1994-0920_HINDERLITER, DELLAMAS/ASSOC_AgreementAGREEMENT FOR CONSULTING SERVICES
SALES AND USE TAX AUDIT AND INFORMATION SERVICES
AGREEMENT is made and entered into this 20th day of September, 1994, by and
between TBE CITY OF SAN JUAN CAPISTRANO, a municipal corporation hereinafter called
"CITY," and HINDERLITER, DE LLAMAS AND ASSOCIATES a California Corporation,
called "CONSULTANT."
WITNESSETH
sales tax revenues can be increased through: a system of continuous monitoring,
and correction of"point of sale" allocation errors; and
an effective program of sales tax management will improve identification of sales tax
!s as they relate to economic development and provide for more accurate sales tax
and
WHEREAS, City desires the combination of data entry, report preparation, and data analysis
necessary o effectively manage the municipal sales tax base and recover revenues erroneously
allocated t other jurisdictions and allocation pools; and
WHEREAS, Consultant has the programs, equipment and personnel required to deliver the sales tax
services re renced herein;
NOW, TH�REFORE, City and Consultant, for the consideration hereinafter described, mutually
agree as fol ows:
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Te considerations of work on the project shall be governed by the conditions contained
herein. I general, the tasks delineated herein are to be performed with minimum direction and
assistance from City.
Aq work performed by Consultant, however, shall be subject to review and approval of the
City Maner, or his designee at all times.
to the terms and conditions to this Agreement, Consultant shall perform the tasks as
set forth in Exhibit A.
D ng the performance of the above tasks, Consultant shall have access to existing data in
City files Oil City shall provide copies of any such data Consultant requests at no cost to Consultant.
Th services provided under this Agreement shall begin upon execution of this Agreement by
all parties. City may, without cause, terminate this Agreement at any time prior to completion by
Consultant of any of the Services required hereunder. Notice of Termination of this Agreement shall
be given in writing to Consultant, and shall be sufficient to complete when same is deposited in the
U.S. Mail, first class postage prepaid.
Th s Agreement may be terminated by either party by giving 30 days written notice to the
other of s ch termination and specifying the effective date thereof. Upon the presentation of such
notice, C nsultant may continue to work through the date of termination. Upon termination as
provided h rein, Consultant shall be paid the value of all tax analysis and reporting work performed
less payme is previously made by City. In ascertaining the value of the work performed up to the date
of terminati n, consideration shall be given to amounts due for any unpaid invoices, and to businesses
identified b Consultant which make tax payments after termination of this Agreement as a result of
Consultant' work. After City receives said tax payments for such businesses, Consultant shall be paid
the audit f s resulting from tax payments made by the business for back quarter reallocations and
the first ei ht consecutive reporting quarters following completion of the audit by Consultant and
confirmati n of corrections by the State Board of Equalization. Compensation for any audit work
previously authorized and satisfactorily performed shall be made at the times provided in the
preceding ction entitled "Payment for Consultant's Services."
All documents, data, surveys and reports prepared by Consultant pursuant to this Agreement
shall be considered the property of the City and upon payment for services performed by Consultant,
such docu ents and other identified materials shall be delivered to City by Consultant.
under this Agreement shall be as follows:
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A.C nsultant shall establish the sales tax and audit data bases and shall provide the monthly and
qu erly updates referenced above for a fee of $350.00 per month, invoiced quarterly
(h reafter referred to as "monthly fee").
Th�ee (3) copies of itemized bills, clearly indicating the monthly period for which the billing
is made, Od including dates on which expenses (except costs for reproduction and telephone) were
incurred, shall be submitted to: City of San Juan Capistrano, Attn: Administrative Services Director,
32400 Pa*o Adelanto, San Juan Capistrano, California 92675.
B. C sultant shall be further paid 15% of all new Sales and/or Use tax revenue received by the
Ci as a result of audit and recovery work performed by Consultant (hereafter referred to as
" dit fees"). New sales and\or use tax revenue shall not include any amounts determined by
Ci y or Consultant to be increment attributable to causes other than Consultant's work
psuant to this agreement. In the event that Consultant is responsible for an increase in the
to reported by businesses already properly making tax payments to the City, it shall be
Co sultant's responsibility to separate and support the incremental amount attributable to its
e its prior to the application of the audit fee. Said audit fees will apply to state fund
tra sfers received for back quarter reallocations and monies received in the first eight
co secutive reporting quarters following completion of the audit by Consultant and
co rmation of corrections by the State Board of Equalization. Consultant shall provide City
wit an itemized quarterly invoice showing all formula calculations and amounts due for audit
isultant shall obtain City approval prior to beginning the work of correcting tax reporting
hodology or "point of sale" for specific businesses where said payment of the percentage
will be expected. Said approval shall be accomplished by the City Administrator or his
gnated representative on the Sales Tax Authorization form, as identified in Exhibit B. City
II pay audit fees upon Consultant's submittal of evidence of State Fund Transfers and
ments to City from businesses identified in the audit and approved by the City.
C. Ab ve sum shall constitute full reimbursement to Consultant for all direct and indirect
ex nses incurred by Consultant in performing audits including the salaries of Consultant's
emloyees, and travel expenses connected with contacting local and out-of-state businesses
and Board of Equalization representatives.
Co sultant warrants that Hinderliter, de Llamas and Associates has not employed or retained
any comp or person, other than a bona fide employee working for Consultant, to solicit or secure
this Agre ent, that Hinderliter, de Llamas and Associates has not paid or agreed to pay any
company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee,
gift or any other consideration, contingent upon or resulting from the award or making of this
Agreement. For breach of violation of this warranty, City shall have the right to annul this Agreement
without lial ility, or, at its sole discretion, to deduct from the Agreement price or consideration, or
otherwise -ecover, the full amount of such fee, commission, percentage, brokerage fee, gift or
contingent be.
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C nsultant acknowledges City is under no obligation to compensate Consultant for services
rendered r expenses accrued under this Agreement in excess of the maximum compensation
specified i Section 4.
tracings, plans, specifications, maps or other documents prepared or obtained under the
terms oft is Agreement shall be delivered to, and become the property of, City, and basic survey
notes and sketches, charts, computations and other data prepared or obtained under this Agreement,
shall be made available upon request, to City without restriction or limitation on their use.
Se tion 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
Equalizati n. This section specifies the conditions under which a City may authorize persons other
than City fficers 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. Consultant is authorized by this Agreement to examine sales or transactions and use tax
records of the Board of Equalization provided to City pursuant to contract under the Bradley -
Burns Uniform Sales and Use Tax Law.
B. Consultant 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 City who is authorized
by resolution to examine the information.
C. Consultant is prohibited from performing consulting services for a retailer, as defined in
Calforma Revenue & Tax Code Section 6015, during the term of this agreement.
D. Cosultant is prohibited from retaining the information contained in, or derived from those
sal s or transactions and use tax records, after this Agreement has expired. Information
obined by examination of board records shall be used only for purposes related to collection
of I cal sales and use tax or for other governmental functions of the City as set forth by
res lution adopted pursuant to Section 7056 (b) of the Revenue and Taxation Code. The
resolution shall designate the Consultant 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
705 (b), (1) of the Revenue and Taxation Code.
In performing its duties under this contract, Consultant will produce reports, technical
1tioO and other compilations of data to City. These reports, technical information and
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compilatiosof data are derived by Consultant using methodologies, formulae, programs, techniques
and other rocesses designed and developed by C Consultant at a substantial expense. Consultant's
reports, t hnical information, compilations of data, methodologies, formulae, programs, techniques
and other processes designed and developed by Consultant shall be referred to as Proprietary
Informatio. Consultant's Proprietary Information is not generally known by the entities with which
Consultancompetes.
C sultant desires to protect its Proprietary Information. Accordingly, City agrees that neither
it nor any f its employees, agents, independent consultants or other persons or organizations over
which it control, will at any time during or after the term of the Agreement, directly or indirectly
use any o Consultant's Proprietary Information for any purpose not associated with Consultant's
activities. Purther, City agrees that it nor any of its employees, agents, independent contractors or
other per ons or organizations over which it has control, will disseminate or disclose any of
Consultants Proprietary Information to any person or organization not connected with Consultant,
without t express written consent of Consultant. The City also agrees that it will undertake all
necessary and appropriate steps to maintain the proprietary nature of Consultant's Proprietary
Fo� the duration of this Agreement, Consultant shall not act as consultant or perform services
of any kind for any person or entity in regard to this project without the prior written consent of City.
No additional fee shall be paid by City for additional consulting services not included in this
Agreement without the written approval of the City prior to undertaking such work. In the event of
suspension of project by City, Consultant shall have the right to renegotiate fees if delay is greater
than six (61 months.
Uness otherwise specified herein, any dispute over a question of fact arising under this
Agreement which cannot be resolved by agreement between the parties may be, by mutual consent
of the p ies, submitted to a "Board of Arbitration" consisting of three (3) arbitrators having
expertise relating to this contract subject matter, one of whom shall be selected by each of the parties,
and the third by the two members selected by the parties.
Ea of the parties shall pay the member selected by it, and the compensation of the third
member 1 be paid equally by the parties. The parties shall be bound by the decision of the Board
of Arbitrati n.
Nei her any part nor all of this Agreement may be assigned or subcontracted, except as
otherwise s ecifi, lly provided herein, or to which City, in its sole discretion, consents to in advance
thereof in riting. Any assignment or subcontracting in violation of this provision shall be void.
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At all times during the term of this Agreement, Consultant shall be an independent contractor
and shall not be an employee of City. City shall have the right to control Consultant only insofar as
the results of Consultant's services rendered pursuant to this Agreement; however, City shall not have
the right to control the means by which Consultant accomplishes services rendered pursuant to this
Al persons employed to provide services under this Agreement shall be employee or
contractor of Consultant and shall not be deemed employees of City for any reason or purpose.
shall be r sponsible for providing worker's compensation insurance coverage for all persons
employed o perform services under this Agreement.
SE TION 15. CONSULTANT NOT AN AGENT.
Ex pt as City may specify in writing, consultant shall have no authority, express or implied,
to act on b half of City in any capacity whatsoever as an agent. Consultant shall have no authority,
express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.
agrees to assign the following person/persons to perform the tasks set forth in this
Hinderliter
dtant shall not unilaterally alter the assignment of the above personnel without the
of the City Manager or his designee.
City shall have the unrestricted right to order the removal of any person/persons assigned by
Consultant by giving oral or written notice to Consultant to such effect.
Cit shall adopt a resolution in a form acceptable to the State Board of Equalization and in
compliance 'th Section 7056 of the Revenue and Taxation Code, authorizing Consultant to examine
the confide tial sales tax records of City. City further agrees to provide any information or assistance
that may r adily be available such as business license records within the City and to provide
Consultant 'th proper identification for contacting businesses. City further agrees to provide copies
of the mont y allocation reports received for the most recent five quarters from the execution of this
agreement and to continue to provide copies of future allocation reports on computer readable
magnetic m dia until such time as all audit adjustments have been completed by the State Board of
Equalizatio and percentage reimbursements due the Consultant have been paid.
shall be responsible for all injuries to persons and for damages to real or personal
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property o City, caused by or resulting from any activity or operation of Consultant, its employees
or its agen s during the progress of or connected with the rendition of services hereunder. Consultant
shall defen and hold harmless and indemnify City and all officers and employees of the City from all
costs and claims for damages to real or personal property or personal injury to any third party
resulting om the activity of itself, employees or its agents.
S TION 19. INSURANCE REQUIREMENTS.
Th following shall be required of Consultant and of each subcontractor employed by
Consultan to perform services under this Agreement. Consultant shall supply evidence of valid,
current co erage in all specified areas for all services covered by this Agreement, whether performed
by Consul nt or by subcontractors of Consultant.
1. Comprehensive General Liability. Consultant shall maintain in full force and effect
Comprehe sive general liability coverage, including premises operations, products/completed
operations, Broad form property damage, and blanket contractual liability in the following minimum
amounts:
$500,000 property damage;
$500,000 injury to one person/any one occurrence/not limited to
contractual period;
$1,000,000 injury to more than one person/any one occurrence/not
limited to contractual period.
II. Comprehensive Automobile Liability. Consultant shall maintain in full force and effect
comprehen ive automobile liability coverage, including owned, hired, and non -owned vehicles in the
following inimum amounts:
$500,000 property damage:
$500,000 injury to one person/any one occurrence/not limited to
contractual period;
$1,000,000 injury to more than one person/any one occurrence/not
limited to contractual period.
III. Worker's Compensation. If Consultant intends to employ employees to perform
services un r this Agreement, Consultant shall obtain and maintain, during the life of this Agreement,
Worker's C mpensation Employer's Liability Insurance in the statutory amount as required by state
law.
This policy/policies shall not terminate, nor shall they be cancelled, nor the coverage reduced,
until after 3 days written notice is given to the City.
shall provide an endorsement to City establishing that City has been legally added
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as an additional named insured to the insurance policies required under this Agreement.
Consultant shall submit proof of insurance requirements under this Agreement to the City
Clerk's o ce prior to beginning any work under this Agreement.
shall not receive any compensation until all insurance provisions have been
satisfied.
Co ultant represents and warrants to City that he has all licenses, permits, qualifications and
approvals of whatever nature that are legally required to practice his profession. Consultant
represents and warrants to City that Consultant shall, at his sole cost and expense, keep in effect at
all times d 'ng the term of this Agreement, any license, permit or approval which is legally required
for Consultant to practice his profession.
Pu uant to Council Policy, it has been determined that the services to be rendered under the
provisions of this Agreement are excluded by the requirement of filing a Financial Disclosure
Statement y California Administrative Code Section 18700 (2) (A) and (B).
Consultant xnifies that to the best of its knowledge, no City employee or office of any public agency
interest in this Agreement has any pecuniary interest in the business of Consultant and that no person
associated with Consultant has any interest that would conflict in any manner or degree with the
performance of this Agreement. Consultant represents that it presently has no interest and shall not
acquire any interest, direct or indirect, which could conflict in any manner or degree with the faithful
performance of this Agreement. Consultant is familiar with the provisions of Government Code
Section 87'00 and following, and it certified that it does not know of any facts which constitute a
violation ol said provisions. Consultant will advise the City if a conflict arises.
In the event a legal action is commenced to enforce any of the provisions of this Agreement,
the prevaili g party shall be entitled to recover its costs and reasonable attorney's fees.
T4 laws of the State of California shall govern the rights, obligations, duties and liabilities
of the parti s to this Agreement and shall also govern the interpretation of this agreement.
All notices required by this Agreement shall be given to City and Consultant in writing, by
personal delivery or first class mail postage prepaid, addressed as follows:
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CITY OF SAN JUAN CAPISTRANO
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
HINDERLITER, DE LLAMAS, & ASSOCIATES
1340 Valley Vista Drive, Suite 200
Diamond Bar, CA 91765
A and B are attached to and incorporated in this service agreement by reference.
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IN�WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year
first herei above written.
"CONS TANT"
HINDE ITER, DE LLAMAS & ASSOCIATES
A Califo a Corporation
Robert
"CITY"
CITY OF SAN JUAN CAPISTRANO
ayor C ell
Approved s to form: Attest:
) ( �JL I eL a
0`
card K. benhalter, City Attorney Cheryl John y Clerk
9919
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EXHIBIT A
SCOPE OF TASKS
The Consultant shall perform the following services:
A. S*s tax and economic analysis
1.onsultant shall establish a special data base that identifies the name, address and quarterly
all ations of the major sales tax producers within the City for the most current and previous
fo quarters from the date of this agreement. Major sales tax producers are defined as those
bu finesses from
a quarterly revenue threshold determined by City. Since 100% of the
bu iness outlets registered with the Board of Equalization are tracked monthly, this major
pr ucers data base is designed to highlight the activities of major businesses. A second data
ba covering the same period will be established showing total sales tax receipts for each
bu ness category identified by the Board of Equalization. These data bases will be utilized
to generate special reports to the City on: major sales tax producers by rank and category,
analysis of sales tax activity by category and business districts or redevelopment areas
specified by City, analysis of reporting aberrations, and per capita and outlet comparisons
witT state wide sales.
2. onsultant shall provide updated reports each quarter identifying changes in sales by major
out is 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
alo g with late or double payments will be identified.
3. Consultant will additionally provide an analysis for the City or its Redevelopment Agency
to s e with Chambers of Commerce and other economic development interest groups that
an yze City's sales tax trends by major groups, and geographic areas without disclosing
co idential information.
4. onsultant will provide annual reports for the Administrator and City Council identifying
hist rical growth comparisons with state, county, selected city averages and C.P.I. indices;
top roducer listings and make up and volatility of the economic base. Annual reconciliation
wo sheets to assist Finance Officers with budget forecasting will also be provided.
'.Consultant shall make available to City Staff the HdL DATA computer program and data
has containing sellers permit information for all in -city business outlets registered with the
Bo4d of Equalization. In addition, contractor shall process for City the monthly registration
and allocation files provided by the Board in magnetic media. Printouts of registration
ch ges and dollars allocated by business name and number will be provided from these files
on a monthly basis.
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B. Allocation Audit and Recovery
Consultant shall conduct an initial and on-going sales tax audit in order to identify and
rect "point-of-sale" distribution errors and thereby generate previously unrealized sales tax
ame for the City. Common errors that will be monitored and corrected include:
isposition errors resulting in misallocations; erroneous consolidation of multiple outlets;
reporting of "point-of-sale" from the wrong location; delays in reporting new outlets;
identifying transactions as a "use tax" rather than a "sales tax," and erroneous fund
isfers and adjustments.
2. Consultant will initiate contacts with the appropriate sales management and accounting
ocials in companies that have businesses where a probability of error exists to verify
wh ther current tax receipts accurately reflect the local sales activity. Such contacts will be
co ducted in a manner to encourage local business retention and expansion.
Consultant shall prepare and submit to the Board the Equalization all information
;ssary to correct any allocation errors that are identified and shall follow-up with the
✓idual businesses and the State Board of Equalization to ensure that all back quarter
nents due the City are recovered.
4. f during the course of its audit, Consultant finds businesses located in the City that are
pro erly reporting sales tax but have the potential for modifying their operation to provide
an even greater share to the City, Consultant will work with those businesses and the City to
enc urage such changes.
C. On�Goina Consultation
Co sultant shall work with City and City Redevelopment Agency Staffs on questions related
to t nant mix alternatives for maximum sales tax returns; advise City business license staff on
utilization of reports to enhance business license collection efforts; provide sales tax
prof ions on specific projects for redevelopment negotiation and city budget purposes; and
pro 'de sample reports, letters and programs to enhance the sales tax base through improved
economic development efforts.
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EXHIBIT B
Sales Tax Audit
Work Authorization No.
The followfng business or businesses, located in the City of San Juan Capistrano, have been identified
as having t e potential for generating additional sales tax revenue to the City of San Juan Capistrano.
Consultant is hereby authorized to contact the given business(es) and the State Board of Equalization
to verify the accuracy of the current reporting methodology and obtain the necessary documentation
for the BOrd of Equalization, to modify allocation formulas, and to return previous misallocated
revenue th t may be due to City.
Consultant�mpensation shall be 15% of the new sales and/or use tax revenue received by the City
as a resul of audit and recovery work performed by Consultant, as set forth in the Agreement
between G nsultant and City.
CITY OF $AN JUAN CAPISTRANO
By:
Its:
Date
By:
Its:
Date
DE LLAMAS AND ASSOCIATES
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motion carried by the following vote:
AYES: Council Members Hausdorfer, Jones, Nash, Vasquez, and Mayor Campbell
NOES: None
ABSENT: None
City Clerk was directed to forward the Resolution to the County Recorder.
Council recessed at 7.33 p.m. to convene the San Juan Capistrano Community Redevelopment Agency, and
reconvene at 7:34 p.m.
)rt dated September 20, 1994, from Douglas Dumhart, Management Assistant II, recommending
the City contract with Hinderliter, de Llamas & Associates to provide services to continuously
tor, identify, and correct point-of-sale allocation errors to facilitate an increase in sales and use tax
lues to the Citv.
It was moved by Council Member Hausdorfer, seconded by Council Member Jones, and unanimously
caried that the Agreement for Consultant Services with Hinderliter, de Llamas & Associates be
ap roved in the amount of $350 per month, including 15% of all new sales and/or use tax revenues
received by the City as a result of their services, for the provision of sales and use tax audit and
inf rmation services. The Mayor was authorized to execute the Agreement on behalf of the City.
It was moved by Council Member Hausdorfer, seconded by Council Member Jones, that the following
Re olution be adopted:
RESOLUTION NO. 94-9-20-4. AUTHORIZING ACCESS TO SALES AND I ISE
TAX RECORDS - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN JUAN CAPISTRANO, CALIFORNIA, AUTHORIZING ACCESS TO SALES
AND USE TAX RECORDS PURSUANT TO REVENUE AND TAXATION CODE
SECTION 7056
City Council 41nutes -6- 9/20/94
motion carried by the following vote:
AYES: Council Members Hausdorfer, Jones, Nash, Vasquez, and Mayor Campbell
NOES: None
ABSENT. None
Report dated September 20, 1994, from the Planning Director, forwarding the draft General
Development Plan and the Draft Environmental Impact Report #548 for the Prima Deshecha
Canada Landfill for consideration of amendments to mitigate adverse impacts from the project
to the City.
Revised draft Resolution.
Memorandum dated September 20, 1994, from the Deputy City Clerk noting that Laurie West,
member of the Rancho San Juan Homeowners Association, phoned to voice her opposition to
the County's proposal for the Prima Deshecha landfill.
Letter dated September 20, 1994, from George Gajdos, 31391 Via Las Palmas, in opposition
to the County's proposal for the Prima Deshecha landfill because of the resulting increase in
traffic on Ortega Highway.
Mr Tomlinson reviewed the three major issues the City has with regard to the County's future plans for
th Prima Deshecha landfill 1) major encroachment within the City's designated ridgelines, 2)
si ficant increase in traffic on Ortega Highway, and 3) noise impacts resulting from the increase in
trc. William Ramsey, Senior Planner, spoke regarding the Planning Commission's recommendation
to equine that the County provide an alternative access to San Clemente, with La Pata to serve as an
en ante to the landfill and Camino de los Mares to serve as an exit, to split the distribution of traffic to
the andfil1. A slide presentation was given showing views of the proposed landfill grading operations
Froo Rancho Viejo Road and Ortega Highway, from La Novia Avenue and Ortega Highway, from
Sh etree Lane, and from the Forster Planned Community in San Clemente. Mr. Tomlinson advised that
he and Bill Ramsey met with Jim Holloway, Director of Planning, and Jim Barnes of the City of San
Cl te. He stated that all parties agreed that both cities should coordinate their effects to mmmuze
the erre impacts from the landfill operation on the cities and urge that the County adopt the reduced
heiiht alternative.
Co cil Member Jones inquired about the intersection of La Pata and Ortega Highway and the potential
for Antonio Parkway eventually connecting to La Pata. Mr. Tomlinson advised there was no time frame
to (Ionstruct the connection but that the County had instituted an alignment study. He noted that the
fi cited in the project's Environmental Impact Report assumed that this arterial network would be
City Council Minutes -7- 9/20/94
TO:
FROM:
SUBJ
0
September 20, 1994
George Scarborough, City Manager
Douglas D. Dumhart, Management Assistant II
Agreement for Sales and Use Tax Audit and Information Services
By motion, approve the Agreement for Sales and Use Tax Audit and Information Services,
execute the resolution authorizing access to sales and use tax records, and appropriate
$3,150 tol account #01-62121-4141 from fund balance reserves.
The City !aJuan Capistrano has been experiencing declining sales and use tax
revenues ora iety of reasons. One way sales and use tax revenues can be increased
is throug a system of continuous monitoring, identification and correction of "point-of-
sale" alto ation errors. An effective program of sales and use tax management will
improve i entification of sales tax opportunities as they relate to economic development
and provi ing for more accurate sales and use tax forecasting. This task is accomplished
by a co bination of data entry, report preparation, and data analysis necessary to
effectivel manage the municipal sales tax base and recover revenues erroneously
allocated to other jurisdictions and allocation pools. The City lacks the staff resources,
specializ d programs and equipment to effectively implement and maintain a sales and
use tax onitoring program. Additionally, by utilizing a Consultant to implement this
program, t e City will benefit from specialized expertise. Therefore, staff is recommending
the City C uncil approve an agreement for these services at this time.
Cities and counties each year lose one percent to five percent of their sales tax revenue
through taxpayer error in reporting "point-of-sale" either by misreporting the sale to another
jurisdictionj or by misinterpreting the sale as a "use in transaction" that is allocated to pools
rather than to the agency. Further, because it is not cost-effective to invest in the "in-
house" st ff, training and start-up costs needed to fully monitor and maximize sales and
use tax re nues, agencies are often at a disadvantage in economic and redevelopment
FOR CRY COUNCIL AGEN G 1 a__
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Agenda I em -2- September 20, 1994
planning ue to the inability to accurately identify the true revenue value of businesses for
which th y are negotiating. The most common causes of misallocations can be divided
accordin to the four business classifications retailers, lessors, contractors, and
Most peo le who have reason to be interested in sales tax and sales tax misallocations
tend to ocus on the retailers. And while the discount clubs, super regional malls,
departme t stores, car dealerships and other major retailers account for much of the sales
tax, they re usually not reporting in error since retail store sales are easy for the State
Board of qualization (SBE) to audit and for the taxpayer to report properly. Consequently,
the SBE oes an excellent job of minimizing sales tax allocations for retail store accounts.
When ret ilers do report in error, it is typically for one of the following reasons:
�r Convenience - As an example of an owner convenience reporting error, the
r of a retail operation does all of his/her bookkeeping and tax filing from
Dr home. Thus he registers his/her California Sales and Use Tax Permit, for
it own convenience, to his/her home address. The problem stems from the fact
the taxpayer's home is in a different jurisdiction than his/her business.
equently, the local allocation is sent to his/her home rather than to the
iction where the sales occur.
• Un a orted Moves - This reporting error occurs when the taxpayer moves his/her
bu iness to another jurisdiction, but fails to notify the SBE. The old location
co tinues to receive the allocation rather than the new location where the sales
tak place.
• Man Store with Branch Locations - This reporting error occurs when the taxpayer
expands his/her business to different locations. However, the taxpayer (for
simplification purposes) attributes all of the sales tax to his/her main store.
• Lo le Confusion - Taxpayers are sometimes confused as to which jurisdiction their
business is physically located in, especially where there are poorly defined borders
separating contiguous cities and unincorporated areas.
• Ide tical Cit /Count Names - Cities having the same name as the county in which
the are located oftentimes lose their local allocation due to taxpayer confusion.
Thij occurs when the taxpayer checks the appropriate name on the form schedule
listi g all the counties in California (Schedule B rather than Schedule C), believing
that he/she has correctly identified the local jurisdiction for point-of-sale distribution
(i.e., the city with the identical name as the county).
0
Agenda
Lessors
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September 20, 1994
The appl cation of sales/use tax to lease transactions depends on the type of property
being lesed, the means by which a lessor obtained the property, and the contract
between he lessor and the lessee. In lease transactions, the applicable tax is usually a
use tax mposed on the lessor. The sales/use tax complexities involved in leasing
transacts ns cause many lessors to improperly report the local allocation.
Californiasales and use tax law treats a contractor as a consumer of materials and
equipmet. Considering that the contractor is deemed to consume tangible personal
property, he/she must pay use tax based on the cost of such consumed materials and
equipme t. The most common issue we encounter is whether the taxpayer who is
categoriz d by the seller's permit as a "contractor' is in fact a contractor at all times and
for every function in which a tax is triggered. This issue is further reduced to the situation
where the contractor is installing - rather than fabricating - tangible personal property.
Cities freq ently find that businesses with "contractor' designations reporting on a use tax
basis are not engaged in the building trades, but are engaged in the business of selling
and installing machinery and equipment.
In terms of dollars, most misallocations identified are due to reporting errors by
manufact ers engaged in business -to -business sales. Unlike the retail consumer outlets
where all ales are taxable, manufacturers sell to resellers and exempt customers as well
as end users, and some of the products require installation affixing them to realty.
According, some of the transactions are subject to sales tax, some are subject to use tax
and some are exempt.
For nv
coe fence and expediency, it is common for manufacturers to erroneously report on
a consolid ted or customer destination basis or characterize sales transactions as being
subject to use tax or contractor -installed classifications, further discussed as follows:
•
Destination vs. Origination - Many manufactures erroneously report sales and use
taxn a destination rather than origination or point -of -sales basis, particularly when
tra sactions are subject to transit taxes.
• Co solidated Return Reporting - For their own convenience, many manufacturers
con olidate their California sales tax revenue and information at the region or
divi ion level rather than the individual locations throughout the State.
0
Agenda I em -4- September 20, 1994
Tax vs. Sales Tax - Many manufacturers headquartered outside of California,
also ship materials from outside of California, automatically assume that all
h transactions are subject to treatment as use tax rather than sales tax.
rever, depending on when and where title passes, many of these manufacturers
improperly reporting sales tax transactions as use tax transactions.
Because etail stores reporting errors are the least difficult to detect and correct, they have
historically represented less than 20% of the total misallocations, in terms of dollars. In
contrast, toe contractors, lessors and manufacturers have historically represented 80% to
90% of the misallocated dollars, due to the complex issues involved in detecting and
correcting their reporting errors.
There ar only two known firms who specialize in the area of sales and use tax auditing
services. They are Municipal Resource Consultants (MRC) of Tustin, California, and
Hinderlite , de Llamas and Associates (HdL) of Diamond Bar, California. Because these
firms spe ialize in such a narrow field, the services they offer are almost identical. Staff
has requ sted proposals from both firms, reviewed their proposals and sample reports,
interviewe their officers and verified their references. Both firms are very reputable, with
the difference between the firms being slightly different fee structures. Hinderliter,
dLlamas and Associates fees are $350. 00 monthly for the reports and 15% of discovered
revenues for eight quarters. Municipal Resource Consultants fees are $700.00 quarterly
for reports and 25% of discovered revenues for six quarters. After having completed the
above analysis, staff is recommending the services of Hinderliter, de Llamas and
Associate 3 for this program.
The Con ultant will conduct an initial and on-going sales and use tax audit in order to
identify a d correct "point-of-sale" distribution errors and thereby generate previously
unrealizesales tax income for the City. The Consultant will accomplish this by field
inspection and contacts with the appropriate sales management and accounting officials
in compa ies that have business where a probability of error exists. These audits will
verify wh ther current tax receipts accurately reflect the local sales activity. Once a
special da base is established that identifies the name, address and quarterly allocation
of sales to producers, the Consultant will provide up -dated reports, graphs and listings.
Because existing law generally prohibits persons administering the Sales and Use Tax
Law or the Bradley -Burns Uniform Sales and Use Tax Law from disclosing sales and use
tax record information to other persons, Assembly Bill 1611 (July 12, 1985) provides
Agenda
specific
other pe
and use
City whit
Taxation
Ll
-5-
11
September 20, 1994
amption to this prohibition. This bill permits disclosure of these tax records to
ms who are under contract for the purposes related to collection of local sales
(es and who are designated to do so by resolution of the legislative body of the
is requesting disclosure. Also attached for City Council approval is a resolution
the Consultant access to sales and use tax records pursuant to Revenue and
:ode Section 7056.
The Cons ltant will establish the sales and use tax and audit data bases and will provide
monthly a d quarterly updates for $350.00 per month. Funds for the monthly and quarterly
updates through June 30, 1995 need to be appropriated from general fund reserves to
account 1-62121-4141. The additional sales tax revenue generated from the audit will
be more t an adequate to cover this expenditure. Additionally, the Consultant shall be
paid 15 percent of all new sales and use tax revenue received by the City over the
following eight quarters as a result of audit and recovery work performed by the
Consultant. If these audit services were performed in-house, the City could realize costs
incurred without a guarantee of discovering additional revenue. Below is a chart indicating
sales tax f r the last eight quarters.
$1,000
Quarterly Sales Tax Totals
August 1992 to May 1994
Third Fourth First Second Third Fourth First Second
Qtr 92 Qtr 92 Qtr 93 Qtr 93 Qtr 93 Qtr 93 Qtr 94 Qtr 94
Assuming t ie City is on the average losing one to five percent of sales tax to misreporting,
we can est mate using the last quarter's sales tax total of $613,733 that $6,000-$30,000
could be re mvered quarterly. Thus the Consultant's 15% share could be between $900-
$4,602 qu rterly. The City could capture as much as $120,000 annually in misallocated
sales tax of which the Consultant would be paid approximately $18,000.
Agenda
Robert H riderliter, HdL Companies
Jan Ishii, State Board of Equalization
Rich Hansen, Chamber of Commerce
Not
0
-6- September 20, 1994
1. Aju�lh
rove the Agreement for Sales and Use Tax Audit, adopt the resolution
aorizing disclosure of tax records to consultant, and appropriate $3,15to
aount # 01-62121-4141 from fund balance reserves.
2. Approve the Agreement subject to revisions, adopt resolution authorizing disclosure
of tax records to consultant, and appropriate $3,150. to account # 01-62121-4141
from fund balance reserves.
3. Continue item and direct staff for additional information.
Approve Ihe Agreement for Sales and Use Tax Audit, adopt the resolution authorizing
disclosure of tax records to Consultant, and appropriate $ 3,150. to account # 01-62121-
4141 froni fund balance reserves.
submitted,
Douglas Q. Dumhart
Manaaem nt Assistant II
Resolution
Agreement
i
0 0
RESOLUTION N0. 94-9-20-4
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO, CALIFORNIA, AUTHORIZING ACCESS TO SALES AND USE
TAX RECORDS PURSUANT TO REVENUE AND TAXATION CODE
SECTION 7056
THE CITY COUNCIL OF THE CITY OF SAN NAN CAPISTRANO HEREBY
RESOLVES AS FOLLOWS:
The following City Officials, by title, are hereby authorized to receive and review sales and
use tax ocation information from the State Board of Equalization:
Members of the City Council
City Manager
City Treasurer
Community Development Manager
Business Advocate
The following independent contractor for the City of San Juan Capistrano is hereby also
to receive and review sales and use tax data received from the State Board of Equalization:
Hinderliter, de Llamas & Associates: Robert Hinderliter, Principal
Lloyd de Llamas, Principal
The City of San Juan Capistrano hereby certifies that Hinderliter, de Llamas & Associates:
A. Has a current confidentiality contract with the City to receive sales and use tax
records;
B. Is required by that contract to disclose information contained in, or derived from,
those salesand use tax records only to an officer or employee of the City who is authorized by this resolution
to examin the information; and,
C. Is prohibited by that contract from performing consulting service for a retailer during
the term o that contract; and,
D. Is prohibited by that contract from retaining the information contained in, or derived
from those sales tax records, after that contract has expired.
/ , -
9 0
SECTION 4.
Information obtained by examination of Board records shall be used only for purposes related
to the col 'on of local sales and use tares by the Board for municipal revenue forecasting and verification.
ATTEST:
CITY
SECTION 5.
This resolution supersedes all previous authorizations.
SECTION 6.
The City Clerk shall certify to the adoption of this resolution and forward a certified copy to
State Board of Equalization
450 N Street
P. O. Box 942879
Sacramento, California 95814
Attention: Local Tax Administrator
PASSED. APPROVED, AND ADOPTED this 20th day of
, 1994.
OLL BEL , MAYOR
-2-
•
STATE F CALIFORNIA
)
COU
OF ORANGE ) ss
CITY 0 SAN JUAN CAPISTRANO )
I, CHERYL JOHNSON, City Clerk of the City of San Juan Capistrano, California, DO
HEREB CERTIFY that the foregoing is a true and correct copy of Resolution No. 94-9-20-4
adopted b the City Council of the City of San Juan Capistrano, California, at a regular meeting thereof held
on the 2 day of Septemher - 1994, by the following vote:
AYES: Council Members Jones, Hausdorfer, Nash, Vasquez and
Mayor Campbell
NOES: None
ABSTAIN: None
ABSENT: None
(SEAL)
CHERYL JORNSOff, CITY CLERK
-3-
INFINITE IMAGING SYSTEMS
23011 Moulton Parkway, Suite #E-8
Laguna Hills, California 92653
(714) 472-2777 l
0
23, 1995
Mr. B b Hinderliter
Hinde liter de Llamas and Associates
1340alley Vista Drive, Suite 200
Diam nd Bar, CA 91765
Agreement for Consulting Services
Dear Mr. Hinderliter:
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
WYATT HART
GILJO14ES
CAROLYN NASH
DAVID SWEROLIN
CITY MANAGER
GEORGE SCARBOROUGH
I regr to inform you that due to budgetary constraints, we must terminate our contract with
yourfor sales and use tax audit and information services. Our decision to terminate this
serv4 is not a reflection on our firm or services rendered, but rather a financial decision.
Pursu t to Section 3 on page 2 of the Consultant Services Agreement, this letter is to serve
as No ice of Termination. The termination shall be effective September 30, 1995, ending
reporti g services for the fourth quarter of Fiscal Year 1994-95.
It has been a pleasure doing business with HdL and we appreciate all that you have done.
D. Dumhart
nent Analyst II
cc: George Scarborough
indv Pendleton
32400 PA5I�0 ADELANTO. SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171
•
•
Q1111 I M I P.O. BOX 420807, SAN FRANCISCO, CA 94142-0807
COMPENSATIO
I N S U R A N C
FUN CERTIFICATE OF WORKERS' COMPENSATION INSURANCE
APRIL 5, 1995
POLICYNUMBER: 0761323 - 94
CERTIFICATE EXPIRES: 10-1-95
CITY OF S N JUAN CAPISTRANO
DEPT OF B ILDING AND SAFETY
32400 PAS O ADELANITO
SAN JUAN APISTRANO, CA 92675
L
JOB: 20 EMPLOYEES
This is to certify tha we have issued a valid Workers' Compensation insurance policy in a form approved by the California
Insurance Commissi ner to the employer named below for the policy period indicated.
This policy is not subject to cancellation by the Fund except upon ten days' advance written notice to the employer.
We will also give you ITEN days' advance notice should this policy be cancelled prior to its normal expiration.
This certificate of in urance is not an insurance policy and does not amend, extend or alter the coverage afforded by the
policies listed herei I. Notwithstanding any requirement, term, or condition of any contract or other document with
respect to which th s certificate of insurance may be issued or may pertain, the insurance afforded by the policies
described herein is s jbject to all the terms, exclusions and conditions of such policies.
PRESIDENT
EMPLOYER'SILIABILITY LIMIT INCLUDING DEFENSE COSTS: $3,000,000 PER OCCURRENCE
f -
HINDERLITE, DE LLAMAS AND ASSOCIATES
DBA: HIND ERLITER, DE LLAMAS AND ASSOC.
1340 VALLE VISTA #1200
DIAMOND BA CA 91765
AI:111:1/. C
RTIFICA* OF INSURANCE OPID CH DATE IMAI/DDNYI
HIHDs-3= 12/07/94
lPRooucER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
Johns Insurance
gency, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
P. 0. Suit 660339
ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
Arca;3ia CA 91066
COMPANIES AFFORDING COVERAGE
818-445-7030
COMPANY
A Aetna Casualty & Surety Cc of
INSURED
COMPANY
B Illinois
COMPANY
Hinderliter,
De Llamas & Assoc
C
1340 Valley[Vista
Diamond Har
Dr., Ste 200
CA 91765
COMPANY
D
COVERAGES
-
THIS IS TO CERTIFY THA
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED, NOTWITHST
NDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAV BE IS
LED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND COND
IONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
GOPOUCYEFFECTME
LTR
TYPE OF NSURAN
POLICY NUMBER
DATE tMMIDOXY1
MUCYEXPIRATKIN
DATE t&IMIDUA'YI
lIAfPS
GEIENL
LIABILITY
GENERAL AGGREGATE s2,000,000
X
PRODUCTS - COMP/OP AGO 1120000,000
A
COMMERCIAL GENERA
LIABILITY
86ACM24532757
12/11/94
12/11/95
PERSONAL &ADV INJURY 51,000,000
CLAIMSMADE
OCCUR
EACH OCCURRENCE $1,000,000
OWNER'S&CONTRAC
R'SPROT
FIRE DAMAGE IAny oro T°°I $ 100,000
MED EXP (Any one".. S 51000
A
AUTOMONLE
LIABILITY
ANY AUTO
86FJ24532757
12/11/94
12/11/95
COMBINED SINGLE LIMIT $ 1,000,000
BODILY INJURY
IPO1 P°�1on1 T
X
ALL OWNED AUTOS
SCHEDULED AUTOS
BODILY INJURY
(P°,..wd.nt) P
X
X
HIRED AUTOS
NON -OWNED AUTOS
I
PROPERTY DAMAGE L
OARAQE LIABILITY
AUTO ONLY - EA ACCIDENT $
OTHER THAN AUTO ONLY:
ANY AUTO
EACH ACCIDENT $
AGGREGATE $
EXCESS WBRITY
EACH OCCURRENCE s3,000,000
AGGREGATE $
A
X UM BRELLA FORM
86XS24532757
12/11/94
12/11/95
S
OTHERTHANUMBRELL
FORM
WORKERS COMPENSATION A
D
STATUTORY LIMITS
EACH ACCIDENT $
EMPLOYERY LIABILITY
DISEASE - POLICY LIMIT F
THE PROPRIETOR/
PARTNERSIEXECUTIVE
OFFICERS ARE:
INCL
EXCL
DISEASE- EACH EMPLOYEE 77
OTHER
n
W .n
ftl
n
DESCRIPTION OF OPERATIONSRA
*10 donotice fo
Certifhate holds
attached hereto.
TIONSNEHICLES/SPECIAL ITEMS
nonpaYm nt.
is name as additional insured per form CG2026
CERTIFICATE: HOLDER
..
CANCELLATION
SANJQAN
SHOULD ANY OF THE ABOVE DESCRIBED POUCES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
* 3 0 DAYS WRITTEN NOTICE TO THE CERTFICATE HOLDER NAMED TO THE LEFT,
City of So
Attn: Doug
32400 Page
Juan Capistrano
as Dumhart
Adelante
BUT FAKURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLHGATION OR LMNUTY
OF ANY KPIP UPON HE OCAPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHOR PRE AT
San Juan
C pistrano CA 92675
ACCORD 25-8 (3/931
mACORD CORPORATION 1993
POLICY NUMBER: 86ACM24532757
j COMPANY : Aetna Casualty & Surety
T IS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY
AD ITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION
This endorse ant modifies insurance provided under the following:
COMMER IAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Name of Parse or Organization: City of San Juan Capistrano
32400 Paseo Adelante
San Juan Capistrano, CA 92075
(Ifno entry ap ears above, information required to complete this endorsement will be shown in the Declarations
as applicable t this endorsement.)
WHO IS AN I Insured
(Section II) is amended to include as an insured the person or organization shown in the
Schedule as a insured but only with respect to liability arising out of your operations or premises owned by or
rented to you.
CG 20 26 1185 Copyright, Insurance Services Office, Inc., 1984
E
IIG,ral,ll,
uumua I96i
1776
28, 1994
Mnderlit r, De Llamas & Associates
1340 Val y Vista Drive, Suite 200
Diamond Bar, California 91765
Dear
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
GARY L. HAUSOORFER
GIL JONES
CAROLYN NASH
JEFF VASOUEZ
CITY MANAGER
GEORGE SCARBOROUGH
The Gen as
Liability and Automobile Liability Certificates of Insurance, regarding the above -
reference service, are due to expire on December 11, 1994. In accordance with your agreement,
the incur ce certificates need to be renewed for an additional period of one year. The agreement
requires a general liability endorsement form naming the City of San Juan Capistrano as an additional
insured. Ihave included a City approved endorsement form to submit to your insurance company;
however, our insurance company may provide their own endorsement form.
Please forward the updated certificates and the endorsement form to the City, attention City Clerk's
office, by December 12, 1994.
If you have any questions, please contact me at (714) 443-6310.
Thank you for your cooperation.
Very truly
Dawn M. Schande
Deputy Ci Clerk
Enclosure
cc: Ch ryl Johnson, City Clerk
Do glas Dumhart, Management Assistant II
32400 PASO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 499.1171
COMrt NEAT
INSUPIAN
Funs
10
P.O. BOX 420807, SAN FRANCISCO, CA 94142-0807
CERTIFICATE OF WORKERS' COMPENSATION INSURANCE
SEPTEMBER 7, 1994 POLICY NUMBER: 0761323 94
CERTIFICATE EXPIRES: 10 - 1-95
r
CITY OF S N JUAN CAPIS'I'RANO
ATTNDO CLAS DUAHART
32400 PAS 0 ADELANTO
SAN JUAN APIS'TRANO CA 9267 JOB: 20 EMPLOYEES
L
This is to certify th t we have issued a valid Workers' Compensation insurance policy in a form approved by the California
Insurance Commiasi ner to the employer named below for the poli y period indicated.
This policy is not su jact to cancellation by the Fund except uponXw days' advance written notice to the employer.
30
We will alio give you jtG{V days' advance notice should this policy be cancelled prior to its normal expiration.
This certificate of in urance is not an insurance policy and does not amend, extend or alter the coverage afforded by the
policies listed her ei Notwithstanding any requirement, term, or condition of any contract or other document with
respect to which t is certificate of insurance may be issued or may pertain, the insurance afforded by the policies
described herein is s bject to all the terms, exclusions and conditions of such policies. V"
PRESIDENT
EMPLOYER'S LIABILITY LIMIT: 3;000,000 PER OCCURRENCE.
ENDORSEMEN #2U65 ENTITLED CERTIFICATE HOLDERS NOTICE EFFECTIVE
09/07/94 IS ATTACHED TO AND FORMS A PART OF THIS POLICY.
SPECIMEN ENDORSEMENT #2U65 ATTACHED.
EMPLOYER
r
HINDERLITE DE LLAMAS AND ASSOCIATES
DBA.. HIND RLI'TER, DE LLAMAS & ASSOC,
1340 VALLE VISTA, #200
DIAMOND BA CA 9i7b
SCIF 10262 (REV. 0-86)
C
L
STA"
COMPEN5/
tr4suRA
Fun
HOME OFFI
SAN FRANCE
mm
• CERTIFICATTAOLDERS' NORCE
1-1
ENDORSEMENT AGREEMENT
'ES ARE
THE
TIME
20-00-354
EXHIBIT C
ANYTHING IN THIS POLICY TO THE CONTRARY NOTWITHSTANDING, IT
IS AGREED THAT THIS POLICY SHALL NOT BE CANCELLED UNTIL:
30 DAYS
AFTER WRITTEN NOTICE OF SUCH CANCELLATION HAS BEEN PLACED IN
THE MAIL BY STATE FUND TO CURRENT HOLDERS OF CERTIFICATE OF
WORKERS' COMPENSATION INSURANCE.
THING IN THIS ENDORSEMENT CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE
EXTEND ANY OF THE TERMS, CONDITIONS, AGREEMENTS, OR LIMITATIONS OF THIS
LICY OTHER THAN AS ABOVE STATED. NOTHING ELSEWHERE IN THIS POLICY SHALL BE
LD TOpMARY, AI TLR WAly.LpR LIpOLLTHE
10516 (REV. 10.86)
IF
2065
OLD FOAM 516
//RDe CIERTIFICPW
OF INSURANCE i CSR CH DATE(MM/DDNY)
-HINDE-3. 09/07/94
PRODUCER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
Johns Insurance Agency,
ONLYAND CONFERS NO RIGHTS UPON THE CERTIFICATE
Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
P. 0. Box 660339
ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
Arcadia CA 91066
COMPANIES AFFORDING COVERAGE
COMPANY
818-445-7030
A Aetna Casualty 8 Surety Co of
INSURED
COMPANY
B Illinois
COMPANY
Hinderliter, De
lamas 8 Assoc
C
1340 Valley Vist
Diamond Bar CA 9
Dr., Ste 200
765
COMPANY
p
COVERAGES
THIS IS TO CERTIFY THAT
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED, NOTWITHST
DING ANY REQUIREMENT, TERM OR CONDMON OFANYCONTRACTOR OTHER DOCUMENTWITH RESPECTTO WHICH THIS
CERTIFICATE MAYBE ISS
ED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDI
IONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
CO
LTR
TYPE OFINSURAN
E
POLICY NUMBER
POLICY EFFECTIVE
DATE IMM/DD/Y't)
POLICY EXPIRATION
DATE (MM/DD/YY)
LIMITS
GENERAL
LIABILITY
GENERAL AGGREGATE
S 2,000,000
PRODUCTS-COMP/OP AGO
$ 2,000 000
A
MERCIAL GENE
LIABILITY
86ACM23870598
12/11/93
12/11/94
PERSONAL S ADV INJURY
$1,000 000
CLAIMS MADE F�IOCCUR
EACH OCCURRENCE
S 1 , 000, 000
TXCOR
NER'S 8 CONTRACT
R'S PROT
FIRE DAMAGE (Any one tire)
8 100,000
MED EXP (Any one person)
$ 5,000
AUTOMOBILE
LIABILITY
A
ANY qurD
86FJ23870598
72/11/93
12/11/94
COMBINED SINGLE LIMR
1,0000
$ 00,
BODILY INJURY
(Per personn))
$
ALLOWNEDAUTOS
SCHEDULED AUTOS
X
X
X
HIRED AUTOS
NON-OWNED AUTOS
BODILY INJURY
(Par acciderf)
na
$
PROPERTY DAMAGE
$
GARAGE
LIABILITY
AUTO ONLY -EA ACCIDENT
$
OTHER THAN AUTO ONLY:
ANY AUTO
EACH ACCIDENT
$
AGGREGATE
$
EXCESS
LABILITY
EACH OCCURRENCE
$ 3,000,000
AX
UMBRELLA FORM
86X523870598
12/11/93
12/11/94
AGGREGATE
$
$
OTHER THAN UMBRELLA
ORM
WORKERS COMPENSATION
AND
STATUTORY UMITS
EMPLOYERS' LIABILITY
EACH ACCIDENT
$
THE PROPRIETOR/
PARrNERS/E)(ECUnVE
INCL
DISEASE-POLICY UMI-r
$
DISEASE -EACH EMPLOYEE
$
OFFICERS ARE:
EXCL
I
OTHER
DESCRIPTION OF OPERATIONS(
ATIONSA(EHICLES/SPECIAL ITEMS
e10 day notice for nonpa
ant.
Certificate holder is na
attached hereto.
d as additional insured per form CG2026
CERTIFICATE HOLDER
- -.-CANCELLATION
-
SANJUAN
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
X30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT,
City Of San J
Attn: Douglas
an Capistrano
umhart
BUT FAILURE TO MAILSUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY
32400 Paseo A
elante
OF ANY KIND UPON THE COMPANY, I AGENTS OR REPRESENTATIVES,
AUTHORRED REPRESE TIV
San Juan Capi
trano CA 92675
ACORDr25-S. (3/93) -
CACORD-CORPORATION 1983
IKW 0 0
POLICY NUIV BER: 86ACM23870598
COMPANY : Aetna Casualty & Surety
T IS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY
A DITIONAL INSURED • DESIGNATED PERSON OR ORGANIZATION
This endorsement modifies insurance provided under the following:
COMMER IAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Name of Pers n or Organization: City of San Juan Capistrano
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement.)
WHO IS AN ISURED (Section II) is amended to include as an insured the person or organization shown in the
Schedule as a insured but only with respect to liability arising out of your operations or premises owned by or
rented to you.
CG 20 26 1185 Copyright, Insurance Services Office, Inc., 1984
0
IAIIA,IAIIII
uTIIII:p, 1961
1776
22, 1994
Mr. Robe Hinderliter
The HdL ompanies
1340 Valley Vista Drive, Suite 200
Daimond 3ar, California 91765
Re:
Dear Mr
MEMBERS OF THE CITY COUNCIL
COI LENE CAMPBELL
GARY L. HAUSDORFER
OIL JONES
CAROLYN NASH
JEFF VASQUEZ
CITY MANAGER
At their meeting of September 20, 1994, the City Council of the City of San Juan Capistrano
approved the Agreement for Sales and Use Tax Audit and Information Services with your
company. Enclosed for your records are a fully -executed copy of the Agreement and a copy of
Resolution No. 94-9-20-4, which authorizes access to the City's sales and u se tax records. The
City has mceived all required insurance.
Thank you for your cooperation. If we can be of any further assistance, please call.
Very truly yours,
Cheryl Jo uison
City Clerk
cc: Jan Ishii, State Board of Equalization (with copy of agreement and resolution)
D uglas Dumhart (with copy of agreement and resolution)
32400 PAISEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171