07-073, Muniservices, LLC
AGREEMENT
BETWEEN
CITY OF CUPERTINO
AND
MUNISERVICES, LLC
FOR
PROFESSIONAL SERVICES
THIS IS AN AGREEMENT MADE AS OF :Ju..ne- /3 ,2007,
BETWEEN CITY OF CUPERTINO (hereinafter referred to as CITY), and
MuniServices, LLC, a Delaware limited liability company, with an office at 7335 N.
Palm Bluffs Avenue, Fresno, CA 93711 (hereinafter referred to as MuniServices).
WITNESSETH:
WHEREAS, CITY intends to revise its utility users tax ordinance, implement the
ordinance, and ensure compliance with the ordinance (hereinafter referred to as Project)
and,
WHEREAS, CITY requires certain professional services in connection with the Project
(hereinafter referred as Services);
WHEREAS, MuniServices is qualified and prepared to provide the CITY with such
Services as part of a comprehensive utility users tax/franchise compliance and revenue
protection program (hereinafter referred as PROGRAM), with broad participation by
California public agencies, that is designed to preserve, protect, and enhance its utility
users tax (ooT) and utility franchise revenues.
NOW, THEREFORE, in consideration of the promises contained herein, the parties agree
as follows:
ARTICLE 1 - PROGRAM OBJECTIVES
MuniServices auditing, geocoding, information, and associated services and skills, in
conjunction with the legal and "protective" services of the CITY's outside counsel,
Donald H. Maynor, A Professional Law Corporation (LAW FIRM), will be used to
establish and implement a PROGRAM that will allow participating California public
agencies to preserve, protect and enhance their ooT and utility franchise revenues
through a combination of auditing, geocoding, tax application compliance, business
PC/DIRlCITY IFRMSI A92502
detection, ordinance update, legislative monitoring, technology update, and other
essential compliance and protective services. An effective compliance PROGRAM
will assist the CITY, and other participating public agencies, in identifying and
correcting errors/omissions causing revenue deficiencies, and thereby produce new or
previously unrealized revenue for such participants. The PROGRAM's tax
preservation services will protect the CITY's existing UUT revenues from erosion
due to new legislation, new technologies, outdated ordinance language and inaccurate
information. By offering these essential services through a comprehensive
PROGRAM, with widespread participation, there are the additional benefits of: i)
achieving lower individual costs for such joint activities; and, ii) developing
consensus-based decisions regarding ordinance interpretations and tax
implementation that utility industries require of California public agencies.
ARTICLE 2 - FIXED FEE SERVICES
2.1 Compliance Review Services
At any time during the term of this AGREEMENT, with the prior consent of
the City where specifically indicated, MuniServices may perform compliance
review activity on behalf of the CITY in any of the following areas:
a. UUT Tax Application and Franchise Fee Review: MuniServices will
perform compliance reviews of major utility providers, with a focus on
common client issues, to assure that the UUT is being properly applied
to taxable services and charges, and that the franchise fee formula is
being properly applied to the revenue base (as provided in standard
franchise agreements). MuniServices will use the legal expertise of
LAW FIRM on matters requiring legal analysis or an interpretation of
ordinances, standard utility franchises, laws, and IRS letter rulings,
which will be coordinated with the City Attorney.
b. Geocode Information and Review: MuniServices will develop and
maintain a proprietary address range database to assure accurate
address range information regarding the CITY's boundaries. Such
databases will reflect the latest available LAFCO information
regarding CITY boundary changes due to annexations or other
municipal reorganizations. Upon request, this service will be made
available to any utility service provider that serves customers within
the CITY.
c. UUT Business Detection: MuniServices will perform periodic
compliance reviews of major utility providers and utilize other
detection tools to verify whether such companies are doing business
within the CITY, and then identify such possible non-complying
companies to the CITY's staff for enforcement actions. MuniServices
will assist the CITY in developing compliance correspondence and
enforcement procedures.
d. UUT Payment Calculations and Deviations: If the CITY provides
MuniServices with regular and accurate UUT payment history (i.e.,
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copies of all UUT remittances), MuniServices will identify to the
CITY's staff possible gaps in payments, calculation mistakes, and
other payment errors. MuniServices will assist the CITY in developing
compliance correspondence and enforcement procedures. On request,
MuniServices will provide the CITY, on a semi-annual basis, with a
spreadsheet reflecting the CITY's UUT payments (based on remittance
data provided by the CITY to MuniServices).
2.2 Revenue Protection Services
MuniServices will work cooperatively with LA W FIRM in providing the
following revenue protection services designed to protect the CITY's existing
and future UUT and utility franchise revenues:
a. Ordinance Update and Legis1ativeIRegu1atory Review Services
1. Ordinance/Franchise and Technology Update. Provide a
comprehensive review and update of the CITY's existing UUT
ordinance. Thereafter, provide periodic reviews and
recommended updates to the UUT ordinance, administrative
rulings and standard utility franchise agreements, to address
new issues that may arise because of deregulation, litigation,
changes in laws or regulations, the unbundling of traditional
utility services, or the introduction of new technologies to
provide utility services. Such recommendations will clarify or
add procedural protections to the existing ordinance, and
should not require a Proposition 218 election approval.
2. State and Federal Legislation. Monitor proposed state and
federal legislation to identify issues affecting the CITY's UUT
or utility franchise revenues, and, if justified, make
recommendations to the CITY and lobbyists of California
public agencies.
3. Regulatory Agencies. Monitor proceedings at the various
regulatory proceedings (e.g., California Public Utilities
Commission, California Energy Commission, Federal
Commerce Commission, and Federal Energy Regulatory
Commission) that affect the deregulation of the various utilities
and make appropriate recommendations to the CITY.
4. Information Services. Provide the CITY with periodic
newsletters, special communications, and legislative bulletins.
LAW FIRM may also provide instruction to the CITY's staff
through workshops and seminars on such subjects as industry
deregulation, new technologies, complying with new utility-
related legislation, and other timely subjects.
b. Statutory Compliance and Consulting Services
1. Publication of Ordinance Requirements. Prepare and
maintain an accurate copy of the CITY's UUT ordinance and
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its administrative rules and interpretations on the uutinfo.org
website, and otherwise assist the CITY in complying with
Public Utilities Code S 495.6.
2. Web-Based Data Links. Prepare and maintain on the
uutinfo.org website (and provide a link to the CITY's web
page, if desired) the CITY's UUT ordinance and administrative
rules and rulings, frequently asked questions, e-mail inquiry
feature, and model forms for exemption applications, UUT
remittances, information requests, and other tax compliance
documents.
3. Access to Client-Only Webpage. Provide the CITY's staff
(with UUT responsibilities) access to the client-only features of
the uutlaw.com webpage and periodic newsletters, including
legislative tracking, legal memos, breaking news, special utility
issue features (e.g., new technologies), and practice hints.
4. Access to Information. Assist the CITY's staff in obtaining
SB 278 lists, tax compliance information, exemption lists of
utility service providers, and in determining the exempt status
of utility customers pursuant to the exemption provisions of the
CITY's UUT ordinance or federal excise tax law relating to
telecommunications.
5. Revenue Forecasts. Provide staff with revenue forecasts
based on industry trends, historical trends, and other relevant
factors.
c. Assistance to CITY's Internal UUT Staff
1. Representation on the Utility Users Tax Technical Task
Force. Provide representation on and assistance in connection
with the activities of the Utility Users Tax Technical Task
Force (UUT TTF). Assist the CITY with analysis ofUUT TTF
issues and recommend appropriate responses. Bring important
UUT issues to the attention of the UUT TTF, and recommend
appropriate action consistent with the CITY's interests.
2. Timely Response to Tax Application Inquiries. Provide
legal and technical assistance to existing CITY staff and the
City Attorney's office, and provide timely analysis and draft
responses to tax application inquiries from taxpayers or tax-
collecting entities (e.g., utility providers, hotels, businesses)
using Web-based interactive technology.
3. Enforcement Assistance. Provide the CITY's staff and the
City Attorney's office with: i) legal advice on specific issues
that arise in the enforcement of the tax ordinance (e.g., nexus
issues and questions from taxpayers or tax collectors); and, ii)
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compliance correspondence and legal notices as required by
ordinance and due process.
4. Audit Assistance. Assist the CITY's staff and the City
Attorney's office in, i) gaining access to audit-related
information under existing legal authorities; ii) addressing legal
issues that arise in the course of an audit; iii) providing
exemption analysis; and, iv) reviewing and developing legal
measures to improve existing or proposed tax compliance
programs, including tax amnesty programs.
5. UUT Exemption Review. Review for accuracy the gas and
electric exemption lists and telecommunication exemption
certificates for non-residential customers, as provided by the
CITY, and identify possible errors to the CITY's staff.
2.3 MuniServices Does Not Provide Legal Services.
It is agreed and understood that MuniServices will provide no legal services
that may be required under any of the PROGRAM activities described in this
AGREEMENT, but rather LAW FIRM will provide such legal services by
separate agreement with the CITY. It is also acknowledged that in providing
such legal services, LAW FIRM's client will be the CITY, and not
MuniServices.
ARTICLE 3 - CITY-SPECIFIC AUDITS WITH PERFORMANCE-BASED FEE
3.1 Scope of CITY-Specific Audits
At any time during the term of this AGREEMENT, with the prior mutual
consent of the CITY and MuniServices, MuniServices may perform a CITY-
specific audit of a utility franchise or UUT payments from a specific utility,
when the audit intends to focus on CITY-specific issues. See Article 5.2
below regarding compensation for CITY -specific audits.
3.2 MuniServices Responsibilities for CITY -Specific Activities
a. Work Plan Approval for CITY-Specific Activities. MuniServices will
submit to the CITY's staff a proposed Work Plan for review and approval
that will serve as the basis for CITY -specific compliance activities (e.g.,
CATV UUT or franchise review, gas or electric franchise review, or
payment deviation from a specific utility).
b. CITY Approval of Discovery Actions. For City-specific activities,
MuniServices will receive prior authorization from the CITY's staff to
obtain and examine utility and customer records (hard copy and data
format) necessary to assure compliance with the CITY's UUT ordinance
through the use of administrative subpoenas, nondisclosure agreements,
and other procedures required by the utility service provider as a condition
of providing access to confidential customer information.T
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c. MuniServices to Comply with Local Laws. In performing the compliance
review services described in this subsection, MuniServices agrees to abide
by the provisions of the CITY's UUT ordinance, any administrative rules
the CITY may adopt relating to such ordinance, and the confidentiality
requirements of state law (Revenue and Taxation Code Section 7284.6-.7).
Throughout the above process, MuniServices shall be available to meet
with the CITY, utility service providers, or their customers to review any
MuniServices findings or recommendations arising out of its compliance
review activities for the CITY.
ARTICLE 4 - CITY's RESPONSIBILITIES
To facilitate and maximize the effectiveness of the above compliance review activities,
the CITY shall diligently assist MuniServices by performing the following:
4.1 Necessary Information.
The CITY will provide MuniServices, on a timely basis, with information
necessary to conduct its compliance review activities including but not limited
to: monthly UUT payment histories, exemption lists, and SB 278 gas and
electric lists (including names of customers refusing to pay surcharges), and
certified copies of the UUT ordinance and any subsequent amendments.
4.2 Letter of Authorization.
The CITY will provide a letter of authorization identifying MuniServices as an
authorized agent of the CITY to perform utility user's tax compliance audits,
to receive and examine appropriate utility and customer records (hard copy
and data format) necessary to assure UUT tax compliance, and to execute
necessary nondisclosure agreements approved by the CITY.
4.3 Legal Interpretations of Ordinance.
Upon request, the CITY will provide MuniServices with appropriate legal and
administrative interpretations of its UUT ordinance. It is agreed and
understood that the CITY will retain the exclusive authority and responsibility
to administer, interpret, and enforce its UUT ordinance, recognizing that the
role of MuniServices and LAW FIRM is limited to employing their unique
expertise and proprietary tools for: i) detecting and identifying
errors/omissions by utility service providers or utility users in the application,
calculation, collection, and/or remittal of UUT; and, ii) providing the CITY
with technical assistance, without assuming or being delegated the authority or
responsibility of the CITY to administer, interpret, and enforce its UUT
ordinance and standard utility franchise agreements.
ARTICLE 5 - COMPENSATION/TERM
5.1 Annual Fixed Fee
a. Total Annual Fixed Fee. The CITY's total annual fixed fee for
participating in the PROGRAM shall be the greater of: i) one-half percent
(0.5%) of the total UUT revenues received by the CITY (excluding UUT
revenues derived from sewer, water, trash or CATV) based on the prior
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fiscal year, or ii) ten thousand dollars ($10,000) ("Minimum Fee"). In no
case shall the CITY's annual fixed fee exceed eighty-five thousand dollars
($85,000) ("Maximum Fee"). The Minimum Fee and Maximum Fee shall
be increased at the rate of two percent (2%) each year.
b. Allocation of Annual Fixed Fee. Said annual fixed fee payment shall be
allocated, and paid separately, to LAW FIRM and MuniServices as
follows: i) to LA W FIRM, the greater of one-eighth of one percent
(0.125%) of the total UUT revenues or five thousand dollars ($5,000), as
reflected in a separate attorney/client agreement with the CITY, and ii) to
MuniServices, one-half of one percent (0.5%) of the total UUT revenues
less the amount allocated and paid separately to LAW FIRM. At any
time, LA W FIRM and MuniServices may, by mutual agreement, adjust
their proportional share of said total annual fixed fee, provided that such
parties shall receive prior approval of such adjustment from the CITY.
c. Ouarterly Payments of Fixed Fee. Said annual fixed fee shall be paid in
four equal quarterly payments with due dates of: March 31, June 30,
September 30, and December 31. Invoices for services rendered shall be
in arrears (invoiced for the immediately preceding quarter). If the
effective date of this AGREEMENT is other than on an invoice date, the
CITY shall be invoiced for the first quarterly payment on the immediately
following invoice date as set forth herein. CITY shall be invoiced and
responsible for a prorated portion of the preceding quarter based on the
effective date of this AGREEMENT. Payment will be made to
MuniServices within thirty (30) days of receipt of MuniServices invoice
therefore. Excluding disputed billings, amounts which remain unpaid
after thirty (30) days shall accrue interest at the rate of one and one-half
percent (1.5%) per month, or the maximum amount permitted by law.
These quarterly payments are nonrefundable. For purposes of this Article
5.1, the effective date of this AGREEMENT shall be deemed to be the last
date signed below, unless otherwise agreed to by the parties.
5.2 Performance-Based Compensation for City-Specific Audit Services
a. With respect to a CITY-specific audit, including a CATV UUT/franchise
audit referred to in Article 3.1 above, MuniServices shall be entitled
compensation on rates and terms to be agreed upon following the CITY's
request for the CITY-specific audit service.
b. In the event that any legal services from LAW FIRM are required in
connection with a CITY-specific audit, the cost of such services to the
CITY shall be paid by MuniServices, and MuniServices shall disclose to
the CITY the financial arrangement between MuniServices and LAW
FIRM regarding the payment of such costs and how it effects the
compensation discussed in Article 5.2.a.
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5.3 CITY's Obligations
Regarding the CITY-specific compliance review activities of MuniServices in
Articles 3 and 5.2 above, the CITY agrees to:
a. Invoice the responsible party for tax deficiencies (plus interest and
penalties if applicable) identified and confirmed by MuniServices within
thirty (30) days following receipt of MuniServices detection report or
correspondence;
b. Provide MuniServices with a copy of any settlement agreement with a
taxpayer/tax collector within ten (10) days of entering into such
agreement; and,
c. Notify MuniServices within ten (10) days following receipt by the CITY
of payments (cash, installment, or other compensation directly benefiting
the CITY) of such tax deficiencies, whether invoiced or not. Upon receipt
of such notice, MuniServices will promptly invoice the CITY.
MuniServices compensation is due and payable within thirty (30) days of
the CITY's receipt of MuniServices invoice. Any un-disputed amounts
which remain unpaid after thirty (30) days shall accrue interest at the rate
of one and one-half percent (1.5%) per month, or the maximum amount
permitted by law.
5.4 MuniServices Expenses
MuniServices shall absorb all expenses incurred by MuniServices in
providing its services as described herein. These expenses include items such
as employee salaries and benefits, insurance, airfare, auto rentals, meals,
lodging, Federal Express, mail, telephone, copying, directories, on-line
resources, and other overhead and miscellaneous expenses.
ARTICLE 6 - STANDARD OF CARE
6.1 MuniServices shall exercise the same degree of care, skill, and diligence in the
performance of the Services as is ordinarily provided by a professional consultant
under similar circumstance and MuniServices shall, at no cost to City, re-perform
services which fail to satisfy the foregoing standard of care.
ARTICLE 7 - SUBCONTRACTING
7.1 No subcontract shall be awarded by MuniServices until prior written approval is
obtained from the City.
ARTICLE 8 - MUNISERVICES-ASSIGNED PERSONNEL
8.1 MuniServices shall designate in writing an individual to have immediate
responsibility for the performance of the services and for all matters relating to
performance under this Agreement. Key personnel to be assigned by
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MuniServices will be stipulated in each Service. Substitution of any assigned
person shall require the prior written approval of the City, which shall not be
unreasonably withheld. If the City determines that a proposed substitution is not
responsible or qualified to perform the Services then, at the request of the City,
MuniServices shall substitute a qualified and responsible person.
ARTICLE 9 - OWNERSHIP OF DOCUMENTS
9.1 All reports, charts, and other products produced by MuniServices and delivered to
the City are the property of the City.
9.2 MuniServices shall retain custody of all project data and documents other
than deliverab1es specified in each Service, but shall make access
thereto available to the City at all reasonable times the City may request.
City may make and retain copies for information and reference.
9.3 All deliverab1es and other information prepared by MuniServices pursuant to this
Agreement are instruments of Service in respect to this Project. They are not
intended or represented to be suitable for reuse by City or others on extensions of
this Project or on any other project. Any reuse without written verification or
adaptation by City for the specific purpose intended will be at City's sole risk and
without liability or legal exposure to MuniServices; and City shall indemnify and
hold harmless MuniServices against all claims, damages, losses, and expenses.
including attorney's fees arising out of or resulting from such reuse. Any such
verification or adaptation will entitle MuniServices to further compensation at
rates to be agreed upon by City and MuniServices.
ARTICLE 10 - INSURANCE
MuniServices shall provide and maintain at all times during the performance of the
Agreement the following insurances:
1 0.1 Workers' Compensation and Employer's Liability Insurance for protection of
MuniServices' employees as required by law and as will protect MuniServices
from loss or damage because of personal injuries, including death, to any of his
employees.
10.2 Comprehensive Automobile Liability Insurance. MuniServices agrees to carry a
Comprehensive Automobile Liability Policy providing bodily injury liability.
This policy shall protect MuniServices against all liability arising out of the use of
leased automobiles both passenger and commercial. Automobiles, trucks, and
other vehicles and equipment (not owned, or hired, licensed or unlicensed for road
use) shall be covered under this policy. Limits of liability for Comprehensive
Automobile Liability Insurance shall not be less than $1,000,000 Combined
Single Limit.
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10.3 Comprehensive General Liability. Insurance as will protect MuniServices and
City from any and all claims for damages or personal injuries, including death,
which may be suffered by persons, or for damages to or destruction to the
property of others, which may arise from the MuniServices' operations under this
Agreement, which insurance shall name the City as additional insured. Said
insurance shall provide a minimum of $1 ,000,000 Combined Single Limit
coverage for personal injury, bodily injury, and property damage for each
occurrence arid aggregate. Such insurance will insure MuniServices and City
from any and all claims arising from the following:
1. Personal injury;
2. Bodily injury;
3. Property damage;
4. Broad form property damage;
5. Independent contractors;
6. Blanket contractua11iability.
10.4 MuniServices shall maintain a policy of professiona11iabi1ity insurance,
protecting it against claims arising out of negligent acts, errors, or omissions of
MuniServices pursuant to this Agreement, in an amount of not less than
$1,000,000. The said policy shall cover the indemnity provisions under this
Agreement.
10.5 MuniServices agrees to maintain such insurance at MuniServices' expense in full
force and effect in a company or companies satisfactory to the City. All coverage
shall remain in effect until termination of this Agreement.
10.6 MuniServices will furnish the City with certificates of insurance issued by
MuniServices' insurance carrier and countersigned by an authorized agent or
representative of the insurance company. Upon receiving written notice of
cancellation from its insurers, MuniServices shall give the City twenty-five days
prior written notice of the cancellation. The certificates for liability insurance will
show that liability assumed under this Agreement is included.
ARTICLE 11 - LIABILITY AND INDEMNIFICATION
11.1 Having considered the risks and potential liabilities that may exist during the
performance of the Services; and in consideration of the promises included herein,
City and MuniServices agree to allocate such liabilities in accordance with this
Article 11. Words and phrases used in this Article shall be interpreted in
accordance with customary insurance industry usage and practice.
11.2 MuniServices shall indemnify and save harmless and defend the City and all of
their agents, officers, and employees from and against all claims, demand, or
cause of action of every name and nature arising out of negligent error, negligent
PC/CITY /FRMS/ A92502
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omission, or negligent act of MuniServices, its agents, servants, or employees in
the performance of its services under this Agreement.
11.3 In the event an action for damages is filed in which negligence is alleged on the
part of City and MuniServices, MuniServices agrees to defend City. In the event
City accepts MuniServices' defense, City agrees to indemnify and reimburse
MuniServices on a pro rata basis for all expenses of defense and any judgment or
amount paid by MuniServices in resolution of such claim. Such pro rata share
shall be based upon a final judicial determination of negligence or, in the absence
of such determination, by mutual agreement but City's portion of the pro-rata
share will be no less than a twenty-five percent share.
11.4 MuniServices shall indemnify City against 1ega11iabi1ity for damages arising out
of claims by MuniServices' employees for injuries or sickness arising out the
employee's employment with MuniServices. MuniServices will not indemnify
City for claims by a MuniServices' employee that are not covered by the
Worker's Compensation exclusive remedy doctrine. City shall indemnify
MuniServices against legal liability for damages arising out of claims by City's
employees.
11.5 Indemnity provisions will be incorporated into all contractual arrangements
related to these services, entered into by City and will protect City and
MuniServices to the same extent.
11.6 Upon completion of all services, obligations and duties provided for in the
Agreement, or in the event of termination of this Agreement for any reason, the
terms and conditions of this Article shall survive.
11.7 To the maximum extent permitted by law, MuniServices' liability for City's
damage will not exceed the aggregate compensation received by MuniServices
under this Agreement or the maximum amount of professiona11iabi1ity insurance
required by this Agreement, which ever is greater.
ARTICLE 12 - INDEPENDENT CONTRACTOR
MuniServices undertakes performance of the Services as an independent contractor and
shall be wholly responsible for the methods of performance. City will have no right to
supervise the methods used, but City will have right to observe such performance.
MuniServices shall work closely with City in performing Services under this Agreement.
ARTICLE 13 - COMPLIANCE WITH LAWS
In performance of the Services, MuniServices will comply with applicable regulatory
requirements including federal, state, and 10ca11aws, rules, regulations, orders, codes,
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criteria and standards. MuniServices shall procure the permits, certificates, and licenses
necessary to allow MuniServices to perform the Services.
ARTICLE 14 - NONDISCLOSURE OF PROPRIETARY INFORMATION
MuniServices shall consider the following information proprietary unless it is available
from public sources: (a) all information provided by City; and (b) all drawings, reports,
studies, calculations, specifications, and other documents designed solely for the City and
resulting from MuniServices' performance of the Services. MuniServices shall not
publish or disclose proprietary information for any purpose other than the performance of
the Services without the prior written authorization of City or in response to legal
process.
ARTICLE 15 - TERMINATION OF AGREEMENT
15.1 The obligation to continue Services under this Agreement may be terminated by
either party upon thirty (30) days written notice as provided in this Article.
15.2 City shall have the right to terminate this Agreement or suspend performance
thereof for City's convenience upon written notice to MuniServices, and
MuniServices shall terminate or suspend performance of Services on a schedule
acceptable to City.
15.3 If the CITY terminates this AGREEMENT at any time within twelve (12) months
following the effective date of this AGREEMENT, and LAW FIRM has prepared
and delivered an ordinance update to the CITY's satisfaction (which satisfaction
will not be unreasonably withheld) whether or not the CITY adopts the
recommended update, the CITY shall nevertheless pay MuniServices four (4)
quarterly payments from the commencement of the AGREEMENT to compensate
MuniServices for services rendered. MuniServices shall also be entitled to
additional compensation as described in Article 15.4.
15.4 Upon termination by either party of the AGREEMENT as provided herein,
MuniServices shall be entitled to retain any fees it may have received from the
CITY pursuant to Articles 5.1 and 5.2 of this AGREEMENT. In addition,
MuniServices shall be entitled to payment according to the terms of Article 5.2 for
additional revenues described in this Article, including interest and penalties,
resulting from MuniServices compliance review activities. Within thirty (30)
days following termination, MuniServices shall provide the CITY with a list of
detections of non-compliance resulting from the compliance review activities of
MuniServices. The CITY shall, in good faith, diligently seek to: i) correct such
detections of non-compliance made by MuniServices prior to the date of
termination; and, ii) collect the additional revenues that are due the CITY and
MuniServices for past periods and for the eight quarters going forward following
the correction, even though the date of actual correction may occur after the
termination date. MuniServices shall assist the CITY in this correction/collection
effort, if so requested by the CITY. MuniServices right to compensation for City-
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Specific Audit Activities under Article 5.2 shall survive termination of this
Agreement.
ARTICLE 16 - UNCONTROLLABLE FORCES
16.1 Neither City nor MuniServices shall be considered to be in default of this
Agreement if delays in or failure of performance shall be due to uncontrollable
forces, the effect of which, by the exercise of reasonable diligence, the
nonperforming party could not avoid. The term "uncontrollable forces" shall
mean any event which results in the prevention or delay of performance by a party
of its obligations under this Agreement and which is beyond the control of the
nonperforming party. It includes, but is not limited to, fire, flood, earthquake,
storms, lightening, epidemic, war, riot, civil disturbance, sabotage, inability to
procure permits, licenses, or authorizations from any state, local, or federal
agency or person for any of the supplies, materials, accesses, or services required
to be provided by either City or MuniServices under this Agreement, strikes, work
slowdowns or other labor disturbances, and judicial restraint.
16.2 Neither party shall, however, be excused from performance if nonperformance is
due to uncontrollable forces which are removable or remediable, and which the
nonperforming party could have, with the exercise of reasonable diligence,
removed or remedied with reasonable dispatch. The provisions of this Article
shall not be interpreted or construed to require MuniServices or City to prevent,
settle, or otherwise avoid a strike, work slowdown, or other labor action. The
nonperforming party shall, within a reasonable time of being prevented or delayed
from performance by an uncontrollable force, give written notice to the other
party describing the circumstances and uncontrollable forces preventing continued
performance of the obligations of this Agreement. MuniServices will be allowed
reasonable negotiated extension of time or adjustments for City initiated
temporary stoppage of services.
ARTICLE 17 - MISCELLANEOUS
17.1 A waiver by either City or MuniServices of any breach of this Agreement shall
not be binding upon the waiving party unless such waiver is in writing. In the
event of a written waiver, such a waiver shall not affect the waiving party's rights
with respect to any other or further breach.
17.2 The invalidity, illegality, or unenforceabi1ity of any provision of this Agreement,
or the occurrence of any event rendering any portion or provision of this
Agreement void, shall in no way effect the validity or enforceability of any other
portion or provision of the Agreement. Any void provision shall be deemed
severed from the Agreement and the balance of the Agreement shall be construed
and enforced as if the Agreement did not contain the particular portion or
provision held to be void.
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ARTICLE 18 - INTEGRATION AND MODIFICATION
18.1 This Agreement (consisting of pages 1 to ) b ), and any attachments hereto, is
adopted by City and MuniServices as a complete and exclusive statement of the
terms of the Agreement between City and MuniServices. This Agreement
supersedes all prior agreements, contracts, proposals, representations,
negotiations, letters, or other communications, whether written or oral, between
the City and MuniServices relating to the provision of utility users tax compliance
services by MuniServices or its predecessor Municipal Resource Consultants
(MRC).
18.2 The Agreement may not be modified unless such modifications are evidenced in
writing signed by both City and MuniServices.
ARTICLE 19-5UCCESSORS AND ASSIGNS
19.1 City and MuniServices each binds itself and its directors, officers, partners,
successors, executors, administrators; assigns and legal representatives to the
other party to this Agreement and to the partners, successors, executors,
administrators, assigns, and legal representatives of such other party, in respect to
all covenants, agreements, and obligations of this Agreement.
19.2 Neither City nor MuniServices shall assign, sublet, or transfer any rights under or
interest in this Agreement without the written consent of the other, except to the
extent that the effect ofthis limitation may be restricted by law. Unless
specifically stated to the contrary in any written consent to an assignment, no
assignment will release or discharge the assignor from any duty or responsibility
under this Agreement. Nothing contained in this paragraph shall prevent
MuniServices from employing such independent consultants, associates, and
subcontractors as MuniServices may deem appropriate to assist itself in the
performance of the Services hereunder and in accordance with Article 7.
Notwithstanding the foregoing, MuniServices may assign monies due under this
agreement (whether characterized as an account receivable or otherwise).
19.3 Nothing herein shall be construed to give any rights or benefits to anyone other
than City and MuniServices.
ARTICLE 20 - OTHER GENERAL PROVISIONS
20.1 Interest. Unless the CITY requests in writing additional information regarding the
billing or otherwise disagrees with the billing, the CITY shall pay MuniServices
within thirty (30) days of receipt ofMuniServices billing, or from the date of
agreement on the billing in the event of a written request. Any payment received
after such time period shall accrue monthly interest of one and one-half percent
(1.5%).
PC/CITY /FRMS/ A92502
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20.2 CITY's Determination Final. Whenever the City Councilor a CITY Officer is
empowered under State or local ordinance to make a determination as to whether or
not a tax assessed against a taxpayer is due, for purposes ofthis Agreement that
determination shall be final and binding on the parties hereto.
20.3 Confidentiality. MuniServices agrees that it shall keep all information it receives
concerning CITY taxpayers confidential and shall use it solely for tax compliance
purposes. Services performed by MuniServices prior to termination may result in
the CITY's receipt of revenue after termination. This receipt of revenue entitles
MuniServices to payment from the CITY even after expiration of contract or
termination. The CITY agrees to provide to MuniServices after expiration or
termination of this Agreement such confidential payment information as is
necessary to enable MuniServices to calculate the compensation due to
MuniServices as a result of said receipt of revenue and MuniServices shall
maintain the confidentiality of this information. Therefore, MuniServices shall be
deemed a contractor under Revenue and Taxation Code Section 7284.6 - .7 after
expiration of contract or receipt of notice of termination from the CITY for the
sole and limited purpose of enabling MuniServices to have access to said
information to calculate compensation.
20.4 Notices. Any notice to be given from one party to the other pursuant to this
Agreement shall be deposited with the United States Postal Service postage prepaid,
or with a recognized courier such as Fed-Ex or UPS, and addressed as follows:
To City:
Finance Director
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3255
To Contractor:
MuniServices, LLC
7335 North Palm Bluffs Drive
Fresno, CA 93711
Attn: General Counsel
Nothing in this Paragraph shall be construed to prevent the giving of notice by
personal service.
Remainder of page left blank intentionally.
PC/CITY /FRMS/ A92502
15
ARTICLE 21- EXECUTION
IN WITNESS THEREOF, the parties hereto have made and executed this Agreement as
of the day and year first above written.
CITY OF CUPERTINO
By: &iJ!-I U.{?/ZI/liZ#
Carol A. Atwood
Title: Administrative Services Director
Date:
o .- /:3 - () l
By:
PC/CITY /FRMS/ A92502
16
MUNISrC J( _
By: ~
Marc Herman
Title: President and CEO
Date:
tR/'1/0'7
, ,
LEGAL SERVICES AGREEMENT
1. IDENTIFICATION OF PARTIES. This agreement, executed in duplicate with
each party receiving an executed original, is made between Donald H. Maynor, A
Professional Corporation, hereafter referred to as "LAW FIRM", with a business
address of 235 Catalpa Drive, Atherton, CA 94027, and the City of Cupertino, with an
address of 10300 Torre Avenue, Cupertino, CA 95014, hereafter referred to as "CITY".
This agreement is required by Business and Professions Code Section 6148 and is
intended to fulfill the requirements of that section.
2. LEGAL SERVICES TO BE PROVIDED. The legal services (and other related
services requiring legal expertise) to be provided by LAW FIRM to CITY are as follows:
This agreement is intended primarily to ensure the availability of LAW FIRM to
perform "Revenue Protection Services" to the CITY (as described in Article 2.2 of
Attachment One), and to assist CITY and CITY's consultant (MuniServices) in
connection with legal issues that arise in the audit and compliance activities performed
by MuniServices, all of which are described in the CITY's agreement with MuniServices
entitled" Agreement Between City of Cupertino and MuniServices, LLC for
Professional Services," dated Junl 13 , 2007, and hereafter referred to as the
"MuniServices Agreement", a copy of which is attached hereto as Attachment One.
3. LEGAL SERVICES SPECIFICALL Y EXCLUDED. Legal services that are not
to be provided by LAW FIRM under this agreement specifically include, but are not
limited to, the following: Consultations beyond those legal, tax preservation and
protective services described in Paragraph 2 of this agreement (and as more specifically
described in Article 2.2 of the MuniServices Agreement), and any activity related to
litigation. If CITY wishes that LAW FIRM provide any legal services not to be provided
under this agreement, a separate written agreement between LAW FIRM and CITY will
be required.
4. RESPONSIBILITIES OF LAW FIRM AND CITY. LAW FIRM will perform the
legal, tax preservation and protective services called for under this agreement and
respond promptly to CITY's inquiries and communications. CITY will be truthful and
cooperative with LAW FIRM and timely make any payments required by this
agreement.
5. ATTORNEY CLIENT RELATIONSHIP WITH CITY ONLY. It is
acknowledged that LAW FIRM will work cooperatively with CITY's consultant,
MuniServices, in the providing of services set forth in the MuniServices Agreement, to
the benefit of CITY. It is also understood that CITY, not MuniServices, is the client of
LAW FIRM, and that LAW FIRM provides no legal services directly to MuniServices
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that would establish an attorney/client relationship between LAW FIRM and
MuniServices.
6. ATTORNEY'S FEES. Subject to Article 5.1 of the MuniServices Agreement,
the CITY's total annual fixed fee shall be the greater of: i) one-half percent (0.5%) of the
total UUT revenues received by the CITY (excluding UUT revenues derived from
municipal electricity, water and cable television) based on the prior fiscal year, or ii) ten
thousand dollars ($10,000). CITY shall pay to LAW FIRM a portion of said total annual
fixed fee equal to the greater of: i) one-eighth of one percent (0.125%) of the total UUT
revenues received by the CITY for the prior fiscal year, or ii) five thousand dollars
($5,000). At any time, LAW FIRM and MuniServices may, by mutual agreement, adjust
their proportional share of said total annual fixed fee, provided that such parties shall
receive prior written approval of such adjustment from CITY. Said annual fixed fee
shall be paid in four equal quarterly payments with due dates of: March 31, June 30,
September 30, and December 31. The first quarterly payment shall be due on the next
quarterly due date following the effective date of this agreement.
In the event that any legal services from LAW FIRM are required in connection
with a CITY-specific audit, the cost of such services to the CITY shall be paid by
MuniServices, and MuniServices shall disclose to the CITY the financial arrangement
between MuniServices and LAW FIRM regarding the payment of such costs and how it
effects the fees paid by the CITY.
7. TERMINATION. Either LAW FIRM or CITY may terminate this agreement
by providing thirty (30) days prior written notice to the addresses in Paragraph 1 of this
agreement. If the CITY terminates this agreement at any time within twelve (12) months
following the effective date of this agreement, and LAW FIRM has prepared and
delivered an ordinance update to the CITY's satisfaction (whether or not the CITY
adopts the recommended update), the CITY shall nevertheless pay LAW FIRM four (4)
quarterly payments from the commencement of the agreement, in accordance with
Paragraph 6, to compensate LAW FIRM for services rendered.
8. DISCLAIMER OF GUARANTEE. Nothing in this agreement and nothing in
LAW FIRM's statements to CITY will be construed as a promise or guarantee about the
outcome of CITY's matte. Attorney makes no such promises or guarantees. LAW
FIRM's comments about the outcome of any matter are expressions of opinion only.
Notwithstanding the above, LAW FIRM agrees to perform in a competent and lawyer-
like manner.
9. INSURANCE. LAW FIRM shall maintain a policy of professional liability
insurance, protecting it against claims arising out of negligent acts, errors, or omissions
of LAW FIRM pursuant to this agreement, in an amount of not less than $1,000,000.
LAW FIRM agrees to maintain such insurance at LAW FIRM'S expense in full force and
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effect in a company or companies satisfactory to the City. All coverage shall remain in
effect until termination of this agreement.
Each party is signing this agreement on the date below that party's signature.
CITY OF CUPERTINO
Donald H. Maynor
a Professional Law Corporation
Date: ~- /3-() '7
By:~4~
Title: -1" e GI de J4, f
Date: r;, - 7 - ~ L> () :;z
By: {~~LU t1, Ct!z'U7Jrc#
Carol A. Atwood
Title: Administrative Services Director
CHARLES T. KILIAN
LEGAL COUNSEL
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