AGREEMENT BETWEEN THE COUNTY OF SAN MATEO AND
Hinderliter, de Llamas & Associates

THIS AGREEMENT, entered into this _____ day of _______________ , 20_____, by and between the COUNTY OF SAN MATEO, hereinafter called "County," and Hinderliter, de Llamas & Associates, hereinafter called "Contractor";

W I T N E S S E T H:

WHEREAS, pursuant to Government Code, Section 31000, County may contract with independent contractors for the furnishing of such services to or for County or any Department thereof;

WHEREAS, it is necessary and desirable that Contractor be retained for the purpose of Sales Tax Audit, Recovery and Consulting Services.

NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES HERETO AS FOLLOWS:

Exhibits and Attachments

The following exhibits and attachments are included hereto and incorporated by reference herein:

Exhibit A—Services

Exhibit B—Payments and rates

Attachment I—§504 Compliance

Attachment II—County Declaration Form

Services to be performed by Contractor

In consideration of the payments set forth herein and in Exhibit “B,” Contractor shall perform services for County in accordance with the terms, conditions and specifications set forth herein and in Exhibit “A.”

Payments

In consideration of the services provided by Contractor in accordance with all terms, conditions and specifications set forth herein and in Exhibit "A," County shall make payment to Contractor based on the rates and in the manner specified in Exhibit "B." The County reserves the right to withhold payment if the County determines that the quantity or quality of the work performed is unacceptable. In no event shall the County’s total fiscal obligation under this Agreement exceed three hundred thousand dollars, $300,000.

The County's payment to Contractor is based on a percentage of money the Contractor recovers for the County. Accordingly, the County's payment to Contractor, and the County's maximum fiscal obligation stated herein, is based on the parties' projection of the amount of recovery the County is expected to realize as a result of Contractor's services.

The parties will monitor performance and payments to verify that they are taking place at the projected rate. If trend data indicates that County is likely to recover more revenue than projected, that could cause the County's maximum fiscal obligation to exceed the projection stated in this section 3. In that case, the parties or their designees will meet and confer in an effort to agree upon a revised maximum fiscal obligation, and in the event an agreement is reached, to amend the Agreement accordingly.

Term and Termination

Subject to compliance with all terms and conditions, the term of this Agreement shall be from January 1, 2007 through December 31, 2009. At the end of the three year term and with concurrence from both parties, the County and the Contractor may elect to extend the Agreement for an additional two years, to December 31, 2011.

This Agreement may be terminated by Contractor, the County Manager or his/her designee at any time without a requirement of good cause upon thirty (30) days’ written notice to the other party.

In the event of termination, all finished or unfinished documents, data, studies, maps, photographs, reports, and materials (hereafter referred to as materials) prepared by Contractor under this Agreement shall become the property of the County and shall be promptly delivered to the County. Upon termination, the Contractor may make and retain a copy of such materials. Subject to availability of funding, Contractor shall be entitled to receive payment for work/services provided prior to termination of the Agreement. Such payment shall be that portion of the full payment which is determined by comparing the work/services completed to the work/services required by the Agreement.

Relationship of Parties

Contractor agrees and understands that the work/services performed under this Agreement are performed as an independent Contractor and not as an employee of the County and that Contractor acquires none of the rights, privileges, powers, or advantages of County employees.

Hold Harmless

Contractor shall indemnify and save harmless County, its officers, agents, employees, and servants from all claims, suits, or actions of every name, kind, and description, brought for, or on account of: (A) injuries to or death of any person, including Contractor, or (B) damage to any property of any kind whatsoever and to whomsoever belonging, or (C) any other loss or cost, including but not limited to that caused by the concurrent active or passive negligence of County, its officers, agents, employees, or servants, resulting from the performance of any work required of Contractor or payments made pursuant to this Agreement, provided that this shall not apply to injuries or damage for which County has been found in a court of competent jurisdiction to be solely liable by reason of its own negligence or willful misconduct.

The duty of Contractor to indemnify and save harmless as set forth herein, shall include the duty to defend as set forth in Section 2778 of the California Civil Code.

Assignability and Subcontracting

Contractor shall not assign this Agreement or any portion thereof to a third party or subcontract with a third party to provide services required by contractor under this Agreement without the prior written consent of County. Any such assignment or subcontract without the County’s prior written consent shall give County the right to automatically and immediately terminate this Agreement.

Insurance

The Contractor shall not commence work or be required to commence work under this Agreement unless and until all insurance required under this paragraph has been obtained and such insurance has been approved by Risk Management, and Contractor shall use diligence to obtain such insurance and to obtain such approval. The Contractor shall furnish the Department/Division with certificates of insurance evidencing the required coverage, and there shall be a specific contractual liability endorsement extending the Contractor's coverage to include the contractual liability assumed by the Contractor pursuant to this Agreement. These certificates shall specify or be endorsed to provide that thirty (30) days' notice must be given, in writing, to the Department/Division of any pending change in the limits of liability or of any cancellation or modification of the policy.

(1)

Worker's Compensation and Employer's Liability Insurance The Contractor shall have in effect during the entire life of this Agreement Workers' Compensation and Employer's Liability Insurance providing full statutory coverage. In signing this Agreement, the Contractor certifies, as required by Section 1861 of the California Labor Code, that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of the Code, and will comply with such provisions before commencing the performance of the work of this Agreement.

(2)

Liability Insurance The Contractor shall take out and maintain during the life of this Agreement such Bodily Injury Liability and Property Damage Liability Insurance as shall protect him/her while performing work covered by this Agreement from any and all claims for damages for bodily injury, including accidental death, as well as any and all claims for property damage which may arise from contractors operations under this Agreement, whether such operations be by himself/herself or by any sub-contractor or by anyone directly or indirectly employed by either of them. Such insurance shall be combined single limit bodily injury and property damage for each occurrence and shall be not less than the amount specified below.

Such insurance shall include:

(a)

Comprehensive General Liability . . . . . . . . . . . . . . . . . .

$1,000,000

(b)

Motor Vehicle Liability Insurance . . . . . . . . . . . . . . . . . .

$1,000,000

(c)

Professional Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,000,000

County and its officers, agents, employees and servants shall be named as additional insured on any such policies of insurance, which shall also contain a provision that the insurance afforded thereby to the County, its officers, agents, employees and servants shall be primary insurance to the full limits of liability of the policy, and that if the County or its officers and employees have other insurance against the loss covered by such a policy, such other insurance shall be excess insurance only.

In the event of the breach of any provision of this section, or in the event any notice is received which indicates any required insurance coverage will be diminished or canceled, the County of San Mateo at its option, may, notwithstanding any other provision of this Agreement to the contrary, immediately declare a material breach of this Agreement and suspend all further work pursuant to this Agreement.

Compliance with laws; payment of Permits/Licenses

All services to be performed by Contractor pursuant to this Agreement shall be performed in accordance with all applicable Federal, State, County, and municipal laws, ordinances and regulations, including, but not limited to, the Americans with Disabilities Act of 1990, as amended, and Section 504 of the Rehabilitation Act of 1973, as amended and attached hereto and incorporated by reference herein as Attachment “I,” which prohibits discrimination on the basis of handicap in programs and activities receiving any Federal or County financial assistance. Such services shall also be performed in accordance with all applicable ordinances and regulations, including, but not limited to, appropriate licensure, certification regulations, provisions pertaining to confidentiality of records, and applicable quality assurance regulations. In the event of a conflict between the terms of this Agreement and State, Federal, County, or municipal law or regulations, the requirements of the applicable law will take precedence over the requirements set forth in this Agreement.

Contractor will timely and accurately complete, sign, and submit all necessary documentation of compliance.

10.

Non-Discrimination and Other Requirements

Section 504 applies only to Contractors who are providing services to members of the public. Contractor shall comply with § 504 of the Rehabilitation Act of 1973, which provides that no otherwise qualified handicapped individual shall, solely by reason of a disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination in the performance of this Agreement.

General non-discrimination. No person shall, on the grounds of race, color, religion, ancestry, gender, age (over 40), national origin, medical condition (cancer), physical or mental disability, sexual orientation, pregnancy, childbirth or related medical condition, marital status, or political affiliation be denied any benefits or subject to discrimination under this Agreement.

Equal employment opportunity. Contractor shall ensure equal employment opportunity based on objective standards of recruitment, classification, selection, promotion, compensation, performance evaluation, and management relations for all employees under this Agreement. Contractor’s equal employment policies shall be made available to County of San Mateo upon request.

Violation of Non-discrimination provisions. Violation of the non-discrimination provisions of this Agreement shall be considered a breach of this Agreement and subject the Contractor to penalties, to be determined by the County Manager, including but not limited to

termination of this Agreement;

ii)

disqualification of the Contractor from bidding on or being awarded a County contract for a period of up to 3 years;

iii)

liquidated damages of $2,500 per violation;

iv)

imposition of other appropriate contractual and civil remedies and sanctions, as determined by the County Manager.

To effectuate the provisions of this section, the County Manager shall have the authority to examine Contractor’s employment records with respect to compliance with this paragraph and/or to set off all or any portion of the amount described in this paragraph against amounts due to Contractor under the Contract or any other Contract between Contractor and County.

Contractor shall report to the County Manager the filing by any person in any court of any complaint of discrimination or the filing by any person of any and all charges with the Equal Employment Opportunity Commission, the Fair Employment and Housing Commission or any other entity charged with the investigation of allegations within 30 days of such filing, provided that within such 30 days such entity has not notified Contractor that such charges are dismissed or otherwise unfounded. Such notification shall include the name of the complainant, a copy of such complaint, and a description of the circumstance. Contractor shall provide County with a copy of their response to the Complaint when filed.

Compliance with Equal Benefits Ordinance. With respect to the provision of employee benefits, Contractor shall comply with the County Ordinance which prohibits contractors from discriminating in the provision of employee benefits between an employee with a domestic partner and an employee with a spouse.

F. E.

The Contractor shall comply fully with the non-discrimination requirements required by 41 CFR 60-741.5(a), which is incorporated herein as if fully set forth.

11.

Compliance with Contractor Employee Jury Service Ordinance

Contractor shall comply with the County Ordinance with respect to provision of jury duty pay to employees and have and adhere to a written policy that provides that its employees shall receive from the contractor, on an annual basis, no less than five days of regular pay for actual jury service in San Mateo County. The policy may provide that employees deposit any fees received for such jury service with the contractor or that the contractor deduct from the employees’ regular pay the fees received for jury service.

12.

Retention of Records, Right to Monitor and Audit

(a) CONTRACTOR shall maintain all required records for three (3) years after the COUNTY makes final payment and all other pending matters are closed, and shall be subject to the examination and/or audit of the County, a Federal grantor agency, and the State of California.

(b) Reporting and Record Keeping: CONTRACTOR shall comply with all program and fiscal reporting requirements set forth by appropriate Federal, State and local agencies, and as required by the COUNTY.

(c) CONTRACTOR agrees to provide to COUNTY, to any Federal or State department having monitoring or review authority, to COUNTY's authorized representatives, and/or their appropriate audit agencies upon reasonable notice, access to and the right to examine all records and documents necessary to determine compliance with relevant Federal, State, and local statutes, rules and regulations, and this Agreement, and to evaluate the quality, appropriateness and timeliness of services performed.

13.

Confidentiality

On March 2, 2004, the County adopted Resolution 66528, in a form acceptable to the State Board of Equalization and in compliance with Section 7056 of the Revenue and Taxation Code, authorizing Contractor to examine the confidential sales tax records of the County. County agrees to provide any information or assistance that may readily be available with the County and to provide Contractor with proper identification for contacting businesses.

Section 7056 of the State of California Revenue and Taxation code specifically limits the disclosure of confidential taxpayer information contained in the records of the State Board of Equalization. This section specifies the conditions under which a County may authorize persons other than County officers and employees to examine State sales and use tax records.

The following conditions specified in Section 7056(b)(1) of the State of California Revenue and Taxation Code are hereby made part of this contractual agreement:

(A) Contractor is authorized by this Agreement to examine sales or transactions and use tax records of the Board of Equalization provided to County pursuant to contract under the Bradley-Burns Uniform Sales and Use Tax law.

(B) Contractor is required to disclose information contained in, or derived from, those sales or transactions and use tax records only to an officer or employee of the County who is authorized by resolution to examine the information.

(C) Contractor is prohibited from performing consulting services for a retailer, as defined in California Revenue and Taxation Code Section 6015, during the term of this agreement.

(D) Contractor is prohibited from retaining the information contained in, or derived from those sales or transactions and use tax records, after this Agreement has expired.

Information obtained by examination of Board records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the County as set forth by resolution adopted pursuant to Section 7056(b) of the Revenue and Taxation Code. The resolution shall designate the Contractor as a person authorized to examine sales and use tax records and certify that this Agreement meets the requirements set forth above and in Section 7056(b)(1) of the Revenue and Taxation Code.

14.

Proprietary Information

In performing its duties under this contract, Contractor will employ methodologies, formulae, programs, techniques and other processes designed and developed by Contractor at a substantial expense. Contractor’s reports, technical information, compilations of data, methodologies, formulae, programs, techniques and other processes designed and developed by Contractor shall be referred to as Proprietary Information. Contractor’s Proprietary Information is not generally known by the entities with which Contractor competes.

Contractor desires to protect its Proprietary Information. Accordingly, County agrees that neither it nor any of its employees, agents, independent contractors or other persons or organization over which it has control, will at any time during or after the term of the Agreement, directly or indirectly use any of Contractor’s Proprietary Information for any purpose not associated with Contractor’s activities. Further, County agrees that neither it nor any of its employees, agents, independent contractors or other persons or organizations over which it has control, will disseminate or disclose any of Contractor’s Proprietary Information to any person or organization not connected with Contractor, without the express written consent of Contractor. The County also agrees that it will undertake all necessary and appropriate steps to maintain the proprietary nature of Contractor’s Proprietary Information.

This section is subject to all applicable provisions of state and federal law, including but not limited to the California Public Records Act.

15.

Merger Clause

This Agreement, including the Exhibits attached hereto and incorporated herein by reference, constitutes the sole Agreement of the parties hereto and correctly states the rights, duties, and obligations of each party as of this document's date. In the event that any term, condition, provision, requirement or specification set forth in this body of the agreement conflicts with or is inconsistent with any term, condition, provision, requirement or specification in any exhibit and/or attachment to this agreement, the provisions of this body of the agreement shall prevail. Any prior agreement, promises, negotiations, or representations between the parties not expressly stated in this document are not binding. All subsequent modifications shall be in writing and signed by the parties.

16.

Controlling Law

The validity of this Agreement and of its terms or provisions, as well as the rights and duties of the parties hereunder, the interpretation, and performance of this Agreement shall be governed by the laws of the State of California.

17.

Notices

Any notice, request, demand, or other communication required or permitted hereunder shall be deemed to be properly given when deposited in the United State mail, postage prepaid, or when deposited with a public telegraph company for transmittal, charges prepaid, addressed to:

In the case of County, to: County of San Mateo

County Manager’s Office

400 County Center, 1^st Floor

Redwood City, CA 94063

In the case of Contractor, to: Hinderliter, de Llamas & Associates

1340 Valley Vista Drive, Ste. 200

Diamond Bar, CA 91765

IN WITNESS WHEREOF, the parties hereto, by their duly authorized representatives, have affixed their hands.

COUNTY OF SAN MATEO

By:

President, Board of Supervisors, San Mateo County

Date:

ATTEST:

By:

Clerk of Said Board

Hinderliter, de Llamas & Associates

Contractor’s Signature

Date:

EXHIBIT “A”

AGREEMENT BETWEEN COUNTY OF SAN MATEO

AND HINDERLITER, DE LLAMAS & ASSOCIATES

In consideration of the payments set forth in Exhibit “B”, Contractor shall provide the following services:

A. Sales Tax and Economic Analysis

1. Contractor shall establish a special database that identifies the name, address and quarterly allocations of the major sales tax producers within the County for the most current quarters from the date of this agreement. Major sales tax producers are defined as those businesses meeting a quarterly revenue threshold determined by County. Since 100% of the business outlets registered with the Board of Equalization are tracked monthly, this major producers database is designed to highlight the activities of major businesses. A second database covering the same period will be established showing total sales tax receipts for each business category identified by the Board of Equalization. These databases will be utilized to generate special reports to the County on: major sales tax producers by rank and category, analysis of sales tax activity by category and business districts or redevelopment areas specified by County, analysis of reporting aberrations, and per capita and outlet comparisons with statewide sales.

2. Contractor shall provide updated reports each quarter identifying changes in sales by major outlets and by category; area growth and decline comparisons; and current graphics, tables, and top 100 listings. Quarterly aberrations due to State audits, fund transfers, and receivables along with late or double payments will be identified.

3. Contractor shall provide annual reports for the County identifying historical growth comparisons with state, county, selected county averages and C.P.I. indices; top producer listings, and make up the volatility of the economic base. Annual reconciliation worksheets to assist Finance Officers with budget forecasting will also be provided.

4. Contractor shall make available to County staff the Contractor's computer program and database containing seller’s permit information for all in-county business outlets registered with the Board of Equalization. In addition, contractor shall process for County the monthly registration and allocation files provided by the Board in magnetic media. Printouts of registration changes and dollars allocated by business name and number will be provided from these files on a monthly basis.

B. Allocation Audit and Recovery

1. Contractor shall conduct ongoing sales tax audits in order to identify and correct “point-of-sale” distribution errors and thereby generate previously unrealized sales tax income for the County. Common errors that will be monitored and corrected include: transposition errors resulting in misallocations; erroneous consolidation of multiple outlets; misreporting of “point of sale” from the wrong location; delays in reporting new outlets; misidentifying transactions as a “use tax” rather than a “sales tax.” And erroneous fund transfers and adjustments.

2. Contractor will initiate contracts with the appropriate sales management and accounting officials in companies that have businesses, where a probability of error exists to verify whether current tax receipts accurately reflect the local sales activity. Such contracts will be conducted in a manner to encourage local business retention and expansion.

3. Contractor shall prepare and submit to the Board of Equalization all information necessary; to correct any allocation errors that are identified and shall follow-up with the individual businesses and the State Board of Equalization to ensure that all back quarter payments due the County are recovered.

C. Ongoing Consultation

1. Contractor shall work with the County on questions related to tenant mix alternatives for maximum sales tax returns; provide sales tax projections on specific projects for County budget purposes; and provide sample reports, letters and programs to enhance the sales tax base through improved economic development efforts.

EXHIBIT “B”

AGREEMENT BETWEEN COUNTY OF SAN MATEO

AND HINDERLITER, DE LLAMAS & ASSOCIATES

In consideration of the services provided by Contractor in Exhibit “A”, County shall pay Contractor based on the following fee schedule:

A. Contractor shall be paid 15% of all new sales and/or use tax revenue received by the County as a direct result of audit and recovery work performed by Contractor (hereafter referred to as “audit fees”). New sales and/or use tax revenue shall not include any amounts determined by County or Contractor to be increment attributable to causes other than Contractor’s work pursuant to this agreement. In the event that Contractor is responsible for an increase in the tax reported by businesses already properly making tax payments to the County, it shall be Contractor’s responsibility to separate and support the incremental amount attributable to its efforts prior to the application of the audit fee. Said audit fees will apply to State fund transfers received for back quarter reallocations and monies received for the first eight consecutive reporting quarters following completion of the audit by Contractor, and confirmation of corrections by the State Board of Equalization. Contractor shall provide County with an itemized quarterly invoice showing all formula calculations and amounts due for audit fees.

Contractor shall obtain County approval prior to beginning the work of correcting tax reporting methodology or “point of sale” for specific businesses where said payment of the percentage fee will be expected. Said approval shall be accomplished by the County Manager or his designated representative on the Sales Tax Audit Authorization form. County shall pay audit fees upon Contractor’s submittal of evidence of State fund transfers and payments to County from businesses identified in the audit and approved by the County.

The above sum shall constitute full reimbursement to Contractor and covers all direct and indirect costs incurred by the Contractor under the agreement, including: salaries of Contractor’s employees; travel expenses connected with contacting local and out-of-state businesses and Board of Equalization representatives; quarterly reports; software; and optional monitoring of the County’s various transaction taxes.