except *10 days for non payment CERTIFICATE HOLDER CANCELLATION CITYROS SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Rosemead 8838 E.Valley Blvd AUTHORIZED REPRESENTATIVE Rosemead,CA 91770 1:41<d.,./1-4,____C\524/17)&74_ ©1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(2010/05) The ACORD name and logo are registered marks of ACORD DB ACORD CERTIFICATE OF LIABILITY INSURANCE 022 DATE 0 12-07-2009 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION PACIFIC PARTNERS INS AGENCY/ PHS ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER, THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 185756 P:(866)467-8730 F:(877)905-0457 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. PO BOX 33015 SAN ANTONIO TX 78265 INSURERS AFFORDING COVERAGE INSURED INSURERA:Hartford Casualty Ins Cc HINDERLITER, DE LLAMAS & ASSOCIATES INSURER B: Propertry, & Casualty Co of Hartford HDL PROPERTIES & HDL SOFTWARE INSURERc:Hartford Ins Cc of the Midwest 1340 VALLEY VISTA DR. STE 201 INSURERD:Twin City Fire Ins Co DIAMOND BAR CA 91765 INSURER E: COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OFINSURANCE POUCYNUMBER POUCYE££ECVAE DATE MM O Y POLICYEXPIRATWN DATE MM DD Y LIMITS GENERAL LIABILITY EACH OCCURRENCE 92, 000, 000 A COMMERCIAL GENERAL LIABILITY 72 SBA TV4596 11/15/09 11/15/10 FIRE DAMAGE (Any one fire) s300,000 CLAIMS MADE O OCCUR MED EXP (Any one person) 510 000 X General Liab PERSONAL &ADV INJURY 92 000, 000 GENERAL AGGREGATE 94, 000, 000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS - COMPIOP AGG $4 0 0 0 , 0 0 0 POLICY PRO X LOC AUT OMOBILELIABILITY COMBINED SINGLE LIMIT $1, 000, 000 B X ANY AUTO 72 UEC J04544 11/15/09 11/15/10 (Ea accitleri ALL OWNED AUTOS BODILY INJURY $ SCHEDULED AUTOS PBr Perapn) X HIRED AUTOS BODILY INJURY 6 X NON-OWNED AUTOS IPer accitlentl PROPERTY DAMAGE It ' IPer attitlentl GA RAGE L1411i AUTO ONLYEA ACCIDENT $ ANY AUTO OTHER THAN EA ACC $ ' AUTO ONLY. AGG $ EXCESS 1JA8ILOY EACH OCCURRENCE $1 , 000 , 000 A X OCCUR EICLAIMSMADE 72 SBA TV4596 11/15/09 11/15/10 AGGREGATE $1, 000, 000 4 DEDUCTIBLE 9 X RETENTION $10, 000 S WORKERS COMPENSATION AND X WCSTATU- OE C EMPLOYERS' LIABILITY 'I 72 WEC TZ079'I 11/15/09 11/15/10 E.L. EACH ACCIDENT 41 000, 000 E.L. DISEASE - EA EMPLOYEE 91, 000, 000 E.L. DISEASEPOLICY LIMIT $1 000,000 D OTHER Professional OOPGO146728 11/15/09 11/15/10 Each Claim $1,000,000 Liability Aggregate $1,000,000 DESCRIPTION OF OPERATIONS/LOCA TIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Those usual to the Insured's Operations. Certificate holder listed as Additional Insured per the Business Liability Coverage Form SS0008, attached to this policy. City of-Rosemead 8838 E. Valley Blvd. Rosemead CA 91770 DULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE 'IRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL DAYS WRITTEN NOTICE (10 DAYS FOR NON-PAYMENT) TO THE CERTIFICATE LDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO LIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR 'RESENTATIVES. ACORD 25-S (7/97) ° ACOHU CUHYUHAI IUN 18BB BUSINESS LIABILITY COVERAGE FORM Form SS 00 08 04 05 0 2005, The Hartford QUICK REFERENCE BUSINESS LIABILITY COVERAGE FORM READ YOUR POLICY CAREFULLY BUSINESS LIABILITY COVERAGE FORM Beginning on Page A. COVERAGES 1 Business Liability 1 Medical Expenses 2 Coverage Extension - Supplementary Payments 2 B. EXCLUSIONS 3 C. WHO IS AN INSURED 10 D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE 14 E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 15 1. Bankruptcy 15 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit 15 3. Financial Responsibility Laws 16 4. Legal Action Against Us 16 5. Separation Of Insureds 16 6. Representations 16 7: Otherlnsurance 16 8. Transfer Of Rights Of Recovery Against Others To Us 17 F. OPTIONAL ADDITIONAL INSURED COVERAGES 18 Additional Insureds 18 G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 20 Form SS 00 08 04 05 ABCDEFGHIJ BUSINESS LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and "our" refer to the, stock insurance company member of The Hartford providing this insurance. The word "insured" means any person or organization qualifying as such under Section C. - Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section G. - Liability And Medical Expenses Definitions. A. COVERAGES 1. BUSINESS LIABILITY COVERAGE (BODILY INJURY, PROPERTY DAMAGE, PERSONAL AND ADVERTISING INJURY) Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage" or "personal and advertising injury" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" or offense and settle any claim or "suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section D. - Liability.And Medical Expenses Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments, settlements or medical expenses to which this insurance applies. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Coverage Extension - Supplementary Payments. b. This insurance applies: (1) To "bodily injury" and "property damage" only if: (a) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"(b) The "bodily injury' or "property damage" occurs during the policy period; and (c) Prior to the policy period, no insured listed under Paragraph 1. of Section C. - Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury'.' or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury' or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. (2) To "personal and advertising injury' caused by an offense arising out of your business, but only if the offense was committed in the "coverage territory" during the policy period. C. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section C. - Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; Form SS 00 08 04 05 Page 1 of 24 © 2005, The Hartford BUSINESS LIABILITY COVERAGE FORM (2) Receives a written or verbal demand or claim for damages because of the "bodily injury"or "property damage"; or (3) Becomes aware by any other means that "bodily injury' or "property damage" has occurred or has begun to occur. d. Damages because of "bodily injury" include damages . claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". e. Incidental Medical Malpractice (1) "Bodily injury" arising out of the rendering of or failure to render professional health care services as a physician, dentist, nurse, emergency medical technician or paramedic shall be deemed to be caused by an "occurrence", but only if: (a) The physician, dentist, nurse, emergency medical technician or paramedic is employed by you to provide such services; and (b) You are not engaged in the business or occupation of providing such services. (2) For the purpose of determining the limits of insurance for incidental medical malpractice, any act or omission together with all related acts or omissions in the furnishing of these services to any one person will be considered one "occurrence". 2. MEDICAL EXPENSES Insuring Agreement a. We will pay medical expenses as described below for "bodily injury" caused by an accident: (1) On premises you own or•rent; (2) On ways next to premises you own or rent; or (3) Because of your operations; provided that: (1) The accident takes place in the "coverage territory" and during the policy period; (2) The expenses are incurred and reported to us within three years of the date of the accident; and (3) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require. Page 2 of 24 b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: (1) First aid administered at the time of an accident; (2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and (3) Necessary ambulance, hospital, professional nursing and funeral services. 3. COVERAGE EXTENSION - SUPPLEMENTARY PAYMENTS a. We will pay, with respect to any claim or "suit" we investigate or settle, or any "suit" against an insured we defend: (1) All expenses we incur. (2) Up to $1,000 for the cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which Business Liability Coverage for "bodily injury" applies. We do not have to furnish these bonds. (3) The cost of appeal bonds or bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. (4) All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $500 a day because of time off from work. (5) All costs taxed against the insured in the "suit". (6) Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer.. (7) All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. Any amounts paid under (1) through (7) above will not reduce the limits of insurance. Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM b. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met: (1) The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; (2) This insurance applies. to such liability assumed by the insured; (3) The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; (4) The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interest of the indemnitee; (5) The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and (6) The indemnitee: (a) Agrees in writing to: (i) Cooperate with us in the investigation, settlement or defense of the "suit"; (ii) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (iii) Notify any other insurer whose coverage is available to the indemnitee; and (iv) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (b) Provides us with written authorization to: (i) Obtain records and other information related to the "suit"; and , (ii) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 1.15.(b) of Section B. - Exclusions, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the Limits of Insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: (1) We have used up the applicable limit of insurance in the payment of judgments or settlements; or (2) The conditions set forth above, or the terms of the agreement described in Paragraph (6) above, are no longer met. B. EXCLUSIONS 1. Applicable To Business Liability Coverage This insurance does not apply to: a. Expected Or Intended Injury (1) "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" or "property damage" resulting from the use of reasonable force to protect persons or property; or (2) "Personal and advertising injury" arising out of an offense committed by, at the direction of or with the consent or acquiescence of the insured with the expectation of inflicting "personal and advertising injury. b. Contractual Liability (1) "Bodily injury" or "property damage"; or (2) "Personal and advertising injury" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages because of: (a) "Bodily injury", "property damage" or "personal and advertising injury"that the insured would have in the absence of the contract or agreement; or Form SS 00 08 04 05 Page 3 of 24 BUSINESS LIABILITY COVERAGE FORM (b) "Bodily injury" or "property damage' assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purpose of liability assumed in an "insured contract", reasonable attorneys' fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage" provided: (t) Liability to such party for, or for the cost of, that partys defense has also been assumed in the same "insured contract", and (it) Such attorneys' fees and litigation expenses are for defense of that parry against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. c. Liquor Liability "Bodily injury" or "property damage" for which any insured may be held liable by reason of: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. d. Workers' Compensation And Similar Laws Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. e. Employer's Liability "Bodily injury' to: (1) An "employee" of the insured arising out of and in the course of: (a) Employment by the ihsured; or Page 4 of 24 (b) Performing duties related to the conduct of the insured's business, or (2) The spouse, child, parent, brother or sister of that "employee" as a consequence of (1) above. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an "insured contract". f. Pollution (1) "Bodily injury", "property damage" or "personal and advertising injury' arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants": (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to any insured. However, this subparagraph does not apply to: (t) "Bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests; (tt) "Bodily injury" or "properly damage" for which you may be held liable, if you are a contractor and the owner or lessee of such premises, site or location has been added to your policy as an additional insured with respect to your ongoing operations performed for that additional . insured at that premises, site or location and such premises, site or location is not and never was owned or occupied by, or rented or loaned to, any insured, other than that additional insured; or Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (iii) "Bodily injury" or "property released as part of the damage" arising out of heat, operations being performed by smoke or furfies from a such insured, contractor or "hostile fire"; subcontractor; (b) At or from any premises, site or (i i) 'Bodily injury' or "property location which is or was at any damage" sustained within 'a time used by or for any insured or building and caused by the others for the handling, storage, release of gases, fumes or disposal, processing or treatment vapors from materials brought of waste; into that building in connection with operations being performed (c) Which are or were at any time you or on your behalf by a by transported, handled, stored, contractor or subcontractor; or treated, disposed of, or processed as waste by or for: (iii) "Bodily injury" or "property damage" arising out of heat, (i) Any insured; or smoke or fumes from a (ii) Any person or organization for "hostile fire"; or whom you may be legally (e) At or from any premises, site or responsible; location on which any insured or any (d) At or from any premises, site or contractors or subcontractors location on which any insured or working directly or indirectly on any any contractors or subcontractors insured's behalf are performing working directly or indirectly on operations if the operations are to any insured's behalf are test for, monitor, clean up, remove, performing operations if the contain, treat, detoxify or neutralize, "pollutants" are brought on or to or in any way respond to, or assess the premises, site or location in the effects of, "pollutants". connection with such operations (2) Any loss, cost or expense arising out by such insured, contractor or of any: subcontractor. However, this subparagraph does not apply to: (a) Request, demand, order or statutory (i) "Bodily injury" or "property "property or regulatory requirement that any the damage" arising out insured or others test for, monitor, escape of fuels, lubricants or clean up, remove, contain, treat, other operating fluids which are detoxify or neutralize, or in any way needed to perform the normal respond to, or assess the effects of, " " electrical, hydraulic or ; or pollutants mechanical functions (b) Claim or suit by or on behalf of a necessary for the operation of governmental authority for "mobile equipment" or its parts, damages because of testing for, if such fuels, lubricants or other monitoring, cleaning up, removing, operating fluids escape from a containing, treating, detoxifying or vehicle part designed to hold, neutralizing, or in any way store or receive them. This responding to, or assessing the exception does not apply if the effects of, "pollutants". "bodily injury" or "property However, this paragraph does not damage" arises out of the apply to liability for damages because intentional discharge, dispersal of "property damage" that the insured or release of the fuels, would have in the absence of such lubricants or other operating request, demand, order or statutory or fluids, or if such fuels, regulatory requirement, or such claim' lubricants or other operating or "suit" by or on behalf of a fluids are brought on or to the governmental authority. premises, site or location with the intent that they be discharged, dispersed or Form SS 00 08 04 05 Page 5 of 24 BUSINESS LIABILITY COVERAGE FORM g. Aircraft, Auto Or Watercraft "Bodily injury' or "properly. damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading". This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured. This exclusion does not apply to: (1) A watercraft while ashore on premises you own or rent; , (2) A watercraft you do not own that is: (a) Less than 51 feet long; and .(b) Not being used to carry persons for a charge; (3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured; (4) Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft or watercraft; (5) "Bodily injury" or "property damage" arising out of the operation of any of the equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment"; or (6) An aircraft that is not owned by any insured and is hired, chartered or loaned with a paid crew. However, this exception does not apply if the insured has any other insurance for such "bodily injury"or "property damage", whether the other insurance is primary, excess, contingent or on any other basis. h. Mobile Equipment ' "Bodily injury" or "property damage" arising out of: (1) The transportation of "mobile equipment" by an "auto" owned or operated by or rented or loaned to any insured; or Page 6 of 24 (2) The use of "mobile equipment" in, o'r while in practice or preparation for, a prearranged racing, speed or demolition contest or in any stunting activity. I. War "Bodily injury", "property damage" or "personal and advertising injury', however caused, arising, directly or indirectly, out of: (1) War, including undeclared or civil war; (2) Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or (3) Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these. Professional Services "Bodily injury', "property damage" or "personal and advertising injury" arising out of the rendering of or failure to render any professional service. This includes but is not limited to: (1) Legal, accounting or advertising services; (2) Preparing, approving, or failing to prepare or approve maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; (3) Supervisory, inspection, architectural or engineering activities; (4) Medical, surgical, dental, x-ray or nursing services treatment, advice or instruction; (5) Any health or therapeutic service treatment, advice or instruction; (6) Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming; (7) Optical or hearing aid services including the prescribing, preparation, fitting, demonstration or distribution of ophthalmic lenses and similar products or hearing aid devices; Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (8) Optometry or optometric services including but not limited to examination of the eyes and the prescribing, preparation, fitting,demonstration or distribution of ophthalmic lenses and similar products; (9) Any: (a) Body piercing (not including ear piercing); (b) Tattooing, including but not limited to the insertion of pigments into or under the skin; and ' (c) Similar services; (10) Services in the practice of pharmacy; and (11) Computer consulting, design or programming services, including web site design. Paragraphs (4) and (5) of this exclusion do not apply to the Incidental Medical Malpractice coverage afforded under Paragraph 1.e. in Section A. - Coverages. k. Damage To Property "Property damage" to: Paragraphs (1), .(3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate Limit of Insurance applies to Damage To Premises Rented To You as described in Section D. - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3) and (4) of this exclusion do not apply to the use of elevators. Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraphs (3) and (4) of this exclusion do not apply to "property damage" to borrowed equipment while not being used to perform operations at a job site. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". 1. Damage To Your Product (1) Property you own, rent or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. "Property damage" to "your product" arising out of it or any part of it. m. Damage To Your Work "Properly damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. n. Damage To Impaired Property Or Property Not Physically Injured "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work"; or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of. use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. Form SS 00 08 04 05 Page 7 of 24 BUSINESS LIABILITY COVERAGE FORM o. Recall Of Products, Work Or,impaired (c) Title of any literary or artistic work; Property (8) Arising out of an offense committed by Damages claimed for any loss, cost or an insured whose business is: expense incurred by you or others for the (a) Advertising, broadcasting, loss of use, withdrawal, recall, inspection, publishing or telecasting; repair, replacement, adjustment, removal (b) Designing or determining content or disposal of: of web sites for others; or (1) "Your product"; (c) An Internet search, access, (2) "Your work"; or content or service provider. (3) "Impaired property; However, this exclusion does not if such product, work or property is apply to Paragraphs a., b. and c. withdrawn or recalled from the market or under the definition of "personal and from use by any person or organization advertising injury" in Section G. - because of a known or suspected defect, Liability And Medical Expenses deficiency, inadequacy or dangerous Definitions. condition in it. For the purposes of this exclusion, p. Personal And Advertising Injury placing an "advertisement" for or "Personal and advertising injury": linking to others on your web site, by , is not considered the business itself (1) Arising out of oral, written or electronic of advertising, broadcasting, publication of material, if done by or at publishing or telecasting; the direction of the insured with (9) Arising out of an electronic chat room knowledge of its falsity; hosts, or bulletin board the insured (2) Arising out of oral, written or electronic owns, or over which the insured publication of material whose first exercises control; publication took place before the beginning of the policy period; (10) Arising out of the unauthorized use of name or product in your e-mail another's Arising out of a criminal act committed address, , domain name or metatags, or b or at the direction of the insured; by any other similar tactics to mislead (4) Arising out of any breach of contract, another's potential customers; except an implied contract to use (11) Arising out of the violation of a another's "advertising idea" in your person's right of privacy created by "advertisement"; any state or federal act. (5) Arising out of the failure of goods, However, this exclusion does not products or services to, conform with apply to liability for damages that the any statement of quality or insured would have in the absence of performance made in your such state or federal act; "advertisement"; (12) Arising out of: (6) Arising out of the wrong description of " the price of goods, products or services; for others on (a) An "advertisement your web site; (7) Arising out of any violation of any (b) Placing a link to a web site of intellectual property rights such as others on your web site; copyright, patent, trademark, trade name, trade secret, service mark or (c) Content from a web site of others other designation of origin or displayed within a frame or border authenticity. on your web site. Content includes However, this exclusion does not information, code, sounds, text, apply to infringement, in your graphics or images; or "advertisement", of (d) Computer code, software or (a) Copyright; programming used to enable: (b) Slogan, unless the slogan is also a (1) Your web site; or trademark, trade name, service (ii) The presentation or functionality mark or other designation of origin of an "advertisement" or other or authenticity; or content on your web site; Page 8 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (13) Arising out of a violation of any anti- trust law; (14) Arising out of the fluctuation in price or value of any stocks, bonds or other securities; or (15) Arising out of discrimination or humiliation committed by or at the direction of any "executive officer", director, stockholder, partner or member of the insured. q. Electronic Data Damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate "electronic data". r. Employment-Related Practices "Bodily injury" or "personal and advertising injury" to: (1) A person arising out of any: (a) Refusal to employ that person; (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or (2) The spouse, child, parent, brother or sister of that person as a consequence of "bodily injury" or "personal and advertising injury" to the person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. s. Asbestos (1) "Bodily injury", "property damage" or "personal and advertising injury" arising out of the "asbestos hazard". (2) Any damages, judgments, settlements, loss, costs or expenses that: (a) May be awarded or incurred by reason of any claim or suit alleging actual or threatened . injury or damage of any nature or kind to persons or property which would not have occurred in whole or in part but for the "asbestos hazard (b) Arise out of any request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, encapsulate, contain, treat, detoxify or neutralize or in any way respond to or assess the effects of an "asbestos hazard"; or (c) Arise out of any claim or suit for damages because of testing for, monitoring, cleaning up, removing, encapsulating, containing, treating, detoxifying or neutralizing or in any way responding to or assessing the effects of an "asbestos hazard". Violation Of Statutes That Govern E- Mails, Fax, Phone Calls Or Other Methods Of Sending Material Or Information "Bodily injury", "property damage", or "personal and advertising injury" arising directly or indirectly out of any action or omission that violates or is alleged to violate: (1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law; (2) The CAN-SPAM Act of 2003, including any amendment of or addition to such law; or (3) Any statute, ordinance or regulation, other than the TCPA or CANSPAM Act of. 2003, that prohibits or limits the sending, transmitting, communicating or distribution of material or information. Damage To Premises Rented To You - Exception For Damage By Fire, Lightning or Explosion Exclusions c. through h. and k. through o. do not apply to damage by fire, lightning or explosion to premises rented to you or temporarily occupied by you with permission of the owner. A separate Limit of Insurance applies to this coverage as described in Section D. - Liability And Medical Expenses Limits Of Insurance. Form SS 00 08 04 05 Page 9 of 24 BUSINESS LIABILITY COVERAGE FORM 2. Applicable To Medical Expenses Coverage We will not pay expenses for "bodily injury": a. Any Insured To any insured, except "volunteer workers". b. Hired Person To a person hired to do work for or on behalf of any insured or a tenant of any insured. c. Injury On Normally Occupied Premises To a person injured on that part of premises you own or rent that the person normally occupies. d. Workers' Compensation And Similar Laws To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefits law or a similar law. e. Athletics Activities To a person injured while practicing, instructing or participating in any physical exercises or games, sports or athletic contests. f. Products-Completed Oper4ons Hazard Included with the "products-completed operations hazard". g. Business Liability Exclusions Excluded under Business Liability Coverage. C. WHO IS AN INSURED 1. If you are designated in the Declarations as a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner. b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers. d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees. 2. Each of the following is also an insured: a. Employees And Volunteer Workers Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees", other than either your "executive officers" (if you are an organization other than a .partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" or "volunteer workers" are insureds for: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), or to a co-"employee" while in the course of his or her employment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co- "employee" or that "volunteer worker" as a consequence of Paragraph (1)(a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1)(a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. If you are not in the business of providing professional health care services, Paragraph (d) does not apply to any nurse, emergency medical technician or paramedic employed by you to provide such services. (2) "Property damage" to property: (a) Owned, occupied or used by, Page 10 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your "employees", "volunteer workers", any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company). b. Real Estate Manager Any person (other than your "employee" or "volunteer worker"), or any organization while acting as your real estate manager. c. Temporary Custodians Of Your Property Any person or organization having proper temporary custody of your property if you die, but only: (1) With respect to liability arising out of the maintenance or use of that property, and (2) Until your legal representative has been appointed. d. Legal Representative If You Die Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this insurance. e. Unnamed Subsidiary Any subsidiary and subsidiary thereof, of yours which is a legally incorporated entity of which you own a financial interest of more than 50% of the voting stock on the effective date of this Coverage Part. The insurance afforded herein for any subsidiary not shown in the Declarations as a named insured does not apply to injury or damage with respect to which an insured under this- insurance is also an insured under another policy or would be an insured under such policy but for its termination or upon the exhaustion of its limits of insurance. 3. _ Newly Acquired Or Formed Organization Any organization you newly acquire or form, other than a partnership, joint venture or limited liability company, and over which you maintain financial interest of more than 50% of the voting stock, will qualify bs a Named Insured if there is no other similar insurance available to that organization. However: a. Coverage under this provision is afforded only until the 180th day after you acquire or form the organization or the end of the policy period, whichever is earlier; and b. Coverage under this provision does not apply to: (1) "Bodily injury" or "property damage" that occurred; or (2) "Personal and advertising injury" . arising out of an offense committed before you acquired or formed the organization. 4. Operator Of Mobile Equipment With respect to "mobile equipment registered in your name under any motor vehicle registration law, any person is an insured while driving such equipment along a public highway with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the equipment, and only 6 no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co-"employee" of the person driving the equipment; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 5. Operator of Nonowned Watercraft With respect to watercraft you do not own that is less than 51 feet long and is not being used to carry persons for a charge, any person is an insured while operating such watercraft with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the watercraft, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co-"employee" of the person operating the watercraft; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 6. Additional Insureds When Required By Written Contract, Written Agreement Or Permit The person(s) or organization(s) identified in Paragraphs a. through f. below are additional insureds when you have agreed, in a written Form SS 00 08 04 05 Page 11 of 24 BUSINESS LIABILITY COVERAGE FORM _ contract, written agreement or because of a (e) Any failure to make such permit issued by a state or political subdivision, inspections, adjustments, tests or that such person or organization be added as servicing as the vendor has provided an additional insured on your policy agreed to make or normally , the injury or damage occurs subsequent to the undertakes to make in the usual execution of the contract or agreement, or the course of business, in connection issuance of the permit. with the distribution or sale of the A person or organization is an additional products; (f) Demonstration, installation, insured under this provision only for that period servicing or repair operations, of time required by the contract, agreement or except such operations performed permit. at the vendor's premises in However, no such person or organization is an connection with the sale of the additional insured under this provision if such product; person or organization is included as an additional insured by an endorsement issued (g) Products which, after distribution by us and made a part of this Coverage Part, or sale by you, have been labeled including all persons or organizations added as or relabeled or used as a additional insureds under the specific container, part or ingredient of any additional insured coverage grants in Section other thing or substance by or for - F. - Optional Additional Insured Coverages. the vendor; or Vendors a (h) "Bodily injury" or "property . damage" arising out of the sole Any person(s) or organization(s) (referred to negligence of the vendor for its below as vendor), but only with respect to own acts or omissions or those of "bodily injury' or "property damage" arising its employees or anyone elsd out of "your products" which are distributed or acting on its behalf. However, this sold in the regular course of the vendor's exclusion does not apply to: business and only if this Coverage Part " " (i) The exceptions contained in or bodily injury provides coverage for "property damage" included within the Subparagraphs (d) or (f); or "products-completed operations hazard". (ii) Such inspections, adjustments, (1) The insurance afforded to the vendor tests or servicing as the vendor is subject to the following additional has agreed to make or normally exclusions: undertakes to make in the usual This insurance does not apply to: in course of business, connection with the distribution (a) "Bodily injury" or "property or sale of the products. damage" for which the vendor is (2) This insurance does not apply to any obligated to pay damages by insured person or organization from reason of the assumption of whom you have acquired such products, liability in a contract or agreement. or any ingredient, part or container, This exclusion does not apply to entering into, accompanying or liability for damages that the containing such products. vendor would have in the absence of the contract or agreement; b. Lessors Of Equipment (b) Any express warranty (1) Any person or organization from whom unauthorized by you; you lease equipment; but only with " bodily. respect to their liability for (c) Any physical or chemical change injury", "property damage" or "personal in the product made intentionally and advertising injury" caused, in b the vendor; by whole or in part, by your maintenance, (d) Repackaging, except when operation or use of equipment leased unpacked solely for the purpose of to you by such person or organization. inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; Page 112 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after you cease to lease that equipment. c. Lessors Of Land Or Premises (1) Any person or organization from whom you lease land or premises, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land or premises leased to you. (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply, to: (a) Any "occurrence" which takes place after you cease to lease that land or be a tenant in that premises; or (b) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. , d. Architects, Engineers Or Surveyors (1) Any architect, engineer, or surveyor, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (a) In connection with your premises; or (b) In the performance of your ongoing operations performed by you or on your behalf. (2) With respect to the insurance afforded to these additional insureds, the following additional exclusion applies: This insurance does pot apply to "bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of or the failure to render any professional services by or for you, including: (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, 'designs or drawings and specifications; or (b) Supervisory, inspection, architectural or engineering activities. e. Permits Issued By State Or Political Subdivisions (1) Any state or political subdivision, but only with respect to operations performed by you or on your behalf for which the state or political subdivision has issued a permit. (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: (a) "Bodily injury", "property damage" or "personal and advertising injury" arising out of operations performed for the state or municipality; or (b) "Bodily injury" or "property damage" included within the "products- completed operations hazard". f. Any Other Party (1) Any other person or organization who is not an insured under Paragraphs a. through e. above, but only with respect to liability for "bodily injury', "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (a) In the performance of your ongoing operations; (b) In connection with your premises owned by or rented to you; or (c) In connection with "your work" and included within the "products- completed operations hazard", but only if (i) The written contract or written agreement requires you to provide such coverage to such additional insured; and (ii) This Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products- completed operations hazard". (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: "Bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including: Form SS 00 08 04 05 Page 13 of 24 BUSINESS LIABILITY COVERAGE FORM (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Supervisory, inspection, architectural or . engineering activities. The limits of insurance that apply to additional insureds are described in Section D. - Limits Of Insurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. - Liability And Medical Expenses General Conditions. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE 1. The Most We Will Pay The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. Aggregate Limits The most we will pay for: a. Damages because of "bodily injury' and "property damage" included in the "products-completed operations hazard" is the Products-Completed Operations Aggregate Limit shown in the Declarations. b. Damages because of all other "bodily injury", "property damage" or "personal and advertising injury", including medical expenses, is the General Aggregate Limit shown in the Declarations. This General Aggregate Limit applies separately to each of your "locations" owned by or rented to you. "Location" means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway or right-bf-way of a railroad. Page 14 of 24 This General Aggregate limit does not apply to "property damage" to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of fire, lightning or explosion. 3. Each Occurrence Limit Subject to 2.a. or 2.b above, whichever applies, the most we will pay for the sum of all damages because of all "bodily injury.'; "property damage" and medical expenses arising out of any one "occurrence" is the Liability and Medical Expenses Limit shown in the Declarations. The most we will pay for all medical expenses because of "bodily injury" sustained by any one person is the Medical Expenses Limit shown in the Declarations. 4. Personal And Advertising Injury Limit Subject to 2.b. above, the most we will pay for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization is the Personal and Advertising Injury Limit shown in the Declarations. 5. Damage To Premises Rented To You Limit The Damage To Premises Rented To You Limit is the most we will pay under Business Liability Coverage for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, lightning or explosion, while rented to you or temporarily occupied by you with permission of the owner. In the case of damage by fire, lightning or explosion, the Damage to Premises Rented To You Limit applies to all damage proximately caused by the same event, whether such damage results from fire, lightning or explosion or any combination of these. 6. How Limits Apply To Additional Insureds The most we will pay on behalf of a person or organization who is an additional insured under this Coverage Part is the lesser of: a. The limits of insurance specified in a written contract, written agreement or permit issued by a state or political subdivision; or b. The Limits of Insurance shown in the Declarations. Such amount shall be a part of and not in addition to the Limits of Insurance shown in the Declarations and described in this Section. Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM If more than one limit of insurance under this policy and any endorsements attached thereto applies to any claim or "suit", the most we will pay under this . policy and the endorsements is the single highest limit of liability of all coverages applicable to such claim or "suit". However, this paragraph does not apply to the Medical Expenses limit set forth in Paragraph 3. above. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 1. Bankruptcy (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation, settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the insured because of injury or damage to which this insurance may also apply. d. Obligations At The Insured's Own Cost No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. Bankruptcy or insolvency of the insured or of e. Additional Insured's Other Insurance the insured's estate'will not relieve us of our If we cover a claim or "suit" under this obligations under this Coverage Part. Coverage Part that may also be covered 2. Duties In The Event Of Occurrence, by other insurance available to an Offense, Claim Or Suit additional insured, such additional insured Notice Of Occurrence Or Offense a must submit such claim or "suit" to the . other insurer for defense and indemnity. You or any additional insured must see to However, this provision does not apply to it that we are notified as soon as " the extent that you have agreed in a or an practicable of an "occurrence written contract, written agreement or offense which may result in a claim. To permit that this insurance is primary and the extent possible, notice should include: non-contributory with the additional (1) How, when and where the "occurrence' insured's own insurance. or offense took place; f. Knowledge Of An Occurrence, Offense, (2) The names and addresses of any Claim Or Suit injured persons and witnesses; and Paragraphs a. and b. apply to you or to (3) The nature and location of any injury any additional insured only when such or damage arising out of the "occurrence", offense, claim or "suit" is "occurrence" or offense. known to: b. Notice Of Claim (1) You or any additional insured that is If a claim is made or "suit" is brought an individual; against any insured, you or any additional (2) Any partner, if you or an additional insured must: insured is a partnership; (1) Immediately record the specifics of the (3) Any manager, if you or an additional claim or "suit" and the date received; insured is a limited liability company; and (4) Any "executive officer" or insurance (2) Notify us as soon as practicable. manager, if you or an additional You or any additional insured must see to insured is a corporation; it that we receive a written notice of the (5) Any trustee, if you or an additional claim or "suit" as soon as practicable. insured is a trust; or c. Assistance And Cooperation Of The (6) Any elected or appointed official, if you Insured or an additional insured is a political You and any other involved insured must: subdivision or public entity. Form SS 00 08 04 05 Page 15 of 24 BUSINESS LIABILITY COVERAGE FORM This Paragraph f. applies separately to you and any additional insured. 3. Financial Responsibility Laws a. When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, the insurance provided by the policy for "bodily injury' liability and "property damage" liability will comply with the provisions of the law to the extent of the coverage and limits of insurance required by that law. b. With respect to "mobile equipment" to which this insurance applies, we will provide any liability, uninsured motorists, underinsured motorists, no-fault or other coverage required by any motor vehicle law. We will provide the required limits for those coverages. 4. Legal Action Against Us No person or organization has a right under this Coverage Form: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Form unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this insurance or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 5. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this policy to the first Named Insured, this insurance applies: a. As if each Named insured were the only Named Insured; and b. Separately to each insured against whom a claim is made or "suit" is brought. 6. Representations a. When You Accept This Policy . By accepting this policy, you agree: (1) The statements in the Declarations are accurate and complete; (2) Those statements are, based upon representations you made to us; and Page 16 of 24 (3) We have issued this policy in reliance upon your representations. b. Unintentional Failure To Disclose Hazards If unintentionally you should fail to disclose all hazards relating to the conduct of your business at the inception date of this Coverage Part, we shall not deny any coverage under this Coverage Part because of such failure. 7. Other Insurance If other valid and collectible insurance is available for a loss we cover under this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. b. Excess Insurance This insurance is excess over any of the other insurance, whether primary, excess; contingent or on any other basis: (1) Your Work That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work"; (2) Premises Rented To You That is fire, lightning or explosion insurance for premises rented to you or temporarily occupied by you with permission of the owner; (3) Tenant Liability That is insurance purchased by you to. cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner; (4) Aircraft, Auto Or Watercraft If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to Exclusion g. of Section A. - Coverages. (5) Property Damage To Borrowed Equipment Or Use Of Elevators If the loss arises out of "property damage" to borrowed equipment or the use of elevators to the extent not subject to Exclusion k. of Section A. - Coverages. Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (6) When You Are Added As An Additional Insured To Other Insurance That is other insurance available to you covering liability for damages arising out of the premises or operations, or products and completed operations, for which you have been added as an additional insured by that insurance; or (7) When You Add Others As An Additional Insured To This Insurance That is other insurance available to an additional insured. However, the following provisions apply to other insurance available to any person or organization who is an additional insured under this Coverage Part: (a) Primary Insurance When Required By Contract This insurance is primary if you have agreed in a written contract, written agreement or permit that this insurance be primary. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. (b) Primary And Non-Contributory To Other Insurance When Required By Contract If you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance, this insurance is primary and we will not seek contribution from that other insurance. Paragraphs (a) and (b) do not apply to other insurance to which the additional insured has been added as an additional insured. When this insurance is excess, we will have no duty under this Coverage Part to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of: (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and (2) The total of all deductible and self- insured amounts under all that other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part. c. Method Of Sharing If all the other insurance permits contribution by equal shares, we will follow this method also. Under this approach, each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 8. Transfer Of Rights Of Recovery Against Others To Us a. Transfer Of Rights Of Recovery If the insured has rights to recover all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them. This condition does not apply to Medical Expenses Coverage. b. Waiver Of Rights Of Recovery (Waiver Of Subrogation) If the insured has waived any rights of recovery against any person or organization for all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, we also waive that right, provided the insured waived their rights of recovery against such person or organization in a contract, agreement or permit that was executed prior to the injury or damage. Form SS 00 08 04 05 Page 17 of 24 BUSINESS LIABILITY COVERAGE FORM F. OPTIONAL ADDITIONAL INSURED COVERAGES If listed or shown as applicable in the Declarations, one or more of the following Optional Additional Insured Coverages also apply. When any of these Optional Additional Insured Coverages apply, Paragraph 6. (Additional Insureds When Required by Written Contract, Written Agreement or Permit) of Section C., Who Is An Insured, does not apply to the person or organization shown in the Declarations. These coverages are subject to the terms and conditions applicable to Business Liability Coverage in this policy, except as provided below: , . 1. Additional Insured - Designated Person Or Organization WHO IS AN INSURED under Section C. is amended to include as an additional insured. the person(s) or organization(s) shown in the Declarations, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or, omissions or the acts or omissions of those acting on your behalf: a. In the performance of your ongoing operations; or b. In connection with your premises owned by or rented to you. 2. Additional Insured - Managers Or Lessors Of Premises a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Designated Person Or Organization; but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) Any "occurrence" which takes place after you cease to be a tenant in that premises; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. Page 18 of 24 3. Additional Insured - Grantor Of Franchise WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Grantor Of Franchise, but only with respect to their liability as grantor of franchise to you. 4. Additional Insured - Lessor Of Leased Equipment a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Lessor of Leased Equipment, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury' caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization(s). b. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after you cease to lease that equipment. 5. Additional Insured - Owners Or Other Interests From Whom Land Has Been Leased a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Owners Or Other Interests From Whom Land Has Been Leased, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) Any "occurrence" that takes place after you cease to lease that land; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. 6. Additional Insured - State Or Political Subdivision - Permits a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the state or political subdivision shown in the Declarations as an Additional Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM 7. Insured - State Or Political Subdivision - (e) Any failure to make such Permits, but only with respect to inspections, adjustments, tests or operations performed by you or on your servicing as the vendor has agreed behalf for which the state or political to make or normally undertakes to subdivision has issued a permit. make in the usual course of b. With respect to the insurance afforded to business, in connection with the these additional insureds, the following distribution or sale of the products; additional exclusions apply:. (f) Demonstration, installation, This insurance does not apply to: servicing or repair operations, except such operations performed (1) "Bodily injury", "property damage" or at the vendor's premises in "personal and advertising injury" connection with the sale of the arising out of operations performed for product; the state or municipality; or . (g) Products which, after distribution (2) "Bodily injury' or "property damage" or sale by you, have been labeled included in the "product-completed or relabeled or used as a operations" hazard. container, part or ingredient of any Additional Insured - Vendors other thing or substance by or for a. WHO IS AN INSURED under Section C. is the vendor; or amended to include as an additional (h) "Bodily injury" or "property insured the person(s) or organization(s) damage" arising out of the sole (referred to below as vendor) shown in the negligence of the vendor for its Declarations as an Additional Insured - own acts or omissions or those of Vendor, but only with respect to "bodily its employees or anyone else injury" or "property damage" arising out of acting on its behalf. However, this "your products" which are distributed or exclusion does not apply to: sold in the regular course of the vendor's (i) The exceptions contained in business and only if this Coverage Part Subparagraphs (d) or (f); or provides coverage for "bodily injury" or " (ii) Such inspections, included within the "property damage "products-completed operations hazard". adjustments, tests or servicing as the vendor has agreed to b. The insurance afforded to the vendor is make or normally undertakes subject to the following additional exclusions: to make in the usual course of (1) This insurance does not apply to: business, in connection with (a) "Bodily injury" or "property the distribution or sale of the damage" for which the vendor is products. obligated to pay damages by (2) This insurance does not apply to any reason of the assumption of insured person or organization from liability in a contract or agreement. whom you have acquired such This exclusion does not apply to products, or any ingredient, part or liability for damages that the container, entering into, accompanying vendor would have in the absence or containing such products. of the contract or agreement; 8, Additional Insured - Controlling Interest (b) Any express , warranty WHO IS AN INSURED under Section C. is unauthorized by you; amended to include as an additional insured (c) Any physical or chemical change the person(s) or organization(s) shown in the in the product made intentionally Declarations as an Additional Insured - by the vendor; Controlling Interest, but only with respect to (d) Repackaging, unless unpacked their liability arising out of: solely for the purpose of inspection, a. Their financial control of you; or demonstration, testing, or the b. Premises they own, maintain or control substitution of parts under while you lease or occupy these premises. instructions from the, manufacturer, and then repackaged in the original container; Form SS 00 08 04 05 Page 19 of 24 BUSINESS LIABILITY COVERAGE FORM This insurance does not apply to structural alterations, new construction and demolition operations performed by or for that person or organization. 9. Additional Insured - Owners, Lessees Or Contractors - Scheduled Person Or Organization a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the-Declarations as an Additional Insured - Owner, Lessees Or Contractors, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury"caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: ' (1) In the performance of your ongoing operations for the additional insured(s); or (2) In connection with "your work" performed for that additional insured and included within the "products- completed operations hazard", but only if this Coverage Part provides coverage for "bodily' injury' or "property damage" included within the "products-completed operations hazard". b. With respect to the insurance afforded to these additional insureds, this insurance does not apply to "bodily injury", "property damage" or "personal an advertising injury" arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including: (1) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (2) Supervisory, inspection, architectural or engineering activities.' 10. Additional Insured - Co-Owner Of Insured Premises -WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or Organization(s) shown in the Declarations as an Additional Insured - Co- Owner Of Insured Premises, but only with respect to their liability as co-owner of the premises shown in the Declarations. Page 20 of 24 .The limits of. insurance that apply to additional insureds are described in Section D. - Limits Of Insurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. - Liability And Medical Expenses General Conditions. G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 1. "Advertisement" means the widespread public dissemination of information or images that has the purpose of inducing the sale of goods, products or services through: a. (1) Radio; (2) Television; (3) Billboard; (4) Magazine; (5) Newspaper; b. The Internet, but only that part of a web site that is about goods, products or services for the purposes of inducing the sale of goods, products or services; or c. Any other publication that is given widespread public distribution. However. "advertisement" does not include: a. The design, printed material, information or images contained in, on or upon the packaging or labeling of any goods or products; or b. An interactive conversation between or among persons through a computer network. 2. "Advertising idea" means any idea for an "advertisement". 3. "Asbestos hazard" means an exposure or threat of exposure to the actual or alleged properties of asbestos and includes the mere presence of asbestos in any form. 4. "Auto" means a land motor vehicle, trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment". 5. "Bodily injury" means physical: a. Injury; b. Sickness; or c. Disease sustained by a person and, if arising out of the above, mental anguish or death at any time. 6. "Coverage territory" means: Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM a. The United States of America (including its territories and. possessions), Puerto Rico and Canada; b. International waters or airspace, but only if the injury or damage occurs in the course of travel or transportation between any places included in a. above; c. All other parts of the world if the injury or damage arises out of: (1) Goods or products made,or sold by you in the territory described in a. above; (2) The activities of a person whose home is in the territory described in a. above, but is away for a short time on your business; or (3) "Personal and advertising injury" offenses that take place through the Internet or similar electronic means of communication provided the insured's responsibility to . pay damages is determined in the United States of America (including its territories and possessions), Puerto Rico or Canada, in a "suit" on the merits according to the substantive law in such territory, or in a settlement we agree to. 7. "Electronic data" means information, facts or programs: a. Stored as or on; b. Created or used on; or c. Transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 8. "Employee" includes a "leased worker". "Employee" does not include a "temporary - worker". 9. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document. 10. "Hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. 11. "Impaired property" means tangible property, other than "your product" or "your work", that cannot be used or is less useful because: a. It incorporates 'your product" or "your work" that is known or thought to be defective, deficient, inadequate or dangerous; or b. You. have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment or removal of "your product" or "your work"; or b. Your fulfilling the terms of the contract or agreement. 12. "Insured contract" means: a. A contract for a lease of premises. However, that portion of the contract fora lease of premises that indemnifies any person or organization for damage by fire, lightning or explosion to premises while rented to you or temporarily occupied by you with permission of the owner is subject to the Damage To Premises Rented To You limit described in Section D. - Liability and Medical Expenses Limits of Insurance. b. A sidetrack agreement; c. Any easement or license agreement, including an easement or license agreement in connection with construction or demolition operations on or within 50 feet of a railroad; d. Any obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; e. An elevator maintenance agreement; or f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization, provided the "bodily injury" or "property damage" is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. Paragraph f. includes that part of any contract or agreement that indemnifies a railroad for "bodily injury" or "property damage" arising out of construction or demolition operations within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road-beds, tunnel, underpass or crossing. However, Paragraph f. does not include that part of any contract or agreement: Form SS 00 08 04 05 Page 21 of 24 BUSINESS LIABILITY COVERAGE FORM (1) That indemnifies an architect, engineer or surveyor for injury or damage arising out of: (a) Preparing, approving or failing to prepare or approve maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; or (2) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising out of,the insured's rendering or failure to render professional services, including those listed in (1) above and supervisory, _ inspection, architectural or engineering activities. 13. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker". 14. "Loading or unloading" means the handling of property: a. After it is moved from the place where it is accepted for movement into or onto an aircraft, watercraft or "auto"; b. While it is in or on an aircraft, watercraft or "auto"; or ' c. While it is being moved from an aircraft, watercraft or "auto" to the place where it is finally delivered; but "loading or unloading" does not include the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or "auto". 15. "Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment: a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads; b. Vehicles maintained for use solely on or next to premises you own or rent; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, on which are permanently mounted: (1). Power cranes, shovels, loaders diggers or drills; or (2) Road construction or resurfacing equipment such as graders, scrapers or rollers; e. Vehicles not described in a., b., c., or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: (1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or (2) Cherry pickers and similar devices used to raise or lower workers; f. Vehicles not described in a., b., c., or d. above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos": (1) Equipment, of at least 1,000 pounds gross vehicle weight, designed primarily for: (a) Snow removal; (b) Road maintenance, but not construction or resurfacing; or (c) Street cleaning; (2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. 16. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 17. "Personal and advertising injury" means injury, including consequential "bodily injury", arising out of one or more of the following offenses: a. False arrest, detention or imprisonment; b. Malicious prosecution; Page 22 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that the person occupies, committed by or on behalf of its owner, landlord or lessor; d. Oral, written or electronic publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral, written or electronic publication of material that violates a person's right of privacy; f. Copying, in your "advertisement", a person's or organization's "advertising idea" or style of "advertisement"; g. Infringement of copyright, slogan, or title of any literary or artistic work, in your "advertisement"; or h. Discrimination or humiliation that results in injury to the feelings or reputation of a natural person. 18. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 19. "Products-completed operations hazard"; a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed to be completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. The "bodily injury" or "property damage" must occur away from premises you own or rent, unless your business includes the selling, handling or distribution of "your product" for consumption on premises you own or rent. b. Does not include "bodily injury" or. "property damage" arising out of: (1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; or (2) The existence of tools, uninstalled equipment or abandoned or unused materials. 20. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of "occurrence" that caused it. As used in this definition, "electronic data" is not tangible property. 21. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 22. "Temporary worker"means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions. 23. "Volunteer worker" means a person who: a. Is not your "employee"; Form SS 00 08 04 05 Page 23 of 24 BUSINESS LIABILITY COVERAGE FORM b. Donates his or her work; ' c. Acts at the direction of and within the scope of duties determined by you; and d. Is not paid a fee, salary or other compensation by you or anyone else for their work performed for you. 24. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and , (2) Containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product" and ' (2) The providing of or failure to provide . warnings or instructions. c. Does not include vending machines or other property rented to or located for the use of others but not sold. 25. "Your work": a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. Page 24 of 24 Form SS 00 08 04 05 1 June 10, 2008 . Revenue Management for Local Government. Hinderliter, de Llamas & Associates HdL Coren & Cone HdL Software; LLC Mr. Matt Hawkesworth, Assistant City Manager City of Rosemead 8838 E. Valley Blvd.: Rosemead, CA 91770 D-ar Mr eworth: oTccmuvwD JUN '1 2 2006 0 BY r With the strong real estate market and high turnover rate of properties in Los Angeles County in recent years, now would be a good time to ensure that Rosemead,is receiving , all of the documentary.transfer tax that is due the.City. As with sales and .property taxes, HdL has found that this tax is susceptible to mis_ or non allocation Escrow companies are responsible., for both, collecting the DTT, and indicating on the" facie-of the ilocunient'the'city'or county unincorporated area to which the revenue is to be remitted.'..We find..that often the County fails to collect more than their share of fhe'tax or allocate the tax to an, erroneous city. Founded in 1992, HdL Coren & Cone (HdLCC) developed the-first'computer software, system in.California for identifying misallocated property tax revenues and,has been providing documentary transfer tax audit services to cities since 1995. In the lasf five years, the company ha,'s recovered over $4.8 million in documentary transfer taxes for client agencies in 'Los Angeles County. According to the Los Angeles County' Recorder's office, HdL Coren &'Cone is the only firm providing these services to cities in Los Angeles County. , Our investigation of Documentary Transfer Tax payments indicates that as much-as.12%"of cities DTT revenue may be misallocated to other jurisdictions. HdL Coren & Cone has developed a comprehensive program for analyzing property transfers for comparison, with. the monthly, statements provided. by the Los Angeles County Recorder's office., ;We;are prepared to offer this service to Rosemead fora;fee of 25% of the Tainotiriti,6L.revenuet rec'oveied:(, -There 'are-no monthly' retainer's or-fees required. - The City will only be invoiced for those corrections identified by HdL and corre6tedby'the1Lo.s1A'NI ngeles County,Recorder. u ( .a. , 3 :CQIb (~:i1J 3 ..,,l .>!1(G 12 o JC` r6L1J (G( G PJr (Jnt O V" ~C`i `inn OU [U^ l.`1 E,. r1t 'IJG QncnrucL;,J. l e-- ~`i'~' it C O.1! ro ¢kolcli The following table includes references and"DTT. audit recovery amounts for. some of our, Los Angeles County clients. r 1340 Valley Vista Drive's Suite 200 Diamond Bar, CA 91765 - 19091 861-4335 j r;l.e 19091 861-7726 - 1,18881 86170220 1 twvw.hdicompanies.cum City Client Since DTT Rate Tax Recovery Fee City of Redondo Beach Jan. 1997 -$2.20 $620,944 .25% Frank Rowland, Dep. City Treasurer (310) 372-1171 x2420 City of Santa Monica Aug. 2000 $3.00 $862,343 25% Eva Uren, Business Tax Manager (310) 458-8747 City of Culver City_ - March 2006 $4.50 $2,152,226 25% -Nagam Rao, Treasury Manager (310) 253-5889 City of Long Beach June 1995 $1.10 $142,611 25% Melinda Nickelberry, Budget Analyst' (562) 570-6869 City of West Covina ' May 1,995 $1.10 $64,738 25% Tom Bachman, Finance Director (626).939-8449 We can begin providing this service to the City of Rosemead with your authorization on the enclosed letter .of..erigagement. We look forward. to, providing this revenue enhancement. service to the City:::Please'feel free to contact me at 909.861.4335 with any questions. Sincerely, Andrew Nickerson u AGREEMENT FOR DOCUMENTARY TRANSFER TAX AUDIT SERVICES A. On a quarterly basis, HdL Coren & Cone will review Documentary Transfer Tax remittance detail provided by Los Angeles County and compare all qualifying transfer of ownership deeds to those for which the City has received payment. Misallocations may be recovered for the current and prior three years. B. Those transfers which are coded to the City and which have not resulted in taxes being remitted to the City will be identified and submitted to the County Recorder for review and corrective action. C. Upon completion of review, the County Recorder will remit the misallocated DTT revenue to the City and provide HdL Coren & Cone with a detailed listing of the corrected DTT amounts. HdL Coren & Cone will provide a copy of the Recorder's report of reallocation attached to our invoice for services provided. D. The fee for DTT Audit Recovery Services described in A, B & C above will be 25% of documentary transfer tax recovered as a result of our audit efforts. The City of Rosemead hereby authorizes HdL Coren & Cone to perform a quarterly. review of the Documentary Transfer Taxes remitted by the County of Los Angeles and provide all necessary documentation and correspondence to initiate corrective action, tax recovery and payment of fees as described above. Signature Date Print Name: OLnftiL CO% Print Title: CITY OF OSME b C-41 M.OT~ ACORDTM CERTIFICATE OF LIABILITY INSURANCE HD I I DATE (/3MMJDDffYYY) PRODUCER Phone, (949)580-1969 Fax: 949-580-1963 _ THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Ffl- PACIFIC PARTNERS 'pj IVED ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE 25283 CABOT ROAD UIT~'224 HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. LAGUNA HILLS CA 9 653 M A-117 T2 0s. F.zVi f, e1,D I INSURED HDL COREN & CONI 1340 VALLEY VISTA DIAMOND BAR CA NOY t 's 2008 Agency Li :OC460 CI'T'Y CILERX'S OFFICE BY INSURERS AFFORDING COVERAGE NAIC # A. HARTFORD CASUALTY INS CO 29424 B: HARTFORD FIRE INSURANCE CO 13269 INSURER D: INSURER E: :OVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. IrvSa App' TYPE OF INSURANCE POLICY NUMBER POUCV E FFECirvE POLICY EXPIRATION LIMITS LTR INSR MIO oATE MOM' DATE MM/DDfYYI GENERAL LIABILITY 72SBATV5035 11115108 11/15109 EACH OCCURRENCE $ 3,000,000 X COMMERCIAL GENERAL LIABILITY - PR DAMAG TO RENTED EMIESESS (E. oc o - - - ' PREMI (Ee Pcarmce) - $ 300,000 CLAIMS MADE OCCUR MED. EXP (Any one person) $ 10,000 A PERSONAL S ADV INJURY $ 3,000,000 GENERAL AGGREGATE $ 5,000,000 GENL AGGREGATE LIMIT APPL~IES PER: PRODUCTS-COMP/OP AGG. $ 5,000,000 ~ POLICY n JECT 1 LOC AUT OMOBILE LIABILITY 72SBATV5035 11115/08 11/15109 COMBINED SINGLE LIMIT (Ea accident) $ 3,000,000 ANY AUTO ALL OWNED AUTOS BODILY INJURY (Per Person) $ SCHEDULED AUTOS A X HIRED AUTOS BODILY INJURY X NON-OWNED AUTOS (Per accident) $ PROPERTY DAMAGE (Per accident) $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO OTHER THAN EA ACC $ AUTO ONLY AGG S E%CEBB / UMBRELLA LIABILITY EACH OCCURRENCE $ OCCUR ❑ CLAIMS MADE AGGREGATE $ 8 DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSATION AND 72WECTZ0882 11115/08 11115109 X TORVTLMTS OTHER EMPLOYERS' LIABILITY ANVPROPRIETOR/PARTNER/E%ECOTIVE E L. EACH ACCIDENT . $ 2,000,600 B OFFICERIMEMSER EXCLUDED? E.L. DISEASE-EA EMPLOYEE IS 2,000,000 If u.d., SPECIAL PROVISIONS MIPw SPECIAL E.L. DISEASE-POLICY LIMIT $ 2,000,000 OTHER: PROFESSIONAL LIABILITY OOPGO246728 11115108 11115109 AGGREGATE $1,000,000 C OCCURRENCE $100000000 DEDUCTIBLE $25,000 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/ SPECIAL PROVISIONS FOR THOSE OPERATIONS USUAL TO INSURED. 10 NOTICE FOR NON-PAYMENT OF PREMIUM. CERTIFICATE HOLDER IS NAMED AS ADDITIONAL INSURED IN REGARDS TO GENERAL LIABILITY PER BUSINESS LIABILITY FORM SS0008. CFICTIFICATIP Mnl nFR CANCFI I ATION CITY OF ROSEMEAD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS 8838 E. VALLEY BLVD WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE ROSEMEAD, CA 91770 TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE Attention: ACORD 25 (2001108) Certificate # 8574 \ \ © ACORD CORPORATION 1988 SPECTRUM POLICY DECLARATIONS (Continued) POLICY NUMBER: 72 SBA TV5035 r 0 m 0 ri 0 F N r O O O N O Form N umbers of Forms and En dors ements that apply: SS 00 01 04 93 SS 00 05 12 06 SS 00 07 07 05 SS 00 08 04 05 SS 00 45 12 06 SS 84 32 04 06 SS 01 21 08 97 SS 04 15 07 05 SS 04 19 07 05 SS 04 30 07 05 SS 04 38 06 01 SS 04 39 07 05 SS 04 41 07 05 SS 04 42 07 05 SS 04 44 07 05 SS 04 45 07 05 _ SS 04 46 07 05 SS 04 47 07 05 SS 04 78 07 05 SS 04 80 03 00 SS 04 86 03 00 SS 40 05 07 05 SS 40 18 07 05 SS 40 93 07 05 SS 41 12 09 05 IH 10 01 09 86 SS 05 47 09 01 SS 50 19 01 08 SX 80 01 06 97 SS 38 25 09 05 SS 83 76 01 08 IH 12 00 11 85 ADDITIONAL INSURED - PERSON-ORGANIZAT ION Form SS 00 02 12 06 Page 007 Process Date: 09/04/08 Policy Expiration Date: 11/15/09 BUSINESS LIABILITY COVERAGE FORM 2. Applicable To Medical Expenses Coverage We will not pay expenses for "bodily injury": a. Any Insured To any insured, except "volunteer workers". b. Hired Person To a person hired to do work for or on behalf of any insured or a tenant of any insured. c. Injury On Normally Occupied Premises To a person injured on that part of premises you own or rent that the person normally occupies. d. Workers' Compensation, And Similar Laws To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefits law or a similar law. e. Athletics Activities To a person injured' while practicing, instructing or participating in any physical exercises or games, sports or athletic contests. f. Products-Completed Operations Hazard Included with the "products-completed operations hazard". g. Business Liability Exclusions Excluded under Business Liability Coverage. C. WHO IS AN INSURED 1. If you are designated in the Declarations as: a. An individual, you and your spouse are insureds, but only with, respect to the conduct of a business of which you are the sole owner. b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers. d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees. 2. Each of the following is also an insured: a. Employees And Volunteer Workers Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" or "volunteer workers" are insureds for: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), or to a co-"employee" while in the course of his or her employment or 'performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co- "employee" or that "volunteer worker" as a consequence of Paragraph (1)(a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1)(a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. If you are not in the business of providing professional health care services, Paragraph (d) does not apply to any nurse, emergency medical technician or paramedic employed by you to provide such services. (2) "Property damage" to property: (a) Owned, occupied or used by, Page 10 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM contract, written agreement or because of a i (e) Any failure f to, make such permit issued by a state or political inspections, adjustments, tests or subdivision, that such person or organization servicing as the vendor has be added as an additional insured on your agreed to make or normally policy, provided the injury or damage occurs undertakes to make in the usual subsequent to the execution of the contract or course of business, in connection agreement, or the issuance of the permit. with the distribution or sale of the A person or organization is an additional products; insured under this provision only .for that (f) Demonstration, installation, period of time required by the contract, servicing or repair operations, agreement or permit. except such operations performed ' at the vendor s premises in However, no such person or organization is an connection with the sale of the additional insured under this provision if such product; person, or organization is included as an after distribution (g) Products which additional insured by an endorsement issued , by us and made a part of this Coverage Part, or sale by you, have been labeled including all persons or organizations added or relabeled or used as a as additional insureds under the specific container, part or ingredient of any additional insured coverage' grants in Section other thing or substance by or for F. - Optional Additional Insured Coverages. the vendor; or a. Vendors (h) "Bodily injury" or "property arising out of the sole damage" Any person(s) or organization(s) (referred to negligence of the vendor for its below as vendor), but only with respect to own acts or omissions or those of "bodily injury" or "property damage" arising its employees or anyone else out of "your products" which are distributed acting on its behalf. However, this or sold in the regular course of the vendor's exclusion does not apply to: business and only if this Coverage Part provides coverage for "bodily injury" or (1) The exceptions contained in "property damage" included within the Subparagraphs (d) or (f); or "products-completed operations hazard". (ii) Such inspections, adjustments, (1) The insurance afforded to the vendor tests or servicing as the vendor is subject to the following additional has agreed to make or normally exclusions: undertakes to make in the usual course of business, in This insurance does not apply to: connection with the distribution (a) "Bodily injury" or "property or sale of the products. damage" for which the vendor is (2) This insurance does not apply to any obligated to pay damages by insured person or organization from reason of the assumption of whom you have acquired such products, liability in a contract or agreement. or any ingredient, part or container, This exclusion does not apply to entering _ into, , accompanying or liability for damages that the containing such products. vendor would have in the absence of the contract or agreement; b. Lessors Of Equipment (b) Any express warranty (1) Any person or organization from unauthorized by you; whom you lease equipment; but only " with respect to their liability for bodily (c) Any physical or chemical change injury", property damage" or inj in the product made intentionally "personal and advertising injury" by the vendor; caused, in whole or in part, by your (d) Repackaging, except when maintenance, operation or use of unpacked solely for the purpose of equipment leased to you by such inspection, demonstration, testing, person or organization. or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; Page 12 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Supervisory, inspection, architectural or engineering activities. The limits of insurance that apply to additional insureds are described in Section D. - Limits Oflnsurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. - Liability And Medical Expenses General Conditions. No person -or -organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE 1. The Most We Will Pay The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. Aggregate Limits The most we will pay for: a. Damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard" is the Products-Completed Operations Aggregate-' Limit shown in the Declarations. b. Damages because of. all other "bodily injury", "property damage" or "personal and advertising injury", including medical expenses, is the General Aggregate Limit shown in the Declarations. This General Aggregate Limit applies separately to each of your "locations" owned by or rented to you. "Location" means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway or right-of-way of a railroad. This General Aggregate limit does not apply to "property damage" to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of fire, lightning or explosion. 3. Each Occurrence Limit Subject to 2.a. or 2.b above, whichever applies, the most we will pay for the sum of all damages because of all "bodily injury", "property damage" and medical expenses arising out of any one "occurrence" is the Liability and Medical Expenses Limit shown in the Declarations. The most we will pay for all medical expenses because of "bodily injury" sustained by any one person is the Medical Expenses Limit shown in the Declarations. 4. Personal And Advertising Injury Limit Subject to 2.b. above, the most we will pay for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization is the Personal and Advertising Injury Limit shown in the Declarations. 5. Damage To Premises Rented To You Limit The Damage To Premises Rented To You Limit is the most we will pay. under Business Liability Coverage for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, lightning or explosion, while rented to you or' temporarily occupied by you with permission of the owner. In the case of damage by fire, lightning or explosion, the Damage to Premises Rented To You Limit applies to all damage proximately caused by the same event, whether such damage results from fire, lightning or explosion or any combination of these. 6. How Limits Apply To Additional Insureds The most we will pay on behalf of a person or organization who is an additional insured under this Coverage Part is the lesser of: a. The limits of insurance specified in a written contract, written agreement or permit issued by a state or political subdivision; or b. The Limits of Insurance shown in the Declarations. Such amount shall be a part of and not in addition to the Limits of Insurance shown in the Declarations and described in this Section. Page 14 of 24 Form SS 00 08 04 05 0 Agreement for Permit Tracking Software Annual Maintenance Services City of Rosemead, CA July 24, 2007 AGREEMENT FOR PERMIT TRACKING SOFTWARE ANNUAL MAINTENANCE SERVICES JAVU A-iq ~0O8 t This agreement is made and entered into as of the day ofby and between the CITY OF ROSEMEAD, a municipal corporation, hereinafter referred to as City, and HdL SOFTWARE, LLC, a California company, hereinafter referred to as HdL. WHEREAS, City desires to enforce its building permit ordinance to ensure that all persons and organizations doing business within the City are properly permitted; and WHEREAS, HdL shall provide the City with HdL's menu driven Permit Tracking Software that will assist the City to process permits; THEREFORE, it is agreed by the City and HdL as follows: A. SCOPE OF SERVICES - ANNUAL MAINTENANCE HdL will provide annual maintenance support, ongoing software upgrades, and updated data from HdL's proprietary data sets and cross-directories to assist the City in its permit tracking processes. HdL's standard maintenance and customer support includes telephone, email and remote support as needed by the City. B. SOFTWARE LICENSE License. HdL hereby provides a license to the City to use HdL's Permit Tracking Software. The software shall only be used by the City. The City shall not sublet, duplicate, or modify said software. The software shall be returned to HdL at the time the license expires, which is the last day of the last year for which the City has paid the annual maintenance fee to HdL. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. 2. City data. HdL acknowledges that the permit data is the property of the City. At the termination of this Agreement, the permit data will be available to the City in machine-readable format. 3. Proprietary information. As used herein, the term "proprietary information" means any information which relates to HdL'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 HdL proprietary information in connection with this Agreement or otherwise learned or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information that is public information. HdL Software, LLC • • 4I Agreement for Permit Tracking Software Annual Maintenance Services City of Rosemead, CA June 18, 2007 C. WARRANTY AND MAINTENANCE SUPPORT Support services are available to the City during the first year warranty period and during any maintenance year for which the annual maintenance fees have been paid. In the United States, no charge support from HdL Software is available as follows: For technical support between the hours of 8:00 am and 5:00 pm Pacific time, Monday through Friday, email help@hdlcompanies.com or call HdL offices and ask for software application support. For technical support before 8:00 am or after 5:00 pm Pacific time, Monday through Friday (or anytime on Saturday or Sunday), email 911@hdlcompanies.com and an HdL staff member will be paged. Please only include your name, agency and contact # in emails to 911@hdlcompanies.com. You will be contacted as soon as possible. Support policy regarding reports. HdL provides a number of reports with the installation of the permit software. These reports are developed using Crystal Reports and fall into one of two categories, standard or custom. HdL provides support on standard and HdL custom developed reports provided that the reports have not been modified by the City or other third party. Report edits and modifications requested by the City are not covered under the Maintenance Support. Report edits and modifications may include changes to layout, programming, text, City logos and signatures. City requested changes to standard and HdL custom developed reports will be provided on a time and material basis. If the City or other third party modifies a report or designs a report, support on those modified reports are not covered under the Maintenance Support. HdL will provide support for City/third party-modified reports on a time and material basis. Outside Connections to HdL database. HdL software relies on the integrity of the database to operate properly. As such, it is critical that any outside connection to the database be implemented with HdL's full knowledge and participation. i • Only "read only" connections will be established to the HdL database. • No modifications will be made to'the HdL database, including database/table design and data content. • Any repair work necessary due to violations of the above items will be outside the scope of normal contract maintenance, and as such will be billable to the City on a time and material basis. The City shall contact HdL for instructions if any added functionality is required, including reading additional data or writing to the HdL database. D. COMPENSATION There is no charge for the first year of maintenance and customer support. The annual maintenance and customer support fee shall begin at the second year (which includes software upgrades) and shall be $3,385. The annual maintenance fee includes unlimited telephone, email and remote support as needed by the City and upgrades to the software. The annual maintenance fee shall be adjusted at the beginning of each anniversary year following the first year of service. The adjustment shall equal the increase in the most HdL Software, LLC 2 • • Agreement jor Permit Tracking Software Annual Maintenance Services City ojRosemead, CA June 18, 2007 recently published Consumer Price Index (as published by the Bureau of Labor Statistics) for the surrounding statistical metropolitan area, all urban consumers. Each maintenance fee increase shall not be less than two percent (2%) or greater than ten percent (10%). E. CUSTOMIZING SERVICES The permit tracking software is a table-driven system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of permits. However, should the need occur, HdL is available to provide custom enhancements to the permit software on a pre-determined time and material basis. No work shall be performed without prior written approval of the City. The standard rate for these services is $170 per hour. This fee is subject to change annually. F. WARRANTY Commencing upon the City's final acceptance of HdL's Permit Software, HdL warrants: (1) the complete system, including, but not limited to, all software components and software support for one year; and (2) against defective materials and workmanship for each year that the Permit Software is covered by maintenance. Warranty and maintenance response time shall be as soon as possible of notification by the City of its need for maintenance services. G. TERMINATION This Agreement may terminate each year by either party upon written notice 30 days prior to the anniversary date of the Agreement. Upon termination, the software license shall expire, all copies of the software shall be removed from the City's computers and network and the software shall be returned to HdL. H. INDEPENDENT CONTRACTOR HdL shall perform the services hereunder as an independent contractor. No agent, representative or employee of HdL shall be considered as an employee of the City. 1. NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. J. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govem the interpretation of this Agreement. K. INDEMNIFICATION HdL shall indemnify and hold harmless City, its officers, officials and employees from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage including attorney fees which may arise out of the performance of the work described herein, caused in whole or in part by any negligent act or omission of HdL, its officers, agents and employees under this Agreement. HdL Software, LLC 3 i • Agreement for Permit Tracking Software Annual Maintenance Services Citv of Rosemead, CA June 18, 2007 City shall indemnify and hold harmless HdL, its officers, agents and employees, from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage, including attorney fees which may arise from City's negligent acts, errors or omissions under this Agreement. L. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class mail postage prepaid, addressed as follows: City CITY OF ROSEMEAD 8838 E. Valley Blvd. Rosemead, California 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. CITY OF ROS EAD By:. Oliver Chi, City Manager Date HdL SOFTWARE, LLC By: ~iv75 F~Obe f~s', 6 EkST- Date:- 08 By: bL I V Jo ran, Mayor TlotP 0 HdL Software, LLC 0 0 • i Agreement for Permit Tracking Software Annual Maintenance Services Citv of Rosemead, CA AN 24. 2007 AGREEMENT FOR PERMIT TRACKING SOFTWARE ANNUAL MAINTENANCE SERVICES This agreement is made and entered into as of the day of July 2007, by and between the CITY OF ROSEMEAD, a municipal corporation, hereinafter referred to as City, and HdL SOFTWARE, LLC, a California company, hereinafter referred to as HdL. WHEREAS, City desires to enforce its building permit ordinance to ensure that all persons and organizations doing business within the City are properly permitted; and WHEREAS, HdL shall provide the City with HdL's menu driven Permit Tracking Software that will assist the City to process permits; THEREFORE, it is agreed by the City and HdL as l'ollows: A. SCOPE OF SERVICES - ANNUAL MAINTENANCE HdL will provide annual maintenance support, ongoing software upgrades, and updated data from HdL's proprietary data sets and cross-directories to assist the City in its permit tracking processes. HdL's standard maintenance and customer support includes telephone, email and remote support as needed by the City. B. SOFTWARE LICENSE 1. License. HdL hereby provides a license to the City to use HdL's Permit Tracking Software. The software shall only be used by the City. The City shall not sublet, duplicate, or modify said software. The software shall be returned to HdL at the time the license expires, which is the last day of the last year for which the City has paid the annual maintenance fee to HdL. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. 2. City data. HdL acknowledges that the permit data is the property of the City. At the termination of this Agreement, the pcnnit data will be available to the City in machine-readable format. 3. Proprietary infonnation. As used herein, the tern "proprietary information" means any information which relates to HdL'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 HdL proprietary information in connection with this Agreement or otherwise learned or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information that is public information. HdL Software. LLC • • Agreement for Permit Tracking Sofhvare Annual Maintenance Servicas Citv ofRo.semead, CA Jane 18, 2007 C. WARRANTY AND MAINTENANCE SUPPORT Support services are available to the City during the first year warranty period and during any maintenance year for which the annual maintenance fees have been paid. In the United States, no charge support from HdL Software is available as follows: For technical support between the hours of 8:00 am and 5:00 pm Pacific time, Monday through Friday, email help@hdlcompanies.com or call HdL offices and ask for software application support. For technical support before 8:00 am or after 5:00 pm Pacific time, Monday through Friday (or anytime on Saturday or Sunday), email 91 I@hdlcompanies.com and an HdL staff member will be paged. Please only include your name, agency and contact # in emails to 911@hdlcompanies.com. You will be contacted as soon as possible. Support policy regarding reports. HdL provides a number of reports with the installation of the permit software. These reports are developed using Crystal Reports and fall into one of two categories, standard or custom. HdL provides support on standard and HdL custom developed reports provided that the reports have not been modified by the City or other third party. Report edits and modifications requested by the City are not covered under the Maintenance Support. Report edits and modifications may include changes to layout, programming, text, City logos and signatures. City requested changes to standard and HdL custom developed reports will be provided on a time and material basis. If the City or other third party modifies a report or designs a report, support on those modified reports are not covered under the Maintenance Support. HdL will provide support for City/third party-modified reports on a time and material basis. Outside Connections to HdL database. HdL software relies on the integrity of the database to operate properly. As such, it is critical that any outside connection to the database be implemented with HdL's full knowledge and participation. • Only "read only" connections will be established to the HdL database. • No modifications will be made to the HdL database, including database/table design and data content. • Any repair work necessary due to violations of the above items will be outside the scope of normal contract maintenance, and as such will be billable to the City on a time and material basis. The City shall contact HdL for instructions if any added functionality is required, including reading additional data or writing to the HdL database. D. COMPENSATION There is no charge for the first year of maintenance and customer support. The annual maintenance and customer support fee shall begin at the second year (which includes software upgrades) and shall be $3,385. The annual maintenance fee includes unlimited telephone, email and remote support as needed by the City and upgrades to the software. The annual maintenance fee shall be adjusted at the beginning of each anniversary year following the first year of service. The adjustment shall equal the increase in the most HeIL Srffivare, LLC 2 • Agreement for Permit Tracking Software Annual Maintenance Services Citv of Rosemead, CA June 18, 2007 recently published Consumer Price Index (as published by the Bureau of Labor Statistics) for the surrounding statistical metropolitan area, all urban consumers. Each maintenance fee increase shall not be less than two percent (2%) or greater than ten percent (10%). E. CUSTOMIZING SERVICES The permit tracking software is a table-driven system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of permits. However, should the need occur, HdL is available to provide custom enhancements to the permit software on a pre-determined time and material basis. No work shall be performed without prior written approval of the City. The standard rate for these services is $170 per hour. This fee is subject to change annually. F. WARRANTY Commencing upon the City's final acceptance of HdL's Permit Software, HdL warrants: (1) the complete system, including, but not limited to, all software components and software support for one year; and (2) against defective materials and workmanship for each year that the Permit Software is covered by maintenance. Warranty and maintenance response time shall be as soon as possible of notification by the City of its need for maintenance services. G. TERMINATION This Agreement may terminate each year by either party upon written notice 30 days prior to the anniversary date of the Agreement. Upon termination, the software license shall expire, all copies of the software shall be removed from the City's computers and network and the software shall be returned to HdL. H. INDEPENDENT CONTRACTOR HdL shall perform the services hereunder as an independent contractor. No agent, representative or employee of HdL shall be considered as an employee of the City. L NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. J. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. K. INDEMNIFICATION HdL shall indemnify and hold harmless City, its officers, officials and employees from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage including attorney fees which may arise out of the performance of the work described herein, caused in whole or in part by any negligent act or omission of HdL, its officers, agents and employees under this Agreement. HtIL Software, LLC 3 • Agreentent. for Permit Tracking Software Annual Maintenance Senwes City of Rosemead. CA Jane !8. 2007 City shall indemnify and hold harmless HdL, its officers, agents and employees, from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage, including attorney fees which may arise from City's negligent acts, errors or omissions under this Agreement. L. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class snail postage prepaid, addressed as follows: City CITY OF ROSEMEAD 8838 E. Valley Blvd. Rosemead, California 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. CITY OF ROSEMEAD By: O rver Chi, nterim City Manager By: I v HdL SOFTWARE, LLC By: Lloyd de Llamas, Principal Date: John ff an, Mayor HdL Software, LLC Agreemen! for Permit Tracking Software Annual Maintenance Services City of Rosemead. CA June 18. 1007 EXHIBIT "A" If the City has any of the following needs, an additional fee will apply as follows: L Additional User Licenses. Additional user licenses are $750 each and may be added to the software anytime during the life of the Permit Tracking Agreement. 2. Additional training- At City. Will be billed at $1,050 per day. Travel and lodging costs for additional training will be billed at actual cost. 3. Additional training - Web Connection. Will be billed at $90 per hour. 4. Additional training - At HdL Office. Will be billed at $90 per hour. 5. Additional form layout or letters will be billed at $170 per hour. 6. Web Module (view only). The cost is $1,000. ML Sqftware, LLC 5 • • Agreement far Permit Tracking Sgfiware Annual Maintenance Services Citv of Rosemead. CA h(h, 24. 2007 AGREEMENT FOR PERMIT TRACKING SOFTWARE ANNUAL MAINTENANCE SERVICES This agreement is made and entered into as of the day of July 2007, by and between the CITY OF ROSEMEAD, a municipal corporation, hereinafter referred to as City, and HdL SOFTWARE, LLC, a California company, hereinafter referred to as HdL. WHEREAS, City desires to enforce its building permit ordinance to ensure that all persons and organizations doing business within the City are properly permitted; and WHEREAS, HdL shall provide the City with HdL's menu driven Permit Tracking Software that will assist the City to process permits; THEREFORE, it is agreed by the City and HdL as follows: A. SCOPE OF SERVICES - ANNUAL MAINTENANCE HdL will provide annual maintenance support, ongoing software upgrades, and updated data from HdL's proprietary data sets and cross-directories to assist the City in its permit tracking processes. HdL's standard maintenance and customer support includes telephone, email and remote support as needed by the City. B. SOFTWARE LICENSE I. License. HdL hereby provides a license to the City to use HdL's Permit Tracking Software. The software shall only be used by the City. The City shall not sublet, duplicate, or modify said software. The software shall be returned to HdL at the time the license expires, which is the last day of the last year for which the City has paid the annual maintenance fee to HdL. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. 2. City data. HdL acknowledges that the permit data is the property of the City. At the termination of this Agreement, the permit data will be available to the City in machine-readable ' format. Proprietary information. As used herein, the term "proprietary information" means any information which relates to HdL'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 HdL proprietary information in connection with this Agreement or otherwise learned or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information that is public information. HdL Software. LLC Agreement for Pemit Tracking Software Annual Maintenance Services City of Rosemead, CA June 18, 2007 C. WARRANTY AND MAINTENANCE SUPPORT Support services are available to the City during the first year warranty period and during any maintenance year for which the annual maintenance fees have been paid. In the United States, no charge support from HdL Software is available as follows: For technical support between the hours of 8:00 am and 5:00 pm Pacific time, Monday through Friday, email help@hdlcompanies.com or call HdL offices and ask for software application support. For technical support before 8:00 am or after 5:00 pm Pacific time, Monday through Friday (or anytime on Saturday or Sunday), email 911@hdlcompanies.com and an HdL staff member will be paged. Please only include your name, agency and contact # in emails to 911@hd]companies.coin. You will be contacted as soon as possible. Support policy regarding reports. HdL provides a number of reports with the installation of the permit software. These reports are developed using Crystal Reports and fall into one of two categories, standard or custom. HdL provides support on standard and HdL custom developed reports provided that the reports have not been modified by the City or other third party. Report edits and modifications requested by the City are not covered under the Maintenance Support. Report edits and modifications may include changes to layout, programming, text, City logos and signatures. City requested changes to standard and HdL custom developed reports will be provided on a time and material basis. If the City or other third party modifies a report or designs a report, support on those modified reports are not covered under the Maintenance Support. HdL will provide support for City/third party-modified reports on a time and material basis. Outside Connections to HdL database. HdL software relies on the integrity of the database to operate properly. As such, it is critical that any outside connection to the database be implemented with HdL's full knowledge and participation. • Only "read only" connections will be established to the HdL database. • No modifications will be made to the HdL database, including database/table design and data content. • Any repair work necessary due to violations of the above items will be outside the scope of normal contract maintenance, and as such will be billable to the City on a time and material basis. The City shall contact HdL for instructions if any added functionality is required, including reading additional data or writing to the HdL database. D. COMPENSATION There is no charge for the first year of maintenance and customer support. The annual maintenance and customer support fee shall begin at the second year (which includes software upgrades) and shall be $3,385. The annual maintenance fee includes unlimited telephone, email and remote support as needed by the City and upgrades to the software. The annual maintenance fee shall be adjusted at the beginning of each anniversary year following the first year of service. The adjustment shall equal the increase in the most HdL Software, LLC 2 Agreement f nr Pemul Tracking Software Annual Maintenance Services City of Rosemead, CA June l8, 2007 recently published Consumer Price Index (as published by the Bureau of Labor Statistics) for the surrounding statistical metropolitan area, all urban consumers. Each maintenance fee increase shall not be less than two percent (2%) or greater than ten percent (10%). E. CUSTOMIZING SERVICES The permit tracking software is a table-driven system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of permits. However, should the need occur, HdL is available to provide custom enhancements to the permit software on a pre-determined time and material basis. No work shall be performed without prior written approval of the City. The standard rate for these services is $170 per hour. This fee is subject to change annually. F. WARRANTY Conunencing upon the City's final acceptance of HdL's Permit Software, HdL warrants: (1) the complete system, including, but not limited to, all software components and software support for one year; and (2) against defective materials and workmanship for each year that the Permit Software is covered by maintenance. Warranty and maintenance response time shall be as soon as possible of notification by the City of its need for maintenance services. G. TERMINATION This Agreement may terminate each year by either party upon written notice 30 days prior to the anniversary date of the Agreement. Upon termination, the software license shall expire, all copies of the software shall be removed from the City's computers and network and the software shall be returned to HdL. H. INDEPENDENT CONTRACTOR HdL shall perform the services hereunder as an independent contractor. No agent, representative or employee of HdL shall be considered as an employee of the City. 1. NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. J. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. K. INDEMNIFICATION HdL shall indemnify and hold harmless City, its officers, officials and employees from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage including attorney fees which may arise out of the performance of the work described herein, caused in whole or in part by any negligent act or omission of HdL, its officers, agents and employees under this Agreement. HdL Software, LLC 3 • • Agreement for Pemrit Tracking Sall ware Annual Maintenance Services Citv of Rosemead, CA - June 18. 2007 City shall indemnify and hold harmless HdL, its officers, agents and employees, from any liability for damage or claims for personal injury, including death, as well as from claims for breach of confidentiality or property damage, including attorney fees which may arise from City's negligent acts, errors or omissions under this Agreement. L. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class mail postage prepaid, addressed as follows: City CITY OF ROSEMEAD 8838 E. Valley Blvd. Rosemead, California 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. CITY OF ROS EAD By: Oliver Chi, City Manager HdL SOFTWARE, LLC By: Lloyd de Llamas, Principal Date By: Joh ran, Mayor Date: HdL Software, LLC 0 0 Agreement for Permit Tracking Sgfhvare Annual Maintenance Sen ices City of Rosemead, CA June 1R, 2007 EXHIBIT "A" If the City has any of the following needs, an additional fee will apply as follows: 1. Additional User Licenses. Additional user licenses are $750 each and may be added to the software anytime during the life of the Permit Tracking Agreement. 2. Additional training - At City. Will be billed at $1,050 per day. Travel and lodging costs for additional training will be billed at actual cost. 3. Additional training - Web Connection. Will be billed at $90 per hour. 4. Additional training - At HdL Office. Will be billed at $90 per hour. 5. Additional fonn layout or letters will be billed at $170 per hour. 6. Web Module (view only). The cost is $1,000. HA Software. LLC 5 0 0 • • This Agreement is made and entered into as of the ~ day of 4& 2007 by and between the CITY OF ROSEMEAD, a municipal corporation hereinafter called CITY, and HdL Coren & Cone, a California Corporation hereinafter called CONTRACTOR. RECITALS WHEREAS, property tax revenues can be verified and potentially increased through a system of continuous monitoring, identification and reconciliation to county records; and WHEREAS, an effective program of property tax management will assist the CITY in fiscal, economic and community development planning; and WHEREAS, CITY desires the property tax data based reports and data analysis required to effectively manage the CITY property tax base and identify and recover revenues misallocated within the CITY, or to other jurisdictions; and WHEREAS, CONTRACTOR has the programs, equipment, data and personnel required to deliver the property tax services referenced herein; NOW, THEREFORE, CITY and CONTRACTOR, for the consideration hereinafter described, mutually agree as follows: DEFINITIONS Data Base: A computerized listing of property tax parcels and information compiled for CITY from information provided by the County Property Tax Roll: The assessed values of parcels on the lien date as reported by the County TRA: Tax Rate Area SERVICES The CONTRACTOR shall perform the following services: A. Annually, after the Property Tax Roll is available: 1. CONTRACTOR shall establish a Data Base for CITY and install the Data Base on a personal computer or network 2. Utilizing the Data Base, CONTRACTOR will provide • • a. A listing of the major property owners in the CITY, including the assessed value of their property b. A listing of the major property tax payers, including an estimate of the property taxes c. A listing of property tax transfers which occurred since the prior lien date d. A listing of parcels that have not changed ownership since the enactment of Proposition XIIIA C. A comparison of property within the CITY by county-use code designation f. A listing by parcel of new construction activity utilizing city building department data, including building permits with assessor parcel numbers and project completion dates, to identify non-residential parcels with new construction activity and to provide reports for use in the CITY's preparation of Proposition 4 and 111 State Appropriation Limit calculations. g. A listing of multiple owned parcels h. A listing of absentee owner parcels i. Calculate an estimate of property tax revenue anticipated to be received for the fiscal year by the CITY. This estimate is based upon the initial information provided by the County and is subject to modification. This estimate shall not be used to secure the indebtedness of the CITY. j. Upon written request, analyses based on geographic areas designated by the CITY to include assessed valuations and square footage computations for use in community development planning. B. QUARTERLY 1. A listing of property tax appeals filed on properties in the CITY (selected counties). 2. A listing of property transfers that have occurred since the last report. 3. An update of computer program parcel transfer data. 2 • • C. ANALYSIS AND IDENTIFICATION OF MISALLOCATION ERRORS I. In the first year of this Agreement, and as necessary thereafter but not less than once every three years, CONTRACTOR shall conduct an analysis to identify and verify in the CITY parcels on the secured Property Tax Roll which are not properly attributed to a CITY, and will provide the correct TRA designation to the proper County agency. Typical errors include parcels assigned to incorrect TRAs within the CITY or an adjacent city, and TRAs allocated to wrong taxing agencies. 2. CONTRACTOR shall reconcile the annual auditor-controller assessed valuations report to the assessor's lien date rolls and identify discrepancies. 3. CONTRACTOR shall review parcels on the unsecured Property Tax Roll to identify inconsistencies such as value variations, values being reported to a mailing address rather than the situs address, and errors involving TRAs (to the extent records are available). 4. Property transfers and new construction completions will be tracked to determine whether reassessment is performed within a reasonable time. The CITY will be notified of parcels which have failed to be reassessed. D. ON-GOING CONSULTATION - During the term of this Agreement, CONTRACTOR will serve as the CITY's resource staff on questions relating to property tax and assist in estimating current year property tax revenues. On-going consultation would include, but not be limited to, inquiries resolved through use of the CITY's data base. E. OPTIONAL SERVICES - The following services are available on a time and materials basis Generation of specialized data-based reports which would require additional programming or the purchase of additional data not necessary to carry out services outlined in Sections A, B, and C. 2. Any research with county agencies for which CONTRACTOR does not have a current database. 3 0 0 3. Redevelopment Financial Services including but not limited to: a. Tax increment projections b. Feasibility studies c. Agency or Project Area cash flows d. Low and moderate income housing set-aside calculations, findings and consultations e. Fiscal impact studies f Legislative analysis g. Redevelopment plan adoption and amendment financial feasibility studies F. BOND SERVICES - Bond services are available for a fixed fee, including Tax Allocation Bonds fiscal consultant reports 2. Mello-Roos Special Tax studies 3. Independent redevelopment and financial consultant reports, such as escrow release reports and additional bond tests CONSIDERATION A. CONTRACTOR shall provide the services described in Services - Sections A, B, C and D above, for an annual fee of $12,600 invoiced quarterly. B. For services pursuant to Section C of Services, CONTRACTOR shall receive 25 percent of net general fund or tax increment property tax revenue recovered or reallocated that is the result of an audit, analysis or consultation performed by CONTRACTOR (including but not limited to base year value audits; administration of tax sharing agreements; tax increment allocation reviews). CONTRACTOR shall separate and support said reallocation and provide AGENCY with an itemized invoice showing all amounts due as a result of revenue recovery or reallocation. AGENCY shall pay audit fees after Contractor's submittal of evidence that corrections have been made by the appropriate agency. Payment to CONTRACTOR shall be made after AGENCY receives its first remittance advice during the fiscal year for which the correction applies. 4 • • C. Fees for Optional Services as outlined in Services - Section E above shall be billed at the following hourly rates: Partner $150 per hour Principal $135 per hour Associate $100 per hour Senior Analyst $ 85 per hour Analyst $ 60 per hour Administrative $40 per hour Hourly rates are exclusive of expenses, which are billed at 1.15 times actual incurred costs. D. Fees for Bond Services -Section F above will be determined depending upon the complexity of the bond issue and the time available for completion of the task. E. Except for fees billed under Section C above, all sums billed shall constitute full reimbursement to CONTRACTOR for all direct and indirect expenses incurred by CONTRACTOR in performing analyses and audits including the salaries of CONTRACTOR's employees, and travel expenses connected with contacting appropriate county department representatives. F. All fees are due 30 days immediately following billing. All undisputed amounts that are not paid when due shall accrue interest from the due date at the lesser of 18% per annum or the maximum rate allowed by law. CITY MATERIALS AND SUPPORT CITY agrees to provide the following information: A. Current CITY and Agency maps and zoning map; B. A copy of reports received by the CITY and Agency annually from the Auditor-Controller's office detailing assessed values (secured, unsecured and utilities), as well as unitary values for reconciliation analysis; C. Parcel listing and maps of CITY or Agency parcel annexations since the lien date roll; D. A listing of completed new construction projects with Assessor's map book, page and parcel numbers (APN) for proper identification and tracking for two years prior to the date of this Agreement. If the data does not include 5 • • the APN information, CONTRACTOR will research this information at an additional cost; E. A listing of the CITY levies assessment districts and direct assessments. INDEPENDENT CONTRACTOR CONTRACTOR shall perform the services hereunder as an independent CONTRACTOR and shall furnish such services in his 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. NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by CONTRACTOR without the written consent of CITY. ATTORNEY'S FEES In the event a legal action is commenced to enforce any of the provisions of this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney's fees. NON-DISCLOSURE CLAUSE In performing its duties under this Agreement, CONTRACTOR will produce reports, technical information and other compilations of data to CITY. These reports, technical information and compilations of data are derived by CONTRACTOR using methodologies, formulae, programs, techniques and other processes designed and developed by CONTRACTOR at a substantial expense. CONTRACTOR'S reports, technical information, compilations of data, methodologies, formulae, programs, techniques and other processes designed and developed by CONTRACTOR shall be referred to as Proprietary Information. CONTRACTOR'S Proprietary Information is not generally known by the entities with which CONTRACTOR competes. CONTRACTOR desires to protect its Proprietary Information. Accordingly, CITY agrees that neither it nor any of its employees, agents, independent contractors or other persons or organizations over which it has control, will at any time during or after the term of this Agreement, directly or indirectly use any of CONTRACTOR'S Proprietary Information for any purpose not associated with CONTRACTOR'S activities. Further, CITY agrees that it nor any of its employees, agents, independent contractors or other persons or organizations over which it has control, will disseminate or disclose any of CONTRACTOR'S Proprietary Information to any person or organization not connected 6 with CONTRACTOR, without the express written consent of CONTRACTOR. The CITY also agrees that it will undertake all necessary and appropriate steps to maintain the proprietary nature of CONTRACTOR'S Proprietary Information. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. TERMINATION This Agreement may be terminated by either party 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 work through the date of termination. Upon termination as provided herein, CONTRACTOR shall be paid the value of all tax analysis and reporting work performed less payments previously made by CITY. In ascertaining the value of the work performed up to the date of termination, consideration shall be given to amounts due for any unpaid invoices, and to parcels identified by CONTRACTOR which may result in increased or reallocated revenues after the termination of this Agreement. After CITY receives said tax payments, CONTRACTOR shall be paid for the percentage work as previously authorized and satisfactorily performed at the times provided in the preceding section entitled "Consideration". INDEMNIFICATION CONTRACTOR hereby agrees to, and shall hold CITY, its elective and appointive boards, officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from CONTRACTOR'S willful or negligent acts, errors or omissions or those of its employees or agents. CONTRACTOR agrees to and shall defend CITY and its elective and appointive boards, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid willful or negligent acts, errors or omissions. CITY hereby agrees to, and shall hold CONTRACTOR, its officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death as well as from claims for breach of confidentiality or property damage which may arise from CITY'S negligent acts, errors or omissions under this Agreement. CITY agrees to and shall defend CONTRACTOR and its officers, agents and employees from any suits or actions at law or in equity for damage caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. 7 • v • NOTICE All notices required by this Agreement shall be given to CITY and CONTRACTOR in writing, by personal delivery or first class mail postage prepaid, addressed as follows: CITY City of Rosemead P.O. Box 399 Rosemead, California 91770 CONTRACTOR: HdL COREN & CONE 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. EAD G-1-1 ~ L L, 4 / City Clerk CONTRACTOR: HdL COREN & CONE A California Corporation ~o. TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CFI'~Y COUNCIL FROM: BILL CROWECITY MANAGER DATE: JULY 1, 2003 RE: RESOLUTION NO. 2003-23, AUTHORIZING EXAMINATION OF SALES AND USE TAX RECORDS Attached for your consideration is Resolution No. 2003-23 which updates the Board of Equalization records regarding the distribution of confidential sales and use tax information. The resolution authorizes positions instead of designating specific individuals. It is recommended that the City Manager, Assistant City Manager, Director of Finance, Mayor, Mayor Pro-tem and Council Members be the designated positions. Attached are the following: a letter of request from the Board of Equalization, the contract with HDL Companies, the original Resolution No. 85-35 designating specific individuals to review confidential information and Ordinance No. 363 authorizing the State Board of Equalization to administer the sales and use tax. I have also attached a recent memorandum from HDL regarding Sales and Use Tax Confidentiality. All documents have been reviewed by the City Attorney. RECOMMENDATION It is recommended that the City Council adopt Resolution No. 2003-23 authorizing the examination of sales and use tax records. COUNCIL AGENDA J U L 08 2003 ITEM No. (a) City administration (b) Revenue management and budgeting (c) Community and economic development (d) Business license tax administration The information obtained by examination of Board records shall be used only for those governmental functions of the City listed above. Section 3. That Hinderliter, de Llamas & Associates is hereby designated to examine the sales and use tax records of the Board-pertaining to sales and use taxes collected, for the City by the Board. The person or entity designated by this section meets all of the following conditions:. (a) has an existing contract with the City to examine those sales and use tax records; (b) is required by that contract to disclose information contained in, or derived from, those sales and use tax records only to the officer or employee authorized under Sections 1 or 2 of this resolution to examine the information. (c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract: and (d) is prohibited by that contract from retaining the information contained in, or derived from those sales and use tax records. after that contract has expired. The information obtained by examination of Board records shall be used only for purposes related to the collection of City sales and use taxes by the Board pursuant to the contract between the City and the Board and for purposes relating to the governmental functions of the City listed in section 2 of this resolution. Introduced, approved and adopted this ' day of ATTEST: (s) City Clerk (s) Mayor 2003. I, City Clerk of the City of California. DO HEREBY CERTIFY that the foregoing resolution was duly introduced approved and adopted by the City Council of the City of . at a regular meeting of said Council held on the _ day of 20 , by the following roll call vote: AYES: NOES: ABSENT. (s) City Clerk 06/11/03 02:19 BOE LOCAL REV 4 626 307 9218 NO.311- P02 STATE OF CALIFORNIA STATE BOARD OF EQUALIZATION JDwwXLEHS Fm, Dmda, Hv .d LOCAL REVENUE ALLOCATION SECTION 450 N STREET, MIG 27, SACRAMENTO. CALFORNIA DEAN "DAL 6xa+d Dlstria. SiocNm (PO BOX 042870, SACRAMENTO, CALIFORNIA 94279-0027) TELEPHONE (018) 324-1388 C✓.UDE PARRIBH Thy Oiwa yen Din. FAX (810) 324.8117 WW .boo _m gnv JOHN CHIANG October 2. /vuz Ew u D.:o a, Lo 0. Da ee FRANK TRIPEPI CITY MANAGER CITY OF ROSEMEAD PO BOX 399 ROSEMEAD, CA 91770 TAC 19073 Dear Mr. Tripepi: Authorization to Review Confidential Sales and Use Tax Information Pursuant to Revenue and Taxation Code Section 7056 JAMES E. SPEED Fae . N; m We are requesting your assistance in updating our records regarding the disclosure to the City of Rosemead of confidential sales and use tax inforination. Revenue and Taxation Code Section 7056 restricts the release of confidential sales and use tax information to officers or employees of local jurisdictions who are designated by a resolution of the legislative body of the jurisdiction, or by a letter of designation; if such authority to designate has been granted by the resolution. We have conducted a review of the City of Rosemead's resolution and our review has disclosed the following questionable situation(s): Some of the authorized individuals are no longer with the City. Our records show Resolution 85-35, dated August 13, 1985 on file with the Board of Equalization for the City of Rosemead. Resolution 85-35 authorizes the following City Officials to receive and review confidential sales and use tax transactions for the City: Louis Tury, Jr., Mayor Robert W. Buesch, Councilmember Gary A. Taylor, Councilmember Susan Neely, Assistant Finance Officer Jay T. Imperial, Mayor Pro tem G H "Pat" Cleveland, Councilmember Frank G. Tripepi, City Manager There is no authority granted in the resolution to designate other officials by letter. The consultant Robert Kinderliter & Associates (currently known as The HDL Companies) is designated as a representative of the City to examine confidential sales and use tax data. IWTHLEEN CONNELL slue Con . S~'. AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES This Agreement is made and entered into as of the 13th day of .August , 1985 by and between the CITY OF ROSEMEAD a Municipal Corporation, hereinafter called CITY, and ROBERT HINDERLITER AND ASSOCIATES, a California Corporation, hereinafter called CONTRACTOR. RECITALS' This Agreement is entered into with reference to the following facts and circumstances. 1. That City desires to engage Contractor to render certain professional services hereafter described in connection with the review of sales tax revenue generated by businesses located within the City; and, 2. That Contractor is qualified to provide such services to the City; and, 3. That the Rosemead City Council has elected to engage the services of Contractor upon the terms and conditions as hereinafter set forth. SERVICES The services to be performed by Contractor under this agreement shall include, but not be' limited to, those services set forth in Parts One and Two of that certain "Agreement for Sales Tax. Audit and Information Services," hereinafter called Proposal, a copy of which is attached hereto as Exhibit "A" and by this reference incorporated herein and made a part hereof as though it were fully set forth herein. Performance of the work specified in said Proposal is hereby made an obligation of Contractor under this Agreement, subject to any changes which may be make subsequently hereto upon the mutual written agreement of the said parties. -1- EXHIBIT "A" AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES Part One - Basic Services The scope of work is divided into the specific tasks that are necessary to provide the City with reasonable assurance it is receiving the sales tax dollars it is entitled to. Also included are the task descriptions covering development of the information necessary to evaluate trends, target economic development efforts, and improve the sales tax productivity of the existing base. TASK A. Transfer sales tax return data from quarterly reports provided by the State Board of Equalization for the immediate prior three (3) quarters to the computer data bases that provide a basis for all future analyses. Enter business name from Contractor provided computer listing of sales tax permitees reqistered in City and assign geo-code designation. TASK B. Enter sales tax return data from each subsequent quarterly report and provide City with computer reports generated from the two basic data bases - Sales By the Major Outlet, and Sales By Category. Reports provided on a quarterly basis include: Major Outlets by Industry type, Top 50 Producers by rank, Growth and Decline Comparisons with other Jurisdictions, Growth and Decline Comparisons by Category, Sales by Geographic Area, Sales by Business Type, and supplemental charts and graphs. Evaluation of this data to detect deviance in reporting by tax payers with multiple outlets is a very important part of the effort to isolate error and recover lost revenue. TASK C. Develop and maintain in conjunction with City staff a "current business retention" program designed to protect the existing sales tax base. Sample letters and survey documents will be provided that enable the City to gain knowledge of business plans to expand or relocate. This is an effective way to let business managers know their presence in the community is appreciated, while enabling the City to act in a timely way to influence relocation decisions. Work within this task will also include. evaluation of the existing system of correlating business license data with permit data provided by the State Board of Equalization. Recommendations for system improvements, if appropriate, will be provided. -2- onal Part Two Services The services described in this part provide the City with the option to pursue opportunities for augmentation of its sales tax base thru effective use of information -developed as'part of the Audit and Information Service. Major outlets whose sales tax reporting patterns reveal a probability of error are contacted in order to make sure the City is receiving all the point-of-sale dollars from local transactions. Firms with the potential for making constructive moves in point-of-sale determining activity are identified, contacted and encouraged to locate the sales personnel responsible for that activity in the City. Assistance is provided in making the reporting changes that assure the City of receiving proper credit for new taxable sales. Note: Sensitivity to the needs and interests of the business community are essential for the maintenance of a positive business climate. Experience with this work shows that the contacts authorized by the City for sales tax development purposes are perceived by business leaders as evidence of careful management of municipal resources. It is generally understood that maximization of revenues available from sales tax makes a city less dependent on local fees and taxes. Also, the correction of allocation errors does not result in any additional tax obligation. The steps provided for in this part assure the city of ongoing control of field contacts. Task A. Identify from the Audit and Information Reports the companies currently located in the City that have unrealized potential for, producing additional sales tax revenue. Identify those outlets with aberrant reporting patterns where the probability of significant error warrants review. Task B. Obtain city approval to begin the work of inducing change in tax reporting methodology or point-of-sale for the identified companies. The approval process is accomplished thru separately approved "Part Two Work Authorizations" (sample attached). The City is thereby assured of continuing participation in and control of the essential field contacts. -3- Task C. Initiate contact with the appropriate officials in the companies that have been identified in Task "A" Generally, the initial contacts will be with the person responsible for reporting sales tax receipts to the State Board of Equalization. This establishes the current reporting methodology and makes it possible to verify its accuracy and appropriateness. In those instances where error is found, the necessary documentation and correspondence is provided to obtain confirmation by the Board of Equalization and subsequent recovery of misallocated revenue. Meetings with sales and/or management personnel who have knowledge of product lines, and the distribution of taxable sales activities are arranged. The information obtained here is evaluated for the purpose of determining whether current receipts accurately reflect the local sales activity. In addition, an evaluation is made of the potential for positive change in the location of point-of-sale tax generating activities. Movement of point-of-sale activity may require City zoning or permit approval. Should this be the case, meetings will be arranged with the appropriate City officials, and the company will be assisted with the process. To the extent City officials or staff involved in Economic Development are available to assist in the efforts to induce the relocation of tax producing activity, their participation is encouraged. MEASURE OF PERFORMANCE AND COMPENSATION The measure of performance shall be the incremental growth in the local sales and use tax reported by those companies identified in a "Part Two Work Authorization" (copy attached). Base sales tax amounts, inflationary growth, and incremental growth determined by the City to be attributable to causes other than the work authorized in this agreement shall be deducted prior to calculating compensation. The amount of gain is verified by reference to the sales tax return data developed by the State Board of Equalization and provided to the city on a quarterly basis. The Adjusted Incremental Growth on which compensation is calculated is determined by subtracting (a) same quarter base year receipts adjusted for inflation, and (b) city determined adjustments for growth not attributable to work authorized in this agreement, from (c) current receipts. -4- Fee for Basic Services - Part One NOT APPLICABLE payable upon completion of the computer data bases and reports covering the prior three sales tax quarters as described in TASK "A". Three Hundred Dollars ($300.00) per month for the work described in TASK'"B", and Task "C" so long as this agreement is in effect.. The City will be invoiced quarterly for the services rendered in the prior three month period. Fee for Optional Services - Part Two The services described in Part Two of this agreement are available to the City at its option. Contractor will not perform or charge for Part Two work without separate written authorization by the City in the form of an approved "Part Two Work Authorization" (sample attached). The fee for services described in Part Two is Fifteen (15) percent of: 1. New sales and/or use tax revenue received as a result of work performed by contractor for the the first eight (8) quarters following verification of incremental sales tax gain in accordance with an approved "Part Two-Work Authorization". 2. Fund Transfers processed by The Board of Equalization for taxpayer misallocations found by Contractor and paid to City. The City will be provided with a quarterly invoice showing all formula calculations and amounts due. Authorization and Termination Provisions This agreement becomes effective when endorsed by the City in the space provide below, and may be terminated by either party with 30 days written notice. Upon termination, Contractor shall be paid the value of Part One work performed, less payments of compensation previously made. Compensation for any Part Two work previously agreed to and satisfactorily performed shall-be governed by the provisions of the applicable "Part Two Work Authorization -5- Confidentiality 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 State Board of Equalization. This section specifies the conditions under which a City may authorize persons other than City officers and employees to' examine State Sales and Use Tax records. The following conditions specified in Section 7056 (b),(1) of the State of California Revenue and Taxation Code are hereby made part of this contractual agreement. A. Contractor is authorized by this agreement to. examine sales and use tax records of the Board of Equalization provided to City pursuant to contract under the_'Bradley-Burns Uniform Sales and Use Tax Law. B. Contractor is required to disclose information contained in, of derived from, those sales and use tax records only to an officer or employee of the City who is authorized by resolution to examine the information. C. Contractor is prohibited from performing consulting services for a retailer during the term of this agreement. D. Contractor is prohibited from retaining the information contained in, or derived from, those sales and use tax records, after this agreement has expired . Information obtained by examination of board 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. -6- INDEPENDENT CONTRACTOR Contractor shall perform the services hereunder as an independent contractor and shall furnish such services in his 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. NONASSIGNMENT This Agreement is not assignable either in whole or in part by Contractor without the written consent of City. ATTORNEY'S FEES In the event a legal action is commenced to enforce any of the provisions of this-Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney's fees. GOVERNING LAW This Agreement shall be governed by the laws of the State of California INDEMNIFICATION Contractor hereby agrees to, and shall hold City, its elective and appointive boards officers,, agents and employees, harmless from.any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from Contractor's negligent acts, errors or omissions under, this Agreement. Contractor agrees to and shall defend City and its elective and appointive boards, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. City hereby agrees to, and shall hold Contractor, its officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from City's negligent acts, errors or omissions under this Agreement.. City agrees to and shall defend Contractor and its officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. -7- NOTICE All notices required and Contractor in prepaid, addressed as by this Agreement shall be given to City writing, by first class mail postage follows: City: Frank G. Tripepi City Manager City of Rosemead 8838 E. Valley Blvd. Rosemead, Ca. 91770 Contractor: Robert Hinderliter President 507 Michel P1. Placentia, Ca. 92670 IN WITNESS WHEREOF, the parties hereto Agreement to be executed on the date first their respective officers duly authorized in CITY: CITY CLERK/ CONTRACTOR: ROBERT HINDERLITER & ASSOCIATES a California corporation PRESIDENT APPROVED AS TO FORM: CITY ATTORNEY have caused this above written by that behalf. - CITY OF ROSEMEAD, a municipal corporation MAYOR -8- RESOLUTION NO. 85-35 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD AUTHORIZING CERTAIN CITY OFFICIALS AND A CITY CONTRACTOR ACCESS TO SALES AND USE TAX RECORDS PURSUANT TO GOVERNMENT CODE SECTION 7056 THE CITY COUNCIL OF THE CITY OF ROSEMEAD HEREBY RESOLVES AS FOLLOWS. Section 1. The following City officials are hereby authorized to receive and review sales and use.tax transactions, for the City of Rosemead, from the Board of Equalization: Mayor: Mayor Pro Tem: Councilmember: Councilmember: Councilmember: City Manager: Assistant Finance Officer Louis Tury, Jr. Jay T. Imperial Robert W. Bruesch G. H. "Pat" Cleveland Gary A. Taylor Frank G. Tripepi Susan M. Neely Section 2. The following independent contractor for the City of Rosemead is hereby also authorized to receive and review sales and use tax transactions for the City of Rosemead: Robert Hinderliter & Associates: Robert Hinderliter, President Section 3. The City of Rosemead hereby cetifies that Robert Hinderliter & Associates: A. Has an existing contract with the City of U Rosemead to receive sales and,use tax records.; and B. Is required by that contract to disclose information contained in, or derived from, those sales and use tax records only to an officer or employee of the City who is authorized by this resolution to examine the information; and C. Is prohibited by that contract from performing consulting services for a retailer during the term of that contract; and D. Is prohibited by that contract from retaining the information contained in, or derived from, those sales tax records, after that contract has expired. Section 4. Information obtained by examination of board records shall be used only for purposes related to the collection of local sales and use taxes by the board pursuant to the contract, or for purposes related to other govern- mental functions. Section 5. This resolution supercedes all previous authorizations. Section 6. The City Clerk shall certify to. the adoption of this Resolution and send forward a certified copy to the Board of Equalization. MAYOR ATTEST: l CITY CLERK Rd MW ISSUE UPDATE June 16, 2003 (909) 861-4335 www.hdlcomoanies.com To: All Clients Re: Sales'and Use Tax Confidentiality HdL regularly fields questions about the rules for maintaining the sales and use tax confidentiality. This Issue Paper summarizes the key points to remember and also includes tips to consider when preparing tax-sharing agreements. Sales Tax Information, Non-Disclosure Sales tax data is required by Revenue and Taxation Code Section 7056 to be kept confidential. Thus, it is unlawful for any person who obtains access to sales and use tax records, to make known in any manner the information disclosed on any [tax] return, including any abstract thereof. Accordingly, a local agency may not disclose amounts of tax paid, whether tax amounts are up or down from a prior period, or any other information that would reveal the business affairs or operations of a business. Though confidential by law, sales and use tax information can be used by local government officials if the use is "related to collection of local sales and use taxes" or "related to other governmental functions of the county, city and county, or city." Permit administrators, finance or revenue managers, economic development staff, redevelopment and community development personnel, and business license officials can benefit from access-to local sales and use tax allocation information. However, only those positions or individuals authorized by resolution of the governing body (City Council or Board of Supervisors) may have access to confidential data and each person so authorized is required to abide by the provisions of Revenue and Taxation Code Section 7056. Combined Information May be Disclosed Sales tax payments for groups of businesses may be revealed to the general public if the so-called "gang of four" rule is followed. This rule allows combined data for four or more businesses to be released as long as no single member of the group is the source of a disproportionate percentage of the group total. The "group" may be defined as businesses in the same shopping center, a specific business type such as new auto sellers, or businesses sharing the same major business group. Pursuant to an authorization signed by Governor Wilson in April 1994, it is also possible to publish a list of the top sales tax generators if all of the following conditions are met: • At least 25 retailers are included; • Businesses are presented in random or alphabetical order; • Businesses are not ranked by amount paid; and • Sales or use tax amounts are omitted. Special Issue: Sales Tax Sharing Agreements If not handled properly, so-called tax sharing agreements between a local government and a retailer can result in improper disclosure because these agreements are often tied to a retailer's sales activity. To satisfy the public's right to know how local tax revenues are being used while staying within confidentiality rules, Hill- recommends that clients obtain explicit taxpayer permission to disclose any confidential information that may be in a tax sharing agreement. Such provisions should be incorporated in the tax sharing agreement. HdL also advises local agencies to require a business participating in a tax sharing agreement to supply copies of its quarterly sales and use tax returns as a means to document local sales activity and administer the agreement. Local agencies can then use BOE data to verify what the participating business has disclosed. New Restrictions on Use of Board of Equalization Data A131945, adding Section 1798.69 to the Civil Code, was signed into law in 2000. The bill bars the release of the names and addresses of individuals in order to protect the privacy of these often home- based businesses. The BOE codes these firms as married co-ownership companies or sole proprietorships. The ownership code is provided in your HdL Sales Tax Software. "M" designates married co-ownership firms. "S" denotes a sole proprietorship. Similar information collected by a local government in the normal course of business license administration, or from other sources, may be released, but Section 1798.69 prohibits disclosure if the BOE is the information source. Remember, maintaining confidentiality protects local businesses from competitors. It also precludes penalties such as losing access to Board of Equalization ("BOE") sales and use tax data. 1) ORDINANCE NO.363 AN ORDINANCE IMPOSING A SALES AND USE TAX TO BE ADMINISTERED BY THE STATE BOARD OF EQUALIZATION AND PROVIDING, PENALTIES FOR VIOLATIONS AND AMENDING THE ROSEMEAD MUNICIPAL CODE. THE CITY COUNCIL OF THE CITY OF ROSEMEAD DOES ORDAIN AS FOLLOWSP A new Chapter One (1) of Article Six (6) of the Rosemead Municipal Code is hereby adopted to read: SECTION 6100. SHORT TITLE. This ordinance shall be known as the Uniform Local Safes and Use Tax Ordinance. SECTION 6101. 'RATE. The rate of sales tax and use tax imposed by this Ordinance shall be one percent (1%). SECTION 6102. OPERATIVE DATE. This Ordinance shall be operative on January 1, 1974. SECTION 6103. PURPOSE. The City Council hereby declares that this ordinance is adopted to achieve the, following, among other, purposes, and directs that the provisions hereof be interpreted in order to. accomplish those purposes: (a) To adopt a sales and use tax ordinance which complies with,the requirements and limitations contained in Part 1.5 of Division 2 of the Revenue and Taxation Code; (b) To adopt a sales and use tax ordinance which incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.5 of Division 2 of the Revenue and Taxation Code; (c) To adopt a sales and use tax ordinance which imposes a tax and provides a measure therefor that can be administered and collect by the State Board of Equalization in a manner that adapts itsel as fully as practicable to, and requires the least possible deviation from the existing statutory and administrative procedures followed by the State Board of Equalization in administering and-collecting the California State Sales and Use Taxes; (d) To adopt a sales and use tax ordinance which can be administered in a manner that will, to the degree possible consistent with the provisions of Part 1.5 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting city sales and use taxes and at the same time minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance. SECTION 6104. CONTRACT WITH STATE. Prior to the operative date this City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this sales and use tax ordinance; provided, that if this city shall not have contract with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such contract rather than the first day of the first calendar quarter following the adoption of this ordinance. SECTION 6105. SALES TAX. For the privilege of selling tangible personal property at retail a tax is hereby imposed upon all retailers in the City at the rate stated in Section 6101 of the gross receipts of the retailer from the sale of all tangible personal property sold at retail in this City on and after the operative date. Page Two 3 ordinance Me. 3(, SECTION 6106. PLACE OF SALE. For,the purposes of this ordinance; all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-State destination or to a common carrier for delivery to an out=of-State destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the State sales and use tax, regardless of the place to which delivery is made.' In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the. State Board of Equalization. SECTION 6107. USE TAX. An excise tax is hereby imposed on the storage, use or other consumption in the. City of tangible personal property purchased from any retailer on and after the operative date for storage, use or other consumption in this City at the rate stated in Section 6101 of the sales price of the property. The sales price shall include delivery charges when such charges are subject to State sales or use tax regardless of the place to which delivery is made. SECTION. 6108. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.5 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein. SECTION 6109. LIMITATIONS ON ADOPTION) OF STATE LAW. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. The substitution, however, shall not be made when the word "State" is used as part of the title of the State Controller, the State Treasurer, the State Board of Control, the State Board of Equalization, the State Treasury, or the Const-itution of the State of California; the substitution shall not be made-when the result of that substitution would require action to be taken by or against the City, or any agency thereof rather. than by or against the State Board of Equalization, in,performing the functions incident to the administration or operation of this ordinance; the substitution shall not be made in those sections, including but not necessarily limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to provide an exemption from this tax with respect to certain sales,, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales,storage, use or other consumption remain subject to tax by the State under the provisions.of Part 1 of Division 2 of the Revenue and Taxation Code, or to impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the State under the said provisions of that Code; the substitution shall not be made in sections 6701, 6702.(except in the last sentence thereof), 6711, 6715, 6737, 6797, or 6828 of the Revenue and Taxation Code; and the substitution shall not be made for the word "State" in the phrase "retailer engaged in business in this State"in Section 6203 or in the definition of that phrase in Section 6203. SECTION 6110. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional seller's permit shall not be required by this ordinance. SECTION 6111. EXCLUSIONS AND EXEMPTIONS. There. shall be excluded from the measure of tax: (a) The amount of any sales or use tax imposed by the State of California upon a retailer or consumer. (b) The storage, use or other consumption of tangible personal property, the gross receipts from the sale of which has been subject to sales tax under a sales and use tax ordinance enacted in accordance with Part 1.5 of Division 2 of the Revenue and Taxation Code by any city and county, county, or city in this State. Page Three ordinance No. 36 3 (c) The gross receipts from sales to, and the storage, use or other consumption of property purchased by, operators of common carriers and waterborne vessels to be used or consumed in the operation of such common carriers or waterborne vessels, prin- cipally outside this City. (d) The storage or use of tangible personal property in the trans- portation or transmission of persons, property or communications, or in the generation, transmission or distribution of electricit} or in the manufacture, transmission or distribution of gas in intrastate, interstate or foreign commerce by public utilities which are regulated by the Public Utilities Commission of the State of California. SECTION 6112. EXCLUSIONS AND EXEMPTIONS. (a) The amount subject to tax shall not include any sales or use tax imposed by the State of California upon a retailer or consumer. (b) The storage, use, or other consumption of tangible personal property, the.gross receipts.from the sale of which have been subject to tax under a sales and use tax ordinance era-ted in accordance with Part 1.5 of Division 2 of the Revenue and Taxation Code by any city and county, county, or city in this State shall be exempt from the tax due under this ordinance. (c) There are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of waterborne vessels to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the carriage of persons or property in such vessels for commercial purposes. (d) The storage, use, or other consumption of tangible personal property purchased by operators of waterborne vessels and used or consumed by such operators directly and exclusively in the carriage of persons or property of such vessels for commercial purposes is exempted from the use tax. (e) There are-exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government. (f) In addition to the exemptions provided in Sections 6366 and 6366. of the Revenue and Taxation Code the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempted from the use tax. SECTION 6113. APPLICATION OF PROVISIONS RELATING TO EXCLUSIONS AND EXEMPTIONS. (a) Section 6112 of this ordinance shall become operative on January 1st of the year following the year in which the State Board of Equalization adopts an assessment ratio for state- assessed property which is identical to the ratio which is required for local assessments. by Section 401 of the Revenue and Taxation Code, at which time Section 6111 of this ordinance shall become inoperative. (b) In the event that Section 6112 of this ordinance becomes operative and the State Board of Equalization subsequently adopts an assessment' ratio for the state-assessed property which is higher than the ratio which is required for local assessments,by,Section 401 of the Revenue and Taxation Code, Page Four Ordinance No. 36 3 Section 6111 of this ordinance shall become operative on the first day of the month next following the month in which such higher ratio is adopted,.at which time Section 6112 of this ordinance shall be inoperative until the first day of the month following the month in which the Board again adopts an assessment ratio for state-assessed property which is identical to the ratio required for local assessments by Section 401 of. the Revenue and Taxation Code,- at which time Section 6112 shall again become operative and Section 6111 shall become inoper= ative. SECTION 6114. AMENDMENTS. All subsequent amendments of the Revenue and Taxation Code which relate to the sales and use tax and which are not inconsistent with Part 1.5 of Division 2 of the Revenue and.Taxation Code shall automatically become a part of this ordinance. SECTION 6115. ENJOINING COLLECTION FORBIDDEN. Wo injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or this City, or against any officer of the State or this City, to prevent or enjoin the collection under this ordinance, or Part 1.5 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collecte( SECTION 6116. PENALTIES. Any person violating any of the provisions of this ordinance shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not more than $500.00 ' or by imprisonment for a period of not more than six months, or by both such fine and imprisonment. SECTION 6117. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby. SECTION 6118. REPEALS. Present Chapter 1 of Article VI of the Rosemead Municipal Code entitled "Uniform Local Sales and Use Tax Ordinance" is hereby repealed; provided, however, that said Chapter shall remain applicable for the purposes of the administration of said Chapter a) the imposition of and the collection of tax with respect-to the sales of, and the storage, use, or other consumption of tangible personal property prior to January 1, 1974, the making of refunds, effecting credits, the disposition of monies collected, and for the commencement or continuance of any action or proceeding under said Chapter. PASSED, APPROVED, AND ADOPTED THIS _2~_DAY OF OCTOBER, 1973. "1 YOR OF THE CITY OF ROSEMEAD' ATTEST: L C Y CLERK MAYOR: JOE VASOUEZ MAYOR PRO TEM: MARGARETCLARK COUNCILMEMSERS: JAY T. IMPERIAL GARY. A. TAYLOR WILLIAM. F. ALARCON July 9, '_003 Cleveland Turner Associate Tax Auditor Local Revenue Allocation Section State Board of Equalization 450 N Street. N11C 27 Sacramento, CA 94279-0027 Dear Mr. Turner. 8838 E. VALLEY BOULEVARD • P.O. BOX 399 ROSEMEAD, CALIFORNIA 91770 TELEPHONE (626) 569-2100 FAX (626) 307-9218 - At their regular meeting of July 8, 2003, the Rosemead City Council adopted Resolution No. 2003-21, Authorizing Examination of Sales and Use Tax Records. Enclosed is Resolution No. 2003-23. Also enclosed is a copy of the City's agreement with Robert FImderliter & Associates (I-IDL). Please give me a call if you have any questions at 626/569-2171. NANCY VALDER -W-k City Clerk City of Rosemead Encl. RESOLUTION NO, 2003-23 , A RESOLUTION OF THE CITY COUNCIL OF THE CITY ROSEMEAD_ AUTHORIZING EXAMINATION OF SALES AND USE TAX RECORDS WHEREAS, pursuant to Ordinance No. 363, the City of Rosemead entered into a contract with the State Board of Equalization to perform all functions incident to the administration and collection of local sues and use taxes; and „ WHEREAS; the City Council of the City of Rosemead deems it desirable and necessary. for authorized representatives of the City to examine confidential sales and use tax.records of the State Board of Equalization pertainine to sales and use taxes collected by the Board for the City pursuant to that corm act; and WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions forthe disclosure of Board of Equalization records, and establishes criminal penalties for the unlawful disclosure of information 'contained in, or derived from. the sales and use tax records of the Board. NONV, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEMEAD HEREBY RESOLVES AS FOLLOWS: Section 1. That the City Manager, Assistant City Manager; Director of Finance, Mayor, Mayor Pro Tem and Council members or other officer or employee of the City designated in writing by the City Manaaer to the State Board of Equalization (hereafter referred to as Board), is hereby appointed to represent the City of Rosemead with authority to examine sales and use tax records of the Board pertaining to sales and use. taxes collected for'-the City by the Board pursuant to the' contact be ueen the Cite and the Board. The information ob*.ained by examination of Board records shall be used only for purposes related to the collection of City sales and use taxes by the Board ou suant to that contract Section 2. That :he City Manager, Assistant City vmanager. Director of Finance. Mayor, Mayor Pro , Tenn and Councilmembers or other officer or employee of the City designated in writing by the Ciro Manager to the Board, is hereby appointed to represent the City with authority to examine those sales and use tax records of the Board, for purposes related to the following governmental functions of the City: (a) Cin, administration (b) Revenue manaLemen: and budgeting (c) Community and economic development (d) Business license tax administration The information obtained by examination of Board records shall be used only for those governmental functions of the Ciry listed above. Section 3. That Hinderliter, de Llamas B Associates is hereby designated to examine the sales and use tax records of the Board pertaining to sales and use taxes collected for the City by the Board. The person or entity designated by this section meets all of the following conditions: (a) has an existing contract with the City to examine those sales and use tax records. (b) is required by that contract to disclose information contained in, or derived from, those sales and use tax records only to the officer or employee authorized under Sections l or 2 of this resolution to examine the information. (c) is prohibited by that contract from performing consulting services fo*_ a retailer during the tern of thai contract; and (d) is arohibited by that contract from retaining the infonation contained in, or derived from those sales and use tax records; after that contract has expired. The information obtained by examination of Board records shall be used only for purposes related to the collection of Cin sales and use taxes by the Board pursuant to the contract between the City and the Board and for pu-Doses ; elating to the Bove nmemal functions of the City listed in section ? of this resolution. Lntoduced; approved and adopted this 0 day of ~ - 2003 ATTEST: (s) City Clerk I. Ciry Clerk o_` t'n° City of A, Cahforma; DO HEREBY CERTIFY that the forecoi~a resolution was duly introduced approved and adopted'oy the City Cou iI of the City or ~ at a ewlar rneetin_ of said Council held on the day of i 2Q . by the following roll tali vote: Q AN tS: NOES: ABSENT. (S) Ckf rY Clerk ACREE_M NT_ FOR SALES TA% AUDIT ANTD !NFOP_K,ATION SERVICES 9S LC_'ccIIlen= 1s made and entere d _a =o as cf t_RE I:J L_'? L'+•v- °i~.c'.~cL 1~ 8 J '-,,v and between L.ne C 7 7V OT7 R0SEMEAD a Mu-:icIDal Corporation, hereinaf*_er called CITY, and ROBERT _INDERLTTER 1ND zcSOCI?!TES, a California' COrporaii_=, here_na tc_ Called CONTRACTOR RECITkLS This Agreement is entered .into with reference to the following - is and circumstances. 1. That City desires t0 engage Cbntracto to render. Certain Drofessicnal services hereafter desc:-i~Ded in co-=eCLi_on Wltn...:.. the review or Sales tax revenue generated by businesses located within the City; and, 2. T-nat Contractor is qualified to provide such services to 7 and, the CiLv 3. That the Rosemead City Council has elected to engage the services Of ContraCLor upon the terms and conditions as here-na=_er set forth. SERVICES The services to be L1erf OrIIie6 b•y Contract-or under' th-s agreemenz shall include, but not be limited to, thos services Sct forz,.n _in harts One and Two of that Certain °Agreeme';t T_or Sales Tax A Cit and Inr Ormation Services," 'nereina-ter Called PrODOSa" d Copp Of wnicn, 2.s at--ached he--o as Exhibit end D.V Lnia re`e r e n ce =n COr Do at°_d here; n and made a -Dart Hereof as ou gh _L were -'ally Sct _o_ ~n `:e-n. . ?erS OrITian Ce of the wo" sDeCifi_-n said _rODOsal i.5 hc_e- made an Obl_gation OZ Contractor -'.der this ZGi"eement, sub ]e Ct t0 any Cn GildeS whl C_": ma' oe IT,.=),e SL'•bSe4'~2_ ~-Y t0 uCi(D- tSte nu. tual w- en agreement or the said parties. -l- AGREEMENT FOR S-kLES T_k AUDIT ALvTD, _!R OPuL?TIOh SERVICES Part One - Basic Sergi=ices T^e sc:^Dc o: h'CrlC as Qivi ded 1_^.. o the soeci f c tasYs ~Rd: are necessary oroviae -he City wi-h reasonable assurance it s _sceivi':Q_ sales tag collars is entitled `moo. Also inClua ed are the t a sk ' d e s C r'_ p t l on s covering deve Iopmen_ oL the in'orPla'Ci on necessary to eyaiuata r enas, target economiC deve1o_oment ee orts, aria imprOVe one sales tax oroQtiCtiv_ty of the existing base. TASK A. Tra7sfer-sales --ax 'return data from Guarterly reports provioec Dv ode State Board o_, aualization -or the immediate Drior three (3) Quarters to -the comcuter data bases that D_ovice a'basis =or all future analti'SeS. Enter business.name r rom Contractor provided com_PL'ter listing of sales tax Dermi tees reci Stered i City and assign, geo-code designation. TASK B. Enter sales tad; return data from each subsequent ouarterly report and provide City with comullte_" reports generated from the two basic data bases Sales By tiie Major O i_azlet, and Sales By Category. _PeportS _provided on a quarterly basis include: Ya~or Outlets b,\% lndustrv type, TOD 50 Producers by ran.;, Growthand Decline Comparisons with other Jurlsdictlons, Growth and Decline 'Comoar --sons by Category, Sales by Geographic urea, Sales by Business and supolemental charts and graphs. Evaluation of this data to de`zect deviance in reporting by =ax ravers wit_n multiple 0 'at1ets is a very i mportant pa=t cI the efort to isclate-error and recover lost revenue. \ I TAS£. C. Develop and coal-ta_h con']unct~i On with City sta_ a "current bu Slness retention" program des'igned to _protect ^.e ai:_'s7ing sales tax base. Semple letters and Survev . documents Y.ill be oroy'_ded ;that enable the Ci v "co gain !_no'wledae cf business Dlans .to expand or relocate. This is an effective wa'.% to let, business managers knob- their presence COID.m Lais aDDr2Clated, \Whi 1°_ enab 14 13 the Cit'y' to act a zlirely wav to '1n-luence' re l ocaLloP_ cecisi ons. IN ear)'.' W_uhln is -task w_11 a1 SO Include ava.l ua ti on, oi' _he existing. sv St em O_ CCr_re-, atlnc business license data with peru!it data Drcvided br _he Stage board of Equ;_l_za•..ion. Recommends-lo,s for Sj%St°em imnrcvements, aoproJriate, will, be provided. DDtional Fa=t 7'wo Services m h e services des CrIbad in thIS oar= Dr OV i Oe th°'C-__, With the oD7ion t0 D"_'rsne ODpOrtunities T_Or auCjmentoti0:? Oi -Its a=les Lax base =_^-`u c_=eCL1V6' use c._ in-Orma Lion oevelo ed as part Cf L`!2 ZiLdit and lnf Orma-~aOn Service. . major ou-1 e_ts whose sales tax reporting patterns reveal a probability o_ error are contacted in order to mare sure the CiLV is receiving all the ocInt-Of-sale dollars -from local L_LLn5=ctlons. _rIIis tdlth --^-e DOten Llal `Or Iriarinp constructive moves in coin=-of-sale d=etermining activity are identified,,contacted anc encouraged to locate the sales personnel resDOnslDle for that aCt1i%i-y in the City. Assistance is Provided in making Lhe reporting charges that assure the City of receivingg Proper credit for new taxable sales. Note: Sensitivity to the needs and Interests of the business community are essential for the maintenance of a positive business Climate. BxDerience with this WOr): shows that the Con-aCLS author'_Zed by the Citv for sales tax develooment DurDOses are perceived by bus._ness leaders as evidence of careful management O_T munici pal resources. it is generally understood that maximi ZatIon C-f revenues available from sales tax mares a City less dependent on local fees ana taxes. Also, the correction Cf a110CatiOr! errors does not,resulL in any additional tax Obl'_ga-4cn. The steps Provided for in t.!is Dart assure the city of OngC_ng Control of field contacts. Task A. 1Centifv -from -,he Aud-t and information. Reports he COmpani 25 Current-,y located in -he City -Rat have unrealized DO-en-ia1 fcr Dr oduci ng add It IO_^,a1 sales Lax, revenue. '1Cen!Lifv those oiitle-s wIth aberrant reDOrILIng Patterns CdI'lei"e the DrOriavI li_j' Or ci.-ni yi Cac]L e--o-, warrants re-v- ew. Task, B. 0 n t ain cl` " apPr o vain Lo bee; I'n Lhe Wor.K Of incuCing c lr Ja _l tax :-eDor -1'nq melhodologv 0- Doiimt OL-sale -for -ne _denti--cd com.vcn:ies. The aD=oval Process iS accom7Dlia-led t_hru secara Lely approved earl Two Worth Authorizations" (samD le at La ched~ T_I-_ City IS _harebV assured of. ccntlnuing =rL_cir_-aticn in and control of -she essent_a1 -field contacts. Tash C. contact with the aDDrOpri=tE 0 ..-C-a1S in n Cv^mD aP._es that naive Deer! id. E_nL _2d in T'as}: Z_ GEnErglly~ tn_ __._..1a1 COrlta Cts wbe H _JE On resDOnSiDle for reoorting sales tar _ECeiDtS to tLe state Board of Equalization. This establishes =rte Current reDDrz_n^ metnDcolOgy anc ma.es IL Doss_ul° to ver_rF 2L5 aoCLaCV an'_ approDr:ateneSS. In Lncse _instances where error _s founc, the necessary documentation and correspondence is prov-ded to obtain COnrirmation by the °_-card of : -QuElization and subsequent recovery of misallocated revenue. Meetings with sales and/or mina Cement. personnel who have knowledge of product lines, and the distrlb'utlon of taxable sales activities are arranaec. The information obtained here is evaluated for the purpose of determining whether cLirrent receipts accurately reflect the local sales activi t''. Tn additlon, an evaluation is made of the potential for poslti.pe change the location of point-of-sale tax generatina activities. - movement of Dolnt-of.sale activity may require City zoning o Der^lit apor Oval. Should this be the case, meetings..wIl", be- arranC_ed with the appropriate City officials, and the company will be assisted with the process. To the extent C-1ty officials or staff involved in Economic Development are available to assist in the efforts to induce the i-°_location ofT_ tax producing activity, t'neir participation is encouraged. I-a!ASURE OF PERFORMANCE AND COYLPENSP.TION The measure of performance shall be the incremental. growth in zhe local sales and use tax. reported by those COmpanles ldEnti tied in a "Part `_'wo Wor};_ A'uthori zat-0n° (copy at taC}1Ed) Ease sales _ax amounts, inflationary growth, and incremental growth determined by the City to be attr-,u- 1E -o causes oz-her than the work authorized In. this agreement shall be deducted Dr'_Or to calculating compensation. ^'ne amount of gain verified Jov reference to -ne sales tax return data -developed Dy the State Board o` SquallzatiOn, and Dr 0V id eO to the clay On a ou'aiterly basis. Th-E ZClusted 7nCreIIlental Growth on which ComDensairon IS Ca_cu1__..i. _s de-rmir!ed DJ Subtracting. (a) Same auarter base rear recelpts dju=tad in`~aticn, and .(b) city determined adjustments vor crop: - n Vnot attributable to work aut'norized in LP.IS agreeme-lt, from (c) current receipts. Fee for Basic Services - Part One NOT -PLTCABLE, Davabie upon completion of 'compu=e- data L,a=_es and -e:,= S covering the prier fnree sales tax aua_"ters as described in TTi S?: "A". Three :und-ed Dollars (S300.00) D<r month for the work described in TASK IIB" ; and Tasi; C" t ee so lD:!g as _ tL _!__JG 'aer. me_n t is in effect. . Tn° City Will be 'nvoiCed cuarterly for the.Services rendered the DZfor _..ree month period. Fee for Optional Services - Part Two The sere lces described in Part Two of this acreement are aC;allable t0 the C_ty cL its ootion. Contractor wi 11 not Derform. or charce for Part Two work without separate written r a.Lt_?Or iZatiOn by -he C1tV in the _Orm-Of'an aDpr ove d' "Part Two Vdor}: zuthorization" (Sample attached). The fee fo- services described in Part T-wo Is Fifteen (17) percent of. 1. new sales and/or use tax revenue received as a result of wor}: performed 'by contractor for t_'.e the first eight (6) Quarters following verification of incremental sales tax. 'gain-'.- :P- accorclance with an apDr.oved "Part Two Work Authorization" 2. Fund Transfers processed by The Board of Cjualizatlo_n for taxnaver misallocations found by Contractor and paid tO C=t i'• The City will be orovided with a dllarterly invoice show',nC - all formula calculations and amoun_l s_dul . Authorization and 'Termination Provisions This agreement becomes effeOtive when endorsed by the City 1n =ne space provide below, and may be terminate pa rtj7 with ~0 days wr i tt en\ not l.Ce. Upon to -llli na ti On, Contractor shall be _'D '.id the value of Part 0'le wor}; performed, 'less Navme-ts-of comDensa__on prEVi p^,as1V mace. C om.be n s at_cn fo- any Palt Two wor}_ Dreviosly agreed to and s a t'isf a c t o n li' performed shall be co'verned by the D-OVi Si Ons of the applicable "mart lido Wor}: th 0 r i z a t i on Confide -ia lity Section 7050 of the State of California Revenue and Taxation cote s^eci-ica11- limits th disclosure o= confidential taypayer TOrIr.a ti or: COreta_ned in the records of the State 3oard o= E- qualizat on. T`.is section speCifies the ccn6icions under which a City may authorize persons other than City officers and employees to examine State Sales and Use Tax r ec Ords . T'.'le following CondItlona sDeclfied in Section 070 (D),(1) of the State of Califon-'a ?even'ue and Taxation Code are .herebv made Dart of this contractllal agreement. Cor:traCtOr is au-.ho--' zed by thl5 agreement tO examine sales and use tax.'records of the Board of Eouallzation provided to City pursuant ao contract under the Bradley-Burns uniform Sales and Use Tax Law. B. Contractor is required to disclose information contained ,7, of derived from, those sales and use tax records Only tO an cIfiC'er or (employee of the City who -s authorized by resolution to examine the, information. C. Contractor is prohibited from Derrcrming consulting services for a retailer during the term of this agreement. D. Contractor i orohibite3 from retaining the information contained or 3erived from, '.hose sales and use lax records, after ~this agreement has expired __-ori¢ation obtained by examination of: board record-s Shallbe use G C':1y for purpOS es related to Collect"ion off local sales and use -ax or for Other governments= funct.ions 0- the City as se- forth by resol'•_tion adopted pursuant to Seczon i055 . (D) cf. 7- h-2 2e e'en -ue _ nd, T.-xa Js on Code. The _"esollltion shall des-gr:aze ut: Con ractc_ as a' Derson auLAOriz°_d to examlrie sales and use tax records and Cer.tifv that Lnls agreement meets .he regniremen~ts sat forth above and Sec:* *C7 /O.-^.D. (D), (l) of the evenue and Taxation CoCe. Ir\'D=rF1\>DDl\T CDNT L 0 Con ra ct0'_- s."!all De--f orm -he Ser ices hereunder as 1-: Ge_aendent contractor and shall =--_:i Sn such S_r'viCeS in his _ own, manner a r _ f method, and n 0 - C.r CuI(:St anCeS ce~ C Gnd iti o n s s h a 11 any age_ n se rvcl'!t, Or emD1 o_vee Of Contractor be considered as an emolovee of CitV. NON?:SCTC>NMNT This zgreement is not assignable either in whole a-- in pars. by contractor without the written consent Of City. - In tne event a legal action is commenced to enforce any Of the orovisi Ons of this zareemen.t, the Dre'vailing party shall be entitled to recover its costs and reasonable attor-_,'s fees. GOVEPNING LAINI This Agreement shall be governed by the laws of the State Or California INDENNIFICATICN Contractor hereby agrees to, and shall hold City, its elective and appointive boards officers, agents and emDlovees, :armless from.any liability for damage or claims for damatie for personal injury, including death, as well as from claims for breach of confidentiality or property'damage whic_`I may, arise from Contractor's negligent acts, errors or omissions uncer this Agreement. Co_zraCLOr agrees to and small de.fen.d. City and its elective and cpp0>_n t1 Vc DOar.S, officers, agents and employees from anv snits Or act_ons at law or _n aauity for damages caused, or alleged to 'Nave been: Caused, by reason of anv of the aforesaid negligent acts, errors or oinisslons. City hereby agrees t0, and. shall hold Con,--rector, i_S Of Cers, agents and employees, harmless from any li abi lit-` -or damage Or claJMS 7Or damage for personal including, death, as well a'S from claims IOr bread? 0- C O'fidentiallty Gr Dr Obe r tv` Gamace wYlizn may arise _rom CitV'S negligent acts, errO_S Or CmiSSi0i:5 under ,:rreement. City agrees t0 and shall veieno CGntraGtor anv _t5 officers, agents and employees from anv suits or actions at laW GY in eQllity for Camages caused, or al legen to nave been CauS_d, by reason c-7 any Of the al Oresa id ne^li get aC ts, =-r-ors or omissions. ~0-Tr-T } l _o-- ces _eau- red by ,:'re°_ment shall be g- ven _O C- ~v a - d. C o _YaC=Or a-_! w=1__PG, Dy _1rst class mail postace Dr-Dcid, addres Sed as fC, iOw s: C1L_l: Frank G. TripeDi- City ManaCer Citv o Rosemead 8838 =.:valley 7lvd. Rosemead, Ca. 51770 Contractor: Robert H_nderliter President 07 Michel Pl. Placentia, Ca. 52670 IN WTTN-SS WHE_--.'O _ , one Dar t1P _s h -.e_'-etO _ cT'e causeQ t'-is Acreement to be executed on the date =irst.above o;ri-t n by _heir respective ofi3cers ciUlV authorized i that behalf. CITY: CITY OF ROSEMEAD, a municipal corporation CIT CI,E_1 MAYOR COWTPACTO~. ROBERT _TNDERLITER d SSOCIATES a Cali=ornia.ccrporation k7PR0_v'ZD 17S TO FOR-1111: PRESIDENT CTTV 7-7•r,"RI~E.1 -b- AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES This Agreement is made and entered into as of the 13th day of August , 1985 by and between the CITY OF ROSEMEAD a Municipal Corporation, hereinafter called CITY, and ROBERT HINDERLITER AND ASSOCIATES, a California Corporation, hereinafter called CONTRACTOR. RECITALS This Agreement is entered into with reference to the following facts and circumstances. 1. That City desires to engage Contractor to render certain professional services hereafter described in connection with the review of sales tax revenue generated by businesses located within the City; and, 2. That Contractor is qualified to provide such services to the City; and, 3. That the Rosemead City Council has elected to engage the services of Contractor upon the terms and conditions as hereinafter set forth. SERVICES The services to be performed by Contractor under this agreement shall include, but not be limited to, those services set forth in Parts One and Two of that certain "Agreement for Sales Tax Audit and Information Services," hereinafter called Proposal, a copy of which is attached hereto as Exhibit "A" and by this reference incorporated herein and made a part hereof as though it were fully set forth herein. Performance of the work specified in said Proposal is hereby made an obligation of Contractor under this Agreement, subject to any changes which may be make subsequently hereto upon the mutual written agreement of the said parties. -1- EXHIBIT "A" AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES Part One - Basic Services The scope of work is divided into the specific tasks that are necessary to provide the City with reasonable assurance it is receiving the sales tax dollars it is entitled to. Also included are the task descriptions covering development of the information necessary to evaluate trends, target economic development efforts, and improve the sales tax productivity of the existing base. TASK A. Transfer sales tax return data from quarterly reports provided by the State Board of Equalization for the immediate prior three (3) quarters to the computer data bases that provide a basis for all future analyses. Enter business.name from Contractor provided computer listing of sales tax permitees reqistered in City and assign geo-code designation. TASK B. Enter sales tax return data from each subsequent quarterly report and provide City with computer reports generated from the two basic data bases - Sales By the Major Outlet, and Sales By Category. Reports provided on a quarterly basis include: Major Outlets by Industry type, Top 50 Producers by rank, Growth and Decline Comparisons with other Jurisdictions, Growth and Decline Comparisons by Category, Sales by Geographic Area, Sales by Business Type, and supplemental charts and graphs. Evaluation of this data to detect deviance in reporting by tax payers with multiple outlets is a very important part of the effort to isolate error and recover lost revenue. TASK C. Develop and maintain in conjunction with City staff a "current business retention" program designed to protect the existing sales tax base. Sample letters and survey documents will be provided that enable the City to gain knowledge of business plans,to expand or relocate. This is an effective way to let business managers know their presence in the community is appreciated, while enabling the City to act in a timely way to influence relocation decisions. Work within this task will also include evaluation of the existing system of correlating business license data with permit data provided by the State Board of Equalization. Recommendations for system improvements, if appropriate, will be provided. -2- Optional Part Two Services The services described in this part provide the City with the option to pursue opportunities for augmentation of its sales tax base thru effective use of information developed as part of the Audit and Information Service. Major outlets whose sales tax reporting patterns reveal a probability of error are contacted in order to make sure the City is receiving all the point-of-sale dollars from local transactions. Firms with the potential for making constructive moves in point-of-sale determining activity are identified, contacted and encouraged to locate the sales personnel responsible for that activity in the City. Assistance is provided in making the reporting changes that assure the City of receiving proper credit for new taxable sales. Note: Sensitivity to the needs and interests of the business community are essential for the maintenance of a positive business climate. Experience with this work shows that the contacts authorized by the City for sales tax development purposes are perceived by business leaders as evidence of careful management of municipal resources. It is generally understood that maximization of revenues available from sales tax makes a city less dependent on local fees and taxes. Also, the correction of allocation errors does not result in any additional tax obligation. The steps provided for in this part assure the city of ongoing control of field contacts. Task A. Identify from the Audit and Information Reports the companies currently located in the City that have unrealized potential for producing additional sales tax revenue. Identify those outlets with aberrant reporting patterns where the probability of significant error warrants review. Task B. Obtain city approval to begin the work of inducing change in tax reporting methodology or point-of-sale for the identified companies. The approval process is accomplished thru separately approved "Part Two Work Authorizations" (sample attached). The City is thereby assured of continuing participation in and control of the essential field contacts. -3- Task C. Initiate contact with the appropriate officials in the companies that have been identified in Task "A" Generally, the initial contacts will be with the person responsible for reporting sales tax receipts to the State Board of Equalization. This establishes the current reporting methodology and makes it possible to verify its accuracy and appropriateness. In those instances where error is found, the necessary documentation and correspondence is provided to obtain confirmation by the Board of Equalization and subsequent recovery of misallocated revenue. Meetings with sales and/or management personnel who have knowledge of product lines, and the distribution of taxable sales activities are arranged. The information obtained here is evaluated for the purpose of determining whether current receipts accurately reflect the local sales activity. In addition, an evaluation is made of the potential for positive change in the location of point-of-sale tax generating activities. Movement of point-of;sale activity may require City zoning or permit approval. Should this be the case, meetings will be arranged with the appropriate City officials, and the company will be assisted with the process. To the extent City officials or staff involved in Economic Development are available to assist in the efforts to induce the relocation of tax producing activity, their participation is encouraged. MEASURE OF PERFORMANCE AND COMPENSATION The measure of performance shall be the incremental growth in the local sales and use tax reported by those companies identified in a "Part Two Work Authorization" (copy attached). Base sales tax amounts, inflationary growth, and incremental growth determined by the City to be attributable to causes other than the work authorized in this agreement shall be deducted prior to calculating compensation. The amount of gain is verified by reference to the sales tax return data developed by the State Board of Equalization and provided to the city on a quarterly basis. The Adjusted Incremental Growth on which compensation is calculated is determined by subtracting (a) same quarter base year receipts adjusted for inflation, and (b) city determined adjustments for growth not attributable to work authorized in this agreement, from (c) current receipts. -4- Fee for Basic Services - Part One NOT APPLICABLE payable upon completion of the computer data bases and reports covering the prior three sales tax quarters as described in TASK "A". Three Hundred Dollars ($300.00) per month for the work described in TASK "B", and Task "C" so long as this agreement is in effect. The City will be invoiced quarterly for the services rendered in the prior three month period. Fee for Optional Services - Part Two The services described in Part Two of this agreement are available to the City at its option. Contractor will not perform or charge for Part Two work without separate written authorization by the City in the form of an approved "Part Two Work Authorization" (sample attached). The fee for services described in Part Two is Fifteen (15) percent of: 1. New sales and/or use tax revenue received as a result of work performed by contractor for the the first eight (S) quarters following verification of incremental sales tax gain in accordance with an approved "Part Two Work Authorization". 2. Fund Transfers processed by The Board of Equalization for taxpayer misallocations found by Contractor and paid to City. The City will be provided with a quarterly invoice showing all formula calculations and amounts due. Authorization and Termination Provisions This agreement becomes effective when endorsed by the City in the space provide below, and may be terminated by either party with 30 days written notice. Upon termination, Contractor shall be paid the value of Part One work performed, less payments of compensation previously made. Compensation for any Part Two work previously agreed to and satisfactorily performed shall be governed by the provisions of the applicable "Part Two Work Authorization". -5- Confidentiality 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 State Board of Equalization. This, section specifies the conditions under which a City may authorize persons other than City officers and employees to examine State Sales and Use Tax records. The following conditions specified in Section 7056 (b),(1) of the State of California Revenue and Taxation Code are hereby made part of this contractual agreement. A. Contractor is authorized by this agreement to examine sales and use tax records of the Board of Equalization provided to City pursuant to contract under the Bradley-Burns Uniform Sales and Use Tax Law. B. Contractor is required to disclose information contained in, of derived from, those sales and use tax records only to an officer or employee of the City who is authorized by resolution to examine the information. C. Contractor is prohibited from performing consulting services for a retailer during the term of this agreement. D. Contractor is prohibited from retaining the information contained in, or derived from, those sales and use tax records, after this agreement has expired . Information obtained by examination of board 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. -6- INDEPENDENT CONTRACTOR Contractor shall perform the services hereunder as an independent contractor and shall furnish such services in his 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. NONASSIGNMENT This Agreement is not assignable either in whole or in part by Contractor without the written consent of City. ATTORNEY'S FEES In the event a legal action is commenced to enforce any of the provisions of this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney's fees. GOVERNING LAW This Agreement shall be governed by the laws of the State of California INDEMNIFICATION Contractor hereby agrees to, and shall hold City, its elective and appointive boards officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from Contractor's negligent acts, errors or omissions under this Agreement. Contractor agrees to and shall defend City and its elective and appointive boards, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. City hereby agrees to, and shall hold Contractor, its officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from City's negligent acts, errors or omissions under this Agreement. City agrees to and shall defend Contractor and its officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. -7- NOTICE All notices required and Contractor in prepaid, addressed as by this Agreement shall be given to City writing, by first class mail postage follows: City: Frank G. Tripepi City Manager City of Rosemead 8838 E. Valley Blvd. Rosemead, Ca. 91770 Contractor: Robert Hinderliter President 507 Michel P1. Placentia, Ca. 92670 IN WITNESS WHEREOF, the parties hereto Agreement to be executed on the date first their respective officers duly authorized in CITY: have caused this above written by that behalf. CITY OF ROSEMEAD, a municipal corporation MAYOR CITY CLERK/ CONTRACTOR: ROBERT HINDERLITER & ASSOCIATES a California corporation PRESIDENT APPROVED AS TO FORM: CITY ATTORNEY -8- SAMPLE PART TWO WORK AUTHORIZATION NUMBER COMPANY NAME: ADDRESS: SALES TAX NO. SAMPLE MEASURE OF PERFORMANCE AND COMPENSATION: The measure of performance and compensation shall be the calculated incremental growth in sales tax due to work performed by contractor and approved by City for the company named herein. FORMULA FOR DETERMINING INCREMENTAL GROWTH: Incremental growth will be determined by application of the designated formula: IG = CR - (B*CPI) - X FOR QUARTERS AFTER IG = FT - X FOR MISALLOCATIONS IN PRIOR QUARTERS IG = Incremental Growth. CR =Current Receipts credited to the city by the taxpayer in the quarterly report provided by the Board of Equalization. B = Base amount determined by City to be FT= Fund Transfers initiated by the Board of Equalization for missallocations in prior quarters. CPI= L.A. Long Beach Consumer Price Index factor. X = Any amounts determined by City or Contractor to be increment attributable to causes other than contractor's work. COMPENSATION: Contractor's compensation shall be fifteen percent (158) of the incremental growth calculated above for the first eight (8) quarters following completion of work. Contractor shall provide City with an itemized quarterly invoice showing all formula calculations and amount due. CITY OF ROSEMEAD ROBERT HINDERLITER ,AND ASSOCIATES A California Corporation BY DATE BY PRESIDENT DATE SAMPLE PART TWO WORK NUMBER COMPANY NAME: ADDRESS: SALES TAX NO. SAMPLE MEASURE OF PERFORMANCE AND COMPENSATION: The measure of performance and compensation shall be the calculated incremental growth in sales tax due to work performed by contractor and approved by City for the company named herein. FORMULA FOR DETERMINING INCREMENTAL GROWTH: Incremental growth will be determined by application of the designated formula: IG = CR - (B*CPI) - X FOR QUARTERS AFTER IG = FT - X FOR MISALLOCATIONS IN PRIOR QUARTERS IG = Incremental Growth. CR =Current Receipts credited to the city by the taxpayer in the quarterly report provided by the Board of Equalization. B = Base amount determined by City to be FT= Fund Transfers initiated by the Board of Equalization for missallocations in prior quarters. CPI= L.A. Long Beach Consumer Price Index factor. X = Any amounts determined by City or Contractor to be increment attributable to causes other than contractor's work. COMPENSATION: Contractor's compensation shall be fifteen percent (158) of the incremental growth calculated above for the first eight (S) quarters following completion of work. Contractor shall provide City with an itemized quarterly invoice showing all formula calculations and amount due. CITY OF ROSEMEAD DATE ROBERT HINDERLITER AND ASSOCIATES A California Corporation BY PRESIDENT DATE I' m 1 STATE OF CALIFORNIA ~ STATE BOARD OF EQUALIZATION W'I LUA A i BE Nad Dis r n, n 20 EAST FOOTHILL BOULEVARD SUITE 205 , CONWAY H. COLDS CALLER 16 Second Distdn, Los Angeles ARCADIA CALIFORNIA 910060016 ' , _ ERNEST DRONENBURG, IR TELEPHONE: (818) 350-6423 OR FROM LA (213) 681-3551 t, Son D Third District, San Diego RICHARD NEVINS • Fourth District, Pasadena August 23, 1985 Ms. Ellen Poochigian City Clerk City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Dear Ms. Poochigian: Thank you for advising the Board of your City Council action authorizing certain city officials and a City Contractor access to your sales and use tax records under Government Code Section 7056. Your letter has been transmitted to our local tax unit and made a part of your permanent file. Our procedure for distribution of local sales and use tax information will continue to be directed to your local jurisdiction. Your city must make all arrangements for dissemination to your contractor. If your contractor should contact any of our field offices or Sacramento Headquarters, he should have in his possession a copy of City Resolution. Sincerely yours; ichard Nevins Member State Board of Equalization RN:atf KENNETH CORY Comroller, Soaamenm DOUGLAS D. BELL &scoriw Secretary cc: Mr. J.D. Dotson Mr. David Craig T v 'Y ^O TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CITY COUNCIL FROM: FRANK G. TRIPEPI, CITY MANAGER DATE: AUGUST 8, 1985 RE: APPROVAL OF RESOLUTION &.AGREEMENT FOR. SALES & USE TAX AUDIT At a regularly scheduled meeting of the Rosemead City Council held December 11, 1984, the City Council approved an agreement with Robert Hinderliter and Associates for sales tax audit and informa- tion services. Following the approval of that agreement, the City Council was notified by Richard Nevins of the State Board of Equal- ization that the agreement did not comply with existing laws per- taining to the use of sales tax records. In response to this notification, and under the sponsorship of Assemblyman Dominic Cortese, legislation was introduced in the State Assembly to allow outside contractors to review Sales Tax information on behalf of client cities. As a result, AB 1611 (Cortese) became law on July 12, 1985. In order to have our Agreement comply with the.new law, a Resolu- tion stating those persons authorized to receive and review the Sales and Use Tax information must be approved, along with an amended agreement dealing with the "Confidentiality'! of the records and information. It is recommended that the City Council adopt Resolution No. 85-35, and authorize the Mayor to execute the amended Agreement. SE "D ± a~ r~,=4'o AUG 1 3 19$5 Ca -~G f'7` 9 ~ to. RESOLUTION NO. 85-35 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD AUTHORIZING CERTAIN CITY OFFICIALS AND A CITY CONTRACTOR ACCESS TO SALES AND USE TAX RECORDS PURSUANT TO GOVERNMENT CODE,SECTION 7056 THE CITY COUNCIL OF THE CITY OF ROSEMEAD HEREBY RESOLVES AS FOLLOWS: Section 1. The following City officials are hereby authorized to receive and review sales and use tax transactions, for the City of Rosemead, from the Board of Equalization: Mayor: Louis Tury, Jr. Mayor Pro Tem: Jay T. Imperial Councilmember: Robert W. Bruesch Councilmember: G. H. "Pat" Cleveland Councilmember: Gary A. Taylor City Manager: Frank G. Tripepi Assistant Finance Officer: Susan M. Neely Section 2. The following independent contractor for the City of Rosemead is hereby also authorized to receive and review sales and use tax transactions for the City of Rosemead: Robert Hinderliter & Associates: Robert Hinderliter,President Section 3. The City of Rosemead hereby cetifies that Robert Hinderliter & Associates: A. Has an existing contract with the City of Rosemead to receive sales and use tax records; and B. Is required by that contract to disclose information contained in, or derived from, those sales and use tax records only to an officer or employee of the City who is authorized by this resolution to examine the information; and C. Is prohibited by that contract from performing consulting services for a retailer during the term of that contract; and D. Is prohibited by that contract from retaining the information contained in, or derived from, those sales tax records, after that contract has expired. Section 4. Information obtained by examination of board records shall be used only for purposes related to the collection of local sales and use taxes by the board pursuant to the contract, or for purposes related to other govern- mental functions. Section 5. This resolution supercedes all previous authorizations. Section 6. The City Clerk shall certify to the adoption of thisis Reso and send forward a certified copy to the Board of Equalization. MAYOR ATTEST: CITY CLERK AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES This Agreement is made and entered into as of the day of , 1985 by and between the CITY OF ROSEMEAD a Municipal Corporation, hereinafter called CITY, and ROBERT HINDERLITER AND ASSOCIATES, a California Corporation, hereinafter called CONTRACTOR. RECITALS This Agreement is entered into with reference to the following facts and circumstances. 1. That City desires to engage Contractor to render certain professional services hereafter described in connection with the review of sales tax revenue generated by businesses located within the City; and, 2. That Contractor is qualified to provide such services to the City; and, , 3. That, the Rosemead City Council has elected to engage the services of Contractor upon the terms and conditions as hereinafter set forth. SERVICES The services to be performed by Contractor under this agreement shall include, but not be limited to, those services set forth in Parts One and Two of that certain "Agreement for Sales Tax Audit and Information Services," hereinafter called Proposal, a copy of which is attached hereto as Exhibit "A" and by this reference incorporated herein and made a part hereof as though it were fully set forth herein. Performance of the work specified in said Proposal is hereby made an obligation of Contractor under this Agreement, subject to any changes which may be make subsequently hereto upon the mutual written agreement of the said parties. -1- EXHIBIT "A" AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES Part One - Basic Services The scope of work is divided into the specific tasks that are necessary to provide the City with reasonable assurance it is receiving the sales tax dollars it is entitled to. Also included are the task descriptions covering development of the information necessary to evaluate trends, target economic development efforts, and improve the sales tax productivity of the existing base. TASK A. Transfer sales tax return data from quarterly reports provided by the State Board of Equalization for the immediate prior three (3) quarters to the computer data bases that provide a basis for all future analyses. Enter business name from Contractor provided computer listing of sales tax permitees reqistered in City and assign geo-code designation. TASK B. Enter sales tax return data from each subsequent quarterly report and provide City with computer reports generated from the two basic data bases - Sales By the Major Outlet, and Sales By Category. Reports provided on a quarterly basis include: Major Outlets by Industry type, Top 50 Producers by rank, Growth and Decline Comparisons with other Jurisdictions, Growth and Decline Comparisons by Category, Sales by Geographic Area, Sales by Business Type, and supplemental charts and graphs. Evaluation of this data to detect deviance in reporting by tax payers with multiple outlets is a very important part of the effort to isolate error and recover lost revenue. TASK C. Develop and maintain in conjunction with City staff a "current business retention" program designed to protect the existing sales tax base. Sample letters and survey documents will be provided that enable the City to gain knowledge of business plans to expand or relocate. This is an effective way to let business managers know their presence in the community is appreciated, while enabling the City to act in a timely way to influence relocation decisions. Work within this task will also include evaluation of the existing system of correlating business license data with permit data provided by the State Board of Equalization. Recommendations for system improvements, if appropriate, will be provided. -2- Optional Part Two Services The services described in this part provide the City with the option to pursue opportunities for augmentation of its sales tax base thru effective use of information developed as part of the Audit and Information Service. Major outlets whose sales tax reporting patterns reveal a probability of error are contacted in order to make sure the City is receiving all the point-of-sale dollars from local transactions. Firms with the potential for making constructive moves in point-of-sale determining activity are identified, contacted and encouraged to locate the sales personnel responsible for that activity in the City. Assistance is provided in making the reporting changes that assure the City of receiving proper credit for new taxable sales. Note: Sensitivity to the needs and interests of the business community are essential for the maintenance of a positive business climate. Experience with this work shows that the contacts authorized by the City for sales tax development purposes are perceived by business leaders as evidence of careful management of municipal resources. It is generally understood that maximization of revenues available from sales tax makes a city less dependent on local fees and taxes. Also, the correction of allocation errors does not result in any additional tax obligation. The steps provided for in this part assure the city of ongoing control of field contacts. Task A. Identify from the Audit and Information Reports the companies currently located in the City that have unrealized potential for producing additional sales tax revenue. Identify those outlets with aberrant reporting patterns where the probability of significant error warrants review. Task B. Obtain city approval to begin the work of inducing change in tax reporting methodology or point-of-sale for the identified companies. The approval process is accomplished thru separately approved "Part Two Work Authorizations" (sample attached). The City is thereby assured of continuing participation in and control of the essential field contacts. -3- Task C. Initiate contact with the appropriate officials in.. the companies that have been identified in Task "A" Generally, the initial contacts will be with the person responsible for reporting sales tax receipts to the State Board of Equalization. This establishes the current reporting methodology and makes it possible to verify its accuracy and appropriateness. In those instances where error is found, the necessary documentation and correspondence is provided to obtain confirmation by the Board of Equalization and subsequent recovery of misallocated revenue. Meetings with sales and/or management personnel who have knowledge of product lines, and the distribution of taxable sales activities are arranged. The information obtained here is evaluated for the purpose of determining whether current receipts accurately reflect the local sales activity. In addition, an evaluation is made of the potential for positive change in the location of point-of-sale tax generating activities. Movement of point-of-sale activity may require City zoning or permit approval. Should this be the case, meetings will be arranged with the appropriate City officials, and the company will be assisted with the process. To the extent City officials or staff involved in Economic Development are available to assist in the efforts to induce the relocation of tax producing activity, their participation is encouraged. MEASURE OF PERFORMANCE AND COMPENSATION The measure of performance shall be the incremental growth in the local sales and use tax reported by those companies identified in a "Part Two Work Authorization" (copy attached). Base sales tax amounts, inflationary growth, and incremental growth determined by the City to be attributable to causes other than the work authorized in this agreement shall be deducted prior to calculating compensation. The amount of gain is verified by reference to the sales tax return data developed by the State Board of Equalization and provided to the city on a quarterly basis. The Adjusted Incremental Growth on which compensation is calculated is determined by subtracting (a) same quarter base year receipts adjusted for inflation, and (b) city determined adjustments for growth not attributable to work authorized in this agreement, from (c) current receipts. -4- Fee for Basic Services - Part One NOT APPLICABLE payable upon completion of the computer data bases and reports covering the prior three sales tax quarters as described in TASK "A". Three Hundred Dollars ($300.00) per month for the work described in TASK "B", and Task "C" so long as this agreement is in effect. The City will be invoiced quarterly for the services rendered in the prior three month period. Fee for Optional Services - Part Two The services described in Part Two of this agreement are available to the City at its option. Contractor will not perform or charge for Part Two work without separate written authorization by the City in the form of an approved "Part Two Work Authorization" (sample attached). The fee for services described in Part Two is Fifteen (15) percent of: 1. New sales and/or use tax revenue received as a result.of work performed by contractor for the the first eight (8) quarters following verification of incremental sales tax gain in accordance with an approved "Part Two Work Authorization". 2. Fund Transfers processed by The Board of Equalization for taxpayer misallocations found by Contractor and paid to City. The City will be provided with a quarterly invoice showing all formula calculations and amounts due. Authorization and Termination Provisions This agreement becomes effective when endorsed by the City in the space provide below, and may be terminated by either party with 30 days written notice. Upon termination, Contractor shall be paid the value of Part One work performed, less payments of compensation previously made. Compensation for any Part Two work previously agreed to and satisfactorily performed shall be governed by the provisions of the applicable "Part Two Work Authorization". -5- Confidentiality 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 State Board of Equalization. This section specifies the conditions under which a City may authorize persons other than City officers and employees to examine State Sales and Use Tax records. The following conditions specified in Section 7056 (b),(1) of the State of California Revenue and Taxation Code are hereby made part of this contractual agreement. A. Contractor is authorized by this agreement to examine sales and use tax records of the Board of Equalization provided to City pursuant to contract under the Bradley-Burns Uniform Sales and Use Tax Law. B. Contractor is required to disclose information contained in, of derived from, those sales and use tax records only to an officer or employee of the City who is authorized by resolution to examine the information. C. Contractor is prohibited from performing consulting services for a retailer during the term of this agreement. D. Contractor is prohibited from retaining the information contained in, or derived from, those sales and use tax records, after this agreement has expired . Information obtained by examination of board 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. -6- INDEPENDENT CONTRACTOR Contractor shall perform the services hereunder as an independent contractor and shall furnish such services in his 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. NONASSIGNMENT This Agreement is not assignable either in whole or in part by Contractor without the written consent of City. TTORNEY'S FEES In the event a legal action is commenced to enforce any of the provisions of this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney's fees. GOVERNING LAW This Agreement shall be governed by the laws of the State of California INDEMNIFICATION Contractor hereby agrees to, and shall hold City, its elective and appointive boards officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from Contractor's negligent acts, errors or omissions under this Agreement. Contractor agrees to and shall defend City and its elective and appointive boards, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. City hereby agrees to, and shall hold Contractor, its officers, agents and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for breach of confidentiality or property damage which may arise from City's negligent acts, errors or omissions under this Agreement. City agrees to and shall defend Contractor and its officers, agents and employees from any suits or actions-at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid negligent acts, errors or omissions. -7- NMMTr c All notices required by this Agreement shall be given to City and Contractor in writing, by first class mail postage prepaid, addressed as follows: City: Frank G. Tripepi City Manager City of Rosemead 8838 E. Valley Blvd. Rosemead, Ca. 91770 Contractor: Robert Hinderliter President 507 Michel P1. Placentia, Ca. 92670 . 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 that behalf. CITY: ITY CLERK APPROVED AS TO FORM: CITY ATTORNEY CITY OF ROSEMEAD, a municipal corporation MAYOR CONTRACTOR: ROBERT HINDERLITER & ASSOCIATES a California corporation -8- PRESIDENT MAYOR' LOUIS TURY, JR. MAYOR PRO TEK JAY T. IMPERIAL COUNCILMEN' ROBERT W. BRUESCH G.H."PAT" CLEVELAND GARY A. TAYLOR Board of Equalization % Richard Nevins 20 E. Foothill Blvd. Arcadia, Calif. 91006 Dear Mr. Nevins: August.19, 1985 ®~esead 8838 E. VALLEY BOULEVARD • P.O. BOX 399 ROSEMEAD, CALIFORNIA 91770 TEL. (818) 288-6671 The City Council of the City of Rosemead took action at the regular meeting of August 13, 1985 to adopt Resolution No. 85-35 which authorizes certain City officials and a City.Contractor access to sales and use tax records pursuant to Government Code Section 7056. Enclosed you.will find a certified copy of Rsolution No. 85-35 for your files. Sincerely, ~ -..~~fw<jc.tcc~ Ellen Poochigian City Clerk encl. AGREEMENT FOR BUSINESS LICENSE SERVICES This agreement is made and entered into as of the - day of April, 1997, by and between the City of Rosemead, a municipal corporation, hereinafter referred to as City, and HdL Software, LLC, a California corporation, hereinafter referred to as HdL. A. BUSINESS LICENSE SOFTWARE. HdL shall provide the City with an easy to operate, menu driven Business License Software System which includes the following capabilities: 1. Maintenance and processing. a. The software will store, print and process all business license records, including annual licenses and those which may be issued on a daily, monthly, quarterly or semi-annual basis. It will process licenses for businesses based on any number of City determined factors including, but not limited to, gross receipts, number of employees, coin-operated devices, and number of vehicles. b. The software will allow easy data entry of the information contained in business license applications. Based on business type and rate tables, it will calculate fees and print licenses. It will track unrenewed licenses and print renewal notices at the end of the license period, which contain specific calculation instructions based on business type and rate type. Delinquent notices will be generated, which include the calculation of late fees and penalties. The system will generate a journal entry for entering business license payments into the accounting records. c. The software provides a tracking system to insure that businesses have received the appropriate approvals and permits from various city departments. d. The software contains data fields for the entry of other business related information such as emergency contact name and address, alarm company or patrol company information, SIC codes, and room or building capacity. e. The system will maintain business license history for active and closed businesses including prior fees, receipts and business characteristics. The amount of history to be stored will be determined by the City and is dependent on the available free space on the City's computer. f. Users will be able to make inquiry into the data set in a variety of ways, by license number, business name, owner name, address, telephone number, vehicle license number and key word. 2. Additional audit features. HdL intends to enhance the business license software with the ability to cross check against other data sets available through HdL, such as sales tax and property tax, telephone directories and membership directories of state organizations. This will assist the City in detecting unlicensed businesses and/or incorrectly licensed businesses. These additional features will be added as developed at no additional cost. 3. Reports. A variety of reports are available, in standard format and on an ad hoc basis, including, but not limited to, reports by business name, address, or type, mailing labels and the mandated reports to the Franchise Tax Board on magnetic media. The system will also permit the export/import of data for use on laptop computers by field inspectors. The software will allow the generation of a variety of management reports, for example by geographic area, SIC code and/or amount of business license revenue paid. 4. Security. The system allows for user defined levels of security and confidentiality through the use of passwords. Agreement for Business Licenses Services Page # 2 5. Ongoing software upgrades are provided as part of the annual maintenance fee. B. MANAGEMENT SUPPORT HdL is available to assist the City in evaluating current policies and procedures to enhance the audit, collection and enforcement of the City's business license taxes. Examples may include the redesign of forms and/or reports, and strategies for improving . communication with the business community as well as other City departments that are involved in the business license process. C. CONVERSION AND IMPLEMENTATION 1. HdL will convert the City's existing business license data to HdL program files. HdL will build the tables for the City (rate tables, business type tables, SIC code tables, etc.) (If rates or business types change in the future, or new ones are created, the tables are maintainable by the City.) The City agrees to provide current business license data information in machine readable format. If this is not possible, there may be an additional charge for manually converting the data. The work will be done on a time and material basis in consultation with the City. 2. The new data set created during this process will be verified and audited for inconsistencies between existing data and the rate tables and business type tables using HdL's computerized systems. Audit exceptions will be provided to the City for follow up. 3. The new data set and software will be installed on the City's designated standalone computer or computer network. If the City uses HdL sales and property tax programs, these programs will be integrated with the business license system. 4. Training will be provided for the business license staff at the time of installation. A four hour training session is anticipated. Trained HdL staff will be available for any for Business Licenses Services PaEe # 3 follow up needed either by telephone or in person as part of our ongoing maintenance and support. 5. User manuals will be provided. D. HARDWARE REQUIREMENTS The business license software will be installed on hardware supplied by the City. The HdL. business license software is a Windows application requiring Microsoft Windows 3.1 or higher. 1. A PC compatible 486DX2 or Pentium system is required, with 8 MB of memory and a VGA monitor. The amount of free space required on the hard drive is dependent on the number of licenses and the extent of the history maintained, but will range typically from 15MB to 30MB for a city the size of Rosemead. 2. In a network environment, the server must be a dedicated server. The software will operate with all currently existing network software. 3. The software is designed to work with a basic laser printer or higher. E. ACCEPTANCE OF THE SOFTWARE The scheduled date of acceptance of the software by the City is the when all data has been converted, all tables have been built, and licenses, renewals and reports can be generated. The acceptance date will become the anniversary date of the Agreement. F. SOFTWARE MAINTENANCE AND CUSTOMER SUPPORT HdL will provide ongoing software upgrades and updated data from HdL's proprietary data sets and cross-directories to assist the City in its audit work. HdL's standard maintenance and customer support includes telephone support as needed by the City and up to twelve hours of onsite support annually. Agreement for Business Licenses Services Page # 4 The first year maintenance and support is provided at no cost. There is an annual maintenance fee beginning the second year. See Paragraph I "Compensation" for the fee schedule. G. CUSTOMIZATION The business license software is a "table driven" system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of business licenses. However, should the need occur, HdL is available to provide custom enhancements on a time and material basis. No work shall be performed by HdL without the prior approval of the City. See Paragraph I "Compensation" for the fee schedule. H. SOFTWARE LICENSE 1. License. HdL hereby provides a license to the City to use HdUs Business License Software. The software shall only be used by the City. The City shall not sublet, duplicate, or modify said software. The software shall be returned to HdL at the time the license expires, which is the last day of the last year for which the annual maintenance fee has been paid by the City to HdL. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. 2. City data. HdL acknowledges that the business license data is the property of the City. At the termination of this Agreement, the business license data will be available to the City in machine readable format. 3. Proprietary information. As used herein, the term "proprietary information" means any information which relates to HdUs 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 HdL proprietary information in connection with this Agreement or otherwise learned for Business Licenses Services Page # 5 or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information which is public information. 1. COMPENSATION 1. Software license fee. The one time software license fee shall be $5,000. 50% of this amount shall be due and payable within thirty days of the effective date of this Agreement and the remaining 50% within thirty days of the date of acceptance of the software by the City as set forth in Paragraph E. 2. Annual maintenance and customer support fee. There is no charge for the first year maintenance and customer support. The annual maintenance fee shall begin at the second year and shall be as follows: Standalone: $ 2,000 for 1 user Network: $ 2,000 for the 1st user Plus $ 800 each additional user Maximum of $ 5,000 The fee will be increased each year in an amount equal to the increase in the most recently published Consumer Price Index for the surrounding statistical metropolitan area, all urban consumers. The maintenance fee will be invoiced each year by HdL and shall be due and payable within thirty days of the date of the invoice. 3. Customizing services. The business license software is a "table driven" system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of business licenses. However, should the need occur, HdL is available to provide custom enhancements to the business license software on a pre-determined time and materials basis. No work shall be performed without prior written approval of the City. Fees for these services are as follows: Agreement for Business Licenses Services Page # 6 Principal Principal programmer Associate Associate programmer Secretarial/Administrative $ 135 per hour 135 per hour 85 per hour 85 per hour 35 per hour 4. SB 90 reimbursement. Certain costs associated with the Business License Software K. L. M. N. may be eligible for reimbursement under the provisions of SB 90. HdL will assist the City and/or its consultant in preparation of the SB 90 claim. TERMINATION This Agreement may terminate each year upon written notice thirty days (30) days prior to the anniversary date of the Agreement. Upon termination, the software license shall expire and the software shall be returned to HdL. INDEPENDENT CONTRACTOR HdL shall perform the services hereunder as an independent contractor. No agent, representative or employee of HdL shall be considered as an employee of the City. NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. for Business Licenses Services #7 O. INDEMNIFICATION During all phases of this agreement, HdL agrees to defend, indemnify and save harmless City, its officers, agents, and employees from and against any and all claims, demands, losses, defense costs, or liability of any kind or nature which the City, its officers, agents, and employees may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property as a result of, arising out of, or any manner connected with HdL's performance under the terms of this Agreement, excepting only liability arising out of the sole negligence of the City. Without limiting, HdL indemnification, it is agreed that HdL shall maintain in force at all times during the performance of this agreement the following policy or policies of insurance covering its operations: a) Comprehensive General Liability, including contractual liability, business automobile liability, and products and completed operations, all of which shall include coverage for both bodily injury and property damage, with a combined single limit of one million dollars. b) Worker's Compensation coverage at statutory limits. HdL's liability insurance policy shall contain the following clauses: a) "The City of Rosemead is named as an additional insured as respects operation of the named insured performed under the contract with the City". b) "It is agreed that any insurance maintained by the City shall apply in excess of, and not contribute with insurance provided by this policy". All insurance policies required by this Section O. shall contain the following clause: "This insurance shall not be canceled, limited or non-renewed until after thirty days written notice has been given to City". for Business Licenses Services Page # 8 Certificates of insurance evidencing the coverages required by the clauses set forth above shall be filed with the City prior to the effective date of this Agreement. This is a condition precedent to the formation of any obligation by the City to compensate HdL under this Agreement. for Business Licenses Services Page # 9 P. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class mail postage prepaid, addressed as follows: City, CITY OF ROSEMEAD 8838 East Valley Boulevard Rosemead, CA 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. CITY: CITY OF ROSEM City Clerk APPROVED AS TO FORM: City Attorney HdL: HdL SOFTWARE, LLC for Business Licenses Services Page # 10 AGREEMENT FOR BUSINESS LICENSE SERVICES This agreement is made and entered into as of the ~J day of April, 1997, by and between the City of Rosemead, a municipal corporation, hereinafter referred to as City, and HdL Software, LLC, a California corporation, hereinafter referred to as HdL. A. BUSINESS LICENSE SOFTWARE. HdL shall provide the City with an easy to operate, menu driven Business License Software System which includes the following capabilities: 1. Maintenance and processing. a. The software will store, print and process all business license records, including annual licenses and those which may be issued on a daily, monthly, quarterly or semi-annual basis. It will process licenses for businesses based on any number of City determined factors including, but not limited to, gross receipts, number of employees, coin-operated devices, and number of vehicles. b. The software will allow easy data entry of the information contained in business license applications. Based on business type and rate tables, it will calculate fees and print licenses. It will track unrenewed licenses and print renewal notices at the end of the license period, which contain specific calculation instructions based on business type and rate type. Delinquent notices will be generated, which include the calculation of late fees and penalties. The system will generate a journal entry for entering business license payments into the accounting records. c. The software provides a tracking system to insure that businesses have received the appropriate approvals and permits from various city departments. d. The software contains data fields for the entry of other business related information such as emergency contact name and address, alarm company or patrol company information, SIC codes, and room or building capacity. e. The system will maintain business license history for active and closed businesses including prior fees, receipts and business characteristics. The amount of history to be stored will be determined by the City and is dependent on the available free space on the City's computer. f. Users will be able to make inquiry into the data set in a variety of ways, by license number, business name, owner name, address, telephone number, vehicle license number and key word. 2. Additional audit features. HdL intends to enhance the business license software with the ability to cross check against other data sets available through HdL, such as sales tax and property tax, telephone directories and membership directories of state organizations. This will assist the City in detecting unlicensed businesses and/or incorrectly licensed businesses. These additional features will be added as developed at no additional cost. 3. Reports. A variety of reports are available, in standard format and on an ad hoc basis, including, but not limited to, reports by business name, address, or type, mailing labels and the mandated reports to the Franchise Tax Board on magnetic media. The system will also permit the export/import of data for use on laptop computers by field inspectors. The software will allow the generation of a variety of management reports, for example by geographic area, SIC code and/or amount of business license revenue paid. 4. Security. The system allows for user defined levels of security and confidentiality through the use of passwords. Agreement for Business Licenses Services Page # 2 5. Ongoing software upgrades are provided as part of the annual maintenance fee. B. MANAGEMENT SUPPORT HdL is available to assist the City in evaluating current policies and procedures to enhance the audit, collection and enforcement of the City's business license taxes. Examples may include the redesign of forms and/or reports, and strategies for improving communication with the business community as well as other City departments that are involved in the business license process. C. CONVERSION AND IMPLEMENTATION 1. HdL will convert the City's existing business license data to HdL program files. HdL will build the tables for the City (rate tables, business type tables, SIC code tables, etc.) (If rates or business types change in the future, or new ones are created, the tables are maintainable by the City.) The City agrees to provide current business license data information in machine readable format. If this is not possible, there may be an additional charge for manually converting the data. The work will be done on a time and material basis in consultation with the City. 2. The new data set created during this process will be verified and audited for inconsistencies between existing data and the rate tables and business type tables using HdL's computerized systems. Audit exceptions will be provided to the City for follow up. 3. The new data set and software will be installed on the City's designated standalone computer or computer network. If the City uses HdL sales and property tax programs, these programs will be integrated with the business license system. 4. Training will be provided for the business license staff at the time of installation. A four hour training session is anticipated. Trained HdL staff will be available for any for Business Licenses Services Page # 3 follow up needed either by telephone or in person as part of our ongoing maintenance and support. 5. User manuals will be provided. D. HARDWARE REQUIREMENTS The business license software will be installed on hardware supplied by the City. The HdL business license software is a Windows application requiring Microsoft Windows 3.1 or higher. 1. A PC compatible 486DX2 or Pentium system is required, with 8 MB of memory and a VGA monitor. The amount of free space required on the hard drive is dependent on the number of licenses and the extent of the history maintained, but will range typically from 15MB to 30MB for a city the size of Rosemead. 2. In a network environment, the server must be a dedicated server. The software will operate with all currently existing network software. 3. The software is designed to work with a basic laser printer or higher. E. ACCEPTANCE OF THE SOFTWARE The scheduled date of acceptance of the software by the City is the when all data has been converted, all tables have been built, and licenses, renewals and reports can be generated. The acceptance date will become the anniversary date of the Agreement. F. SOFTWARE MAINTENANCE AND CUSTOMER SUPPORT HdL will provide ongoing software upgrades and updated data from HdL's proprietary data sets and cross-directories to assist the City in its audit work. HdL's standard maintenance and customer support includes telephone support as needed by the City and up to twelve hours of onsite support annually. Agreement for Business Licenses Services Page # 4 The first year maintenance and support is provided at no cost. There is an annual maintenance fee beginning the second year. See Paragraph I "Compensation" for the fee schedule. G. CUSTOMIZATION The business license software is a "table driven" system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of business licenses. However, should the need occur, HdL is available to provide custom enhancements on a time and material basis. No work shall be performed by HdL without the prior approval of the City. See Paragraph I "Compensation" for the fee schedule. H. SOFTWARE LICENSE 1. License. HdL hereby provides a license to the City to use HdL's Business License Software. The software shall only be used by the City. The City shall not sublet, duplicate, or modify said software. The software shall be returned to HdL at the time the license expires, which is the last day of the last year for which the annual maintenance fee has been paid by the City to HdL. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. 2. City data. HdL acknowledges that the business license, data is the property of the City. At the termination of this Agreement, the business license data will be available to the City in machine readable format. 3. Proprietary information. As used herein, the term "proprietary information" means any information which relates to HdL'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 HdL proprietary information in connection with this Agreement. or otherwise learned Agreement for Business Licenses Services Page # 5 or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information which is public information. 1. COMPENSATION 1. Software license fee. The one time software license fee shall be $5,000. 50% of this amount shall be due and payable within thirty days of the effective date of this Agreement and the remaining 50% within thirty days of the date of acceptance of the software by the City as set forth in Paragraph E. 2. Annual maintenance and customer support fee. There is no charge for the first year maintenance and customer support. The annual maintenance fee shall begin at the second year and shall be as follows: Standalone: $ 2,000 for 1 user Network: $ 2,000 for the 1st user Plus $ 800 each additional user Maximum of $ 5,000 The fee will be increased each year in an amount equal to the increase in the most recently published Consumer Price Index for the surrounding statistical metropolitan area, all urban consumers. The maintenance fee will be invoiced each year by HdL and shall be due and payable within thirty days of the date of the invoice. 3. Customizing services. The business license software is a -"table driven" system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of business licenses. However, should the need occur, HdL is available to provide custom enhancements to the business license software on a pre-determined time and materials basis. No work shall be performed without prior written approval of the City. Fees for these services are as follows: for Business Licenses Services Page # 6 Principal $ 135 per hour Principal programmer 135 per hour Associate 85 per hour Associate programmer 85 per hour 'Secretarial/Administrative 35 per hour 4. SB 90 reimbursement. Certain costs associated with the Business License Software may be eligible for reimbursement under the provisions of SB 90. HdL will assist the City and/or its consultant in preparation of the SB 90 claim. K. TERMINATION This Agreement may terminate each year upon written notice thirty days (30) days prior to the anniversary date of the Agreement. Upon termination, the software license shall expire and the software shall be returned to HdL. L. INDEPENDENT CONTRACTOR HdL shall perform the services hereunder as an independent contractor. No agent, representative or employee of HdL shall be considered as an employee of the City. M. NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. N. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. Agreement for Business Licenses Services Page # 7 O. INDEMNIFICATION During all phases of this agreement, HdL agrees to defend, indemnify and save harmless City, its officers, agents, and employees from and against any and all claims, demands, losses, defense costs, or liability of any kind or nature which the City, its officers, agents, and employees may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property as a result of, arising out of, or any manner connected with HdUs performance under the terms of this Agreement, excepting only liability arising out of the sole negligence of the City. Without limiting, HdL indemnification, it is agreed that HdL shall maintain in force at all times during the performance of this agreement the following policy or policies of insurance covering its operations: a) Comprehensive General Liability, including contractual liability, business automobile liability, and products and completed operations, all of which shall include coverage for both bodily injury and property damage, with a combined single limit of one million dollars. b) Worker's Compensation coverage at statutory limits. HdL's liability insurance policy shall contain the following clauses: a) "The City of Rosemead is named as an additional insured as respects operation of the named insured performed under the contract with the City". b) "It is agreed that any insurance maintained by the City shall apply in excess of, and not contribute with insurance provided by this policy". All insurance policies required by this Section O. shall contain the following clause: "This insurance shall not be canceled, limited or non-renewed until after thirty days written notice has been given to City". Agreement for Business Licenses Services Page # 8 Certificates of insurance evidencing the coverages required by the clauses set forth above shall be filed with the City prior to the effective date of this Agreement. This is a condition precedent to the formation of any obligation by the City to compensate HdL under this Agreement. Agreement for Business Licenses Services Page # 9 P. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class mail postage prepaid, addressed as follows: City CITY OF ROSEMEAD 8838 East Valley Boulevard Rosemead, CA 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. CITY: CITY OF ROSEME City Clerk APPROVED AS TO FORM: City Attorney HdL: HdL SOFTWARE, LLC Agreement for Business Licenses Services Page # 10 1 or Part One Services $900:00 . _ payable upon completion of the computer reports, data bases, and analyses described in TASK No. 1. $300.00 per month for the work described in TASK No. 2, Task No. 3, and Task No. 4. so long as this agreement is in effect. The City will be invoiced quarterly for the services rendered in the prior three month period. Fee for Part Two Services The fee for services described in Part Two is fifteen (15) percent of any new sales and/or use tax revenue produced for the first eight (8) quarters following notice of completion and verification of incremental sales tax gain in accordance with any Specific Contact Authorizations previously approved by the City. The City will be provided with a quarterly invoice showing all formula calculations and amounts due. Work Related Needs The services outlined in this proposal require the use of City sales tax and business license records. It may also be necessary, depending upon the current status of the sales outlet permit cards, for the City to order a current tape of sales tax permit information from the State Board of Equalization. Authorization and Termination Provisions This agreement becomes effective when endorsed by the City in the space provide below, and may be terminated by either party with 30 days written notice. CITY AND/OR ROBERT HINDERLITER REDEVELOPMENT AGENCY AND ASSOCIATES By By Date Date December 11, 1984 -4- :f DESCRIPTION OF SALES TAX AUDIT AND INFORMATION SERVICES STATEMENT OF PURPOSE SALES TAX AUDIT AND REVENUE RECOVERY To provide a cost effective ongoing municipal system for the discovery and collection of "point-of-sale" determined local sales and use tax revenues that have been misallocated to other jurisdictions or pooled accounts. SALES TAX To provide City management with quarterly reports, computer generated spreadsheets and graphs covering the factors and trends that impact current receipts. All major sales tax producing outlets and all business categories defined by the State Board of Equalization are tracked and monitored quarterly. Reports generated from these data bases include: Top Producers, Sales by Major Category, Geo-base reports, Comparisons with other jurisdictions, and Specialized reports as requested. SALES TAX BASE - DEVELOPMENT To provide the City with the means to effectively focus their efforts on the types of business both in and out of the community that are potential sales tax producers. This work includes the identification of firms and institutions within the City that may be induced with municipal encouragement and cooperation to make the changes in accounting or office use necessary to shift point-of-sale for sales tax purposes. SALES TAX BASE - MAINTENANCE To assist the City in the development of a sales tax retention program designed to help prevent the loss of the important established businesses that are often taken for granted in economic development programs. AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES Part One Scope of Work The scope of work is divided into the specific tasks that are necessary to provide the City with reasonable assurance it is receiving the sales tax dollars it is entitled to. Also included are the task descriptions covering development of information necessary to evaluate trends, target economic development efforts, and improve the sales tax productivity of the existing base. TASK 1. Transfer sales tax return data from quarterly reports provided by the State Board of Equalization for the immediate prior three (3) quarters to computer spreadsheets that provide the basis for all future analyses. Enter business name and address from sales tax permit cards and assign geo-code designation. Evaluation of this data to detect deviance in reporting 'by tax payers with multiple outlets is a very important part of the effort to isolate error and recover lost revenue. TASK 2. Enter sales tax return data from each subsequent quarterly report and review for potential misallocations. Undertake the audit work necessary to verify error and initiate the actions necessary to recover lost revenue. Work within this task will also include evaluation of the existing system of correlating business license data with permit data provided by the State Board of Equalization. Recommendations for system improvements, if appropriate, will be provided. TASK 3. Provide City with quarterly reports outlining the most significant facts pertaining to its sales tax base, including: Totals and changes by major use category, top sales tax producers, growth/decline comparisons with other jurisdictions, sales tax trends by city area, supplemental graphs and charts, and status of accounts currently under audit. TASK 4. Develop in conjunction with City staff a "current business retention" program designed to protect the existing sales tax base. Sample letters and survey documents will be provided that enable the City to gain knowledge of business plans to expand or relocate. This is an effective way to let business managers know their presence in the community is appreciated, while enabling the City to act in a timely way to influence relocation decisions. -1- AGREEMENT FOR SALES TAX AUDIT AND INFORMATION SERVICES Part two Scope of Work The services described in this part provide the City with the means to pursue opportunities for augmentation of its sales tax base thru effective use of information developed as part of the Audit and Information Service. Firms with the potential for making constructive moves in point-of-sale determining activity are identified, contacted and encouraged to locate the sales personnel responsible for that activity in the City. Assistance is provided in making the reporting changes that assure the City of receiving proper credit for new taxable sales. Major outlets whose sales tax reporting patterns reveal a probability of error are contacted in order to make sure the City is receiving all the point-of-sale dollars from local transactions. Sensitivity to the needs and interests of the business community are essential for the maintenance of a positive business climate. Experience with this work shows that the contacts authorized by the City for sales tax development purposes are perceived by business leaders as evidence of careful management of municipal resources. They understand that the maximization of revenues available from the uniform sales and use tax makes a city, less dependent on local fees and taxes. Task 1. Identify from the Audit and Information Reports the companies currently located in the City that have unrealized potential for producing additional sales tax revenue. Identify those outlets with aberrant reporting patterns where the probability of significant error warrants review. Task 2. Obtain city approval to begin the work of inducing change in tax reporting methodology or point-of-sale for the identified companies. The approval process is accomplished thru the mechanism of Specific Contact Authorizations (sample attached) for every firm contacted in the quarter. The City is thereby assured of continuing participation in and control of the essential field contacts. -2- e Task 3. Initiate contact with the appropriate officials in the companies that have been identified in Task No. 1 and approved by the City. Generally, the initial contacts will be with the person responsible for reporting sales tax receipts to the State Board of Equalization. This establishes the current reporting methodology and makes it possible to verify its accuracy and appropriateness. In those instances where error is found, assistance in revising reporting procedures is provided. Meetings with sales and/or management personnel who have knowledge of product lines, and the distribution of taxable sales activities are arranged. The information obtained here is evaluated for the purpose of determining whether current receipts accurately reflect the local sales activity. In addition, an evaluation is made of the potential for positive change in the location of point-of-sale tax generating activities. Movement of point-of-sale activity may require City zoning or permit approval. Should this be the case, meetings will be arranged with the appropriate City officials, and the company will be assisted with the process. To the extent City officials or staff involved in Economic Development are available to assist in the efforts to induce the relocation of tax producing activity, their participation is encouraged. MEASURE OF PERFORMANCE AND COMPENSATION The measure of performance shall be the incremental growth in the local sales and use tax reported by those companies identified as "Target Firms" in a Specific Contact Authorization (copy attached). Base sales tax amounts, inflationary growth, and incremental growth determined by the City to be attributable to causes other than the work authorized in this agreement shall be deducted prior to calculating compensation. The amount of gain is verified by reference to the sales tax return data developed by the State Board of Equalization and provided to the city on a quarterly basis. The Adjusted Incremental Growth on which compensation is calculated is determined by subtracting (a) same quarter base year receipts adjusted for inflation, and (b) city determined adjustments for growth not attributable to work authorized in this agreement, from (c) current receipts. -3- SPECIFIC CONTACT AUTHORIZATION COMPANY NAME: ADDRESS: SALES TAX NO. SALES TAX HISTORY: SALES TAX POTENTIAL: MEASURE OF PERFORMANCE AND COMPENSATION: The measure of performance and compensation shall be the calculated incremental growth in sales tax due to work performed by contractor and approved by City for the company named herein. FORMULA FOR DETERMINING INCREMENTAL GROWTH: Incremental growth will be determined by application of the formula: IG = CR - (B*CPI) - X IG = Incremental Growth. CR = Current Receipts reported by the Board of Equalization. B = Base amount determined by City to be CPI= L.A. Long Beach Consumer Price Index factor. X = Any amounts determined by City or Contractor to be increment attributable to causes other than contractor's work., COMPENSATION: Contractor's compensation shall be fifteen percent (15%) of incremental growth calculated above for the first eight (8) quarters following notice of completion. Contractor shall provide City with an itemized quarterly invoice showing all formula calculations and amount due. CITY AND/OR REDEVELOPMENT AGENCY DATE - ROBERT HINDERLITER AND ASSOCIATES BY DATE AGREEMENT FOR BUSINESS LICENSE SERVICES This agreement is made and entered into as of the day of April, 1997, by and between the City of Rosemead, a municipal corporation, hereinafter referred to as City, and HdL Software, LLC, a California corporation, hereinafter referred to as HdL. A. BUSINESS LICENSE SOFTWARE. HdL shall provide the City with an easy to operate, menu driven Business License Software System which includes the following capabilities: 1. Maintenance and processing. a. The software will store, print and process all business license records, including annual licenses and those which may be issued on a daily, monthly, quarterly or semi-annual basis. It will process licenses for businesses based on any number of City determined factors including, but not limited to, gross receipts, number of employees, coin-operated devices, and number of vehicles. b. The software will allow easy data entry of the information contained in business license applications. Based on business type and rate tables, it will calculate fees and print licenses. It will track unrenewed licenses and print renewal notices at the end of the license period, which contain specific calculation instructions based on business type and rate type. Delinquent notices will be generated, which include the calculation of late fees and penalties. The system will generate a journal entry for entering business license payments into the accounting records. c. The software provides a tracking system to insure that businesses have received the appropriate approvals and permits from various city departments. Fmm. THE.HDL-COMPANIES No. 3 d. The software contains data fields for the entry of other business related information such as emergency contact name and address, alarm company or patrol company information, SIC codes, and room or building capacity. e. The system will maintain business license history for active and closed businesses including prior fees, receipts and business characteristics. The amount of history to be stored will be determined by the City and is dependent on the available free space on the City's computer. f. Users will be able to make inquiry into the data set in a variety of ways, by license number, business name, owner name, address, telephone number, vehicle license number and key word. 2. Additional audit features. HdL intends to enhance the business license software with the ability to cross check against other data sets available through HdL, such as sales tax and property tax, telephone directories and membership directories of state organizations. This will assist the City in detecting unlicensed businesses and/or incorrectly licensed businesses. These additional features will be added as developed at no additional cost. 3. Reports. A variety of reports are available, in standard format and on an ad ltoc basis, including, but not limited to, reports by business natne, address, or type, mailing labels and the mandated reports to the Franchise Tax Board on magnetic media. The system will also permit the exportlimport of data for use on laptop computers by field inspectors. The software will allow the generation of a variety of management reports, for example by geographic area. SIC code and/or amount of business license revenue paid. 4. Security. The system allows for user defined levels of security and confidentiality through the use of passwords. Agreement for Business Licenses Services Page H 2 Ty- -_CCS1G4'0E3 f . 5. Ongoing software up grades are provided as part of the annual maintenance fee. B. MANAGEMENT SUPPORT HdL is available to assist the City in evaluating current policies and procedures to enhance the audit, collection and enforcement of the City's business license taxes. Examples may include the redesign of forms and/or reports, and strategies for improving communication with the business community as well as other City departments that are involved in the business license process. C. CONVERSION AND IMPLEMENTATION 1. HdL will convert the City's existing business license data to HdL program riles. HdL will build the tables for the City (rate tables, business type tables, SIC code tables. etc.) (if rates or business types change in the future, or new ones are created, the tables are maintainable by the City.) The City agrees to provide current business license data information in machine readable format. If this is not possible, there may be an additional charge for manually converting the data. The work will be done on a time and material basis in consultation with the City. 2. The new data set created during this process will be verified and audited for inconsistencies between existing data and the rate tables and business type tables using HdL's computerized systems. Audit exceptions will be provided to the City for follow up. 3. The new data set and software will be installed on the City's designated standalone computer or computer network. If the City uses HdL sales and property tax programs, these programs will be integrated with the business license system. 4. Training will be provided for the business license staff at the time of installation. A four hour training session is anticipated. Trained HdL staff will be available for any for Business Licenses Services Pa¢e 0 3 `.1^1 0112". 1 ","AM m THF.!:'L-COIAP..MU; 'age5 follow up needed either by telephone or in person as part of our ongoing maintenance and support. 5. User manuals will be provided. D. HARDWARE REQUIREMENTS The business license software will be installed on hardware supplied by the City. The HdL business license software is a Windows application requiring Microsoft Windows 3.1 or higher. 1. A PC compatible 486DX2 or Pentium system is required, with 8 MB of memory and a VGA monitor. The amount of free space required on the hard drive is dependent on the number of licenses and the extent of the history maintained, but will range typically from 15MB to 30MB'for a city the size of Rosemead. 2. In a network environment, the server must be a dedicated server. The software will operate with all currently existing network software. 3. The software is designed to work with a basic laser printer or higher. E. ACCEPTANCE OF THE SOFTWARE The scheduled date of acceptance of the software by the City is the when all data has been converted, all tables have been built, and licenses, renewals and reports can be generated. The acceptance date will become the anniversary date of the Agreement. F. SOFTWARE MAINTENANCE AND CUSTOMER SUPPORT HdL will provide ongoing software upgrades and updated data from HdL's proprietary data sets and cross-directories to assist the City in its audit work. HdL's standard maintenance and customer support includes telephone support as needed by the City and up to twelve hours of onsite support annually. for Business Licenses Services Peke # 4 a , JJ i1/17 1 1 . 10 Ah1 -r n\ ?F' E . Faga A The first year maintenance and support is provided at no cost. There is an- annual maintenance fee beginning the second year. See Paragraph 1 "Compensation" for the fee schedule. G. CUSTOMIZATION The business license software is a "table driven" system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of business licenses. However, should the need occur, HdL is available to provide custom enhancements on a time and material basis. No work shall be performed by HdL without the prior approval of the City. See Paragraph I "Compensation" for the fee schedule. H. SOFTWARE LICENSE 1. License. HdL hereby provides a license to the City to use HdUs Business License Software. The software shall only be used by the City. The City shall not sublet, duplicate, or modify said software. The software shall be returned to HdL at the time the license expires, which is the last day of the last year for which the annual maintenance fee has been paid by the City to HdL. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferable. 2. City data. HdL acknowledges that the business license data is the property of the City. At the termination of this Agreement, the business license data will be available to the City in machine readable format. 3. Proprietary information. As used herein, the term "proprietary information" means any information which relates to HdL'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 HdL proprietary information in connection with this Agreement or otherwise learned fur Business Licenses Services Page # $ Farr , I- 1416k, Fr- .q~ "'.,c r ral or obtained by the City in connection with this Agreement. The obligations imposed by this Paragraph shall survive any expiration or termination of this Agreement. The terms of this section shall not apply to any information which is public information. 1. COMPENSATION 1. Software license fee. The one time software license fee shall be $5,000. 50% of this amount shall be due and payable within thirty days of the effective date of this Agreement and the remaining 50% within thirty days of the date of acceptance of the software by the City as set forth in Paragraph E. 2. Annual maintenance and customer support fee. There is no charge for the first year maintenance and customer support. The annual maintenance fee shall begin at the second year and shall be as follows: Standalone: $ 2,000 for 1 user Network: $ 2,000 for the lst user Plus $ 800 each additional user Maximum of $ 5,000 The fee will be increased each year in an amount equal to the increase in the most recently published Consumer Price Index for the surrounding statistical metropolitan area, all urban consumers. The maintenance fee will be invoiced each year by HdL and shall be due and payable within thirty days of the date of the invoice. 3. Customizing services. The business license software is a "table driven" system and has been developed to meet almost all of the needs of a City with regard to the management, processing and reporting of business licenses. However, should the need occur, HdL is available to provide custom enhancements to the business license software on a pre-determined time and materials basis. No work shall be performed without prior written approval of the City. Fees for these services are as follows: for Business Licenses Services Page # 6 o - L,4102/Q7 1'..1919 AM hnrTnr °L-Cr.4^Ahli~b Principal $ 135 per hour Principal programmer 135 per hour Associate 85 per hour Associate programmer 85 per hour Secretarial/Administrative 35 per hour 4. SB 90 reimbursement. Certain costs associated with the Business License Software may be eligible for reimbursement under the provisions of SB 90. HdL will assist the City and/or its consultant in preparation of the SB 90 claim. K. TERMINATION This Agreement may terminate each year upon written notice thirty days (30) days prior to the anniversary date of the Agreement. Upon termination, the software license shall expire and the software shall be returned to HdL. L. INDEPENDENT CONTRACTOR HdL shall perform the services hereunder as an independent contractor. No agent, represcntative or employee of HdL shall be considered as an employee of the City. M. NON-ASSIGNMENT This Agreement is not assignable either in whole or in part by HdL or the City without the written consent of the other party. N. GOVERNING LAW The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and shall also govern the interpretation of this Agreement. 1 Agreement for Business Licenses Services Page # 7 O. INDEMNIFICATION During all phases of this agreement, HdL agrees to defend, indemnify and save harmless City, its officers, agents, and employees from and against any and all claims, demands. losses, defense costs, or liability of any kind or nature which the City, its officers, agents, and employees may sustain or incur or which may be'imposed upon them for injury to or death of persons, or damage to property as a result of, arising out of, or any manner connected with HdL's performance under the tenns of this Agreement, excepting only liability arising out of the sole negligence of the City. Without limiting, HdL indemnification, it is agreed that HdL shall maintain in force at all times during the performance of this agreement the following policy or policies of insurance covering its operations: a) Comprehensive General Liability, including contractual liability, business automobile liability, and products and completed operations, all of which shall include coverage for both bodily injury and property damage, with a combined single limit of one million dollars. b) Worker's Compensation coverage at statutory limits. 11dL's liability insurance policy shall contain the following clauses: a) "The City of Rosemead is named as an additional insured as respects operation of the named insured performed under the contract with the City". b) "It is agreed that any insurance maintained by the City shall apply in excess of, and not contribute with insurance provided by this policy". All insurance policies required by this Section O. shall contain the following clause: "This insurance shall not be canceled, limited or non-renewed until after thirty days written notice has been given to City". for Business Licenses Services page ff 8 . - THE-HDL' C. PANIF ;r Certificates of insurance evidencing the coverages required by the clauses set forth above shall be filed with the City prior to the effective date of this Agreement. This is a condition precedent to the formation of any obligation by the City to compensate HdL under this Agreement. rur Business Licenses Services Paee.# 9 P. NOTICE -dcx All notices required by this Agreement shall be given to the City and to Hdl, in writing, by personal delivery or first class mail postage prepaid, addressed as follows: City CITY OF ROSEMEAD 8838. East Valley Boulevard Rosemead, CA 91770 HdL HdL SOFTWARE, LLC 1340 Valley Vista Drive, Suite 200 Diamond Bar, California 91765 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 that behalf. CITY: CITY OF ROSEMEAD City Clerk APPROVED AS TO FORM: City Attorney HdL: HdL SOF'T'WARE, LLC for Business Licenses Services Pace # 10 SEN"r BY: WALLIN kRESS REISMAN : 4- 2-97 .}i173PM 13101 450-fi5iG- APR. 91(WED) I3:31 CITY OF ROSEMEAD TEL:818-307-9218 sane 0410297 11;19:10M7 Fpm: TH&HDLCDUP.W 165 alit .+07 921it: it 2/ 2 P. 011 Peg' 11 P. NOTICE All notices required by this Agreement shall be given to the City and to HdL in writing, by personal delivery or first class trail postage prepaid, addressed zc follows: City CITY OF ROSEMEAD 8838 East Valley Boulevard Rosemead, CA 91770 HdL HdLSOFTWARE,LLC 1340 valley Vista Drive, Suite 200 Diamond Bar, California 91765 IN WTINESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written by their respective officers duly authorized in that behalf. Cfl'Y: City Clerk APPROVED AS TO FORM: CITY OF ROSEMEAD Q City Attorney HdL: HdL SOFTWARE, LLC .agreement for Bwlne Licenses SwIces Page* 10 a IV. CONSENT CALENDAR CC-A APPROVAL OF AGREEMENT FOR SUI NDTER YOUTH LUNCH PROGRAM ✓CC-B RELEASE OF BONDS - TM 51544; 8448 MISSION DRIVE ,/CC-C ACCEPTANCE OF BIDS AND AWARD OF CONTRACT - EMULSION SLURRY SEAL ON VARIOUS STREETS, FY 1996-97; PROJECT NO. 97- 01 CC-D ACCEPTANCE OF WORK FOR CITY HALL ROOF COVERING PROJECT ✓CC-E COOPERATIVE AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND CLATRANS FOR THE MISSION DRIVE AND ROSEMEAD BOULEVARD TRAFFIC SIGNAL MODIFICATION PROJECT /CC-H AUTHORIZATION TO ATTEND LEAGUE OF CALIFORNIA CITIES EXECUTIVE ACADEMY, SACRAMENTO, APRIL 30, 1997. -I CONSIDERATION OF PROPOSAL FROM HDL COMPANIES TP PROVIDE BUSINESS LICENSE SOFTWARE AND SERVICES CC-J SB 1310 (CALDERON) - ADULT ENTERTAINMENT TAX - SUPPORT MOTION BY MAYOR PRO TEM BRUESCH SECOND BY COUNCILMEMBER TAYLOR that the Council approve the aforementioned items. Vote resulted: Yes: Vasquez Imperial, Bruesch, Clark No: None Absent: None Abstain: Taylor The Mayor declared said motion duly carried and so ordered. CC-F APPROVAL OF LORICA STREET CUL-DE-SAC DESIGN Councilmember Bruesch asked what is the width of the standard radius on a cul-de-sac and what type of parking restriction would be implemented. Fred Wickman, City Engineer; responded that the standard radius is 32' and No Parking restriction will be placed at the end of the cul-de-sac because of the small turning radius. MOTION BY MAYOR PRO TEM BRUESCIT SECOND BY COUNCILMEMBER CLARK that the Council direct staff to obtain the necessary documents for the dedication of the 25 feet from the remaining property owner and proceed with the substandard cul-de-sac ali2unent; and that staff prepare the necessary documents to establish the ultimate right-of-way requirements for Lorica Street for Council consideration. Vote resulted: Yes: Vasquez, Taylor, Imperial, Bruesch, Clark No: None Absent: None Abstain: None `The Mayor declared said motion duly carried and so ordered. CC 4/8/97 Page t,'4