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HomeMy WebLinkAboutA6576 - MUNISERVICES LLC - MED CANNABIS TAX AUDITING SERVICES CONSULTING SERVICES AGREEMENT Cannabis and Marijuana Tax Deficiency Audit Services THIS AGREEMENT FOR CONSULTING SERVICES ("Agreement") is made and entered into on February 2, 2018, by and between the City of Palm Springs, a California charter city and municipal corporation ("City"), and MuniServices LLC, a Delaware limited liability company ("Consultant"). City and Consultant are individually referred to as "Party" and are collectively referred to as the 'Parties". RECITALS A. City requires the services of a professional tax auditing firm to audit medical cannabis collectives for the City's Medical Cannabis Tax ("Project"). B. Consultant has submitted to City a proposal to provide medical cannabis tax auditing services to City under the terms of this Agreement. C. Based on its previous experience auditing cannabis collections for the City, education, training, and reputation, Consultant is qualified and desires to provide the necessary services to City for the Project. D. City desires to retain the services of Consultant for the Project. Inconsideration of these promises and mutual agreements, City agrees as follows: AGREEMENT 1. CONSULTANT SERVICES 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide Medical Cannabis Tax Auditing Services to City as described in the Scope of Services/Work attached to this Agreement as Exhibit "A" and incorporated by reference (the "services" or "work"). Exhibit "A" includes the agreed upon schedule of performance and the schedule of fees. Consultant warrants that all services and work shall be performed in a competent, professional, and satisfactory manner consistent with prevailing industry standards. In the event of any inconsistency between the terms contained in.the Scope of Services/Work and the terms set forth in this Agreement, the terms set forth in this Agreement shall govern. 1.2 Compliance with Law. Consultant services rendered under this Agreement shall comply with all applicable federal, state, and local laws, statutes and ordinances and all lawful orders, rules, and regulations. 1.3 Licenses and Permits. Consultant shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the services required by this Agreement. ORIGINAL BID AND/OR AGREEMENT 1 1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that it has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the work under this Agreement. 2. TIME FOR COMPLETION The time for completion of the services to be performed by Consultant is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently the work of this Agreement according to the agreed upon schedule of performance set forth in Exhibit "A." Consultant shall not be accountable for delays in the progress of its work caused by any condition beyond its control and without the fault or negligence of Consultant. Delays shall not entitle Consultant to any additional compensation regardless of the party responsible for the delay. 3. COMPENSATION OF CONSULTANT 3.1 Compensation of Consultant. Consultant shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit "A". The total amount of Compensation shall not exceed $25,000. 3.2 Method of Payment. In any month in which Consultant wishes to receive payment, Consultant shall submit to City an invoice for services rendered prior to the date of the invoice, no later than the first working day of such month, in the form approved by City's finance director. Payments shall be based on the hourly rates set forth in Exhibit "A" for authorized services performed. City shall pay Consultant for all expenses stated in the invoice that are approved by City and consistent with this Agreement, within thirty (30) days of receipt of Consultant's invoice. 3.3 ChanLyes. In the event any change or changes in the Scope of Services/Work is requested by City, Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including,but not limited to, any additional fees. An amendment may be entered into: A. To provide for revisions or modifications to documents, work product, or work,when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant's profession. 3.4. . Ag�ropriations. This Agreement is subject to, and contingent upon, funds being appropriated by the City Council of City for each fiscal year. If such appropriations are not made, this Agreement shall automatically terminate without penalty to City, but Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter. 4. PERFORMANCE SCHEDULE 4.1 Time of Essence. Time is of the essence in the performance of this Agreement. 2 4.2 Schedule of Performance. All services rendered under this Agreement shall be performed under the agreed upon schedule of performance set forth in Exhibit "A." Any time period extension must be approved in writing by the Contract Officer. 4.3 Force Majeure. The time for performance of services to be rendered under this Agreement may be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, if Consultant notifies the Contract Officer within ten (10) days of the commencement of such condition. Unforeseeable causes include, but are not limited to, acts of God or of a public enemy, acts of the government, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually severe weather. After Consultant notification, the Contract Officer shall investigate the facts and the extent of any necessary delay, and extend the time for performing the services for the period of the enforced delay when and if, in the Contract Officer's judgment, such delay is justified. The Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. 4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall begin on February 2, 2019 and continue until December 31, 2018, unless extended by mutual written agreement of the parties. 4.5 Termination Prior to Expiration of Term. City may terminate this Agreement at any time, with or without cause, upon thirty (30) days written- notice to Consultant. Where termination is due to the fault of Consultant and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Consultant shall immediately cease all services except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer after such notice. Consultant may terminate this Agreement, with or without cause, upon thirty (30)days written notice to City. 5. COORDINATION OF WORK 5.1 Representative of Consultant. The following principal of Consultant is designated as being the principal and representative of Consultant authorized to act and make all decisions in its behalf with respect to the specified services and work: Doug Jensen, Senior VP Client Services. It is expressly understood that the experience, knowledge, education, capability, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services under this Agreement. The foregoing principal may not be changed by Consultant without prior-written approval ofthe Contract Officer. 5.2 Contract Officer. The Contract Officer shall be the City Manager or his/her designee ("Contract Officer"). Consultant shall be responsible for keeping the Contract Officer fully informed of the progress of the performance of the services. Consultant shall refer any decisions that must be made by City to the Contract Officer. Unless otherwise specified, any approval of City shall mean the approval of the Contract Officer. 3 5.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, education, capability, and reputation of Consultant, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall not contract with any other individual or entity to perform any services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. 5.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Consultant, its agents or employees, perform the services required, except as otherwise specified. Consultant shall perform all required services as an independent contractor of City and shall not be an employee of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role; however, City shall have the right to review Consultant's work product, result, and advice. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 5.5 Personnel. Consultant agrees to assign the following individuals to perform the services in this Agreement. Consultant shall not alter the assignment of the following personnel without the prior written approval of the Contract Officer. Acting through the City Manager, the City shall have the unrestricted right to order the removal of any personnel assigned by Consultant by providing written notice to Consultant. Name: Doug Jensen Sr.Vice President, Client Services Karo Aydindzhyan Client Services Manager Jonathan Gerth Auditor 6. INSURANCE Consultant shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in the attached Exhibit "B",incorporated herein by reference. 7. INDEMNIFICATION. 7.1 Indemnification. To the fullest extent permitted by law, Consultant shall defend (at Consultant's sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, and agents, (collectively the "Indemnified Parties"), from and against any and all third party liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively third party "Claims"), including but not limited to third party Claims arising from injuries to or death of persons (Consultant's employees included), for damage to property, including property owned by 4 City, from any violation of any federal, state, or local law or ordinance, and from errors and omissions committed by Consultant, its officers, employees, representatives, and agents, which Claims arise out of or are related to Consultant's performance under this Agreement. This indemnification clause excludes such third party Claims arising from the sole negligence or willful misconduct of the City, its elected officials, officers, employees, and agents. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be constructed to limit Consultant's indemnification obligation or other liability under this Agreement. Consultants indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if any action is timely filed, until such action is final. This provision is intended for the benefit of third parry Indemnified Parties not otherwise a party to this Agreement. 8. RECORDS AND REPORTS 8.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer reports concerning the performance of the services required by this Agreement, or as the Contract Officer shall require. 8.2 Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Consultant shall keep such books and records as shall be necessary to properly perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records. 8.3 Ownershin of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of this Agreement shall be the property of City. Consultant shall deliver all above-referenced documents to City upon request of the Contract Officer or upon the termination of this Agreement. Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights or ownership of the documents and materials. Consultant may retain copies of such documents for Consultant's own use. Consultant shall have an unrestricted right to use the concepts embodied in such documents. 8.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 8.5 Cost Records. Consultant shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred while performing under this Agreement. Consultant shall make such materials available at its offices at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment for inspection by City and copies shall be promptly furnished to City upon request. 5 9. ENFORCEMENT OF AGREEMENT 9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 9.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs. 9.3 Waiver, No delay or omission in the exercise of any right or remedy of a non- defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City shall be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing. No such waiver shall be a waiver of any other default concerning the same or any other provision of this Agreement. 9.4 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative. The exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 9.5 Legal Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, a declaratory judgment, or any other remedy consistent with the purposes of this Agreement. 10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 10.1 Non-Liability of City Officers and Employees. No officer or employee of City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by City or for any amount which may become due to the Consultant or its successor, or for breach of any obligation of the terms of this Agreement. 6 10.2 CONFLICT OF INTEREST. Consultant acknowledges that no officer or employee of the City has or shall have any direct or indirect financial interest in this Agreement, nor shall Consultant enter into anAgreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. Consultant warrants that Consultant has not paid or given, and will not pay or given, any third party any money or other consideration in exchange for obtaining this Agreement. 10.3 Covenant Against Discrimination, 10.3.1 In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin (i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a "prohibited basis"). Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard any prohibited basis. Contractor's actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Contractor activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; provision of benefits, rates of pay or other forms of compensation; and selection for training, including apprenticeship. Contractor shall fully comply with the provisions of Palm Springs Municipal Code Section 7.09.040 relating to non-discrimination in city contracting. 11. MISCELLANEOUS PROVISIONS 11.1 Notice. Any notice, demand, request, consent, approval, or communication that either party desires, or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first--class mail to the address set forth below. Notice shall be deemed communicated seventy-two (72) hours from the time of mailing if mailed as provided in this Section. Either party may change its address by notifying the other party of the change of address in writing. To City: City of Palm Springs Attention: City Manager/City Clerk 3200 E.Tahquitz Canyon Way Palm Springs,California 92262 To Consultant: MuniServices,LLC Attention: Contract Dept. 7625 N. Palm Avenue, Suite 108 Fresno, CA 93711 7 11.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and supersedes all other written agreements. 11.3 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement by all Parties. 11.4 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the parties. 11.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties' successors and assignees. 11.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise,upon any entity or person not a party to this Agreement. 11.7 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same. 11.8 Authority. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by so executing this Agreement the Parties are formally bound to the provisions of this Agreement. 8 IN"WITNESS WHEREOFi the Parties have executed.and entered into;this Agreement as of the date first written above. "CITY" CITY OF PALM SPRINGS;. ATTEST: a California charter city and municipal corporation By . . y: Anthony J. 1VI Crty Clerk Davia:H. Ready, City.:Manager Date APPROVED°.AS TO FORM`. APPROVED BY CITY MMIAGER fl�045P--00 A 01& y , Print; 1 %A'Ac Attorney Date 2`, . 2-01 "CONSULTANT MUNISERVICES;LLC . a Delaware limited lability company By: oug. sen., SVP'Client Services CONSULTANT- Check one:_Individual Partnership_Corporation X LLC EXHIBIT "A" CONSULTANT'S SCOPE OF SERVICES/WORK Including, Schedule of Fees And Schedule of Performance 10 Cannabis and Marijuana Tax Deficiency Audit Services Background MuniServices has performed audits for several municipalities with regard to medical marijuana dispensaries thus providing us with the institutional knowledge on regulations, taxation, acquisition, cultivation, production and distribution of medical marijuana, thus uniquely qualifying our firm to perform the work. We understand that many businesses in this industry are heavily cash oriented, experience difficulties with banking due to federal laws, have weak internal controls, lack fluent audit trails, and have inadequate books and records, and that the primary focal points of the examiners' audits center upon probing for unreported income, inventory tracking, and reconstructing sales. The City will fully share in our knowledge and experience of this industry if it elects to do so. MuniServices has already performed three rounds of audits for the City of Palm Springs' medical cannabis collectives. This particular audit engagement will be of the six permitted collectives (non- permitted collectives will be excluded from these audits). The time period being reviewed is from November 1, 2016 through December 31, 2017. Deficiency Audit Services are designed to identify entities subject to taxation by the City that are not properly reporting the full amount of tax which they are subject to under the City's ordinances. Deficiency Audit Services also identifies entities that are potentially underreporting, or not reporting all applicable taxes. MuniServices reviews entities records to ensure compliance with the City'staxes. In performing the Deficiency Audit Services, MuniServices will: 1. Establish a comprehensive inventory of the registered and unregistered entities subject to taxation by the City and the database elements needed to facilitate an analysis of records of those entity's current and prior year's tax remittance; 2. Compare MuniServices' records with the City's records to identify potential under-reporting entities subject to taxation; 3. Meet with designated City staff to review and discuss potential audit candidates and mutually agree which entities will be subject to review. Only entities mutually agreed by MuniServices and the City to be reviewed shall be subject to MuniServices' audit services. 4. Review applicable provisions of the City's municipal code and ordinances adopted by the City; 5. Represent the City for purposes of examining records pertaining to the Cannabis and Marijuana Tax to identify and confirm any errors/omissions that are resulting in deficient payment to the City; 6. Analysis into compliance with the IRC § 501(c) requirements for non-profits 7. For potential under-reporting entities identified, MuniServices will obtain authorization from the City to conduct a review of the entities' records and determine the amount of tax due for current and prior periods (plus applicable interest and penalties,where appropriate). 8. Submit audit summaries to the City to permit the City to determine the amount of a deficiency owed, if any (MuniServices will calculate as part of the summary the amount we determine that is owed, but this step allows the City discretion in pursuing the deficiencies); 9. Invoice entity for the amount of identified deficiencies,together with supporting documentation; 10. Educate entity regarding the City's reporting requirements to prevent recurring deficiencies in future years. 11 Audit Procedures In the review process an auditor will perform a physical inspection of the business location. Further inquiries will be made to the owner or manager as to the business transactions and compliance with the City's ordinances. MuniServices will conduct short tests before starting a complete verification of up to three years operations of a business. An extensive examination may not be justified. If the short tests indicate the taxpayer has not properly reported their tax liability, then more extensive tests will be conducted. When conducting the audit, a preliminary discussion with the taxpayer or with the person who is in charge of the records is performed to determine the exact nature of the business activity. The following briefly describes the books, records and detail that may be used in any given audit: 1. The General Ledger accounts may be examined for debits and credits, which may represent unreported transactions. 2. Review of payroll records and employee information filed with the State or other government agencies 3. Compare tax returns with Cannabis and Marijuana Tax returns. Kick Off Meeting To begin the Audit project, the service will start with a kick off meeting to establish logistics, communication, and to set forth the procedures the City wants to establish. 1. Initial Meeting. MuniServices meets with the City staff to review the procedures and objectives of the service, business entity relations and logistical matters, including establishing an appropriate liaison with City management and staff and logical checkpoints for measuring progress (the "Initial Meeting"). MuniServices and the City will schedule the meeting within 10 days after MuniServices receives the fully-signed copy of the Agreement from the City. 2. Workplan. Based on the Initial Meeting, MuniServices develops a workplan that incorporates the logistical matters agreed to in the Initial Meeting and describes in detail how the objectives of the CANNABIS AND MARIJUANA TAX service will be met(the "Work plan"). 3. Commencement of Services. After the Workplan is developed, MuniServices will begin providing the services described. MuniServices' obligation to provide services is contingent on the City providing the necessary information and cooperation. Draft Audit Report The draft reports for the audit will be completed and sent to City staff for review by July 6, 2018. Final Audit Reports The final reports for the audit will be completed, sent to City staff for review and approval, and then sent to the cannabis collective owners by August 6, 2018. Legislative and Regulatory Updates MuniServices will monitor proposed state and federal legislation to identify issues affecting the City's revenues with respect to Cannabis and Marijuana Tax related revenues, and, if justified, make recommendations to the City and its lobbyists. Our Government Relations team works in collaboration with stakeholders including the League of California Cities, the California Municipal Revenue Tax Association (CMRTA) representatives and members, and others. We understand that last year the League along with law enforcement organizations defeated four different Cannabis and Marijuana Tax bills in the legislature. 12 Each of these measures to varying degrees sought to override or undermine local control and each failed to adequately address the many public safety issues presented by dispensaries and efforts to regulate them. This year our team is monitoring and participating in discussions with regards to SB 1262 (Correa), which at the time of this proposal is being sponsored by the California Police Chiefs Association and cosponsored by the League of California Cities. Amendments taken to the bill in early May 2014 deleted key provisions to the bill however remaining intact are the local control provisions, certain health and safety provisions and public safety provisions in terms of security requirements at dispensaries, transport and inventorying requirements. We understand the League is re-evaluating its support position as well as whether to continue sponsoring the bill. Please refer to www.leginfo.ca.gov for more detail. We have historically followed and monitored for client impact measures including SB 626 (Calderon/ 2011) BOE: cannabis and cannabis products: study/ SB 676 (Leno/ 2001) industrial hemp. SB 626 would have required the State Board of Equalization to establish a voluntary task force to conduct a study to determine the most efficient means to obtain compliance under the Sales and Use Tax Law by sellers of cannabis and cannabis products. The Governor also vetoed SB 676 which would have created an eight-year, four- county pilot project with respect to the cultivation and processing of industrial hemp. The Governor said: "Federal law clearly establishes that all cannabis plants, including industrial hemp, are marijuana, which is a federally regulated controlled substance. Failure to obtain a permit from the U.S. Drug Enforcement Administration prior to growing such plants will subject a California farmer to federal prosecution. Although I am not signing this measure, I do support a change in federal law. Products made from hemp, clothes, food, and bath products are legally sold in California every day. It is absurd that hemp is being imported into the state, but our farmers cannot grow it." Consultation MuniServices offers to provide ongoing consultation services in the Cannabis and Marijuana Taxation area. Akin to a gross receipts audit, most of the audit should be straight forward. There may likely be consultation that MuniServices will provide, in close collaboration with the City, over the non-profit requirements. As you have come to expect from MuniServices, we typically provide all the extra consultation at no additional cost. Key Personnel List MuniServices' Palm Springs Project Management Team is comprised of a dedicated group of individuals who have been chosen based on their experience working directly with the public sector. Each member of the Project's Team also brings the necessary skill set, knowledge and education to support Palm Spring's stated objectives. 13 Executive/Management Team Doug Jensen,SVP Client Services &Executive Contact.Doug will assist the City's staff in developing and implementing strategies to preserve and enhance the City's cannabis tax revenue. In addition, his management responsibilities are to ensure the various deliverables and aspects of services are provided to the City and meet with their expectations. Doug is an expert in the field of municipal revenue enhancement management and local government revenue consulting and ensures the delivery of audit, information, and consulting services, with breadth and depth of knowledge and experience in local government focused on customer care. Doug has over 25 years of expertise in tax policy, municipal finance, and economic development and consulting. Doug oversees the Western Region of MuniServices. Doug is a frequent speaker to professional organizations, committees and governing bodies. Education: Doug has a BS in Business Administration with an emphasis in Accounting from California State University, Fresno. Affiliations & Memberships: Doug is a member of the California Society of Municipal Finance Officers and the California Municipal Revenue and Tax Association. Jonathan V. Gerth,Esq.,VP Tax and Audit Services. Jonathan manages our Cannabis Audit Division, and personally oversees our current medical dispensary audits for our clients in California, including audit projects for the Cities of Sacramento, Palm Springs and Cathedral City. Jonathan's professional background provides successful experience representing diverse services in legal, business, and accounting environments; including federal and local governmental functions, advanced federal, state, and local tax compliance and controversy, tax accounting, tax litigation, regulatory and statutory compliance, and alternative dispute resolution. He began his career as a tax attorney for Internal Revenue Service's Division of Chief Counsel and Compliance in Dallas, Texas where he conducted compliance audits, provided legal support for federal tax examinations, and conducted federal tax appeals in both administrative and federal court forums. After moving to Birmingham in 2009, he joined a Birmingham tax firm where he performed varieties of legal and accounting functions assisting clients in tax planning and forecasting, estate planning, corporate mergers, acquisitions, and reorganizations, tax preparation, legal research and tax advisory, and representation of taxpayers before federal and state taxing authorities. He joined Revenue Discovery Systems (RDS), a division of PRA Government Services, LLC, in April of 2010, and has since performed a wide latitude of legal and tax functions in the Audit department consisting of regulatory compliance initiatives and reforms in audit, assessment and collection practices, external litigation support, and legal support and analysis on compliance audits in the areas of direct and indirect transactional taxes, utility franchises, license/privilege taxes, revenue sourcing & apportionment, constitutionality of governmental tax systems&levies,taxation of interstate commerce, and advanced nexus and due process concerns. Jonathan is a regular speaker to local government organizations in California on cannabis issues. Speaking topics include industry trends, the impacts related to the implementation of new state laws and ordinance revisions. Education: Jonathan has a master's degree in tax accounting from Spring Hill College (2002), and a law degree (J.D.) from Thomas Goode Jones School of Law in 2006 where he concentrated in the area of taxation.Jonathan is an actively licensed attorney, and a member of the Tax Section of the Alabama State Bar&the Alabama League of Municipal Attorneys.He has also served as the administrative law judge presiding over tax appeals for all RDS represented local governments' transactional taxes in Alabama since 2010. Karo Aydindzhyan, Client Services Manager. Karo has over 6 years' experience working for the City of Los Angeles- Office of Finance as a Tax Auditor. In this capacity, Karo oversaw field audits of corporations, individuals, and businesses to determine the accuracy of tax payments to the City of Los Angeles. Karo Aydindzhyan has experience in CUT, Business Tax, Sales Tax, Transient Occupancy Tax audits and forecasting industry projections. He has a vast knowledge of the City Charter provisions, ordinances, regulations, City Court Rulings and decisions, City Attorney opinions, and policies & procedures of the Office of Finance for the biggest metropolitan city in Southern California. Throughout 14 his years as a tax auditor he recovered millions of unpaid tax revenues for the City of Los Angeles. Education: BS in Accounting from the University of Southern California. Compliance Audit Team John Thrasher III, CPA, AVP Audit Operations. John is responsible for the day to day direction, implementation, and development of the Cannabis Audit Division for MuniServices. John has more than 20 years of professional accounting, tax and consulting experience. Prior to joining MuniServices, John was founder and managing member of a full-service accounting and consulting firm that focused on growing small to mid-sized privately held businesses. John began his career in public accounting, serving as a Manager in the assurance practice of Ernst and Young, and later as Senior Manager in the assurance practice of PricewaterhouseCoopers. John's extensive experience in the areas of cannabis audit and state and local taxes provides for a solid management foundation for MuniServices Cannabis Audit Division. Education: John has a BS degree in Business Administration from the University of Alabama at Birmingham and is a licensed Certified Public Accountant (CPA) in the state of Alabama. Professional Affiliations: He is a member of the American Institute of Certified Public Accountants (AICPA) and the Alabama State Society of Public Accountants(ASCPA). Chris Wills, CRE, Audit Manager. Chris oversees audit operations for all national Cannabis and Utility Tax clients. Chris has been with our Birmingham office since 2008 and has developed a specialty practice within the company working on Cannabis Tax engagements. Chris has built a wide array of resources and knowledge specific to the cannabis industry, which has been pivotal in resolving audit issues for our cannabis audit clients. Education: Chris received his BS degree in Accounting from Jacksonville State University and is a Certified Revenue Examiner. Jeffrey Kolin, Special Technical Cannabis Advisor. Jeff has worked in both large and small cities and has consistently developed strong long range financial plans and balanced budgets. His expertise includes cannabis, water and wastewater utilities, public parking enterprises and property management with over 400,000 square feet actively leased at the City of Beverly Hills. Mr. Kolin worked closely with the community and City Council in Santa Rosa to develop regulations for medical marijuana dispensaries. He has helped cities stabilize and grow their general funds, prepare for difficult financial challenges as well as manage future growth. As City Manager he developed City Budget Teams that involved Departments in the development and justification of their budget requests under a framework of Strategic Goals and Initiatives developed with his City Councils. He has also developed successful financing plans for a variety of complex capital projects including the construction of a new civic center complex, a 450 megawatt gas fired co-generation power plant, a 50 mile long tertiary treated waste water pipeline and pumping system used to inject water into a geothermal field to create steam for electric power generation and the creation of a variety of park and open space projects in both Southern and Northern California. Jeff will serve as a senior advisor on our cannabis audit team and will meet regularly with the City and our team throughout this project. Larry Bergkamp, Special Technical Cannabis Advisor. Larry joined MuniServices in April 2016. Prior to joining MuniServices he served for over 28 years with the State Board of Equalization (BOE). While working for the BOE, he has worked on medical marijuana issues since 2003. Larry was recognized as the leading medical marijuana expert at the agency until his retirement in 2015. Larry was involved in the initial registration of medical marijuana dispensaries for sales and use taxes purposes. He evaluated, developed and implemented medical marijuana administrative policies and audit methodologies to address the unique industry environment. Larry has extensive experience with every aspect of the medical marijuana industry and has an in-depth understanding of the state regulatory process. He has a proven track record of working cooperatively with multiple state agencies and local 15 governments. Larry will be available as a technical resource throughout this project and he is also available to meet with City staff on a regular basis. Government Relations Team Francesco D.Mancia,MBA,VP Government Relations &Business Development.Fran is responsible for overseeing company Legislative, Regulatory, and Government Relations work at the state and federal level. Fran has a strong working knowledge of local government general fund tax laws and state and federal regulatory and legislative issues that impact local governments. He monitors, analyzes and leads company lobbying efforts related to legislation, state mandates, and regulatory changes and policies that affect client revenue streams. Fran currently serves as a member of the League of California Cities Revenue and Taxation Policy Committee and was the 2007 and 2008 President of the League's Partner Program. Currently Fran serves on the Board of Regents of the University of California and is a member of the Board of Trustees of the California City Management Foundation. Fran will work closely with our team, state legislators and regulatory agencies on all issues related to the ongoing implementation of rules and regulations impacting cannabis revenue during this project. The MuniServices Government Relations team will provide regular updates to the City during the project. Education: Fran graduated from the University of California, Santa Barbara and earned a Bachelor of Arts degree in Communications, and attended the University of San Francisco where he earned an MBA. Brenda Narayan, Director Government Relations/In-House Lobbyist. Brenda monitors legislation in Sacramento and Washington D.C. that may have potential impacts to local government including the cannabis industry. Brenda is the primary author of MuniServices Policy, Regulatory and Legislative updates and is our in-house lobbyist. Brenda is responsible for coordinating the Company's day-to-day legislative and regulatory activity. Brenda researches, identifies and tracks key legislation for MuniServices on behalf of clients. She provides internal and external leadership insight and concepts in public and community relations activities as they pertain to policy matters. Prior to joining MuniServices, Brenda served as an assistant to the Speaker of the State Assembly. Brenda has served on the Executive Committee for the League's (business) Partner program and has served numerous terms as a member of the League of California Cities Revenue and Taxation Policy Committee. Brenda was elected to serve on the United States Conference of Mayors Business Council Steering Committee beginning June 2016. Education: BA in Humanities from, Sacramento State, and a Certificate in Leadership and Management from UC Berkeley Extension. Project Support Patricia Dunn, MSHR, Client Services-Operations & Contracts Manager. Patricia will oversee the contract preparation and compliance. In her role as the Contracts Compliance Manager she is responsible for reviewing, drafting, and negotiating client and vendor contracts, and provides administrative and technical support to client services and senior and executive management. Patricia is also responsible for issuing and maintaining compliance-related documents including insurance certificates, local business licenses, and corporate filings. She has over 28 years of paralegal experience. Education: BA in Organizational Leadership from Fresno Pacific University, graduating magna cum laude, and a MS in Human Resources Management from Chapman University, graduating summa cum laude. 16 COMPENSATION Cannabis and Marijuana Tax MuniServices' compensation for the Cannabis and Marijuana Tax Audit Service will be $150 per hour with a maximum of 50 hours per audit for an amount not to exceed $25,000, including out-of- pocket expenses. No audit will be conducted without written authorization from the City. This audit is akin to a gross receipts audit with the addition of reviewing compliance with its non-profit status. We would notify the City if MuniServices approaches the maximum fee of$25,000 in order to secure spending authorization to allow MuniServices to continue to perform these audits. We are proposing a cap on the total number of hours per audit; however, we will likely have many audits well below the 50 hour cap. Out-of-Pocket Expenses For the Cannabis and Marijuana Tax audit services MuniServices will also charge the City out-of- pocket expenses for reasonable travel costs related to the performance of the audits. "Travel Costs" include but are not limited to the costs of car rental, gasoline, and traveling time at an hourly rate of $125 to $150 per hour. These out-of-pocket expenses will not exceed $2,500. If we expect to spend more than $2,500 we will get prior approval from the City for any amounts over the allotted $2,500. The out-of-pocket expenses will be invoiced to the City upon delivery of the final report to the City. Contract Expiration This contract will expire on December 31, 2018 unless extended by mutual written agreement of the parties. 17 EXHIBIT 'B" INSURANCE PROVISIONS Including Verification of Coverage, Sufficiency of Insurers, Errors and Omissions Coverage, Minimum Scope of Insurance, Deductibles and Self-Insured Retentions, and Severability of Interests (Separation of Insureds) 18 INSURANCE 1. Procurement and Maintenance of Insurance. Consultant shall procure and maintain public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Consultant's performance under this Agreement. Consultant shall procure and maintain all insurance at.its sole cost and expense, in a form and content satisfactory to the City, and submit concurrently with its execution of this Agreement. Consultant shall also carry workers' compensation insurance in accordance with California workers' compensation laws. Such insurance shall be kept in full force and effect during the term of this Agreement, including any extensions. Such insurance shall not be cancelable without thirty (30) days advance written notice to City of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City, its elected officials, officers, employees, and agents as additional named insureds by original endorsement shall be delivered to and approved by City prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify City, its elected officials, officers,agents,and employees. 2. Minimum S c o p e o f I n s u r a n c e. The minimum amount of insurance required under this Agreement shall be as follows: 1. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two million dollars($2,000,000) general aggregate; 2. Automobile liability insurance with limits of at least one million dollars ($1,000,000.00)per occurrence; 3. Professional liability (errors and omissions) insurance with limits of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000) annual aggregate is: t✓' required is not required; 4. Workers' Compensation insurance in the statutory amount as required by the- State of California and Employer's Liability Insurance with limits of at least one million dollars $1 million per occurrence. If Consultant has no employees, Consultant shall complete the City's Request for Waiver of Workers' Compensation Insurance Requirement form. 3. Primary Insurance. For any claims related to this Agreement, Consultant's insurance coverage shall be primary with respect to the City and its respective elected officials, officers, employees, and agents. Any insurance or self-insurance maintained by City and its respective elected officials, officers, employees, and agents shall be in excess of Consultant's insurance and shall not contribute with it. For Workers' Compensation and Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and contribution it may have against City, its elected officials, officers, employees, and agents. 19 4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required, and if Consultant provides claims made professional liability insurance, Consultant shall also agree in writing either (1) to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Consultant's services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in the amount required by this Agreement for at least three years after completion of Consultant's services under this Agreement. Consultant shall also be required to provide evidence to City of the purchase of the required tail insurance or continuation of the professional liability policy. 5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an AM. Best's Key Rating of B++, Class VII, or better, unless otherwise acceptable to the City. 6. Verification of Coverage. Consultant shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, effecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work commences. City reserves the right to require Consultant's insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies. Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or (2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate: 1. "The City of Palm Springs, its officials, employees, and agents are named as an additional insured... " ("as respects City of Palm Springs Contract No._" or 'for any and all work performed with the City"may be included in this statement). 2. "This insurance is primary and non-contributory over any insurance or self- insurance the City may have..." ("as respects City of Palm Springs Contract No._" or 'for any and all work performed with the City" may be included in this statement). 3. "Should any of the above described policies be canceled before the expiration date thereof the issuing company will mail 30 days written notice to the Certificate Holder named."Language such as, "endeavor to"mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative"is not acceptable and must be crossed out. 4. Both the Workers'Compensation and Employers'Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, and agents. 20 In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies. All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agentibroker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Consultant's obligation to provide them. 7. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City prior to commencing any work or services under this Agreement. At the option of the City, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its elected officials, officers, employees, and agents; or(2) Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Certificates of Insurance must include evidence of the amount of any deductible or self-insured retention under the policy. Consultant guarantees payment of all deductibles and self-insured retentions. 8. Severability of Interests (Separation of Insureds). This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability. 21 GOVEREV-01 CSOKOLOWSKI `'4c RoW CERTIFICATE OF LIABILITY INSURANCE DATE 01/1 91201 8 01/19/2018 THIS G'ERTIFICATE 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 NAMEACT Daniel R.Gunter Thompson Flanagan Executive Liability Group jA/c°,NNo,Ext):(312)239-2890 (A/c,No):(312)263-1551 626 W.Jackson Blvd.5th Floor Chicago,IL 60661 ADRIE •dgunter@thompsonflanagan.com INSURERS AFFORDING COVERAGE NAIC# INSURERA:The Continental Insurance Company 35289 INSURED Government Revenue Solutions Holdings LLC INSURER B:American Casualty Company of Reading,Pennsylvania 20427 d/b/a MuniServices,LLC INSURER C:RSUI Indemnity 22314 Attn:Ms.Patricia Dunn INSURER D:Axis Insurance Company 37273 7625 Palm Ave.,Suite 108 Fresno,CA 93711 INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. IL SR ADDLSUBRTR TYPE OF INSURANCE INSD WVD POLICY NUMBER PMIDDY EFF POLICY EXP LIMITS A X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 CLAIMS-MADE X OCCUR 6043362567 01/24/2018 01124/2019 DAMAGE TO RENTED 1,000,000 X X PREMISES Ea occurrence) $ MED EXP(Any oneperson) $ 15,000 PERSONAL&ADV INJURY $ 1,000,000 GENT AGGREGATE LIMIT APPLIES PER: 1/ GENERAL AGGREGATE $ 2,000,000 X POLICY JEn LOC PRODUCTS-COMPIOP AGG $ 2,000,000 OTHER: $ B AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT 1,000,000 Ea accident $ ANY AUTO 6043362670 01124/2018 01/24/2019 BODILY INJURY Per person) $ OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY Per accident $ X AUTOS ONLY X AUUTOS ONLY PPe�acEcidentDAMAGE $ A X UMBRELLA LIAR X OCCUR EACH OCCURRENCE $ 10,000,000 EXCESS LIAR CLAIMS-MADE 6043362684 01/24/2018 01/24/2019 AGGREGATE $ 10,000,000 DED I X I RETENTION$ 10,000 $ B WORKERS COMPENSATION AND EMPLOYERS'LIABILITY X STATUTE E YIN 6043362536 01/24/2018 01124/2019 1,000,000 OFFICERIMEMBER EXCLUDED?ECUTIVE ❑ N/A X E.L.EACH ACCIDENT $ (Mandatory in NH) E.L.DISEASE-EA EMPLOYEE $ 1,000,000 If yes,describe under 1,000,000 DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $ C Professional Liabill LCY761747 01/24/2018 01/24/2019 Limit 5,000,000 D Directors&Officers MCN62051010112018 01/24/2018 01/24/2019 Limit 3,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS/VEHICLES (ACORD 101,Additional Remarks Schedule may be attached if more space is required) Per the cancellation wording listed on this form,the policy provisions include at feast 30 days'notice of cancellation except for non-payment of premium. The City of Palms Springs,its agents,officers,servants and employees are named as additional insure s under the General Liabili policy with respect to the operations and work performed by the named insured as required by contract.The Genera lability policy is Primary& on- ontrl utory.Waiver of subrogation applies under the General Liability and Workers Compensation policies. CERTIFICATE HOLDER CANCELLATION 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 Palm Springs AUTHORIZED REPRESENTATIVE Attn:Finance Director 3200 E.Tahquitz Canyon WayRalm Springs.CA 92262-2743 ACORD 25(2016/03) ©1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD AGENCY CUSTOMER ID:GOVEREV-01 CSOKOLOWSKI LOC#: A O® ADDITIONAL REMARKS SCHEDULE Page 1 of 1 AGENCY NAMED INSURED Thompson Flanagan Executive Liability Group Government Revenue Solutions Holdings LLC g ty p d/b/a MuniServices,LLC POLICYNUMBER Attn:Ms.Patricia Dunn 7625 N Palm Ave.,Ste 108 SEE PAGE 1 Fresno,CA 93711 CARRIER NAIC CODE EE PAGE 1 SEE P 1 EFFECnvE DATE:SEE PAGE 1 ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: ACORD 25 FORM TITLE: Certificate of Liability Insurance California Workers Compensation A separate policy number is applicable to Califomia Workers'Compensation:01-24-18.The same insurer(American Casualty Company of Reading,Pennsylvania)and effective date(01-24-18)are applicable.Policy number is WC643362663.Workers' Compensation limits are per state statute.Employer's Liability limits are as follows: Each Accident-$1,000,000; Disease Each Employee-$1,000,000;and Disease Policy Limit-$1,000,000. ACORD 101 (2008/01) ©2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD p CNA CNA PARAMOUNT General Liability Extension Endorsement 1. ADDITIONAL INSUREDS a. WHO IS AN INSURED is amended to include as an Insured any person or organization described in paragraphs A. through K. below whom a Named Insured is required to add as an additional insured on this Coverage Part under a written contract or written agreement, provided such contract or agreement: (1) is currently in effect or becomes effective during the term of this Coverage Part;and (2) was executed prior to: (a) the bodily injury or property damage;or (b) the offense that caused the personal and advertising injury, for which such additional insured seeks coverage. b. However, subject always to the terms and conditions of this policy, including the limits of insurance, the Insurer will not provide such additional insured with: (1) a higher limit of insurance than required by such contract or agreement; or (2) coverage broader than required by such contract or agreement, and in no event broader than that described by the applicable paragraph A.through K. below. Any coverage granted by this endorsement shall apply only to the extent permissible by law. A. Controlling Interest Any person or organization with a controlling interest in a Named Insured,but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury arising out of: 1. such person or organization's financial control of a Named Insured;or 2. premises such person or organization owns, maintains or controls while a Named Insured leases or occupies such premises; provided that the coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by,on behalf of,or for such additional insured. B. Co-owner of Insured Premises A co-owner of a premises co-owned by a Named Insured and covered under this insurance but only with respect to such co-owner's liability for bodily injury, property damage or personal and advertising injury as co-owner of such premises. C. Grantor of Franchise Any person or organization that has granted a franchise to a Named Insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury as grantor of a franchise to the Named Insured. D. Lessor of Equipment Any person or organization from whom a Named Insured leases equipment, but only with respect to liability for bodily injury, property damage or personal and advertising injury caused, in whole or in part, by the Named Insured's maintenance, operation or use of such equipment, provided that the occurrence giving rise to such bodily injury, property damage or the offense giving rise to such personal and advertising injury takes place prior to the termination of such lease. CNA74879XX(1-15) Policy No: 6043362567 Page 2 of 13 Endorsement No: 7 CONTINENTAL CASUALTY COMPANY Effective Date: 01/24/2018 Insured Name:GOVERNMENT REVENUE SOLUTIONS HOLDINGS LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office,Inc.,with its permission. i. CNA CNA PARAMOUNT General Liability Extension Endorsement E. Lessor of Land Any person or organization from whom a Named Insured leases land but only with respect to liability for bodily injury, property damage or personal and advertising injury arising out of the ownership, maintenance or use of such land, provided that the occurrence giving rise to such bodily injury or property damage, or the offense giving rise to such personal and advertising injury, takes place prior to the termination of such lease. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of,or for such additional insured. F. Lessor of Premises An owner or lessor of premises leased to the Named Insured, or such owner or lessor's real estate manager, but only with respect to liability for bodily injury, property damage or personal and advertising injury arising out of the ownership, maintenance or use of such part of the premises leased to the Named Insured, and provided that the occurrence giving rise to such bodily injury, property damage or the offense giving rise to such personal and advertising injury takes place prior to the termination of such lease. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of,or for such additional insured. G. Mortgagee,Assignee or Receiver A mortgagee, assignee or receiver of premises but only with respect to such mortgagee, assignee or receiver's liability for bodily injury, property damage or personal and advertising injury arising out of the Named Insured's ownership, maintenance,or use of a premises by a Named Insured. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of,or for such additional insured. H. State or Governmental Agency or Subdivision or Political Subdivisions—Permits A state or governmental agency or subdivision or political subdivision that has issued a permit or authorization, but only with respect to such state or governmental agency or subdivision or political subdivision's liability for bodily injury, property damage or personal and advertising injury arising out of: 1. the following hazards in connection with premises a Named Insured owns, rents, or controls and to which this insurance applies: a. the existence, maintenance, repair, construction, erection, or removal of advertising signs, awnings, canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoistaway openings, sidewalk vaults,street banners,or decorations and similar exposures;or b. the construction,erection, or removal of elevators; or N c. the ownership, maintenance or use of any elevators covered by this insurance;or 2. the permitted or authorized operations performed by a Named Insured or on a Named Insured's behalf. The coverage granted by this paragraph does not apply to: a. Bodily injury, property damage or personal and advertising injury arising out of operations performed for the state or governmental agency or subdivision or political subdivision;or b. Bodily injury or property damage included within the products-completed operations hazard. With respect to this provision's requirement that additional insured status must be requested under a written contract or agreement, the Insurer will treat as a written contract any govemmental permit that requires the Named Insured to add the governmental entity as an additional insured. CNA74879XX(1-15) Policy No: 6043362567 Page 3 of 13 Endorsement No: 7 CONTINENTAL CASUALTY COMPANY Effective Date: 01/24/2018 Insured Name:GOVERNMENT REVENUE SOLUTIONS HOLDINGS LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office,Inc.,with its permission. CNA CNA PARAMOUNT General Liability Extension Endorsement I. Trade Show Event Lessor 1. With respect to a Named Insured's participation in a trade show event as an exhibitor, presenter or displayer, any person or organization whom the Named Insured is required to include as an additional insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury caused by: a. the Named Insured's acts or omissions;or b. the acts or omissions of those acting on the Named Insured's behalf, in the performance of the Named Insured's ongoing operations at the trade show event premises during the trade show event. 2. The coverage granted by this paragraph does not apply to bodily injury or property damage included within the products-completed operations hazard. J. Vendor Any person or organization but only with respect to such person or organization's liability for bodily injury or property damage arising out of your products which are distributed or sold in the regular course of such person or organization's business, provided that: 1. The coverage granted by this paragraph does not apply to: a. bodily injury or property damage for which such person or organization is obligated to pay damages by reason of the assumption of liability in a contract or agreement unless such liability exists in the absence of the contract or agreement; b. any express warranty unauthorized by the Named Insured; c. any physical or chemical change in any product made intentionally by such person or organization; d. repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; e. any failure to make any inspections, adjustments,tests or servicing that such person or organization has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; f. demonstration, installation, servicing or repair operations, except such operations performed at the such person or organization's premises in connection with the sale of a product; g. products which, after distribution or sale by the Named Insured, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for such person or organization;or h. bodily injury or property damage arising out of the sole negligence of such person or organization for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (1) the exceptions contained in Subparagraphs d.or f.above; or (2) such inspections, adjustments,tests or servicing as such person or organization has agreed with the Named Insured to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. 2. This Paragraph J. does not apply to any insured person or organization,from whom the Named Insured has acquired such products, nor to any ingredient, part or container, entering into, accompanying or containing such products. CNA74879XX(1-15) Policy No: 6043362567 Page 4 of 13 Endorsement No: 7 CONTINENTAL CASUALTY COMPANY Effective Date: 01/24/2018 Insured Name:GOVERNMENT REVENUE SOLUTIONS HOLDINGS LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office,Inc.,with its permission. CNA CNA PARAMOUNT General Liability Extension Endorsement 3. This Paragraph J.also does not apply: a. to any vendor specifically scheduled as an additional insured by endorsement to this Coverage Part; b. to any of your products for which coverage is excluded by endorsement to this Coverage Part; nor c. if bodily injury or property damage included within the products-completed operations hazard is excluded by endorsement to this Coverage Part. K. Other Person Or Organization Any person or organization who is not an additional insured under Paragraphs A. through J. above. Such additional insured is an Insured solely for bodily injury, property damage or personal and advertising injury for which such additional insured is liable because of the Named Insured's acts or omissions. The coverage granted by this paragraph does not apply to any person or organization: 1. for bodily injury, property damage, or personal and advertising injury arising out of the rendering or failure to render any professional service; 2. for bodily injury or property damage included within the products-completed operations hazard; nor 3. who is specifically scheduled as an additional insured on another endorsement to this Coverage Part. 2. ADDITIONAL INSURED-PRIMARY AND NON-CONTRIBUTORY TO ADDITIONAL INSURED'S INSURANCE A. The Other Insurance Condition in the COMMERCIAL GENERAL LIABILITY CONDITIONS Section is amended to add the following paragraph: If the Named Insured has agreed in writing in a contract or agreement that this insurance is primary and non- contributory relative to an additional insured's own insurance, then this insurance is primary, and the Insurer will not seek contribution from that other insurance. For the purpose of this Provision 2., the additional insured's own insurance means insurance on which the additional insured is a named insured. B. With respect to persons or organizations that qualify as additional insureds pursuant to paragraph 1.K. of this endorsement,the following sentence is added to the paragraph above: Otherwise, and notwithstanding anything to the contrary elsewhere in this Condition, the insurance provided to such person or organization is excess of any other insurance available to such person or organization. 3. BODILY INJURY—EXPANDED DEFINITION N .O Under DEFINITIONS the definition of bodily injury is deleted and replaced by the following: Bodily injury means physical injury, sickness or disease sustained by a person, including death, humiliation, shock, mental anguish or mental injury sustained by that person at any time which results as a consequence of the physical " injury, sickness or disease. 4. BROAD KNOWLEDGE OF OCCURRENCE/NOTICE OF OCCURRENCE Under CONDITIONS,the condition entitled Duties in The Event of Occurrence, Offense, Claim or Suit is amended to add the following: A. BROAD KNOWLEDGE OF OCCURRENCE The Named Insured must give the Insurer or the Insurer's authorized representative notice of an occurrence, offense or claim only when the occurrence, offense or claim is known to a natural person Named Insured, to a partner, executive officer, manager or member of a Named Insured, or to an employee designated by any of the above to give such notice. B. NOTICE OF OCCURRENCE CNA74879XX(1-15) Policy No: 6043362567 Page 5 of 13 Endorsement No: 7 CONTINENTAL CASUALTY COMPANY Effective Date: 01/24/2018 Insured Name:GOVERNMENT REVENUE SOLUTIONS HOLDINGS LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office,Inc.,with its permission. CNA CNA PARAMOUNT General Liability Extension Endorsement The Named Insured's rights under this Coverage Part will not be prejudiced if the Named Insured fails to give the Insurer notice of an occurrence, offense or claim and that failure is solely due to the Named Insured's reasonable belief that the bodily injury or property damage is not covered under this Coverage Part. However, the Named Insured shall give written notice of such occurrence, offense or claim to the Insurer as soon as the Named Insured is aware that this insurance may apply to such occurrence,offense or claim. 5. BROAD NAMED INSURED WHO IS AN INSURED is amended to delete its Paragraph 3. in its entirety and replace it with the following: 3. Pursuant to the limitations described in Paragraph 4. below, any organization in which a Named Insured has management control: a. on the effective date of this Coverage Part;or b. by reason of a Named Insured creating or acquiring the organization during the policy period, qualifies as a Named Insured, provided that there is no other similar liability insurance, whether primary, contributory,excess,contingent or otherwise,which provides coverage to such organization, or which would have provided coverage but for the exhaustion of its limit, and without regard to whether its coverage is broader or narrower than that provided by this insurance. But this BROAD NAMED INSURED provision does not apply to: (a) any partnership, limited liability company or joint venture;or (b) any organization for which coverage is excluded by another endorsement attached to this Coverage Part. For the purpose of this provision, management control means: A. owning interests representing more than 50% of the voting, appointment or designation power for the selection of a majority of the Board of Directors of a corporation;or B. having the right, pursuant to a written trust agreement,to protect, control the use of, encumber or transfer or sell property held by a trust. 4. With respect to organizations which qualify as Named Insureds by virtue of Paragraph 3. above, this insurance does not apply to: a. bodily injury or property damage that first occurred prior to the date of management control, or that first occurs after management control ceases; nor b. personal or advertising injury caused by an offense that first occurred prior to the date of management control or that first occurs after management control ceases. 5. The insurance provided by this Coverage Part applies to Named Insureds when trading under their own names or under such other trading names or doing-business-as names (dba) as any Named Insured should choose to employ. 6. ESTATES, LEGAL REPRESENTATIVES,AND SPOUSES The estates, heirs, legal representatives and spouses of any natural person Insured shall also be insured under this policy; provided, however, coverage is afforded to such estates, heirs, legal representatives, and spouses only for claims arising solely out of their capacity or status as such and, in the case of a spouse, where such claim seeks damages from marital community property, jointly held property or property transferred from such natural person Insured to such spouse. No coverage is provided for any act, error or omission of an estate, heir, legal representative, or spouse outside the scope of such person's capacity or status as such, provided however that the spouse of a natural person Named Insured and the spouses of members or partners of joint venture or partnership Named Insureds are Insureds with respect to such spouses' acts, errors or omissions in the conduct of the Named Insured's business. CNA74879XX(1-15) Policy No: 6043362567 Page 6 of 13 Endorsement No: 7 CONTINENTAL CASUALTY COMPANY Effective Date: 01/24/2018 Insured Name:GOVERNMENT REVENUE SOLUTIONS HOLDINGS LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office,Inc.,with its permission. Workers Compensation And Employers Liability Insurance CNAPolicy Endorsement 02 AN am NMI This endorsement changes the policy to which it is attached. It is agreed that Part One - Workers' Compensation Insurance G. Recovery From Others and Part Two - Employers' Liability Insurance H. Recovery From Others are amended by adding the following: We will not enforce our right to recover against persons or organizations. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) PREMIUM CHARGE - Refer to the Schedule of Operations The charge will be an amount to which you and we agree that is a percentage of the total standard premium for California exposure. The amount is 2%. All other terms and conditions of the policy remain unchanged. ___- ---._...................... - ---- ............. — .__... _.........-...._ ...---- - — - - I This endorsement, which forms a part of and is for attachment to the policy issued by the designated Insurers, takes effect on the Policy Effective Date of said policy at the hour stated in said policy, unless another effective date (the Endorsement Effective Date) is shown below, and expires concurrently with said policy unless another expiration date is shown below. Form No: G-19160-B (11-1997), Policy No:WC 6 43362553 Endorsement Effective Date: Endorsement Expiration Date: Policy Effective Date:01/24/2018 Endorsement No: 5; Page: 1 of 1 Policy Page: 34 of 58 Underwriting Company: American Casualty Company of Reading, Pennsylvania, 333 S Wabash Ave, Chicago, IL 60604 ®Copyright CNA All Rights Reserved. CONSULTING SERVICES AGREEMENT Cannabis and Marijuana Tax Deficiency Audit Services THIS AGREEMENT FOR CONSULTING SERVICES ("Agreement") is made and entered into on re6vakm oq 2017, by and between the City of Palm Springs, a California charter city and nunicipal corporation ("City"), and MuniServices LLC, a Delaware limited liability company ("Consultant"). City and Consultant are individually referred to as "Party" and are collectively referred to as the 'Tarties". RECITALS A. City requires the services of a professional tax auditing firm to audit medical cannabis collectives for the City's Medical Cannabis Tax ("Project"). B. Consultant has submitted to City a proposal to provide medical cannabis tax auditing services to City under the terms of this Agreement. C. Based on its previous experience auditing cannabis collections for the City, education, training, and reputation, Consultant is qualified and desires to provide the necessary services to City for the Project. D. City desires to retain the services of Consultant for the Project. Inconsideration of these promises and mutual agreements, City agrees as follows: AGREEMENT 1. CONSULTANT SERVICES 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide Medical Cannabis Tax Auditing Services to City as described in the Scope of Services/Work attached to this Agreement as Exhibit "A" and incorporated by reference (the "services" or "work"). Exhibit "A" includes the agreed upon schedule of performance and the schedule of fees. Consultant warrants that all services and work shall be performed in a competent, professional, and satisfactory manner consistent with prevailing industry standards. In the event of any inconsistency between the terms contained in the Scope of Services/Work and the terms set forth in this Agreement, the terms set forth in this Agreement shall govern. 1.2 Compliance with Law. Consultant services rendered under this Agreement shall comply with all applicable federal, state, and local laws, statutes and ordinances and all lawful orders, rules, and regulations. 1.3 Licenses and Permits. Consultant shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the services required by this Agreement. ORIGINAL BID AND/OR AGREEMENT 1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that it has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance ofthe work under this Agreement. 2. TIME FOR COMPLETION The time for completion of the services to be performed by Consultant is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently the work of this Agreement according to the agreed upon schedule of performance set forth in Exhibit "A." Consultant shall not be accountable for delays in the progress of its work caused by any condition beyond its control and without the fault or negligence of Consultant. Delays shall not entitle Consultant to any additional compensation regardless of the party responsible for the delay. 3. COMPENSATION OF CONSULTANT 3.1 Compensation of Consultant. Consultant shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit "A". The total amount of Compensation shall not exceed $25,000. 3.2 Method of Payment. In any month in which Consultant wishes to receive payment, Consultant shall submit to City an invoice for services rendered prior to the date of the invoice, no later than the first working day of such month, in the form approved by City's finance director. Payments shall be based on the hourly rates set forth in Exhibit "A" for authorized services performed. City shall pay Consultant for all expenses stated in the invoice that are approved by City and consistent with this Agreement, within thirty (30) days of receipt of Consultant's invoice. 3.3 Chanees. In the event any change or changes in the Scope of Services/Work is requested by City, Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including, but not limited to, any additional fees. An amendment may be entered into: A. To provide for revisions or modifications to documents, work product, or work, when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant's profession. 3.4 Annronriations. This Agreement is subject to, and contingent upon, funds being appropriated by the City Council of City for each fiscal year. If such appropriations are not made, this Agreement shall automatically terminate without penalty to City, but Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter. 4. PERFORMANCE SCHEDULE 4.1 Time of Essence. Time is of the essence in the performance of this Agreement. 2 4.2 Schedule of Performance. All services rendered under this Agreement shall be performed under the agreed upon schedule of performance set forth in Exhibit "A." Any time period extension must be approved in writing by the Contract Officer. 4.3 Force Maieure. The time for performance of services to be rendered under this Agreement may be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, if Consultant notifies the Contract Officer within ten (10) days of the commencement of such condition. Unforeseeable causes include, but are not limited to, acts of God or of a public enemy, acts of the government, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually severe weather. After Consultant notification, the Contract Officer shall investigate the facts and the extent of any necessary delay, and extend the time for performing the services for the period of the enforced delay when and if, in the Contract Officer'sjudgment, such delay isjustified. The Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. 4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect for a period of one (1) year from the date the agreement is entered into, unless extended by mutual written agreement of the parties. 4.5 Termination Prior to Expiration of Term. City may terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Consultant. Where termination is due to the fault of Consultant and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Consultant shall immediately cease all services except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer after such notice. Consultant may terminate this Agreement, with or without cause, upon thirty (30) days written notice to City. 5. COORDINATION OF WORK 5.1 Representative of Consultant. The following principal of Consultant is designated as being the principal and representative of Consultant authorized to act and make all decisions in its behalf with respect to the specified services and work: Doug Jensen, Senior VP Client Services. It is expressly understood that the experience, knowledge, education, capability, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services under this Agreement. The foregoing principal may not be changed by Consultant without prior written approval ofthe Contract Officer. 5.2 Contract Officer. The Contract Officer shall be the City Manager or his/her designee ("Contract Officer"). Consultant shall be responsible for keeping the Contract Officer fully informed of the progress of the performance of the services. Consultant shall refer any decisions that must be made by City to the Contract Officer. Unless otherwise specified, any 3 approval of City shall mean the approval of the Contract Officer. 5.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, education, capability, and reputation of Consultant, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall not contract with any other individual or entity to perform any services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. 5.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Consultant, its agents or employees, perform the services required, except as otherwise specified. Consultant shall perform all required services as an independent contractor of City and shall not be an employee of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role; however, City shall have the right to review Consultant's work product, result, and advice. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 5.5 Personnel. Consultant agrees to assign the following individuals to perform the services in this Agreement. Consultant shall not alter the assignment of the following personnel without the prior written approval of the Contract Officer. Acting through the City Manager, the City shall have the unrestricted right to order the removal of any personnel assigned by Consultant by providing written notice to Consultant. Name: Doug Jensen Sr.Vice President, Client Services Julia Erdkamp Client Services Manager Jonathan Gerth Auditor 6. INSURANCE Consultant shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in the attached Exhibit "B",incorporated herein by reference. 7. INDEMNIFICATION. 7.1 Indemnification. To the fullest extent permitted by law, Consultant shall defend (at Consultant's sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, and agents, (collectively the "Indemnified Parties"), from and against any and all third party liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively third party "Claims"), including but not limited to third party Claims arising from injuries to or death of persons 4 (Consultant's employees included), for damage to property, including property owned by City, from any violation of any federal, state, or local law or ordinance, and from errors and omissions committed by Consultant, its officers, employees, representatives, and agents, which Claims arise out of or are related to Consultant's performance under this Agreement. This indemnification clause excludes such third party Claims arising from the sole negligence or willful misconduct of the City, its elected officials, officers, employees, and agents. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be constructed to limit Consultant's indemnification obligation or other liability under this Agreement. Consultants indemnification obligation shall survive the expiration or _ earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if any action is timely filed, until such action is final. This provision is intended for the benefit of third party Indemnified Parties not otherwise a party to this Agreement. 8. RECORDS AND REPORTS 8.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer reports concerning the performance of the services required by this Agreement, or as the Contract Officer shall require. 8.2 Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Consultant shall keep such books and records as shall be necessary to properly perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records. 8.3 Ownership of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of this Agreement shall be the property of City. Consultant shall deliver all above-referenced documents to City upon request of the Contract Officer or upon the termination of this Agreement. Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights or ownership of the documents and materials. Consultant may retain copies of such documents for Consultant's own use. Consultant shall have an unrestricted right to use the concepts embodied in such documents. 8.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 8.5 Cost Records. Consultant shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred while performing under this Agreement. Consultant shall make such materials available at its offices at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment for inspection by City and copies shall be promptly furnished to 5 City upon request. 9. ENFORCEMENT OF AGREEMENT 9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 9.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs. 9.3 Waiver. No delay or omission in the exercise of any right or remedy of a non- defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City shall be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing. No such waiver shall be a waiver of any other default concerning the same or any other provision of this Agreement. 9.4 81phts and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative. The exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 9.5 Leval Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, a declaratoryjudgment, or any other remedy consistent with the purposes of this Agreement. 10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 10.1 Non-Liability of City Officers and Em llayees. No officer or employee of City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by City or for any amount which may become due to the Consultant or its successor, or forbreach ofany obligation ofthe terms ofthis Agreement. 6 10.2 CONFLICT OF INTEREST. Consultant acknowledges that no officer or emnlovee of the City has or shall have any direct or indirect financial interest in this Agreement. nor shall Consultant enter into any Agreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. Consultant warrants that Consultant has not paid or given and will not pay or given. any third party any money or other consideration in exchange for obtaining this Agreement, 10.3 Non-Discrimination Certification, 10.3.1 Consultant certifies and represents that, during the performance of the Agreement, the Consultant and any other parties with whom it may contract shall adhere to the City's non-discrimination and equal benefits as provided in the Section to assure that applicants and employees are treated equally and are not discriminated against because of their actual or perceived race, color, religion, ancestry, national origin, disability, medical condition, marital status, domestic partner status, sex, gender, gender identity, gender expression, national origin, ancestry, or sexual orientation. Consultant further certifies that it will not maintain any segregated facilities. 10.3.2 Consultant shall, in all solicitations or advertisements for applicants for employment placed by or on behalf of this Agreement, state that it is an "equal opportunity employer" or that all qualified applicants will receive consideration for employment without regard to their actual or perceived race, color, religion, ancestry, national origin, disability, medical condition, marital status, domestic partner status, sex, gender, gender identity, gender expression, or sexual orientation. 10.3.3 Consultant shall certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their actual or perceived race, color, religion, ancestry, national origin, disability, medical condition, marital status, domestic partner status, sex, gender, gender identity, gender expression, or sexual orientation. 10.3.4 if requested to do so by the Contract Officer, Consultant shall provide the City with access to copies of all of its records pertaining or relating to its employment practices, except to the extent such records or portions of such records are confidential or privileged under state or federal law. 10.3.5 Consultant agrees to recruit Coachella Valley residents initially and to give them preference, if all other factors are equal, for any new positions which result from the performance of this Agreement and which are performed within the city. The Contract Officer may agree to modify requirement where it is in conflict with federal or state laws or regulations. 10.3.6 Nothing contained in this Agreement shall be construed in any manner so as to require or permit any act which is prohibited by law. 7 11. MISCELLANEOUS PROVISION 11.1 Notice. Any notice, demand, request, consent, approval, or communication that either party desires, or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first-class mail to the address set forth below. Notice shall be deemed communicated seventy-two (72) hours from the time of mailing if mailed as provided in this Section. Either party may change its address by notifying the other party of the change of address in writing. To City: City of Palm Springs Attention: City Manager/City Clerk 3200 E. Tahquitz Canyon Way Palm Springs,California 92262 To Consultant: MuniServices, LLC Attention: Contract Dept. 7625 N. Palm Avenue, Suite 108 Fresno, CA 93711 11.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and supersedes all other written agreements. 11.3 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement by all Parties. 11.4 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the parties. 11.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties' successors and assignees. 11.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise, upon any entity or person not a party to this Agreement. 11.7 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same. 11.8 Authority. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by so executing this Agreement the Parties are formally bound to the provisions of this Agreement. 8 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date: rek yv z, 01 B �?� �/ David H. Read City Manager APPROVED BY CISY MAPJnGER e � —moo APPROVED AS TO FORM: ATTEST By: By: t- Do las C. Holland Kathie Hart Cit 'Attorney Interim City Clerk "CONSULTANT" MuniServiees, LLC Date: January 12, 2017 By: en en P Clie� vices Not to Exceed $ Without The Expre s Written Authorization Of The City Manager 9 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates statedbelow. "CITY" City of Palm Springs Date: By: David H. Ready City Manager APPROVED AS TO FORM: ATTEST By: By: Douglas C. Holland James Thompson City Attorney City Clerk "CONSULTANT" MumS ices,LLC Date: January 4, 2017 By: o nsen S lient Services 9 EXHIBIT "A" CONSULTANT'S SCOPE OF SERVICES/WORK Including, Schedule of Fees And Schedule of Performance 10 Cannabis and Marijuana Tax Deficiency Audit Services Background MuniServices has performed audits for several municipalities with regard to medical marijuana dispensaries thus providing us with the institutional knowledge on regulations, taxation, acquisition, cultivation, production and distribution of medical marijuana, thus uniquely qualifying our firm to perform the work. We understand that many businesses in this industry are heavily cash oriented, experience difficulties with banking due to federal laws, have weak internal controls, lack fluent audit trails, and have inadequate books and records, and that the primary focal points of the examiners' audits center upon probing for unreported income, inventory tracking, and reconstructing sales. The City will fully share in our knowledge and experience of this industry if it elects to do so. MuniServices has already performed two rounds of audits for the City of Palm Springs' medical cannabis collectives. This particular audit engagement will be of the six permitted collectives (non- permitted collectives will be excluded from these audits). The time period being reviewed is from July 1, 2016 through October 31, 2016. Deficiency Audit Services are designed to identify entities subject to taxation by the City that are not properly reporting the full amount of tax which they are subject to under the City's ordinances. Deficiency Audit Services also identifies entities that are potentially underreporting, or not reporting all applicable taxes. MuniServices reviews entities records to ensure compliance with the City'staxes. In performing the Deficiency Audit Services, MuniServices will: 1. Establish a comprehensive inventory of the registered and unregistered entities subject to taxation by the City and the database elements needed to facilitate an analysis of records of those entity's current and prior year's tax remittance; 2. Compare MuniServices' records with the City's records to identify potential under-reporting entities subject to taxation; 3. Meet with designated City staff to review and discuss potential audit candidates and mutually agree which entities will be subject to review. Only entities mutually agreed by MuniServices and the City to be reviewed shall be subject to MuniServices' audit services. 4. Review applicable provisions of the City's municipal code and ordinances adopted by the City; 5. Represent the City for purposes of examining records pertaining to the Cannabis and Marijuana Tax to identify and confirm any errors/omissions that are resulting in deficient payment to the City; 6. Analysis into compliance with the IRC § 501(c) requirements for non-profits 7. For potential under-reporting entities identified, MuniServices will obtain authorization from the City to conduct a review of the entities' records and determine the amount of tax due for current and prior periods (plus applicable interest and penalties, where appropriate). 8. Submit audit summaries to the City to permit the City to determine the amount of a deficiency owed, if any (MuniServices will calculate as part of the summary the amount we determine that is owed, but this step allows the City discretion in pursuing the deficiencies); 9. Invoice entity for the amount of identified deficiencies, together with supporting documentation; 10, Educate entity regarding the City's reporting requirements to prevent recurring deficiencies in future years. 11 Audit Procedures In the review process an auditor will perform a physical inspection of the business location. Further inquiries will be made to the owner or manager as to the business transactions and compliance with the City's ordinances. MuniServices will conduct short tests before starting a complete verification of up to three years operations of a business. An extensive examination may not be justified. If the short tests indicate the taxpayer has not properly reported their tax liability, then more extensive testswill beconducted. When conducting the audit, a preliminary discussion with the taxpayer or with the person who is in charge of the records is performed to determine the exact nature of the business activity. The following briefly describes the books, records and detail that may be used in any given audit: 1. The General Ledger accounts may be examined for debits and credits, which may represent unreported transactions. 2. Review of payroll records and employee information filed with the State or other government agencies 3. Compare tax returns with Cannabis and Marijuana Tax returns. Kick Off Meeting (January 2017) To begin the Audit project, the service will start with a kick off meeting to establish logistics, communication, and to set forth the procedures the City wants to establish. 1. Initial Meeting. MuniServices meets with the City staff to review the procedures and objectives of the service, business entity relations and logistical matters, including establishing an appropriate liaison with City management and staff and logical checkpoints for measuring progress (the "Initial Meeting"). MuniServices and the City will schedule the meeting within 10 days after MuniServices receives the fully-signed copy of the Agreement from the City. 2. Workplan. Based on the Initial Meeting, MuniServices develops a workplan that incorporates the logistical matters agreed to in the Initial Meeting and describes in detail how the objectives of the CANNABIS AND MARIJUANA TAX service will be met (the "Work plan"). 3. Commencement of Services. After the Workplan is developed, MuniServices will begin providing the services described. MuniServices' obligation to provide services is contingent on the City providing the necessary information and cooperation. Draft Audit Report (May 31, 2017) The draft reports for the audit will be completed and sent to City staff for review by May 31, 2017. Final Audit Reports (June 30,2017) The final reports for the audit will be completed, sent to City staff for review and approval, and then sent to the cannabis collective owners by June 30, 2017. Legislative and Regulatory Updates MuniServices will monitor proposed state and federal legislation to identify issues affecting the City's revenues with respect to Cannabis and Marijuana Tax related revenues, and, if justified, make recommendations to the City and its lobbyists. Our Government Relations team works in collaboration with stakeholders including the League of California Cities, the California Municipal Revenue Tax Association (CM RTA) representatives and members, and others. We understand that last year the League along with law enforcement 12 organizations defeated four different Cannabis and Marijuana Tax bills in the legislature. Each of these measures to varying degrees sought to override or undermine local control and each failed to adequately address the many public safety issues presented by dispensaries and efforts to regulate them. This year our team is monitoring and participating in discussions with regards to SB 1262 (Correa), which at the time of this proposal is being sponsored by the California Police Chiefs Association and cosponsored by the League of California Cities. Amendments taken to the bill in early May 2014 deleted key provisions to the bill however remaining intact are the local control provisions, certain health and safety provisions and public safety provisions in terms of security requirements at dispensaries, transport and inventorying requirements. We understand the League is re-evaluating its support position as well as whether to continue sponsoring the bill. Please refer to www.leginfo.ca.gov for more detail. We have historically followed and monitored for client impact measures including SB 626 (Calderon/ 2011) BOE: cannabis and cannabis products: study/ SB 676 (Zeno/ 2001) industrial hemp. SB 626 would have required the State Board of Equalization to establish a voluntary task force to conduct a study to determine the most efficient means to obtain compliance under the Sales and Use Tax Law by sellers of cannabis and cannabis products. The Governor also vetoed SB 676 which would have created an eight-year, four- county pilot project with respect to the cultivation and processing of industrial hemp. The Governor said: "Federal law clearly establishes that all cannabis plants, including industrial hemp, are marijuana, which is a federally regulated controlled substance. Failure to obtain a permit from the U.S. Drug Enforcement Administration prior to growing such plants will subject a California farmer to federal prosecution. Although I am not signing this measure, I do support a change in federal law. Products made from hemp, clothes, food, and bath products are legally sold in California every day. It is absurd that hemp is being imported into the state, but our farmers cannot grow it." Consultation MuniServices offers to provide ongoing consultation services in the Cannabis and Marijuana Taxation area. Akin to a gross receipts audit, most of the audit should be straight forward. There may likely be consultation that MuniServices will provide, in close collaboration with the City, over the non-profit requirements. As you have come to expect from MuniServices, we typically provide all the extra consultation at no additional cost. Key Personnel List MuniServices' Palm Springs Project Management Team is comprised of a dedicated group of individuals who have been chosen based on their experience working directly with the public sector. Each member of the Project's Team also brings the necessary skill set, knowledge and education to support Palm Spring's stated objectives. 13 Executive/Management Team Doug Jensen, SVP Client Services & Executive Contact. Doug will assist the City's staff in developing and implementing strategies to preserve and enhance the City's cannabis tax revenue. In addition, his management responsibilities are to ensure the various deliverables and aspects of services are provided to the City and meet with their expectations. Doug is an expert in the field of municipal revenue enhancement management and local government revenue consulting and ensures the delivery of audit, information, and consulting services, with breadth and depth of knowledge and experience in local government focused on customer care. Doug has over 25 years of expertise in tax policy, municipal finance, and economic development and consulting. Doug oversees the Western Region of MuniServices. Doug is a frequent speaker to professional organizations, committees and governing bodies. Education: Doug has a BS in Business Administration with an emphasis in Accounting from California State University, Fresno. Affiliations & Memberships: Doug is a member of the California Society of Municipal Finance Officers and the California Municipal Revenue and Tax Association. Jonathan V. Gerth, Esq., VP Tax and Audit Services. Jonathan manages our Cannabis Audit Division, and personally oversees our current medical dispensary audits for our clients in California, including audit projects for the Cities of Sacramento, Palm Springs and Cathedral City. Jonathan's professional background provides successful experience representing diverse services in legal, business, and accounting environments; including federal and local governmental functions, advanced federal, state, and local tax compliance and controversy, tax accounting, tax litigation, regulatory and statutory compliance, and alternative dispute resolution. He began his career as a tax attorney for Internal Revenue Service's Division of Chief Counsel and Compliance in Dallas, Texas where he conducted compliance audits, provided legal support for federal tax examinations, and conducted federal tax appeals in both administrative and federal court forums. After moving to Birmingham in 2009, he joined a Birmingham tax firm where he performed varieties of legal and accounting functions assisting clients in tax planning and forecasting, estate planning, corporate mergers, acquisitions, and reorganizations, tax preparation, legal research and tax advisory, and representation of taxpayers before federal and state taxing authorities. He joined Revenue Discovery Systems (RDS), a division of PRA Government Services, LLC, in April of 2010, and has since performed a wide latitude of legal and tax functions in the Audit department consisting of regulatory compliance initiatives and reforms in audit, assessment and collection practices, external litigation support, and legal support and analysis on compliance audits in the areas of direct and indirect transactional taxes, utility franchises, license/privilege taxes, revenue sourcing & apportionment, constitutionality of governmental tax systems & levies, taxation of interstate commerce, and advanced nexus and due process concerns. Jonathan is a regular speaker to local government organizations in California on cannabis issues. Speaking topics include industry trends, the impacts related to the implementation of new state laws and ordinance revisions. Education: Jonathan has a master's degree in tax accounting from Spring Hill College (2002), and a law degree (J.D.) from Thomas Goode Jones School of Law in 2006 where he concentrated in the area of taxation. Jonathan is an actively licensed attorney, and a member of the Tax Section of the Alabama State Bar & the Alabama League of Municipal Attorneys. He has also served as the administrative law judge presiding over tax appeals for all RDS represented local governments' transactional taxes in Alabama since 2010. Julia Erdkamp, MPA, Client Services Manager. Julia is the proposed Account Manager for this project and will be the dedicated Client Services Manager. She will partner with and assist the City's staff in developing and implementing strategies to preserve and enhance the City's sales and use tax 14 revenue. She has over 14 years of government experience including her most recent work with the County of Orange, managing the budget administration, renewable energy and public information offices. Previous experience also includes serving as chief of the U.S. Department of the Interior's Enterprise Program Management Office, chief liaison and quality improvement manager for the U.S. Department of Homeland Security, and program analyst for the City of Sacramento. Julia has received many finance, technology and operational awards from a number of government organizations. Affiliations & Membership: Julia serves as an advisor on business and municipal finance education at Coastline Community College in Orange County, CA. She is also a member of Municipal Management Association of Southern California (MMASC), ICMA's Women Leading Government (WLG), and California Society of Municipal Finance Officers (CSMFO). Education: Julia graduated magna cum laude in Political Science from the University of Southern California (USC) and has a Master of Public Administration magna cum laude from the USC Sol Price School of Public Policy. Compliance Audit Team John Thrasher 1H, CPA, AVP Audit Operations. John is responsible for the day to day direction, implementation, and development of the Cannabis Audit Division for MuniServices. John has more than 20 years of professional accounting, tax and consulting experience. Prior to joining MuniServices, John was founder and managing member of a full service accounting and consulting firm that focused on growing small to mid-sized privately held businesses. John began his career in public accounting, serving as a Manager in the assurance practice of Ernst and Young, and later as Senior Manager in the assurance practice of PricewaterhouseCoopers. John's extensive experience in the areas of cannabis audit and state and local taxes provides for a solid management foundation for MuniServices Cannabis Audit Division. Education: John has a BS degree in Business Administration from the University of Alabama at Birmingham and is a licensed Certified Public Accountant (CPA) in the state of Alabama. Professional Affiliations: He is a member of the American Institute of Certified Public Accountants (AICPA) and the Alabama State Society of Public Accountants (ASCPA). Chris Wills, CRE, Audit Manager. Chris oversees audit operations for all national Cannabis and Utility Tax clients. Chris has been with our Birmingham office since 2008, and has developed a specialty practice within the company working on Cannabis Tax engagements. Chris has built a wide array of resources and knowledge specific to the cannabis industry, which has been pivotal in resolving audit issues for our cannabis audit clients. Education: Chris received his BS degree in Accounting from Jacksonville State University and is a Certified Revenue Examiner. Jeffrey Kolin, Special Technical Cannabis Advisor. Jeff has worked in both large and small cities and has consistently developed strong long range financial plans and balanced budgets. His expertise includes cannabis, water and wastewater utilities, public parking enterprises and property management with over 400,000 square feet actively leased at the City of Beverly Hills. Mr. Kolin worked closely with the community and City Council in Santa Rosa to develop regulations for medical marijuana dispensaries. He has helped cities stabilize and grow their general funds, prepare for difficult financial challenges as well as manage future growth. As City Manager he developed City Budget Teams that involved Departments in the development and justification of their budget requests under a framework of Strategic Goals and Initiatives developed with his City Councils. He has also developed successful financing plans for a variety of complex capital projects including the construction of a new civic center complex, a 450 megawatt gas fired co-generation power plant, a 15 50 mile long tertiary treated waste water pipeline and pumping system used to inject water into a geothermal field to create steam for electric power generation and the creation of a variety of park and open space projects in both Southern and Northern California. Jeff will serve as a senior advisor on our cannabis audit team and will meet regularly with the City and our team throughout this project. Larry Bergkamp, Special Technical Cannabis Advisor. Larry joined MuniServices in April 2016. Prior to joining MuniServices he served for over 28 years with the State Board of Equalization (BOE). While working for the BOE, he has worked on medical marijuana issues since 2003. Larry was recognized as the leading medical marijuana expert at the agency until his retirement in 2015. Larry was involved in the initial registration of medical marijuana dispensaries for sales and use taxes purposes. He evaluated, developed and implemented medical marijuana administrative policies and audit methodologies to address the unique industry environment. Larry has extensive experience with every aspect of the medical marijuana industry and has an in-depth understanding of the state regulatory process. He has a proven track record of working cooperatively with multiple state agencies and local governments. Larry will be available as a technical resource throughout this project and he is also available to meet with City staff on a regular basis. Government Relations Team Francesco D. Mania, MBA, VP Government Relations & Business Development. Fran is responsible for overseeing company Legislative, Regulatory, and Government Relations work at the state and federal level. Fran has a strong working knowledge of local government general fund tax laws and state and federal regulatory and legislative issues that impact local governments. He monitors, analyzes and leads company lobbying efforts related to legislation, state mandates, and regulatory changes and policies that affect client revenue streams. Fran currently serves as a member of the League of California Cities Revenue and Taxation Policy Committee and was the 2007 and 2008 President of the League's Partner Program. Currently Fran serves on the Board of Regents of the University of California and is a member of the Board of Trustees of the California City Management Foundation. Fran will work closely with our team, state legislators and regulatory agencies on all issues related to the ongoing implementation of rules and regulations impacting cannabis revenue during this project. The MuniServices Government Relations team will provide regular updates to the City during the project. Education: Fran graduated from the University of California, Santa Barbara and earned a Bachelor of Arts degree in Communications, and attended the University of San Francisco where he earned an MBA. Brenda Narayan, Director Government Relations/In-House Lobbyist. Brenda monitors legislation in Sacramento and Washington D.C. that may have potential impacts to local government including the cannabis industry. Brenda is the primary author of MuniServices Policy, Regulatory and Legislative updates and is our in-house lobbyist. Brenda is responsible for coordinating the Company's day-to-day legislative and regulatory activity. Brenda researches, identifies and tracks key legislation for MuniServices on behalf of clients. She provides internal and external leadership insight and concepts in public and community relations activities as they pertain to policy matters. Prior to joining MuniServices, Brenda served as an assistant to the Speaker of the State Assembly. Brenda has served on the Executive Committee for the League's (business) Partner program and has served numerous terms as a member of the League of California Cities Revenue and Taxation Policy Committee. Brenda was elected to serve on the United States Conference of Mayors Business 16 Council Steering Committee beginning June 2016. Education: BA in Humanities from, Sacramento State, and a Certificate in Leadership and Management from UC Berkeley Extension. Project Support Patricia Dunn, MSHR, Client Services-Operations & Contracts Manager. Patricia will oversee the contract preparation and compliance. In her role as the Contracts Compliance Manager she is responsible for reviewing, drafting, and negotiating client and vendor contracts, and provides administrative and technical support to client services and senior and executive management. Patricia is also responsible for issuing and maintaining compliance-related documents including insurance certificates, local business licenses, and corporate filings. She has over 25 years of paralegal experience. Education: BA in Organizational Leadership from Fresno Pacific University, graduating magna cum laude, and a MS in Human Resources Management from Chapman University, graduating summa cum laude. 17 COMPENSATION Cannabis and Marijuana Tax MuniServices' compensation for the Cannabis and Marijuana Tax Audit Service will be $150 per hour with a maximum of 50 hours per audit for an amount not to exceed $25,000, including out-of- pocket expenses. No audit will be conducted without written authorization from the City. This audit is akin to a gross receipts audit with the addition of reviewing compliance with its non-profit status. We would notify the City if MuniServices approaches the maximum fee of $25,000 in order to secure spending authorization to allow MuniServices to continue to perform these audits. We are proposing a cap on the total number of hours per audit; however, we will likely have many audits well below the 50 hour cap. Out-of-Pocket Expenses For the Cannabis and Marijuana Tax audit services MuniServices will also charge the City out-of-pocket expenses for reasonable travel costs related to the performance of the audits. "Travel Costs" include but are not limited to the costs of car rental, gasoline, and traveling time at an hourly rate of $125 to $150 per hour. These out-of-pocket expenses will not exceed $2,500. If we expect to spend more than $2,500 we will get prior approval from the City for any amounts over the allotted $2,500. The out-of-pocket expenses will be invoiced to the City upon delivery of the final report to the City. Contract Expiration This contract will expire one year from the date the agreement is entered into, unless extended by mutual written agreement of the parties. 18 EXHIBIT 'B" INSURANCE PROVISIONS Including Verification of Coverage, Sufficiency of Insurers, Errors and Omissions Coverage, Minimum Scope of Insurance, Deductibles and Self-Insured Retentions, and Severability of Interests (Separation of Insureds) 19 INSURANCE 1. Procurement and Maintenance of Insurance. Consultant shall procure and maintain public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Consultant's performance under this Agreement. Consultant shall procure and maintain all insurance at its sole cost and expense, in a form and content satisfactory to the City, and submit concurrently with its execution of this Agreement. Consultant shall also carry workers' compensation insurance in accordance with California workers' compensation laws. Such insurance shall be kept in full force and effect during the term of this Agreement, including any extensions. Such insurance shall not be cancelable without thirty (30) days advance written notice to City of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City, its elected officials, officers, employees, and agents as additional named insureds by original endorsement shall be delivered to and approved by City prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify City, its elected officials, officers, agents,and employees. 2. Minimum Scope of Insurance. The minimum amount of insurance required under this Agreement shall be as follows: I. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two million dollars($2,000,000) general aggregate; 2. Automobile liability insurance with limits of at least one million dollars ($1,000,000.00) per occurrence; 3. Professional liability (errors and omissions) insurance with limits of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000) annual aggregate is: required is not required; 4. Workers' Compensation insurance in the statutory amount as required by the- State of California and Employer's Liability Insurance with limits of at least one million dollars $1 million per occurrence. If Consultant has no employees, Consultant shall complete the City's Request for Waiver of Workers Compensation Insurance Requirement form. 3. Primary Insurance. For any claims related to this Agreement, Consultant's insurance coverage shall be primary with respect to the City and its respective elected officials, officers, employees, and agents. Any insurance or self-insurance maintained by City and its respective elected officials, officers, employees, and agents shall be in excess of Consultant's insurance and shall not contribute with it. For Workers' Compensation and Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and contribution it may have against City, its elected officials, officers, employees, and agents. 20 4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required, and if Consultant provides claims made professional liability insurance, Consultant shall also agree in writing either (1) to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Consultant's services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in the amount required by this Agreement for at least three years after completion of Consultant's services under this Agreement. Consultant shall also be required to provide evidence to City of the purchase of the required tail insurance or continuation of the professional liability policy. 5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an AM. Best's Key Rating of B++, Class VII, or better, unless otherwise acceptable to the City. 6. Verification of Coverage. Consultant shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, effecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work commences. City reserves the right to require Consultant's insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies. Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or (2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate: 1. "The City of Palm Springs, its officials, employees, and agents are named as an additional insured- " ("as respects City of Palm Springs Contract No. " or ,for any and all work performed with the City"may be included in this statement). 2. "This insurance is primary and non-contributory over any insurance or selti= insurance the City may have..." ("as respects City of Palm Springs Contract No._" or 'for any and all work performed with the City" may be included in this statement). 3. "Should any of the above described policies be canceled before the expiration date thereof the issuing company will mail 30 days written notice to the Certificate Holder named."Language such as, "endeavor to"mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative"is not acceptable and must be crossed out. 9. Both the Workers'Compensation and Employers'Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, and agents. In addition to the endorsements listed above, the City of Palm Springs shall be named 21 the certificate holder on the policies. All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agent/broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Consultant's obligation to provide them. 7. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City prior to commencing any work or services under this Agreement. At the option of the City, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its elected officials, officers, employees, and agents; or (2) Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Certificates of Insurance must include evidence of the amount of any deductible or self-insured retention under the policy. Consultant guarantees payment of all deductibles and self-insured retentions. 8. Severability of Interests (Separation of Insureds). This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability. 22 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date: By: David H. Ready City Manager APPROVED AS TO FORM: ATTEST By: By: Douglas C. Holland James Thompson City Attorney City Clerk "CONSULTANT" Mums vices, LLC Date: January 4, 2017 By: o nsen S lient Services 9 CONSULTING SERVICES AGREEMENT Cannabis and Marijuana Tax Deficiency Audit Services THIS AGREEMENT FOR CONSULTING SERVICES ("Agreement") is made and entered into on k—'Ii (0 2016, by and between the City of Palm Springs, a California charter city and municipal corporation ("City"), and MuniServices LLC, ("Consultant"). City and Consultant are individually referred to as "Party" and are collectively referred to as the 'Parties". RECITALS A. City requires the services of a professional tax auditing firm to audit medical cannabis collectives for the City's Medical Cannabis Tax ("Project"). B. Consultant has submitted to City a proposal to provide medical cannabis tax auditing services to City under the terms of this Agreement. C. Based on its experience, education, training, and reputation, Consultant is qualified and desires to provide the necessary services to City for the Project. D. City desires to retain the services of Consultant for the Project. Inconsideration of these promises and mutual agreements, City agrees as follows: AGREEMENT 1. CONSULTANT SERVICES 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide Medical Cannabis Tax Auditing Services to City as described in the Scope of Services/Work attached to this Agreement as Exhibit "A" and incorporated by reference (the "services" or 'Work"). Exhibit "A" includes the agreed upon schedule of performance and the schedule of fees. Consultant warrants that all services and work shall be performed in a competent, professional, and satisfactory manner consistent with prevailing industry standards. In the event of any inconsistency between the terms contained in the Scope of Services/Work and the terms set forth in this Agreement, the terms set forth in this Agreement shall govern. 1.2 ComIlliance with Law. Consultant services rendered under this Agreement shall comply with all applicable federal, state, and local laws, statutes and ordinances and all lawful orders, rules, and regulations. 1.3 Licenses and Permits. Consultant shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the services required by this Agreement. 1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that it 1 ORIGINAL BID WOW''^�'"ENT has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the work under this Agreement. 2. TIME FOR COMPLETION The time for completion of the services to be performed by Consultant is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently the work of this Agreement according to the agreed upon schedule of performance set forth in Exhibit "A." Consultant shall not be accountable for delays in the progress of its work caused by any condition beyond its control and without the fault or negligence of Consultant. Delays shall not entitle Consultant to any additional compensation regardless of the party responsible for the delay. 3. COMPENSATION OF CONSULTANT 3.1 Compensation of Consultant. Consultant shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit "A". The total amount of Compensation shall not exceed $25,000, 3.2 Method of Paym n . In any month in which Consultant wishes to receive payment, Consultant shall submit to City an invoice for services rendered prior to the date of the invoice, no later than the first working day of such month, in the form approved by City's finance director. Payments shall be based on the hourly rates set forth in Exhibit "A" for authorized services performed. City shall pay Consultant for all expenses stated in the invoice that are approved by City and consistent with this Agreement, within thirty (30) days of receipt of Consultant's invoice. 3.3 Changes. In the event any change or changes in the Scope of Services/Work is requested by City, Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including, but not limited to, any additional fees. An amendment may be entered into: A. To provide for revisions or modifications to documents, work product, or work, when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant's profession. 3.4 Anoronriations. This Agreement is subject to, and contingent upon, funds being appropriated by the City Council of City for each fiscal year. If such appropriations are not made, this Agreement shall automatically terminate without penalty to City, but Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter. 4. PERFORMANCE SCHEDULE 4.1 Time of Esser. Time is of the essence in the performance of this Agreement. 2 4.2 Schedule of Performance. All services rendered under this Agreement shall be performed under the agreed upon schedule of performance set forth in Exhibit "A." Any time period extension must be approved in writing by the Contract Officer. 4.3 Force Maieure. The time for performance of services to be rendered under this Agreement may be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, if Consultant notifies the Contract Officer within ten (10) days of the commencement of such condition. Unforeseeable causes include, but are not limited to, acts of God or of a public enemy, acts of the government, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually severe weather. After Consultant notification, the Contract Officer shall investigate the facts and the extent of any necessary delay, and extend the time for performing the services for the period of the enforced delay when and if, in the Contract Officer's judgment, such delay isjustified. The Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. 4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect for a period of one year from the date the agreement is entered into, unless extended by mutual written agreement of the parties. 4.5 Termination Prior to Expiration of Term. City may terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Consultant. Where termination is due to the fault of Consultant and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Consultant shall immediately cease all services except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer after such notice. Consultant may terminate this Agreement, with or without cause, upon thirty (30)days written notice to City. 5. COORDINATION OF WORK 5.1 Representative of Consultant. The following principal of Consultant is designated as being the principal and representative of Consultant authorized to act and make all decisions in its behalf with respect to the specified services and work: Doug Jensen, Senior VP Client Services. It is expressly understood that the experience, knowledge, education, capability, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services under this Agreement. The foregoing principal may not be changed by Consultant without prior written approval ofthe Contract Officer. 5.2 Contract Officer. The Contract Officer shall be the City Manager or his/her designee ("Contract Officer"). Consultant shall be responsible for keeping the Contract Officer fully informed of the progress of the performance of the services. Consultant shall refer any decisions that must be made by City to the Contract Officer. Unless otherwise specified, any approval of City shall mean the approval of the Contract Officer. 3 5.3 Prohibition Against Subcontracting or Assignment, The experience, knowledge, education, capability, and reputation of Consultant, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall not contract with any other individual or entity to perform any services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. 5.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Consultant, its agents or employees, perform the services required, except as otherwise specified. Consultant shall perform all required services as an independent contractor of City and shall not be an employee of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role; however, City shall have the right to review Consultant's work product, result, and advice. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 5.5 Personnel. Consultant agrees to assign the following individuals to perform the services in this Agreement. Consultant shall not alter the assignment of the following personnel without the prior written approval of the Contract Officer. Acting through the City Manager, the City shall have the unrestricted right to order the removal of any personnel assigned by Consultant by providing written notice to Consultant. Name: Doug Jensen Sr.Vice President, Client Services Julia Erdkamp Client Services Manager Jonathan Gerth Auditor 6. INSURANCE Consultant shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in the attached Exhibit "B",incorporated herein by reference. 7. INDEMNIFICATION. 7.1 Indemnification. To the fullest extent permitted by law, Consultant shall defend (at Consultant's sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, and agents, and veltinteeFs. (collectively the "Indemnified Parties"), from and against any and all third party liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively third party "Claims"), including but not limited to third party Claims arising from injuries to or death of persons (Consultant's employees included), for damage to property, including property owned by City, from any violation of any federal, state, or local law or 4 ordinance, and from errors and omissions committed by Consultant, its officers, employees, representatives, and agents, which Claims arise out of or are related to Consultant's performance under this Agreement. This indemnification clause excludes such third party Claims arising from the sole negligence or willful misconduct of the City, its elected officials, officers, employees, and agents, and veltiateefs. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be constructed to limit Consultant's indemnification obligation or other liability under this Agreement. Consultants indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if any action is timely filed, until such action is final. This provision is intended for the benefit of third party Indemnified Parties not otherwise a party to this Agreement. 8. RECORDS AND REPORTS 8.1 R nor c. Consultant shall periodically prepare and submit to the Contract Officer reports concerning the performance of the services required by this Agreement, or as the Contract Officer shall require. 8.2 Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Consultant shall keep such books and records as shall be necessary to properly perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records. 8.3 Ownership of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of this Agreement shall be the property of City. Consultant shall deliver all above-referenced documents to City upon request of the Contract Officer or upon the termination of this Agreement. Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights or ownership of the documents and materials. Consultant may retain copies of such documents for Consultant's own use. Consultant shall have an unrestricted right to use the concepts embodied in such documents. 8.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 8.5 Cost Records. Consultant shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred while performing under this Agreement. Consultant shall make such materials available at its offices at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment for inspection by City and copies shall be promptly furnished to City upon request. 5 9. ENFORCEMENT OF AGREEMENT 9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 9.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs. 9.3 Waiver. No delay or omission in the exercise of any right or remedy of a non- defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City shall be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing. No such waiver shall be a waiver of any other default concerning the same or any other provision of this Agreement. 9.4 Riohts and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative. The exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 9.5 Legal Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, a declaratoryjudgment, or any other remedy consistent with the purposes ofthis Agreement. 10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 10.1 Non-Liability of City Officers and Employees. No officer or employee of City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by City or for any amount which may become due to the Consultant or its successor, or for breach of any obligation of the terms of this Agreement. 10.2 Conflict of Interest. Consultant acknowledges that no officer or employee of the 6 City has or shall have any direct or indirect financial interest in this Agreement nor shall Consultant enter into any agreement of any kind with any such officer or employee during the term of this agreement and for one year after. Consultant warrants that Consultant has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement. 10.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, marital status, ancestry, national origin, sexual orientation, gender identity, physical or mental disability, or medical condition. Consultant shall ensure that applicants are employed, and that employees are treated during their employment, without regard to their race, religion, color, sex, age, marital status, ancestry, sexual orientation, gender identity, physical or mental disability, medical condition, or national origin. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. 11. MISCELLANEOUS PROVISIONS 11.1 Notice. Any notice, demand, request, consent, approval, or communication that either party desires, or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first-class mail to the address set forth below. Notice shall be deemed communicated seventy-two (72) hours from the time of mailing if mailed as provided in this Section. Either party may change its address by notifying the other party of the change of address in writing. To City: City of Palm Springs Attention: City Manager/City Clerk 3200 E.Tahquitz Canyon Way Palm Springs,California 92262 To Consultant: MuniServices,LLC Attention: Patricia Dunn, Legal Dept. 7625 N. Palm Avenue, Suite 108 Fresno, CA 93711 11.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and supersedes all other written agreements. 11.3 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement by all Parties. 11.4 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining 7 phrases, sentences, clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the parties. 11.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties' successors and assignees. 11.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise, upon any entity or person not a party to this Agreement. 11.7 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same. 11.8 Authority. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by so executing this Agreement the Parties are formally bound to the provisions of this Agreement. [Signatures on next page.] 8 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs rr Date: X- David H. Ready City Manager APPROVED BY CITY MANAGER APPROVED AS TO FORM: ATTEST By: r (! X-'a By: Douglas C. Holland James Thompson City Attorney City Clerk "CON ULTANT" Muni ices,LLC Date: By: '� Doug ns inSVP li t Services Am pudic orolher oflcercomplefing this Cartificale verifies only the identity of the individual who signed No document to which this conificato is attached,and rot the VuNlulnoss,amracgavaidityof Natdmumml. Stale of 1 County of C J Lv ss. o�ame PlarsyPDjic, Personal !�f11,L� �i vt�Who proved to me on the basis of gsfadory evidence to bo No porsort�s).whoso �0W_tt0am-subscribed to the within insirumenl and acknowlodged to me that heAhoy.oxecutted the same it it authoi capacity(iaeir and that by r sgnalure(s�on the instrument the person�;.or the entity,upon behalf of w ¢h tte pereonl+acled,execuled Iho instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is We andconect. WITNESS my hand and official seal N.DANO NOTARY PUBLIC CALIFORNIA COMMISSION 1112087225 E' SOLANO COUNTY My Comm.Exp.October 23,2018 9 EXHIBIT 'iA" CONSULTANT'S SCOPE OF SERVICES/WORK Including, Schedule of Fees And Schedule of Performance 10 Cannabis and Marijuana Tax Deficiency Audit Services Background MuniServices has performed audits for several municipalities, including the City of Palm Springs, with regard to medical marijuana dispensaries thus providing us with the institutional knowledge on regulations, taxation, acquisition, cultivation, production and distribution of medical marijuana, thus uniquely qualifying our firm to perform the work. We understand that many businesses in this industry are heavily cash oriented, experience difficulties with banking due to federal laws, have weak internal controls, lack fluent audit trails, and have inadequate books and records, and that the primary focal points of the examiners' audits center upon probing for unreported income, inventory tracking, and reconstructing sales. The City will fully share in our knowledge and experience of this industry if it elects to do so. The City of Palm Springs has asked MuniServices to perform another aauditing engagement of your medical cannabis collectives for your Medical Cannabis Tax. The City would like the audit to cover the 2014-2015 Fiscal Year. The City would like to know if the collectives are doing something wrong up front in order to take corrective action quickly. The City wants to serve audit notices to both the permitted (legal) and the numerous non-permitted(illegal)collectives. Deficiency Audit Services are designed to identify entities subject to taxation by the City that are not properly reporting the full amount of tax which they are subject to under the City's ordinances. Deficiency Audit Services also identifies entities that are potentially underreporting, or not reporting all applicable taxes. MuniServices reviews entities records to ensure compliance with the City'staxes. In performing the Deficiency Audit Services,MuniServices will: 1_ Establish a comprehensive inventory of the registered and unregistered entities subject to taxation by the City and the database elements needed to facilitate an analysis of records of those entity's current and prior year's tax remittance; 2 Compare MuniServices' records with the City's records to identify potential under-reporting entities subject to taxation; a Meet with designated City staff to review and discuss potential audit candidates and mutually agree which entities will be subject to review. Only entities mutually agreed by MuniServices and the City to be reviewed shall be subject to MuniServices'audit services. 4 Review applicable provisions of the City's municipal code and ordinances adopted by the City; 11 * Represent the City for purposes of examining records pertaining to the Cannabis and Marijuana Tax to identify and confirm any errors/omissions that are resulting in deficient payment to the City; 6 Analysis into compliance with the !RC § 501(c) requirements for non-profits 7. For potential under-reporting entities identified, MuniServices will obtain authorization from the City to conduct a review of the entities' records and determine the amount of tax due for current and prior periods (plus applicable interest and penalties, where appropriate). & Submit audit summaries to the City to permit the City to determine the amount of a deficiency owed, if any(MuniServices will calculate as part of the summary the amount we determine that is owed, but this step allows the City discretion in pursuing the deficiencies); 9 Invoice entity for the amount of identified deficiencies, together with supporting documentation; 1Q Educate entity regarding the City's reporting requirements to prevent recurring deficiencies in future years. Audit Procedures In the review process an auditor will perform a physical inspection of the business location. Further inquires will be made to the owner or manager as to the business transactions and compliance with the City's ordinances. MuniServices will conduct short tests before starting a complete verification of up to three years operations of a business. An extensive examination may not be justified. If the short tests indicate the taxpayer has not properly reported their tax liability, then more extensive tests will be conducted. When conducting the audit, a preliminary discussion with the taxpayer or with the person who is in charge of the records is performed to determine the exact nature of the business activity. The following briefly describes the books, records and detail that may be used in any given audit: 1. The General Ledger accounts may be examined for debits and credits, which may represent unreported transactions. 2 Review of payroll records and employee information filed with the State or other government agencies 3_ Compare tax returns with Cannabis and Marijuana Tax returns. 12 Kick Off Meeting To begin the Audit project, the service will start with a kick off meeting to establish logistics, communication, and to set forth the procedures the City wants to establish. 1. Initial Meeting. MuniServices meets with the City staff to review the procedures and objectives of the service, business entity relations and logistical matters, including establishing an appropriate liaison with City management and staff and logical checkpoints for measuring progress (the "Initial Meeting"). MuniServices and the City will schedule the meeting within 10 days after MuniServices receives the fully-signed copy of the Agreement from the City. 2 Workplan. Based on the Initial Meeting, MuniServices develops a workplan that incorporates the logistical matters agreed to in the Initial Meeting and describes in detail how the objectives of the CANNABIS AND MARIJUANA TAX service will be met (the "Work plan"). 3. Commencement of Services. After the Workplan is developed, MuniServices will begin providing the services described. MuniServices' obligation to provide services is contingent on the City providing the necessary information and cooperation. Legislative and Regulatory Updates MuniServices will monitor proposed state and federal legislation to identify issues affecting the City's revenues with respect to Cannabis and Marijuana Tax related revenues, and, if justified, make recommendations to the City and its lobbyists. Our Government Relations team works in collaboration with stakeholders including the League of California Cities, the California Municipal Revenue Tax Association (CMRTA) representatives and members, and others. We understand that last year the League along with law enforcement organizations defeated four different Cannabis and Marijuana Tax bills in the legislature. Each of these measures to varying degrees sought to override or undermine local control and each failed to adequately address the many public safety issues presented by dispensaries and efforts to regulate them. This year our team is monitoring and participating in discussions with regards to SB 1262 (Correa), which at the time of this proposal is being sponsored by the California Police Chiefs Association and cosponsored by the League of California Cities. Amendments taken to the bill in early May 2014 deleted key provisions to the bill however remaining intact are the local control provisions, certain health and safety provisions and public safety provisions in terms of security requirements at dispensaries, transport and inventorying requirements. We understand the League is re-evaluating its support position as well as whether to continue sponsoring the bill. Please refer to www.leginfo.ca.gov for more detail. We have historically followed and 13 monitored for client impact measures including SB 626 (Calderon/ 2011) BOE: cannabis and cannabis products: study/ SB 676 (Zeno/ 2001) industrial hemp. SB 626 would have required the State Board of Equalization to establish a voluntary task force to conduct a study to determine the most efficient means to obtain compliance under the Sales and Use Tax Law by sellers of cannabis and cannabis products. The Governor also vetoed SB 676 which would have created an eight-year, four-county pilot project with respect to the cultivation and processing of industrial hemp. The Governor said: "Federal law clearly establishes that all cannabis plants, including industrial hemp, are marijuana, which is a federally regulated controlled substance. Failure to obtain a permit from the U.S. Drug Enforcement Administration prior to growing such plants will subject a California farmer to federal prosecution. Although I am not signing this measure, I do support a change in federal law. Products made from hemp, clothes, food, and bath products are legally sold in California every day. It is absurd that hemp is being imported into the state, but our farmers cannot grow it." Consultation MuniServices offers to provide ongoing consultation services in the Cannabis and Marijuana Taxation area. Akin to a gross receipts audit, most of the audit should be straight forward. There may likely be consultation that MuniServices will provide, in close collaboration with the City, over the non-profit requirements. As you have come to expect from MuniServices, we typically provide all the extra consultation at no additional cost. Key Personnel List MuniServices' Palm Springs Project Management Team is comprised of a dedicated group of individuals who have been chosen based on their experience working directly with the public sector. Each member of the Project's Team also brings the necessary skill set, knowledge and education to support Palm Spring's stated objectives. 14 Executive/Management Team • Doug Jensen Mr. Jensen has over 24 years of experience working on sales and use tax audit and information services contracts and has expertise in tax policy, municipal SVP Client Services finance,and economic development and consulting.He will work closely with the MuniServices team several times a month on the progress of the project and Executive Contact provide counsel on strategies and approaches. Doug is an expert in the field of municipal revenue enhancement management and local government revenue (Since 1991) consulting and ensures the delivery of audit, information, and consulting services, and is the company's west region leader overseeing 80 professionals with breadth and depth of knowledge and experience in local government focused on customer care. Professional Affiliations: Doug is a member of the California Society of Municipal Finance Officers and the California Municipal Revenue and Tax Association. Education: Doug has a BS in Business Administration with an emphasis in Accounting from California State University, Fresno. Jonathan Gerth Jonathan manages our Audit Division, and will have overall responsibility for implementation and successful completion of the auditing services for this VP of Audit contract Jonathan has extensive professional experience in legal, business and accounting environments, including advanced federal, state and local (Since 2010) governmental functions and tax compliance. He began his career as a tax attorney and appeals officer for the Internal Revenue Service's Division of Chief Counsel and Compliance in Dallas,Texas. He later worked for a local private tax firm in Birmingham before joining RDS in April 2010. Jonathan has held a wide variety of legal roles in our audit department consisting of legal tax support and strategic analysis on compliance audits, tax controversy and advocacy, regulatory compliance initiatives, reforms in audit, assessment and collection practices, and intensive litigation support. He also serves as the administrative law judge presiding over tax appeals for all 275+ RDS represented jurisdictions throughout Alabama. Education: Jonathan received an advanced degree in tax accounting from Spring Hill College in 2002, and a law degree with a concentration in taxation and corporate law from Thomas Goode Jones School of Law in 2006. Julia Nichole Julia is the Account Manager for this project and will be the dedicated Client (McGinnis)Erdkamp, Services Manager. She will partner with and assist the City's staff in developing MPA and implementing strategies to preserve and enhance the City's revenue. She Client Services has over 10 years of government experience including her most recent work Manager with the County of Orange, managing the budget administration, renewable energy and public information offices. Previous experience also includes serving (Since 2014) as chief of the U.S. Department of the Interior's Enterprise Program Management Office,chief liaison and quality improvement manager for the U.S. Department of Homeland Security, and program analyst for the City of Sacramento.Julia has received many finance, technology and operational awards from a number of government organizations. Affiliations & Membership: Julia serves as an advisor on business and municipal finance education at Coastline Community College in Orange County, CA. She is also a member of Municipal Management Association of Southern California (MMASC), ICMA's Women Leading Government (WLG), and California Society of Municipal Finance Officers (CSMFO). Education:Julia graduated magna cum laude in Political Science from the University of Southern California (USC) and has a Master of Public Administration magna cum laude from the USC Sol Price School of Public Policy. 15 Government Relations Team • Francesco Fran is responsible for overseeing company Legislative, Regulatory, and Mancia,MBA Government Relations work including business development in the western region of the country.Fran has a strong working knowledge of local government VP of Government general fund tax laws and state and federal regulatory and legislative issues that Relations and Business impact local governments. He monitors, analyzes and leads company lobbying Development efforts related to legislation,state mandates,and regulatory changes and policies that affect client revenue streams with a primary focus and working knowledge (Since 1995) of all general fund tax areas. Fran has served as a member of the League of California Cities Revenue and Taxation Policy Committee and was the 2007 and 2008 President of the League's Partner Program and currently serves as Advisor and Chairman of the California Contract Cities Association, Associate Members Program. Education: Fran graduated from the University of California, Santa Barbara and earned a Bachelor of Arts degree in Communications, and attended the University of San Francisco where he earned a Masters degree in Business Administration. Brenda Narayan Brenda will monitor and research legislation that may have a potential impact to public agency clients.She is responsible for writing letters to elected officials and Director developing policy positions (and recommendations) on legislation. She is the Government primary author of MuniServices Policy, Regulatory and Legislative updates. Relations Bringing over 20 years of experience working in a leadership office in the California State Capitol,Brenda coordinates the Company's day-to-day legislative (Since 1997) and regulatory activity. She researches, identifies and tracks key legislation for MuniServices on behalf of clients.As with each legislative session,Brenda meets regularly with industry representatives to discuss,review and analyze legislation issues impacting local government revenues. Brenda was also serves as a League partner for the Leagues of California Cities Revenue and Taxation Committee. Education: BA in Humanities, California State Sacramento. Certificate in Leadership and Management from UC Berkeley Extension. Support Team • Patricia Dunn,MSHR Patricia joined MuniServices in 2006 as the Contracts Administrator. She was appointed as the Contracts Compliance Manager in 2008 and then in 2011 as Client Services- Client Services-Operations Manager. She is presently responsible for the Operations&Contracts reviewing, drafting, and negotiating client and vendor contracts, and provides Manager administrative and technical support to client services managers and senior and executive management. She is also responsible for issuing and maintaining (Since 2006) compliance-related documents including insurance certificates, local business licenses, and corporate filings. She has over 25 years of paralegal experience. Education: Patricia graduated magna cum laude with a BA in Organizational Leadership from Fresno Pacific University and summa cum laude with a MS in Human Resources Management from Chapman University. 16 Compensation Cannabis and Marijuana Tax MuniServices' compensation for the Cannabis and Marijuana Tax Audit Service will be $150 per hour with a maximum of 50 hours per audit for an amount not to exceed $25,000, including out- of- pocket expenses. No audit will be conducted without written authorization from the City. This audit is akin to a gross receipts audit with the addition of reviewing compliance with its non- profit status. We would notify the City if MuniServices approaches the maximum fee of$25,000 in order to secure spending authorization to allow MuniServices to continue to perform these audits. We are proposing a cap on the total number of hours per audit; however, we will likely have many audits well below the 50 hour cap. Out-of-Pocket Expenses For the Cannabis and Marijuana Tax audit services MuniServices will also charge the City out- of-pocket expenses for reasonable travel costs related to the performance of the audits. "Travel Costs" include but are not limited to the costs of car rental, gasoline, and traveling time at an hourly rate of$125 to $150 per hour. These out-of-pocket expenses will not exceed $2,500. If we expect to spend more than $2,500 we will get prior approval from the City for any amounts over the allotted $2,500. The out-of-pocket expenses will be invoiced to the City upon delivery of the final report to the City. Contract Expiration This contract will expire one year from the date the agreement is entered into, unless extended by mutual written agreement of the parties. 17 EXHIBIT 'B" INSURANCE PROVISIONS Including Verification of Coverage, Sufficiency of Insurers, Errors and Omissions Coverage, Minimum Scope of Insurance, Deductibles and Self-Insured Retentions, and Severability of Interests (Separation of Insureds) 18 INSURANCE 1. Procurement and Maintenance of Insurance. Consultant shall procure and maintain public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Consultant's performance under this Agreement. Consultant shall procure and maintain all insurance at its sole cost and expense, in a form and content satisfactory to the City, and submit concurrently with its execution of this Agreement. Consultant shall also carry workers' compensation insurance in accordance with California workers' compensation laws. Such insurance shall be kept in full force and effect during the term of this Agreement, including any extensions. Such insurance shall not be cancelable without thirty (30) days advance written notice to City of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City, its elected officials, officers, employees, agents, and volunteers as additional named insureds by original endorsement shall be delivered to and approved by City prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify City, its elected officials,officers,agents,employees,and volunteers. 2. Minimum Scope of Insurance. The minimum amount of insurance required under this Agreement shall be as follows: 1. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two million dollars($2,000,000) general aggregate; 2. Automobile liability insurance with limits of at least one million dollars ($1,000,000.00)per occurrence; 3. Professional liability (errors and omissions) insurance with limits of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000)annual aggregate is: ✓ required 1 , 2 �y is not required; 4. Workers' Compensation insurance in the statutory amount as required by the- State of California and Employer's Liability Insurance with limits of at least one million dollars $1 million per occurrence. If Consultant has no employees, Consultant shall complete the City's Request for Waiver of Workers' Compensation Insurance Requirement form. 3. Primary Insurance. For any claims related to this Agreement, Consultant's insurance coverage shall be primary with respect to the City and its respective elected officials, officers, employees, agents, and volunteers. Any insurance or self-insurance maintained by City and its respective elected officials, officers, employees, agents, and volunteers shall be in excess of Consultant's insurance and shall not contribute with it. For Workers' Compensation and 19 Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and contribution it may have against City, its elected officials, officers, employees, agents, and volunteers. 4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required, and if Consultant provides claims made professional liability insurance, Consultant shall also agree in writing either (1) to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Consultant's services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in the amount required by this Agreement for at least three years after completion of Consultant's services under this Agreement. Consultant shall also be required to provide evidence to City of the purchase of the required tail insurance or continuation of the professional liability policy. 5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California, Coverage shall be provided by insurers admitted in the State of California with an AM. Best's Key Rating of B++, Class VII, or better, unless otherwise acceptable to the City. 6. Verification of Coverage. Consultant shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, effecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work commences. City reserves the right to require Consultant's insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies. Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or(2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate: I."The City of Palm Springs, its officials, employees, and agents are named as an additional insured... " ("as respects City of Palm Springs Contract No. or 'for any and all work performed with the City"may be included in this statement). 2. "This insurance is primary and non-contributory over any insurance or self- insurance the City may have..." ("as respects City of Palm Springs Contract No. or 'for any and all work performed with the City"may be included in this statement). 3. "Should any of the above described policies be canceled before the expiration date thereof the issuing company will mail 30 days written notice to the Certificate Holder named" Language such as, "endeavor to" mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative" is not acceptable and must be crossed out. 4. Both the Workers' Compensation and Employers' Liability policies shall 20 contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents,and volunteers. In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies. All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agent/broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Consultant's obligation to provide them. 7. Deductibles and Self-Insured Retentions.Any deductibles or self-insured retentions must be declared to and approved by the City prior to commencing any work or services under this Agreement. At the option of the City, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its elected officials,officers, employees, agents, and volunteers; or (2) Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Certificates of Insurance must include evidence of the amount of any deductible or self- insured retention under the policy. Consultant guarantees payment of all deductibles and self- insured retentions. 8. Severability of Interests (Separation of Insureds). This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability. 21 I CONSULTING SERVICES AGREEMENT Cannabis and Marijuana Tax Deficiency Audit Services THIS AGREEMENT FOR CONSULTING SERVICES ("Agreement') is made and entered into on (p 2014, by and between the City of Palm Springs, a California charter city and mun' i part 1 corporation ("City"), and MuniServices LLC, ("Consultant"). City and Consultant are individually referred to as "Party" and are collectively referred to as the "Parties". RECITALS A. City requires the services of a professional tax auditing firm to audit medical cannabis collectives for the City's Medical Cannabis Tax("Project'). B. Consultant has submitted to City a proposal to provide medical cannabis tax auditing services to City under the terms of this Agreement. C. Based on its experience, education, training, and reputation, Consultant is qualified and desires to provide the necessary services to City for the Project. D. City desires to retain the services of Consultant for the Project. In consideration of these promises and mutual agreements, City agrees as follows: AGREEMENT 1. CONSULTANT SERVICES 1.1 Scone of Services. In compliance with all terms and conditions of this Agreement, Consultant shalt provide Medical Cannabis Tax Auditing Services to City as described in the Scope of Services/Work attached to this Agreement as Exhibit "A" and incorporated by reference (the "services" or "work"). Exhibit "A" includes the agreed upon schedule of performance and the schedule of fees. Consultant warrants that all services and work shall be performed in a competent, professional, and satisfactory manner consistent with prevailing industry standards. In the event of any inconsistency between the terms contained in the Scope of Scrvices/Work and the terns set forth in this Agreement, the terms set forth in this Agreement shall govern. 1.2 Compliance with Law. Consultant services rendered under this Agreement shall comply with all applicable federal, state, and local laws, statutes and ordinances and all lawful orders, rules, and regulations. 1.3 Licenses and Permits. Consultant shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the services required by this Agreement. Revlxd:6116116 720599.1 1A Familiarity with Work. By executing this Agreement, Consultant warrants that it has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the work under this Agreement. 2. TIME FOR COMPLETION ' The time for completion of the services to be performed by Consultant is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently the work of this Agreement according to the agreed upon schedule of performance set forth in Exhibit "A." Consultant shall not be accountable for delays in the progress of its work caused by any condition beyond its control and without the fault or negligence of Consultant. Delays shall not entitle Consultant to any additional compensation regardless of the party responsible for the delay. 3. COMPENSATION OF CONSULTANT 31 Compensation of Consultant. Consultant shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit"A". The total amount of Compensation shall not exceed $25,000. 3.2 Method of Payment. In any month in which Consultant wishes to receive payment, Consultant shall submit to City an invoice for services rendered prior to the date of the invoice, no later than the first working day of such month, in the form approved by City's finance director. Payments shall be based on the hourly rates set forth in Exhibit "A" for authorized services performed. City shall pay Consultant for all expenses stated in the invoice that are approved by City and consistent with this Agreement, within thirty(30) days of receipt of Consultant's invoice. 3.3 Changes. In the event any change or changes in the Scope of Services/Work is requested by City, Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including, but not limited to, any additional fees. An amendment may be entered into: A. To provide for revisions or modifications to documents, work product, or work,when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant's profession. 3.4 Appropriations. This Agreement is subject to, and contingent upon, funds being appropriated by the City Council of City for each fiscal year. If such appropriations are not made, this Agreement shall automatically terminate without penalty to City, but Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter. 4. PERFORMANCE SCHEDULE 4.1 Time of Essence. Time is of the essence in the performance of this Agreement. 2 Revbed:6116110 720599.1 4.2 Schedule of Performance. All services rendered under this Agreement shall be performed under the agreed upon schedule of performance set forth in Exhibit "A." Any time period extension must be approved in writing by the Contract Officer. 4.3 Force Maieure. The time for performance of services to be rendered under this Agreement may be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, if Consultant notifies the Contract Officer within ten (10) days of the commencement of such condition. Unforeseeable causes include, but are not limited to, acts of God or of a public enemy, acts of the government, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and unusually severe weather. After Consultant notification, the Contract Officer shall investigate the facts and the extent of any necessary delay, and extend the time for perfomring the services for the period of the enforced delay when and if, in the Contract Officer's judgment, such delay is justified. The Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. 4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect until December 31, 2014, unless extended by mutual written agreement of the parties. 4.5 Termination Prior to Expiration of Term. City may terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Consultant. Where termination is due to the fault of Consultant and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Consultant shall immediately cease all services except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer after such notice. Consultant may terminate this Agreement, with or without cause,upon thirty(30) days written notice to City. 5. COORDINATION OF WORK 5.1 Representative of Consultant. The following principal of Consultant is designated as being the principal and representative of Consultant authorized to act and make all decisions in its behalf with respect to the specified services and work: Doug Jensen, Senior VP Client Services. It is expressly understood that the experience,knowledge, education, capability, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services under this Agreement. The foregoing principal may not be changed by Consultant without prior written approval of the Contract Officer. 5.2 Contract Officer. The Contract Officer shall be the City Manager or his/her designee ("Contract Officer"). Consultant shall be responsible for keeping the Contract Officer fully informed of the progress of the performance of the services. Consultant shall refer any decisions that must be made by City to the Contract Officer. Unless otherwise specified, any approval of City shall mean the approval of the Contract Officer. 3 Revised:snsno 720599.1 5.3 Prohibition Against Subcontracting or Assianment. The experience, knowledge, education, capability, and reputation of Consultant, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall not contract with any other individual or entity to perform any services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. 5.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Consultant, its agents or employees, perform the services required, except as otherwise specified. Consultant shall perform all required services as an independent contractor of City and shall not be an employee of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role; however, City shall have the right to review Consultant's work product, result, and advice. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. 5.5 Personnel. Consultant agrees to assign the following individuals to perform the services in this Agreement. Consultant shall not alter the assignment of the following personnel without the prior written approval of the Contract Officer. Acting through the City Manager, the City shall have the unrestricted right to order the removal of any personnel assigned by Consultant by providing written notice to Consultant. Name: Title: Doug Jensen Sr. Vice President,Client Services Steve Stark Client Services Manager Jonathan Gerth Auditor 6. INSURANCE Consultant shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in the attached Exhibit"B", incorporated herein by reference. 7. INDEMNIFICATION. 7.1 Indemnification. To the fullest extent permitted by law, Consultant shall defend (at Consultant's sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, and agents, and velunteeFs (collectively the "Indemnified Parties"), from and against any and all third party liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively third party "Claims"), including but not limited to third party Claims arising 4 Revised:6116110 720599.1 from injuries to or death of persons (Consultant's employees included), for damage to property,including property owned by City, from any violation of any federal,state, or local law or ordinance, and from errors and omissions committed by Consultant, its officers, employees, representatives, and agents, which Claims arise out of or are related to Consultant's performance under this Agreement. This indemnification clause excludes such third party Claims arising from the sole negligence or willful misconduct of the City, its elected officials, officers, employees, and agents,, ems. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be constructed to limit Consultant's indemnification obligation or other liability under this Agreement. Consultants indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if any action is timely filed, until such action is final. This provision is intended for the benefit of third party Indemnified Parties not otherwise a party to this Agreement. 7.2 Desimi Wa fe el Setwiees indemniflea4lien and Reimbuffement. (Waiwd, not annlicablel. If the Agreement is determined to be a "design professional services agreement" and Consultant is a "design professional" under California Civil Code Section 2782.8, then: A. Te the fullest eiaefft permitted b7-law, (at Gensultant's sole east emd wkpease), pmtee4 afid held hafffiless Girt), Ead its eleeted effi Genst*.-im "I indmw96-, defend ,,eet is mquir (indi-yid„ally"Inde.mi fiod ➢eFW'; eelieetiyely"Indemnified^aFges-") /af* and all liabilities, elainw,judgments, afbitration awards, a f .d penalties (eerleefiyely"ClaimyTineluding-but net-lttfrted to Claims d t of peFsens (Gamult&Ws _le..ees i eladed) & d damage to pre....-.-. .hiel, Glaims arise eta C pertain aferelated to the «egligeneef eeldessness vAllful «duet 9 f > Gensultanti its agents, e.« 1eyees, er subee«t_..etes a fi,e . Geri. _,. _ r eendifien of this Agreement ("Indemmified ") f B. 44i G „„Le_, i. 11 require Y all .i design pr-ef ssienal gab een#fteter.. AgreemeFA, e , gefNxiees .. Si jerk required b', ..de.. tMs A gfeeme..t to ebte:« : die t et : iste..t „M tt,e f 8. RECORDS AND REPORTS 5 Revised:&18110 720599-1 8.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer reports concerning the performance of the services required by this Agreement, or as the Contract Officer shall require. 8.2 Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Consultant shall keep such books and records as shall be necessary to properly perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all reasonable f times, including the right to inspect, copy, audit, and make records and transcripts from such j records. 8.3 Ownership of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of this Agreement shall be the property of City. Consultant shall deliver all above-referenced documents to City upon request of the Contract Officer or upon the termination of this Agreement. Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights or ownership of the documents and materials. Consultant may retain copies of such documents for Consultant's own use. Consultant shall have an unrestricted right to use the concepts embodied in such documents. 8.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 8.5 Cost Records. Consultant shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred while performing under this Agreement. Consultant shall make such materials available at its offices at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment for inspection by City and copies shall be promptly furnished to City upon request. 9. ENFORCEMENT OF AGREEMENT 9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 9.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections 6 Revised:6/16/10 720599.1 and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand,or define the contents of the respective sections or paragraphs. 93 Waiver. No delay or omission in the exercise of any right or remedy of a non- defaulting party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City shall be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing. No such waiver shall be a waiver of any other default concerning the same or any other provision of this Agreement. 9.4 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative. The exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 9.5 Legal Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, a declaratory judgment, or any other remedy consistent with the purposes of this Agreement. 10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 10.1 Non-Liability of City Officers and Employ. No officer or employee of City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by City or for any amount which may become due to the Consultant or its successor, or for breach of any obligation of the terms of this Agreement. 10.2 Conflict of Interest. No officer or employee of the City shall have any direct or indirect financial interest in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects their financial interest or the financial interest of any corporation, partnership, or association in which he/she is, directly or indirectly, interested in violation of any state statute or regulation. Consultant warrants that Consultant has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement. 10.3 Covenant Against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination or segregation in the performance of or in connection with this Agreement regarding any person or group of persons on account of race, color, creed, religion, sex, marital status, disability, sexual orientation,national origin, or ancestry. 11. MISCELLANEOUS PROVISIONS 11.1 Notice. Any notice, demand, request, consent, approval, or communication that either party desires, or is required to give to the other party or any other person shall be in writing and either served personally or sent by pre-paid, first-class mail to the address set forth below. Notice shall be deemed communicated seventy-two (72) hours from the time of mailing Revised:6116110 720599.1 if mailed as provided in this Section. Either party may change its address by notifying the other party of the change of address in writing. To City: City of Palm Springs Attention: City Manager/City Clerk 3200 E. Tahquitz Canyon Way Palm Springs,California 92262 To Consultant: MuniServices, LLC Attention: Patricia Dunn, Legal Dept. 7625 N. Palm Avenue, Suite 108 Fresno, CA 93711 11.2 Inteerated Agreement. This Agreement contains all of the agreements of the parties and supersedes all other written agreements. 11.3 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement by all Parties. 11A Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses,paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the parties. 11.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties' successors and assignees. 11.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise, upon any entity or person not a party to this Agreement. 11.7 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement,by the same. 11.8 Authority. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by so executing this Agreement the Parties are formally bound to the provisions of this Agreement. 8 Revlsed:el18/10 720599.1 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date:_ David H.Ready City Manager APPROVED BY CRY MANAGER APPROVED AS TO FORM: ATTEST r4e,t�5 Izr) Ate5'1(° By. 9By- Dougl#s C. Holland, awes Thompson, City Attorney City Clerk "CONSULTANT' MuniServices LLC Date: July 8 , 2014 By : g Jensen Senior Vice President, Client Services 9 RevMd:&16f10 720599.1 CALIFORNIA AL1.-PURPOSE ACKNOWLEDGMENT State of CNtiomla County of On before ms, floe Wataaowntl aW pemne*smeared gasgwp who proved to me the basis of satisfacfiDry mdance to be the person(s) nerne(s) islets sr bsMbed to the within insou nt and acknowledged to me that helslteJtfRperson(s) the same rrr hisfietlrhetr aWhaired and that b hlshterltlteb signatuie(s)on the (nswmthe person(s), or the erYttiy upon behalf of which Wed,eae�lAed the blsinxtrent- i under PENALTY OF PERJURY under the laws the State nt California that the foregoing pmagnaptt Is e and correct. Wrl-NESS my hand and official seal. wr.xmnar . Signature mp�clwwy� OPTIONAL Though ft"ormmrron habwis nor by W hnWAove vsfta ro pafsorrs rayho an 8re dMffogg ad m&pm" m ml and reellsdnnenr of this brm to erro9wdOctrllalt Description of Affect D mat Title or?ype of Doarment Document Date: Number of Pages: /Aey )OftwThan If Above: y(les)C ad by Signe I(s) Signer's Name: dua ❑Ircvldlal OHlosr—Tise(sk l7 Corpora�OHtcar—Tisa(s): —p EJmited O l3errerel ©Partner—❑Lirrritetl ❑General ey In Fact ❑Attorney in Factes ❑Trustee man orConeervasor ❑bimr7ren or Coneervetor . ❑Osier:RepreselB6g: Signer Is Representing: ..iwmrO. a $awasmr.,raeaamz.cre.�n.c.ers+ssroz.....xmdra�.xra mr�em a.o�mr:c.rnarebea�®eaw 10 Revised:6116l70 720599.1 i EXHIBIT "A" CONSULTANT'S SCOPE OF SERVICES/WORK Including, Schedule of Fees And Schedule of Performance Revised:6116110 720599.1 Cannabis and Marijuana Tax Deficiency Audit Services The City of Palm Springs has asked for a proposal for auditing your medical cannabis collectives for your new Medical Cannabis Tax. The City would like to audit them soon -- at the end of this fiscal year even though it will only cover six months. The City would like to know if the collectives are doing something wrong up front in order to take corrective action quickly.The City wants to serve audit notices to both the legal ones and the numerous illegal ones. There are currently only three jlegal ones and two illegal ones who have paid the tax during the two months the City has collected I tax returns and payments. Deficiency Audit Services are designed to identify entities subject to taxation by the City that are not properly reporting the full amount of tax which they are subject to under the City's ordinances. Deficiency Audit Services also identifies entities that are potentially underreporting, or not reporting all applicable taxes. MuniServices reviews entities records to ensure compliance with the City's taxes. In performing the Deficiency Audit Services, MuniServices will. 1. Establish a comprehensive inventory of the registered and unregistered entities subject to taxation by the City and the database elements needed to facilitate an analysis of records of those entity's current and prior year's tax remittance; 2. Compare MuniServices' records with the City s records to identify potential under-reporting entities subject to taxation; 3. Meet with designated City staff to review and discuss potential audit candidates and mutually agree which entities will be subject to review. Only entities mutually agreed by MuniServices and the City to be reviewed shall be subject to MuniServices'audit services. 4. Review applicable provisions of the Cit/, s municipal code and ordinances adopted by the City; S. Represent the City for purposes of examining records pertaining to the Cannabis and Marijuana Tax to identify and confirm any errors/omissions that are resulting in deficient payment to the City; 6. Analysis into compliance with the IRC §501(c)requirements for non-profits - 7. For potential under-reporting entities identified, MuniServices will obtain authorization from the City to conduct a review of the entities' records and determine the amount of tax due for current and prior periods (plus applicable interest and penalties, where appropriate). 8. Submit audit summaries to the City to permit the City to determine the amount of a deficiency owed, if any(MuniServices will calculate as part of the summary the amount we determine that is owed,but this step allows the City discretion in pursuing the deficiencies); 9. Invoice entity for the amount of identified deficiencies, together with supporting documentation; 10. Educate entity regarding the City's reporting requirements to prevent recurring deficiencies in future years. Audit Procedures In the review process an auditor will perform a physical inspection of the business location.Further inquires will be made to the owner or manager as to the business transactions and compliance with the City's ordinances. MuniServices will conduct short tests before starting a complete verification of up to three years operations of a business. An extensive examination may not be justified. If the short tests indicate the taxpayer has not properly reported their tax liability, then more extensive tests will be conducted. When conducting the audit,a preliminary discussion with the taxpayer or with the person who is in charge of the records is performed to determine the exact nature of the business activity. The following briefly describes the books,records and detail that may be used in any given audit: 1. The General Ledger accounts may be examined for debits and credits,which may represent unreported transactions. 2. Review of payroll records and employee information filed with the State or other government agencies 3. Compare tax returns with Cannabis and Marijuana Tax returns. Kick Off Meeting To begin the Audit project, the service will start with a kick off meeting to establish logistics, communication,and to set forth the procedures the City wants to establish. 1. Initial MeetinE. MuniServices meets with the City staff' to review the procedures and objectives of the service, business entity relations and logistical matters, including establishing an appropriate liaison with City management and staff and logical checkpoints for measuring progress (the "Initial Meeting"). MuniServices and the City will schedule the meeting within 10 days after MuniServices receives the fully-signed copy of the Agreement from the City. 2. Workl2lan. Based on the Initial Meeting, MuniServices develops a workplan that incorporates the logistical matters agreed to in the Initial Meeting and describes in detail how the objectives of the CANNABIS AND MARIJUANA TAX service will be met (the "Work plan"). 3. Commencement of Services. After the Workplan is developed, MuniServices will begin providing the services described. MuniServices' obligation to provide services is contingent on the City providing the necessary information and cooperation. Legislative and Regulatory Updates MuniServices will monitor proposed state and federal legislation to identify issues affecting the City's revenues with respect to Cannabis and Marijuana Tax related revenues,and,if justified,make recommendations to the City and its lobbyists. Our Government Relations team works in collaboration with stakeholders including the League of California Cities, the California Municipal Revenue Tax Association (CMRTA) representatives and members, and others. We understand that last year the League along with law enforcement organizations defeated four different Cannabis and Marijuana Tax bills in the legislature. Each of these measures to varying degrees sought to override or undermine local control and each failed to adequately address the many public safety issues presented by dispensaries and efforts to regulate them. This year our team is monitoring and participating in discussions with regards to SB 1262 (Correa),which at the time of this proposal is being sponsored by the California Police Chiefs Association and cosponsored by the League of California Cities. Amendments taken to the bill in early May 2014 deleted key provisions to the bill however remaining intact are the local control provisions, certain health and safety provisions and public safety provisions in terms of security requirements at dispensaries, transport and inventorying requirements. We understand the League is re-evaluating its support position as well as whether to continue sponsoring the bill. Please refer to w::w leginfo.ca.Qov for more detail. We have historically followed and monitored for client impact measures including SB 626 (Calderon/ 2011) BOE: cannabis and cannabis products: study/ SB 676 (Leno/ 2001) industrial hemp. SB 626 would have required the State Board of Equalization to establish a voluntary task force to conduct a study to determine the most efficient means to obtain compliance under the Sales and Use Tax Law by sellers of cannabis and cannabis products. The Governor also vetoed SB 676 which would have created an eight-year, four-county pilot project with respect to the cultivation and processing of industrial hemp. The Governor said: "Federal law clearly establishes that all cannabis plants, including industrial hemp, are marijuana, which is a federally regulated controlled substance. Failure to obtain a permit from the U.S. Drug Enforcement Administration prior to growing such plants will subject a California farmer to federal prosecution. Although I am not signing this measure, 1 do support a change in federal law. Products made from hemp, clothes, food, and bath products are legally sold in California every day. It is absurd that hemp is being imported into the state,but our farmers cannot grow it" Consultation MuniServices offers to provide ongoing consultation services in the Cannabis and Marijuana Taxation area. Alin to a gross receipts audit, most of the audit should be straight forward. There may likely be consultation that MuniServices will provide, in close collaboration with the City, over the non-profit requirements.As you have come to expect from MuniServices,we typically provide all the extra consultation at no additional cost Key Personnel List MuniServices' Palm Springs Project Management Team is comprised of a dedicated group of individuals who have been chosen based on their experience working directly with the public sector. Each member of the Project's Team also brings the necessary skill set, knowledge and education to support Palm Spring's stated objectives. Executive/Management Team Doug Jensen Role in project:Executive contact and contract guarantees. Doug Jensen has over 22 years of experience working on projects similar to the SVP Client Services City's and has expertise in tax policy, municipal finance, and economic Executive Contact development and consulting. He will interface with Mr. Scott and Ms. Varalli several times a month on the progress of the project and provide counsel on (Since 1991) strategies and approaches to ensure maximum revenue production and customer satisfaction. Doug is an expert in the field of municipal revenue enhancement management and local government revenue consulting and ensures the delivery of audit, information, and consulting services, and supervises a staff of 18 professionals with breadth and depth of knowledge and experience in local overnment focused on customer care. He is an associate member of numerous local government associations throughout the country.Education:Doug has a BS in Business Administration with an emphasis in Accounting from California State University, Fresno. Affiliations & Memberships: Doug is a member of the California Society of Municipal Finance Officers and the California Municipal Revenue and Tax Association. Steve Stark ?ole in project:Steve will be the liaison between the City and MuniServices. teve Stark,a professional with more than 30 years of local government experience Client Services oined MuniServices as a Client Services Manager in 2008. Steve is responsible for Manager issisting in cultivating new and current partnerships with MuniServices' client hies. Steve's broad experience includes serving as the former department head of (Since 2008) inance, Information Technology, Risk Management Internal Audit, Budget urchasing and Grant Administration for several California cities including asadena,Santa Monica,Santa Clarita and Fontana.He has worked on development greements that had significant positive financial impacts to the County and formed artnerships with other government agencies to accomplish common goals. Steve as also developed a financial model that allowed city officials to see the costs of nnexation of areas outside the city limits and developed a long range financial plan at quantified the long term costs of replacement of the aging infrastructure.Steve s received many budget technology and operational awards from a number of unicipal organizations including the GFOA, CSMFO, CMTA, and is a Certified overnment Financial Manager.Education: Steve holds a Business Administration e ree from West Texas University, ole in project:Jonathan.will manage,research and conduct the examinations Jonathan Gerth,Esq. Jonathan manages our Audit Division, and will have overall responsibility for VP of Audit implementation and successful completion of the auditing services for this contract. Jonathan has extensive professional experience in legal, business and accounting environments, including advanced federal, state and local governmental functions (Since 2010) and tax compliance. He began his career as a tax attorney and appeals officer for the Internal Revenue Service's Division of Chief Counsel and Compliance in Dallas, Texas. He later worked for a local private tax firm in Birmingham before joining RDS in April 2010. Jonathan has held a wide variety of legal roles in our audit department consisting of legal tax support and strategic analysis on compliance audits, tax controversy and advocacy, regulatory compliance initiatives, reforms in audit, assessment and collection practices, and extensive litigation support. He also serves as the administrative law judge presiding over tax appeals for all 275+ RDS represented jurisdictions throughout Alabama. Education: Jonathan received an advanced degree in tax accounting from Spring Hal College in 2002, and an accredited law degree with a concentration in taxation from Thomas Goode Jones School of Law in 2006.He is an actively licensed allome . Compliance Audit Role in project J.C.will manage,research and conduct the examinations. J.C.Green,CPA J.C. has over 20 years in compliance auditing; for the last six of those years he has AVP,Audit Operations worked in our Birmingham office as a Foreign Audit Specialist and the Assistant Vice-President of Auditing. He manages audit cases throughout the country for the Transactional Tax Compliance, Franchise Fee and Utility Tax Departments, and (Since 2006) provides intricate guidance on audit techniques, audit leads and recovery, and intra and interstate nexus considerations. J.C. started his field auditing career with the Internal Revenue Service and the Mississippi Department of Revenue. He performed transactional and income tax compliance audits for national companies all over the nation. Education: BA in Accounting, University of Southern Mississippi; Actively licensed ertifted Public Accountant. Government Relations Francesco D. Fran is responsible for overseeing company Legislative, Regulatory, and Mania,MBA Government Relations activity throughout the country.He monitors,analyzes and leads company lobbying efforts related to legislation, state mandates, and VP of Government regulatory changes and policies that affect client revenue streams with a primary Relations focus on sales and use tax laws,and the impacts on local and special district sales tax allocation. Fran has spent a significant portion of his time interacting with (Since 1995) Mayors and Council Members, SBE Members, County Assessors and Tax Collectors, Legislators, State Agency Directors and their respective staffs. Education: Fran graduated from the University of California, Santa Barbara and earned a Bachelor of Arts degree in Communications,and attended the University of San Francisco where he earned a Masters degree in Business Administration. Professional Affiliations: Fran has served as a member of the League of California Cities Revenue and Taxation Policy Committee and is the President of the Lea e's Partner Program. Brenda Narayan Brenda Narayan has direct experience working with MuniServices' local government clients throughout the country. Brenda regularly interacts with Director MuniServices clients on policy issues related to local government revenue. She is Government the primary author of MuniServices Policy, Regulatory and Legislative updates Relations that is distributed to several hundred clients and industry representatives. She has spent a significant amount of time at the Capitol interacting with our (Since 1997) legislative liaison and legislators. Brenda each week briefs Fran Mancia on legislative issues of interest to clients and local governments. She is responsible for writing letters to elected officials and developing polity positions (and recommendations) on legislation_ Brenda sits on the League of California Cities Revenue and Taxation Committee as Partner representative. Education: BA in Humanities from CSU, Sacramento; Certificate in Leadership and Management from UC,Berkeley,Extension. Support Team Patricia Dunn Patricia joined MuniServices in 2006 as the Contracts Administrator. She was appointed as the Contracts Compliance Manager in 2008 and then in 2011 as Client Services- Client Services-Operations Manager. She is presently responsible for the Operations Manager& reviewing, drafting, and negotiating client and vendor contracts, and provides Contracts Manager administrative and technical support to client services managers and senior and executive management She is also responsible for issuing and maintaining (Since 2006) compliance-related documents including insurance certificates, local business licenses, and corporate f0ings.She has been an instructor for the company in the areas of Sexual Harassment Prevention and injury and Illness Prevention Program and also serves as the Safety Officer. She has over 20 years of paralegal experience. Education: Patricia graduated magna cum laude with a BA in Organizational Leadership from Fresno Pacific University and summa cum laude with a MS in Human Resources Management from Chapman University. I Compensation Cannabis and Marijuana Tax MuniServices' compensation for the Cannabis and Marijuana Tax Audit Service will be $150 per hour with a maximum of 50 hours per audit for an amount not to exceed $25,000,including out-of- pocket expenses. No audit will be conducted without written authorization from the City.This audit is akin to a gross receipts audit with the addition of reviewing compliance with its non-profit status. We would notify the City if MuniServices approaches the maximum fee of $25,000 in order to secure spending authorization to allow MuniServices to continue to perform these audits. We are proposing a cap on the total number of hours per audit; however, we will likely have many audits well below the 50 hour cap. Out-of-Pocket Expenses For the Cannabis and Marijuana Tax audit services MuniServices will also charge the City out-of-pocket expenses for reasonable travel costs related to the performance of the audits. "Travel Costs" include but are not limited to the costs of car rental,gasoline,and traveling time at an hourly rate of$125 to$150 per hour.These out-of-pocket expenses will not exceed$2,500. If we expect to spend more than$2,500 we will get prior approval from the City for any amounts over the allotted $2,500. The out-of-pocket expenses will be invoiced to the City upon delivery of the final report to the City. Contract Expiration This contract will expire December 31,2014 unless written mutual agreed by both parties. EXHIBIT 64B99 INSURANCE PROVISIONS Including Verification of Coverage, Sufficiency of Insurers, Errors and Omissions Coverage, Minimum Scope of Insurance, Deductibles and Self-Insured Retentions, and Severability of Interests (Separation of Insureds) 12 Revised:6116/10 720599.1 INSURANCE 1. Procurement and Maintenance of Insurance. Consultant shall procure and maintain public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Consultant's performance under this Agreement. Consultant shall procure and maintain all insurance at its sole cost and expense, in a form and content satisfactory to the City, and submit concurrently with its execution of this Agreement. Consultant shall also carry workers' compensation insurance in accordance with California workers' compensation laws. Such insurance shall be kept in full force and effect during the i term of this Agreement, including any extensions. Such insurance shall not be cancelable without thirty(30) days advance written notice to City of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City, its elected officials, officers, employees, agents, and volunteers as additional named insureds by original endorsement shall be delivered to and approved by City prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify City, its elected officials, officers, agents, employees, and volunteers. 2. Minimum Scope of Insurance. The minimum amount of insurance required under this Agreement shall be as follows: 1. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two million dollars($2,000,000) general aggregate; 2. Automobile liability insurance with limits of at least one million dollars ($1,000,000.00)per occurrence; 3. Professional liability (errors and omissions) insurance with limits of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000) annual aggregate is: required is not required; 4. Workers' Compensation insurance in the statutory amount as required by the- State of California and Employer's Liability Insurance with limits of at least one million dollars $1 million per occurrence. If Consultant has no employees, Consultant shall complete the City's Request for Waiver of Workers' Compensation Insurance Requirement form. 3. Primary Insurance. For any claims related to this Agreement, Consultant's insurance coverage shall be primary with respect to the City and its respective elected officials, officers, employees, agents, and volunteers. Any insurance or self-insurance maintained by City and its respective elected officials, officers, employees, agents, and volunteers shall be in excess of Consultant's insurance and shall not contribute with it. For Workers' Compensation and Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and 13 RaA30d:6116110 720599.1 contribution it may have against City, its elected officials, officers, employees, agents, and volunteers. 4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required, and if Consultant provides claims made professional liability insurance, Consultant shall also agree in writing either(1) to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Consultant's services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in the amount required by this Agreement for at least three years after completion of Consultant's services under this Agreement. Consultant shall also be required to provide evidence to City of the purchase of the required tail insurance or continuation of the professional liability policy. 5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an A.M. Best's Key Rating of B++, Class VII, or better,unless otherwise acceptable to the City. 6. Verification of Coverage. Consultant shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, effecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work commences. City reserves the right to require Consultant's insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers' Compensation policies. Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or(2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate: 1. "The City of Palm Springs, its officials, employees, and agents are named as an additional insured... " ("as respects City of Palm Springs Contract No._" or 'for any and all workperformed with the City"may be included in this statement). 2. "This insurance is primary and non-contributory over any insurance or self- insurance the City may have..." ("as respects City of Palm Springs Contract No. " or 'for any and all workperformed with the City" may be included in this statement). 3. "Should any of the above described policies be canceled before the expiration date thereof, the issuing company will mail 30 days written notice to the Certificate Holder named." Language such as, "endeavor to" mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative" is not acceptable and must be crossed out. I4 Revised:6116110 720599.1 4. Both the Workers' Compensation and Employers' Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents, and volunteers. In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies. I All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agent(broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Consultant's obligation to provide them. 7. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City prior to commencing any work or services under this Agreement. At the option of the City, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its elected officials, officers, employees, agents, and volunteers; or(2) Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Certificates of Insurance must include evidence of the amount of any deductible or self-insured retention under the policy. Consultant guarantees payment of all deductibles and self-insured retentions. 8. Severability of Interests (Separation of Insureds). This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer's liability. 15 Revised:6116110 720599.1